The Vietnamese economy has stabilised and is now on track to recover from the global financial crisis, said Asian Development Bank President Haruhiko Kuroda.

He made the remarks at a conference entitled “The Impact of the Global Economic Slowdown on Poverty and Sustainable Development in Asia and the Pacific”, the first of its kind in the region, in Hanoi on September 28.

Poverty alleviation restored

Together with economic recovery, Vietnam is going to see its poverty rate decrease in the coming time, President Kuroda said.

According to the ADB President, the global economic crisis has slowed growth rates in regional countries, bringing unpredictable adverse social impacts, hitting the poor especially hard and impeding poverty reduction in the region.

Food and energy crises within the last two years and the latest financial crisis that started spreading throughout the world last year have pushed more than 40 million people in Asia and the Pacific out of work and forced 60 million into poverty, President Koruda said.

“Also in Vietnam, poverty alleviation has been almost entirely stalled recently, but the economy has bottomed out, is recovering and that means that poverty alleviation will soon be restored in the country,” said Kuroda.

The economy has yet to fully recover this year, with a growth in GDP of only 4.7 percent, as projected by the ADB, which Kuroda says is “still below medium-term potential.” But next year, it will grow by a “respectable” 6.5 percent which will “further facilitate poverty reduction in the country.”

No need for 2nd stimulus package

“I must say that the Vietnamese economy has bottomed out and is on a very strong recovery track. And if this trend continues, there would be no need to have a second stimulus package,” ADB President Kuroda said.

He acknowledged that fiscal and monetary policies and measures by the Vietnamese government so far have been effective in navigating the economy out of the storm of the crisis. “Inflation decelerated quite substantially,” he said, but warned that “if macroeconomic policies are too expansionary, that could ignite inflation.”

He expressed the belief that, given that the economy has started to rebound already, the Vietnamese government “will carefully consider growth prospects and inflationary risks, and will decide appropriate macroeconomic policies in the coming months.”

The ADB President highly valued Vietnam’s efforts to integrate poverty alleviation components into its strategy for sustainable growth.

Stressing that the crisis should be seen as a chance to bolster economic growth and chart a course toward sustainable development in the future, Kuroda said that Vietnam is doing just this, “taking this crisis as an opportunity to strengthen domestic industries to compete in external markets.”

He pointed out in particular that Vietnam has carried out various infrastructure projects that have taken into consideration mitigating and adapting to climate change, which “will be very good in the long run.”

“Already various policies and measures that the government has adopted during this global financial crisis have good elements which will contribute to the long-term, sustainable and inclusive development of the economy,” President Kuroda concluded.

However, he suggested Vietnam as well as regional countries should restructure their economies, increase intra-regional trade, maximise the benefits of labour mobility and invest more in education, health and social protection.

He reaffirmed ADB’s long-term commitments to assist economic development in Vietnam, mainly through “facilitating infrastructure development, improving education and facilitating economic integration with the regional economy.”

As for short-term assistance, the Manila-based bank has recently approved a 500 million USD fiscal support loan to Vietnam for the 2010-2011 period./.