Deputy Minister of Finance Võ Thành Hưng and Chief Representative of JICA Việt Nam Sugano Yuichi signed three loan agreements worth nearly 61 billion yen on Tuesday in Hà Nội. — Photo courtesy of JICA Việt Nam

HÀ NỘI — The Japan International Cooperation Agency (JICA) on Tuesday signed three loan agreements with the Government of Việt Nam to provide an Official Development Assistance (ODA) loan of up to JPY60.983 billion (US$422 million) for the country’s post-COVID recovery and key infrastructure projects.

Of this, 50 billion yen (roughly VNĐ8.750 trillion) is for the General Budget Support Programme focussed on the economic recovery and development of Việt Nam Post-COVID-19.

A further 6.244 billion yen (roughly VNĐ1.093 trillion) is for the Public Transport Infrastructure Improvement Project in the southern province of Bình Dương, while 4.74 billion yen (roughly VNĐ829 billion) is for upgrading infrastructure and agriculture in the southern province of Lâm Đồng.

The signing of the loan agreements marks another milestone to celebrate the 50th anniversary of diplomatic relations between Japan and Việt Nam.

Post-COVID recovery

Though Việt Nam’s economy maintained good performance during the pandemic, the aftershock has gradually undermined the strength and resilience of economic and social resources, particularly for vulnerable people and working forces.

There are challenges ahead for an open economy like Việt Nam, with a trade/GDP ratio of about 180 per cent.

Global decline in growth and demand, financial sector stress and high inflation in major economies makes it harder for the Government of Việt Nam to protect vulnerable groups, maintain good economic records and promote overall social development in the post-COVID years.

Low GDP growth rates recorded in the first quarters of 2023 (3.32 per cent and 3.72 per cent, respectively) suggest the importance of government interventions and public spending to stimulate the economy.

The general budget support, passed by the National Assembly in early 2022, aims at providing the Government of Việt Nam funding for recovery and development programmes in the post-pandemic period. 

Infrastructure projects

The industrial province of Bình Dương has seen a significant increase in population and rapid urbanisation.

The Public Transport Infrastructure Improvement Project in the province seeks to alleviate traffic congestion and enhance connectivity among cities by improving traffic infrastructure between Bình Dương New City and Suối Tiên Terminal of the HCM City Urban Railway Line 1.

Lâm Đồng Province meanwhile is endowed with favourable natural conditions for agricultural development.

The province leaders have determined to develop the province as an advanced agricultural centre in the Central Highlands.

The Medium and Long-term Vision for Việt Nam-Japan Agricultural Cooperation (Phase 1: 2015-2019, Phase 2: 2020-2024) has been established to strengthen food value chains in Việt Nam. The vision stipulates specific initiatives to promote the development of infrastructure related to agriculture, and Lâm Đồng Province is one of the model areas in the vision.

The project in Lâm Đồng has been formulated to transform the agricultural sector in the province through infrastructure including new road networks, irrigation systems and a Flower Collection Centre to improve the income of farmers and industrialise the agricultural sector.

The project is a significant model for agricultural cooperation between Việt Nam and Japan, JICA noted. — VNS