Poverty Reduction Strategy Credit IV

closed

This Fourth Poverty Reduction Support Credit (PRSC) Project provides further support to Vietnam's reform program, within the current cycle of PRSCs, and is a vehicle for the Bank, and the donor community, to stay engaged with a client that has delivered an outstanding performance in terms of economic growth and poverty reduction. The project strengthens the reform program on several fronts: 1) promotes greater competition and faster integration with the world economy. The credit supports actions aimed at gaining accession to the World Trade Organization (WTO), measures to accelerate the divestiture of state-owned enterprises (SOEs) in non-strategic sectors, adoption of a more determined approach to banking reform, and introduction of regulatory bodies for infrastructure services. 2) The project also promotes human development and environmental protection. It supports improvements in the quality of education, especially in poor areas, and, also endorses measures aimed at protecting and developing forests, which sustain the livelihoods of many poor households. Moreover, it includes the adoption of a better regulatory framework in relation to the environment. 3) The introduction of modern planning methods, focused on attaining development outcomes, is also supported, in addition to other measures aimed at enhancing transparency and improving governance, i.e., increased disclosure for all state budget entities, strengthened accountability through the independence of the State Audit, and improved information systems. While risks exist, the government is taking steps towards more effective anti-corruption policies, and, rapidly emerging and fast-growing provincial investment funds could contribute to the development of infrastructure at the local level, despite their limited transparency and accountability, which remains a matter of concern.