The Asian Development Bank (ADB) on September 15 approved a 500 million USD loan to Vietnam in support of its efforts to bolster domestic economy and ensure social stability.
According to ADB’s press release the same day, the five-year loan which is part of its Countercyclical Support Facility (CSF) will be used to provide budgetary support for Vietnam to finance critical public expenditure programmes in 2009 and 2010.
Vietnam has been severely affected by the global economic downturn brought about by the slump in foreign direct investment, exports, and remittances. The crisis has affected the government's access to financial markets for budget financing.
Arjun Thapan, Director General of ADB's Southeast Asia Department, said the loan will allow the Vietnamese government to meet its financing needs and support economic growth in a fiscally responsible way during a challenging period for the global economy.
“The government will be better able to protect its social spending and poverty alleviation programmes and objectives, and continue with its longer-term development objectives in 2009,” he added.
The government has announced a set of temporary stimulus measures that would advance infrastructure projects to generate jobs; cut tax and defer tax payments to support business and boost domestic consumption; provide credit guarantees and other measures to keep the credit flowing; and increase its budget for social welfare to assist the poor and vulnerable groups.
The CSF, established in June 2009, supports ADB's developing member countries needing to increase fiscal spending to counter the global economic crisis.
ADB has approved CSF loans to the Philippines and Kazakhstan . The CSF loan has a five-year repayment term, with a three-year grace period./.