This report is the outcome of a study commissioned to examine the capacity building needs in Vietnam, and is a supplementary document to the Asian Development Bank's Country Operational Strategy for Vietnam. Vietnam's needs in terms of capacity building are particularly important given that is it a transitional economy and also one with little institutional experience in dealing with the international donor community. This paper examines the international awareness of capacity building and capacity building needs in Vietnam, approaches to and modalities of capacity building, recommendations and a Bank strategy for Vietnam, and discusses the momentum of reform.