Over the years, Vietnam has made incredible strides against poverty. During the 1990s, the number of people living in poverty in Vietnam was around 60 percent and today that number has dropped to less than 20.7 percent. On July 17, 2014, the nation demonstrated its continued commitment to fighting poverty with the announcement of a joint government and World Bank Group study.
The study will detail policies Vietnam should undertake to continue increasing economic growth. It will also pinpoint the specific obstacles the country needs to overcome in order to ensure sustainable growth, modernization and prosperity for all social classes.
By working with the World Bank Group, the government of Vietnam hopes to increase the country’s economic competitiveness and, in so doing, help its citizens prosper. One way the nation seeks to reduce poverty is by improving the efficiency of the economy in attracting foreign and domestic investments. Increased private sector investments will lead to higher job creation, free flowing capital and innovation, which will be beneficial to everyone.
The study’s aim is to boost Vietnam’s economy to reform policies that widen inequality, and create more opportunities for everyone in the country. Such measures include demanding more transparency from businesses and state-owned enterprises.
Vietnam’s Prime Minister Nguyen Tan Dung and World Bank President Jim Yong Kim plan to have their agencies finish the study within one year. The hope is that, through observations made in the study, Vietnam will be able to guide its economy to reach the marker of a high-income nation within a single generation.
In addition announcing the study, Dung and Kim finalized plans for five new projects which credit Vietnam with over $876 million. The World Bank Group also loaned about $3.8 billion over the next three years to the country through the IDA, a fund used by The World Bank for the world’s poorest nations.
The financing now makes Vietnam the second biggest IDA recipient to date.
The government will use recommendations from the study to apply these funds in a way that increases private sector investment.
The effort comes as a continuation of the World Bank Group’s investment in Vietnam, as IFC, a World Bank Group member that deals only with private sector development, has contributed $5 billion to the nation’s private sector over the past 20 years.
With Vietnam’s growth rate averaging over 6.4 percent per year for over 10 years, it is hoped that renewed investment in the private sector will increase growth and help bring more individuals out of poverty.
The government of Vietnam and the World Bank Group’s efforts aim to lead the country down the path of economic growth and prosperity for all because, despite the nation’s sustained progress over the past 20 years, income inequality has grown. With this new study and loans from the World Bank Group, Vietnam seeks to foster growth that is accessible to all of its citizens and continue reducing the prevalence of poverty throughout the country.
– Kathleen Egan