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Jul 07, 2021 / 11:29

ADB approves US$4.6 million technical assistance for Vietnam's private sector

The private sector is expected to play a key role in driving the country forward in the upcoming decade.

The Asian Development Bank (ADB) has approved a US$4.6 million technical assistance to help the Vietnamese Government strengthen public-private partnerships (PPPs), private sector development, and state-owned enterprise (SOE) reform.

 Inside Vinfast's factory. Photo: Pham Hung

The technical assistance will provide policy advice, assist in infrastructure project preparation, and strengthen institutional capacity to enhance sustainable economic growth. The financing includes a $2.7 million grant from the Government of Canada and a $1.9 million grant from the Government of Australia, both to be administered by ADB.

ADB Principal Private Sector Development Specialist Donald Lambert said Vietnam has achieved impressive socio-economic development over the past three decades by maintaining the high economic growth gained from its structural reforms.

“To meet the targets of its upcoming Socio-Economic Development Strategy (SEDS) 2021-2030, maintain a growth rate of 6%-7%, and achieve the Sustainable Development Goals, Vietnam will need to further accelerate economic reforms, expanding the role of the private sector in driving the country’s development,” Lambert said.

Between 2011 and 2020, Vietnam invested an estimated $117 billion in infrastructure. However, the country’s infrastructure remains underdeveloped compared to its regional peers.

Vietnam will need to mobilize between 2021 and 2030 an estimated $237 billion to close the infrastructure deficit, which is $49 billion more than the historical spending trajectory.

Recognizing the potential of the private sector to help close the infrastructure deficit, Vietnam’s SEDS 2021-2030 prioritizes removing barriers to open competition and developing a supportive environment to increase the private sector’s contribution to the economy, including a larger role in infrastructure development.

ADB’s new technical assistance will help by delivering policy advice on PPPs and private sector development, piloting projects that embed the G20 Quality Infrastructure Investment principles, and strengthening PPP and private sector development institutional capacities.