IMF agrees in principle to resume loans to Vietnam

Ulhas Joglekar ulhasj at
Wed Jan 24 17:16:08 MST 2001

19 January 2001

IMF agrees in principle to resume loans to Vietnam
HANOI, Vietnam: An International Monetary Fund delegation has reached an
agreement in principle with Vietnam to resume loans after a five-year gap,
officials said Thursday.
The IMF is considering lending Vietnam between $350 million and $400 million
over a three-year period, IMF senior resident representative Dennis de Tray
He said the IMF's board in Washington will likely "consider Vietnam's
request for funding by the end of the first quarter this year."
The first portion of the loan could reach Hanoi shortly after approval by
the board, he said.
The exact value of Vietnam's funding request will be discussed at a later
date, a central bank official said.
De Tray said fruitful discussions with various government agencies resulted
in the agreement in principle Wednesday.
A central bank official earlier said the talks were due to end Tuesday. He
said Wednesday's meetings were added to the original schedule, suggesting
more time was needed to reach an agreement than originally planned.
The IMF is expected to fund primarily the state sector, banking and other
structural reform programs. It is expected to provide both direct funding
and technical assistance.
The IMF cancelled a three-year lending agreement with Vietnam in 1996,
arguing that Hanoi wasn't using the money to fund the structural reforms it
had promised.
For Vietnam, a new lending agreement would offer a clear indication that it
remains committed to the reforms it has long promised and which it started
to enact last year.
Last year was a watershed year for Vietnam's reformers. After years spent
trying to convince more conservative colleagues to open the country's
economy, in 2000 they pushed through a landmark trade deal with the United
States, a liberal private enterprise law, a stock market launch and a major
$ 1.5 billion natural gas deal, the first to give foreign companies control
over a major natural resource.
The moves refocused attention on Vietnam's potential as an investment
destination and trading partner. But because of Hanoi's history of
backtracking on its promises, they failed to fully convince the
international community that real change was coming.
For the IMF, which has come under fire for its tough treatment of some Asian
governments during the region's economic crisis, the loan is a chance to
show a softer, more moderate, side.
Because of Hanoi's fierce independence, the IMF under de Tray has chosen to
work with Vietnam's leadership to refine a reform agenda the government
developed itself.
"In the past, we did not borrow money from the IMF because we saw its plans
as inappropriate. But now we will accept offers which aim to support our
programs," said a Finance Ministry official, who spoke on condition he not
be identified by name. (AP)
 For reprint rights:Times Syndication Service

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