The World Bank will provide an interest-free long-term credit valued over US$800 million a year for Vietnam in the 2007-2011 period, totalling US$4 billion in five years. Mr James Adam, WB Vice President for Asia and the Pacific, revealed these figures at the meeting announcing the new WB strategic partnership with the country from 2007 to 2011.
According to Mr Adam, Vietnam is not only the donation recipient but has become a “partner” of the WB. This proves the higher position of Vietnam on the international arena. The World Bank’s Country Partnership Strategy for Vietnam provides support for strengthening institutions necessary for facilitating and safeguarding a more complex and diverse economy. Four possibly WB-supported fields are business environment improvement; social harmonisation enhancement; better environment and natural resource management; and better governance.
According to Mr Adam, Vietnam’s development strategy stood out as an example for lifting millions of people out of poverty and distributing the benefits of its vibrant market economy fairly evenly across society. The poverty rate was reduced from 58 per cent in 1993 to below 20 per cent in 2004. “Vietnam is clearly aware of upcoming challenges and its efforts to grow from a low-income earner to medium income earner require strong leadership as well as support from the development community,” Mr Adam said. “The approaching method of the Government is aimed to ensure a common development direction of its partners.”
“The World Bank has been an important partner in Vietnam’s development over the past 13 years,” said Deputy Governor of the State Bank of Vietnam (SBV) Phung Khac Ke. “Beyond the very substantial financial resources the Bank has provided, it has also played a vital role in bringing the Government and a growing number of donors together around one roadmap for reforms, as Viet Nam moves towards the completion of its transition to a market economy,” he said.
However, the strategy also points out that poverty and hunger still exists in many places and especially in rural areas (the poverty rate is 25 per cent in rural areas and 4 per cent in urban zones.) Poverty and hunger are still besetting ethnic minorities. Although ethnic minorities account for only 13 per cent of the country’s total population, they make up 39 per cent of total poor people. In urban areas, poverty is still present in many places, especially where people from rural areas are living.
Adam said the World Bank will seek to focus on next generation reforms required to improve Viet Nam’s competitiveness and integration into the world economy, while also providing support for good governance, modern social protection systems, better environmental management and improved infrastructure. “Picking up the pace of Viet Nam’s banking and anticorruption reforms, which have lagged behind other reforms, will be especially important.”
Since the World Bank returned to Vietnam in 1993, the International Development Association (IDA) granted some US$6 billion interest-free and non-refundable credits for Vietnam’s development and poverty reduction.
The IDA funds have been used for various purposes, including building roads and other vital infrastructure, connecting millions of rural people to the electricity grid, improving the quality of the education system, expanding farm production, and providing access to basic services such as running water for close to 3 million poor people in urban areas.
Quynh Chi
Vietnamese
