Vietnam woos US in bid to win Western loans. On verge of economic collapse, Hanoi takes on free-market hue

Hanoi has warmed up its courtship of the United States. Vietnamese officials have set their hopes on Washington's eventual nod to loans needed for Vietnam's collapsed economy. To accommodate US interests, Vietnam has released a record number of emigrants, Amerasians, and remains of missing US soldiers during the second half of 1988, nearly 14 years after the end of the war between the two nations.

In addition, Vietnam has taken radical economic steps this year to obtain help from the International Monetary Fund (IMF), over which the US has substantial influence.

``The state must get foreign loans. This real situation is the underlying source of ... confusion in our economy and life,'' said Communist Party chief Nguyen Van Linh in an October speech.

The most drastic economic step has been a seven-fold devaluation of the Vietnamese currency since early November to near parity with the rate on the illegal dollar market. Officials describe the move to a near-floating currency as an ideological breakthrough. This is the first time the Communist Party has admitted it must follow free-market forces.

``For a long time, the leaders held ultraconservative theories of trying to maintain two economies,'' says Le Dang Doanh, a top government economic adviser. ``But now they admit to pure economic reality.

``Creating a capitalist sector is the highest priority of Vietnam,'' adds Mr. Doanh. ``It's the only way to create jobs.''

An IMF team was invited to Vietnam in December, the first time the organization has been asked to give advice and criticism to party and state officials.

Vietnam has a hard-currency foreign debt of $2.44 billion, with an additional debt of an estimated $5.5 billion in ``soft'' currencies, mainly owed to the Soviet Union. To obtain new loans, Vietnam must meet IMF economic criteria and pay back at least $50 million of a longstanding $70 million debt owed to the IMF, according to Western diplomats in Hanoi.

By devaluing the currency, welcoming foreign investment, and reducing government subsidies, along with other steps taken since 1987, Hanoi is following prescriptions laid down by the IMF.

Officials hope the IMF, with US approval, will eventually provide a $150 million loan. This amount, Mr. Doanh says, will quickly boost production of consumer goods by 30 percent, the second most important economic goal after improving agricultural production.

``The IMF wants immediate steps nationwide, but the government wants it step by step, region by region,'' says Doanh. ``And the IMF wants us to eliminate all subsides - but so far only a few provinces have been able to do this.''

Last week, at a National Assembly meeting, party leaders government reported ``no marked progress'' in the economy this year. Since 1985, the average income has been cut in half to $130 per person, or about one-third less than that of China. Per capita grain consumption is about half of China's. Inflation, one of the highest in the world, is running 700 to 1,000 percent.

``Our biggest mistake has been not even seeing the mistakes of our political theories,'' says Ha Xuan Truong, editor of a party theoretical journal.

``We're discarding this [Leninist] idea of jumping over the capitalist phase [to communism],'' he adds. ``We thought a happy society would be one with no exploitation and with production in the hands of the state. So we set up the bureaucracy for that - but no results.''

He cites one example in Thanh Hoa Province, where 15 state-run restaurants earn as much profit as 4 private restaurants.

``Now we know that eliminating the bourgeois and having state production is not socialism,'' says Mr. Truong. ``If we want goods, we need both rich and poor. We don't call it capitalism, but `socialist goods-producing mechanism.'''

The shifts in economic policies has created so much confusion that the party's ruling Politburo issued a statement Dec. 8 clarifying its ideology. One point was that only management and technical ideas should be adopted from capitalist countries, not ``the difficult problems'' of capitalism.

``Socialism still remains,'' says Doanh. ``But we must be extremely creative in reinterpreting Marx. He lived in a different time. It would be extremely treasonous to treat Marxism as a bible. Vietnam's situation is different than the Europe that he knew.''

Hanoi regards US recognition as the linchpin to break its economic and political isolation, which was imposed by the West and China after Vietnamese troops invaded Cambodia 10 years ago.

The US will not consider setting up an embassy in Hanoi until all Vietnamese troops leave Cambodia. Vietnam claims it pulled out 50,000 troops this year, the largest contingent yet, leaving an estimated 50,000 to go. Hanoi officials admit the credibility of the pullout with the rest of the world is based on US intelligence reports.

On the recovery of the bones of US MIAs, as well most other bilateral issues, Vietnam is moving faster than ever. Hanoi-based diplomats say Vietnam wants to create a good impression with the new Bush administration, since little progress in relations was made during eight years of the Reagan presidency. And as relations between the US, China, and the Soviet Union are changing quickly, Vietnam wants to readjust its position with the big powers.

President Reagan set the MIA issue as one of his highest priority, helping to give the Washington lobby of MIA families a strong voice on US policy toward Vietnam. Hanoi officials hope the MIA issue will be different under Bush.

``I do not understand very well the political life in the US,'' says Vietnamese Foreign Minister Nguyen Co Thach. ``Some quarters are trying to block [a solution]. Some would like to have a monopoly on this [MIA] question.''