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ADB agrees US$3.8b loan for Vietnam
Publication Date : 10-08-2012
The Asian Development Bank (ADB) would lend Vietnam US$3.8 billion to help promote socioeconomic growth between 2013 and 2015, it announced yesterday.
About $2.6 billion would come from ordinary capital resources and $1.2 billion from concessional Asian Development Funds. Funding for technical assistance could reach $8 million annually.
ADB said it had agreed on a new four-year country partnership strategy (CPS) with Vietnam that will focus on promoting inclusive and sustainable growth, and economic efficiency.
"Vietnam has experienced rapid GDP growth and remarkable poverty reduction over the past two decades. There are still persisting pockets of poverty, however, and longer-term structural constraints continue to be a concern," said Stephen P. Groff, ADB Vice-President for Operations in East Asia, Southeast Asia and the Pacific.
While Vietnam has made impressive progress in reducing poverty, regional disparities remain, with poverty among ethnic minority groups causing the most concern, according to Groff.
The poor are vulnerable to environmental degradation and climate change, but adapting infrastructure and building climate resilience in coastal and low-lying areas will safeguards human and natural resources, and protect the poor.
Although Vietnam has weathered the global financial crisis well, destabilising inflationary pressure has been a persistent problem.
National competitiveness is also being held back by a shortage of skilled labour and inadequate infrastructure, while structural rigidities including inefficiencies at State-owned enterprises (SOEs) and a shallow banking system are also part of the problem.
The new strategy will focus support on six core sectors: agriculture and natural resources; education; energy; finance; transport; and water supply and other municipal infrastructure.
It will continue to support structural and policy reforms including SOE reforms, promote inclusive growth by targeting disadvantaged regions, and strengthen the Government's ability to address environmental and climate change challenges.
ADB's support for infrastructure, rural development, and education will help enhance economic opportunities and access to services for poor people, said Groff.
ADB's engagement in public sector management supports policies and institutional reforms aimed at enhancing economic efficiency and improving social services for the poor while minimising the risk of external and internal shocks pushing them back into poverty, he said.