Seite 1 MPI-GTZ Small and Medium Enterprise Development Programme (SMEDP) Doris Becker & Le Duy Binh April 2009 Sub-national PPD Initiatives in Vietnam

Seite 2 Seite 2  Fast transition to a market economy with strong reforms since the 90es, which led to a boom of private enterprises.  The state is slowly reducing its influence while associations assume a new role in society.  Public consultation is mandatory by law but inadequate in implementation.  There is still considerable mistrust between the state and private sector.  Associations are “mushrooming”, have no consistent structures and limited capacity to engage in policy advocacy.  Decentralization is taking place at fast pace but provincial associations are weak.  At provincial level Public Private Dialogue suffered from severe methodological and institutional constraints, typically consisting in top-down monologues by state officials to the business community.  Public sector regards private sector as the beneficiary or target of their development policy rather than a partner in developing policies and strategies. Country Context: Vietnam Objective: Strengthening business associations and state entities to engage in policy advocacy on a basis of mutual trust, hereby (i) improving the quality of laws and regulations when they are made; and (ii) improving the implementation at provincial level.

Seite 3 Seite 3 Particularities of the PPD - Vietnam  PPD initiatives started at the national level due to strong reform initiatives (EL) which were in dire need of this type of instrument.  Rather than introducing PPD as a stand-alone instrument, it was included in the “mix of instruments” selected by GTZ SMEDP to improve governance in the area of private sector development:  Provincial competitiveness index (business information transparency, proactivity of provincial leadership…)  Regulatory Impact Assessment  BusinessPortal (reduction of entry costs, increasing transparency)  The PPD process itself is accompanied by the development of other tools such as PPD guideline, training for BizAss and public sector stakeholders.  Strong participation of the mass media in the process (both at national and provincial level)

Seite 4 Seite 4 Two PPD processes under GTZ – MPI SMEDP- Vietnam Consultatio n Techniques RIA Methodology Technical Advice on EL and IL Press Campaign PPD AT NATIONAL LEVEL PPD AT PROVINCIAL LEVEL Inter- active PPD methods Facilitatio n Technical Inputs Training for BAs Early 2005 July 2005: EL and IL passed July 2006: EL and IL became effective Early 2007: First provincial PPD May 2009: SMEDP ends Capacity Bldg. Topic of PPD: law implementation issues, tax, credit, customs Topic of PPD: Enterprise Law and Investment Law Dec PPD Guideline

Seite 5 Seite 5 PPD structure: GTZ as Facilitator - Vietnam PMRC CIEM PPD National Level VCCI Laws Drafting Commitee EuroCham Business Association PPD Provincial Level DPI Line Departments Enterprises People’s Committee as facilitator

Seite 6 Seite 6  Not really a top-down approach  Rather, it aims at quick gains since expertise, preparedness for PPD… is higher at national level.  PPD on hot topics: Enterprise Law, Investment Law.  In combination with introduction of Regulatory Impact Assessment.  Support included PPD methodology and content of the PPD.  Strong participation of the mass media. The Process: Starting with PPD at the National Level

Seite 7 Seite 7 The Process: Encouraged by Quick Gains, the Process is Rolled Down to the Provinces  Adopt a comprehensive approach in supporting public and private dialogue;  Four steps: preparation, dialogue, follow-up, monitoring and evaluation.  Facilitate the ownership of the PPD process from the public sector and private sector.  Strengthening the capacity of business associations to be come effective policy advocators.  Development of tools and guidelines.

Seite 8 Seite 8 Results and challenges - Vietnam Major results:  Awareness of public and private sector stakeholders about the benefits of PPD has been improved.  Private sector takes bolder and more professional initiatives in policy dialogues with the Government. Capacity regarding content and methodology in both sectors has been improved.  Results from PPD at national level are well taken into account by the governments.  PPD format which emphasizes the interaction between the two sides is introduced and accepted.  Ownership of the PPD process was successfully transferred to the private sector (in some provinces).  Tools and methodology on PPD have been developed and disseminated. Challenges:  It is still a long way to go for the institutionalization of PPD;  Broad-based improvement in the quality of PPD remains a challenge.  The link between PPD at provincial and national levels is missing or weak.

Seite 9 Seite 9 Key factors for success: Vietnam  Emphasis on national ownership.  Stakeholders should be aware of the benefits from PPD.  Keep the stakeholders informed about the results of the process – make sure that local authorities to take actions after each PPD event.  Collective voices are important.  Methodology should be an important area of support (not only in terms of substance and content).  Identify the right dialogue partners..  Use the mass media.  Build trust between the private and public sector.