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Community Funding and Private Sector Participation

Vietnam is currently placing a major emphasis on developing its rural roads as part of its overall development strategy. Provincial governments each determine local contributions to rural transport infrastructure in the form of labour, cash and materials. The country is also encouraging greater involvement of the private sector in the delivery of rural road projects and to ensure that they can compete favourably with state owned enterprises. This section summarises the findings of two studies, one on community funding/labour and one on private sector involvement, funded by the South East Asia Community Access Programme (SEACAP).

There is an overall effort to involve citizens in development projects, but each province in Vietnam determines the community participation requirements. In one province studied, the fee allocation was based on the size of paddy field or garden. Families without land are exempt. The problem with this calculation is that it doesn't take into account droughts and crop failures. People with road fee arrears are unable to borrow for agricultural inputs and other needs. Both compulsory labour allocations and voluntary labour are used for road construction and maintenance. The second province studied has a higher poverty incidence. It is more dependent on national government contribution and donor assistance. Local people in the mountainous regions are not required to make contributions of labour, cost or materials. Instead, they can obtain some income by working on road construction. In the low land, villagers do contribute labour, cost and materials for rural road construction. The cost is calculated on a per person basis regardless of age. Therefore larger households pay more. Poor people are not exempted. Since transport fees are often lumped with irrigation fees, school fees, etc, they can constitute a sizable burden.

Read more in the gTKP Finance & Economics Topic Information Sheet on Community Funding and Private Sector Participation.

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