THE
OF
This site presents an analysis of the Vietnamese government's economic policies compared to a list of 33 economic policies as prepared by the McKeever Institute of Economic Policy Analysis (MIEPA). This study was written in October of 1996. To read the analysis scroll through this site. To learn more about the background policies, click here
To learn more about MIEPA, click here
To read another view of the Vietnamese government, scroll to the end of this analysis.
Several foreign born students living in California have completed a
study of their home country governments' economic policies as compared
to the MIEPA list of policies as outlined above. The study on Vietnam is
shown below. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 1996. Used herein with permission]
RATING SUMMARY
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 2.0 6.0 15.0 40 %
2 2.0 6.0 15.0 40
3 2.0 6.0 15.0 40
4 2.1 6.3 15.0 42
5 2.2 6.6 15.0 44
6 2.8 8.4 15.0 56
7 2.5 7.5 15.0 50
8 2.0 6.0 15.0 40
9 5.0 15.0 15.0 100
10 2.0 6.0 15.0 50
11 2.0 6.0 15.0 40
12 3.5 7.0 10.0 70
13 1.8 3.6 10.0 36
14 1.8 3.6 10.0 36
15 1.0 2.0 10.0 20
16 3.3 6.6 10.0 66
17 1.9 3.8 10.0 38
18 1.5 3.0 10.0 30
19 2.5 5.0 10.0 50
20 2.0 4.0 10.0 40
21 2.0 4.0 10.0 40
22 1.5 3.0 10.0 30
23 1.2 2.4 10.0 24
24 1.3 2.6 10.0 26
25 3.5 7.0 10.0 70
26 2.0 4.0 10.0 40
27 2.5 5.0 10.0 50
28 1.4 2.8 10.0 28
29 2.0 2.0 5.0 40
30 3.0 3.0 5.0 60
31 1.3 3.0 5.0 26
32 2.0 2.0 5.0 40
33 3.5 3.5 5.0 70
TOTAL 73.1 162.7 360.0 45%
===== ====== ===== =====
INDIVIDUAL POLICIES
FREEDOM FROM INTERNAL CONTRAL: 2.0
The vietnamese Government Strongly controls movement within the country. Each family has a "ho khau " and if you move from one place to another place without changing " ho khau" , you are moving illegally. In that case, you can not get a job and your children can not go to school. I think this control is very necessary because there is 75 to 80% of the population are poor farmers in Vietnam who want to move to the cities. If they were allowed to move freely, there would be very severe problems. However, if you have money, you can freely invest almost everywhere in Vietnam
Source: Personal
2.FREEDOM OF SPEECH: 2.0
In Vietnam, I think all the people have freedom of speech as long as they do not try to agitate against the communist party and Vietnamese government. In Vietnam, communism is allegedly the mass faith, and people in power closely monitor religious groups. Karl Mark belived that religion is the opiate of the masses, employed by repressive regimes to divert the attention of the people from their true enemies. Therefore, in a true communist society, religion does not exist. In Vietnam, a modified version of this exists: religious practices that do not harm political rule can be tolerated. This is the case in Vietnam People can criticize government policy now, sometime they make jokes about it
Source: Personal
3.EFFECTIVE, FAIR POLICE FORCE : 2.0
Vietnamese are convinced that their cities are very dangerous and full of criminals. Before reunification street crime was rampant in the south, especially in Saigon. Motorbike borne thieves (called cowboys by Americans) would speed down major thoroughfares, ripping pedestrians' watches off their wrists. Pickpocketing, confidence tricks,violence, prostitution, drugs and beggars were also common. After the fall off Saigon, a few bold criminals even swindled the newly arrived North Vietnamese troops. But, when a few such outlaws were summarily shot street crime almost disappeared overnight.
When the Vietnamese withdrawal from Cambodia was completed in 1989, the Government accelerated its programme to cut military expenditures by discharging tens thousands of soldiers from the army. Joining an already saturated job market without marketable skills and without Government assistance in finding employment, many have been unable to earn a living. Some turned to crime. Another source of criminals are the disillusioned youths who have been discriminated against because their parents worked for the Americans during the war. That could explain why crime rates are highest in the South, especially in Ho Chi Minh City. Crime rates have risen precipiously in the past couple of years. Despite all this, visitors should not be overly paranoid. Although crime certainly exists and you need to be aware of it, crime in Vietnam does not seem to be any worse than elsewhere in the Third world. Do not assume that everyone's a thief- most Vietnamese are very poor but reasonably honest. The problem of police corruption has been acknowledged in official newspapers. To be fair, Vietnam is hardly unique in this sense. The conditions that plague many Third World police forces- very low pay and low levels of education and training- certainly exist in Vietnam.
Source: Personal experience
4.CURRENCY: 2.1
The currency of Vietnam is the "dong"(abbreviated by "d" following the amount). Banknotes in denominations of 200d,500d,1000d, 2000d, 5000d, 10,000d, 20,000d, 50,000d are presently in circulation. All dong denominated prices are based on an official exchange rate of US $1 to 11, 053d. Both dollars and gold used extensively, especially for major transactions such as the sale of homes or car, to pay with Vietnamese currency would require truck loads of dong.
Source: Vietnam Travel survival kit Robert storey and Daniel Robinson 1996 Page 76-77. Lonely planet.
5.COMMERCIAL BANK: 2.2
In early 1990 the government established four independent commercial banks, and introduced legislation to permit the operation of foreign banks in Vietnam. By 1994 18 Foreign banks had opened branch offices in Hanoi (Ho Chi Minh City), while a further 40 had established representative offices. There were also 3 joint banking ventures between foreign interests and Vietnam. In January 1994 it was announced that private citizens were to be permitted to open current bank accounts and loan for small projects. But, people don't want to save their money in Vietnames banks because of inflation and old habits.
Source: The Europa World year book, volume II 1996 Page 3559 Europa publications limited.
6.COMMUNICATION SYSTEMS: 2.8
Radio and Tv :
The voice of Vietnam broadcasts on short- wave, Am and Fm for 18 hours per day. The broadcasts are mostly music, but there are also news bulletins in Vietnamese, English, French and Russian. Vietnamese TV began broadcasting in 1970 and it's fair to say that content hasn't improved much since then. Now there are two channel in Ho Chi Minh City. Broadcast hours are from Monday through Saturday from 9 to 11:30 am and 7 to 11pm , on Sunday there is an extra broadcast from 3 to 4 PM. English - language news comes on in the evenings as the last broadcast at some time after 10 PM
Newspapers and Magazines:
English : Most of Vietnam's English language press is geared towards attracting the foreign investor and business traveler rather than presenting the news. There are some English magazines or newspapers: Vietnam Economic Times; and, Vietnam Investment Review.
Vietnamese: There are now about 135 periodicals published in Vietnam, all but 35 of them in Hanoi.
Fax, Telex and Telegraph: Most GPOs and many tourist hotels and postoffices in Vietnam offer domestic and international fax telex and telegraph services.Fax machines are rapidly proliferating in Vietnam. Major hotels and many companies doing international business already have them. The main offices in the big cities offer fax services too. The cost for faxes are based on zones. The telegraph windows of major GPOs are open 24 hours a day and seven day a week.Vietnam still has telex machines but they are dying off quickly and used mainly by banks.
Telephone: International and domestic long distance call can be used at many hotels offices, but this is expensive.Vietnamese's international telephone service has improved in recent years but still leaves much to be desired. International calls from Vietnam are ridiculously expensive and, except for major cities, unreliable. International rates are easily 2 to 5 Times higher than in Western countries (USA 3.90 USD/ minute)
E mail and internet is not available in Vietnam yet.
Source: Vietnam Travel survival kit Robert and Daniel 1996 Page 88-89-90 Lonely planet.
7.TRANSPORTATION : 2.5
AIR: Vietnam airlines- Vietnam's flag carrier is the government owned Vietnam Airlines. Long noted for shoddy service and unsafe aircraft, Vietnam airlines has been working hard to spruce up its battered image. Safety standards have improved vastly now that the ageing Russian built Tupolev aircraft have all been retired on all international routes ( except those to China ). Most flights are on a French - built AIRBUS or US - made BOEINGS and LOCKHEED planes. The majority of flights into and out of Vietnam are joint operations between Vietnam airlines and foreign carriers. The air ticket you purchase might have the words " Vietnam Airlines " printed on it, but you could find yourself flying on , for example Cathay Pacific or Thai Airlines. At all Vietnam Airlines offices which book international flights there is a computer link up with the international reservations system. Vietnam airlines has a near monopoly on domestic flights, although upstart Pacific Airlines flies ones route. Flights fill up fast on weekends and holidays, but space is readily available at other times.
SEA: Among fed up Vietnamese nationals authorized departure by sea has been very popular since 1975. Since about 1990, the numbers of boat people fleeing the country has been considerably reduced by the orderly departure programme and the opening of the Chinese border, which provides a much safer and easier route. At this writing, there seems to be no sea routes available to foreign tourists. There is somes talk of allowing luxury cruisers to dock at Vietnam ports.
TRAIN: The 2600km Vietnamese railway system runs along the coast between Ho Chi Minh city and Hanoi and links the Capital with Haiphong and other points. A few month ago links with the China railway system were established.
ROAD: Car: Vietnam has about 2,500,000 motorcycles and 200,000 cars and renting a car or van with driver is a realistic option in Vietnam, even if you are a budget traveler. In Vietnam , they drive on the right sight of the road. Overall the Vietnamese intercity road network of two-lane highways is fairly good, especially in the South ( Thanks to huge US war time infrastructure investments) though maintenance has been spotty and potholes are a problem in some places. In 1993 there were an estimated 105,000 km of roads, of which about 10% were paved. In 1995 the Government announced plans to upgrade 430 km of the national highway which runs from Hanoi in the North to Ho Chi Minh city in South.
BUS: The good news is that Vietnam has an extensive network of cheap, but dirty, buses and other passenger vehicles which reach virtually every corner of the country. The bad news is that buses tend to be slow, crowded, uncomfortable and unreliable. Almost all Vietnamese buses suffer from frequent breakdowns ( many have been in service for 3 or 4 decades and spare parts are home made ).
Source:Vietnam Travel survival kit Robert and Daniel 1996 Page 162-163 Lonely palnet.
8.EDUCATION : 2.0
Primary education, which is compulsory, begins at six years of age and lasts for five years. Secondary education, beginning at age of 11, lasts for 7 years, comprising a first cycle of four years and second cycle of three years.Total secondary enrollment in 1993 was equivalent to 35% of children in the relevant age group. In 1993/1994 there were 104 universities and colleges of higher education, with a total enrollment of 118,589 students . In 1995 , according to UNESCO estimates, the average rate of adult illiteracy was 6.3%. In 1989 Vietnam's first private college since 1954 was opened in Hanoi. Of total projected budgetary expenditure by the central government in 1994, 3,739,000m.dong.(8%) was allocated to education.
Source: The Europa World year book, volume II 1996 Page 3550 Europa publications limited.
9.FREEDOM FORM OUTSIDE CONTROL: 5.0
Independence, liberty are the main ideas of the first Vietnamese constitution. Until today, the history of Vietnam is the history of anti-colonialism. Form 2nd century BC to 1975, Vietnam had many giant enemies ( China , French , USA ...) but Vietnameses understand the values of independence and liberty so they fought and died for their freedom. Today, Vietnam is the poor country, but all of Vietnameses are proud to be Vietnamese. Nobody frightens them.
Source: personal.
10.FOREIGN CURRENCY TRANSACTION: 2.0
In the recent past, many up-market, hotels and restaurants demanded payment in US dollars and would not accept Vietnamese currency. In 1994 the Vietnamese government banned this practice. With the notable exception of Vietnam Airlines, all businesses in Vietnam officially must now accept payment in dong only. In reality, many places still quote prices in dollars and will"exchange" on the spot.
Source: Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996 Page 76-77 Lonely planet.
11.BORDER CONTROL: 2.0
At the present time, border cotrol is not a big problem for the Vietnamese Government because the economy of Vietnam is just begining to develop. There is no big different between the living costs and standards of the Vietnamese and their neighbors. From 1985 to 1990s Government faces a larger emigration problem than immigration (more than 500,000 Vietnamese have left their country illegally after Vietnam war). So it's not easy to say whether or not the country has strong border control or not The central government dominates trade, cigarette imports were banned, most legal imports will remain subject to a comprehensive system of licensing. Decision no 275/QD-NH7 concerning the carriage of foreign currenciess on exit and entry was recently issued by the state bank. According to the contents of this decision, carriers of foreign currencies in cash on exit and entry, both Vietnamese and foreigner, of USD 5,000 or other currencies of equivalent value, are exempted from declaring to the customs office in charge, with foreign currencies in cash over USD 5,000's value, the carrier shall produce to the customs office in charge a permit of foreign currency carriage granted by the state bank unless these currencies has been brought in with declaration but have not been spent.
Source: Personal experience
12.CULTURAL, LANGUAGE HOMOGENEITY: 3.5
In 1994, Vietnam's population reached 73.6 million, making it the 12th most population country in the world. Eighty four percent of the population is ethnic Vietnamese (called Annamites's by the French), 2% ethnic Chinese and the rest Khmers, Cham and members of some 60 ethnic linguistic groups. The current rate of population growth is 2.2 % per year, and until recently ideology prevented effective family planning. The Vietnamese language (kinh) is a fusion of Khmer, Tai and Chinese elements. Chinese gave Vietnamese most of its philosophical, literary, technical and governmantal vocabulary as well as its traditional writing system. For centuries, the Vietnamese language was written in standard Chinese characters. The Roman based "Vietnam's system of writing today" in wide use since world war I, was developed in 17th century by Alexandre de Rhodes, a brilliant French Jesuit scholar who first preached in the Vietnamese language only six months after arriving in the country in 1627.
Source: Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996. Lonely planet.
13.POLITICAL EFFECTIVENESS: 1.8
Even though Vietnam has a strongly centralized Government, this policy has a low score. (The country only has a hight score in the case of war.) It is not because the local governments do not follow the central government, it is because they understand the orders from the central gorvernment in a different way that either goes beyond the desired objective or under the desired objective. Sometimes the local government wants to protect its regional benefits and goes around the orders from the central government. The poor qualification of many Vietnamese officials is a big problem for the Vietnamese gorvernment. Urgent efforts should made to train official and local governments in order to meet the demands of the central government. This is regarded by Vietnamese state as a dicisive factor for expanding the scale and enhancing the social economic efficiency.
Source: Personal Vietnam marketing 1995-1996 ( Le Nguyen ) Maketing Vietnam 14.
INSTITUTIONAL STABILITY: 2.8
Today, Vietnam is a strongly centralized country. The communist party takes exclusive possession of politics. But economic reform is bringing many new concepts. After 10 years of reform ( 1986-1996) the economic growth rate of Vietnam is 8.5% each year. The Vietnamese living standard are improving. Stability of the society in the most important goal in Vietnamese Government decision making. They are reforming in a measured, step-by-step manner after learning from the USSR experience. But there are strong risks for Vietnamese reform. Instability factors include a high rate of inflation, the possibility of economic reform failure, corruption, widening income gaps between haves and have nots and the central government losing control to regional government.
Source: Personal
15.HONEST GOVERNMENT: 1.0
Is the Vietnamese Government honest? The answer is no. The Vietnamese Government is not honest at all. The Communist party is the party of poor workers and framers and needs their support to succeed. The Communist party say that they will organize a world where all people are absolutely equal.The communist party also says that they are poor people and that they come from poor people so they are the saviours of poor workers and farmers. But in fact, after the reunification, the poor workers and farmers are poorer and "equal" hasn't happened.
Children of poor workers and farmers still can not go to universities because their parents are poor and they receive no helping hand from government. The universities are the places for children of governors and military officers. Who are the common soldiers? Sons of poor people, because their parents have not enough money to bribe the officers. Even though the Vietnamese Government is not honest most Vietnamese still follow the rule of government, perhaps because of traditional Vietnamese ethinic values and perhaps because they are isolated from information about the government. They do not know who are the owners of beautiful houses and expensive cars, they do not know their salary for one half year is not enough for a birthday party of a provincial governor's son. The Vietnamese do not need a Government like that.
Source: Personal.
16.COMMON LAWS: 3.3
Today the administration and implementation of the legal system is uniform in all parts of Vietnam. The French gave Vietnamese the Napoleonic code, much of which has not been repealed though these laws may conflict with later statutes. From about 1960 to 1975, South Vietnam modified much of its commercial code to resemble that of the USA. Since reunification, Soviet style laws have been applied to the whole country, with devastating consequences for private property owners. The recent economic reforms have been a flood of new property legislation, much of it the result of advice from the UN, the IMF and other international organizations. The rapid speed at which Legislation is being enacted is a challenge for those who must interpret and enforce the law.
Source: Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996 Page 40-41 Lonely planet.
17.CENTRAL BANK: 1.9
The central bank, State Bank Of Vietnam, has the authority to set the country's monetary policy, it is the central bank of issue, it provides a national network of banking services and supervises the operation of the state banking sestym. The commercialization of state banks means that lending is transferred out of central specialized locations to a so-called commercial banking system; it is made up of the BANK OF FOREIGN TRADE OF VIETNAM, authorized to deal in foreign currencies and all other international banking business; INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM, authorized to receive personal savings, extend loans, issue stocks and invest in export orientated; VIETNAM EXPORT-IMPORT COMMERCIAL JOINT-STOCK BANK, authorized to undertake banking transactions for the production and processing of export and import products and operations; and, VIETNAM AGRICULTUREAL BANK, authorized to support for agricultural projects. These commercial banks hold 80% of total bank assets. The Vietnamese authorities still use mostly direct monetary instrument such as the credit plan- the centrepiece of its system for controlling and allocating credit which is the investment plan issued by the state planning commission. In 1994 the Vietnamese Government started a finance reform. The objective is to provide innovation in the financing enterprises and decentralization of decision making.
Source: Oxford review of economic policcy Personal
18.DOMESTIC BUDGET MANAGEMENT:1.5
Revenue (000million dong) 1992 1993 1994
Tax revenue 14,586 23,701 30,987
State enterprises 9,106 12,685 16,087
Profits tax 2,028 4,019 5,042
Turnover tax 2,158 3,333 4,492
Special consumption tax 1,317 1,908 2,700
Natural resources tax 1,874 1,809 2,084
Non agricultural private sector
1,992 3,376 4,550
Profits tax 420 593 913
Turnover tax 582 863 1,361
Agricultural tax 1,294 1,351 900
Tax on trade 2,194 5,900 8,500
Joint ventures n.a 389 950
Other revenue 5,589 5,801 6,713
State enterprises 2,807 3,400 4,213
Depreciation allowance 2,277 2,594 2,884
Capital user fee 530 806 1,329
TOTAL 20,175 29,502 37,700
Expenditure 1992 1993 1994
Current expenditure 18,672 29,375 34,853
General adm Services 2,404 3,245 3,435
Economic services 1,495 2,997 3,229
Social services 6,245 10,854 13,475
Education 1,495 2,910 3,739
Health 1,136 1,656 1,883
Pensions and social relief
2,374 4,135 5,074
Traning na 984 1,214
Other services 5,314 8,604 11,331
Interest on public debt 3,218 3,675 3,383
Capital expanditure 530 806 1,329
TOTAL 25,121 38,975 46,853
Inflation has gradually been controlled and pushed back, bringing the 1991's price increase of 67 percent down to 5.2 percent in 1993; however, continuing budget imbalances are a problem for the Vietnamese government.
Source: The Europa World year book, volume II 1996 Page 3553 Europa publications limited.
19.GOVERMENT DEBT: 2.5
Vietnam's total foreign debt was 14,6 billion USD at the end of 1990, a high level relative to GDP. Debt servicing has been a problem, since payments have run as high as 60% of exports. Agreements by several nations, including Japan and Germany, to write off part of Vietnam's debts helped Vietnam keep its total foreign debt to about 14 billion USD. This total has started to climb again, however, as new borrowings have been negotiated. In February 1995, the government adopted a new policy to reduce borrowing from foreign commercial banks and to borrow more if possible from the IMF and the World Bank. Government plans call for obtaining 25 billion USD in foreign capital through 2000. Domestic debt (Tri an dam and 500kv ) is not a big problem for Vietnamese government.
Source: Internet Http://www.polrisk.com
20.PRIVATE PROPERTY: 2.0
In the past, the communist concept was to not respect rich individuals the communist party believed the ideal world will be where all people were absolutely equal. In Vietnam, free market economic reforms are bringing many new concepts to the Vietnamese Communist party. They are trying to establish a new legal system. Under the new law, the Government says that it respects private property but land still belongs to the government and people (you can get a permit [lease] to use the land for a long term). People buy and sell buildings, but have no legal protection agaisnt the Government. The new business contract law respects contract rights, especcially the rights of foreigners because Government wants to attract foreign investors.
Source: Personal
21.ECONOMIC STASTISTICS: 2.0
The Vietnamese government has a large economic statistics system because they need all kinds of economic statistics to make economic plan for the whole country. But under this system, local governments were rewarded by higher output numbers; as a result, they did not submit the real economic numbers - they created fictional bigger and smaller numbers to submit. So it is hard to believe the government's statistics. Even now, there are still some fraudulent numbers in the statistics, because the lower level governors who arre responsible for the data think the bigger or lower number can bring benefit for them. So they just go a head to make up a bigger or smaller numbers and then submit them to the higher level statistic agent. Another reason I think Vietnam has lower score on economic statistic is that the Vietnamese Government keeps its statistics confidential. Many numbers are not available to the public. It is difficult and expensive for business person to get certain economic statistics. Vietnamese Government does not relize that effecient and cheap information will encourage overseas investment in Vietnam
Source: Personal.
22.PROTECTION OF PUBLIC HEALTH AND SAFETY: 1.5
The state operates a system of medical social security. In 1982 there were 12,500 hospitals with a total of 208,400 beds (one for every 270 inhabitants). In 1991 there was one practising physician for every 3,140 inhabitants. There are also mobile medical teams. In 1990 five private health clinics were established, and the government introduced a system of fees for hospital care. Of total projected budgetary expenditure by the central government in 1994, 1,883,000m.dong (4%) was allocated to health. In fact, many medicines that are available in rural pharmacies have been improperly stored and are way past their expiration dates. Doctors are even forced to reuse " disposable " needles and syringes because replacements are simply not obtainable. In some part of the country, many cases go untreated for lack of the most medicines. Rural hospitals are short of vaccines and medical equipment (everything from scalpels to diagnostic gadgets ).
Source: The Europa World year book, volume II 1996 Page 3550 Europa publications limited Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996 Page 102-103 Lonely planet.
23.HIGH WAGE POLICIES: 1.2
Labor costs are fairly low, in keeping with Vietnam's low per capital income (under 500 USD per year). The demobilization of 600,000 soldiers, the discharge of 500,000 state employees, and the return to Vietnam of hundreds of thousands of workers from East Europe have swelled the ranks of the unemployed. As much as 50% of the labor force suffer from unemployment or underemployment. Unions are active in most large state plants. The unions are under Government control, but strike activity to obtain higher wages is becoming more frequent. In early 1995 the Goverment took steps to curb the increase in wages caused by the adaption of a new wage system in 1993.
Source: Internet Http://www.polrisk.com.
24.ENVIROMENTAL PROTECTION: 1.3
Originally, almost the whole of Vietnam was covered with dense forests. Over the centuries, human exploitation has spread higher and higher into the hills and mountains, a process accelerated by the wars and pollution growth. While 44% of the original forest cover was extant in 1943, by 1976 only 29% remained and by 1983 only 24.5% was left. Currently an estimated 2000 sq. km are deforested every year because of slash and burn agriculture by montagnards, forests fires (made all the fiercer by the deadwood of trees killed by the herbicide agent orange ), the processing of trees into charcoal and massive harvesting of exportable hardwood (the country's third largest hard currency earner after rice and crude oil).
Along the forest periphery, firewood gathering greatly exceeds regeneration capacity, causing the forest edge to recede. Environmentalists warn that unless these patterns of use are changed, Vietnam's forests will almost completely disappear by the year 2000. At present only 21 % of the country is forested and just 8-9% of Vietnam's land area retain its primary forest cover. For many years , Vietnam has had an active reforestation program. However, only 36% of 8720 sq. km of trees plated between 1955 and 79 were still forested at the end of the period. Currently about 1600 sq. km are planted with some 500 million trees each year. However, even at that rate, reafforestation is not keeping up with forest exploitation. In 1992, Vietnam announced the banning of unprocessed timber exports. The Vietnam press touted this as an attempt to prevent deforestation, but cynical foreign observers were less sure. The real reason, according to these sources, was so Vietnam could gain foreign investment to develop its own wood processing industry. "Value added" wood exports are still allowed if the timber is first processed into paper, furniture etc... .
Because Vietnam is a developing country so pollution is not a big problem, except in major cities.
Source:Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996 Page 34-35. Lonely planet.
25.STRONG ARMY: 3.5
During the war, Vietnam had about 1,600,000 Soldiers(main force), but in June 1995 the active (main force) armed forces of Vietnam had an estimated total strength of 572,000: 500,000 in the army , an estimated 42,000 in the navy , 15,000 in the air force and 15,000 in the defense force. Military service is compulsory and usually lasts for two years. Paramilitary forces number 4m.- 5m. and include the urban People's self defense force and the rural People's militia. The defense budget for 1995 was estimated at 16,000,000m dong
Source: The Europa world year book, volume II 1996 Page: 3549 Europa publications limited
26.FOREIGN TRADE IMPACT: 2.0
During the 1991 to 1995 period the average annual GDP increased 8.5 percent, agro product value increased 5.4 percent and industrial product value increased 13.2 percent. Export turnover grew 20 percent and total investment grew over 30 percent, Since 1989 Vietnam has continuosly exported from 1.5 to 2.0 million metric tons of rice per year, becoming the third largest rice exporter the world over. Its external economy has been developing in various aspects: commercial relationships have been extended to over 100 countries and regions the world over. The year 1986's export turn over was only 36% of import value, while that of the 1991 -1994's period was 91 percent.
So far over 1,000 foreign investment projects have been licensed with total registered capital of over USD 10 billion.
Source: Vietnam efforts for an economic take off Deputy PM Phan Van Khai 1994 Page 14 Vietnam exhibition-fair center-parorama magazin.
27.PROTECTION OF FOREIGN CURRENCY EARNING ENTERPRISE: 2.5
Vietnam is expanding its multiaspectual external economic relationship. In 1995 Vietnam concentrated its efforts to push up exportation and marketing task to exploit new markets and accelerate the implementation of investment projects already signed with foreign counterparts, and of the employment of development aid funds already approved, expand its participation in international and regional economic organizations. The most note worthy point in absorbing direct foreign investments is to resolve harmoniously different requirements in the present process of economic development such as technology transfers, applying the "one door" principle of easy permit processing, because businessmen still are harassed by intricate administrative formalities, adjusting the foreign investment absorption to better meet Vietnam's strategy of development.
Government permits and allows only the state sector easy access to foreign trade so that no one except the state sector can export or import directly. If citizens want to do business with foreign partner they must invite a state firm along with them. By the way, if business with foreigner go over 2 million dollars per year they may apply for a direct export and import permit, but it will cost a lot of time and money.
EXPORT 1993 1994 Petroleum 756 844 Rice 300 350 Coal 48 59 Rubber 54 70 coffee 86 85 Marine 302 370 Handicraft 156 450 Other 434 602 Total 2,475 2,850
Source: The Europa World year book, volumr II 1995 Page 3553 Europa publications limited.
28.MANAGERMENT OF FOREIGN CURRENCY BUDGET: 1.5
External trade (US $ million )
Import 1992 1993
Fertilizers 320 158
Petroleum products 615 684
Steel 104 189
Machinary and spare parts 297 549
Total ( include. Other) 2,535 3,505
Exports 1992 1993
Petroleum 756 844
Rice 300 350
Coal 48 59
Rubber 54 70
Coffee 86 85
Marine products 302 370
Other agricultureal and forestry products
434 602
Handicrafts and light industrial goods
146 450
Total (include, other) 2,042 2,850
Overrall balance -493 -655
Vietnam is a developing contry so the Vietnamese government must have a plan for managing foreign currency budget and try to balance this budget in the near future.
Source: The Europa World Year book, volume II. 1996 , pp 3553.
29.LAYER S OF COLLECTIVE ACTION: 2.0
Vietnam's political system is dominated by the Communist party. The 1992 constitution declares the supremacy of the Communist party. Legislation power is vested in the National Assembly, which is elected for a five year term by universal suffrage, the voting age is 18 and everyone of voting age is required to vote. The Assembly has a maximum of 400 members. The President is elected by the National assembly from among its members and is the head of the state and commander in chief of the armed force. The president appoints a prime minister from among the members of the National assembly, and subject to their approval. These parties form a government, again, subject to ratification by the national assembly.
The country is divided into provices and municipalities, which are subordinate to the central government. Local government is entrusted to locally elected People's councils. In practice, the main decision making bodies are those of the Communist party, especially the Politburo, which can, independently of the Government, issue decrees with the force of law. Party cadres dominate the higher echolons of government. Only party approved andidates are permitted to run and opposition parties are prohibited. Most of Vietnamese are highly cynical about their "democracy".
Source: The Europa World year book, volume II 1996 Page 3555 Europa publications limited. Vietnam Travel survival kit Robert Storey and Daniel Robinson 1996 Page 39-40. Lonely planet.
30.PRO BUSINESS CLIMATE: 3.0
During recent years, the Vietnamese people have put great efforts in reinforcing their country's economic potentialities, stabilizing Vietnam's politics and raising its position in international relationships and have attained some considerable achievements. Therefore, these achievements confirmed that Vietnam's policies are developing in the right course, reinforcing the motive power for development, clarifying the direction and capability of raising of Vietnam into an area of faster and more stable development. Achievements attained in innovation are setting several new problems to the entire Vietnamese economy, and the year 1995 was critical to struggling for objectives assigned for the 1992-1995 quinquennial plan.
This year was also considered a bridging year for further development in the remaining years of this century. It is Vietnamese people's strategic determination which will succeed, according to VoVan Kiet, Prime Minister. Vietnam's efforts to restructure the economy really get under way with the sixth party congress hold in December 1986. At the time , Nguyen Van Linh ( a proponent of reform ) was general secretary of the Communist party. Recent reforms have cut state subsidies, allowed limited private enterprise, reduced centralised planning, rationalised exchange rates and liberalised foreign investment.
Vietnam has joined ASEAN in July 1995, a step which observers say will greatly benefit Vietnam's economy. So far over 1,000 foreign investment projects have been licensed with a total registered capital of over US 10 billions. The Vietnamese government has promulgated hightly important laws and regulations aimed at stimulating the development of the private economic sector. But these may not be sufficient. Businessmen in this sector are still anxious about there long-term future and feel themselves discriminated against in comparision with state enterprises.
Source: Vietnam efforts for an economic take off Prime minister Vo Van Kiet 1994. Vietnam Exhibition- Fair center- Panorama magazine.
31.GOVERNMENT ENTERPRISES: 1.3
"Reforming" promotes the combined strength of all economic components in order to attain a higher growth rate. Vietnam needs to be persistent and to implement the multipartite economic policy, making the work of industrialization and modernization become that of all the people and all economic components, ensuring that the state economic sector will have the key position in the national economy.
Government owned businesses hold 70- 80% of national economy. It is also vital to gradually transform government ministries and bodies into state administrative ones, reducing intermediary department and bureaux, reducing these state establishments which require government subsidies to servive (50% of government owned businesses). State run businesses must be more effective, corresponding to the capital and investments poured there in and must be deserving of the position and role they occupy. State economic sector: roughly, the Vietnamese state enterprises have many rights of autonomy such as labor recruitment, wage payment, acquisition of fund, price setting... almost all they have to do now, concerning obligations, is to pay taxes and to deliver depreciation money to the state. But if they incur losses, the state bears the burden.
Source: Hoa xuyen tuyet Bui Tin 1992
32.INTERNATIONAL SECURITY AGREEMENTS: 2.0
When the Soviet Union disappeared in 1991, Vietnam did not have any international security agreements, except with Cambodia and Laos which agreements are meaningless. Recently, the relationship between Vietnam and China become better so now China and Vietnam have a security agreement. The Vietnamese government always count on its own forces to protect itself.
Source: personal experience
33.PROTECTION OF DOMESTIC ENTERPRISES FROM GOVERNMENT MANDATED COST: 3.5
Because Vietnam is a developing country there are many things which require applications for approval. But, today a firm in Vietnam only needs to pay taxes, it doesn't need to pay any costs from welfare to safety; if there is an accident the firm can make deal with their victims. There are no rules to protect workers. Firm can set the wage payment and can fight or lay off its employees without any reason. Enterprises with foreign investment capital and partners in joint ventures enjoy import tariff exemption with respect to the following: machinery, equipment, spare parts, means of production (including transportation means) brought into Vietnam for capital construction in connection with the enterprise. Investment projects which fall into a special category would enjoy preferential income tax exemption for two years from the day the venture starts making profits and 50% reduction of income tax during the following two to four years. Where foreign organizations or individuals reinvest their profit earning, they may receive reimburesment by the tax authorities of any income tax already paid on the reinvested amount.
Source: Vietnam-maketing Le Nguyen 1996 Page 47-57 Maketing Vietnam Personal
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I want to contribute on the topic Honest Government.This is based on observation from trips to VN.The VN Government was indoctrinated and now ,as the cynical is set in,is completely corrupted.Everything is for grab to near mafiosos level at the prime minister level down to the local officer. You can say that they are former terrorists,with little knowledge to run the country.Blowing a bridge is easy,building a bridge need math calculation and organization. With no opposition and absolute power,corruption set in. The vietnamese population.The education level is very low,there was never or little exposure to the democratic process.That is why there is no danger for the present government,even those the hate of the poeple towards the government is 100%.The division between North and South.After 1975,the North officers came to the South with one objective:Grab everything.This is not exagerate. I am pessimistic,I believe there is no hope,I think the country will slowly slide towards anarchy and eventually under very strong Chinese influence. Cat Nguyen, March 13, 1997
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