Workers package herbal remedies at Nam Duoc Co.,Ltd in northern Nam Dinh Province. Preferential loans worth US$55 million will be offered by the World Bank to help research institutes and enterprises, including those in traditional medicine sector, develop products for low income earners. — VNA/VNS Photo Danh Lam

HA NOI (Biz Hub)— The World Bank is offering preferential loans worth US$55 million for research institutes and small to medium enterprises in Viet Nam to promote technological innovations that help the nation's poor.

The five-year project, named "Viet Nam Inclusive Innovation Project", was kicked off yesterday by the Ministry of Planning and Investment in partnership with the Ministry of Science and Technology, Vietcombank and Vietinbank.

The preferential loans will be offered via the two commercial banks to eligible projects targetting three areas: traditional medicine, information technology (IT) and communications, and agriculture.

The project aims to help research institutes and enterprises develop, scale and commercialise technological products for low income earners.

Speaking at the project launching ceremony yesterday, Deputy Prime Minister Nguyen Thien Nhan said there had been real life examples of scientific and technological applications in Viet Nam.

He referred to the case of a flower farm in the Central Highland City of Da Lat, cultivated in an area of 1.7 hectares and earning VND10 billion (US$476,000) per year due to applying technology and exporting seedlings.

Technological innovations could help reduce poverty, create competitive products and make quality products more accessible to poor people, he said, noting that while average annual incomes in Viet Nam were now $1,100, many people in rural, mountainous or disadvantaged areas across the country, had incomes between $300-400 per year.

He expected that the funding would produce useful products while promoting research and co-operation between State and private enterprises.

Minister of Planning and Investment Bui Quang Vinh, said Vietnamese enterprises, particularly small-to-medium ones, played an important role in generating jobs, income and economic growth, but were facing low technological capabilities and a lack of competitiveness.

According to statistics from the Ministry of Science and Technology, the number of scientists in Viet Nam made up only 0.025 per cent of the total labour force in enterprises and up to 80-90 per cent of technologies were imported, with 76 per cent of technologies from 1980-90.

"The innovation project could help address the challenges, especially given Viet Nam's budget for science and technology is insufficient and the country is yearning for economic restructuring and a new growth model," Vinh said.

Keiko Sato, from the World Bank, emphasised that innovation benefited large portions of the poor and low income earners.

Fostering innovation

The World Bank (WB) will also provide US$100 million to help Viet Nam implement the Fostering Innovation through Research, Science and Technology (FIRST) project which was inaugurated yesterday.

The funding is part of a financial agreement reached by the State Bank of Viet Nam and the WB on July 25 this year.

Addressing the event, Minister of Science and Technology Nguyen Quan said the project aimed to bring businesses and scientists closer and apply science and technology to the cause of poverty reduction and economic development, the minister said.

Victoria Kwakwa, WB Country Director for Viet Nam, affirmed the significance of technological education, research and innovation to a country's prosperity, affirming that the WB stood ready to help Viet Nam implement projects in this field.

The five-year FIRST project has total investment of $110 million, $10 million of which is coming from the Vietnamese Government.

It includes three components: knowledge and policy development, support for Government research reform and business innovation, and project management. — VNS