The Hanoitimes - At the average GDP growth rate of 7.5% annually, Vietnam has huge capital demand for economic development.
The International Investment Bank (IIB) has applied to set up a representative office in Vietnam, aiming to expand its operation not only in Vietnam’s banking sector but also to support large scale project of national importance, said IIB’s Chairman Nikolay Kosov.
Among its member states, Vietnam is the fastest growing economy and the second largest country in terms of population, however, capital contribution in IIB remained at modest level of a 4% interest, Kosov said in a meeting with Deputy Prime Minister Vuong Dinh Hue on March 12, the governmental portal reported.
Deputy Prime Minister Vuong Dinh Hue and Nikolay Kosov, IIB’s chairman. Source: VGP.
Kosov expected Vietnam to play a more prominent role in IIB, as the country has not appointed the governor of the central bank into IIB’s board of governors.
The Moscow-headquartered bank is a multilateral institution for development that promotes social and economic development, prosperity, and economic cooperation between its member states, including Bulgaria, Hungary, Vietnam, Cuba, Mongolia, Russia, Romania, Slovak Republic and the Czech Republic.
At the meeting, Deputy PM Hue said Vietnam is committed to playing an active role for the sustainable development of IIB and contributing the required capital amount in the coming time.
At an average GDP growth rate of 7.5% annually, Vietnam has huge capital demand for economic development, and the major sources of capital mainly come from credit and the banking sector, Hue stated.
Hue informed that Vietnam’s banking sector has been undergoing restructuring towards greater resilience against external shocks and lower the bad debt ratio.
Moreover, the country considered a combination of flexible management of fiscal and monetary policies a way to stabilize macro-economy, which is a favorable condition for the IIB to increase its presence in Vietnam.
Hue encouraged the IIB to approach Vietnam’s major corporations which are in need of large funds for infrastructure development projects, including transport infrastructure and energy sector.