OREANDA-NEWS. The President of the Asian Development Bank (ADB) Takehiko Nakao met with Viet Nam’s State President Tran Dai Quang and Prime Minister Nguyen Xuan Phuc during his two-day visit to discuss ADB’s deepening partnership with the country and priorities for future cooperation. Mr. Nakao also met with Deputy Prime Minister Vuong Dinh Hue, Chairman of the Party’s Central Economic Commission Nguyen Van Binh, Minister of Planning and Investment Nguyen Chi Dung, Minister of Finance Dinh Tien Dung, and Governor of the State Bank of Viet Nam Le Minh Hung.

At the meetings, Mr. Nakao commended Viet Nam’s recent macroeconomic performance and economic reforms. He reaffirmed that ADB will continue strong assistance to the government through sovereign lending of about $1 billion annually as ADB is preparing a new Country Partnership Strategy, 2016-2020. The central goal of the strategy is to help Viet Nam to promote more inclusive and environmentally sustainable economic growth, in alignment with Viet Nam’s Socio-Economic Development Plan, 2016-2020, and in cooperation with development partners.

“It is crucial that Viet Nam continue pursuing sound economic policies and deepen structural reforms,” said Mr. Nakao. “It is particularly important to reform state-owned enterprises by reducing the state’s ownership, improving corporate governance, and strengthening financial performance. The government also needs to resolve non-performing loans, strengthen tax revenues, and improve efficiency of public expenditures.”

ADB expects economic growth of 6.7% in 2016, the same rate of growth as in 2015, although there is a downside risk due to an ongoing severe drought. Growth is projected to remain robust at 6.5% in 2017. Inflation, which moderated to an average of just 0.6% last year, the lowest level since 2001, is forecast to be 3.0% this year.

Viet Nam achieved most of the Millennium Development Goals ahead of time. ADB will support the country’s efforts to achieve many of the new Sustainable Development Goals. In health, ADB will provide assistance in expanding community health care centers and broadening health insurance coverage from the current 76%. In education, ADB will deepen its support to improve the quality of secondary education, and extend support to technical and vocational education and training.

ADB will support infrastructure including roads and mass rapid transit systems, power transmission and distribution, renewable energy, rural electrification, urban infrastructure, and irrigation and water resource management. ADB will continue to enhance connectivity under the Greater Mekong Subregion program, including the East-West Economic Corridor.

Viet Nam has increasingly become susceptible to climate change-related extreme events such as droughts and flooding that severely affect agriculture, forestry and fisheries. Adaptation and mitigation will be crucial areas for ADB’s loans and technical assistance. ADB will help the government set clear and consistent policies on an appropriate energy mix to pursue its COP 21 commitments based on careful cost analysis of different energy sources, including declining renewable energy costs over time