The World Bank Group and the Australian government have committed a further AUD5 million (US$3.4 million) to supporting Vietnam’s economic recovery and protecting the most vulnerable from the negative impacts of the COVID-19 pandemic, the bank said in a press release on Wednesday.
The fund, provided by the Australian government and administered by the World Bank Group, is additional financing to the ongoing Australia-World Bank Group Strategic Partnership - Phase 2 (ABP2) that focuses on aiding Vietnam’s development agenda through sharing knowledge and advising policymaking.
The additional funding will help address Vietnam’s emerging challenges and critical needs after COVID-19, said Ousmane Dione, World Bank country director for Vietnam.
“By providing support in key areas such as private sector development, trade integration, and innovation, the program aims to help the country’s economy gain back its full potential in the fastest and most sustainable way,” Dione elaborated.
“Vietnam should be very proud of how it has tackled COVID-19,” said Robyn Mudie, Australian Ambassador to Vietnam.
“The next challenge for Vietnam, as for Australia, will be to replicate the successes of the health response in the economic response.
“I am proud of the role the Australia-World Bank Group Strategic Partnership is playing in Vietnam’s economic recovery.
“It will continue providing world-class economic advice and analysis for Vietnam’s leaders and policymakers to accelerate economic recovery, with an increasingly strong focus on gender equality and social protection.”
Vietnam has well contained the COVID-19 pandemic, with 352 confirmed cases, 329 recoveries, and no documented deaths, according to Ministry of Health statistics.
The health crisis has shaken the Southeast Asian country’s traditional resilience to external shocks, as its economic growth reached only 3.8 percent in the first quarter, compared to a projected rate of 6.5 percent prior to the pandemic, the World Bank said.
In order to mitigate the economic and social impacts of COVID-19, it is critical for the Vietnamese government to target sectors and activities that create jobs and improve long-term productivity and growth, such as infrastructure, innovation, social protection, health, and education.
To address the potential loss of human capital from the pandemic, the activities to be funded will protect and support vulnerable groups, including by strengthening social safety nets with more efficient and effective delivery of social security payments; narrowing human capital gaps, particularly for ethnic minorities, with a well-designed ethnic minority national targeted program; and improving gender equality in legal frameworks.
The funds will also be directed toward economic recovery activities, including accelerating the execution of the investment program while deepening trade integration, supporting the private sector in strengthening resilience against future shocks through structural reforms, and taking advantage of the digital agenda by reducing transactions’ costs for the government, people, and businesses.
This program of work takes forward part of the AUD10.5 million ($7.2 million) commitment from Australia toward Vietnam’s COVID-19 recovery efforts, discussed in a meeting between Ambassador Mudie and Vietnam’s Minister of Planning and Investment Nguyen Chi Dung on June 5.
The ongoing ABP2 program, signed in April 2017, aims to support Vietnam’s key national reforms, which are intended to gradually benefit millions of Vietnamese people and help the Southeast Asian country reach its ambition of becoming a high-income economy by 2045.