VN news (July 1)

[Dam Son <son@fermi.phys.washington.edu>]

Vietnam: Candidate Drops Out Of Election On Mistress Report 
Dengue fever spreads in central Vietnam 
Appeal Court Upholds Death Sentences in Vietnam Drug Trial 
Hanoi praises Hong Kong handover, hopes for further investment
Asian Cash Rice Mixed; Thai 100%B Up, Vietnam 25% Brokens Dn
Vietnam Rate Cut Makes Market Tougher For Foreign Banks 

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Vietnam: Candidate Drops Out Of Election On Mistress Report 

Hanoi (Dow Jonews, AP)--A Communist Party member and handpicked candidate
for upcoming national elections was forced to drop out of the race after
voters claimed he had a mistress, official media reported Tuesday.

Nguyen Van Bu, 43, president of the Ho Chi Minh City Farmers Association,
was among the Communist Party's favored candidates and was widely expected
to take up a seat in the National Assembly after elections this month.

Several unidentified voters accused Bu of adultery, after which he confessed
to having an affair, the state-controlled Youth newspaper reported.

Bu, a member of Ho Chi Minh City's Communist Party Committee, was one
of most qualified candidates for the national elections, Youth reported.
He had served on the Farmer's Association, the elite Party committee
in Ho Chi Minh City and earned three university degrees.

In an unrelated incident, a second unidentified candidate from Ho Chi
Minh City was disqualified from the elections when officials learned
he was a bigamist, the newspaper said.

A modified list of 664 candidates will contest the National Assembly's
450 seats later this month. More than 80% of the candidates are members
of the ruling Communist Party.

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Dengue fever spreads in central Vietnam 

Hanoi, July 01, (AP) - An outbreak of dengue fever is spreading quickly
in central Vietnam's Phu Yen province, health officials reported Tuesday.

At least 130 people were infected, one fatally, by the mosquito-borne
virus over the last 10 days.

In all, 230 people have been infected in Phu Yen this year, the Health
Department said in a published report.

The dengue virus is usually not fatal. Symptoms include high fever, dizziness,
weakness and diarrhea.

Dengue can, however, cause death by internal bleeding, but usually only
in victims who contract the illness a second time.

In Vietnam, dengue fever killed dozens of people last year during an
outbreak triggered by flooding that brought mosquitoes into more widely
populated areas of the southern Mekong delta.

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Appeal Court Upholds Death Sentences in Vietnam Drug Trial 

By Frederik Balfour

HANOI, July 1 (AFP) - The Hanoi Supreme People's court upheld the death
sentences of two former police captains and six other convicted drug
traffickers, a court official said Tuesday.

The eight included Vu Xuan Truong, a former captain of the anti-drug
squad in the Ministry of Interior who masterminded a smuggling network
involving more than 400 kilogrammes of heroin (880 pounds) and 500 kilogrammes
(1100 pounds) of opium.

Six other people condemned to life imprisonment also failed in their
appeal attempts, as did five others facing prison sentences ranging from
five to 20 years.

The court decision to uphold the death sentences was widely expected
in the trial intended to showcase the government's fight against drugs.

The decision to uphold all 19 original sentences follows an explosion
in both international narcotics trafficking and domestic use of hard
drugs in Vietnam.

There are some 183,000 drug addicts in Vietnam, according to official
estimates, with an alarming increase in consumption among youth.

In recent years Vietnam has also become an important transhipment point
for drugs produced in the "golden triangle" of Burma, Laos and Thailand.

The case also laid bare corruption within the police force. After his
arrest, Truong said trafficking extends well beyond those implicated
in the trial.

But he failed to deliver on his promise to name those involved either
during the original trial or the one-week appeal process.

The Tuoi Tre newspaper said Tuesday that Truong admitted to being a "dangerous
criminal for the Vietnamese people and the people of the world" who deserved
"to be executed 1000 times.

Instead of trying to save his own life, Truong pleaded for a reduction
of the his brother's life sentence and the 20-year prison term for his
wife.

His pleas went unheard. His younger brother, Vu Thuong Kiet, will spend
his life in prison and his wife, Nguyen Thi Lua, is condemned to 20 years.

A total of 60 people have been arrested for their role in Truong's drug
network of whom 22, including the 19 who lost their appeal cases, have
been tried.

Truong's ring was exposed last July by a condemned Laotian drug trafficker
on death row whom Truong had arrested.

Since 1993, 36 people, including seven foreigners, have been condemned
to death for drug trafficking in Vietnam.

Possession of 100 grammes of heroin (one-quarter pound) is punishable
by firing squad execution in Vietnam.

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Hanoi praises Hong Kong handover, hopes for further investment

Hanoi (dpa) - Vietnamese leaders highlighted the historical significance
of Hong Kong's handover to China and vowed to deepen ties with the country's
northern neighbour Monday.

"July 1, 1997 is going to become a great event in China's history, ending
more than a century of foreign rule in Hong Kong," said a joint message
of greetings signed by Vietnam's Communist party General Secretary Do
Muoi, President Le Duc Anh, Prime Minister Vo Van Kiet and National Assembly
chairman Nong Duc Manh.

Vietnamese leaders expressed their confidence in Hong Kong's further
development within the framework of the "one country - two systems"
arrangement and wished China further successes in pursuing economic reforms
and open-door policies.

Meanwhile, Hanoi is encouraging Hong Kong businessmen to invest in high-tech
parks and industrial zones in Vietnam, a top industrial official was
quoted in the Saigon Times Daily as saying.

Le Xuan Trinh, former government minister and current chief of Vietnam's
Industrial Zones Authority, told the paper he was confident that Hong
Kong companies will continue to do business in Vietnam after the handover
from Britain to China.

Raymond Yip, senior manager of the Hong Kong Trade and Development Council,
was quoted by the same newspaper as saying that Hong Kong will improve
and increase its investment in Vietnam.

"Hong Kong wants to use Vietnam as a gateway into the markets of the
sub-Mekong region," he added.

Companies from Hong Kong are involved in some 187 investment projects
in Vietnam worth of 2.3 billion dollars, according to Vietnamese statistics.

Bilateral trade between Vietnam and Hong Kong in 1996 reached 791 million
dollars, with Hong Kong enjoying a 401 million dollars surplus, according
to Hong Kong Trade Statistics, Census and Statistics department.

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Asian Cash Rice Mixed; Thai 100%B Up, Vietnam 25% Brokens Dn

SINGAPORE (Dow Jones)--Asian physical rice offers are mixed late Tuesday,
with offers heard for Thai 100%B rice up and offers heard for Vietnamese
25% broken rice down, market sources said.

'Prices of the 25% ( Vietnamese brokens) have gone down about $3 to $4
from last week,' said a trade source in Ho Chi Minh City. 'Buyers aren't
clear about prices so they don't want to negotiate.'

Vietnamese 25% broken rice is largely offered around $220/ton, down $5/ton,
though an offer was heard as low as $215/ton.

FOB offers for Vietnamese 5% broken rice remain largely at $255-$260/ton,
which according to the Ho Chi Minh City trade source is the same price
contracted by Brazilian buyers about two weeks ago for one to two July
shipments of the grade.

The Ho Chi Minh City port is no longer congested now that Vietnam has
shipped out the bulk of its outstanding contracts, traders said.

A source with a cargo surveyor in Ho Chi Minh City said Vietnam's June
rice shipments are estimated at 500,000 tons, while July rice shipments
could reach 350,000 tons.

In Thailand, the 100%B rice is largely offered at around $345-$350/ton,
up from $340/ton, amid active exporter buying. 'People are trying to
cover for the Japan tender and the Iranian order,' said a trade source
in Bangkok. 'It's also difficult to get stocks because there is not much
in the market.'

Japan contracted 39,000 tons of Thai rice in a tender that closed June
24.

Offers for Pakistani 25% broken rice are heard around $235-$240/ton while
Indian 25% brokens remained offered at $245/ton.

-By Joyce Teo +65-421-4825

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Vietnam Rate Cut Makes Market Tougher For Foreign Banks 

Hanoi, July 01 (Dow Jones) -- The interest rate cuts announced Monday
by the State Bank of Vietnam could make a tough job tougher for foreign
banks operating in the country, banking executives said.

There already are relatively few creditworthy local clients to lend to
and even less information to guide a lending decision. The competition
is fierce, returns are small.

And they grew even smaller as a result of the decision to lower interest
rates, bankers say.

As part of a series of interest-rate reductions intended to boost economic
growth, the central bank lowered the ceiling interest rate on dollar
loans by a full percentage point to 8.5%.

'It's a difficult place to operate and now we're being penalized on profit
without risk being evaluated,' complained one foreign banker.

To be sure, many banks weren't lending to foreign companies based in
Vietnam at the previous ceiling rate.

For those loans, which are funded offshore, the banks were generally
charging a lower rate of 1.25 to 2 percentage points above the Singapore
interbank offered rate - currently around 3.87% for one year loans. Many
of the foreign banks' clients are international corporates.

Instead, the squeeze comes in lending to Vietnamese companies, which
generally don't benefit from the same rates. Dong denominated rates were
cut by 0.25 percentage point Monday.

'It's an interest-rate cut, but we can live with it,' says another foreign
banker. 'But if it goes down any further, we'll have a problem,' he adds.

Most foreign banks operating in the country don't take deposits, but
fund lending by borrowing offshore. (Vietnamese law does not allow them
to take dollar deposits from locals and dong deposits are limited to
25% of capital from non-dong borrowers.)

The level of deposits at state-owned and private Vietnamese banks is
also relatively low due to a broad lack of confidence in the system and
concerns about confidentiality.

Because Vietnamese law mandates that deposit rates be within .35 percentage
points of lending rates, deposit rates will fall as well. This is unlikely
to lure deposits to local institutions.

'It was a fairly drastic decline,' says Bradley LaLonde, general manager
of Citibank in Hanoi. 'I didn't think the economy was declining at that
rate. It remains to be seen what the impact will be on domestic savings
and borrowing demand.'

The rate cut hit nerves already raw from a recent spate of deferred letters
of credit that Vietnamese banks have failed to honor. The State Bank
convened an unusual press conference on Monday to assure foreign financial
institutions that the nation's banks would pay up, but it didn't specify
when.

Still, the fact that some remain unpaid months after their due date gives
bankers plenty of reason to worry. When asked about interest rates, one
foreign banker declined to comment and quipped: 'I have too many other
fires to put out.'

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