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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military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973.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: 011 - (01/11/02)

The Ministry of Police recently urged the State to tighten its management of information and Internet use, to avoid what it called "the distortion of the truth by hostile forces."
The People's Police newspaper issued a warning over the emergence of activities that break the Press Law and violate regulations on exploring and disseminating information, which it said was due to "problems in enforcement of the measures and infrastructure for information management."
Some e-newspapers have publicly operated without State approval while some printed newspapers exploited information from the Internet, regardless of its negative impact, it said.
The paper warned that "hostile forces [without specifying who they are] are taking advantage of public and secret, legal and illegal, information systems to promote their distorted views for peaceful evolution and a change of ideology in a bid to deceive the public." 
It called on journalists to be more politically sensitive and professional to avoid adverse consequences. It said that the timing and scope of the release of information must be prudently considered and approved.
"Newspapers should extend publishing about the country's achievements, which can be perceived as indirectly joining the fight against hostile forces," it said.
In early October, Hanoi authorities ordered localities nationwide to inspect Internet use to crack down on "depraved and anti-State information" after initial examinations in the two largest cities, Hanoi and Ho Chi Minh City. 
The Ministry of Culture and Information has recently suspended the operation of a website designed as a forum for Vietnamese youth, claiming it did not seek permission and violated the press law. 
Three people were reportedly arrested early this year for publishing documents on the Internet calling for democracy and criticizing Vietnam's land concessions to China. 
Vietnam reports 200,000 Internet subscriptions currently and nearly 5,000 Internet access points. 

Investment Focus 
The quality of the investment environment in Vietnam has improved greatly during first nine months this year as reflected in the inflow of foreign direct investment.
The number of investment licences granted to large scale projects was not especially high. However, within the context of tough competition to attract foreign direct investment (FDI) among regional countries, the results obtained over the first nine months of this year are very promising. 
Ministry of Planning and Investment (MPI) figures show that as of September 25th 2002 there were 3,495 effective FDI projects with total investment capital registered at $38.9 billion.
Of these, 1,861 projects were in operation with total registered capital of $22.5 billion. 709 projects were under construction with total registered capital of $11.2 billion and 925 projects, with total registered capital of $5.2 billion, had been granted investment licences but had yet to begin work.
Implemented investment capital amounted to $20.7 billion, excluding the implemented capital for expired projects.
During the first nine months of this year, the implemented capital of foreign investment projects reached $1.65 billion, an increase of 12 percent against that of the same period last year.
Foreign invested enterprises achieved an export turnover of $3.079 billion, an increase of 12 percent year-on-year, but imported around $4.48 billion, an increase of 22 percent compared to the same period last year. Foreign firms also contributed some $286 million to the state budget, an increase of 14 percent compared to that of the same period last year. 
It is notable that after the first nine months of 2002, there were 181 projects asking for capital increases of $601 million, a rise of 20 percent compared to that of the same period last year. 
Foreign invested projects are expected to reach $2.34 billion in implemented capital, $8.4 billion in turnover, $4.2 billion in exports and $460 million in contributions to the state budget this year.
Upcoming policies are said to continue to favour foreign investors in accordance with the spirit of the government resolution No.09/2002 on strengthening and enhancing the effectiveness of encouraging foreign investment during the period 2001-2005.
The proposed amendments to Decree 24 on the implementation of the Foreign Investment Law have been hailed by foreign investors as encouraging steps to improve the investment environment. The amendment will make licensing procedures and requirements clearer and more attractive for potential investors.
One of the most significant reforms in the draft decree is the easing of conditions for the issuance of investment licenses through registration and the list of specific projects that are subject to special conditions.
These improvements would assist potential investors in accessing the opportunities and limitations in investing in Vietnam.
Conditions concerning compulsory state planning approval and environmental impact assessment are also relaxed.
Licensing via registration would now be open to projects exporting 80 percent of their output, down from 100 percent and those capitalised at up to $5 million, exporting 50 percent, down from 80 percent. These projects, which would not be in Group A, should gain state planning approval and would not be subject to environmental impact assessment requirements.
Another proposed amendment is the scrapping of the 20 percent cap value of capital contribution via technical transfer. This would help provide realistic assessment on how much capital can be contributed in terms of "soft assets" for a project to work. The move would also be an incentive in attracting more technology transfer into Vietnam.
The draft decree also specifies that licensing authorities consider withdrawing the licence in cases when six months have passed since a foreign-invested project stops operations or if operations are delayed for that amount of time. 

A recent survey conducted in Hanoi to gauge the level of competitiveness of enterprises in key economic sectors came up with mixed results. 
The survey found the majority of state-owned firms replied that the level of state protection was still low despite being aware that by relying on such state protection they could be forced out of business while the organizer of the survey said company efficiency is relatively low. 
There are currently 807 state-owned enterprises (SOEs) in Hanoi, contributing 60 percent of the city's GDP and creating 330,000 jobs. 
Shortcomings of SOEs include lack of financial capability, overdue debts and out of date technology. Unemployment and redundancy remain at a high level. 
Meanwhile, due to the comparative advantage of capital, management and production technologies, foreign invested enterprises (FIEs) are more competitive than domestic ones. 
Local private enterprises are still limited in their access to business support sources like capital and information. But FIEs are also having to face problems. Many of them have second-hand machinery and equipment, resulting in finished products with bad quality and high prices.
The scale of FIEs is normally small and aims to import spare parts from overseas markets for assembling. 
Out of 11 groups of products surveyed, in the main only garment and textile and footwear products are exported to European Union, Japan and the US. All other products are concentrated on domestic markets.
On both the overseas and local markets, products are suffering fierce competition from products from China and other regional countries. 
Domestic materials are still not being made to replace imported ones and the production of many firms is still dependent on imports, states the survey. 
Almost all enterprises have been applying measures to increase the competitiveness of products, especially by increasing quality, improving patterns and models, reducing prices and developing their distribution systems. However, efficiency measures are not having the desired effect. It could come about that many enterprises will move to trading rather than stay in production. 

Leading Political Dissident Dies
Vietnamese communist authorities have finally announced the death of one of its most active dissidents, Lieutenant-General Tran Do, in only one newspaper.
The Party's mouthpiece Nhan Dan (The People) Daily devoted only two small columns at the bottom right hand-side to announce the death of Tran Do at the age of 78. 
Do died at Huu Nghi Hospital in Hanoi after suffering from acute diabetes for a long period. 
The paper detailed his life as a Party member from November 1940 to January 1999; former Central Party Committee member from 1960 to 1991, former vice chairman of National Assembly session VIII, deputy minister of Culture and Information and vice chairman of Vietnam Military Commissariat. 
But it avoided any references to him being one of the country's leading political and human rights activists, as was widely known by in the public and in international organizations. Do was expelled from the Party in 1999 and placed under surveillance for urging it to create true democracy and remove monopolies.
The first two parts of Do's book, expressing his anguish over the failure of the Communist Party to realize its targets and promises after the revolution against foreign invaders, were published widely on the Internet. 
But police reportedly confiscated the draft of the third installment when he was on his way to visit his son, an act which caused public excitement at the time. Hanoi authorities said that Do had violated the Publishing Law, which regulates that the publishing of any books must first gain approval from the government.
Vietnam is now more open to allowing the public to voice their opinions to the Party, but any calls for pluralism or the pointing out of mistakes by party leaders are considered taboo. 
Overseas human rights groups condemn the Communist-ruled Vietnamese government for suppressing local dissidents. Vietnam, however, denies the accusations, vaguely responding that these people have broken the law. 

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Vietnam's food output estimated at 35.85m tons this year

Vietnam estimates it will record food output of 35.85 million tons in 2002, an increase of 1.58 million tons over last year, according to the General Statistics Office.
The paddy rice output will increase by 1.5 million tons to 33.62 million tons this year, while rice area will narrow by 0.4% to 7.46 million hectares.
Output in the winter-spring crop, the most important of the year, was 16.71 million tons, up 8% on-year, the summer-autumn rice output increased by 3.2% to 8.59 million tons and the output of subsidiary crops was 8.3 million tons.
Maize output will also rise by 3.3% to 2.23 million tons in the time, as farmers nationwide widened the maize area by 6.5% to 776,800 hectares.
The cassava area is to be enlarged by 9.2% on-year to 319,100 hectares with output of 3.91 million tons, up 11.5%. Although the sweet potato area will narrow by 2.6% to 238,200 hectares, output will rise by 2.5% to 1.69 million tons.
Farmers nationwide are expected to plant 1.5 million hectares of cash crops this year, an increase of 29,300 hectares over last year. The areas of cashew, rubber, pepper and tea will widen to 34,400 hectares, 14,700 hectares, 8,700 hectares and 8,000 hectares, respectively, over last year. The coffee area, meanwhile, will reduce by 30,000 hectares and the coconut area will shrink by 7,600 hectares because of the prospect of low profits.
Cashew output will increase by 54,000 tons to 127,200 tons, rubber by 15,100 to 327,700 tons, pepper by 5,600 tons to 50,000 tons and tea by 60,900 to 401,400 tons. Coffee output is expected to fall by 64,200 tons to 776,400 tons and coconuts by 17,600 tons to 874,400 tons.
Orchards will increase by 26,200 hectares on-year to 635,800 hectares. Farmers will cultivate 191,800 hectares of forests, including 154,400 hectares under the Five Million Hectares of Forest program, down 0.9% against last year. Wood processing plants in Vietnam are to exploit 2.42 million cu m of wood, some 31,000 cu m higher than last year.

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January-September GDP growth at 6.9% year-on-year

Vietnam's gross domestic product (GDP) in the January-September period grew by 6.9% compared with the same period last year, lower than the growth of 7.1% recorded in the same period last year and less than the yearly target of 7%-7.3%, according to estimates from the Ministry of Planning and Investment.
The nine-month GDP of the industrial and construction sector grew 9.8% on-year, lower than the 10.7% growth in the same period of 2001. The agriculture, forestry and fisheries sector rose 3.4%, higher than last year growth of 2.8%, and the service sector increased 6.1%, a slight fall against last year's 6.3%.
The downward trend of GDP growth in industrial and service sectors, which contribute a total of 6.1% out of the 6.9% growth in the whole country, show that the economy's competitiveness is declining.
The Asian Development Bank (ADB) recently predicted Vietnam's GDP would grow by 6.2% this year and 6.8% next year.

Vietnam to spend $19bn in industrial imports next year

The Ministry of Industry has planned total import turnover of around $19 billion for the industrial sector next year, up 7.5% from this year's figure and accounting for 90% of the country's total import spending in 2003.
Of the total, imports of materials and fuels will cost $12.4 billion.
The industrial sector also targets to earn $11.7 billion from exports in 2003, including $7.2 billion of light industrial products and handicrafts.
Enterprises under the Ministry of Industry are expected to spend $1.5 billion on imports and export $1.4 billion worth of products in the year. Major industrial products for export include garments and textiles, footwear, coal, milk, instant foodstuff, vegetable oil and minerals.

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PM Calls on German Assistance in State Auditing

Prime Minister Phan Van Khai has called for stronger co-operation between Germany and Vietnam in the State auditing sector at a meeting with the visiting Chairman of German State Auditing, Mr Dieter Engels, on October 8th.
Mr Engels pledged that German State Auditing will help Vietnam in training its human resources.
During the visit, Mr Engels also co-chaired a seminar on the two countries' auditing sectors with his Vietnamese counterpart, Do Binh Duong.
The German Government has pledged to assist around 55 million euro ($54.4 million) annually to Vietnam. The country's development assistance agency in Vietnam, the German Technical Cooperation Agency (GTZ), has carried out projects to help improve the effectiveness of Vietnamese financial administrative organizations.

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US becomes sixth biggest foreign investor in Vietnam this year

The US has pledged to pour around $50 million in to 21 projects since the beginning of the year, becoming the sixth biggest foreign investor in Vietnam this year after Taiwan, South Korea, Japan, Hong Kong, and Malaysia.
The Vietnam Semi Conductor Project worth $30 million in Hanoi is the biggest US invested project.
To date, US investment has reached over $1 billion in 144 projects, ranking 13th among foreign investors. Of these, 62 worth $582 million have begun operations while infrastructure construction is underway for another 25 projects with combined capital of $151 million.

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Ministry seeks approval for $4bn Post, Telecoms, IT spree plan

The Ministry of Post and Telecommunications is planning to invest $4 billion in the country's communications systems in the 2002-2010 period to provide high speed, high quality and low cost services. The major spending program has been submitted to the government for approval, said Minister Do Trung Ta on October 2.
Minister Ta said the ministry's development strategy will focus on developing postal, telecommunications, electronics and information technology (IT) services, improving human resources in both professional and managerial fields, and boosting the application of IT and telecoms technology in other fields.
However, he did not unveil any detailed projects or the exact amount of money for each project.
Vietnam now has 5.1 million telephone subscribers and 250,000 Internet subscribers out of its population of 79 million, or 6.26% and 0.32%, respectively. It targets to raise these figures to 15-18% and 5-6% in 2010.
It also target to connect all State agencies and provincial and district level governments to the Internet and to fully equip all universities, colleges and grade schools for IT application in their teaching and training activities by 2005.
The hardware industry is expected to reach production of $1 billion by 2005, and software is to record annual growth of 30-35% in the period.

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Foreign Investors Poured $48m into tourism in January-September

An additional 13 foreign invested projects in tourism with total registered capital of $48 million were licensed in the first nine months of this year, more than three times higher than the figure of the whole last year, reported the Ministry of Planning and Investment.
The total realized capital of the projects was reported at $135 million, an increase of $45 million against the same period of last year.
The tourism sector has attracted 194 foreign investment projects with total registered capital of $6 billion since the implementation of the Law on Foreign Investment in 1987, making up 15.6% of total foreign investment in Vietnam in the period, and accounting for 5.9% of project numbers.
Vietnam welcomed over 1.97 million foreign visitors in the period, up 10.9% over the same period last year.
International visitors to Vietnam rise 10.9% to 1.97m in first nine months
International arrivals to Vietnam rose by 10.9% year-on-year to more than 1.97 million in the January-September period of this year, according to the General Statistics Office (GSO).
Of the figure, tourists totaled 1.09 million and business visitors 328,300, up 17% and 11.4% from the same period last year. The number of overseas Vietnamese coming home to visit their relatives grew 7.1% to 331,300.
China is still the largest market with 552,500 arrivals, making up 28% of the total number of foreigners arriving in Vietnam in the period. Japan took over the second place from the US with 205,700 visitors (accounting for 10.44%) while the US followed with 205,000 visitors (accounting for 10.4%). These markets reported on-year growth of 8.8%, 27.3% and 8.8%, respectively.
Taiwan, France, South Korea, Australia, Cambodia, Britain and Malaysia came next with 159,400 visitors, (up 4.8%), 81,750 (+9.7%), 77,000 (+37.4%), 70,200 (+13.1%), 54,000 (+4.9%), 51,400 (+8%) and 32,700 (+68.6%), respectively.
The three Asian countries of Malaysia, the Philippines and South Korea ranked first, second and third in growth rates in tourist numbers, which stood at 68.6%, 39% and 37.4%.
Of the 29 counted markets, three recorded a decline: Italy and Russia fell 6.9% and Switzerland 4.5%.
The tourism sector predicts that Vietnam will host a total of 2.6 million international visitors this year, up from the initial target of 2.5 million and 10.3% more than last year's figure.

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