General framework of Italian Development Cooperation

The Italian Development Cooperation is based on two major pillars. The first pillar is the solidarity drive toward contributing to guaranteeing to all human beings the protection of the right to life with dignity. The second pillar is the believe that the “cooperation” is the mean to initiate, perfect and consolidate the global economic interconnectedness that, by opening new markets, improving the efficiency of the production factors’ circulation, can insure the economic growth of all people.

The development cooperation policy pursue the achievement of the above objectives (The right to life with dignity and the economic growth for all) along the side with the economic, cultural and security policies  consolidating the role and the image of Italy in the world.
 
The development cooperation policy falls under the responsibility of the Italian Ministry of Foreign Affairs (MAE).  It is implemented mainly through the provisions of Law 49/1987 that allocates funds managed by the Directorate General for Development Cooperation (DGCS) for the promotion and implementation of bilateral and multilateral initiatives. Other funds for cooperation are allocated by MAE in the areas of Scientific and Cultural Cooperation. Furthermore, DGCS acts as the coordinator and co-financing agency for Local Italian Administrations and Civil Society initiatives. Development Cooperation Offices are set up in partner countries, establishing a network of Local Technical Units (UTLs), responsible for information dissemination and the coordination and monitoring of Italy funded ODA projects.    

Italian Cooperation in Vietnam

The Italian Cooperation in Vietnam started with the first bilateral protocol in the years 1989-1992 with commitments reaching 118.1 million USD as soft loans and 37.7 million USD as a grant; however disbursements only reached 55.8 million USD and 5.4 million USD respectively.
After a long pause from 1994, due to problems on both parties, the cooperation activities begun again in 1997 with the Memorandum of Understanding on the Terms and Conditions concerning the Implementation of the Italian Cooperation Program and the decision by the DGCS to execute the pre-existent deliberation of establishing the Italian Development Cooperation Office – UTL at the Italian Embassy in Hanoi.  

In Vietnam, the Italian ODA is supplied through bilateral, multilateral and non governmental organizations (NGOs) and so called decentralized cooperation (Local administrations and civil society at large) systems.

The Italian ODA is not covered by a Bilateral Development Cooperation Protocol, as in the case of other recipient Countries and, in Vietnam, of many other Donor Countries. However it is regulated by the following specific protocols/ agreements:
 

• The Memorandum of Understanding between the Government of the Italian Republic and the Government of the Socialist Republic of Vietnam on the Terms and Conditions concerning the Implementation of the Italian Cooperation Program, Rome 26 May 1997.
  According to this Agreement, Italy has offered Vietnam an amount up to 100 billion Italian lira (Euro 51.645.690) as a concessional soft loan, with a grant element of not less than 80%, to finance development projects/programs in the following sectors: food and agriculture/fishery production and processing, infrastructures, development of human resources and employment, health and education, environmental protection, natural resources exploitation and processing.
  
  
• Year 2000 Joint Commission Meeting, Hanoi, December 2000.
  The Italian Government has decided to allocate an untied grant up to 11.5 billion Lira (Euro 5.939.254) to finance the implementation of initiatives aimed at alleviating the Vietnamese economy from the consequences of the 1999 floods (5 billion Lira – Euro 2.582.378) as well as income generating projects for disadvantaged communities (6.5 billion Lira – Euro 3.357.091). Additionally, in this Joint Commission meeting, the Italian side offered a grant of 1 billion Lira (Euro 516.476) for a technical assistance project, directly managed by DGCS, in support of the Vietnam’s accession to the World Trade Organization (WTO) and an additional amount of 16 billion Lira (Euro 8.263.609) as a highly concessional soft loan for a project in the field of water supply and environment.
  
  
• Year 2002 Development Cooperation Program Mid-Term Review.
  During the Mid-term Review meeting, held in Rome in November 2002, Italy announced its offer to cancel a portion of the Vietnamese debt up to 40 billion lira (Euro 20.66 million).

Based on the above, from May 1997 until now (December 2006) the total bilateral financial commitments of the Italian Government towards the Vietnamese one amount to Euro 80.569.299 as concessional soft loans and Euro 6.455.730 as grant, for a grand total, on the bilateral channel, of  more than Euro 87 million.

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