US Senators & Leading Educators Favor Scholarship-for-Debt Program with Vietnam

On October 13th, heads of five national educational organizations (joined later by leaders of thirty-nine American universities and colleges) sent a letter to President Clinton urging him to convert Vietnam’s payment of war debt into a scholarship fund for Vietnamese students. The letter, coordinated by the Fund for Reconciliation and Development, encouraged Clinton to include this issue on the agenda of his November visit to Vietnam.

The letter states: “Vietnam is required to transfer annually an estimated $7.5 - 9 million to the US over twenty years in payment of the former Saigon government’s war time debt of $150 million. We are not calling for conventional forgiveness of this unusual debt but rather, as a bold act of reconciliation, reallocation of the payment into a Scholarship Fund to support the training of Vietnamese students at US institutions of higher learning.”

Legislation initiated by Senator John Kerry of Massachusetts, with the support of Senators John McCain of Arizona, Robert Kerrey and Chuck Hagel of Nebraska, Max Cleland of Georgia, and Charles Robb of Virginia authorizes immediate expenditure of $5 million and mandates use of the same amount from future annual debt payments to create a Vietnam Education Foundation. The Foundation would support Vietnamese students pursuing graduate and post-graduate work with American institutions and American professors teaching in Vietnam.

The history of the debt payment dates back to December 1993. Under the Paris Club of Western Creditor Countries agreement, Vietnam acknowledged responsibility for the former Republic of Vietnam’s debt. On April 7, 1997, then Treasury Secretary Robert E. Rubin and then Vietnamese Finance Minister Nguyen Sinh Hung agreed that Vietnam would repay the US approximately $145 million for loans made to South Vietnam from 1960-1975. The terms of the agreement stipulated that Vietnam would make regular payments to the US government beginning in July 1997 and extending until the year 2019.

In his historic speech to the Vietnamese people in November, President Clinton stated: “The United States has great respect for your intellect and capacity. One of our government’s largest educational exchange programs is with Vietnam. And we want to do more. Senator Kerry… is leading an effort in our United States Congress, along with Senator McCain and other veterans of the conflict here, to establish a new Vietnam Education Foundation. Once enacted, the Foundation would support 100 fellowships every year, either here or in the United States, for people to study or teach science, math, technology and medicine.”

Language to set up a Vietnam Education Foundation was reported to be included in the ten inch thick appropriations bill adopted at the end of the December “lame duck” session of Congress. In contrast to the letter from educational institutions, the legislative initiative limits fields of study and financial commitment ($5 million annually rather than the complete debt payment).

How Other Countries Handle Vietnam’s Debts and Development Needs

ITALY has written off its old debts to Vietnam and will grant Vietnam non-refundable aid of US$24 million dollars and a preferential loan of US$7.5 million. Italian Deputy Minister of Foreign Affairs Ugo Intini informed Vietnamese Deputy Minister of Planning and Investment Vo Hong Phuc in Hanoi on 8th December that his country also supports Vietnam’s bid to join the World Trade Organization. Italy is also considering to include Vietnam on the list of countries to receive assistance for poverty reduction. [Voice of Vietnam web site, Hanoi, in Vietnamese 8 Dec 00]

BELGIUM will write off three-quarters of Vietnam’s debts worth US$22 million. Representatives of the two governments signed an agreement in Hanoi on 7 December regarding Belgium-funded projects for Vietnam. Under the agreement, the remaining debt will be converted into grants in which Vietnam will establish a counterpart fund in Vietnam Dong to use for bilateral development projects for the 2001-2003 period. This is the second time Belgium has announced debt reductions for Vietnam. [Voice of Vietnam web site, Hanoi, 7 Dec 00]

SOUTH KOREA The Korea-Vietnam Industrial Technology Institute, a two-year junior college has been opened in Vinh City. The technology school was built as part of the Korea International Cooperation Agency’s (KOICA) US$5-million cooperative project to financially support the building of schools in Vietnam. [The Korea Herald, 8 Dec 2000]

KOICA, an overseas support agency under the Ministry of Foreign Affairs and Trade, will also build 40 schools in Vietnam starting in 2001, officials said. KOICA will invest US$2 million into the schools’ construction in central Vietnam to help enhance friendly bilateral ties. [The Korea Herald, 11 Dec 2000]

NORWAY has granted $ 1.4 million to build 16 primary schools in the three flood-stricken central provinces of Quang Tri, Thua Thien-Hue and Quang Nam. The project will improve facilities for pupils whose schools were badly damaged by the 1999 floods. [VNA 8 Dec 2000]