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The US$221.5-million credit is a budget support operation and comes in the form of concessional terms for a period of 30 years with a grace period of five years. It encourages policy reforms under two pillars.

The first supports an inclusive economic recovery by easing the tax burden on businesses, improving access to financial assistance among vulnerable groups, reducing gender gaps in the workplace, and promoting financial inclusion.

The second pillar contributes to greening trade policies, accelerating the adoption of e-government, and increasing the uptake of renewable energy.

The government has moved quickly in recent months on the implementation of these reforms. The approval of mobile money licenses and the roll out of electronic invoice systems in the country’s largest municipalities are examples of this. The pace of reform is expected to accelerate as part of the recovery package to be discussed at the National Assembly next week.

The credit is provided through the World Bank’s International Development Association (IDA), the Bank’s concessional lending window for low-income countries.

WB Country Director for Viet Nam Carolyn Turk said that the WB is proud to support Viet Nam at a time when the economy is struggling. 

“The range of policy actions supported by this operation will not only create a strong foundation for the immediate recovery from the COVID-19 crisis but also benefit Viet Nam in the longer run,” she said.