The World Bank (WB) will support Vietnam in building a road map to smoothly shift preferential loans from the International Development Association (IDA) to the International Bank for Reconstruction and Development (IBRD) to ensure the national budget’s sustainable payment capacity.

Governor of the State Bank of Vietnam Nguyen Van Binh

The statement was made by President of the World Bank Group Jim Yong Kim at his working session with Governor of the State Bank of Vietnam Nguyen Van Binh in Hanoi on February 23.

He announced that the WB will focus its resources on helping Vietnam realise the 12 th National Party Congress’s guideline and orientations as well as the Vietnam 2035 Report.

He also appreciated efforts made by Governor Binh in managing monetary policies and banking restructuring. As such, the Vietnamese banking sector has gained remarkable achievements, contributing to stabilising the macro economy and promoting growth.

Binh pledged that Vietnam will effectively use loans from the World Bank for its socio-economic development and poverty reduction plan in accordance with the bank’s general development goals.

The WB leader is in Vietnam to release the Vietnam 2035 report, which was prepared jointly by the Government of Vietnam and the World Bank Group, and lays out key reforms for the lower-middle income country to grow its economy, become more equitable, and put in place modern governance over the next 20 years.

Earlier, he was received by top Vietnamese leaders, including Party General Secretary Nguyen Phu Trong, President Truong Tan Sang and Prime Minister Nguyen Tan Dung.

Vietnam - one of great development success stories: WB Group President

Vietnam has become one of the world’s great development success stories, rising from the ranks of the poorest countries, said Work Bank (WB) Group President Jim Yong Kim.

The WB leader made the comment at a press conference in Hanoi on February 23 as part of his visit to Vietnam to attend a ceremony announcing Vietnam 2035 report titled: “Toward prosperity, creativity, equity and democracy.”

Over the past 30 years, on the strength of a nearly 7 percent average growth rate and targeted government policies, tens of millions of people have lifted themselves out of extreme poverty, he said.

Kim noted that the Vietnam 2035 report reflects Vietnam’s aspirations of becoming a modern, industrialised nation within a generation.

Improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth. It will be critically important to remove barriers that exclude marginalised groups and deliver quality public services to an aging and urbanising middle-class, he stressed.

According to the President, the report recommends that Vietnam build modern and more transparent institutions – those steps will help the country meet its ambitious goals.

Kim said the WB will continue to help Vietnam with loans, especially in climate change response and renewable energy development.

The WB pinned hope on Vietnam’s capacity to escape from the middle-income trap as the country has made big strides in health care and education which decide the quality of human resources as well as productivity.

Vietnam should pay more attention to equality and social inclusion among ethnic minority groups in order to raise people’s income, he suggested.

Regarding the report’s suggestion that industry and services will make up about 90 percent of the national GDP, Kim said it’s hard for Vietnam to achieve upper-middle income status if based only on agriculture. The farming sector, however, is still a key player in the economy, he added.

In the next 20 years, Vietnam will increase the rate of industry and services with consumption playing an important role to the country’s economic growth, Kim said.

The President pointed out two challenges hindering Vietnam from actualising the goals set in the report. They are structural reform to ensure economic growth and investment in human resources to create a competitive edge in the present digitalised world.

The Vietnam 2035 report, prepared jointly by the Government of Vietnam and the World Bank Group, lays out key reforms for the lower-middle income country to grow its economy, become more equitable, and put in place modern governance over the next 20 years. Reaching the ambitious goal of upper-middle income status would require Vietnam to continue to grow at least 7 percent per year, raising the average income level to over 7,000 USD – or 18,000 USD in purchasing-power parity terms by 2035, compared with 2,052 USD – or 5,370 USD in PPP terms in 2014.

VNA