FREE GEOPOLITICAL NEWSLETTER

Vietnam

For current reports go to EASY FINDER

  VIETNAM

REPUBLICAN REFERENCE

Area (sq.km)
329,560

Population
79,939,000

Capital
Hanoi

Currency
dong

President
Tran Duc Luong

SPECIAL REPORTS

"Special Shi'a Report"

Afghanistan

Axis-of-Evil



NEW BUSINESS
OPPORTUNITIES

a free service

FREE World audit country reports on democracy, corruption, human rights and press freedom
democracy
check


CNN.COM
ELECTION WATCH


Currency converter
currency
converter


Background:
France occupied all of Vietnam by 1884. Independence was declared after World War II, but the French continued to rule until 1954 when they were defeated by communist forces under Ho Chi MINH, who took control of the north. US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973. Two years later North Vietnamese forces overran the south. Economic reconstruction of the reunited country has proven difficult as aging Communist Party leaders have only grudgingly initiated reforms necessary for a free market.

Update No: 08 - (26/07/02)

From mid-July to the end of the month, 498 newly-elected National Assembly (NA) members of Vietnam convened for the first session in Hanoi, setting out a very tough agenda to continue the nation's reform path and drive for international integration, including World Trade Organization (WTO) entry. 70 percent of the members were newly selected and of a younger age compared to the re-elected ones. 
Concerns over social stability and order, national security, trade frauds, administrative and structural reforms, Vietnam's integration into the world market, setting proper socio-economical directions for the second half of the year were the major focus points of NA delegates this time. In the first seven months of the year the country did not achieve any positive economic records, the NA concluded. 
Foreign direct investment (FDI) plummeted by 50 percent in the first half of the year to $500 million. However, officials remain upbeat as the number of investment projects rose by 12.8 percent and the disbursement reached $1.1 billion, a 11 percent increase. This is due to the fact that most of FDI projects to Vietnam in the first half of the year are of small and medium size. 
Minister of planning and investment, Tran Xuan Gia, unveiled a number of giant projects in the pipeline for licensing, including a $500 million mobile phone network by an unidentified European investor, a $500 million cement project by Swiss firm HolderCem in central Quang Nam province and a $800 million project to further develop the Nam Con Son gas basin by a British Petroleum-led consortium. 
Gia is even optimistic that Vietnam is on its way back to being on an investors' hit-list with the bilateral trade deal with the US coming to effect and increased efforts to improve the investment climate. 
The nation has tried to woo back foreign investors by issuing several favourable regulations including the dollar surrender rules of 30 percent from 50 percent, the introduction of specific projects calling for investment, incentives for investors in building complexes for rent and the reduction of products required for exports.
During the remaining months of the year, the government will enact a decree allowing foreign invested firms to become joint stock companies to list their shares on the stock market, a regulation concerning investors' rights on land and the further dissolution of the sub-licenses. The government will also set up a new mechanism to address investors' concerns once they emerge. Currently, investors are raising many worries over the sluggishness of local authorities to solve their problems on time.

Statistics
Vietnam's trade deficit is predicted to reach $1.44 billion in the first seven months of the year, significantly higher than the $219 million deficit in the same period last year. 
Exports fell by 0.7% on-year to $1.4 billion in July as a result of the decline in the sale of the country's key products such as oil, electronic goods, rice, pepper, coffee, fruits and vegetables. Import value meanwhile rose 10.7% to $1.55 billion on strong spending on cloth and yarn, production machinery, automobile and steel. 
The country's January-July exports fell by 4.2% to $8.72 billion, while seven-month imports rose 11.6% to $10.16 billion. 
The country exported 9.757 million tons of crude oil worth $1.705 million in the January-July period, down 4.4% in volume against the same period last year, of which July's exports were 1.4 million tons worth $262 million, decreasing by 3.4% and 15.5% year-on-year respectively.
Electronics and computer parts shipments declined by 27.3% to $40 million in July, pulling seven-month exports down by 26.5% to $269 million.
July's rice shipments fell by 16.7% in volume and 20.8% in value to 250,000 tons and $42 million. Domestic firms were able to ship 30,000 tons of coffee worth $13 million in July, down 45.5%.
GDP growth for the first six months stood at 6.7 percent, 0.6 points down on the year's target, which for 2001-2005 period is 7.5 percent. Officials are starting to show their concern over the government's ability to make realistic long and short-term plans. 
For the time being, the government has set out eight solutions which includes stepping up business production; strengthening reimbursement for investment capital sources, synchronous implementation of solutions to solve difficulties in exporting; continuing restructuring, reform and improvement of state-owned business efficiency; putting more effort into hunger and poverty elimination and job creation programmes and strengthening the fight against increasing crime, social vices and traffic accidents. 

Roots of upheaval in Tay Nguyen
The breaking down of forest and village cultures is giving rise to political upheavals in the Tay Nguyen (Central Highlands) region recently. 
A revealing article in the Suc Khoe & Doi Song (Health & Life) newspaper today, stressed that one of the Communist Party's most serious mistakes in Tay Nguyen since 1975 (the liberation of Southern Vietnam) is that it has not taken account of these two features in its plan for socio-economic development in the region.
The forest and land and the village are the two most important foundations of the Tay Nguyen people's community. But since 1975, these foundations have been totally broken. The population of Tay Nguyen has increased four-fold over the past 26 years, as a result of the State's policy on massive migration into the region in a bid to ease pressure on other populous areas (mainly from northern plain and central coastal areas) and the establishment of forest farms which aim to exploit the region's natural resources. Immigrants also appeared from northern mountainous areas. The average annual population growth in Tay Nguyen has reached 5.15%, and more than 7% in Dak Lak province. 
This, consequently, has turned the native people, who previously accounted for the majority in the region, into an ethnic minority on their own land. The ratio of native people of Tay Nguyen's population has diminished from 95% in the pre-1975 period to a mere 20% currently. Kinh people, representing the majority of Vietnam's population, make up the rest.
The native people have therefore gradually lost forest and land to the newcomers. By 1985, State-run forest farms account for 70% of the region's acreage, not excluding additional large areas taken by free immigrants so most of them have had to retreat deep into the forest and are forced to destroy the forest for their survival. 
For Tay Nguyen people, the forest is a vital part of their life. Tay Nguyen culture is forest culture. Destroying forests means suicide, even being considered a degradation of morality, the newspaper said. The shrinking ownership of forest and land for production has broken lang (village), one of the most important characteristics of Tay Nguyen's traditional social organisations. Forest and land are considered the existential space of lang. The real owners of the regional land can only look in vain at the fierce destruction of forests by free migrants and State-run forest farms. 
In recent years, some central highlands provinces have allotted land and forests to each family of the hill tribes aiming to help them develop production the way it is done in the plain areas. But they forget that the cell unit of Tay Nguyen is not the family but the lang. 

No Response from US Senate on Call for Rejecting Human Rights Act
The Vietnamese Communist Party has made its final, desperate effort to call on the US Senate not to pass the Human Rights in Vietnam Act, which gained almost unanimous approval from the House of Representatives.
The Communist Party sent two religious delegations to the US last month, who returned home recently without knowing whether the Senate plans to reject the Act or not. 
"We had talks with senior officials from the US Government and some religious organizations, trying to explain the human rights situation in Vietnam, but are yet to receive any response from them," said Head of the Government's Religious Committee Le Quang Vinh, in an interview with the military newspaper, Quan Doi Nhan Dan (People's Army) today. "They just said they would take the information provided by Vietnam under consideration."
Vinh said the delegations were "warmly welcomed" by American religious organizations who were waiting for an explanation of the religious situation in Vietnam. "We told them that the Act entirely distorted religious activities and freedom in Vietnam, and provided them with information about the development of religion in the country."
The State and Party creates favorable conditions for religious activities but they must be in line with the law, he said.
Currently, six religions are officially recognized in Vietnam - Buddhism, Catholicism, Protestantism, Caodaism, Hoa Hao and Islam. 
Last year, Vietnam put Catholic priest Nguyen Van Ly in prison on October 19 for "not obeying house arrest by a State office" and for "destroying the national unity policy".
Ly has called on Catholic followers since 1977 to seek religious freedom and the abolition of Article 4 of the Constitution [which regulates the sole rule of the Communist Party in Vietnam], and to discontinue the study of socialism and the history of the Communist Party.

« Top


AGRICULTURE

Vietnam to widen sugarcane area in 2002-03 


The Ministry of Agriculture and Rural Development (MARD) plans to widen the country's sugarcane area by 5,000 ha to 315,000 hectares in 2002-03 to provide raw materials for domestic sugar refineries, it was reported at a conference on June 25th, which was reviewing the 2001-02 sugarcane crop
It targets sugar output to increase by 77,351 to 850,000 tons, including 650,000 tons for domestic consumption and 200,000 tons for export. 
MARD plans to set a sugarcane floor price of VND230,000-250,000 ($15.1-16.4) per ton for the 2002-03 crop, aiming to reduce the sugar price to VND4.5-5 million ($296-328.9) per ton and make Vietnamese sugar more competitive on the global market. 
Vietnam now has 42 sugar refineries, which are able to process 12.1 million tons of sugarcane per annum. The refineries produced 772,649 tons of sugar from the last crop, an increase of 122,649 tons against the 2000-01 crop. 
The sugarcane price climbed to VND380,000-400,000 ($25-26.3) per ton because of fierce competition between sugar plants stemming from material shortage during the 2001-02 crop. That then caused the sugar price to increase to VND7 million ($460) per ton. 

Rice trading firms cry for government help

Domestic rice exporting firms have proposed that the government subsidize them to the amount VND230 billion ($15.1 million) to cover their losses from shipping rice abroad since the beginning of the year. They have suggested the subsidy be provided under the form of export bonuses.
The increase in fresh paddy rice prices over the past few months and the rise in processing costs and transportation charges have narrowed their margins and even caused significant losses. The reluctance to buy paddy for storage earlier this year by State-run firms, who are responsible for exporting rice under government-to-government deals, is also stated as a reason for their losses. 
Firms complain that they have lost about VND50,000 ($3.28) from shipping each ton of 25% broken rice and VND100,000 ($6.57) from shipping a ton of 15% broken rice abroad.
The increase of the petroleum price over the past months has raised firms' transportation costs. Inland water transport from southern Can Tho province to Ho Chi Minh City rose by VND15,000-20,000 ($1-1.31) to VND55,000-60,000 ($3.6-3.94) per ton. The charge from Ho Chi Minh City to Hai Phong has increased to VND240,000 ($15.8) per ton, double the cost of a few months ago.
They have to spend around VND800,000-900,000 ($52.6-59.2) on processing each ton of 25% broken rice, which accounts for 50-60% of their production costs, said a trader in Chau Thanh district in Can Tho province, the biggest rice trading centre in the Mekong Delta, where most of the country's rice for export is grown.
Domestic rice prices have risen by 15% since the beginning of the year while fresh paddy prices have grown by 30%.

« Top

ENERGY

Vietnamese deputy premier says energy cooperation with Russia successful

Vietnam is going to cooperate with Russia in the construction of the biggest hydraulic power station in Vietnam, Son La. Vietnamese Deputy Prime Minister Nguyen Manh Cam said in an exclusive interview to ITAR-TASS News Agency.
He heads the Vietnamese part of the intergovernmental commission for trade, economic, scientific, technical and cultural cooperation.
Nguyen Manh Cam believes interaction in the fuel and energy sector is developing successfully. He said the sides had already cooperated in the construction of Hoabin hydropower station...
He said Vietnam plans to draw also on Russia's vast experience in oil and gas prospecting and extraction. It was noted at the meeting of the co-chairmen of the intergovernmental commission in Moscow that despite the 30 per cent increase in the volume of trade over the past five months it is yet far from exhausted the potentials of the two countries.
Vietnam is interested in cooperation with Russia in the use of high technologies, particularly in machine building. Of much importance for Vietnam is cooperation with Russia in modernising Russian armaments adopted for service by the Vietnamese army. "We have got accustomed to Russian arms and these matters are now discussed at the bilateral level," Nguyen Manh Cam said. He said Vietnam is ready to supply to Russia tropical farm products, consumer goods and coal. The joint committee on agriculture will also discuss a large plan for interaction in the area, he said.
Hanoi is also going to expand the 1994 agreement on cooperation in fisheries with Moscow. Nguyen Manh Cam said that from the beginning of next year Vietnam is ready to begin sending to study in Russia some 200 students and postgraduates in various fields, on the basis of the agreement on the training of Vietnamese personnel in Russian higher educational establishments, signed on 9th July 2002 in Moscow.

Price slump forces up local oil exports

PetroVietnam has announced plans to increase oil exports by 400,000 tonnes in the second half of the year to meet the annual target. The decision followed reports that oil export volume and value in the first five months of the year decreased slightly, to 96.6 percent and 80.6 percent of the figure for the same period last year, due to a reduction in demand from major markets like America and Japan.
PetroVietnam has announced that 8.42 million tonnes of crude oil had been drilled by the end of June, translating into 51.5 percent of the annual target. Around 8.1 million tonnes of crude oil was exported in the same period, with total export value of more than $1.4 billion.
In the period, 1.04 billion cubic metres of associated gas was exploited, or 54 percent of the annual target.
The planned increase of 400,000 tonnes exploited by the end of the year pushes PetroVietnam's oil volume up to 17 million tonnes from the previously scheduled 16.6 million tonnes.
The oil and gas giant announced that a drop in international oil prices was the major reason for the decrease in export value in the first quarter.
Oil prices averaged $180 per tonne or $240 per barrel in the first half of the year, a decrease of $33 per tonne or $4.4 per barrel on the same period of 2001.

« Top

ENVIRONMENT

World Bank plans to fund $40m for Vietnam Environment Fund

The World Bank plans to provide the Vietnam Environment Protection Fund with $40m in official development assistance, according to the Environment Department under the Ministry of Science, Technology and Development on July 17th.
The fund, with legal capital of VND200 billion ($13.15 million), was set up on June 26th and its operation rules are being worked out.
Capital for the fund will annually be injected from the State budget, administrative fines or compensation for damaging the environment. 

« Top

FINANCIAL NEWS

Greenlight for joint stock FIEs expected 'in days'

The government is expected to issue a decree allowing foreign-invested firms (FIEs) to become joint stock foreign-invested companies shortly.
"We have submitted the latest draft to the government for approval and we are expecting the degree to be signed in early July. Many of the concerns have been sorted out," said a senior Ministry of Planning and Investment (MPI) official.
Concerns centred on whether Vietnam would allow new joint stock foreign-invested firms to be established or only allow the conversion of existing FIEs into joint stocks FIEs.
"There should be changes later, but according to the latest draft, Vietnam will only allow the conversion of existing FIEs into joint stock FIEs", the official said. A provision requiring FIE firms to make a profit for at least three years before being entitled to conversion was amended to allay potential foreign investor concerns.
"Under the decree, foreign invested firms making a profit for one year could convert themselves into joint stock FIEs. It will increase the number of firms that could join the first wave to become joint stock FIEs," he said.
The decree, if issued however, could still fall short of foreign investors' expectations, as it would only allow the conversion of FIEs into joint stock FIEs on a trial basis.
"The trial basis means several provisions, which might be unsuitable, could be amended during implementation. We are trying to do things in a positive way for foreign investors," the official said.
Vietnam has mulled over the joint stock FDI firm plan for at least two years, but held back for fear foreign investors might withdraw their capital on mass causing a financial crisis. 

« Top

FOREIGN INVESTMENT

Ha Giang awaits OK on first foreign-invested project 

The northern province of Ha Giang is waiting for the go-ahead from the central government for its first foreign-invested project in general trading, hotels and slot machine entertainment.
Ha Giang investment authorities said that a Chinese trading firm had expressed interest in setting up a $5-million joint venture with the Ha Giang-based Tourism, Service & Trading Co.
This is because ventures to provide slot machine entertainment are sensitive and the Ministry of Planning and Investment must appraise all gaming applications on a case-by-case basis, and must then receive the green light from the Prime Minister.
Gaming is now permitted at a few foreign-invested hotels, golf courses and numerous entertainment complexes, following the government's approval last year.
The government's decision specified, however, that gaming would only become available in clearly designated venues. These venues must be located at a specified distance from the main facilities of the establishments.
Furthermore, in an effort to limit the spread of gaming in Vietnam, such entertainment is only available to foreigners and overseas Vietnamese.

« Top

INFORMATION TECHNOLOGY

IT Development Plan Approved

The Vietnamese Government on July 17th approved an information technology (IT) application and development framework up to 2005, which will receive total investment equal to 2% of the Gross Domestic Product (GDP).
The framework, which focuses on developing software, hardware and human resources, consists of three main goals, with the first to match the average IT development level of regional countries. By 2005, all provinces and cities should be linked together via optical fibre systems, and 4-5% of the population should be Internet users. The second goal is to reach an annual growth of 20-23%, while the third is to train 50,000 more IT experts, half being advanced experts and programmers with a good command of foreign languages. 
According to the framework, the software industry will become a spearhead industry with an annual growth of 30-35%. The government will encourage economic sectors, including foreign-invested ones, to establish investment funds operating in the software industry, as well as give preferential policies to software parks. It will pour $50-70m into projects to develop manpower, markets and products, in the hope of making total software revenue of $500m (including export turnover of $200m) by 2005. 
The government will also facilitate the hardware industry by further developing the assembly and production of computers and communication equipment so that the domestically-made and assembled products can meet some 80% of the local demand by 2005. It will boost the export of communication equipment, especially networking ones. To this end, Vietnam will lure more foreign IT giants to invest and transfer technology to the local industry.
In addition to specialized training methods, the government has decided to implement new IT training programmes that are suitable for students in non-IT fields. Between 2,000 and 3,000 students will undergo such training programmes each year in the 2002-2005 period. Specifically, it will send 300 undergraduates and postgraduates as well as 500 specialists and officials abroad to study IT. Some 20% cadres in Party and State organizations at all levels will also be fostered in terms of their IT ability annually.
To realize the above targets by 2005, Vietnam will mobilize a huge amount of money, equal to 2% of the GDP, mainly from domestic and foreign enterprises and economic and social organizations. The Department General of Posts & Telecommunications is to upgrade telecommunications and Internet infrastructure, the Ministry of Education & Training to implement IT manpower development programs, and the Ministry of Science, Technology & Environment and the Ministry of Industry are to develop software and hardware industries, respectively.

HCM City to constrict internet service provision 

Ho Chi Minh City authorities will inspect public Internet services and eight Internet service providers in the local area shortly, according to the Tuoi Tre (HCM City Youth) newspaper.
The inspection will focus on obedience to State regulations on the Internet, from which measures will be put forward to deal with violations. The authorities said the inspections would not have a negative impact on the business of Internet services or create bad public opinion, the paper added, without specifying what these bad opinions may be. 
This move follows the prime minister's instruction requesting local authorities to tighten management of the country's 4,000 public Internet services, claiming that many documents with "depraved and reactionary content" are being disseminated publicly by "anti-Communist forces inside and outside the country" through emails to organizations and individuals or on websites. Many are found on public Internet services. 

« Top

INTERNATIONAL RELATIONS

Russia, Vietnam seek closer ties

Moscow is satisfied with the growth of trade and economic contacts with Vietnam, Deputy Prime Minister Viktor Khristenko has said, ITR-TASS News Agency has reported.
He told reporters after a meeting with his Vietnamese counterpart, Nguyen Manh Cam, on 9th July that trade between the two states increased 32 per cent in the first five months of this year as compared to the last year's figure, to US$272m.
"This is a joyous fact, and we hope that this tendency has a sustainable character," Khristenko said.
As for a settlement of Vietnam's debt to Russia, he said the first bidding for delivering Vietnamese goods to Russia, in clearance of the debt, will be held in September.
Besides, Khristenko and Nguyen Manh Cam signed an intergovernmental agreement on the training of Vietnamese citizens at Russia's higher education centres.
Vietnam will issue US$8m for this programme, also in repayment of the debt.
The deputy prime ministers discussed cooperation in the fuel and energy sector, in particular the prospects of the joint venture Vietsovpetro, and the situation in the electricity sector.
Khristenko said he hoped that Vietnam would use this year Russia's US$100m loan for its electricity industry.
The next round of Russian-Vietnamese talks will be held at the end of this year, when Khristenko and Nguyen Manh Cam will chair a regular meeting of the intergovernmental cooperation commission.

Vietnam, China Bolster Ties

Discussing measures to implement agreements reached by senior Vietnamese and Chinese leaders on enhancing trust and strengthening traditional ties was the main focus of a meeting between Deputy Foreign Minister Le Van Bang and his Chinese counterpart, Wang Yi, during Bang's visit to China on July 4th-10th.
They also discussed measures to enhance relations between the two foreign ministries in the new era. 
During his six-day visit, Bang also met with members of the Central Committee of the Communist Party of China and the head of the committee's International Liaison Department Dai Bingguo, Permanent Deputy Foreign Minister Li Zhaoxing, and President of China-Vietnam Friendship Association Zhao Dongyuan.
Bang later visited Guangzhou, Shenzhen, and met with the Deputy Chairman of the Guangdong Provincial People's Committee, Tang Bingquan.
The Tonkin Gulf Delimitation Agreement was signed in 2000, together with an agreement on fishing cooperation, after several disputes and conflicts on fishing and oil exploitation in the Gulf.
The two countries have not finalized territorial disputes in the East Sea (South China Sea), mostly related to the ownership over the Paracel and Spratly archipelagoes.

« Top

REGIONAL DEVELOPMENT

Central Vietnam's largest textile, dyeing complex gets off the ground

Construction of the largest textile and dyeing complex in the central region, at a cost of VND641 billion ($42.2 million), began on July 10th in the Hoa Khanh Industrial Park in Da Nang city, said project developer, Vietnam National Garment & Textile Corporation.
The construction is part of the national garment and textile industry's development strategy between now and 2010 to build 10 garment and textile complexes, including three textile and dyeing complexes in central Da Nang city, northern Hung Yen province and southern Binh Duong province. 
The complex includes a textile plant producing 15 million metres of fabric annually, a dying mill with an annual capacity of 25 million metres of cloth, and a wastewater treatment plant with a daily capacity of 5,000 cu m. The operation of the complex's key parts will be run by foreign experts.
The local garment and textile industry reported export turnover of $990 million in the first half of 2002, a year-on-year increase of 3% and realising 39.6% of the yearly target. 

MPI to seek $570m in ODA for Central Highlands

The Ministry of Planning and Investment is seeking $570m in official development assistance (ODA) for 15 projects in the central highlands between now and 2005 to promote socio-economic development in the region.
The ministry will need $150m to build the 120-MW Play Krong hydropower plant, $112m to fund afforest ration programs in Dak Lak, Gia Lai and Kon Tum provinces, $100m to build the 260-MW Thuong Kon Tum hydropower plant, and $70m to fund a forest protection project in Gia Lai province.
The region, comprising the four provinces of Dak Lak, Gia Lai, Kon Tum and Lam Dong, received investment of VND24 trillion ($1.5bn) in socio-economic development in the 1996-2000 period, a four-fold increase against the previous five-year period. 
The move follows a recent comprehensive State strategy for the region introduced by Deputy Prime Minister, Nguyen Tan Dzung, in the 'Nhan Dan' (The People) newspaper, the mouthpiece of the Vietnam Communist Party. 
Earlier this year, the Politburo issued a resolution on developing agriculture, industry, education, politics and defence in the central highlands. 
The central highlands, the most sensitive region in the country, reports a high rate of poverty, which is the major reason for local residents being ripe for incitement by hostile forces, which triggered riots in the region last year. The income is nine times lower than the country's average level. Some 40.9% of its children are malnourished.

« Top

 

CUSTOMISED REPORTS

 

INVESTMENT BACKGROUND REPORTS

Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 

For further information email:

reports@newnations.com

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!

To order please click here:
Investment background report

« Top

« Back




Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com