Vietnam Graduates from the IDA
By Thomas Butcher, Associated Director, VanEck
At the end of June, Vietnam “graduated” from the International Development Association (IDA), the World Bank’s fund for low income countries1. Graduating with Vietnam were Bolivia and Sri Lanka. However, having graduated, on an exceptional basis, each will receive transitional support through IDA 18 period (FY18-20)2. As Vietnam “transitions further into middle income country status,”3 this assistance from the bank will be provided under a new Country Partnership Framework (CFP).
However, as the country develops further, its financing needs, too, are growing. Since, according to the World Bank, official financing will not be enough to meet these needs,4 Vietnam will have to tap the capital markets. And pay to do so.
Success, it seems, also comes with its costs!
The article above is an opinion of the author and does not necessarily reflect the opinion of MVIS® indices or its affiliates.
1World Bank: New Vietnam - World Bank Group strategy
focuses on inclusive growth, investment in people, environmental sustainability
and good governance, May 30, 2017. A country’s relative poverty is the
primary test for eligibility for IDA support – GNI per capita below an
established threshold and updated annually. This stood at US$1,215 for the
fiscal year 2016.
2IDA/World Bank: Borrowing Countries
4Bloomberg: Vietnam Learns Becoming a Tiger Economy Comes With a Cost, August 6, 2017