$2.1 Billion in Vietnam Aid Pledged

International donors temporarily brushed aside frustrations over the slow pace of economic reform in Vietnam and on Wednesday pledged another $2.1 billion in desperately needed loans and grants for one of the region’s poorest countries.

The assistance, to be delivered next year, is only a slight decrease from the $2.2 billion pledged for 1999. In addition, the donors Wednesday offered another $700 million if Vietnam meets certain conditions for economic reform. However, $500 million pledged conditionally for 1999 was not dispersed because Vietnam did not meet the donors’ requirements.

Since Vietnam’s Communist government took the first timid steps toward a free-market economy and international borrowing was resumed in 1993, it has received more than $13 billion in assistance.

But despite the new infusion of funds pledged at the annual two-day donors’ meeting, the World Bank and international lending agencies had a somber message for Vietnam: Unless it accelerates the pace of reform, it is in danger of being left behind by neighboring countries that are making a speedy recovery from a two-year recession.

“Vietnam can benefit greatly from the East Asian recovery . . . but it has not yet implemented the policy reforms necessary for that purpose,” a World Bank report released on the eve of the conference said. Among the concerns are corruption, a lack of openness, bureaucratic red tape, ineffective laws, discrimination against foreign companies and the absence of a commitment to move beyond a state-controlled economy.

Tran Xuan Gia, the minister of planning and investment who represented the government at the meeting chaired by the World Bank, reiterated Vietnam’s commitment to an economy that mixes free and state enterprises.

But Western diplomats say Vietnam’s leadership is divided over how far and how fast to move.