ADB to help VN quest for higher economic status
ADB to help VN quest for higher economic status
The Asian Development Bank (ADB) yesterday emphasised the institution's continued assistance to Viet Nam and their hope that this would allow the country to reach upper middle-income status.
ADB Country Director for Viet Nam Tomoyuki Kimura made the announcement in a conference launching the organisation's country partnership strategy for the 2012-15 period.
Though Viet Nam has made some major achievements over the past two decades, such as rapid GDP growth and reducing poverty, the ADB has said that the country's development has been constrained by some persistent structural rigidities.
Yumiko Tamura, Principal Country Specialist, said that low productivity, low competitiveness and inefficiency in Viet Nam's economic management were long-term issues caused by skilled labour shortage and infrastructure bottlenecks.
She warned, "Viet Nam is one of the countries most vulnerable to environmental degradation and climate change."
The country's efforts to increase transparency and consistency in economic policies – key to restoring market confidence – also needed to be stepped up, she added.
Meanwhile, as a lower middle-income country, Viet Nam's access to Official Development Assistance (ODA) resources may change in terms of both volume and the types of concessions granted, Kimura said.
"Although this maybe a challenge, we see it as an opportunity for Viet Nam to review the role of ODA in order to ensure its more strategic use. This allows ADB to refocus our assistance programme and enhance co-ordination and collaboration with other development partners."
Throughout the 2012-15 period, ADB will support Viet Nam's target of rising to upper middle-income status through achieving inclusive growth and enhancing economic efficiency and environmental sustainability.
The support provided will be based on principles that align with the priorities of the country's Socio-Economic Development Plan 2011-15, which also intersect with its Socio-Economic Development Strategy up until 2020.
Inclusive growth will be reached by improving infrastructure, rural development, access to economic resources and support to education.
To efficiently improve the economy, ADB plan to continue supporting structural and policy reforms, including those regulating state-owned enterprises (SOE). They will also invest in the strengthening of public sector management and help Viet Nam to adopt clean technology to become more resilient to the impacts of climate change.
The new strategy will focus its support on six core areas in the public sector: education, energy, finance, transport, water supply, and agriculture, natural resources and environment (ANR).
Total suggested lending for the period will amount to US$2.6 billion from ordinary capital resources and $1.2 billion from concessions granted by the Asian Development Fund. Funding for technical assistance will reach $8 million annually.
The transport sector will be the largest beneficiary, receiving 34 per cent of the US$3.8 billion in total. The energy sector comes next with five projects worth $700 million, while the ANR sector will receive $340 million.
"We will also help the Government promote private sector participation in infrastructure projects through various innovative modalities including public private partnership," Kimura said.
"We will continue working closely with the Government, other stakeholders and development partners to help Viet Nam maintain strong reform and restructuring momentum," he added.
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