Vietnam, World Bank sign $221mn loan deal for recovery from COVID-19
Vietnam, World Bank sign $221mn loan deal for recovery from COVID-19
The Vietnamese government and the World Bank have signed an agreement on a US$221.5 million loan to support Vietnam’s recovery from the COVID-19 pandemic through policy reforms aimed at improving financial inclusion and spurring greater environmental resilience.
“In the spirit of our long-term, trusted, and productive partnership, we are proud to support Vietnam at the time when the economy is recovering from the biggest shock of the past decades and when so many uncertainties remain around the pandemic,” said World Bank country director for Vietnam Carolyn Turk was quoted as saying in a press release his bank issued on Monday.
“I believe that the range of policy actions supported by this operation will not only create a strong foundation for the immediate recovery from the COVID-19 crisis but also benefit Vietnam in the longer run.”
The $221.5-million credit package is a budget support operation and includes concessional terms for a period of 30 years with five years’ grace.
It is meant to encourage policy reforms under two pillars.
The first supports an inclusive economic recovery by easing the tax burden on businesses, improving access to financial assistance among vulnerable groups, reducing gender gaps in the workplace, and promoting financial inclusion.
The second pillar helps green trade policies, accelerate the adoption of e-government, and increase the uptake of renewable energy.
The government has moved quickly in recent months on the implementation of these reforms, the World Bank remarked.
The approval of mobile money licenses and the roll-out of electronic invoice systems in the country’s largest municipalities are examples of such reforms, it elaborated.
The pace of reform is expected to speed up as part of the recovery package to be discussed at the lawmaking National Assembly next week.
The credit is to be provided through the World Bank’s International Development Association, which is its concessional lending window for low-income countries.
