Axel van Trotsenburg, World Bank’s vice president for East Asia and Pacific, highly praised Vietnam for its efforts to repay debts to the global lender.
Vietnam’s ability to fulfill its debt obligations to the World Bank (WB) is always guaranteed and the country is always serious about debt repayment. “Vietnam has a spotless debt repayment record,” said Trotsenburg at a press briefing on Wednesday.
Vietnam last year repaid US$120 million to WB. The International Development Assistance (IDA) loans for Vietnam had totaled US$8 billion as of end-2012.
All of WB’s independent internal evaluations indicate that Vietnam has used the loans provided by the global lender effectively and all projects are deemed efficient.
WB disbursed some US$850 million to Vietnam in 2012. Currently, 55 projects in Vietnam are financed by WB, said the visiting executive.
WB country director for Vietnam Victoria Kwakwa added the studies conducted by WB and IMF revealed that the level of public debt in Vietnam is sustainable.
“All those studies show that Vietnam has not fallen into an alarming situation yet,” she said.
However, she admitted the reports did not comprehend the indebtedness of State-owned enterprises, many of which were guaranteed by the Government.
Vietnam and WB are in talks over a US$4-billion IDA loan for the next three years. The loan has a term of 25 years with a five-year grace period and an annual interest rate of 1.25%, Trotsenburg informed.
Details about this loan will be disclosed late this year when negotiations are concluded.
It is expected that Vietnam will repay VND45 trillion of debts in 2013, VND51 trillion in 2014 and VND64.8 trillion in 2015, according to the foreign debt management program recently passed by the Government.