U.S. May Clear Way for IMF Loans to Hanoi

POW activists and business groups stepped up their efforts Wednesday to influence an expected decision by the Clinton Administration that would clear the way for international banks to make new development loans to Vietnam.

While the White House insisted that no final decision has been made, Administration sources indicated that President Clinton is close to announcing a major policy change in which the United States would drop its opposition to a Japanese- and French-led plan to refinance $140 million in back Vietnamese debt through the International Monetary Fund.

The move, which would pave the way for Hanoi to take out new loans from the IMF and the World Bank, has been strongly urged by U.S. businesses, which fear that otherwise they will lose out to Asian and European competitors lining up for the major development contracts that Vietnam wants to finance with the new loans.

It is also being supported by several influential lawmakers, who argue that sufficient progress has been made in accounting for U.S. servicemen listed as missing in Indochina to warrant a step toward normal U.S.-Vietnamese relations.

More progress has been made by Vietnam in resolving the POW-MIA issue in “the last two years than in the last 14” and “our POW-MIA concerns and business interests can now reinforce each other rather than be in conflict,” said Rep. Lee H. Hamilton (D-Ind.), chairman of the House Foreign Affairs Committee, in a letter to Clinton urging normal diplomatic relations with Vietnam.

But POW-MIA activist groups, supported by a contingent of lawmakers on Capitol Hill, oppose the move on grounds that Vietnam has not done enough to account for the 2,226 servicemen missing from the Vietnam War. They also argue that permitting the loans would undermine a two-decade-old trade embargo imposed on Vietnam, weakening the only leverage Washington has had to force Hanoi’s cooperation on the POW issue.

Administration sources said they expect the decision to be announced at or shortly before the economic summit that Clinton is to attend in Tokyo next week.