“Asian Development Bank (ADB) and the Government of Vietnam signed three loan agreements worth US$210 million to support Vietnam’s rural areas through improvements in infrastructure, transport connectivity and communicable disease control.” This is only one of many ADB’s support projects for Vietnam in the past years, which positively contributed to the socioeconomic development of Vietnam.
Important infrastructure and rural projects
Vietnam officially joined ADB in 1966 but the ties broke up from 1979 to 1992 before being resumed in October 1993. From 1993 to March 2011, ADB approved 114 sovereign loans worth US$9.09 billion for the Government of Vietnam, one sovereign guarantee valued at US$325 million, 255 technical assistance projects valued at US$199.5 million, and 26 other grants worth US$150.1 million. Vietnam is also involved in a number of regional technical assistance projects for the Greater Mekong Subregion (GMS). At present, the country is one of the largest recipients of resources from the Asian Development Fund (ADF). It is also an important borrower of ordinary capital resources (OCR).
ADB’s operations initially focused on rehabilitation and support to economic reforms and supported the government’s targeted efforts. The adoption of result-based management method in the Country Strategy and Programme (CSP) will provide a more objective assessment and generate more effective development result for Vietnam on the path to the future.
In the area of infrastructure, the importance of ADB’s support is borne out by the country’s economic transformation and the rapid increase in foreign and domestic investment in manufacturing. In particular, economic activities that have developed along key transport corridors following upgrading of Hanoi - Lang Son Highway, East West Economic Corridor, and Hanoi - Phnom Penh Highway have helped generate employment and significantly reduce poverty in those areas. ADB is also helping to address inadequate power supply - a critical constraint to continued economic growth - with investments in hydropower, thermal power, renewable energy, biogas and transmission networks.
ADB assistance in rural development and irrigation has helped raise agricultural productivity and farmers’ incomes through improved access to markets and inputs, diversification of high-value crops, and improved water resources management practices.
ADB’s assistance also has had an impact in social areas, such as in preventive health care, cross-border disease control, and in secondary and professional education. ADB has helped the government upgrade the quality of public officials through training and the modernization of public administration, and it has supported the government’s fight against corruption and efforts to improve gender equality. ADB is helping change the basic framework of civil service administration from “input-based control” to “output-based management.”
Although ADB assistance has been a small share of the government’s overall capital spending, ADB is considered a trusted development partner that has, over the years, contributed substantial concessional funds for the country’s socioeconomic development through financing infrastructure, strengthening capacities, safeguarding procedures, and improving processes to move Vietnam along the transition path. ADB has contributed to Vietnam’s rapid economic growth and improved living standards by providing assistance for inclusive social development, sustainable and renewable natural resources, and management for protection of the environment.
In addition to financing programmes and projects, ADB provided Vietnam with 229 non-refundable technical assistance programmes valued at US$116.9 million, of which two-thirds have been finished and brought in practical results and benefits for Vietnam. Aside from above fields, ADB is willing to cooperate with Vietnam in education.
ADB is considering increasing loans for Vietnam to US$2 billion in the coming time.
ADB’s diverse supports have helped Vietnam develop infrastructure, create jobs, increase agricultural productivity and farmers’ incomes, modernise public administration, develop private sector through policy-based lending and the development of nonbank financial institutions, fight fight against corruption and improve gender equality.
ADB’s diverse supports have helped Vietnam develop infrastructure, create jobs, increase agricultural productivity and farmers’ incomes, modernise public administration, develop private sector through policy-based lending and the development of nonbank financial institutions, fight against corruption and improve gender equality.
Supporting Country Development Strategy toward rapid response direction
At present, the Country Strategy and Programme (CSP) is a primary planning instrument to define ADB’s operations in developing member countries (DMC), and is a monitoring tool for CSP implementation.
CSP defines prioritised fields, fields that ADB can support the country’s development goals and strategies towards rapid-response, reasonable and result-based approach, with close consultation with the government, development partners and other stakeholders. CSP fits the country’s planning cycle, usually five years, and successive operating plans based on three-year adjustment basis. CSP term and direction can change, basing on mid-term evaluations and specific conditions of each country.
ADB’s operations were oriented by the Interim Operational Strategy (IOS) since 1993, the Country Operational Strategy (COS) in 1993-1995, and the Country Programme and Strategy in 1996-2000, 2002-2004 and 2007-2010. ADB’s CSP in 2007-2010 stage was fully aligned with the Government’s Socio-Economic Development Plan (SEDP) 2006-2010.
According to CSP 2007-2010, ADB’s objective is to support the Government of Vietnam to reduce poverty rate to some 10-11 percent in 2010. ADB also aims to assist the Government of Vietnam to pursue pro-poor, business-led growth, as well as social inclusiveness, environmental sustainability, good governance, and regional cooperation.
Besides, regional cooperation through GMS programmes will help develop cross-border trade and new economic opportunities in otherwise isolated border areas, and address cross-border concerns such as communicable diseases and adverse development impacts.
CSP 2007 - 2010 includes a sector focus on the link between natural resource depletion and poverty reduction through water and coastal resource management. ADB will help improve urban development and planning in selected cities. Support will be provided to improve public services outside the major cities to help avoid the urban problems associated with rapid growth in mega-cities elsewhere in Asia. Efforts will be made to encourage private sector investments in mass transport and other urban environment improvement initiatives, including a clean water and wastewater financing program.
CSP formulated a list of sectors and subsectors fitting Vietnam’s Socio-Economic Development Strategy and classified priorities basing on the medium-term Strategy 2 and ADB’s comparative advantages as a regional development bank.
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