Vietnam, a one-party socialist statedominated by the Communist Party of Vietnam, has in recentyears moved towards a pragmatic growth-oriented approach toeconomic policy. Early reform measures in 1986 with the doimoi, or new way, introduced a series of market-orientedreforms in industry and trade, as well as agriculture. Thecollapse of the Soviet Union in 1989 hastened the pace ofreform, as the authorities intensified monetary, banking,and structural reforms and set the stage for substantialtrade and investment liberalization, and as Vietnam'sarrears with the International Monetary Fund (IMF) weresettled in 1993. Key lessons that emerge from the Vietnamstudy include: a) the Poverty Reduction Support Credit(PRSC) process is strengthened through rigorous analyticunderpinnings (for example, Vietnam development reports,public expenditure reviews, and other analytical andadvisory services) that provide a shared vision of thedevelopment agenda and a menu of policy actions linked tothe thematic pillars of the poverty reduction strategy; b)even in a context of high government commitment, fostering aconnection to an external anchor (such as world tradeorganization accession) can help maintain momentum in thePRSC process and reform generally; c) PRSCs can function asan effective complement to, and catalyst for, sectoroperations including the development of sector-wideapproaches and sector budget support; and d) with largenumbers of international and government participants, itbecomes increasingly important for both Government and theBank that responsibilities for coordinating inputs andconsultation and maintaining a policy overview be closelylinked, defined, and adequately funded.
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