MANILA, PHILIPPINES – The government of Spain and Asian Development Bank (ADB) are assisting Viet Nam in preparing a master plan for the development of Thanh Hoa Province, the most populous region in the country.

“The province with its significant natural resources has strong potential for regional socioeconomic development,” said Hubert Jenny, senior urban development specialist of ADB’s Southeast Asia Department.

ADB will provide an $800,000 grant for the Technical Assistance for Preparing the Than Hoa City Comprehensive Socioeconomic Development Project, which has a total estimated cost of $1.25 million. The government of Spain will extend a $200,000 grant for the project, while the government of Viet Nam will cover the balance.

The project will finalize the master plan for the provincial and regional economic development of Thanh Hoa province; prioritize investment proposals on the basis of their impact on economic growth; and prepare investment proposals for official development assistance, private sector participation and strengthening of small and medium enterprises.

Through the project, infrastructure in the province should improve, transforming Thanh Hoa into an important regional economic center and enabling it to achieve its target of raising gross domestic product per capita to $1,800 in 2020 from $1,000 in 2005.

Viet Nam views urban and peri-urban development as crucial to achieving its goal of becoming an industrialized country by 2020. Peri-urban development generally includes economic diversification and expansion of agricultural post-production operations.

Thanh Hoa province, 160 kilometers south of Hanoi and connected on the west to Lao People’s Democratic Republic, is strategically positioned as a potential regional hub. But the province is being held back from full local and regional economic development by various constraints, including rapid population growth, which is worsening poverty. Poverty is high in Thanh Hoa, affecting about 45% of the 3.6 million people living in the province. Thanh Hoa is also constrained by an institutional framework that limits new ideas and innovation and the ability of Thanh Hoa City and the province as a whole from attracting private investments.

Local authorities of the province also have limited capacity in mobilizing resources needed for development, providing adequate public information and managing key public assets. Private sector participation in providing urban services is also constrained, while existing infrastructure is old.