M2 Presswire
2 November 2004

At a meeting on Tuesday 2 November at the Vietnamese Ministry of Finance, State Secretary Kjorven and Vice Minister of Finance Tam signed a declaration of intent on a debt-for-development swap between Norway and Vietnam.

Under the debt-for-development swap agreement Vietnam's debt to Norway, equivalent to approximately NOK 35 million, will be converted into a contribution in local currency to strengthen the ''Decentralised Programme for Rural Poverty Reduction''. The programme is a co-operation project between the International Fund for Agricultural Development (IFAD) and the Vietnamese authorities. The main focus of the programme is to promote poverty reduction-oriented and decentralised economic development in the provinces of Quang Binh and Ha Giang. The programme emphasises local participation and private sector and agricultural development.

Multilaterally co-ordinated debt-for-development swaps are one of the new debt policy instruments in the government's Plan of Action on Debt Relief for Development. It envisages the establishment of mechanisms that allow debt to be swapped for investment in the fields of health, development and the environment. A debt-for-development swap agreement with Vietnam will most likely be the first of its kind, and in multilateral forums Norway will encourage other countries to follow suit.

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