Poverty Reduction and PRSP in Uganda and Vietnam

Abstract

PRSP by World Bank is making very dramatic impact on the policy formulation in the developing countries. There has been a great difference in the receipt of ODA between Indochina and East African Community countries. External debts have been significant factors of receiving the amount of ODA and FDI and thereafter have affected the progress of social indicators. Indochina have been rather fortunate beneficiaries in the 1990s due to the presence of Japanese aid. Talking about EAC countries, HIPCs initiatives have impeded the inflow of lending assistance into Uganda and Tanzania, while stabilizing external debt situations.

Both Uganda and Vietnam have been considered as successful countries of economic growth and income poverty reduction in the 1990s. Popularity on the achievement of both countries is outstanding. But Vietnam has been transforming its industry structures and increasing saving rates, while maintaining high economic growth rate. Uganda could not reverse the trend of deterioration of social indicators in the same period, while accepting the constant amount of ODA as an exceptional receiver in Africa and achieving remarkable economic growth.

Therefore, Vietnamese poverty reduction and PRSP efforts can go through more growth and industrialization oriented process. Ugandan efforts are still needed to tackle with the improvement of social indicators. There is contrasting PRSP pictures in both countries. Interim PRSP in Vietnam can be considered a kind of social welfare programs and its PRS (HEPR) is a complement of Vietnamese growth programs. Uganda PRSP has tried to include full of World Bank-favorite ideas and concepts, since Uganda has been achieving similar reduction of income poverty as in Vietnam, but not growing out of human poverty.

It is useful and necessary for countries such as Uganda to adopt textbook type PRSP prescription on the short term. On the longer term, World Bank needs to think about the signiticance of individualistic PRSP country approach, since poverty has multi-dimension and the signiticance of varied characters in the developing country and the corresponding poverty reduction strategy should be individualistic.