Vietnam To Repay South’s Debt To U.S.

Vietnam agreed Monday to repay more than $145 million in debts to the United States incurred by the defeated South Vietnamese regime, eliminating a major roadblock to the eventual normalization of economic and trade relations between Washington and Hanoi.

Hanoi’s commitment came in an accord signed jointly by Vietnamese Finance Minister Nguyen Sinh Hung and U.S. Treasury Secretary Robert E. Rubin, who is visiting Hanoi this week as part of a trip through Southeast Asia.

U.S. officials said Vietnam is scheduled to make a down payment of more than $8.5 million within 30 days, and then begin regular payments aimed at paying off the entire $145 million by the year 2019.

The $145 million in loans stem from the late 1960s and early 1970s, when the United States was channeling hundreds of millions of dollars a year into South Vietnam to prop up its government. North and South Vietnam merged in 1975 after northern troops captured Saigon.

U.S. officials said none of the loans was used to finance military operations.