HA NOI — Representatives of the Asian Development Bank (ADB) and the Government of Viet Nam yesterday signed a US$24.8 million loan agreement to support policy reforms for fostering inclusive economic growth.
The ADB Country Director for Viet Nam, Tomoyuki Kimura, said at the signing ceremony that poverty reduction could not be sustained without this growth.
The new loan will help accelerate reforms to strengthen institutional and human capacity, governance, and policies to address development challenges and to promote economic growth.
As a result of rapid economic growth and improved social protection programmes, Viet Nam's poverty rate declined from 15.5 per cent in 2006 to 9.5 per cent in 2010.
However, some groups remain vulnerable. For example, poverty incidence among ethnic minority groups was more than 50 per cent in 2009.
The ADB said that high inflation caused by macro-economic imbalances had eroded some progress in poverty reduction.
The loan provides parallel financing to the Poverty Reduction Support Credit framework supported by several development partners.
Support credit is expected to help Viet Nam carry out a wide range of policy reforms in business development, social inclusion, natural-resource management, and governance to ensure successful implementation of the 10-year Socio-Economic Development Strategy 2011-20, and the Socio-Economic Development Plan 2011-15.
"The root causes of macro-economic instability can be addressed only by deepening the finance sector, imposing market discipline on State-owned enterprises, and improving the efficiency of public investments," added Kimura. — VNS