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!

Source: Bloomberg

About the Author:
Thomas Butcher is an Associate Director at VanEck. Formerly an independent writer, researcher, and consultant focusing, amongst other things, on strategic materials, in particular metals, Mr Butcher has 38 years of experience in finance. He has lectured and spoken at conferences around the world. 

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

3World Bank: New Vietnam - World Bank Group strategy focuses on inclusive growth, investment in people, environmental sustainability and good governance, May 30, 2017.

4Bloomberg: Vietnam Learns Becoming a Tiger Economy Comes With a Cost, August 6, 2017