Vietnam’s shift from a centrally planned to a market economy has transformed the country from one of the poorest in the world into a lower middle-income country. Vietnam now is one of the most dynamic emerging countries in East Asia region.
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Investment enhances Northern Mountains Poverty Reduction ProjectWASHINGTON, D.C., February 27, 2015—The World Bank’s Board of Executive Directors approved $100 million in additional financing for an o... Show More +ngoing project to help improve living standards for poor people in six provinces in Vietnam’s Northwest, the nation’s poorest region.The increased financing bolsters poverty reduction efforts by the Vietnamese government in the provinces of Hoa Binh, Son La, Dien Bien, Lai Chau, Lao Cai and Yen Bai.“We are very pleased to see this additional financing approved by our Board of Directors,” said Victoria Kwakwa, the World Bank’s Country Director in Vietnam. “The project areas have some of the highest rates of poverty, and most of the project beneficiaries are poor ethnic minority communities. We share the government of Vietnam’s strong desire to reduce poverty through the community-driven development approach embedded in this project, and we stand ready to work with the government to scale up the project’s successes.”The additional financing will contribute further to the government’s poverty reduction efforts by improving the capacity of local governments and communities, increasing access to investments that boost productivity, strengthening commune investment planning, and bolstering community links to markets and business innovations.In particular, the project focuses on expanding support for poverty reduction efforts in the six provinces where it started, as well as additional districts and communes.It also seeks to improve local development planning and help make a participatory approach part of the government’s national poverty reduction programs, with a focus on strengthening of partnerships between farmer groups and agro-businesses.The government of Vietnam is providing $10 million in financing in addition to the $100 million from the International Development Association (IDA), the World Bank Group’s concessional lending arm. Show Less -
During the 90-minute live chat with readers of the Vietnam 2035 website on February 3, 2015, Mr. Dang Nguyen Anh, Director of the Institute of Sociology, and Mr. Gabriel Demombynes, World Bank Senior ... Show More +Economist, discussed a wide range of issues under the topic “inclusive growth”.The chat, which was moderated by Mr. Dang Hoang Giang, Deputy Director of the Center for Community Development Studies, received about 30 questions and comments from participants throughout Vietnam as well as Vietnamese and international readers abroad.The first group of questions, basic yet critical, were on the definition of “social inclusion”. In their responses, the two experts referred to social inclusion as “growth for all” or “avoidance of social exclusion”—when every member can participate fully and enjoy all the benefits and opportunities society allows.Both experts drew attention to an important point—that inclusive growth is a very broad term. Mr. Nguyen Anh said, “It starts with economic aspects because they reflect equal opportunities in development, resources, employment and income, but social dimensions are also very important.” He said economic inclusion may not guarantee social inclusion. Workers in an industrial zone may receive good incomes, but they may remain socially excluded in terms of their cultural and spiritual life.The Organisation for Economic Co-operation and Development (OECD) indicators for social inclusion take into account the level of people’s participation and their right to access basic social services such as information, education, health, employment and legal services. These indicators reflect a need to ensure an equal voice and contribution by all in society as well as an equal share in the benefits of growth.As Vietnam moves up the development ladder, the country will need to ensure that the least fortunate are included and have equal opportunity and access to all basic services. At the same time, the country needs to protect other members of society from the new risks emerging as the result of a modern, middle class market economy. “This includes the need for a strong system of support for the elderly, a social safety net, health insurance, and good labor market institutions,” said Mr. Demombynes. “Policy changes are necessary to address this broader dimension of social inclusion.”Economic growth and social inclusionSeveral questions focused on the concern of a possible trade-off between economic growth and social inclusion. Vietnam should maintain a high economic growth as well as ensure higher social inclusion. But can it have both at the same time and what will it take to achieve it?Mr. Demombynes pointed to the consensus among economists that there are policies that could foster both inclusion and growth. In particular, improving access to opportunities for all members of society is recognized as vital to growth.“If some citizens do not have adequate nutrition or access to education, they will not be able to fulfill their potential and this will depress growth,” said Mr. Demombynes. “Good policies can also help people better manage risk and contribute to boosting growth.”For example, some people may be afraid to leave their family farm and pursue opportunities in the city because of risks of unemployment or falling ill away from their family. If society can help insure against these risks, people will be encouraged to migrate or move into more productive jobs, which can increase growth.There is no single recipe for success in social inclusion. According to Mr. Demombynes, what matters is a genuine effort on the part of government and that all members of society have a voice.Social inclusion with no limitFighting corruption is important to ensure social inclusion. First, payment of bribes can limit access to health and education to those who can pay afford it. This is unjust and an obvious problem for social inclusion. Second, the theft of public money reduces the funds available for social programs. Third, the perception that some people obtain their position or wealth through corruption can undermine trust in institutions and create social unrest.Removing discriminatory treatment of different types of economic ownership, reducing inequality and the gaps between urban and rural areas, ensuring fair recruitment of talented people in the civil service, and reforming human resource development are also crucial in building a strong institution that ensures and sustains inclusive growth.“Social inclusion should have no limit. However, there must be a minimum level of inclusion in society because it ensures social cohesion, a very important precondition for a society to survive and develop”, said Mr. Nguyen Anh.---For full content of the live chat, please click here. Show Less -
WASHINGTON, February 4, 2015—The World Bank Group announced the debarment of Louis Berger Group, Inc. (LBG) for one year for engaging in corrupt practices under two Bank-financed projects in Vietnam.&... Show More +nbsp; The Bank also imposed a one-year conditional non-debarment on Berger Group Holdings, Inc. (BGH), LBG’s corporate parent.Under two World Bank-financed projects, the Third Rural Transport and Da Nang Priority Infrastructure Investment Projects, in Vietnam, the company made corrupt payments to government officials. In addition, BGH failed to effectively supervise LBG and thus bears responsibility for LBG’s misconduct.A World Bank inquiry into the company led LBG to conduct its own internal investigation in accordance with terms agreed to by the Bank, uncover the misconduct, and disclose its findings to the World Bank. During the pendency of the investigation, BGH voluntarily restrained from bidding for any other World Bank-financed contracts. “A company’s response to misconduct is clear evidence of where its commitment to integrity lies,” said Leonard Frank McCarthy, World Bank Integrity Vice President. “What this case demonstrates is an investigative process and outcome that has pushed the company to take remedial action toward achieving a stronger standard of compliance and accountability across the board.”Under the terms of the sanctions, LBG and BGH must take appropriate remedial measures to address the misconduct for which they have been sanctioned, and adopt and implement an effective integrity compliance program consistent with World Bank guidelines. Show Less -