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ADB will Improve Rural Infrastructure in Northern Region With Japanese Fund

HA NOI, VIETNAM (24 March 2009) - The Asian Development Bank (ADB) and the Government of Viet Nam have signed a $1 million grant agreement, funded by the Government of Japan, to prepare a rural infrastructure project to address poverty in the northern mountain provinces.

Deputy Governor Nguyen Van Binh of the State Bank of Viet Nam represented the Government, and ADB Country Director for Viet Nam Ayumi Konishi represented the ADB. Mr. Tomohiro Fujiyama, First Secretary of the Japanese Embassy and other senior officials of the Government witnessed the ceremony.

Under the grant, a project to provide remote mountain communities in 15 provinces with better access to markets, social services, sub regional trade centers, as well as improved social and environmental management will be formulated.

"As Viet Nam is becoming a middle income country, there is a clear need to invest in more the remote northern mountains, where there is a high level of poverty, especially among the ethnic minority population," said Ayumi Konishi.

The poverty ratios in the northern provinces are much higher than in other parts of the country -nearly three times as compared to the national average which has come down to 15%. The problem is felt even more acutely by the ethnic minority population. The region is also vulnerable to extreme weather conditions and flooding.

The Government of Viet Nam is keen to reduce poverty in the northern mountain region. In its 5-year Socio-Economic Development Plan (SEDP) 2006-2010, the Government is aiming at doubling per capita income in the region. To achieve this, rural infrastructure such as irrigation, transport, and clean water supply to promote agriculture and rural development is identified as a priority focus of investment.

"Both ADB and the Government of Viet Nam appreciate the importance of an efficient and functioning rural infrastructure as a foundation for broader socio-economic growth and poverty reduction," said Mr. Konishi.

The grant was sourced from the Japan Special Fund, which was established in 1988 when Japan and ADB agreed to provide financial support for ADB's technical assistance program in the form of an untied grant.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.

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