A dispute that could have cut off U.S. contributions to the World Bank was settled for the time being yesterday when bank President Robert S. McNamara agreed to make no development loans to Vietnam during this fiscal year.
The House in passing the foreign aid appropriation bill had written restrictions forbidding use of U.S. contributions to various international banks in making loans to a half-dozen nations thought unworthy, including Vietnam and Cuba.
McNamara had said if the language remained in the bill the World Bank would have to refuse all U.S. contributions, 30 percent of its total funding, because the bank is not allowed to accept money with conditions. The Senate had rejected the restrictions by close votes.
When House-Senate conferees tried to settle their differences yesterday it appeared the House conferees were deadlocked and would not be able to muster the votes to drop the restrictions as they had done in the last two years.
Word was sent to McNamara that he must sign a letter promising to make no loans to Vietnam, the target of most anger because of its harsh treatment of its people who have become refugees.
A letter drafted by an administration official and signed in the afternoon by McNamara repeated his previous statements that events of the past year have raised serious questions about Vietnam's commitment to a "rational development policy" and that under current conditions it would not be possible to invest funds there "with a high probability that investment objectives would be realized."
"Consequently," the letter concluded, "because of the conditions, the World Bank group will not be providing loans to Vietnam" during the fiscal year that began Oct. 1.
House conferees accepted this and dropped their restrictions.
A World Bank spokesman said no loans to Vietnam are currently being considered, and that the last bank loan to Vietnam was about 18 months ago.