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ADB to Help Thanh Hoa to Reduce Peri-Urban Poverty

Hanoi, Viet Nam (20 June 2008) – At a ceremony held today at the State Bank of Viet Nam (SBV), a grant agreement for $2 million was signed for an ADB project to help Thanh Hoa Province and Thanh Hoa City to reduce urban poverty in the peri-urban areas.

The grant is financed from the Japan Fund for Poverty Reduction, funded by the Government of Japan. The agreement was signed by Deputy Governor Nguyen Van Binh of SBV on behalf of the Government of Viet Nam, Vice Chairman Le The Bac of Thanh Hoa Provincial People's Committee and Mr. Ayumi Konishi, ADB Country Director for Viet Nam in the presence of Counsellor Hiroshi Manabe of the Japanese Embassy.

The project will help communities to develop small scale infrastructure at the commune level, such as access roads, waste collection, piped water supply, drainage, and health center. The project activities will also include the preparation of a grant implementation manual, training of the communities in selecting projects components, and development of the monitoring and evaluation framework. The intention is to develop a model for community-led poverty reduction efforts for possible upscaling to other cities and provinces. The provincial government and the communities will contribute between 10% and 20% of the project costs. The Thanh Hoa Provincial People's Committee will be the Executing Agency of the project.

"If steps are not taken to strengthen the development of the city and the province, the increasing urban migration will put further pressure on Thanh Hoa City. The project objective is to empower community-based organizations in the peri-urban areas to access grant financing to implement small-scale infrastructure projects." says Ayumi Konishi, ADB Country Director for Viet Nam.

"While infrastructure development is important, it should be supplemented by capacity-building of local communities. Japan is proud of helping ADB in Viet Nam to undertake this project with its grant assistance." says Hiroshi Manabe, Counsellor of the Japanese Embassy.

The grant will be implemented over 4 years. There is a parallel large scale project currently under preparation for the comprehensive development of the Thanh Hoa City. It is expected that the two projects will complement each other to address infrastructure gaps in the city, contribute to improve living conditions and reduce poverty in urban and peri-urban areas. The People's Committees of Thanh Hoa City and Thanh Hoa Province aim to raise access to infrastructure and improve basic urban services. Both projects are building on Thanh Hoa's competitive advantages as the Thanh Hoa Province is becoming a growth center with strong local economic development, and Thanh Hoa City becoming a more competitive city with improved infrastructure.

Thanh Hoa Province (THP), the fourth largest province in Viet Nam, has an area of 11,168 km2 and a population of 3.7 million people, whereby only 9.8% live in urban areas. THP is the second densest province in terms of population, the second poorest in Viet Nam, with a poverty level of 36% (2006) and a gross domestic product (GDP) per capita half of that of the national average. The capital Thanh Hoa City (THC) has a population of 197,511 (2006), majority of whom have only low-level skills.

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