World Bank Country Director's Speech at Vietnam Global Investment Conference

Your Excellency the Prime Minister of the Socialist Republic of Vietnam;
Distinguished Officials of the Government of Vietnam;

Ladies and Gentlemen, good afternoon.

The World Bank is honoured to have the opportunity to make a few remarks at this important conference. 

I would like to start by highlighting that the World Bank is a big investor in Vietnam.  Vietnam is our largest IDA borrower and has now also become eligible to receive IBRD resources which are focused towards middle income countries.  This eligibility will considerably expand the volume of financial resources and the range of investment instruments we are able to offer in support of Vietnam’s development. 

Vietnam’s eligibility for IBRD resources reflects its significant and rapid socio-economic progress and signals strongly the World Bank’s confidence in the country’s medium term economic prospects.  IN our view these prospects are solid.   

In early 2008, the Government of Vietnam was faced with a different economic management challenge: that of an overheating economy.  The Government learnt quickly and successfully responded to this challenge. 

Today the economic management challenge Vietnam faces is considerably different.  Globally, key drivers of growth – trade, investment- have taken a significant hit and jobs are being lost across the globe.  Vietnam, being an economy that is increasingly integrated into the global economy is, as the Prime Minister mentioned experiencing a slow down in export, investment, employment and particularly in specific areas such as tourism.  The challenge is to restore growth and create jobs.

We congratulate the government for the way in which it stabilized the economy last year, and the speed at which it has changed priorities, from stabilizing the economy to supporting growth, when the first signs of the global slowdown became visible.

As has been mentioned by the Prime Minister, the Government has put in place several measures to respond to this crisis and to reduce the negative impacts through its stimulus package.  Key elements of the stimulus package notably the increased infrastructure spending are critical for addressing this challenge. 

Results for the first quarter of 2009 indicate that Vietnam is holding better than other countries and there are reasons to expect that subsequent quarters will be stronger.

The current crisis, while difficult, as also an opportunity for the Government to deepen its reform effort in ways that will strengthen the competitiveness of the economy and position Vietnam for even stronger growth after the crisis.  This includes in areas such as the efficiency of investment as well as the environment for business.  The Government is aware of this and is moving to fully seize this opportunity. 

I would like to reiterate the World Bank’s continued support – financial and technical - for Vietnam.  We are working to provide additional resources to Vietnam to help address financing gaps that may be emerging from the crisis, particularly by advancing financing from IBRD and speeding up earlier commitments under IDA.  In our 2009 fiscal year which ends in June 2009, we are providing a total of $1.2 billion dollars in resources to Vietnam. 

In conclusion, despite the current economic difficulties brought about by the global crisis, we are optimistic that Vietnam will come through this difficult period.  The medium term outlook for the Vietnamese economy is in our view favourable and the country is still an attractive destination for foreign investors. 

We are confident that the Government of Vietnam will maintain the sound macroeconomic policies and continue the reforms that will enhance the competitiveness of the economy, and return the country to rapid and sustained growth.

Your Excellency Prime Minister, Ladies and Gentlemen thank you for your attention.