WB credits for Vietnam to be less concessional

The relationship between the Government of Vietnam and the WB will enter into a new chapter as the country can no longer gain access to IDA loans from June 2017. The International Development Association (IDA) of the WB supports the world’s poorest countries to reduce poverty by providing credits and grants for programs that fuel economic growth, reduce inequalities and improve people’s living conditions.

In the coming years Vietnam can only take out IBRD and IDA+ credits from the WB that are less concessional, according to the draft CPF for fiscal years from 2017 to 2022, which was discussed at a consultative workshop in HCMC recently.

The new CPF is based on the Systematic Country Diagnosis (SCD) reports by the international development lender in 2016, the Vietnam 2035 report done by the WB in collaboration with the Government of Vietnam, and Vietnam’s Socio-Economic Development Plan for 2016-2020.

For the previous CPFs, the WB has been assisting Vietnam with poverty reduction, infrastructure development, access to basic services, job creation and economic growth. For the upcoming CPF, the WB will support Vietnam in the transition to a new development model which centers on improving labor productivity to ensure sustainable development.

The WB proposes the new CPF should put emphasis on the state-market relationship, government efficiency, decision-making transparency, allocation of resources, legal reform, public asset management and public service provision.

The new CPF will have three other matters of concern. First, it will promote comprehensive growth and encourage the participation of the private sector to improve the business environment, strengthen economic management and market institutions, develop efficient infrastructure, and support urban-rural conversion and agricultural transformation.

Second, it will invest in human and intellectual resources to enhance education quality and training capacity, ensure quality welfare and affordable health care, give more opportunities to vulnerable groups and ethnic minorities, and promote gender equality.

Third, it will develop sustainably in environment aspect and enhance resilience. To do so, it will be necessary to effectively use and manage resources, prevent water shortages and boost the ability to cope with climate change, improve the efficiency of electricity and energy use, and cushion pollution and disaster consequences.

The WB's total aid pledged for Vietnam in 2017-2022 is about US$35 billion, particularly for clean water, transportation, information technology, infrastructure and energy.