On September 11th, 2018, at the headquarters of the State Bank of Vietnam (SBV), Governor Le Minh Hung had a working session with the delegation of the Asian Infrastructure Investment Bank (AIIB) led by Mr. Joachim Von Amsberg - Vice President, Policy and Strategy.
Also attending the meeting were representatives of the SBV entities: the International Cooperation Department, the Credit Department and the SBV Office. On the AIIB side, there were officials from the Investment Operations Department III and the Strategy, Policy and Budget Department.
At the meeting, SBV Governor Le Minh Hung warmly welcomed Mr. Joachim Von Amsberg and his delegation to visit Vietnam to attend the World Economic Forum on ASEAN 2018 (WEF ASEAN 2018). Especially, Governor Le Minh Hung congratulated Mr. Joachim Von Amsberg on his first visit to Vietnam as AIIB Vice President. After his last visit to Vietnam in 2015 when he was Vice President of the World Bank (WB). Governor Le Minh Hung thanked the Vice President of the AIIB for his precious support to Vietnam, and also believed that Mr. Joachim Von Amsberg will help to strengthen the Vietnam-AIIB cooperation in the future, just like how he supported the relationship between Vietnam and the WB before.
Praising the achievements the AIIB has made during the 3 years’ operations, the Governor of the State Bank affirmed “As the official representative of Vietnam at the AIIB, the SBV will actively coordinate with the relevant agencies to ensure that Vietnam is a reliable, reputable member, and can contribute positively to the AIIB operations."
AIIB Vice President Joachim Von Amsberg speaks at the meeting
So far, the AIIB has funded 29 projects worth US $5.85 billion in 13 countries; also increased the number of member countries to 87 (up from the original 57 founding members). This shows that the AIIB is gradually showing its position as a reputable and reliable multilateral financial institution. In addition, the SBV has always highly appreciated the AIIB in developing the orientations on governance, private capital mobilization and sectoral development (such as energy, transport, sustainable urban development ...). This is the basis for the AIIB to carry out its mission and goals set out in the future.
Speaking at the meeting, Mr. Joachim Von Amsberg expressed his thanks for the contributions and support of Vietnamese Government to the AIIB in its development process. "Vietnam is an active member and always has an important voice in the AIIB activities," said Mr. Joachim Von Amsberg. The AIIB Vice President also highly appreciated the SBV's participation in the AIIB governance and suggested that Vietnam continue to play an active and responsible role for the AIIB's activities in the coming time.
The AIIB Vice President also said that the AIIB is very interested in supporting some specific infrastructure development projects in Vietnam. On the occasion of the WEF ASEAN 2018, there will be meetings and exchanges between the relevant parties in order to reach final decisions on those projects.
SBV Governor Le Minh Hung exchanges at the meeting
At the meeting, the SBV Governor and the AIIB Vice President exchanged and updated each other on the operations of the AIIB projects in Vietnam, as well as the orientations of the SBV in the coming time.
Governor Le Minh Hung said that in the previous period, the SBV was successful in the negotiations to obtain the WB and the ADB loans, contributing to the mobilization of a large capital for the socio-economic development. However, Vietnam has "graduated from IDA" (from July 1st, 2018) and “to be graduate from ADF" (from January 1st, 2019). Given Vietnam's current high investment demands (especially for expressways, seaports, renewable energy, urban development ...) and the public debt ratio is high, Vietnam recognizes that the private sector funding will contribute significantly to the country's development investment and will gradually replace public funds from the state budget in the future. Therefore, the Government has set the orientation and created all necessary conditions for enterprises to raise capital, especially from the international financial institutions such as the AIIB, in the form of self-borrowing without a guarantee from the Government. In order to meet the current investment needs, the Government is committed to maintaining the policy and protecting the investors.
The SBV recognizes that the Non-sovereign financial products for infrastructure investments of the AIIB is in line with Vietnam's policy and capital mobilization orientations. Thus, the AIIB's participation in financing the infrastructure development in Vietnam at this time is in line with the current capital mobilization orientations of the Government.
In particular, in order to create favorable conditions for investors/businesses to raise capital by self-borrowing without government guarantees, Vietnam is amending the Public Investment Law, while building the Law on PPP (to be completed in 2020) and other relevant guiding documents. At the same time, Vietnam hopes that the AIIB can consider to reduce the interest rates of the AIIB loans to be on par with the general interest rates, increase the share of the AIIB funding for projects, and provide co-financing and other technical assistance in order to increase the concessions of the AIIB funding for Vietnam.
SBV Governor Le Minh Hung appreciated the AIIB's leadership for its commitment to assist Vietnam in accessing the AIIB's capital to invest in infrastructure development for Vietnam's socio-economic development. The State Bank of Vietnam - as the official representative office of Vietnam at the AIIB - will coordinate with the relevant agencies to facilitate the activities of the AIIB in Vietnam.
VA