Affluent Vietnam does not want cheap World Bank loans cut off

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Vietnam wants assistance under the World Bank's incentive program for lower middle-income countries to continue, saying its current per capita income exceeds the US$1,175 threshold only due to inflation.

After its average income rose to $1,260 last year Vietnam no longer qualifies as a lower middle-income country and from 2014 cannot get zero-interest loans from the International Development Association (IDA).

But VnExpress cited a Vietnamese government report, released at a meeting between Vietnam and international donors on December 14, as saying a depreciation of the dong over the past five years amid the economic troubles caused the income increase.

Between 2007 and 2011 half of the growth was attributable to this, it said.

The country deeply appreciates the role played by IDA loans in its poverty eradication efforts in the past decade, it said, but pointed out that at 17 percent Vietnam still has among the highest poverty rates in the region.

Since it is threatened by the current economic downturn, it is "necessary" not to completely switch to another World Bank lending program under which loans carry 1.25 percent interest.

The World Bank has lent Vietnam $1.1 billion so far this year, 90 percent of it given by the IDA and the rest by the International Bank of Reconstruction and Development.

It provided the country with interest-free loans until February 2010.

Between 1993 and 2010 it lent a total of $10.7 billion to Vietnam.

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