On September 11, 2020, at the headquarters of the State Bank of Vietnam (SBV), Governor Le Minh Hung had a meeting with Mr. Andrew Jeffries - the new Country Director of the Asian Development Bank (ADB) in Vietnam. Also attending the meeting were leaders of the International Cooperation Department, the Monetary Policy Department, the Communication Department and the SBV Office.
Overview of the meeting
At the meeting, the SBV Governor congratulated Mr. Andrew Jeffries on his appointment as the ADB Country Director in Vietnam. Governor Le Minh Hung hoped that, in the role of the ADB Country Director, Mr. Andrew Jeffries would initiate a lot of ideas, solutions and activities to further promote the long-term cooperation and partnership between the– ADB and Vietnam. The Governor said: “I used to work for many years, directly in charge of Vietnam-ADB cooperation. I personally have very high evaluation and appreciation for the support and assistance provided by the ADB Country Directors over the years to Vietnam during our socio-economic development process.”
Mr. Andrew Jeffries - Country Director of the ADB in Vietnam - thanked SBV Governor Le Minh Hung for his time to meet his mission. Especially, with his 13 years of experience working at the ADB, including many years holding a leadership role at the Energy Division of the Southeast Asia Department, and his extensive knowledge in the fields of diplomacy, economy, etc., Mr. Andrew Jeffries made very high evaluation for the SBV’s role as the representative of Vietnam at the ADB, and for the SBV’s performance as the focal point in bridging with the relevant agencies in the country.
The ADB Country Director emphasized that he was really impressed with the good outcomes that the Government of Vietnam has achieved in containing the spread of the Covid-19 pandemic, which is still occurring complicatedly in many countries around the world, and has been causing serious impacts on the financial operations and the global stability. The outlook of Vietnam's economic growth in 2020 is currently lower than the projections at the beginning of the year due to the impacts of the pandemic; however, Vietnam is still one of the few countries with positive and relatively high growth rates in the world. In particular, the ADB Country Director affirmed that the Government of Vietnam has successfully manage to maintain the macroeconomic stability and control the inflation, in which there has been significant contributions by the SBV.
Mr. Andrew Jeffries - ADB Country Director in Vietnam - speaks at the meeting
In the coming time, with regard to the private sector financing, Mr. Andrew Jeffries said that the ADB would like to expand its operations with the private sector in Vietnam, not only in traditional fields such as infrastructure development, finance, etc., but also expanding to and increasing capital for non-traditional and non-infrastructure fields such as agriculture, education, etc. The ADB Country Director in Vietnam confirmed that, in each and every step, the ADB shall continue to exchange information with and consult the relevant ministries and Government agencies in Vietnam, especially the SBV, in order to develop an effective and highly feasible Country Strategy. Mr. Andrew Jeffries committed to further supporting and providing fundings as well as other resources for Vietnam's economic development. Particularly in the financial and banking sector, the ADB will continue to provide support to promote financial inclusion and the financial markets.
The ADB will consider the specific strategies and fundings to support Vietnam, and can also support the Government of Vietnam by seeking finance for important infrastructure projects; mobilizing non-refundable grants and ordinary loans; using the ADB funds as a catalyst to attract private funding and other technical assistance sources. In addition to the budget support, the ADB can also mobilize capital for innovations and knowledge development. It is expected that the ADB will publish the annual report on Asian Economic Outlook, including the outlook for Vietnam, on September 15, 2020.
Speaking at the meeting, SBV Governor Le Minh Hung said, thanks to the Government's strong and effective measures, and the full support of the people across the country, Vietnam has basically managed to control Covid-19 and restore the economy to a new normal. Under the current complicated impacts Covid-19 pandemic, the SBV has been managing the monetary, foreign exchange and credit policies in a proactive, flexible and prudent manner, in close coordination with the fiscal and other macroeconomic policies, in order to control the inflation, maintain the macro-economic stability, the money and foreign exchange markets, and support the economic recovery.
Since the beginning of 2020, the SBV has twice reduced the operating interest rates in order to help reduce the borrowing costs of the businesses and the people. In particular, the SBV has promptly issued several Circulars and Directives to require the credit institutions to implement measures such as debt restructuring and extending credit for those businesses and people affected by Covid-19. In addition, the whole banking system has proactively exempted or reduced fees for multiple payment services in order to support those people and businesses affected by Covid-19.
SBV Governor Le Minh Hung speaks at the meeting
The SBV has high appreciation for the ADB’s move to increase the size of the emergency support package to 20 billion USD, along with the amendments of the policies and the approval processes to facilitate quick and flexible assistance to the member countries in responding to the impacts of the Covid-19 pandemic. These are very much needed and timely resources to help the ADB member countries to fight the disease and to recover the economy. Regarding the budget support loans for Vietnam as proposed by the ADB, the Prime Minister has promptly instructed the Ministry of Finance to balance the budget and consider the feasibility of accessing these loans to support the Government’s expenditures in the current difficult period.
For the Vietnamese side, the SBV Governor also made high appreciation for the ADB's assistance to Vietnam’s responses to Covid-19 via restructuring the loan under the Health Services Development Program, and providing a grant to the Ministry of Health to assist the Covid-19 responses; mobilizing a 5 million USD non-refundable grant from the Women Entrepreneurs Finance Initiative (We-Fi) to assist women-owned small and medium enterprises (SMEs) in coping with the impacts of the Covid-19 pandemic. Governor Le Minh Hung emphasized that this is a very meaningful grant not only for women-owned SMEs but also for the SBV in general and the credit institutions in particular in facilitating the effective implementation of the solutions stated in Circular 01 and Directive 02 of the SBV on encouraging credit institutions to restructure their repayment terms for the Covid-19 affected businesses.
In the near future, the SBV recommended that the ADB continue to coordinate with the Government and the relevant ministries to accelerate the disbursement of the signed programs/projects, as well as the negotiations and signing of the programs/projects in the 2020-2021 List in order to generate substantial financial resources to promote public investments and to support the economic recovery from the adverse impacts of Covid-19; seek trust fund sources from regional and international organizations to provide non-refundable grants and technical assistance to the SBV and other government agencies in continuing the efforts to respond to Covid-19, as well as in meeting Vietnam’s demands for technical assistance.
In particular, on private sector financing, the Prime Minister has issues some directions on the process and procedures, in which the SBV has been assigned as the lead agency to review the ADB's proposals. Accordingly, the SBV has been actively coordinating with the relevant ministries to consider and review all aspects related to the private sector financing by the ADB, such as tax exemption procedures. In the coming time, it is recommended that the ADB promote and increase private sector financing in line with the Government's priorities and expectations regarding support to the development of the private sector. In addition, the SBV Governor also hoped that the ADB could continue to promptly and timely share available macroeconomic information and the management of the monetary policies in other countries around the world and in the region; work closely with the SBV to implement the pledged technical assistance in the areas of banking and finance, microfinance, finance inclusion, green finance, anti-money laundering, increased access to credit for women-owned SMEs, assistance for mitigating Covid-19 impacts, and other technical assistance.
VA