MaximsNewsNetwork: VIETNAM $500 MILLION DEVELOPMENT POLICY LOAN (WORLD BANK)

MaximsNewsNetwork: 23 December 2009 – World Bank: Vietnam – Vietnam’s goal to reach middle-income status by 2010 moved a step closer today following the approval by the World Bank’s Board of a $500 million development policy loan that will support the country’s stimulus program and drive a major program of public investment reforms.

Vietnam gets its first loan from the International Bank for Reconstruction and Development (IBRD), a low-interest lending arm of the World Bank aimed at reducing poverty in middle income and creditworthy poorer countries. Until now, support to Vietnam has come from the World Banks International Development Association (IDA) which provides credits and grants to the worlds poorest countries.

SOUNDBITE (English) Jim Adams, Vice President for the East Asia & Pacific region, World Bank:
This is an important milestone for Vietnam, when Vietnam first began borrowing 15 years ago from the Bank it was a very poor low income country, facing enormous challenges. Because it has followed good economic policies and implemented its program well, we now view it as eligible for lending from the Bank and this will allow Vietnam to increase its overall borrowing from the bank and have a more effective investment program.

The loan, the first of an expected two, is the Banks direct response to a request from the Government of Vietnam for resources to support its stimulus package which has been helping to sustain economic activity throughout the economic crisis.

Over the last two years, Vietnam has experienced a succession of shocks starting with massive capital inflows in 2007, a surge in commodity prices in 2008 and export declines as a result of the global economic crisis. Stimulus measures adopted in late 2008 and supplemented in early 2009 contributed to a growth rate of 4.6 percent for the first nine months of 2009.

SOUNDBITE (English) Victoria Kwakwa, Vietnam Country Director, World Bank:
The loan is in support of a program of public investment reforms in Vietnam, Vietnam has a pretty decent record of how it has managed it public investments. As it reaches middle income status, the investment financing needs and the investment needs are significantly larger, and this means that a lot more attention needs to be paid to ensuring that public resources are used as efficiently as possible in delivering these investments, and so this program of reforms will support efforts to strengthen the whole investment cycle, from the planning, to the preparing to the implementation.

The reform program will target environmental screening of publicly funded infrastructure projects, environmental management, project preparation and appraisal, procurement, public financial management, the regulatory framework for private participation in infrastructure and monitoring and evaluation.

Todays loan approval builds on the recent Country Partnership Strategy Progress report which was approved by the Bank’s Board last November. The report highlights a number of new areas of engagement for the World Bank Group in Vietnam that are in line with evolving Government priorities, including further financial support for Vietnams natural disaster response and the development of a framework for public-private partnerships. …………………………………………………………………………………………………………………………………………………… ( THE WORLD BANK ) …………………………………………………………………………………………………………………………………………………… MaximsNewsNetwork:
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