HANOI, February 22, 2019 – With a 7.1 percent growth rate in 2018, Vietnam’s fast-paced economic development is boosting demand for infrastructure, the World Bank Vice President for Infrastructure Makhtar Diop said today, during his first visit to the country. According to World Bank estimates, Vietnam’s sustainable infrastructure needs will require investments of up to US$25 billion per year.
Currently, about two-thirds of Vietnam’s infrastructure spending come from public resources. Diop emphasized that financing needs of the magnitude faced by the country now cannot be borne by the public sector alone. Increasing efficiency in public investments and establishing the right conditions to crowd in private financing in infrastructure development are important parts of the solution to infrastructure development.
During his three-day visit, Diop had fruitful discussions with leaders of the central government, cabinet members, the National Assembly, and local governments. During his meeting with Prime Minister Nguyen Xuan Phuc, Diop congratulated Vietnam for the country’s rapid growth while maintaining broad equity and urged the Government to share its development success stories with other peer developing countries that are facing similar challenges.
At the same time, he expressed the World Bank Group’s continued commitment and willingness to support Vietnam’s infrastructure development agenda. He indicated that the WBG could contribute relevant global knowledge and expertise and emphasized that current favourable economic conditions would offer an opportunity to deepen reforms.
According to Diop, strong and quality investments in infrastructure will be key to sustain Vietnam’s economic growth in the medium and long terms. He praised the efforts to plan and prioritize national backbone infrastructure systems, including express ways, railways, and inland waterways; as well as sub-national infrastructure in key areas such as urban transport/mobility and waste water treatment; and regional integrated infrastructure that promotes economic development as well as address emerging challenges such as climate change.
The World Bank official also stated the Bank would stand ready to provide financing and technical support, as well as assist in mobilizing private sector resources, to help Vietnam develop its critical infrastructure. As part of the “Maximizing Finance for Development” approach, the Bank has been supporting the Government of Vietnam to create a well-functioning and enabling environment to attract private sector participation. This includes developing a strong Public-Private Partnership regulatory framework and a solid domestic financial sector that also ensures efficient operation of State Owned Enterprises as a crucial part of the infrastructure agenda.
As part of the trip, Diop met with Hanoi leaders to discuss the City’s infrastructure development needs, particularly urban transport and mobility. He also visited the port city of Haiphong to examine key infrastructure facilities, and witnessed development results brought about by the ongoing World Bank financed Haiphong Urban Transport Development Project, which helped improve urban accessibility and strengthen capacity for urban transport management and planning. He visited the manufacturing site of Vinfast – maker of Vietnam’s first automobile and e-scooter, and Lach Huyen International Gateway Port.