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VIETNAM


  
   

REPUBLICAN REFERENCE

Area (sq.km)
329,560

Population
79,939,000

Capital
Hanoi

Currency
dong

President
Tran Duc Luong

 

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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military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973.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.
One of the most important political events to happen in Vietnam in 2002 was the election held in May of the country's new National Assembly (NA), the highest legislative body, for the 2002-2007 term. 498 individuals were elected as parliament members, including 118 permanent members, who will work on NA committees during their term, unlike the majority of members, who usually operate in local areas and only attend regular meetings of the NA when they are arranged.
The NA has decided on the new government cabinet, whose working term will also extend from 2002 to 2007. Prime Minister Phan Van Khai was re-elected and the number of deputy prime ministers cut to three for the next five years from four in the previous term. 
Minister of Trade Vu Khoan, was elected deputy PM in charge of trade and foreign affairs, replacing Nguyen Manh Cam. Khoan is respected for his contribution in signing a landmark trade deal between Vietnam and its former enemy the United States.
Two deputy PMs, including Nguyen Manh Cam and Nguyen Cong Tan who was responsible for agriculture, retired. Deputy PMs Nguyen Tan Dzung and Pham Gia Khiem continue in their posts for the next five-year term.
The NA approved the setting up of 26 ministries and ministerial committees, up from 23 in the previous term. The new formation aims to help ministries to focus more on their responsibilities and to work more effectively. Stagnation, overlapping functions and the bulky structure of the government's administrative bodies was one of the major causes of the ineffectiveness of government in its previous terms.
Fourteen new ministers and committee heads or 50% of the government's cabinet have been appointed for this new term, including ministers of police, justice, trade, transport, construction, industry, planning and investment, home affairs, science and technology, natural resources and environment, post and telecommunication, state inspectorate, ethnic minority people, and population, family and children. Two newly-created ministries included the Ministry for Natural Resources and Environment and Ministry of Post and Telecommunication.
The NA held its second meeting, which lasted from November 12th to the middle of December, to seek measures to improve the country's socio-economic situation in the remaining months of 2002 and discuss plans for the next year. 
Major issues focused on during this meeting were corruption, squandering, education, criminals, justice and traffic jam and accidents. The government firmly pledged to implement changes to provide a more favourable and equal environment to support private enterprises during the term of the 11th National Assembly, in addition to imposing tougher conditions for state owned enterprises (SOEs). In practice, the new-found commitment to the private sector remains to be tested. The government has, however, moved ahead with economic reforms related to its pursuit of World Trade Organization (WTO) membership, and its commitments under the bilateral trade agreement with the US.
In an effort to ease the public's increasing discontent with corruption and other social ills, the Communist Party general secretary, Nong Duc Manh, promised to pursue a tough campaign to crack down on corruption and wrong-doings of party members. Manh has also attempted to breathe new life into the economic renovation (doi moi) process, but the pace and progress of economic reform is unlikely to quicken significantly in 2002-03. 
The Communist Party, easily the most powerful organization in Vietnam with around two million members, has set targets to consolidate control and leadership in grassroots groups. The Party says it will clarify the responsibilities of commune authorities and other social organizations, make them work under local Party organizations' management, and to consult citizens regarding their decisions. It will also improve discipline in those offices, train staff for commune offices and organizations and increase payments and preferential treatment for grassroots officials, according to the meeting's final announcement. 
For many years, Party organizations have had little effect on people since the tasks and responsibilities of Party organizations and local governments have not been clearly defined. 
In urban areas, local Party organizations just assemble some retired Party members for impractical gossip sessions and rarely admit new Party members, because most Party members are drawn from their offices' organizations. 
In rural areas, Party members are also commune authorities, so they have unchallenged power to decide on local issues, which is the root of increasing corruption and abuse of power, illustrated by the mounting number of complaints and criticisms. 
The Party only has groups in State-owned enterprises and administrative offices. While private and foreign invested enterprises keep expanding and increasing their contribution to the economy, the Party has not yet set up organizations in those sectors because it still prevents Party members from operating businesses. The NA's final announcement, however, did not make it clear if the Party would admit business people into its organization in a bid to increase its influence in the private sector. 
However, not wanting to evade the increasingly important role of private businesses, the party this year made an historical decision allowing businessmen to be members and will permit current members to operate private enterprises. Party members can run private enterprises if they do not violate laws and have the support of their staff and neighbours. They can maintain their Party membership if they wish. The Politburo, the country's political elite, hopes that Party members working in the production sectors will be excellent businessmen who can make legal fortunes and encourage other people to make fortunes but do not explain how these objectives may be realised. 
In the Party's previous regulations, Party members could not practice labour exploitation, because it is contradictory to old Russian socialist theory, which the Party adopted as a bible. But the Party never clarified what "labour exploitation" was, resulting in an implicit understanding that Party members could not run private businesses that employ workers. 
In fact, no Party members are directors of private companies and few are working in private companies. The permission to do so came along with the Party's resolutions on boosting the private sector's role in the economy and on improving the Party's leadership in grassroots organizations. 
The Party now has to admit the existence and increasing role of the private sector. Despite much discrimination and repression, the private sector now contributes around 60% of GDP. The Party also realizes that it has lost control, along with its image and prestige at the grassroots level, in rejecting the private sector, the largest and fastest emerging part of society. 
One of the pressing issues that the party has had difficulty in coping with in 2002 is its failure to find answers to the people's complaints and criticisms. The number of petitions from people regarding losses caused by, and their discontent over, the increasing number of cases of wrong doing, corruption, trade fraud and undue extravagance are on the rise. Many also expressed fury at not receiving any answers to their petitions from local authorities. The State Inspection Department received over 35,000 petitions last year, which were described as becoming more complex. 

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Update No: 015 - (04/03/03)

Vietnamese Communist Party worries about Ethnic Minority Affairs
The second phase of the Communist Party's Central Committee seventh plenum began on January 13th in Hanoi and closed in February with the introduction of four resolutions on issues of national importance. 
Issues relating to the different ethnic minority peoples dominated agenda, with resolutions dwelling on national unity, ethnic minorities, religious activities and the renovation of land policy.
The meeting suggested five key measures to accelerate ethnic minority affairs. It asked for poverty and hunger elimination to be sped up, raising the living standards of ethnic groups in remote and mountainous areas.
The nine-day meeting emphasised building policies to promote national unity, democracy and discipline. The meeting envisioned the promotion of citizen responsibility, building clean and strong party organizations and the enhancement of the Vietnam Fatherland Front's role in national unity.
Party General Secretary, Nong Duc Manh, stressed the importance of scrupulously implemented development policies and plans for ethnic minority groups to enhance national unity.
A communiqué released after the meeting highlighted the need to give people of ethnic groups more access to cultural and communication facilities through the expansion of radio and television networks in minority areas.
The meeting further stressed incentives and legal measures to bring religious followers into the fold. These include guiding religious groups to nurture external relations with Party and State policy. Religious followers are to be encouraged to implement state social and economic policies and improve their cultural life, contributing to the country's doimoi (renovation) policy.
The meeting also noted the need to improve land law and policies as restrictions existed on land use effectiveness. There is a proliferation of illegal land transfer. Land, as a valuable asset, has not been brought fully into play to contribute to national development.
The meeting pointed out that these problems stemmed from the fact that land policies have been changed on different occasions in the transition from a subsided to a socialist- oriented market economy. The meeting asked for improvements in land law and policy to make the most of this valuable asset.

Government commits to improve foreign investment environment 
This year, the Vietnamese government is making the improvement of its foreign investment environment a top priority, by stablising the legal system and reducing business costs.
The basic costs of doing business in Vietnam are still uncompetitive regionally, if one looks at the costs of land, technology, energy, telecoms, transportation and taxes. Although there is an ongoing process of reform (and movement towards equalisation of prices), a level playing field is still lacking for foreign invested enterprises and domestic companies.
Investors have called on the government to improve policies relating to tax, land, finance and the legal system. High income tax and telecommunication charges were the most common complaints in terms of operating costs. 
Vietnam's personal income tax (10-65 per cent, including surtax) is higher than most other Asian countries. China's rate stands at 5-45 per cent, Indonesia's 5-35 per cent, Thailand's 5-37 per cent, Malaysia's 1-24 per cent, the Philippines' 5-32 per cent and Singapore's 3-26 per cent.
Many potential investors are closely watching Vietnam's implementation of the Bilateral Trade Agreement (BTA) which commits the country to improve some of its laws and regulations. The government is also well conscious that dual pricing system applied to foreign investors needs to be entirely abolished. 
Recently, the government made an encouraging move by issuing a new regulation enabling the sale of shares in equitised state-owned enterprises for the first time to outside investors (Circular 80/2002/TT-BTC). This Circular has created the opportunity for foreign investors to purchase shares in such enterprises through auctions.

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ENVIRONMENT

Viet Nam needs grand plan to go green, says new report

An overall and far-reaching strategic plan is needed if Viet Nam is to reduce industrial pollution and improve public health, according to a report released recently, VNS News Agency has reported.
Entitled 'Environmental Toxicological Problems Resulting from Chemical Uses in Viet Nam: an Assessment of Training Requirements', the report was launched in the presence of Her Royal Highness Princess Chulabhorn Mahidol, the President of the Bangkok-based Chulabhorn Research Institute.
According to scientists' findings, Viet Nam must take urgent steps to lower the amount of pollutants used by industry and reduce their impact on the environment. 
The fast rate of growth of the chemicals industry has seriously affected the health of not only the environment but the population, and this issue must be addressed and dealt with swiftly, according to the report which was prepared by the Ha Noi Department of Science, Technology and the Environment and the Chulabhorn Institute.
With the help of the UN Development Programme (UNDP), experts have carried out a comprehensive study of environmental pollution, focusing the use of chemicals by industrial and agricultural enterprises throughout Viet Nam. 
"This report is a landmark document which will enable decision makers and planners in government, academia and the industrial sector to chart a future course for sustainable development, for the benefit of both Viet Nam and our region as a whole," said Princess Chulabhorn.
"By mapping out the status of chemical and pesticides in all phases, from production and usage to management and distribution, the report is the first step to address this challenge for Viet Nam," added Jordan Ryan, UNDP Resident Representative.
The report recommends that Viet Nam formulate and implement an appropriate legal framework for chemical safety and conduct intensive training programmes for enterprises in the State and private sectors. It also suggests that the country should work to raise environmental awareness amongst decision makers, scientists and the general public.
Princess Chulabhorn also attended the opening of a training course on the toxicology of pesticides and industrial chemicals with regard to occupational health and safety. It is hoped that the course will further strengthen the links between the Chulabhorn Institute and Ha Noi Department of Science, Technology and the Environment. 

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FOREIGN ECONOMIC RELATIONS

French, Vietnamese firms to jointly produce concrete

A French company on 24th February joined a famed local concrete maker to produce light concrete for prefabricated construction works inland and on the water, The Saigon Times Daily reported.
The business cooperation contract signed between Adage Industrial Development and Vietnam's Chau Thoi Concrete Corporation No.620 comprises building a VND3-billion factory in Binh Duong Province and transferring technology to the local partner, the signatories announced to assembled reporters.
"This is our company's first cooperation contract with the corporation which we consider a capable producer, and it will help us reinforce our operation in the country," said Alain Poinsot, Adage Vietnam's general manager, after the signing yesterday.
Poinsot said that his company, which set up the first factory in Can Tho Province's Tra Noc Industrial Park in 1999, would find it more difficult to make light concrete in its factory in the Mekong Delta and distribute the product through its own sale network than to cooperate with Chau Thoi. The local partner is also happy with the partnership.
"We have the partner that helps cover up our technology weakness in producing light concrete that are more sought after on the local market," said Nguyen Hung, Chau Thoi's president.
Chau Thoi also signed a distribution contract with HCMC-based Infrastructure Development Investment Company, which will be the sole distributor for the product in Vietnam.


Iranian President Khatami confers with Vietnamese president 

Kuala Lumpur, Feb 24, IRNA - Iranian President Mohammad Khatami and 
Vietnamese President Tran Duc Luong on 24th February held talks on Tehran-Hanoi relations. 
President Khatami said in the meeting which took place alongside the Summit of the Non-Aligned Movement that Tehran-Hanoi Economic Commission is expected to explore the capacity for further developing cooperation. 
He said that Iran and Vietnam have common experience of achieving independence and make endeavours to remove the social backwardness from which the two countries were suffering and called for cooperation to go ahead with development and progress. 
The president also called for Iran-Vietnam cooperation within the Economic Cooperation Organization (ECO) and Association of South-East Asian Nations (ASEAN). 
"No doubt that cooperation among the world nations would help restore peace and security in the world," President Khatami said. 
President Tran Duc Luong expressed pleasure with his recent visit to Iran and called for bilateral cooperation in line with national interest of the two states. 
He hoped that Tehran-Hanoi Economic Commission would work to bolster trade and economic cooperation. 
The Vietnamese president said that Iran and Vietnam share the same views on regional and international issues and called for consultations between the officials to help resolve international crises. 

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TEXTILE INDUSTRY

Vietnam plans to earn US$3.2bn from textile exports 

Vietnam's garment and textile industry has set an export targets of about US$3.2bn this year and US$4.5bn by 2005, Vietnam News Agency quoted the Vietnamese Garment and Textile Association President Le Quoc An, as saying.
In order to reach the target, the industry will invest more than US$1m in trade promotion activities. The industry will focus on eight key promotion programmes, including building the data base for import-export activities. 
An said it is necessary to build a trademark for the whole product category and the whole business, not for each product. 
Apart from promotion activities, the industry will focus on raising products' quality, creating domestic material sources, training workers and designers, and reducing products made under sub-contracts, An said. 
Vietnam exported garment and textile products to 174 nations and regions, earning a record export value of US$2.75bn last year. 
The United States topped the list of importers with US$975m, followed by Japan, US$751m; and the European Union, US$540m. 
While Vietnamese exporters have enjoyed quota increases from the EU of between 50 percent and 70 percent, they may face a limitation from mid-2003 in the US market. 
Vietnam and the United States have finished the first round of negotiations on the garment and textile agreement in Hanoi. Negotiations will be continued. 

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