Donors increased aid pledges to communist Vietnam for 2005 to $3.4 billion on Thursday, up from $2.8 billion in 2004, while urging the government to battle graft, raise transparency and speed up legal reform. Despite healthy economic expansion of 7 percent a year, Vietnam relies on foreign help to build schools, clinics, roads and power grids.
"Your aid is of great value to us", Planning and Investment Minister Vo Hong Phuc told donor nations and multi-lateral organisations at the end of a two-day meeting in Hanoi when he announced the pledges.
The World Bank said the hefty rise in aid reflected the international community's confidence in Vietnam's development.
"In the next five years, Vietnam should have acceded to the World Trade Organisation and completed its transition to a market economy," said Klaus Rohland, the World Bank country director for Vietnam.
Hanoi aims to become a member of the world trade body in December next year.
The government said about 9 percent of its 82 million people live in poverty, although by international standards as many as a third of Vietnamese live in poverty.
Poverty levels have more than halved in less than a decade following its "doi moi" (economic renovation) programme of the late 1980s.
Donors called for the government to clamp down on corruption and reduce red tape.
Vietnam ranked 102nd of 146 nations in a 2004 corruption survey conducted by Transparency International, a global corruption watchdog.
The government has been cracking down on corruption following frequent complaints by foreign investors that graft is a major hindrance to doing business in the country.
"Priority should be placed on improving transparency in public financial management, resource allocation, procurement, audit and inspection as well as on the essential role of a free press in fighting corruption," said Danish ambassador Peter Lysholt Hansen.
Denmark, France and Britain are the three biggest donor countries in the European Union, which collectively pledged 722.5 million euro ($924.8 million) in aid for 2005.
Japan, the biggest donor with this year's pledge of $902 million, urged Vietnam to step up reform of the financial sector and restructuring of state-owned enterprises.
Donors pledged $25 billion to Vietnam between 1999 and 2003, largely for the transport, health care, and energy sectors.
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