I would like to thank the people and government of Vietnam for the very warm welcome I have received. It is wonderful to be here in Hanoi. Thanks to all of you for joining us on short notice, I really wanted to take some time to speak with you.
I have just finished very good meetings with the Party General Secretary, the President, the Prime Minister and other senior leaders.
I am very pleased to announce today that the World Bank Group plans to provide Vietnam with over US$3.8 billion dollars in concessional financing over the next three years from IDA, our fund for the poorest countries. This will help Vietnam continue to invest in improving the lives of the Vietnamese people, including the extreme poor. Vietnam is now the second largest IDA recipient.
I am also very pleased to announce that we have agreed to conduct a joint study with the government of Vietnam to look at the steps the country needs to take to become a modern, industrialized country in a single generation.
The joint study will look at what changes need to be made to boost trade and competitiveness, and improve the business and investment climate to attract more foreign and domestic private investment.
It will also look at the actions Vietnam needs to take to build economic sustainability, reform institutions, and create more equality and opportunities for all people.
Vietnam’s leadership can improve the lives of the Vietnamese people by creating more efficient and competitive conditions for the private sector. The private sector can become a driving force for job creation, innovation and high productivity growth that reaches everyone.
The Prime Minister and I have agreed to complete this study within one year. We will bring our top experts across many disciplines to support this effort.
The study will help Vietnam build on its remarkable development success story. Vietnam has been transformed from a poor rural economy into an emerging middle-income economy, with recent growth averaging 7 percent annually.
Millions of Vietnamese have benefitted. The poverty rate dropped from almost 60 percent in early 1990s to under 10 percent today. Incomes of the bottom 40 percent of the population grew 9 percent annually over the last two decades.
Vietnam is now at a critical juncture. Growth has slowed and the economy is operating at less than its potential. It needs to speed up reforms to improve efficiency in state-owned enterprises and the financial sector. That includes supporting green development and reforming the private sector to boost job creation, innovation and high-productivity growth.
We believe this new joint study with Vietnam will provide the country with good options to continue on its path to reform that will lift even more people out of poverty and boost shared prosperity.
I’m now happy to take your questions.