ADB, Viet Nam to Focus on Inclusive Growth and Economic Efficiency

MANILA, PHILIPPINES – The Asian Development Bank (ADB) and Viet Nam have agreed on a new four year country partnership strategy (CPS) that will focus on promoting inclusive and sustainable growth, and economic efficiency.

“Viet Nam has experienced rapid GDP growth and remarkable poverty reduction over the past two decades. There are still persisting pockets of poverty, however, and longer-term structural constraints continue to be a concern,” said Stephen P. Groff, ADB Vice-President for Operations in East Asia, Southeast Asia and the Pacific.

While Viet Nam has made impressive progress in reducing poverty, regional disparities remain, with poverty most among ethnic minority groups. The poor are vulnerable to environmental degradation and climate change. Adapting infrastructure and building climate resilience in coastal and low-lying areas will safeguards human and natural resources, and protect the poor.

Although Viet Nam has weathered the global financial crisis well, destabilizing inflationary pressure has been a persistent problem. National competitiveness is also being held back by shortage of skilled labor and inadequate infrastructure and structural rigidities including inefficiencies in state-owned enterprises (SOEs) and a shallow banking system.

The new strategy will focus support on six core sectors: agriculture and natural resources; education; energy; finance; transport; and water supply and other municipal infrastructure. It will continue to support structural and policy reforms including SOE reforms, promote inclusive growth by targeting disadvantaged regions, and strengthen the government’s ability to address environmental and climate change challenges. ADB’s support for infrastructure, rural development, and education will help enhance the poor’s economic opportunities and access to services.

ADB’s engagement in public sector management supports policy and institutional reforms for enhancing economic efficiency and improving social services for the poor while minimizing the risk of external and internal shocks pushing them back into poverty.

Planning figures suggest total lending for 2013-2015 could amount to $2.6 billion from ordinary capital resources and $1.2 billion from concessional Asian Development Fund. Funding for technical assistance could reach $8 million annually.