International donors have pledged $4.4 billion in development assistance to Vietnam for 2008, $1 billion more than the country received this year. Vietnam's economy is growing fast, but donors say the money is needed for infrastructure improvements and other programs. Matt Steinglass reports from Hanoi.

Vietnamese Minister for Planning and Investments Vo Hong Phuc (l) as World Bank Country Director Ajay Chhibber (r) listens at the end of a meeting in Hanoi, 07 Dec 2007

Vietnam's Minister of Planning and Investment, Vu Hong Phuc, announced the figures here Friday at the annual meeting of aid donors to Vietnam.

Phuc says donors have pledged $5.4 billion for 2008, an increase of nearly 20 percent over 2007. The figure includes $1.35 billion from the Asian Development Bank, and $1.1 billion each from the World Bank and Japan.

Vietnam's economy is growing at more than eight percent a year, but donors say that is partly why it needs the aid. Most of the new assistance consists of loans for infrastructure improvements, the ports and roads needed by Vietnam's export-driven industries.

Ayumi Konishii, Vietnam director of the Asian Development Bank, says private sources cannot supply the needed capital, and official direct assistance is still needed.

"If you really look at how much the private sector is contributing to the development of infrastructure, it's very limited," said Konishii. "You still have to depend on the government funds and ODA for the infrastructure buildup."

The World Bank's Hanoi representative, Ajay Chhibber, said donor satisfaction at Vietnam's implementation of aid projects was the highest of any country in the world.

"This is about a 20 percent increase over last year, and really it affirms how strongly the donor community stands behind the plans that the government has [for] taking this country forward," said Chhibber.

European countries pledged some $960 million, and the United States pledged $114 million. But their demands to Vietnam were more stringent than those of the larger Asian donors.

Both the U.S. and the European Union called on Vietnam to do more to fight corruption, and to allow greater political freedom for its citizens. An EU statement issued at the meeting said "too many Vietnamese citizens are still imprisoned or detained for the peaceful expression of their personal views."

Planning Minister Phuc did not mention human rights, but he did talk about corruption.

Phuc says corruption is an issue many developing countries face, not just Vietnam. He says Vietnam is determined to fight it.

Vietnam hopes to prevent a repeat of a scandal earlier this year, in which a Transportation Ministry unit that had worked on World Bank projects was found to be riddled with corruption.