HANOI. May 4: The Internationa] Monetary Fund's (IMF) failure to restore Vietnam's eligibility for loans to not an economic disaster, but It will be if tt lasts past September, economists said Monday, reports AFP.

France and other countries friendly to Vietnam declined to force the issue last week at the spring meeting of the IMF In Washington in the face of opposition from the United States. Hanoi's longtime foe.

Until Vietnam Is allowed to settle Its 140-mllllon dollar arrears, tt remains Ineligible for new loans not only from the IMF but also the World Bank. Asian Development Bank (ADB1, and 19 creditor countries who form the Paris Club.

"It's not a catastrophe. Not yet," said a western economist working with Vietnamese monetary authorities.

Vietnam can continue its preparations for the arrival of

the big lenders, notably by accelerating the restructuring of its state-owned enterprises, something the IMF will require. the economist said

Far more auditing and »ta ti st leal research also needs to be done, he said

But If the United States keeps blocking loans past September, when the US embargo against Vietnam comes up for annual presidential renewal. then "the situation could become dramatic.” he said

That Is because a major conference to raise funds for Vietnam, grouping the IMF. World Bank, ADB and donor countries. Is scheduled to be held In October or November under United Nations auspices.

The ADB, which opens its annual meeting Tuesday in Manila, Is eager to resume lending to Vietnam, accordtnc to ADB officials.