ADB decision opens the door to Vietnam

PUBLISHED : Thursday, 29 July, 1993, 12:00am
UPDATED : Thursday, 29 July, 1993, 12:00am

IT is good news that normal international financial services are being resumed in Vietnam, and particularly fitting that it should be the Asian Development Bank which has moved most swiftly to earmark funds for the country.

The problems of Vietnam are not a black-and-white issue, and the time for blame has gone, but there is no doubt that the US embargo on International Monetary Fund loans to the country - now lifted - represented a Western mind-set.

But it is Asia which is going to provide Vietnam with its opportunities. Even lacking the US blessing, without which the ADB could not have moved as far as it has, there was a willingness in the region to support the country's move towards a free-enterprise economy.

Taiwan and Hongkong have proved particularly willing to invest in projects in Vietnam, and the economic deceleration in China almost certainly will release more funds, at least in the short term.

Nevertheless, welcome as the private-enterprise funds may be, Vietnam's infrastructure urgently needs to be re-built, and the resources for that will have to come from traditional lenders of development capital, such as the ADB and International MonetaryFund.

Corporate investors are unlikely to be prepared to become involved in the sort of projects which have been earmarked for ADB loans.

Irrigation works, flood control projects, and the re-building of Highway 1 between Hanoi and Nha Trang, are not exactly magnets for private funds.

However, the flow of ''official'' funds means added incentives for the more adventurous companies and individuals to start backing the country.

Earlier this week, a delegation from Hanoi visited Hongkong in a bid to speed the flow of investment into Vietnam. Their message was worth listening to, for opportunities already are being snapped up by other countries in the region.

Hongkong may be a major investor already, but Singapore is now Vietnam's largest trading partner, and Thailand also is establishing powerful links.

With diplomatic relations now ready to be resumed for the first time in 40 years, the US businessmen won't be far behind, and they will be looking for the plums. Hongkong could benefit by picking them first.