WELCOME REMARKS BY AYUMI KONISHI COUNTRY DIRECTOR FOR VIET NAM, ASIAN DEVELOPMENT BANK OPENING CEREMONY OF THE

WORKSHOP ON STRENGTHENING PUBLIC-PRIVATE PARTNERSHIP FOR INFRASTRUCTURE INVESTMENT IN VIET NAM 8:30am, Monday, 3 November 2008

Resource Persons and Participants, Representatives of the Asian Development Bank Institute and the Staff of the Public Policy Training Center, Ladies and Gentlemen, It is with great pleasure that I am here today to participate in this opening ceremony of the workshop on Strengthening Public-Private Partnership for Infrastructure Investment in Viet Nam. On behalf of the Asian Development Bank and the staff of both the Asian Development Bank Institute as well as the Public Policy Training Program, let me first extend a warm welcome to all of you here this morning. This workshop, organized in collaboration with the Government of Viet Nam, in particular, the Ministry of Planning and Investment, and the Asian Development Bank Institute, is being implemented under the Asian Development Banks Public Policy Training Program (PPTP) and the ADB Institutes Capacity Building and Training Seminar Series, both funded by the Government of Japan. Accordingly, I would like to thank the Government of Japan for its generous support to Public Policy Training Program and the ADB Institutes Capacity Building and Training Seminar Series. Ladies and Gentlemen, As we all know, Viet Nam is changing and changing rapidly. With the implementation of the Socio Economic Development Plan 2006-2010, Viet Nam is becoming a middle income country in the near future. At the same time, with accession to WTO in 2007, Viet Nam is quickly being integrated into the global economy. The total of imports and exports exceeds 170% of GDP and this year, it is expected that the issuance of new FDI licenses will exceed $60 billion, which is the total size of the countrys entire economy just a few years ago. It is also more than 6 times of FDI approvals in 2006 or 3 times of that in 2007. As Viet Ham is to reach the level of middle income countries, the country has met major difficulties this year. As we are all very familiar, the two major issues have been the inflation and the trade deficit. In this connection, I would like to congratulate the Government that it has responded very well to the difficulties so far, and with the monthly CPI became negative in October 2008, and the contraction in trade deficits, it appears that generally that the issues are now generally under control although we certainly need continue to be careful.

It is probably important to note that the inflation has occurred not only because of the rapid credit growth or the reflection of the high global commodity prices, but because of a number of factors, including the inefficiencies of the domestic economy. As the current session of the National Assembly opened in October, it was noted by both the Government and the National Assembly deputies that the maintenance of the stability should still remain as the first policy priority of the Government. At the same time, it was also noted that both the Government and the deputies used the term, -ICOR or the incremental capital-output ratio as a key area for improvement, noting that Viet Nams industry needs to improve its efficiency. This is possible only with improvement of infrastructure, removal of administrative difficulties, efficiency enhancement of financial intermediation and upgrading of human skills. In order for Viet Nam to improve efficiency of its economy, priority investment needs to be made in these areas. The need for infrastructure financing is particularly acute, as the country needs to invest more than $2 billion a year for road transport, $3-4 billion for energy, and also a large amount for urban transport, water supply, sanitation, drainage, etc. Can the Government alone be able to make such investment? And is it appropriate that the Government will be the sole or main source of infrastructure financing? The Government is also fully aware that in fact, for efficient construction and operation of key infrastructure, it is highly desirable if we can realize greater public-private partnership. Yet, we all also know that in reality, there has been very little private sector involvement in funding, developing, and operating infrastructure in Viet Nam. The actual cases of successful PPP projects are very limited. Without us understanding better how we can do things differently, we will not be able to move forward from the theory to practice. The overall objective of this workshop is to improve the understanding of (i) the benefits and challenges of greater private sector participation in, and financing of, infrastructure projects; (ii) the priority policy actions required to strengthen the enabling environment and legislative frameworks for public-private partnerships; and (iii) the critical design elements needed to ensure bankability of PPP projects and to enable the development of a pipeline of PPP infrastructure projects in Viet Nam. Hopefully we will go a long way forward in achieving these objectives over the next 5 days. We are very fortunate to have a large group of highly experienced resource persons with extensive experience in public-private partnership modalities involved in this workshop and I am sure that through their respective presentations, and the panel and group discussions, much will be learnt in determining what can and should be done to realize public and private partnership in developing Viet Nams infrastructure. In closing, I would like to express my appreciation to the Government of Viet Nam though its Ministry of Planning and Investment and the Asian Development Bank Institute for their partnership in this workshop, and the Government of Japan for its generous financial support. I would especially like to thank you all for your participation. We all look forward to a lively exchange of ideas and discussions over the training period and I encourage you all to become actively engaged in the various course discussions and case studies. Thank you and I wish you a successful workshop.