Vietnam Poverty Reduction Support Credit 8

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The Eighth Poverty Reduction Support Credit (PRSC 8) Program for Vietnam is designed to assist the government to implement its Socio-Economic Development Plan (SEDP) 2006-2010.' It aims to support all four pillars of the SEDP, namely, fostering business development, ensuring social inclusion, managing natural resources, and strengthening governance. The credit is the third in a programmatic series of five annual single-tranche operations (PRSCs 6-10). This series follows the first cycle of five operations (PRSCs 1-5). The PRSCs are well-suited to support the implementation of the SEDP, as the cross-cutting nature of the policy dialogue conducted through PRSCs encourages taking a holistic view of the reform agenda, and promotes collaboration among line ministries and government agencies. The annual programming is demanding, but provides the government with predictability for planning purposes, and also helps keep the reform momentum. The PRSCs are designed to be forward-looking. The negotiation of each PRSC operation includes reaching an agreement on a list of policy measures that will, in principle, be supported by the following operation. These policy measures, or 'triggers,' are grounded in the SEDP 2006-2010 as well as other key documents and strategies, and are considered to have strategic importance to attain the SEDP objectives. Triggers are very limited in number. They are not conditions but rather a framework to guide the policy dialogue in the subsequent operation. It is understood that some triggers may not be fully met while others may be exceeded. In addition to the 'triggers,' the policy dialogue conducted under PRSCs addresses a broader set of issues, articulated as 'benchmarks.' These benchmarks are reported to convey the scope of the reforms being implemented. They are not part of the legal agreement, although they strengthen the implementation of the SEDP. The relatively large number of benchmarks is justified by the committed participation in the PRSC process of close to two dozen government ministries and agencies and more than a dozen donors.