Strategy 2030 of the Asian Development Bank (ADB) was approved by the ADB's Board of Directors in 2018 with a vision to achieve a prosperous, inclusive, resilient and sustainble Asia and the Pacific. "The operational priorities in Strategy 2030 are basically in line with Vietnam's priority orientations in the coming time." This is the affirmation of Deputy Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) at the Workshop on Dissemination of the ADB’s Strategy 2030, its new financial products and financing modalities organized by the SBV and the ADB on March 4th, 2019.
SBV Deputy Governor Nguyen Thi Hong and Mr. Tomoyuki Kimura - Director General of the ADB’s Strategy, Policy and Review Department co-chaired the Workshop. Also attending the Workshop were the participants and representatives from many Ministries, Government departments and agencies, corporations and economic groups, as well as many domestic and international economic experts.
SBV Deputy Governor Nguyen Thi Hong speaks at the Workshop
“This Workshop is a very meaningful one. Strategy 2030 has been developed in the context that the Asia-Pacific region has made tremendous progress in poverty reduction and economic growth over the past few decades. However, there are still many big issues that need to be addressed, such as poverty, inequality, climate change and infrastructure shortages, in addition to the challenges and opportunities brought about by scientific and technological advances, especially the Industrial Revolution 4.0,” the SBV Deputy Governor said. Understanding thoset trends, the ADB's Strategy 2030 was designed to meet the changing needs of the region with a vision to achieve a prosperous, inclusive, resilient and sustainble Asia and the Pacific.
During the process of developing the Strategy, the SBV, as the representative of Vietnam at the ADB, performed its role as the focal point, actively coordinating with the relevant agencies in the country to participate in the formulation, research and provision of comments on this Strategy. The SBV appreciated that the ADB welcomed the comments from Vietnam, other member countries and stakeholders in finalizing this important document.
ADB continues to provide significant long-term financing
The development context is changing rapidly in the region and the globe while big challenges, such as increasing inequality, poverty and vulnerability, still remain, worsening climate change and environmental impacts, rapid urbanization, rapid changes in the demographics, etc., whichrequires the ADB to adapt quickly. On one hand, that adaptation needs to be developed in harmony with the global targets (such as Sustainable Development Goals -SDGs, response to climate change and many other objectives); while on the other hand, it needs to respond to the growing diversity and needs (especially the needs for financial resources in the developing member countries -DMC).
Sharing at the Workshop, Mr. Tomoyuki Kimura - Director General of the ADB’s Strategy, Policy and Review Department, emphasized that: “In Strategy 2030, the ADB will maintain its efforts to eliminate extreme poverty and broaden the vision to a prosperous, inclusive, resilient and sustainble Asia and the Pacific. The ADB will help the region thrive by maintaining quality economic growth, creating employment opportunities and promoting inclusiveness to ensure that economic achievements are widely shared, as well as supporting the countries’ resilience and sustainability, while promoting regional integration and cooperation.”
Mr. Tomoyuki Kimura - Director General of the ADB’s Strategy, Policy and Review Department, speaks at the Workshop
In this new strategy, the ADB will continue to prioritize support for the region's poorest and most vulnerable countries, at the same time, implement different approaches to meet the diverse needs of different country groups, such as conflict-affected and fragile countries, small island developing countries, low-income and low-middle income countries like Vietnam, and high-middle income countries.
A notable point is that because the DMCs have significant differences in demands, institutional strengths, and availability of resources, the ADB will use an approach that focuses on each country or each group of countries to implement the appropriate financing modalities to meet those different needs. In which, with low-income and low-middle income countries’ group (including Vietnam), the ADB recognizes that these countries are facing a wide range of challenges in maintaining and promoting growth. Therefore, the ADB will provide significant and predictable long-term financing to support these countries, and the ADB will continue to be a reliable partner in supporting structural and systemic reforms.
“The focuses of the ADB’s support will include green and consistent infrastructure, social services and social security, sustainable urbanization, structural transformation to enhance productivity and competitiveness, public sector reform, private sector development, and domestic resource mobilization,” said Mr. Tomoyuki Kimura. The ADB will also support reforms of the SOEs and increase its involvement with the private sector through attracting private investors and bringing in co-financiers. In particular, special attention will be given to those countries that are vulnerable due to geographic conditions and face serious challenges caused by climate change.
The Strategy will be flexible to match Vietnam's policy framework
According to the Director General of the ADB’s Strategy, Policy and Review Department, for countries graduating from the concessional loans under the ADB's graduation policy, during the transition period, the ADB's support will focus primarily on strengthening the policies and institutions necessary for sustainable graduation, supporting regional and global public goods, contributing to the creation of knowledge. These priorities will be specifically reflected in the Country Partnership Strategy (CPS) between the ADB and each country member.
Overview of the Workshop
To support Strategy 2030, the introduction of new financial products and new financing modalities is essential. At this Workshop, Mr. Keiju Mitsuhashi – Principal Planning and Policy Specialist of the ADB – gave a detailed introduction on the new financial products and financing modalities of the ADB. Specifically, in order to increase the flexibility and resilience to meet the financial needs of the member countries, the ADB will provide two products: Project Readiness Financing and Small Expenditure Financing Facility. Meanwhile, to strengthen the ADB's catalytic role in mobilizing private financing, the ADB will also provide special financing modalities and products, including: Policy-based guarantees; Guarantee in Group A countries; and Incentive to use credit enhancement products. At the same time, in order to expand to support and ensure finance for public-private partnership (PPP) projects, the ADB will provide the PPP standby financing facility. These are test products based on a 5-year pilot implementation. There is also an ongoing product development called Contingency Disaster Financing.
Mr. Tomoyuki Kimura shared the above-mentioned modalities and products were approved by the ADB's Board of Directors in July 2018. “If Vietnam would like to propose to use one or more of these specific tools, the ADB and Vietnam will continue to clarify more, such as how to integrate these tools consistently with Vietnam’s mechanisms and policies. The ADB is willing to listen to specific requests and suggestions from Vietnam, and will try to ensure the most flexibility in accordance with Vietnam's policy framework, as well as to ensure its usefulness and effectiveness in the context of Vietnam,” said Tomoyuki Kimura.
In addition to that development orientaion, the ADB also aims to focus on developing new financial products and financing modalities to meet the needs of the member countries in a timely manner. This content is important in the context that Vietnam has become a low-middle income country, and has officially graduated from concessional loans from the international financial institutions, including the ADB. Understanding the new financial products and financing modalities is necessary to assist the stakeholders to attract resources for the needs of Vietnam's economic and social development.
VA