Japan is extending billions-worth of dollars to Vietnam to help both small businesses in the country as well as support large infrastructure projects.
The money is being provided via the Japan International Cooperation Agency (JICA), and approximately US$1.3bn in overseas development loans are being granted to the Vietnamese government.
The facilities will support a number of projects, including a scheme designed to help the Vietnamese government maintain a high economic growth rate by relaxing the monetary policy with an expansionary fiscal policy.
Loans will also be extended to various small and medium-sized businesses projects, as well as supporting transportation and power infrastructure through the National Highway No.1 Bypass Road Construction Project and the Thai Binh Thermal Power Plant and Transmission Lines Construction Project.
Last year, JICA became the largest bilateral development agency after it merged with the Japan Bank for International Cooperation (JBIC). JICA has taken over responsibility for soft loans and grant aid provided by the Japanese foreign ministry.
Before the financial crisis hit Vietnam, the country was demonstrating high economic growth of around 8% per year. It also formally joined the World Trade Organisation (WTO) in January 2007.
However, growth is now in decline with GDP expected to only rise by 4-5% in 2009.
Last Updated November 20, 2009
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