Vietnam needs to invest around VND24.9 trillion (US$1.56 billion) in rural development from now to 2010, according to the Finance Department (FD) under the Ministry of Agriculture and Rural Development.
Nguyen Van Ha, FD general director said the department will mobilize more capital from the public, companies, official development assistance and foreign investments, which focus on improving rural infrastructure and training unskilled laborers, the Vietnam Investment Review reported November 19.
Currently, more than 70 per cent of the population lives in rural areas and works as unskilled farmers, while in the cities, where rural labor is rarely used, industries that use less labor are booming, said Dang Kim Son, general director of MARD's Institute of Policy and Strategy for Agriculture and Rural Development.
“Investment in rural areas will need to play a key role in the government's poverty reduction and economic growth strategies for the foreseeable future,” said Bill Tweddlell, Australian ambassador to Vietnam.
According to the MARD's Cooperative and Rural Development Department (CRDD), Vietnam's poverty rate has reduced from 22 per cent in 2001 to an expected 14.5 per cent this year and 11 per cent-12 per cent per year by 2010.
Officials from the MARD said Vietnam need to make great efforts in order to increase average annual incomes per capita in rural areas from the US$1,000 at present to US$1,125 by 2010 and US$1,875 in 2020.
The Ministry of Finance said around VND100.86 trillion, or US$6.3 billion, was invested in agriculture and rural development between 2001 and 2005, which met only 17 per cent of demand and accounted for 8.7 per cent of the nation's total investment.
Officials warned that if there will not be adequate investment in agriculture and rural development, the sector will lag behind the country's overall development.
Dang Kim Son predicted that the share of Vietnam's agriculture in the overall gross domestic product (GDP) will continue to decrease to only 10 per cent and even 5 per cent in the next five years from 40 per cent during the mid-1980s and 20 per cent currently.
Agriculture is also forecast to grow at a moderate rate of 4 per cent per annum against 4.5 per cent and 5 per cent in the period before 2001. (Vietnam Investment Review)
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