Vietnam learns becoming a Tiger economy comes with a cost

(Aug 7): Asia’s newest tiger economy is about to find out the cost of being a member of the club.

Vietnam has more than doubled its gross domestic product over the past eight years, becoming a high performer in the world’s fastest-growing region. One consequence is it’s now well-enough off to be disqualified from getting development funding from international institutions on a “concessional” basis at well below market rates.

The country graduated from most concessional financing from the World Bank at the end of June, and it’s currently rated a “blend” borrower from the Asian Development Bank -- one step up from solely getting the cheapest financing. As the discounted funding rolls off, Vietnam will need to turn more to the bond market -- boosting the supply of emerging-market securities that global investors have been happy to snap up in recent years.

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