ADB pledges support for ‘crucial’ Vietnam development

20 Jun 16

The Asian Development Bank is set to promote more inclusive and environmentally sustainable growth in Vietnam, after the bank’s president commended the country’s performance and reforms.

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Hanoi, Vietnam's capital city

Hanoi, Vietnam's capital city

 

During a visit to the country last week, ADB president Takehiko Nakao reaffirmed that the bank will continue lending around $1bn per year to Vietnam as part of its new country strategy, which is currently being developed and will run from 2016-20.

Nakao said it is “crucial” that Vietnam continue pursuing “sound economic policies” and deeper structural reforms.

“It is particularly important to reform state-owned enterprises by reducing the state’s ownership, improving corporate governance, and strengthening financial performance,” he added.

“The government also needs to resolve non-performing loans, strengthen tax revenues and improve efficiency of public expenditures.”

The ADB estimates Vietnam’s growth rate for this year will remain unchanged on 2015, at 6.7%, and will slow to 6.5% in 2017. But it warned that severe drought threatens the outlook.

Some regions of the country have seen their worst water shortages in a century, induced at least in part by this year’s strong El Niño weather pattern, which has sparked extreme weather around the world.

The bank noted that Vietnam is increasingly susceptible to climate-related disasters, and said that adaptation and mitigation will also be crucial focus areas for its loans and technical assistance.

“ADB will help the government set clear and consistent policies on an appropriate energy mix to pursue [Vietnam’s] COP21 commitments based on careful cost analysis of different energy sources,” it added.

The bank will also help Vietnam to achieve the UN’s Sustainable Development Goals, and with the construction of infrastructure – spanning the transport, water and energy sectors.

Last week, the World Bank also urged Vietnam to improve migrants’ access to public services, which it said would support growth and economic transformation. 

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