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Viet Nam and ADB Sign Partnership Agreement to Fight Poverty

MANILA, PHILIPPINES (25 February 2002) - Viet Nam and the Asian Development Bank (ADB) confirmed their shared commitment to fight poverty today by signing a landmark Poverty Reduction Partnership Agreement in Hanoi.

Viet Nam has made remarkable progress towards the realization of international development goals, particularly in the areas of poverty reduction and primary education enrolment. Building on this, the agreement, signed by Governor Le Duc Thuy of the State Bank of Viet Nam and ADB Vice President (Operations 1) Myoung-Ho Shin, aims to further reduce the proportion of the country's poor to less than 19 percent of the population from the current level of 32 percent by 2010. This is akin to reducing the share of households below the national poverty line from 17 per cent to 5 percent or less during the same period and is in line with the Government's 10-year objectives.

Close monitoring and analysis of the poverty situation and of achievements against benchmark targets will be a key component of ADB's assistance and ongoing dialogue with the Government. In this spirit, the agreement sets specific, time-bound targets and includes detailed mechanisms to monitor progress. Other goals to be achieved by 2010 include:

• Achieving universal lower secondary education;
• Reducing the maternal mortality rate to 70 per 100,000 live births;
• Raising the domestic private sector's share of total national investment to 11-13 percent;
• Increasing agricultural output and productivity and off-farm employment;
• Introducing competitive wage levels in the public sector;
• Accelerating the growth of rural per capita expenditure in the poorer provinces in the Central Region.

"Today's signing renews ADB's long-term commitment to the country's further development and constitutes a major milestone in our development partnership with the Government and people of Viet Nam, and with other development partners including the private sector and the civil society," said ADB Vice President Shin.

The Poverty Reduction Partnership Agreement is based on the new ADB Country Strategy and Program (CSP), which focuses on four pillars to align ADB operations in Viet Nam to the objective of poverty reduction:

1. Sustainable growth through rural development and private sector development, with a focus on small and medium enterprise development;
2. Inclusive social development, by mainstreaming poverty, gender, and ethnic dimensions in ADB operations, with an emphasis on human capital development through secondary education and health;
3. Good governance, with emphasis on public administration and civil service reform; and
4. Geographic focus on the poorer provinces in the Central Region.

ADB plans to provide concessional, low-interest loans to Viet Nam in the range of $220 million to $280 million per year. The loans will fund projects, including those that promote cooperation and cross-border investment in the Greater Mekong Subregion. Market rate-based loans of up to $60 million annually will also be made available according to need. Furthermore, ADB will provide technical assistance grants of approximately $6 million annually to prepare quality projects and to assist in capacity building and policy development.

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