Our Ref:
54622/100
BRITAIN INVESTING IN DEVELOPMENT
21 February 1992
George Foulkes MP
House of Commons
London
SW1A OAA
Dear George
Thank you for your letter of 29 January; we too enjoyed seeing you here for lunch.
Since you came here we have been giving further thought to the possibility of CDC investing in Vietnam. We have had some contact, through the Britain-Vietnam Business Association, with British commercial and financial companies who have told us that they believe that CDC's type of financing would be highly relevant in Vietnam, and would see the renewable natural resources sector, including tea and palm oil, as promising areas for possible CDC involvement. We have therefore asked our Representative in Bangkok to visit Vietnam soon to form a preliminary view about the type of projects which CDC could undertake therɛ.
As I think I explained, we have been rather cautious about adding large new countries to our list partly because, since the mid-80's, we have preoccupied with absorbing India and Pakistan. We have however added Mozambique and Nicaragua to our list in the past five years.
Question of resources would therefore arise. Since Vietnam is a large country we would not consider it worthwhile to go into Vietnam unless we could build up some fairly substantial investments within the first few years. One idea which we have been examining in this connection is that the Government of HongKong should provide CDC with a line of credit, which we would on-lend to projects, for example to agricultural projects with a smallholder or small farmer component. It might be possible for such projects to be associated with Vietnamese citizens returning from HongKong. We are working on this idea with the aim of putting some proposals to the Government of HongKong in due course. However, clearly the support of the British Government will be necessary.
yours
John Eccles
Chief Executive
COMMONWEALTH DEVELOPMENT CORPORATION
One Bessborough Gardens London SW1V 2JQ Telephone: 071 (International: + 4471) 828 4488 Facsimile: 071 (International: + 44 71) 828 6505 Telex: (International: +51) 21431 VELOP G/25849 VELOP C
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