Pushing the northwestern region up

 As a big international donor, what do you think about the importance of the northwestern region in Vietnam’s socio-economic development as well as the challenges to poverty reduction in this region?

Vietnam has made remarkable progress in economic growth and poverty reduction over the past decade. Poverty declined from 58 per cent in 1993 to 7.8 percent in 2013 according to official statistics.

The northwestern region of Vietnam possesses unique potential for economic development, especially in tourism, forestry, hydro power, mineral resources and cross-border trade. However, the region’s poverty still remains high, at 25.86 percent, in spite of Vietnam’s impressive national achievements. Reducing the remaining poverty is high on the agenda of the Vietnamese government, and attention needs to be paid to this region.

Limited access to basic services, markets, and financial, land, and information resources are the most critical constraints for the poor in the northern mountains.

In June 2014, the World Bank approved a $250 million credit for Vietnam to implement a programme to develop the region. What is the reason behind that?

In June 2014, , the World Bank approved a $250 million credit for the Results Based National Urban Development Programme for the north and northwestern regions of Vietnam, to develop and improve basic services in seven  urban areas of  these lagging regions of Vietnam.

The World Bank Programme presents an opportunity to address extreme poverty and promote shared prosperity in Vietnam. Rates for poverty, and extreme poverty, are highest in the northern mountains region of the country, and this region has experienced substantially less economic growth and poverty reduction than other parts of Vietnam over the last decade.

This is attributed, in part, to poor transportation links between rural areas and markets and the growing number of rural area residents migrating to cities to work in private industry and services.

At the same time, the strategic challenge facing these cities is to establish an effective urban management and implementation model, including a sound framework for predictable financing for infrastructure investments. Well- managed urbanization is an important catalyst for growth and poverty reduction as we have seen in the case of Korea, Taiwan, Singapore, European countries amongst others. For this to occur, cities will require strategic infrastructure investments as well as capacity to plan, prepare and manage these investments.

What do you expect from this programme?

The programme will focus on strengthening the capacity of participating cities in the northern mountains region to plan, implement, and sustain urban infrastructure, and improve the access of about 800,000 people to better urban services in seven cities under the programme.

Equally important, this operation seeks to strengthen implementation of the Vietnamese government’s National Urban Development Programme through adopting a results-based approach, which funds directly to the delivery of results to the project’s beneficiaries.

This operation, therefore, will support the government in sustainably addressing the twin goals of poverty reduction and inclusive economic growth. In addition, it provides an excellent opportunity to deliver results using Vietnam’s own systems, policies and procedures in all aspects of project management, including procurement, financial management, environmental and social safeguards.