The strategy provides support for strengthening the institutions necessary to facilitate and safeguard a more complex and diverse economy with initiatives ranging from the regulation of infrastructure to social insurance to the development of modern planning and budget systems, according to Jim Adams, new general vice president for East Asia Pacific.

He said the strategy will focus on (i) improving the business environment, (ii) strengthening social inclusion, (iii) better managing natural resources and the environment, and (iv) improving governance.

“Vietnam stands out as an example of a development model that has lifted millions of people out of poverty while ensuring the benefits of its vibrant market economy are fairly evenly distributed across society,” said Mr Adams.

Through the International Development Association (IDA), which provides credits to the world’s poorest countries, the World Bank will focus resources on areas key to helping Vietnam implement its own five-year socio-economic development plan (SEDP). The plan aims to further reduce the poverty rate while moving the country towards the goal of attaining middle income status by 2010.

According to Phung Khac Ke, deputy governor of the State Bank of Vietnam, the World Bank has been an important partner of Vietnam over the past 13 years.   

“Besides substantial financial resources, the World Bank has played a vital role in bringing the Government and donors together around a reform roadmap under which Vietnam is moving towards the completion of its transition to a market economy,” said Mr Ke.

The World Bank has acknowledged Vietnam’s outstanding achievements in its summary report on the national development support strategy for Vietnam in the 2003-2006 period. Accordingly, the national economy grew 7.8 percent in the 2002-2005 period; exports made up 61 percent of total GDP, an increase of 47 percent against 2001; and the poverty rate dropped from 29 percent in 2002 to 19.5 percent in 2004. Human development index, including education development index and child morality rate, improved significantly. Notably, several Vietnam’s Millennium Development Goals were fulfilled ahead of schedule.

However, the strategy indicated that poverty continues to be widespread in Vietnam, particularly in rural areas where the poverty rate stands at 25 percent compared to 4 percent in urban areas. Poverty also remains retrenched for the country’s ethnic minority groups which represent just 13 percent of the population, but 39 percent of the poor.

Since 1993, the International Development Association has provided US$6 billion in interest-free credits and grants to help Vietnam sustain growth and fight poverty. The funding has been used to build road and other vital infrastructure facilities, provide electricity for millions of rural people, improve the quality of education system, expand farm production and provide access to basic services such as safe water for three million poor people in urban areas.