Loans of $1.52 billion to provide support for building the economic infrastructure needed to boost competitiveness.
The Japan International Cooperation Agency (JICA) has signed Japanese ODA loan agreements with the Vietnamese Government totaling 166.124 billion yen ($1.52 billion) for three projects, according to a report released by JICA on June 3.
The three projects are the Ho Chi Minh City Urban Railway Construction Project (Ben Thanh - Suoi Tien Section, Line 1), the Thai Binh Thermal Power Plant and Transmission Line Construction Project, and the Second Ho Chi Minh City Water Environment Improvement Project.
The loans will support the building of economic infrastructure essential to strengthening Vietnam’s competitiveness and promoting environmental improvements to overcome the country’s vulnerabilities.
The construction of the urban railway in Ho Chi Minh City will alleviate traffic congestion and air pollution while encouraging regional economic development.
The Thai Binh power project will use coal produced in Vietnam to meet increasing power needs, boosting economic development and strengthening the country’s international competitiveness.
The water project in Ho Chi Minh City, meanwhile, will see sewerage and drainage systems built to improve water treatment capacity and reduce flooding.
Since the 1990s, the report noted, Vietnam has maintained steady economic growth and in 2010 became a lower middle-income country, which had been a national goal, and successfully reduced its poverty rate.
In a process that began last year, tariffs are being abolished in stages within the ASEAN region. In order to maintain sustainable economic growth while progressing toward the goal of industrialization by 2020 under these new circumstances, Vietnam must make economic structural and governance reforms, including improvements to its financial system and infrastructure to improve its investment environment.
“Taking these steps will create mid- to long-term macro-economic stabilization and strengthen international competitiveness,” the report stated. “Vietnam must also address its vulnerabilities by raising incomes of rural residents, who make up about 70 per cent of the country’s population and have a higher poverty rate than urban residents, and by improving public sanitation, which worsens with urbanization.”