Vietnam is the world’s second largest beneficiary of the World Bank’s International Development Association (IDA) capital, behind only India.
World Bank (WB) East Asia and Pacific Regional Vice President Axel van Trotsenburg, noted Vietnam’s privileged position during a meeting in Hanoi on May 7 with Minister of Planning and Investment Bui Quang Vinh.
Trotsenburg, visiting Vietnam from May 6–9 to deepen his understanding of the country’s socio-economic situation, said IDA capital has delivered significant results -especially in Vietnam’s successful poverty reduction campaign.
He confirmed Vietnam will continue to benefit from IDA funding in the future.
He urged Vietnam to collaborate regionally on IDA capital attraction efforts and pay more attention to IDA funding disbursement.
The country should also attempt to increase capital received from the International Bank for Reconstruction and Development (IBRD), he said.
At the reception, Minister Vinh praised the WB for supporting Vietnam’s recent infrastructure development and social issue initiatives. He said Vietnam plans to reduce its reliance on non-interest IDA capital, shifting its emphasis to low interest IBRD capital.
To develop sustainably and consolidate social achievements Vietnam must transition from IDA to IBRD funding as quickly as possible, Vinh told his guest.
He said the country is devising policy mechanisms to ensure received capital is used efficiently. Over the next fiscal year, he said Vietnam will work with donors to balance spending on infrastructure and social welfare projects.
Experts are also drawing up the criteria for combining IDA and IBRD capital in the same projects, improving IDA capital efficiency to create higher values.
Vinh added that his ministry will compile a list of projects using the two kinds of capital for submission to the Government. Upon Government approval, the ministry and WB will begin fine-tuning funding criteria.