Evaluation: Finland-Vietnam transition process successfully converts relations from development co-operation to trade

An evaluation of the transition in co-operation between Finland and Vietnam has found that the transition phase led to a reduction in development co-operation and growth in other types of co-operation. Trade and investment have become important instruments for achieving development goals and building a mutually beneficial partnership.

Street view in Hanoi
Vietnam is an interesting country from an economic and trading perspective. “Finns can learn something from the entrepreneurial mindset of Vietnamese people. Everything does not always have to be perfect, but you can make progress when you have the passion and make an effort,” explained former Commercial Counsellor to Vietnam Eija Tynkkynen in a webinar address. Tynkkynen now serves as China Country Manager at Business Finland. Photo: Florian Wehde

A recently published external evaluation commissioned by the Finnish Ministry for Foreign Affairs examined the successes and drawbacks of the transition phase, and studied how development co-operation contributed to the transition towards a diversified partnership.

The evaluation findings were presented in a webinar on 16 June 2021. Under-Secretary of State Elina Kalkku pointed out in her opening remarks that Vietnam has been one of Finland’s most important development co-operation partners for almost four decades. Following tremendous economic development in Vietnam, a process of change in development co-operation began in 2008.

“The transition process ultimately took 12 years, and sought mutually beneficial co-operation and involvement of the private sector,” Kalkku continued.

“Relations between the countries are still vibrant after a decade of transition

“The precise terms of the transition process were not always understood in a fully harmonised way,” noted evaluation team leader Frans van Gerwen, who also pointed out that there had been no clear vision of what co-operation between Finland and Vietnam would look like after the transition process and what aims were being pursued.

Gerwen nevertheless continued: “Relations between the countries are still vibrant after a decade of transition, especially in relation to trade, education, diaspora and tourism.”

The evaluation indicates that the transition process succeeded in its aim of reducing bilateral, grant-based co-operation and strengthening trading and mutually beneficial relations. Finnish Ambassador to Vietnam Kari Kahiluoto explained the practical  meaning of this in a panel discussion address: “One essential assignment that has been achieved during my term of office was to shift the emphasis of the mission from development co-operation to promoting trade relations.”

Pekka Kaihilahti, the Deputy Director General of the Department for the Americas and Asia at the Finnish Ministry for Foreign Affairs, confirmed that Vietnam remains an important country for Finland. The vibrant character of society and the economy in Vietnam have facilitated co-operation, yielding many good outcomes in several sectors. “Co-operation has been less successful in the field of human rights, which is of great concern to us, as human rights are a priority of Finland both in domestic and foreign policy,” Kaihilahti continued.

Under-Secretary of State Kalkku, Ambassador Kahiluoto and Mike Speirs, an evaluation specialist at the Danish Ministry of Foreign Affairs, also stressed the importance and the challenge of human rights in their speeches.

Climate change forms a promising sector for co-operation

Mies tekee korjaustöitä Vietnamissa.
Besides partnerships, the Innovation Partnership Programme successfully assisted in building a Vietnamese innovation system. Photo by Marja-Leena Kultanen

The evaluation finds that co-operation has effectively accommodated environmental and climate change as a cross-cutting objective. “This also provides one of the most promising sectors in which co-operation could develop between Finland and Vietnam,” Frans van Gerwen suggests.

The evaluation reserves special praise for development co-operation projects that incorporated partnership building in project planning. These included the Innovation Partnership Programme and the Energy and Environment Programme. Less attention has, by contrast, been paid as a whole to broader joint partnerships between public, private, civil society and academia operators as a whole.

There were also shortcomings in the co-ordination and coherence of various forms of co-operation, as several forms of support were implemented through numerous institutions.

The evaluation will benefit planning of future transitions

The evaluation sought lessons from good practice on transition processes in the peer countries of the Netherlands and Denmark, while transferring lessons learned from the Vietnamese transition to other partner countries of Finland that will undergo a similar shift in the focus of co-operation. The evaluation stressed the particular importance of defining a vision and objectives for the state of the partnership following the transition. A sufficiently long-term process and the consideration and active participation of various stakeholders in Finland and in the partner country are essential, as is the coherence and synergy of various forms of co-operation and operators. Up-to-date, clear and targeted communication must also be ensured throughout the transition.

The experiences of Denmark and the Netherlands show that strategic planning and formal agreement on co-operation can guide co-operation and focus on mutually beneficial themes. The importance of long-term planning was confirmed by Mike Speirs from the Danish Ministry of Foreign Affairs. “Denmark’s commercial interests were, and continue to be strong in Vietnam. The role of the Danish mission in Hanoi is to build economic and trade relations between the countries,” Speirs continued. One important tool of this work is interdepartmental co-operation, which is supported by co-operation development funds and based on mutually beneficial economic relations.

The lessons learned from the evaluation will be valuable for the Ministry for Foreign Affairs. “Finland is facing similar transitions with other countries. While co-operation and partnerships always depend on the context, many of the comments raised in this evaluation are also welcome in other contexts,” Under-Secretary of State Kalkku observed.

The evaluation report and a summary may be viewed on the website of the Ministry for Foreign Affairs (Opens New Window). (Opens New Window)