HANOI. Oct 9: The Asian Development Bank will cut its large lending programme to Vietnam if the authorities here do not move swiftly to ensure that loans are better used, bank president Tadao Chino warned top officials Monday, reports AFP.

One of the biggest recipients of soft loans from the bank. Vietnam is also one of the least efficient in using them with disbursement running at -just 16 per cent last year against a bank average of 22 per cent, according to ADB figures.

It's still below bank average, it has to improve, said the bank’s drpuix programme direc u>r Rajat Nag. who accompanied Chino in nis meetings

"Performance is going to lie key now we are moving Into performance-based lending and the government knows that.

"Our annual programme, we are hoping, will be In the range of 200 to 300 million (dollars). It depends on performance where in that range it will be." he said.

One key performance indicator will be the progress communist Vietnam makes in im-jilrmentlng market reforms and , Chino pressed Vietnamese leaders to maintain their momentum.

"The momentum of the reforms has to be continued both on the economic side and the governance side." Nag said.

The ADB president stressed the Importance of accelerating privatisation of Vietnam's large state sector as well as reform of the ailing banking system which is heavily exposed to bad debts from state-owned enterprises.

He also urged Vietnamese oflk ials to do more to improve the quality of public administration. which donors complain is still riddled with red tape and corruption. "Good governance is a prerequisite for sustainable growth." Nag said

Chino Joined central bank governor Le Duc Thuy in formally opening new offices in I lanoi to raise the bank's profile here.

Thuy acknowledged that there were weaknesses" in Vietnam's take-up of ADB loans but insisted that the government was tackling the problem bv streamlining its administrative procedures and making local authorities more accountable.

The ADB has supported several programmes to boost good governance in Vietnam, including strengthening the auditor generars office.