Press Releases

Signing Ceremony

• 1. Today, JICA (President Sadako Ogata) signed an agreement with the government of the Socialist Republic of Vietnam to provide Japanese ODA loans for up to 119.791 billion yen.
• 2. The details of the loans are provided below.
  (1) The Global Financial and Economic Crisis
  Vietnam recorded high growth from 2005 to 2007 that exceeded eight percent while it reduced the percent of the population classified as impoverished from 37.4 to 16.0 percent between 1998 and 2006 (refer to the graph and the table below). Due to the impact of the global financial and economic crisis that erupted last fall, growth has decelerated such that the gross domestic product (GDP) is expected to grow only four to five percent in 2009. The Eight Poverty Reduction Support Credit with Economic Stimulus Support will provide the necessary support to back the Vietnamese government’s efforts to maintain a high growth rate by relaxing the monetary policy combined with an expansionary fiscal policy for economic stimulation. This program represents the first initiative for the emergency budget support Japanese ODA loans announced by Japan at the London Summit this past April. Floating interest rate will be included so that flexible financing can be provided to developing countries (such as Vietnam) hindered by the worldwide financial and economic crisis. This will ensure such nations can implement the tax reductions and other economic measures necessary to expand domestic demand.
  The effects of the crisis must be alleviated as well, which is why these loans include support for small- and medium-sized businesses as well as for regional infrastructures under the Small and Medium-Sized Enterprises Finance Project (III) and the Small-Scale Pro Poor Infrastructure Development Project (III).
  (2) Sustainable Development over the Mid-term
  While managing the financial and economic crises, Vietnam needs to continue building its economic infrastructure as an instrumental step to forming an investment environment if it is to promote sustainable development over the mid-term. To assist with this, these Japanese ODA loans will provide assistance with transportation and power infrastructures under the National Highway No.1 Bypass Road Construction Project (II) and the Thai Binh Thermal Power Plant and Transmission Lines Construction Project (I). Vietnam also needs to address the environmental issue of climate change. To assist with this, the Energy Efficiency and Renewable Energy Promoting Project aims at improving the energy use efficiency at the business level.
• 3. Before the global financial and economic crises took hold in Vietnam, the nation posted high economic growth around eight percent per year and formally joined the World Trade Organization in January 2007. Further integration into the international economy is expected, and Vietnam is thus considered to be an important country for business development by Japanese companies. For Vietnam to achieve sustained economic growth and poverty alleviation, it must deal with the global financial and economic crisis while addressing climate change and revitalizing the public sector through the creation of economic and investment infrastructures. Through these Japanese ODA loan projects, the new JICA will provide a higher level of assistance to Vietnam with its technical cooperation and grant aid.

Graph. Economic growth in Vietnam

Source: Created using data from the IMF World Economic Outlook Database
(October, 2009)

Table. Poverty alleviation in Vietnam

(%)

	1993	1998	2002	2004	2006
Overall	58.1	37.4	28.9	19.5	16.0
Northeastern region	86.1	62.0	38.4	29.4	25.0
Northwestern region	81.0	73.4	68.0	58.6	49.0
Red River Delta region	62.7	29.3	22.4	12.1	8.8
North Central Coast region	74.5	48.1	43.9	31.9	29.1
South Central Coast region	47.2	34.5	25.2	19.0	12.6
Central Highlands region	70.0	52.4	51.8	33.1	28.6
Southeastern region	37.0	12.2	10.6	5.4	5.8
Mekong River Delta region	47.1	36.9	23.4	15.9	10.3

Source: Created using data from the Vietnam Living Standards Survey

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• Reference：Loan Amount and Terms
• Reference：Projects Summary