Slowing of assistance to Vietnam

Press, 24 May 1977, Page 11

Slowing of assistance to Vietnam

From BRUCE KOHN. NZPA staff correspondent Manila

American Congressional objections to United States money being used in the economic redevelopment of Vietnam will slow the progress of assistance to the socialist republic from the Asian Development Bank. Bank sources said in Manila in a series of interviews that the bank would proceed cautiously in the development of its relationship with Hanoi pending a resolution of differences between Washington and Hanoi. Bank staff were concentrating on assessing the status of nine projects which the Asian Development Bank directors had approved for South Vietnam before Saigon was overrun in April of 1975

and renamed Ho Chi Minh City.

Bank sources said that loans to carry out the projects had been suspended following the fall of Saigon but a special mission dispatched from the bank to Vietnam in January found that Hanoi had sought to continue the projects, using as a base the original designs. It would be necessary to amend some of the programmes. Time would be needed to “sort out” a working relationship before there could be “full steam ahead" on these projects. The sources said that Hanoi had also proposed a number of new assistance schemes embracing agricultural development, hydro-electric power generation, fertiliser production, and the nation’s transport system. The Hanoi Government had indicated its desire for the bank to resume the projects. It wanted a telecommunications programme intended for Ho Chi Minh City dropped and had also proposed

amendments to other intended development programmes. These programmes include fisheries, irrigation, power, water distribution, and agricultural projects. These proposals would have to be further investigated "on the ground,” and at some stage a further investigatory mission from the bank would have to visit Vietnam. No time for this had yet been set. The loan money for the projects would be made available to Hanoi at the bank's concessionary interest rate which involves only a service charge, compared with a normal lending rate in excess of 8 per cent. This was because Vietnam was regarded as a poorer developing country, as are such nations as Bangladesh and Sri Lanka. To the end of the Vietnam War. the bank had agreed to spend some SUS4O.6M on special projects in the south. When the assistance programme was suspended, about S6M of this money had been spent.