ADB launches country partnership strategy for Vietnam

The announcement was released by ADB Country Director for Vietnam, Tomoyuki Kimura at a conference on October 31^st, to launch the bank’s country partnership strategy for the 2012-15 period.

Much success but large challenge

According to ADB’s reports, Vietnam has met with much success over the past two decades.

From 2007 to 2011, Vietnam’s average annual GDP growth rate stood at 6.6 per cent, while per-head GDP rose to $ 1,409 in 2011 from $ 843 in 2007. However, Vietnam is now still in the list of lower middle-income nations.

ADB’s reports also said that Vietnam is on the right track to implement the Millennium Development Goals, of which several goals like the rate of children’s enrolment in primary schools, the death rate of inborn babies and children under 5 years old and maternal healthcare have been achieved before their deadline.

In addition, Vietnam achieved many targets in regard to poverty reduction. While the poverty rate in Vietnam was 58.1 per cent in 1993, it fell to 14.5 per cent in 2008. Vietnam is also seen as a good example of exercising gender equality. The rate of females in the Vietnamese workforce is relatively high and female deputies in the National assembly make up 25.8 per cent, a high rate in the region. What is more, Vietnam has maintained socio-political stability, which has helped the nation focus its all efforts and assets on socio-economic development.

However, ADB also pointed out a number of difficulties and challenges the country has to face.

Although Vietnam enjoyed a comparatively high growth rate in the past, inflation continuously stood at high levels (at about 13 per cent on average in 2007-2011 period) and the competitiveness of the economy was low due to a shortage of skilled workers, lack of infrastructure and obstacles in public administration. In addition, Vietnam is facing a high risk from environmental pollution and climate change.

Focusing assistance on 6 priorities

Within the framework of the bank’s country partnership strategy for the 2012-15 period, ADB pledged to help connect local poor people and other disadvantaged groups to the development process via projects on upgrading infrastructure, rural development, approaching economic resources and supporting education and training opportunities. In addition, ADB will back Vietnam in restructuring the economy, improving policy-making and responding to environmental challenges.

In an effort to bring about the highest efficiency for its assistance and knowledge transfer, ADB will prioritise 6 areas: agriculture and natural resource; education; energy; finance; transport; water supply; infrastructure; and urban services.

ADB will provide a number of channels of assistance, such as loans, investment in shares, technical support and policy consultancy in order to meet the various needs of Vietnam. According to estimates, ADB will earmark $385 million for Vietnam per year in the 2013-2014 period and $395 million in 2015. The amount of funding form ADB in the period of 2013-2014 will depend largely on the effectiveness of the implementation of projects and the bank will also back local private firms in participating in infrastructure projects, according to ADB officials.   

ADB experts affirmed that to respond to financial risks relating to the cost of restructuring the economy and possible inefficiency of the public sector, ADB will strictly monitor the financial impact of the current restructuring process and will regulate its funding and aid programmes and may focus on the management of the public sector. In addition, ADB will help augment abilities for central and local governments in planning investment and implementing projects.