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The Vietnam News

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Japan, Vietnam sign aid agreement

TOKYO - Japan and Vietnam on Monday signed an agreement that allocates 88 billion yen in aid for the southeast Asian nation, and Japanese Prime Minister Keizo Obuchi pledging continued support for Vietnam as it modernises.

In a 40-minute meeting with Vietnamese Prime Minister Phan Van Khai, Obuchi said Japan hoped to see more progress under Vietnam's 'Doi Moi' economic policy, a Japanese Foreign Ministry official told reporters.

The aid, in the form of a yen loan, is directed mainly at infrastructure development.
The effectiveness of the aid would depend on Vietnam making continuing efforts to reform and modernise its economy, Obuchi told Khai.

``I understand that pain often accompanies reform, but have high expectations of your leadership,'' he was quoted as saying.
Khai expressed appreciation for the aid, the official said. The Vietnamese prime minister said the pace of growth of Vietnam's economy, hit by the combined effects of the Asian economic crisis and a series of natural disasters, slowed in late 1998 and again in the early part of this year. He gave no specific figures, the official said.

The official Saigon Times Daily on Monday quoted Khai as saying economic growth this year had not reached a five percent target. Khai, addressing a monthly cabinet meeting last week, gave no specific time period but it appeared he was talking about the first quarter.
His comments, which government officials said they could not confirm, mark the first official indication that Vietnam's economy is not on track to meet an annual growth target of 5 to 6 percent.

Earlier on Monday, a Finance Ministry official said Japan would send a mission to Vietnam to assess economic conditions there and would consider extending possible extra assistance.
The official, briefing reporters on a meeting between Khai and Japanese Finance Minister Kiichi Miyazawa, said Khai repeated Hanoi's request for Japanese assistance under the $30 billion Miyazawa Plan aimed at supporting crisis-hit Asian economies.
Japan has extended aid to Hanoi in the past but Vietnam has not yet received assistance under the Miyazawa Plan, whose beneficiaries include Indonesia, Thailand, Malaysia, the Philippines and South Korea.

``If there is anything we can do, we would like to assist,'' the official quoted Miyazawa as telling Khai.
The Foreign Ministry official said Japan was considering extending additional aid to Vietnam but declined to give a specific amount, saying only it was likely to be from 1 to 2 billion yen.
Obuchi said Japan would continue to support Vietnam's efforts to join the World Trade Organisation, the official said.

Reuters - March 29, 1999.