The World Bank Board of Directors has approved a credit package to help Vietnam with economic management reforms, the WB Vietnam said on Tuesday.

The Economic Management and Competitiveness Credit for Vietnam (EMCC 1), the first of a series of three operations, provides US$250 million in concessional financing to help increase the country’s productivity and competitiveness, WB Vietnam said in a statement released from Washington.

The EMCC 1 will support reforms in seven policy areas, including the financial sector, fiscal policy, public administration and accountability, state enterprise management, public investment management, efficiency of the business environment, and equity and transparency of the business environment.

“The EMCC follows on from the successful Poverty Reduction Support Credit series, and aims to address new challenges that will raise the efficiency and competitiveness of the Vietnamese economy” said Victoria Kwakwa, the World Bank Country Director for Vietnam.

“I hope that the EMCC series will provide a platform for deepening and coordinating dialogue between development partners and the Government of Vietnam with a view to helping Vietnam transition to a new economic growth model, which targets competitiveness and the quality of growth,” she added.

With macroeconomic stability a major priority for competitiveness in Vietnam, and a core objective of EMCC, the credit program will help monitor macroeconomic policies and ensure that they support the stabilization efforts of the government, the WB Vietnam statement reads.

Public investment management, SOE and banking sector reforms are prominent themes under the program, in line with the government’s priorities for structural reforms.

“In addition, the EMCC prioritizes government efforts to streamline administrative procedures and strengthen fiscal discipline because they are critical to productivity and competitiveness,” the WB said.

Vietnam implemented major reforms in the early nineties, which contributed to large gains in competitiveness that spurred rapid growth and poverty reduction.

There is growing recognition, however, that the reform process has slowed down in recent years, according to the WB.

New reforms are needed to address major structural inefficiencies, promote more efficient use of labor and capital assets, and increase productivity across the economy.

“EMCC aims to support the implementation of this reform program over the next three years,” the WB said.