World Bank Loan Will Support Vietnam’s Economic Recovery
HANOI — The Government of Vietnam and the World Bank has signed an agreement for financing of US$221.5 million to support Vietnam’s recovery from the COVID-19 pandemic through policy reforms aimed at improving financial inclusion and spurring greater environmental resilience.
“In the spirit of our long-term, trusted and productive partnership, we are proud to support Vietnam at the time when the economy is recovering from the biggest shock of the past decades and when so many uncertainties remain around the pandemic,” said World Bank Country Director for Vietnam Carolyn Turk. “I believe that the range of policy actions supported by this operation will not only create a strong foundation for the immediate recovery from the COVID-19 crisis but also benefit Vietnam in the longer run.”
The US$221.5-million-credit is a budget support operation and comes in the form of concessional terms for a period of 30 years with a grace period of five years. It encourages policy reforms under two pillars.
The first supports an inclusive economic recovery by easing the tax burden on businesses, improving access to financial assistance among vulnerable groups, reducing gender gaps in the workplace, and promoting financial inclusion.
The second pillar contributes to greening trade policies, accelerating the adoption of e-government, and increasing the uptake of renewable energy.
The government has moved quickly in recent months on the implementation of these reforms. The approval of mobile money licenses and the roll out of electronic invoice systems in the country’s largest municipalities are examples of this. The pace of reform is expected to accelerate as part of the recovery package to be discussed at the National Assembly next week.
The credit is provided through the World Bank’s International Development Association (IDA), the Bank’s concessional lending window for low-income countries.