The Asian Development Bank (ADB) and Vietnam have agreed on a new four-year country partnership strategy (CPS) with a focus on promoting sustainable growth and improving economic efficiency.
The new strategy will pay attention to six core sectors, namely agriculture and natural resources; education; energy; finance; transport; and water supply and other urban infrastructure, ADB said on Thursday.
The strategy will continue to support structural and policy reforms, promote inclusive growth by targeting disadvantaged regions, and strengthen the government’s ability to address environmental and climate change challenges. ADB’s support for infrastructure, rural development and education will provide the poor with more economic opportunities and enhance their access to services.
ADB’s engagement in public sector management will support policy and institutional reforms in a bid to boost economic efficiency and improve social services for the poor while minimising the risk of external and internal shocks pushing them back into poverty.
Total loans for the 2013-2015 period are estimated at $2.6 billion from ordinary capital resources and $1.2 billion from the Asian Development Fund. The annual fund for technical assistance could reach $8 million.
Stephen P. Groff, ADB vice president for operations in East Asia, Southeast Asia and the Pacific, said: “Vietnam has experienced rapid GDP growth and remarkable poverty reduction over the past two decades. There are still persisting pockets of poverty, however, and longer-term structural constraints continue to be a concern.”
The aforesaid funds will help Vietnam overcome the challenges that have existed for years, said ADB.
According to ADB, Vietnam has made impressive progress in poverty reduction. However, regional disparities remain, with higher poverty rates among the ethnic minority groups.
The poor are vulnerable to environmental degradation and climate change. Therefore, adapting infrastructure and building climate resilience in coastal and low-lying areas will safeguard human and natural resources, and protect the poor, ADB said.
The regional lender said that although Vietnam had successfully weathered the global financial crisis, inflationary instability remained a thorny problem. In addition, the national competitiveness is being held back by skilled labour shortage, inadequate infrastructure and structural rigidities including inefficient State-owned enterprises and a shallow banking system.