VN news / business news (July 21)

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

Senior Vietnam Buddhist dies 
Vietnamese Vote for National Assembly
Vietnamese Cast Their Ballots For a Younger Set of Candidates
Vietnam, China hoping to ink border treaty before 2000 
More than 95 Percent Turnout Reported in Vietnam Election 
Vietnamese Elections Expected to Give National Assembly Younger Face
Foreign Firms Withdraw from Vietnam's Saigon 
Vietnam Won't Widen Dong Band 
Vietnam: Nike To Delay More Invest For At Least 1 Yr
Vietnam Official: Must Raise Rice Quality, Prices 
Vietnam MPI Sees '97 Trade Deficit At $3.3B, '98 Below $3B 
Vietnam Deputy PM Sees Possible Economic Downturn
Vietnam State Bank: No Illegal Dollar Repatriation

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Senior Vietnam Buddhist dies 

Hanoi, July 21 (Reuter) - Vietnam's state media announced on Monday that
one of the most prominent members of the state Buddhist Church, Thich
Thien Hao, had died.

Thich Thien Hao, who took part in the resistance movement in U.S.-backed
South Vietnam during the war, died on Sunday after a long illness. He
was 86.

He was one of the most senior monks in the state-sponsored Vietnam Buddhist
Church, and occupied positions in the powerful Fatherland Front and National
Assembly.

Church officials told Reuters official mourning would begin later on
Monday at one of Vietnam's best-known Buddhist shrines, the Xa Loi Pagoda
in Ho Chi Minh City. A memorial ceremony will be held at dawn on Friday.

Buddhism is the religion of most of Vietnam's 77 million people.

In recent years there have been increasingly frequent disputes between
Hanoi and dissident monks who support the banned Unified Buddhist Church
of Vietnam, the main Buddhist organisation in South Vietnam before 1975.

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Vietnamese Vote for National Assembly -- Body Will Select Leadership,
Address Banking and Corruption 

By Anya Schiffrin
07/21/97
The Asian Wall Street Journal

Hanoi -- Vietnamese voters went to the polls Sunday to elect a National
Assembly whose first duties will be to select the country's new prime
minister and president.

The results of the poll -- which doesn't exactly offer voters a wide
range of choices -- won't be known until next Sunday. Communist Party
members make up 83% of the election candidates, while some of the so-called
independents had the support of state-backed organizations.

Nevertheless, voter turnout was high. At a converted Buddhist temple
in the village of Luu Phai on the outskirts of Hanoi, some 700 of the
1,570 registered voters had cast their ballots by early morning, before
heading out to work in the rice fields. The villagers had to choose two
out of three candidates: one was a member of the Communist Party and
two were independents.

"It's an honor to choose these important people to represent us in the
government, so we all want to vote," said a villager who was selling
plaster busts of Ho Chi Minh and the Venus de Milo outside his shop.

The 450-member body -- which is elected once every five years -- is also
expected to ratify comprehensive new banking laws and work on legislation
to curtail corruption in a number of the country's businesses and institutions.

The deputies will take office at a time when corruption scandals have
affected a number of Vietnam's businesses, foreign investment has dropped
and Communist Party officials remain divided as to where Vietnam's economy
should go.

"It is really a hope that Vietnam will complete the market economic reform,
enhance competitiveness and be well prepared for economic globalization
and trade liberalization," a Vietnamese economist said. "It's a big challenge."

The National Assembly has become more independent in recent years and
the new host of candidates are younger and better-educated than those
who had run in the past, observers say. A recent change in government
laws allowed independent candidates to run for office, and of the 663
candidates who made it through the Communist Party's selection procedures,
only 117 were incumbents.

The elections of the country's new leaders are expected to take place
once the National Assembly's first session begins, no later than Sept.
20. The contender who is viewed as the strongest for the job of prime
minister, who will succeed Premier Vo Van Kiet, is Deputy Prime Minister
Phan Van Khai. Foreign Minister Nguyen Manh Cam is expected to get the
position of president, now held by Le Duc Anh.

Observers aren't convinced the National Assembly will have time to vote
on the banking laws before next year. These laws, which have been through
a number of revisions, according to Western bankers and attorneys who
have seen them, are meant to replace current legislation that's hopelessly
outdated.

The new commercial banking law is critical because it will give the mandate
for a host of related legislation regulating a number of practices in
the troubled sector, a Western economist based in Hanoi said.

"The banking law has wide implications because it will create a mandate
for authorities to issue standards and regulations," the Western economist
said.

The National Assembly may also strengthen the laws dealing with corruption,
following measures taken earlier this year that amended the penal code
to make bribery involving amounts of 500,000 dong ($43) or more a criminal
offense. But it's not clear whether comprehensive action will be taken
or whether the Assembly will simply ratify piecemeal legislation.

The Communist Party is split over whether there should be an independent
political force to tackle corruption, according to observers. In many
cases, government officials say, the job has fallen to local officials
who have been lax in following up complaints about corruption.

However, some foreign observers are skeptical as to what the National
Assembly can or should do.

Adam Fforde, a research fellow at the Pacific Asia Studies department
of Australian National University in Canberra, compares the National
Assembly to Britain's House of Lords, saying it can improve proposed
legislation but can't make major decisions.

"It might make things better, but it can't really solve fundamental problems.
That would require a constitutional change," Mr. Fforde said.

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Vietnamese Cast Their Ballots For a Younger Set of Candidates

The New York Times
07/21/97

Hanoi, Vietnam, July 20 -- Vietnamese voted for national lawmakers today
in elections that are expected to start a swing toward a younger, more
dynamic generation of Communist leaders.

All 450 seats of the National Assembly were being selected in the vote,
which is held every five years. With ballots being counted by hand, results
were expected to be announced in one week.

The vote will probably give the assembly a younger, fresher face. Only
a fifth of the departing assembly members sought re-election.

Last month, Vietnam's top three leaders -- Prime Minister Vo Van Kiet,
President Le Duc Anh and the Communist Party General Secretary, Do Muoi,
all in their 70's and 80's -- announced that they were stepping down
from the assembly to make way for new leadership.

New Government leaders will come from assembly ranks when the body convenes
in September.

Although more than 80 percent of the candidates represented the Communist
Party, voters could choose among workers, union representatives, educators
and others who were nominated by state-backed organizations or ran as
independents.

"I want to choose people who are talented so that they can help improve
our life," said Nguyen Van Ha, a 38-year-old voter in Luu Phai, a village
outside Hanoi. Discussing the election in a light drizzle, he and other
villagers said they based their choice on the brief resumes of the candidates
displayed outside a temple used as a polling station.

Red banners bearing party slogans were strung across streets in the capital,
and red-and-gold Vietnamese flags flew outside homes and offices.

Polling stations, some of them in Buddhist temples, were festooned with
red banners, colorful posters showing voters casting their ballots and
portraits of revolutionary hero Ho Chi Minh.

The vote is not expected to bring many major changes, though it is said
that the passing of the old guard may instill more vigor into the political
system and allow for some independent voices to emerge within the party
structure.

"This is a very democratic election," Mr. Muoi, the party leader, said
after casting the first ballot, in Hanoi. "Everybody has the right to
make their own choice." .

Mr. Muoi's position of party leader is an appointed one, and it was not
clear when Mr. Muoi would leave office.

Deputy Prime Minister Phan Van Khai, 64, is among the strongest contenders
for Prime Minister. Mr. Anh is likely to be succeeded in the presidency
by Foreign Minister Nguyen Manh Cam.

Another sign of change is the higher level of education among the more
than 660 candidates. Eighty-two percent of them hold college degrees,
compared with 56 percent of the outgoing assembly. There were also more
women among the candidates than in past elections.

Well-educated and younger candidates seemed to be favored by voters.
"My first criterion is education. National Assembly members have to
be well educated, and it's better if they are young," said Tran Van
Dung, an engineer.

04:39 EDT July 21, 1997

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Vietnam, China hoping to ink border treaty before 2000 

Japan Economic Newswire
07/21/97

Hanoi, July 21 --

Top leaders of Vietnam and China are determined to accelerate negotiations
so as to sign a treaty on a land border and on demarcation of the Tonkin
Gulf in the South China Sea before the turn of the century, according
to Vietnamese Foreign Minister Nguyen Manh Cam.

"It can be understood that those two problems must be settled in the
year 2000 at the latest," Cam said in an interview with the Nhan Dan
(the People) daily, the mouthpiece of the Vietnamese Communist Party,
published Sunday.

The minister, who accompanied party chief Do Muoi on a visit to China
from July 14 to 18 as guest of Chinese Communist Party General Secretary
Jiang Zemin, added that the two top leaders also committed again to continue
accelerating the negotiation process to solve the disputes on the sovereignty
in the sea and over the islands "in the spirit of mutual respect and
compromise."

Muoi said his talks with his host in Beijing on land and sea borders
between the two countries had seen progress, adding that the two sides
had agreed to join hands to solve the issue "as soon as possible" for
the sake of development of the two countries.

He made the remarks to reporters in Hanoi on Sunday after casting his
ballot in a National Assembly election, adding that the disputes over
the Paracel and Spratly archipelagos in the resource-rich South China
Sea "remain complicated."

Vietnam and China have various disputes on land and sea borders as well
as on sovereignty over islands and experts of the two countries have
so far failed to achieve any considerable progress during their many
rounds of negotiations both in Hanoi and Beijing.

The two countries fought a brief border war in early 1979 when China
sent troops across the bilateral border in retaliation over Vietnam's
overthrow of the Chinese-backed Khmer Rouge regime in Cambodia the same
year, and normalized their relations in 1991.

Assessing the Vietnam-China friendship and cooperation over the past
six years since normalization, Cam said they have been "been restored
and developed unceasingly" in every field.

"We are happy at the development. However, the two peoples are surely
not satisfied with that because it has not matched up with the potential
and the desire of each side, and this requires continued and greater
efforts from both sides in the time to come," Cam said.

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More than 95 Percent Turnout Reported in Vietnam Election 

HANOI, Vietnam (AP) The ruling Communist Party today hailed elections
for what is expected to be a younger, more dynamic National Assembly.

Sunday's balloting for the 450-seat legislature was a "festival to the
Vietnamese people," the party newspaper, The People, said.

Most districts reported a turnout of more than 95 percent, while more
than 97 percent cast ballots in Hanoi and Ho Chi Minh City. Some 40 million
people were eligible to vote.

Vote-counting is done by hand, so final election results will not be
announced until next Sunday.

But with only 20 percent of its members running for re-election and several
leaders retiring, the assembly is certain to have a younger, fresher
face. Many of those who chose not to run for reelection were in their
70s and 80s while the candidates generally were a decade or two younger.

While few dramatic policy changes are expected, observers say the turnover
in the legislature may inject more vigor into the political system and
allow for some independent voices to emerge within the party structure.

Although 83 percent of the 663 candidates running for assembly seats
were members of the Communist Party, voters were able to choose among
workers, union representatives, educators and others. Non-party candidates
were nominated by state-backed organizations or ran as independents.

Sunday's polling was billed as an indirect election of Vietnam's new
government leadership, which will be drawn from assembly ranks after
the body convenes in mid-September.

"This is a very democratic election," said party General Secretary Do
Muoi as he cast the first ballot in his Hanoi neighborhood. "Everybody
has the right to make their own choice."

Muoi, 83, opted not to run for re-election, saying he wanted to make
way for a younger generation. Premier Vo Van Kiet and President Le Duc
Anh also announced that they were stepping down.

Deputy Premier Phan Van Khai, 64, is among the strongest contenders for
premier, while Anh is likely to be succeeded by Foreign Minister Nguyen
Manh Cam.

Since the top party job is a five-year, appointed position independent
of the assembly, Muoi may not necessarily leave office at the same time
as his colleagues.

"I am now asking the party and the people to allow me to rest, but they
have not yet allowed it," Muoi said Sunday, indicating his retirement
was not imminent.

Another sign of impending change in the legislature is the higher level
of education among the 663 candidates who ran for assembly seats. College
degrees are held by 82 percent of the field, as opposed to 56 percent
among members of the outgoing assembly.

"My first criterion is education," said Tran Van Dung, a voter who is
employed in engineering. "National Assembly members have to be well-educated,
and it's better if they are young."

Since Friday, red banners bearing party slogans have been strung across
many streets in the capital, and Communist red-and-gold flags hoisted
outside homes and offices.

Polling stations, including some in Buddhist pagodas, were decorated
with red banners, colorful posters showing voters casting their ballots
and busts of revolutionary hero Ho Chi Minh.

State-run media have attempted to rouse interest and counter skepticism
about one-party elections, but on Sunday many remained unconvinced.

"I think most people consider it a duty to vote, but they do not quite
believe in it. So they don't seem enthusiastic," said Nguyen Thi Oanh,
a Hanoi office accountant.

Although general security was tightened before and during the election,
the vote took place without incident, the state-run Voice of Vietnam
radio reported.

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Vietnamese Elections Expected to Give National Assembly Younger
Face 

HANOI, Vietnam (AP) Vietnamese picked national lawmakers Sunday in elections
that are expected to start a swing toward a younger, more dynamic generation
of communist leaders.

All 450 seats of the National Assembly were being selected in the vote,
held every five years. With ballots were being counted by hand, results
were expected to be announced in one week.

The vote hailed in Monday's edition of the Communist Party newspaper
"The People" as a "festival to the Vietnamese people" likely will give
the assembly a younger, fresher face. Only a fifth of the outgoing assembly
members sought re-election.

Last month, Vietnam's top three leaders the premier, president and Communist
Party chief, all in their 70s and 80s announced they were stepping down
from the National Assembly to make way for new leadership.

New government leaders will come from assembly ranks once the body convenes
in September.

Although more than 80 percent of candidates represented the ruling Communist
Party, voters could choose among workers, union representatives, educators
and others who were nominated by state-backed organizations or ran as
independents.

"I want to choose people who are talented so that they can help improve
our life," said Nguyen Van Ha, a 38-year-old voter in Luu Phai, a village
outside Hanoi.

Discussing the election under a light drizzle, Ha and other villagers
said they based their choice on the brief resumes of each candidate that
were displayed outside a temple-turned-polling station.

Red banners bearing party slogans were strung across capital streets,
and Communist red-and-gold flags hoisted outside homes and offices.

Polling stations, including some in Buddhist pagodas, were festooned
with red banners, colorful posters showing voters casting their ballots
and the image of revolutionary hero Ho Chi Minh.

The vote is not expected to bring many dramatic changes, though observers
say the passing of the old guard may instill more vigor into the political
system and allow for some independent voices to emerge within the party
structure.

"This is a very democratic election. Everybody has the right to make
their own choice," said party General Secretary Do Muoi as he cast the
first ballot in his Hanoi neighborhood.

Muoi, 83, along with Premier Vo Van Kiet and President Le Duc Anh, did
not seek re-election in the assembly. His position as party leader is
an appointed job and it was unclear when he would leave office.

Deputy Premier Phan Van Khai, 64, is among the strongest contenders for
premier, while Anh is likely to be succeeded by Foreign Minister Nguyen
Manh Cam.

Another sign of change is the higher level of education among the more
than 660 candidates. Eighty-two percent of them hold college degrees,
compared to 56 percent of the outgoing assembly. There also were more
women among candidates than in past elections.

Well-educated and younger candidates seemed to be voter favorites.

"My first criterion is education. National Assembly members have to be
well-educated, and it's better if they are young," said Tran Van Dung,
an engineering worker.

There were 40 million eligible voters. As in most communist elections,
reported voter turnout was very high.

An hour before polling stations closed, most cities and provinces, including
Hanoi and Ho Chi Minh City, reported voter turnout of more than 90 percent.
Several provinces boasted 100 percent, the state-run Voice of Vietnam
radio reported.

"I think most people consider it a duty to vote, but they do not quite
believe in it. So they don't seem enthusiastic," said Nguyen Thi Oanh,
a Hanoi office accountant.

Voters in a downtown Hanoi district protested against their local election
board last week after they were coached on which names to check on the
ballots, the state-run newspaper Labor reported.

But taped government announcements, played on loudspeakers in central
parts of Hanoi, urged voters to make their own choices.

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Foreign Firms Withdraw from Vietnam's Saigon 

HANOI, July 21 (Reuter) - Fewer foreign firms are applying to set up
offices in Vietnam's Ho Chi Minh City, and the numbers of those pulling
out has increased, a state newspaper said on Monday.

The Thanh Nien described the development as representing "a sharp change
compared with previous years".

It said 105 companies had applied to open representative offices in the
city during the first six months of this year compared to 162 during
the same period in 1996, and 170 in 1995.

Precise figures for the number of firms withdrawing were not given.

Ho Chi Minh City is commonly referred to by its former name Saigon, and
is considered Vietnam's economic powerhouse.

The reasons for the drop in the number of foreign firms setting up Ho
Chi Minh City offices were not given.

Confidence in Vietnam as an investment destination has taken a battering
over the past two years, due chiefly to concerns over a shifting regulatory
environment and low profitability.

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Vietnam Won't Widen Dong Band 

The Asian Wall Street Journal
07/21/97

Hanoi -- Vietnam's central bank would like to see a weaker dong so as
to boost the country's exports, but it has no plans to widen the band
in which the Vietnamese currency trades against the dollar, a central
bank official said.

This means the State Bank of Vietnam is likely to continue its policy
of weakening the dong by adjusting the target rate for the Vietnamese
currency, set every morning on instructions from the bank governor's
office.

"We will keep the dong weaker to encourage exports," Vu Phuong Lien,
the deputy director of the foreign-exchange department, told Dow Jones
on Friday, adding that "in my opinion a 5% (trading) band is enough."

Some foreign bankers have said the State Bank of Vietnam might attempt
to weaken the notoriously overvalued dong, as devaluations across the
region threaten to make Vietnamese exports even more expensive. For the
last three years, the central bank has simply adjusted the middle rate
of the band to guide the dong's value. But in March it took a more dramatic
step by widening the trading band to plus-or-minus 5% from the target
rate. This caused an effective 4% devaluation as the dong immediately
fell to the bottom of the band.

Ms. Lien said that the fact that widening the band would cause a de facto
devaluation is one of the reasons the bank won't widen the band any further.
The current 5% is "rather large for the commercial banks," she said.

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Vietnam: Nike To Delay More Invest For At Least 1 Yr - Mgr 

By Samantha Marshall

Hanoi, July 21 (AP-Dow Jones)--Nike Inc. (NKE) plans to hold off any
further investment in Vietnam for at least another year, according to
a production manager at the company's Vietnam production headquarters
in Ho Chi Minh City.

The sportswear manufacturer said it will wait until Vietnam reaches a
trade agreement with the U.S. before it directs enough orders to the
five Taiwanese- and South Korean-owned factories it subcontracts in southern
Vietnam to justify new factory space. That could take a while, 'but we
kind of need a breather,' the production manager told Dow Jones.

Nike insists its recent labor troubles in Vietnam have nothing to do
with the decision not to expand.

One of Nike's contracters, South Korean-owned SamYang Vietnam Co., recently
had to lay off 450 trainee workers because it didn't receive enough orders
from Nike. Because the factory is new and doesn't have a long production
track record in Vietnam, potential orders were overestimated by its subcontractors,
explained Vada Manager, director of communications at Nike's Beaverton,
Oregon headquarters.

The first of Nike's five subcontractors set up operations in Vietnam
two years ago and most have only just reached capacity within the last
six months, said the Nike production manager.

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Vietnam Official: Must Raise Rice Quality, Prices 

Hanoi, July 21 (Dow Jones) -- Vietnam's deputy minister of agriculture
and rural development has called on rice exporters to raise the quality
of their exports and their prices to world market levels, the Saigon
Times Daily reported Monday.

According to the afternoon paper the official, Nguyen Gioi, was addressing
the Vietnam Food Exporters Association.

The paper also quoted an association report which said in the first half
of 1997, Vietnam's rice exports cost less than those from India, Pakistan
and Thailand, and that quality had decreased significantly.

The newspaper said Vietnam's main rice customers are African and Latin
American nations, as well as developing Asian nations, and that these
countries consume low-quality rice.

At the same time, Vietnam doesn't have stable markets for its high-quality
rice, the paper said.

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Vietnam MPI Sees '97 Trade Deficit At $3.3B, '98 Below $3B 

Hanoi, July 21 (Dow Jones) -- Vietnam's Ministry of Planning and Investment
expects the country's trade deficit to narrow to $3.3 billion in 1997
and to narrow again to less than $3.0 billion in 1998, one of the Ministry's
publications reported Monday.

In 1996 the trade deficit was $4.0 billion.

In 1997 the value of Vietnam's exports is expected to be $9.2 billion,
rising to $11.8 billion-$12.5 billion in 1998.

Imports are expected to be $12.5 billion in 1997 but to edge up again
to $15 billion in 1998.

Foreign-invested enterprises are expected to have imports worth $2.5
billion in 1997 and $3.4 billion-$3.6 billion in 1998.

Import volumes of iron, steel and cement are all expected to drop, the
newspaper reported.

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Vietnam Deputy PM Sees Possible Economic Downturn --Paper 

HANOI, July 20 (AP) -- The possible future prime minister of Vietnam
warned that the country's economic growth may slow if current problems
are not fixed, the Vietnam Investment Review reported Sunday.

According to the weekly paper, Deputy Prime Minister Phan Van Khai warned
a group of finance sector officials at a conference last week that a
shortfall on tax collection, lack of investment in production and slow
industrial growth will 'directly' affect the country's yearly growth
target of 9-10% up to the year 2,000.

'If we can not overcome these issues, the years 1998, 1999 and 2000 will
take the consequences,' Khai reportedly said.

Recent figures show tax and other revenue collection is below target
and officials have warned of a possible shortfall.

Khai is widely expected to be selected as Vietnam's new prime minister,
replacing Premier Vo Van Kiet, when the National Assembly votes on the
matter in its next session, due to begin by September 20.

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Vietnam State Bank: No Illegal Dollar Repatriation -Paper 

HANOI, July 20 (Dow Jones) -- Vietnam's central bank has said it does
not want foreign businesses to take their profits out of the country
unless they have first been put through a bank account, the  Investment
Review reported Sunday.

The comments were regarding new foreign exchange laws which came into
effect July 18 reinforcing existing regulations that require many foreign
businesses to get State Bank of  permission before they may convert dong
into dollars and take the money out of the country.

Vietnam's foreign currency reserves are thought to be quite low and the
State Bank has been trying for months to to stem capital outflows.

Observers point out that the new regulations simply repeat existing policy
prohibiting most foreign companies from taking out more dollars than
they brought in to the country.

Exceptions are companies that produce goods on the government's import
substitute list or those working on infrastructure construction.

'This regulation is aimed at controlling the cash flow of foreign currencies
more effectively and to avoid the situation where dollars are being taken
out of  without official approval,' a State Bank official told the  Investment
review.

According to the unnamed official 'firms must open accounts in banks
that are allowed to deal with foreign currencies and the bank should
be located where the main firm is.'

Within 10 days of these accounts being opened, the company involved must
register with the State Bank or its branch offices.

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