Washington DC, May 30, 2017 – The Board of Executive Directors today discussed and endorsed the World Bank Group’s (WBG) new Country Partnership Framework (CPF) with Vietnam. The CPF outlines continuous strong WBG engagement in Vietnam—accompanying the country in consolidating its development achievements and realizing the ambitious growth and development targets set.
The new partnership framework aligns with Vietnam’s 5-year Socio-Economic Development Plan for 2016-2020 and its goals of balancing economic prosperity with environmental sustainability, of promoting equity, and of strengthening the capacity and accountability of state agencies. It also accompanies Vietnam as it transitions further into middle income country status and graduates from the International Development Association - the World Bank’s fund for low income countries.
“Vietnam continues to strive for more – for higher growth, more advanced industrialization, and a better quality of life for all of its citizens. Vietnam’s growth trajectory is proof of the country’s commitment to excellence, but meeting these ambitions will require a fine-tuning of both approach and implementation,” said Ousmane Dione, the World Bank’s Country Director to Vietnam. “The World Bank Group is honored to remain at Vietnam’s side as it strengthens its position as a successful middle income country and lays out the foundations to advance to high income status.”
The new partnership framework builds on the World Bank Group’s strong engagement in Vietnam, ensures complementarity with other partners, and leverages further support to the country, through mobilizing commercial finance and private sector engagement. Four areas are prioritized: inclusive growth and private sector participation; investment in people and knowledge; environmental sustainability and resilience; and good governance. Implementation of the CPF will involve substantial engagement at the sub-national level, the testing and application of multisector and spatial approaches and addressing as well as integrating gender aspects through analytical support, policy dialogue, lending, and strategic partnerships.
The CPF - prepared based on analysis in the Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy and the 2016 Vietnam Systematic Country Diagnostic - introduces a number of strategic shifts, which include:
- Comprehensive engagement to strengthen private sector development and participation across sectors;
- Support to achieve the financial sustainability of public services and transfers;
- Support to poverty reduction amongst ethnic minorities, through activities that generate jobs and incomes;
- Multisector engagements to strengthen linkages between education and the labor market; and
- Promote and stimulate low carbon energy generation.
“Over the period of this renewed partnership, the World Bank Group’s engagement in Vietnam will focus on key reform and development areas that may have transformative impact. And we will mobilize all our institutions – World Bank, IFC, MIGA – and the instruments and products we have to effect transformative change, be they lending, policy dialogue, analytical and advisory work and/ or guarantees,” said Ousmane Dione.
Throughout the CPF period, the International Finance Corporation (IFC) will also leverage its investment and advisory services and mobilize long-term financing for investments that have strong socioeconomic benefits, and support the development of Vietnam’s capital markets other private finance. To help boost the country’s economic competitiveness and advance private sector development, IFC will continue to attract international investors to key sectors of finance, infrastructure, manufacturing, and energy, combining global expertise with local knowledge and leveraging investment returns and social benefits.
“As a key driver of economic growth and job creation, the private sector will help Vietnam reach its next level of development,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “IFC’s unique financing and advisory services are a product of global expertise and local knowledge and will help boost businesses’ efficiency and innovation to drive high-value growth and generate impactful socioeconomic benefits.”
Through its traditional political risk insurance and credit enhancement products, the Multilateral Investment Guarantee Agency (MIGA) will complement World Bank lending and IFC engagement by mobilizing private investment and supporting commercial borrowing by the government and potentially also by State-Owned Enterprises. Wherever possible, MIGA will seek to support projects alongside other WBG entities, or in sectors where the WBG is already active.
“MIGA stands ready to play its part in delivering this ambitious WBG Country Partnership Framework for Vietnam”, said Tim Histed, MIGA Head of Southeast Asia. “MIGA can deploy its full range of political risk and credit enhancement products in the country, and look forward to helping foreign investors bring high impact projects into the country, particularly in the renewable energy sector”.
Aligned with the new partnership framework, the World Bank Board of Directors also approved today financing for two projects totaling $358 million for Vietnam.
A $240 million (IDA) Scaling Up Urban Upgrading Project (SUUP) will improve infrastructure and urban planning in the cities of Bac Lieu, Ben Tre, Long Xuyen, Soc Trang, Tan An, Vi Thanh and Vinh Long. About 500,000 urban dwellers will directly benefit from the investment, and a further one million people are estimated to indirectly benefit from investments under the project through extended infrastructure networks and environmental improvements.
A $118 million (IDA) Vietnam Emergency Natural Disaster Reconstruction Project (VENDRP) will reconstruct and rehabilitate infrastructure assets in the provinces of Binh Dinh, Phu Yen, Quang Ngai, Ninh Thuan and Ha Tinh, which were severely affected by prolonged flooding in 2016. The project will help with the restoration and improvement of damaged roads, bridges, irrigation systems, rural water supply systems and natural disaster prevention/control structures. The project will also provide capacity building for officials working on disaster management. The project will directly benefit over 1.2 million inhabitants and indirectly around 5.1 million people in the five affected provinces.