WB makes huge loans to fuel Vietnam growth

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WB makes huge loans to fuel Vietnam growth

The World Bank (WB) has announced preferential loans worth more than US$3.8 billion from the International Development Association (IDA) for Vietnam within the next three years.

WB Group President Jim Yong Kim made the announcement at a news briefing in Hanoi on July 17. Vietnam is one of the two nations to receive such large loans from the WB’s IDA, an international financial institution which offers concessional loans and grants to the world’s poorest developing countries.

Vietnam and the global lender have agreed to conduct a joint study that will recommend policy actions to speed up economic growth in Vietnam in the coming years, putting it on the track to become a modern industrialized country within a generation.

The study would look into what Vietnam will need to change to build sustainable and inclusive growth and join the ranks of high-income countries.

It will also look at the steps Vietnam should to take to boost trade and competitiveness as well as to improve the business and investment climate to attract more foreign and domestic private investment, Kim said.

Prime Minister Nguyen Tan Dung and the WB president agreed to complete the study within one year.

With PM Dung witnessing, Kim and the central bank’s governor Nguyen Van Binh signed a loan agreement worth US$876 million for five programs and projects.

Vietnam can return to higher growth rates if it makes the bold reforms needed in the financial sector and in State-owned enterprises with greater transparency and accountability, Kim said.

Applauding the achievements made by Vietnam, he said the WB would help Vietnam effectively use public and private resources to reach its goals.

Besides, the WB hopes to cooperate with other development partners of Vietnam such as the Japan International Cooperation Agency (JICA) to guarantee that the assistance will be monitored effectively.

The WB also expects to strengthen cooperation with Vietnam in the restructuring of State businesses, implementation of the public-private partnership, climate change adaptation, new energy, health services and social security.

PM Dung thanked the WB for its financial support, saying the Vietnamese Government will use the WB’s loans for the nation’s sustainable development.

Dung also approved cooperation proposals by the WB president and suggested the lending institution to enable Vietnam to gain access to its other capital resources.

Dung proposed the WB assist Vietnam in reducing poverty among ethnic minority groups, developing forests as coastal breakwaters, upgrading fishing boats, easing overloads at hospitals, improving people’s lives and fulfilling the Millennium Goal on poverty reduction.

Earlier, during a meeting with State President Truong Tan Sang, Kim said Vietnam has opportunities to become an industrialized country and the WB was keen to cooperate with Vietnam to work out a comprehensive and effective development strategy.

As one of the countries most vulnerable to climate change, Vietnam is carrying out a number of programs and projects on disaster prevention, environmental protection and clean energy. Therefore, Vietnam wants to boost fruitful cooperation with the WB to achieve the best results, Sang said.

Early this month, the WB approved two credit packages worth US$270 million for Vietnam to improve its electricity industry and enhance capacity to cope with climate change.

Of these, US$200 million will be used to support the third reformed electricity policy. It includes the operation of a competitive production electricity market to promote a transparent electricity pricing system.

The US$70-million credit package will help Vietnamese government strengthen its climate change resistance and low-carbon growth.

In June, the WB announced to provide US$2 billion for 30 cities in Vietnam to carry out urban development and management, institution and infrastructure construction projects.

Dung Thao - http://english.thesaigontimes.vn