On March 25th, 2019, at the headquarters of the State Bank of Vietnam (SBV), Deputy Governor Nguyen Thi Hong had a meeting with Mr. Ramesh Subramaniam - Director General of the Southeast Asia Regional Department of the Asian Development Bank (ADB).
At the meeting, the Director General of the ADB’s Southeast Asia Regional Department thanked Deputy Governor Nguyen Thi Hong for taking the time to meet the Delegation. He emphasized that the Government of Vietnam (GoV) has made strategic changes in the management and utilization of new ODA fundings, and the SBV has cooperated closely with the ADB during that process. Mr. Ramesh Subramaniam said: “For the tasks that the SBV has recently implemented, we are very impressed with Vietnam's achievements in the fields of finance - banking, developing the capital market and the bond market ... We see that the SBV has taken the lead in activities to implement a comprehensive financial sector development and financial inclusion program.”
Regarding the financial sector development program and the promotion of financial inclusion, the ADB has high evaluation of the SBV's efforts and wishes to see strong support and consensus in the process of implementation, not only from the SBV but also from other relevant stakeholders, because any reform or innovation in this area is quite complex and would require a certain amount of time.
The Director General of the Southeast Asia Regional Department shared that the ADB is also looking for other opportunities to support Vietnam's financial sector. There have been several innovative platforms, such as ASEAN or ASEAN + 3, or particularly initiatives for the CLMV group (Cambodia, Laos, Myanmar and Vietnam). In this area, Vietnam has been a pioneer country with many reforms and innovations. The ADB looks forward to further cooperation to enhancement of the ADB's technical assistance in this region, helping Vietnam in furthering the development of its financial markets as well as knowledge sharing.
According to Mr. Ramesh Subramaniam, Vietnam is in the process of implementing new methods of managing and utilizing the ODA funds. The ADB wants the banking sector to recommend and adjust the financial products, services and tools to help Vietnam develop a better financial market, while promoting the collaboration of banks and state agencies with the private sector.
This is also the area that the ADB wants to cooperate with Vietnam in general and with the SBV in particular. “We made an assessment of the infrastructure development about a year and a half ago. An impressive result of this assessment was that China, India and Vietnam are the top three among the 25 countries which we conducted assessments with the largest public investment as well as mobilized resources from the private sector for infrastructure development activities. We find that the level of competition to promote investment is very high, that in the context of new funding modality, the ADB would like to cooperate with Vietnam, including the SBV, state-owned enterprises, the private sector, etc. to enhance the effectiveness and efficiency of support for this sector”, Mr. Ramesh Subramaniam said.
Overview of the meeting
Deputy Governor Nguyen Thi Hong expressed her gratitude and high evaluation for the ADB's positive and important role in providing financial resources as well as technical assistance for Vietnam in general and the SBV in particular.
The SBV Deputy Governor stressed that in the present as well as in the coming time, Vietnam still needs financial support from international organizations, including the ADB. The SBV highly appreciates the ADB's development of a multinational strategy, and the ADB's strategy is in line with Vietnam's strategic socio-economic development goals in the coming years. And capital needs for infrastructure investment, climate change response programs, green growth... are still areas in which Vietnam needs the ADB’s support. The banking sector is particularly interested in developing Vietnam's financial market besides the task of building a comprehensive national financial strategy that the Government has assigned to the SBV. These are the priorities of the SBV in the coming time. Currently, Vietnam has graduated from the ADF, starting from January 1st, 2019; besides the funding from the traditional financial resources, the SBV wants the ADB to supply Vietnam with new financial products that can be easily and flexibly applied in the case of Vietnam.
Mr. Ramesh Subramaniam emphasized: “The ADB has very high evaluation for the efforts and effective cooperation of the SBV since the ADB started operations in Vietnam. At the same time, I am happy to see that the SBV continues to closely participate in the whole process of evaluating the credit institutions as well as analyzing financial capabilities.... In addition, the SBV is also the official representative of the Socialist Republic of Vietnam at the ADB, and this is also a major contribution of the SBV in cooperating with us. We see that since the commencement of our operations in Vietnam, especially in the last 10 years, the cooperation between Vietnam and the ADB has become more and more cohesive and efficient.”
Mr. Ramesh also expressed his pleasure that the SBV has been playing a leading role in developing a green financial strategy for Vietnam, and he hoped to cooperate with the SBV in promoting this field in the coming time. Vietnam has made changes in the management and utilization of the ODA fundings as well as the implementation of ODA projects/programs. Accordingly, the managing agencies should conduct such activities as: assessment of debt repayment capacity, financial capacity conditions of the relevant parties... Regarding these contents, the ADB would be very much willing to support and help make this field of innovation in Vietnam more effective and appropriate. The second thing that the ADB wants to focus on is improving the ADB's project/program portfolio in Vietnam. Because Vietnam is also the country with the largest portfolio of the ADB supported programs/projects in the ASEAN region, and the fourth largest within all of the ADB member countries, the ADB wants to ensure that the ADB’s financial and funding resources in the projects in Vietnam are cost-effective.
The SBV Deputy Governor responded that the effective and efficient use of the ADB's fundings has always been a cross-cutting policy throughout the GoV as well as ministries and agencies over the past time, and will continue to be so in the coming time.
The SBV Deputy Governor reaffirmed her gratitude and hoped that Mr. Ramesh Subramaniam, from his position as Director General of the Southeast Asia Regional Department, would always support Vietnam in the cause of its socio-economic development.
VA