Vietnam at cross roads: Context, Challenges and Priorities WB IMF - PowerPoint PPT Presentation

Vietnam at cross roads: Context, Challenges and Priorities WB – IMF Parliamentary Network Visit to Vietnam Hanoi, March 5, 2018 Ousmane Dione Country Director for Vietnam Disclaimer: The boundaries, colors, denominations and other information shown on any map in this presentation do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries

Outline Outline  Country Overview  World Bank Portfolio in Vietnam  Emerging Challenges  World Bank Country Partnership Framework  Key Messages

Countr Country y over erview view A multifaceted nation shaped by the topography and history • Vietn tnam am Facts sheet 8 Natural regions 63 Provinces • Land d area: 331,000 km2 • Coastal al line: 3,260 km • Po Popul ulat ation: n: 94 million Birth rate: 1% - Life expectancy: 72.91 • Ethnic icity ity: Kinh (86%); 53 others (14%) • Major cities: • Hanoi - 7.6 million; HCMC - 8.5 million; Hai Phong - 2.1million; Da Nang - 1.1 million: Can Tho - 1.2 million • Medium – Small (class 1-3) Cities: : 67

Countr Country y over erview view Comple Complex x political political sys system: tem: The tr he triumvir iumvirate te The Triumvirate

Countr Country y over erview view Gr Grea eat t strides strides ha have e been made t been made to o elimina eliminate te extr xtreme eme po pover erty ty 80% $3.10/day Poverty rates  Vietnam has achieved tremendous poverty reduction. $1.90/day GSO-WB Poverty In 1993, half of the population lived on less than 60% MOLISA Poverty $1.90/day (in 2011 PPP terms). By 2014, only 2.8 40% percent of the population fell into this group. 20%  Poverty reduction has been paired with shared 0% 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 prosperity, where the average consumption level of Vietnamese falling into the bottom 40 percent grew 48,1 50 GINI Coefficient 43,0 42,1 by 6.8 percent annually from 1993 to 2014. 39,7 38,7 40 34,8 32,0 29,6  Poverty reduction and shared prosperity have been 30 achieved through a combination of economic growth 20 and effective delivery of basic services. 10 0 Source: Analysis of Vietnam Household Living Standards Survey and WDI data using the Find My Friends tool. NB: Dotted lines indicate periods when substantial methodology changes were made. 5

Countr Country y over erview view Exp Expand anding ing opp oppor ortun tunities ities to ethnic to ethnic mino minorit rities, ies, yet c et challe hallenge nges s rema emain in  The vast majority of the poor — nine out of ten — Poverty rate distribution by district in 2010 and 2014: live in rural areas.  Poverty is concentrated among ethnic minorities, with the smaller ethnic minority groups and those living in the northern and central mountains being particularly affected. Making up only 15 percent of the population, they account for 60 percent of the poor.  More than half (54 percent) of those households that were poor in 2010 were still poor in 2014, while 22 percent had moved to ‘near poor’ . Among the 2010 ‘near poor’, 17 percent had fallen back into poverty. Source: Lanjouw, Marra, and Nguyen (2013) for 2010 data and SCD team analysis for 2014 data

Countr Country y Ov Over erview view Str Strong socio ong socio-economic economic perf perfor ormance mance in 2017 in 2017  Strongest GDP growth since 2008; stronger structural shift towards manufacturing and service.  Six consecutive years of macroeconomic stability – inflation kept well in single digit.  Current account and overall balance of payment continue to be in surplus - reserve rose to a record high level of about $53B  Strong job growth (1.6M new jobs), multi- dimensional poverty rate reduced to about 6.9%  Social security and health insurance coverage continues expanding

Country over Countr erview view Business en Business envir vironment onment continue continues s to to impr improve Doing Business 2018 Doing Business 2018 Vietnam vs. ASEAN Vietnam vs. ASEAN-4

Country over Countr erview view Go Gover ernment nment prior priorities: ities: a f a facilita acilitating ting sta state te for business or business de development elopment  Maintain macroeconomic stability through prudent monetary policies, fiscal consolidation, effective NPLs, and weak credit institution resolution.  Further improve the business enabling environment by streamlining and modernizing administrative systems and procedures.  Promote business development through support to SMEs and linkages to FDI and global value chains.  Promote private sector participation in infrastructure development.  Foster strong drive for implementation and policy coordination from the center of the government  Further strengthen governance, focusing on public sector integrity and transparency.

Country over Countr erview view Go Gover ernment nment prior priorities: ities: Ad Addr dressing essing pr productivity oductivity challenges hallenges for or incr increased eased growth wth  Structural shift towards manufacturing and service sectors, including high potential tourism sector.  Agricultural transformation and restructuring – value chain development; food safety- agribusiness promotion;  Regional development and coordination – e.g. the Mekong Delta, inter-provincials development programs.  Trade facilitation and logistics services development.  Infrastructure development – backbone transport systems (N-S Expressway, railway), airports, power generation – including renewable energy.  Land agenda - land consolidation and administration.  Tertiary education reform – skill development today for growth tomorrow and labor force competitiveness.

Wor orld ld Bank Bank Por ortf tfolio olio Str Strong financing ong financing enga engagements gements acr across oss sector sectors

Wor orld ld Bank Bank Por ortf tfolio olio Compr Comprehensiv ehensive e and quality and quality kno knowledge pr wledge prog ogram am Key flagship analytical works include:  Vietnam 2035 Report  Vietnam Taking Stock – Bi-annual Economic Update  Vietnam Public Expenditure Review 2017 – Towards Efficient, Equitable and Sustainable Fiscal Policies  Vietnam at the Crossroads – Engaging in the next Generation of Global Value Chains  Vietnam Poverty Update 2018 – Climbing the Ladder  Vietnam Job Diagnostic Report.  Vietnam Development Report series: Agriculture Transformation (2016), Connecting Vietnam (forth coming)  Vietnam Water Security and Governance Study  Vietnam Urbanization Report  Vietnam: Improving Workforce Education and Training  Vietnam: Multi-sectoral Nutrition Action Plan  Vietnam: Maximizing Finance for Development

Wor orld ld Bank P Bank Por ortf tfolio olio Econ Economic omic Ref efor orms ms for or Inc Inclusiv lusive e Gr Growth wth 2500 60 Per Capita GNI, Atlas Method Left Axis Poverty Headcount, US$1.90 2011 PPP Adjusted Right Axis 50 2000 40 1500 Economic 30 Outcomes 1000 20 500 10 0 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wor orld ld Bank P Bank Por ortf tfolio olio Comp Compreh ehen ensiv sive e Enga Engage gemen ments ts in in Ener Energy y Secto Sector WB financing: Only about 3-4% of overall power sector investments BUT helped promote power sector reform and restructuring

Compreh Comp Wor orld ld Bank ehen IDA Financing (Total US$3.2B) Key Reforms Outcomes Bank P ensiv sive Highway Rehabilitation Project 1993 (US$159M) Por e Enga 1996 Rural Transport Project (US$55M) ortf 2003: National Program on Traffic Safety Engage Mobility Highway Rehabilitation Project II tfolio (US$198M) 2001: Law on Road Traffic 1997 olio gemen Inland Waterways Project (US$73M) ments Urban Transport Improvement Project 1998 (US$43M) 1999 ts in Rural Transport Project 2 (US$104M) Road Network Improvement Project in Tran 2003 (US$225M) Accessibility 2004: Decree establishing the technical standards for different road classes 2004: National Transport Development Strategy (NTDS) to 2020 2005 Road Safety Project (US$32M) anspo 2005: Law on Inland Waterway Navigation 2006 Rural Transport Project 3 (US$250M) sport Mekong Transport & Flood Protection Project (US$135M) t Secto Mekong Delta Transport Infrastructure 2007 Sector Project (US$342M) 2007: Helmet Policy Hanoi Urban Transport Development Project (US$122.3M) Safety Northern Delta Transport Project 2008 (US$238 M) Hai Phong Urban Transport 2011 Development Project (US$175M) 2012: Establishment of Road Maintenance Fund Vietnam Road Asset Management 2013 Project (US$250M) HCMC Green Transport Development 2014: Update NTDS to 2030 2015 Project (US$124M) Sector Management Results-Based Operation for Local 2016 Bridge Construction and Road Asset Management (US$385M) Central Highlands Connectivity 2017 Improvement Project (US$150M)

Wor orld ld Bank Bank Por ortf tfolio olio Impr Improving access ving access to to clean w lean water ter and sanita and sanitation tion