The Asian Development Bank (ADB) approved a new loan of 15 million U.S. dollars to assist poverty reduction efforts in Vietnam in coordination with a number of other development partners, said ADB on Thursday.
The loan supports the implementation of Vietnam's Poverty Reduction Program within the framework of a multi-donor funded and World Bank-led Sixth Poverty Reduction Support Credit, started in 2002 as a tool for donors to strengthen the coordination in supporting Vietnam's comprehensive reform agenda.
In Vietnam, donors are supporting the government to accelerate reforms in accordance with its Socioeconomic Development Plan 2006-2010, the country's poverty reduction strategy, aimed to reduce the poverty incidence to 10-11 percent by 2010.
The country has already made significant strides in reducing the poverty incidence, which was higher than 58 percent in 1993 to below 20 percent in recent years, said ADB in a new release.
"Vietnam has achieved significant progress in reducing poverty in recent years, reflecting the Government's strong commitment. Such efforts will continue to be supported by the community of development partners including ADB," said Ayumi Konishi, ADB's country director for Vietnam.
Over the last 20 years, Vietnam's economy has been transformed significantly. It has become one of the fastest growing economies in Asia, with an average gross domestic product (GDP) growth of 7.5 percent over the last decade. GDP per capita increased from 288 dollars in 1993 to 716 dollars in 2006, with a marginal increase in inequality.
"Economic growth in Vietnam has been largely equitable. But as the economic growth accelerates, income disparity can widen. Some groups have benefited less from economic growth and are vulnerable to social and economic marginalization. Low-income households face a vicious cycle of remaining poor due to difficulties in accessing health and education services," said Konishi.
There are also considerable disparities in poverty and poverty reduction across regions. Certain areas in the northern and central regions have a poverty incidence of over 30 percent. These regions are home to nearly 57 percent of the poor in Vietnam.
The loan is expected to help boost efficiency, accelerate economic growth and create jobs, as well as improve the quality of education, access of the poor to health services, promote a reformed social protection system and gender equality, said the multilateral development finance institution.