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ADB Approves $25M Loan to Aid Poverty Reduction in Viet Nam
The Asian Development Bank (ADB) is providing a $25 million loan to help Viet Nam carry out policy reforms for its poverty reduction program in cooperation with a number of other development partners.
The loan will support the implementation of Viet Nam’s poverty reduction program embedded in the Socioeconomic Development Plan (SEDP) 2006–2010. To this end, the loan provides parallel financing with the World Bank’s Poverty Reduction Support Credit (PRSC) 7, within the framework of the PRSC process.
The PRSC process is made up of several closely-related activities jointly undertaken annually by participating development agencies to help Viet Nam carry out policy reforms needed for the successful implementation of its poverty reduction strategy. The World Bank coordinates PRSC activities for participating development agencies.
ADB joined the PRSC process in 2003. In 2004-2007, ADB approved four loans to support, through the PRSC process, the implementation of the Government’s poverty reduction programs.
A wide range of policy reforms in the areas of business development, social inclusion, natural resource management, and governance will be supported by the loan.
“The policy reforms will yield considerable economic benefits to Viet Nam. They will raise the living standards of the Vietnamese people and reduce poverty by fostering environmentally sustainable and socially inclusive economic growth,” said Bahodir Ganiev, Country Economist of ADB’s Viet Nam Resident Mission.
Viet Nam’s economy has been one of the fastest growing in Asia in the last two decades, with gross domestic product growth rate averaging 8.1% annually from 2003 to 2007. The country has brought down the poverty rate to 16% in 2006 from 58.1% in 1993.
Despite such progress, challenges still remain. In 2007, 3.4 million people survived on less than $1 a day and 28.1 million on less than $2 a day. The incidence of poverty is still relatively high in rural areas and among ethnic minorities. High inflation in the first half of 2008 had an adverse impact on living standards, especially those of the urban poor.
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