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Foreign and Commonwealth Office
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ĤKK 243/3
M J H Wood Esq- HANOI
RECE1
DE
+3/3
RY
27 JUN 1986
J
RY
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Date 25 June 1986
2016
INCE
Mikel
raken
VIETNAM: BOAT PEOPLE: THE ECONOMY
Thank you for your teleletter of 2 June, about the motivation of those leaving Vietnam for Hong Kong.
1.
2.
I was particularly interested in your reference in para 3 to "the deterioration in the economic situation". This seems to some extent to contradict the report provided in your teleletter of 29 April on the Vietnam/IMF article IV consultations. From this it appeared that the IMF were quite pleased with Vietnam, despite their continuing default. And Economic Advisers commented (David Woodward's minute of 16 May, copied to you) that overall the situation looked fairly favourable, despite two continuing major problems ie the high inflation rate and the weak hard currency balance of payments position. I noted also from Stuart King's teleletter of 7 May that Evers had said that the economy was "doing fairly well and the South in particular was booming".
3. Is it a case of disagreeable medicine, ie the 1985 reforms causing short-term discomfort but which should eventually lead to overall improvements in the medium term? And, even if the number of boat refugee arrivals rises this year above the 1985 level (some 22,000), might we expect it to fall again in 1987?
Aurs ever,
•
S T Nash
South East Asian Department
cc: C T Wood Esq, Hong Kong Govt Secretariat
Mr Whitehead, RD
Mr Woodward, Economic Advisers
Mr King, UKDEL IMF/IBRD, Washington HKD, FCO
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