CUND IDENTIAL
done, and the IMF are quite positive about recent liberalisation
moves within Vietnam. Both the World Bank and the Asian
Development Bank, the two key providers of long term loans, are similarly undertaking work preparatory to the resumption of lending. The French Government attempted to gain bilateral donors' support for a settlement between Vietnam and the IMF in
the run-up to the last IMF/IBRD Annual Meetings in September, but
were rebuffed by the UK as well as by the US and Japan.
The
11.
If we wished to signal a new approach, it would be necessary to instruct our Executive Director to IMF/IBRD, and also our
Executive Director to ADB, to advise Management that we would be prepared to work constructively with others towards a resumption
of normal relations between Vietnam and the IFIS. It would be important, however, to emphasise two points in particular. first is that any agreement must be based on a fully credible adjustment programme. The second is that any UK bilateral financial support could only be modest (we have provisionally
earmarked the equivalent of US$5 million from the additional money made available by the Treasury: the French, probably
tongue in cheek, had sought $25 million when they visited London
in September). It would also be sensible to advise the French of
our more positive attitude, and to discuss with them whether and
when any further lobbying among G7 members might be productive. (This may also serve to encourage greater French cooperation in
future over the African countries of interest to us). The key to
any bilateral package in support of Vietnam is the Japanese attitude, since any financing package would need a major Japanese
contribution. So far, the Japanese have deferred to American susceptibilities and taken an extremely cautious attitude.
EC Aid to Vietnam?
12.
Vietnam is not listed at present as one of the countries eligible to benefit under the European Community ́s Asia Latin
America Programme, nor under the EC ́s food aid programme. EC aid
CONFIDENTIAL