WB Loan Supports Vietnam to Recover from the Pandemic

According to the World Bank (WB) on December 27, the Government of Vietnam and the World Bank have just signed a credit agreement worth US$221.5 million to assist Vietnam in recovering from the Covid-19 pandemic through various policy reforms to increase financial inclusion and improve environmental resilience.

Lasting 30 years with a grace period of five years, and provided through the WB’s International Development Association, the $221.5-million credit encourages policy reforms under two pillars.

The first supports an inclusive economic recovery by lessening the tax burden on enterprises, improving access to financial assistance among vulnerable groups, narrowing gender gaps in the workplace, and promoting financial inclusion, said the Vnexpress.

“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 WB representative noted.

World Bank Country Director for Vietnam Carolyn Turk (Photo: VNA)

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 second pillar contributes to greening trade policies, accelerating the adoption of e-government, and increasing the uptake of renewable energy, reported the VNA.

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 WB’s International Development Association (IDA), the bank’s concessional lending window for low-income countries.

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