THE end of the 1992 United States presidential campaign is good news to Vietnam.
As the latest "rising economic dragon" in Asia, Vietnam is expected to receive large-scale aid and investment from Japan that could lead to a quick erosion of the US-led economic embargo against Hanoi.
During the long US campaign, Japan was wary of offering economic help to its Asian neighbor for fear of being criticized by the lobby for families of US soldiers missing-in-action (MIA) in Vietnam.
The embargo's present aim is to force Hanoi to return the remains of American MIAs. Its original purpose, which Japan and many countries supported, was to punish Vietnam for its 1978 invasion of Cambodia. Last year's settlement of that conflict has opened holes in the embargo and helped to reduce Vietnam's damaging economic isolation.
With the spotlight of the US campaign now gone, Japan is less willing to support the US embargo and will soon announce - perhaps today - that it is granting about $379 million in credit to Vietnam. About half of that low-interest credit will go to help Hanoi pay back overdue debt to Japan.
Japanese companies, a few of which were criticized by the US in 1987 for trying to invest in Vietnam, have been waiting for the start of aid to unleash a major investment offensive. In addition, many firms hope to benefit by building roads, bridges, electric plants, and other public works that Japan's new aid will finance.
Investors from Japan hope to tap Vietnam's natural resources, especially offshore oil; to take advantage of low wages and a strong work-ethic; and to get in early on a market of 67 million people, despite the present level of poverty.
"Japanese companies have been preparing for the green light," says James Paradise, an analyst at Dresdner-ADB Securities in Tokyo. "Vietnam is the new magnet for manufacturing in the region."
Japan's big trading houses have had offices in Vietnam for almost a decade. Under the embargo non-American companies generally conducted trade with Vietnam - unlike aid or investment. Japan is the biggest trade partner of Vietnam, although two-way trade was only about $200 million in the first half of 1992.
But in investment, Japan lags behind Taiwan, Hong Kong, and France, accounting for about 5 percent of total foreign investment. All investors have encountered high levels of bureaucracy, chaos, and corruption, despite a liberal investment law passed in 1989.
By unleashing its investors, Japan could prove to be the propulsion that Hanoi seeks to build a market economy under Communist leadership, much like in China. Still unclear, however, is whether Japan will support Vietnam in receiving credit from the International Monetary Fund. The US, with Japanese acquiescence, has up to now blocked IMF credit that Vietnam needs to attract private lending from foreign banks.
"Japan has tossed the ball to the US, and they are waiting for the US to pitch the ball," says Akira Taguchi, director of the Vietnam Research Economic Institute.
Because of recent progress between the US and Vietnam on the MIA issue and the lame-duck status of President Bush, Japanese officials speculate that the US might soon end the embargo or even set up official ties with Hanoi. "We will not be affected by what the Japanese government may decide," Acting US Secretary of State Lawrence Eagleburger said on a recent trip to Tokyo.