Japan to back Vietnam reforms, cautious on aid
TOKYO - Japan will promise to support Vietnam's reform efforts at a donors meeting
later this week, but is under pressure to be cautious in using taxpayers' money for overseas aid, a
government official said on Tuesday.
"We will continue to firmly support Vietnam," the Japanese official, who is close to the negotiations, told
Reuters.
He added that Tokyo, Hanoi's biggest aid donor, welcomes recent progress in Vietnam's reform efforts
and its loan programme agreement with the World Bank and the International Monetary Fund earlier this
year.
The recent ratification of an historic trade agreement between Vietnam and the United States will also help
improve the environment for Vietnam's trade and investment, he said.
"But we also have a pledge of reducing our official development assistance aid (ODA)," the official said.
While stressing Japan's difficult fiscal conditions, the official said he could not comment on whether Japan
would reduce the amount of its financial support this year ahead of this weekend's meeting of international
donors.
As part of plans to rein in its mushrooming debt, the government has said it plans to cut spending on ODA
by 10 percent in the initial budget for next fiscal year starting in April.
The annual donors' meeting from December 7-8 in Hanoi will be attended by more than 40 countries and
financial institutions making up the Consultative Group on Vietnam.
Last year, Japan pledged 85 billion yen ($685 million), including 70.9 billion yen in loans and six billion yen
in grants, according to Japanese officials.
In early November, World Bank Managing Director Sven Sandstrom said the international donors were
likely to offer it more than the $2.8 billion of assistance pledged last year. ($1=124.07 Yen)
Reuters - December 4, 2001.
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