On Tuesday, December 22, the World Bank approved its largest-ever loan to Vietnam. Owing to the forthcoming elevation to middle income status, the former war-ravaged Southeast Asian country is financially rewarded with 500 million dollars.

Being the first credit that has ever been conceded to Vietnam by the World Bank, the loan is intended for a reform program. It includes the environmental screening of publicly funded infrastructure projects, the strengthening of public financial management as well as arranging a regulatory framework for private participation in infrastructure.

"This is a significant milestone for Vietnam, a country which will have moved from the category of highly indebted country to a middle income status in less than seven years,” Jim Adams, the World Bank Vice President for the East Asian and Pacific region, stated.

So far, the World Bank’s support to Vietnam has come from the International Development Association (IDA), which allocates interest-free loans to the world's poorest countries. When nations hit the limit of a per capita income of 1,025 dollars for two consecutive years, the World Bank provides lending by the International Bank for Reconstruction and Development (IBRD). Established in 1944, the original institution of the World Bank Group aims to reduce poverty in middle-income countries.

For next year, international donors pledged an increase of 33 % in financial aids, accounting for more than eight billion dollars.
(Source: AFP)