[hepr-vn] WB, SBV signed a US$150 million concessional credit to assist Vietnam

[Vern Weitzel]

WB, SBV signed a US$150 million concessional credit to assist Vietnam
The World Bank also envisages up to US$ 5 billion in support of Vietnam’s 
development in the coming three years.


Available in: Tiếng việt

Contacts:
In Hanoi: Nguyen Hong Ngan  (84-4) 934 6600 – 234
nnguyen5 at worldbank.org


Hanoi, July 29, 2007 – The State Bank of Vietnam and the World Bank in Vietnam 
have today signed the financing agreement and related documents for the Seventh 
Poverty Reduction Support Credit (PRSC 7) worth US$ 150 million in concessional 
credit for Vietnam.   Subject to confirmation, 12 donors are expected to 
co-finance the credit, bringing the total amount of resources channeled to the 
government budget close to US$ 370 million.

“Providing long-term finance is important in these difficult times, when the 
trade deficit of Vietnam is still large and there is considerable turmoil in 
world financial markets” said Martin Rama, acting country director for the World 
Bank in Vietnam. “Together with the generous co-financing provided by other 
donors, this credit will help the government succeed in its efforts to stabilize 
the economy and attain the goals of the Social Economic Development Plan (SEDP) 
2006-2010. PRSC 7 was in fact approved in recognition of the country’s progress 
over the year in business development, social inclusion, natural resources 
management and modern governance, which are also the pillars of Vietnam’s SEDP.”

In business development:  The credit endorses the Government’s establishment of 
consultation and information gathering mechanisms to identify the social and 
environmental impacts of WTO accession.  The Government has also assessed the 
scope and nature of lending and other transactions among affiliated parties 
within Economic Groups and General Corporations.  In financial sector reform, 
the Government has approved equitization plans allowing participation of 
strategic investors for two SOCBs and completed the equitization of one of them. 
  It has also adopted market-based pricing systems to estimate the costs of 
state-funded civil engineering investments.

In social inclusion, PRSC 7 recognizes the Government’s efforts to revise 
tuition fees at secondary and tertiary levels, better reflecting market 
conditions, and enhance policies to protect the poor.  At the same time, a 
health insurance law which better pools risks and allows improved incentives in 
payment to service providers has been submitted to the National Assembly for 
consideration.  A voluntary pension program for farmers and informal sector has 
been introduced, allowing for support for the poor to participate in the 
program.  And the Government has determined institutional responsibilities for 
the implementation of the Gender Equality Law and monitoring of gender equality.

Regarding natural resources management, the guidelines for forest development 
based on participatory land-use planning and independent monitoring have been 
issued.  At the same time, institutional responsibilities for integrated river 
basin management have been assigned.

As for modern governance, the credit acknowledges the Government’s actions in 
establishing criteria for selecting public investment projects and mechanisms to 
monitor their financing and implementation.  It also recognizes the issuance of 
regulations on content and timing of disclosure of audit reports of the State 
Audit of Vietnam, including audit reports of individual entities, as well as 
implementation of an asset declaration requirement for senior officials and 
their immediate families, with penalties for non-compliance.

Subject to confirmation, PRSC 7 is expected to receive further financial support 
from the Asian Development Bank, Australia, Canada, Denmark, the European 
Commission, France, Germany, Ireland, Japan, the Netherlands, Spain, and the 
United Kingdom, bringing the total commitment for PRSC 7 close to 370 million USD.

The World Bank also envisages that up to US$ 5 billion in IDA and IBRD resources 
could be channeled to support Vietnam’s development over the next three years. 
The actual level of commitments will depend, among others, on Vietnam’s progress 
in improving its economic policies and strengthening its institutions.

For more information on the projects, please go to the Projects and Program 
section, on www.worldbank.org/vn

Permanent URL for this page: http://go.worldbank.org/0JOR2UECS0