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Viet Nam Signed 3 Loans with ADB for Enhanced Cooperation in "Difficult Times"

HA NOI, VIET NAM (29 December 2008) – The Asian Development Bank (ADB) and the Government of Viet Nam today signed three loans totaling $60.5 million at this year's last loan signing ceremony, confirming the efforts to step up cooperation as 2009 looks to be another difficult year reflecting the global economic slowdown.

State Bank of Viet Nam's Governor Nguyen Van Giau represented the Government, and ADB Country Director for Viet Nam Ayumi Konishi represented the ADB at the signing ceremony.

Three loans signed today were the Support for the Implementation of the Poverty Reduction Program ($25 million), the Supplementary Loan for Emergency Rehabilitation of Calamity Damages project ($25.5 million) and the Development of the Tourism Sector in Greater Mekong Subregion project ($10 million).

"As the New Year, 2009, is just a few days away, I am very pleased to sign these three loans with Governor Giau today," said Konishi at the signing ceremony. "2008 was a very difficult year for Viet Nam, and I believe the Government has done extremely well, particularly in controlling inflation and reducing trade deficit. Given the global economic downturn, however, 2009 will be another difficult year, but Asian Development Bank will continue to give strong support to the Government and people of Viet Nam."

The $25 million loan provides ADB contribution to the "Poverty Reduction Support Credit 7" supported by a number of development partners. The Poverty Reduction Support Credits help the Government of Viet Nam carry out policy reforms needed for the successful implementation of the Socioeconomic Development Plan 2006-2010 by supporting a wide range of policy reforms in the areas of business development, social inclusion, natural resource management, and governance.

The second loan of $25.5 million provides supplementary financing for the currently ongoing project for the rehabilitation of rural infrastructure severely damaged by typhoons and storms in 2005. The project was initially approved in 2006 with an ADB loan of $50.97 million. The rapid increase in construction costs however necessitated additional funding to ensure appropriate rehabilitation of the essential infrastructure to provide their full protective function. Some 450,000 people are expected to benefit from the project through the restoration of essential infrastructure, including roads, flood protection, irrigation systems, and social infrastructure such as schools and water supply.

In parallel with this rural infrastructure rehabilitation project, Viet Nam will also receive a $500,000 grant from the Republic of Korea's "e-Asia and Knowledge Partnership Fund," managed by ADB, to improve disaster preparedness by training staff of the Ministry of Agriculture and Rural Development's Disaster Management Center and the Water Resources University on the use of advanced technology.

Another $10 million loan signed today is to develop sustainable tourism sector in five provinces in Viet Nam including Bac Kan, Cao Bang, Quang Binh, Quang Tri and Thua Thien-Hue, which were selected for their high tourism potential and poverty rates, and are part of the priority zone under the Greater Mekong Subregion Tourism Sector Strategy 2006-2015. The project specifically aims at tapping the new opportunities created by the development of transport corridors in the Greater Mekong Subregion. The project encourages local governments and communities and private sector to work in partnership for developing, operating, and maintaining community tourism facilities. The project also helps preparation of plans for tourism site development and management, training for local communities and private tourism operators, and development of marketing strategies and products.

"As the Government tries to stimulate the economy to ensure that the adverse impact of the global economic slowdown will not affect the poor and the vulnerable groups of people, we believe accelerated implementation of the ODA-assisted projects will be particularly effective. Implementation of the projects provides jobs for the people, and it can also stimulate consumption by those who benefit from the projects," added Konishi.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 67 members – 48 from the region. In 2007, it approved $10.1 billion of loans, $673 million of grant projects, and technical assistance amounting to $243 million.

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