The World Bank has today declared that Vietnam is credit-worthy to receive World Bank’s funding for middle income countries.  

President Robert B Zoellick made the announcement that Vietnam’s development progress and increasing creditworthiness had made it eligible to access World Bank financing for middle income countries – the International Bank for Reconstruction and Development, or IBRD. 

“Vietnam has achieved remarkable progress during the last decade in overcoming poverty”  Zoellick said.  “During my visit to Vietnam last summer, I saw firsthand the commitment to build on the progress achieved to date, and we are prepared to back it with enhanced financial and technical support.”  

During a press conference held this morning to announce the decision, World Bank Vietnam Country Director Ajay Chhibber said the funding will supplement current support from the World Bank’s funding arm for low-income countries – the International Development Association (IDA) – which bears no interest.  

The IBRD is a branch of the World Bank to assist middle-income and creditworthy developing countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services. Although IBRD has commercial interest, it is one of the cheapest types of loans on international financial market that developing countries can access. 

Vietnam has been a major recipient of IDA financing since 1993 when the poverty rate was 58%. By 2004 the poverty rate declined to less than 20%.  Per capita GDP has increased at a rapid rate from less than US $200 in 1993 to approximately US $835 in 2007.  

As Vietnam continues its upward development path, the country still faces multiple challenges. These include the need to further strengthen the policy and regulatory framework for a market economy, preserve social inclusion, address environmental issues and fight corruption. Development of key infrastructure and energy, upgrading higher education and improvements in the business environment are also critical to continue sustainable economic growth.  

World Bank financing will provide much needed supplemental support in meeting these challenges. So far, the World Bank has financed over  US $7 billion for Vietnam’s development efforts.

Source: Nhandan.