Vietnam's donors pledge $2.4 billion, demand reforms

Ulhas Joglekar ulhasj at
Thu Dec 21 16:49:03 MST 2000

16 December 2000

Vietnam's donors pledge $2.4 billion, demand reforms
HANOI, Vietnam: International donors on Friday pledged $2.4 billion in
development aid to Vietnam, praising the government's efforts in pursuing
economic reforms.
Last year, the aid pledges totaled $2.1 billion and donors promised an
additional dlrs 700 million if the country accelerated the pace of reforms.
This year, however, international donors pledged an unconditional lump sum,
saying they are confident that Hanoi is committed to carrying out the
reforms the additional money would finance, said World Bank representative
Andrew Steer.
"Certainly there's much greater confidence on the part of the international
community that Vietnam is moving forward with the reform agenda," Steer said
at the end of the two-day meeting of donors.
But Vietnam's impressive achievements "must not blind us to the very large
task that remains," he said.
Optimism is high at the end of year, which saw Vietnam sign a landmark
bilateral trade agreement with the United States, open a new stock market,
and pass a law encouraging private business.
Vietnam understands the need to "create a liberal business and production
climate - transparent and predictable," said Minister of Planning and
Investment Tran Xuan Gia during his opening address. Vietnam's progress -
including its draft plans to reform state enterprises, the banking sector
and trade policies - has prompted the International Monetary Fund to
consider resuming lending next year to support economic reforms.
The agreement could come early next year, said Dennis de Tray, the IMF's
representative in Hanoi.
The IMF has not yet decided how much money to lend, but de Tray said that
Vietnam would need an additional dlrs 1.5 billion over three years to carry
out the structural reforms it has outlined.
The IMF cut off its aid in 1996, saying that Hanoi was not implementing the
reforms the money was designed to finance. Since 1993, international donors
have given Vietnam dlrs 7.6 billion in assistance, according to a report by
the United Nations Development Program.
An additional $6 billion to 6.5 billion was pledged but never disbursed
because Vietnam failed to make the reforms necessary to qualify for the aid.
The low rate of disbursal has been attributed to the slow pace of Hanoi's
reforms in recent years. However, Vietnamese officials acknowledged the need
to improve the investment climate if they are to achieve the goal of
doubling growth over the next decade.
The country is finally emerging from an economic slump related to the
1997-98 Asian financial crisis and several natural disasters, recording
growth of nearly 7 percent this year compared to 4.8 per cent in 1999, its
lowest level in the 1990s. (AP)
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