World Bank issues $150 mln loan to give Vietnam competitive edge

May 13, 2016 | 01:55 pm GMT+7
World Bank issues $150 mln loan to give Vietnam competitive edge

The World Bank has decided to issue an $150 million loan for structural reforms in Vietnam, the bank said on Friday.

The loan will support the Vietnamese government's socio-economic development plan aimed at macroeconomic stablity, public sector governance and an improvemed business environment, the World Bank said in a statement.

"With this third operation, the World Bank continues its support to enhance Vietnam’s competitiveness thereby laying the foundation for future growth and prosperity." said Achim Fock, the World Bank’s Acting Country Director for Vietnam.

"During the last five years, there has been steady progress in advancing structural reforms in critical areas such as the banking sector, management of state-owned enterprises and the business climate. These reforms need to be sustained during the implementation of the new five-year plan 2011-2016 to unlock Vietnam’s full growth potential," he added.

The 29 1/2-year loan in dollars with a 10-year grace period financed by the World Bank’s International Bank for Reconstruction and Development, the financing window for middle-income countries, will be disbursed in several tranches.

According to the World Bank, the loan will provide a flexible budget for the Vietnamese government to:

(i) Maintain macroeconomic stability. Strengthening financial sector governance and fiscal management, including policies for non-performing loans and promoting the restructuring of banks, and debt and treasury management.

(ii) Create a more transparent, efficient and accountable public sector. Strengthening public administration, state-owned enterprise management and public investment management for more transparency and improved regulatory environment.

(iii) Improve the business environment. Reducing administrative burdens and strengthening tax and procurement policies, including streamlined administrative procedures.

The loan concludes a series of three from the World Bank, registered as EMCC. 

The first loan supported a number of pieces of legislation and government decisions to promote reforms including prime ministerial decisions to restructure general corporations and state economic groups; strengthen supervision in the banking sector and the institutional framework for debt management. The laws on tax administration and anti-corruption were amended to introduce new provisions aimed at improving public administration.

The second loan built on those to promote increased foreign participation in the banking sector and adopt a plan to address non-performing loans; strengthen medium-term debt management and improve the efficiency of public financial management; promote restructuring of state economic groups and improve transparency in state-owned enterprises; and strengthen the legal framework for public procurement, value-added tax and corporate income tax.

 
 
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