The Asian Development Bank (ADB) has approved a $230 loan to support Vietnam’s ongoing reforms to overhaul public finances, boost private investment and revive its economic competitiveness. Vietnam is falling behind neighbors in terms of competitiveness and ease of doing business, and this is hurting its ability to attract private investment and grow the economy, said Tomoyuki Kimura, ADB’s country director for Vietnam. Structural obstacles are holding the country back and this loan assistance from ADB will allow the government to press ahead with measures to resolve the issues along the support of other donors, he noted. Vietnam has seen more muted economic activity in the recent years with domestic private investment as a ratio of gross domestic product (GDP) declining from around 15% a year in 2007-2010 to 11.5% in 2013. Skills gaps in the workforce, an unsophisticated financial sector, a hefty fiscal deficit, unequal conditions for state firms compared with the private sector and an opaque business regulatory environment have held back competition, investment and growth. According to World Bank’s “Doing Business 2015” report, Vietnam dropped six places to 78th among 189 economies worldwide in terms of business environment, much far from Singapore (1st), Malaysia (18th) and Thailand (26th). (Vietnam News Dec 2)
