Manila, Oct 6, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) has approved a US$15 million loan to support a multi donor program to reduce poverty in Viet Nam.
In spite of adverse shocks experienced in recent years, such as the avian influenza and rising oil prices, Viet Nam's gross domestic product has grown at an average annual rate of 7.5% over the past decade, with a high of 8.1% in 2005. This makes Viet Nam one of the fastest growing economies in Asia.
Despite these successes, important structural issues and social challenges remain, and the new loan addresses these through the Poverty Reduction Support Credit framework. It supports the transition to a market economy by removing structural weaknesses and improving the business environment. It will also make development socially inclusive and environment friendly, and will modernize governance capabilities and the public administration system.
"This framework is hinged on the strong commitment of the donor community to supporting Viet Nam's reform agenda and galvanizing interest for the reform program among stakeholders," says Ayumi Konishi, Country Director for ADB's Resident Mission in Viet Nam.
The loan provides this year's ADB support to the framework, which donors are using to provide financial support to the Government's Comprehensive Poverty Reduction and Growth Strategy for 2002-2006. This year, the framework will provide $210 million to the Government.
Approval of the loan immediately followed the adoption of ADB's new assistance strategy to Viet Nam.
"This loan is an excellent example of the operational links among Viet Nam's Socio Economic Development Plan 2006-2010, and the harmonized and coordinated efforts of the development partners in support of the plan," adds Mr. Konishi. "The country is making good progress in reducing poverty supported by strong growth."
Aside from ADB, the framework is supported by concessional loans from the World Bank (US$100 million), Japan Bank for International Cooperation, and Germany (Euro6 million).
Grants will also be provided by Australia (A$10 million), Canada (Can$4 million), Denmark (DKr61 million), European Commission (Euro10 million), Ireland (Euro3 million), Netherlands (Euro9 million-14 million), Spain (Euro3 million), and the United Kingdom (20 million Pounds).
ADB's loan comes from its concessional Asian Development Fund and carries a 24-year term, including a grace period of 8 years. Interest is set at 1% per annum during the grace period, and 1.5% per annum thereafter.
The State Bank of Viet Nam is the executing agency for the program loan, which will be utilized until December 2007.
Contact
Floyd Whaley
Email: fwhaley@adb.org
Tel:+632 632 6848; Mobile: +63 920 938 6488
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; Mobile: +63 920 938-6487
| ||
|
