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Poverty Reduction Support Credits (PRSCs)Background Poverty Reduction Support Credits (PRSCs), established by the World Bank in Vietnam in 2002, put funds through Vietnam’s budgetary and administration systems to support nationally-owned strategies for economic growth and poverty reduction. The process is both a reward for good performance and an incentive to increase the pace of reform. In 2006/07, Australia contributed A$10 million to PRSC Round 5 (PRSC5) from AusAID’s bilateral program in Vietnam. In the lead up to this contribution, Australia was part of the Government of Vietnam/donor negotiations to assess reform progress in the preceding year and agree on the matrix of triggers and policy actions for the following year. We focussed on areas and issues of priority under our bilateral program (trade integration, health, water and sanitation, and gender), where our experience on the ground enabled us to influence the joint assessment of the Vietnamese Government's reform performance. In 2007, the World Bank proposed a second 5-year cycle of credits in Vietnam (PRSC6-10) to align with Vietnam’s 5 year Socio-Economic Development Plan 2006-10, commencing with PRSC6. PRSC6 comprises a World Bank loan of US$150 million, plus approximately US$160 million co-financing from ten other donors, predominantly in grant aid. Similar (or higher) donor commitments are expected for PRSC7. Objectives Australia's contribution is contingent on Vietnam meeting agreed policy actions in areas of social and economic reform, as assessed by co-financiers including Australia. It is consistent with the White Paper focus on accelerating economic growth and strengthening effectiveness through greater use of government systems and alignment of Australia’s development strategies with partner government policies. Australian Contribution (PRSC 6 and 7): A$15 million for each year Duration (PRSC 6): Jan 2007 - Dec 2007 Location: Countrywide Outcomes: In terms of development impact, the PRSC has become the main forum for policy dialogue between Government agencies and donors on reforms. Policy actions under the PRSC process have contributed to the spread of economic market mechanisms, the creation of new wage employment opportunities and strengthened delivery of basic services. Vietnamese Counterparts The State Bank of Vietnam (SBV) World Bank Contact person Poverty Reduction and Economic Management Unit AusAID Contact person Ms. Susan McKeag 2008 |
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