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Country Partnership Strategy (2007-2011)

World Bank to provide over US$4 billion in credits to Vietnam
under new partnership strategy

February 6, 2007----The World Bank announced today that it expects to provide over $US800 million a year in long-term interest-free credits to support Vietnam over the next five years as it builds on its development achievements of the past 15 years. This represents more than $4 billion in support for Vietnam from 2007 to 2011.

Launching the World Bank’s Country Partnership Strategy for Vietnam, the new regional vice president for East Asia Pacific, Mr Jim Adams, said Vietnam stood out as an example of a development model that has lifted millions of people out of poverty while ensuring the benefits of its vibrant market economy are fairly evenly distributed across society.

Mr Adams said that through its concessional lending arm, the International Development Association (IDA) – which provides credits to the world’s poorest countries – the World Bank will focus resources on areas key to supporting Vietnam to implement its own five-year Socio-Economic Development Plan (SEDP). The SEDP aims to further reduce levels of poverty while moving the country towards the goal of attaining middle income status by 2010.

KEY RESOURCES
New Country Partnership Strategy 2007-2011 (17MB pdf)
Request a print version of the CPS at the Vietnam Development Information Center.
PAST PAPERS
Vietnam - Country assistance strategy 2003-2006
Vietnam - Country assistance strategy progress report 2001
Vietnam Country Assistance Evaluation - 2001
Vietnam - Country assistance strategy progress report 2000
Vietnam - Country Assistance Strategy 1999-2001 
Main World Bank CAS Website
The Bank’s Country Partnership Strategy provides support for strengthening the institutions necessary to facilitate and safeguard a more complex and diverse economy – with initiatives ranging from the regulation of infrastructure to social insurance to the development of modern planning and budget systems.

The four proposed areas for engagement are:

  1. improving the business environment;
  2. strengthening social inclusion;
  3. better managing natural resources and the environment; and
  4. improving governance.

“Vietnam is well aware that major challenges remain and that its effort to move from a low-income country to one with middle income status will require strong leadership as well as support from the development community,” said Mr. Adams. “The Government’s partnership approach is leading the way in ensuring that all of Vietnam’s partners are working towards the goal in a harmonized way.”

The Country Partnership Strategy, which covers the period from 2007 to 2011, was launched in Hanoi in the presence of the Deputy Governor of the State Bank of Vietnam H.E. Mr Phung Khac Ke. It came during the Third International Roundtable on Managing for Development Results, a conference of more than 400 government officials and development experts from 40 countries and 33 aid and development agencies.

“The World Bank has been an important partner in Vietnam’s development over the past 13 years,” Mr Phung Khac Ke said. “Beyond the very substantial financial resources that the Bank has provided, it has also played a vital role in bringing the Government and a growing number of donors together around one roadmap for reforms as Vietnam moves towards the completion of its transition to a market economy. We look forward to continuing this very positive engagement under the Bank’s new Country Partnership Strategy.”

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Vietnam’s poverty rate dropped from around 58 percent in 1993 to around 20 percent in 2004.

The CPS outlines some of Vietnam’s key development achievements, including:

  • the rapid creation of private sector jobs and wage employment – increasing from 11 percent of the working age population in 1998 to 18 percent in 2004
  • Strong progress in achieving the Millennium Development Goals with targets for primary school attendance, universal education and improved education quality already achieved
  • the difference between enrollment rates for girls and boys throughout the school system almost eliminated.

However, the strategy also highlights that poverty continues to be widespread and remains overwhelmingly rural (rural poverty stands at 25 percent compared to 4 percent in urban areas). Poverty also remains entrenched for the country’s ethnic minorities which represent just 13 percent of the population yet constitute 39 percent of the poor. And still, pockets of severe poverty remain within cities, especially for migrants.

Mr. Adams said the Bank’s approach would seek to focus on the next generation of reforms needed to improve Vietnam’s competitiveness and integration into the world economy while also attending to growing needs for good governance, modernized social protection systems, better environmental management and improved infrastructure.

“Picking up the pace of Vietnam’s banking and anti-corruption reforms, which have lagged behind other reforms, will be especially important.”

Since 1993, when the World Bank re-engaged with Vietnam, the International Development Association has provided $6 billion in interest-free credits and grants to help the country sustain growth and fight poverty.

Among other things, these IDA funds have been used to build roads and other vital infrastructure, to connect millions of rural people to the electricity grid, to improve the quality of the education system; to expand farm production; and to provide access to basic services such as running water for close to 3 million poor people in urban areas.

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