"Vietnam Has Been One of Fastest Expanding Economies in Asia"

“Vietnam has sharply reduced poverty and improved living standards over the past two decades and progressed towards Middle Income Country status, and the Asian Development Bank (ADB) fully supports its drive to create sustainable growth that benefits all,” ADB President Haruhiko Kuroda said a press conference in Hanoi on his three-day visit ahead of ADB's upcoming Annual Meeting of Board of Governors, which will run from May 3 to 6, 2011 in the capital city of Vietnam.

 

“Vietnam is one of ADB's founding members and a very strong partner in the region's development,” said Mr Kuroda.

 

One of the most important achievements Vietnam has made is poverty reduction. Poverty levels fell from over 58 percent in 1993 to just about 10 percent by the end of 2010. Mr Kuroda said there are certainly many challenges ahead, including avoiding the “middle income trap.” And while rapid economic growth in recent years has clearly brought a higher living standard for Vietnamese people, millions of people still have no access to essential services. In this regard, Mr Kuroda expressed his pleasure with the ADB’s approval of a US$1 billion financial support facility that will help improve clean water access for 3 million families in Vietnam, including 500,000 poor households who will receive their own piped water connection for the first time.

 

Mr Kuroda said Vietnam has been one of the fastest expanding economies in Asia over the past 20 years, driven by exports, foreign investment, and a growing private sector. It has rallied quickly from the global financial crisis, supported by timely stimulus measures.

 

The country has also played an important role in the ADB-supported Greater Mekong Subregion (GMS) Economic Cooperation Programme. As one of just two countries in the six-nation GMS group to have links to all three economic corridors under the programme, it has helped foster trade, tourism, and investment across the region.

 

“The GMS programme has become a showcase for regional cooperation and Vietnam has been an enthusiastic partner," said Mr Kuroda.

 

Vietnam’s ascension to Middle Income Country status signals a bright future, but in the short term it is facing challenges to macroeconomic stability, such as high inflation. Vietnam needs to keep tabs on inflation as global goods prices are anticipated to rise this year. Inflation curbing will require some policy adjustments, Mr Kuroda said, adding that further economic reforms, such as those being carried out in the state-owned enterprises sector, are also necessary to secure longer term inclusive growth.