pushes reforms for a better future
include political stability and FDI
Xuan Gia, Minister of Planning and Investment.
Photo courtesy U.S.-Vietnam Trade Council
Virginia Foote, president, U.S.-Vietnam Trade Council.
is my home and I am happy to be contributing in some small way to its
reconstruction, remarked Nguyen Ngoc My from his newly opened Overseas
Vietnamese Club, located at the Hanoi Horison Hotel.
Viet kieu or overseas Vietnamese from Australia, My operates a
successful construction enterprise, and like thousands of other
returnees to their homeland are hard at work, winning contracts,
creating business opportunities, and in the process, providing jobs for
their Vietnamese brothers and sisters.
Tet approaches, which is Vietnam’s lunar New Year festival, it is not
only returning overseas Vietnamese, formerly pariahs of the Socialist
Republic of Vietnam, but the entire country which finds much to
celebrate during their biggest holiday.
pins its hopes for a brighter future on many events: The most startling
and dramatic is the recently signed bilateral trade agreement with the
United States ushering in new trade and business opportunities. The
historic signing represents an important milestone in the more than
decade-long normalization of U.S.-Vietnam relations. For many, the
signed deal signals a triumph of capitalist pragmatism over communist
Trade Council president Virginia Foote has called the trade agreement
“arguably the most important step for our two countries since the end
of the war.”
trade pact pledges to have a measurable impact on Vietnam’s State
owned enterprises often Byzantine management practices, requires that
trade barriers be lowered, promises a level playing field for foreign
companies in service industries from advertising to telecommunications,
and offers some assurance of adherence to international copyright and
in final preparation for Tet, the shopkeepers along Le Quy Don in Hanoi
are already selling out of their ‘banh chung’ or sticky rice cakes,
to the nearby locals, and decorating their simple tube-like homes with
bright-colored flower blossoms, lanterns and handmade prints. Against
this daily background of widening enterprise and cheerful optimism,
Vietnam’s Politburo, now more than ever, seems poised to take on a new
international voice and role in its quickening pace to fully integrate
with the West.
year, the National Assembly welcomed Nong Duc Manh, as the elected new
general secretary of the Communist Party, a self-declared consensus
builder, who on the face of his present record, is breathing new life
into the country’s unfinished promised reforms.
addressing the Party members and the country, following his election,
Manh spoke with measurable pride and confidence, stating “that the
future of our nation is very bright but we will still have to overcome
many difficulties and trials along the way.”
one denies that Vietnam still faces formidable problems of excessive red
tape, corruption and wasteful spending by government agencies and
officials. And several senior economists bravely acknowledge that
Vietnam must address weakening demand for its exports, declining prices
for key products, and devastation from a series of natural disasters,
including last year’s dramatic floods in the Mekong Delta.
remains a poor country with barefoot street kids selling postcards along
Dong Khoi in former Saigon and disgruntled hard scrabble peasants
seeking redress in the Central Highlands.
it is a land and people well at peace and surely taking huge steps to
insure new prosperity for its more than 80 million citizens. Consider
these facts: Over the last decade Vietnam’s economy experienced 8
percent annual growth, resulting in drastic reduction of poverty,
increased literacy, and a bloom of wealth in the cities, particularly in
the sprawling, southern commercial hub of Ho Chi Minh City. Until very
recently, HCMC accounted for a full 30 percent of the country’s entire
economic output. The city’s population is already at five million, a
remarkable 26 percent growth since 1989.
mind that the trade deal with the U.S. will not unleash an immediate
flood of new investment, but it does place the country squarely back on
the international investment radar screen. Even the Asian Development
Bank admits that Vietnam’s economic growth rate is likely to increase
slightly over 6.2 percent in 2002, in part because of a projected boost
to exports, imports and foreign direct investment prompted by the
ratified bilateral trade agreement.
to increased capital flows attributed to programs funded by the World
Bank and the International Monetary Fund, gross reserves in the country
rose from $3.4 billion at the end of 2000 to $3.9 billion at the end of
Hanoi’s banyan-lined streets, across the country’s numerous verdant
rice paddies and frequent seasonal dark monsoon sky, the gentle rays of
sunlight peek through swift moving nimbus clouds, offering the promise
of continued political stability and hope to this once sorrowful and
ravaged land at war far too long with the United States, France, and its
neighbors, Cambodia and China.
U.S. Trade Representative Ambassador Robert B. Zoellick and
Vietnamese Minister of Trade Vu Khoan at the exchange of letters
ceremony at Blair House, Washington, D.C.
definite signs of progress are visible in the streets of the capital
Hanoi from the modern Hanoi Tower to the city’s beautifully and fully
restored Opera House and in the South’s glistening and commerce
bearing new parks like Saigon South and the Vietnam Singapore Industrial
is not just a veneer, scratch the surface and the reality is striking:
Ask a local about present Asian economic downturn and he’ll tell you
that 16 years ago his family was shoeless. Now witness a new generation
of Vietnamese who have embraced their new-found freedom with enterprise
and who reward themselves with designer mobile phones and the latest
Honda Dream motorbikes whizzing by flashy Sony billboards.
advantages clearly include political stability, commitment in reform and
now with the passage of the BTA, a strong capacity to expand export
markets.” remarked Hanoi’s red capitalist, 58 year-old , Nguyen Tran
Bat, who runs a large international investment consultancy, Invest
optimism despite post WTC attack
Although there is a sharp downturn in the U.S. economy after the
dramatic terrorist attack on the World Trade Center and the Pentagon, it
has had less direct impact on Vietnam than on other regional economies
because of the relatively low volume of U.S.-Vietnam trade.
local textile and garment makers are already lining up and investing in
new technologies to penetrate the U.S. market as the Bilateral Trade
Agreement (BTA) comes into full force. The Viet Nam Textile and Garment
corporation (Vinatex) is one of the first companies to take the plunge,
opening a representative office in New York in December to capitalize on
recognize that with the recent passage of the BTA, Vietnam will indeed
have to gradually open up many areas allowing American investors to
compete with domestic businesses,” remarked Tran Xuan Gia, Minister of
Planning and Investment.
US companies will benefit from the trade accord, targeting the more than
80 million consumers, it is Vietnam that will enjoy tangible new
business prospects, namely in the country’s apparel and manufacturing
industries, increasing exports by nearly a $1 billion annually according
to some observers. U.S. tariffs on Vietnamese-made products will drop
from a high of 40 percent to 4 percent.
growth in Vietnam
While it is true that most Vietnamese still earn less each year than the
price of a premium pair of tickets to a New York Yankees World Series
game—”New Vietnam’s” cityscape and property development both in
Hanoi, the political capital, and in Ho Chi Minh City, the commercial
center, continue to belie these facts.
people agree that Vietnam’s potential to develop a modern,
export-oriented economy remains real, based on an inexpensive,
labor-intensive industry (most workers earn about $50 per month); a
well-educated (92% literate) work force; and rich natural resources
(Vietnam boasts significant energy reserves of one billion-plus tons of
iron ore, five billion tons of oil and gas, and large agricultural
capacity—10 million hectares of cultivated land). Furthermore,
Vietnam’s new consumers are now purchasing over 12,000 Honda motor
scooters each month, at an average cost of $2500 each.
important reason for celebration during Vietnam’s approaching lunar
New Year is Vietnam’s tourism. The industry defies the current
downturn in international travel trends. HCM City alone has set its
sights high with an ambitious target of 1.35 million foreign visitors
and a turnover of at least $335 million pumped into the local economy.
Adding ballast to this optimistic picture is that the country was
recently recognized as the safest destination in the Asia-Pacific region
by the Hong Kong based Political and Risk Consultancy.
Many families will travel
over the holidays in mid-February from the cities and return to their
native villages scattered across the Red River Delta to the southern
Mekong to celebrate Tet - this is the shortened version of tet nguyen
dan (first morning of the new period)- where these Vietnamese sons and
daughters will faithfully observe their ancient rituals: honoring their
ancestors, tending family gravesites, and making offerings. It seems
like a perfect time for all to forgive and forget, and welcome in a
promising new beginning not only for communities, but also for the
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