Foreign Experts Access Vietnam to Join Integration

When looking at the changes in Vietnam’s economy, the evidence suggests very strongly that the vast majority of Vietnamese society has benefited from the renewal reforms of the last 20 years. Increasing global integration of the economy and society has been a key component of this process. Whether one looks at poverty rates, food production per capita, purchases of consumer durables, levels of income per capita or trade performance, all have shown startling improvements through the period. As a result, Vietnam can be classified as a “successful globaliser” and I have every expectation Vietnam will continue to benefit from the strengthened process of integration that WTO accession will bring.

 

The key to the Vietnamese government’s role in this process was its bold decision in the late 1980s and early 1990s to gradually reduce the role of the state in the economy, and allow that to be replaced by private investment from both local and foreign sources. This unleashed productivity gains in business and in the rural sector, and led to the remarkable outcomes that are visible for all to see. Similarly, Australia has found over the last 30 years that a continued process of reform that opens markets and expands opportunity for private enterprise will allow further advances in efficiency and living standards.

 

Looking more recently, two major events – WTO accession and Vietnam’s successful hosting of APEC – have put Vietnam on the map in a very important way. Certainly foreign investor interest was increasing before these occurred, but the two events happening so close together really encouraged closer focus. The key to building on this interest now comes in two parts. First, Vietnam needs to carefully, comprehensively and in a timely fashion implement its WTO commitments – the global business community is watching to see that Vietnam will follow through on these, the results of many years of important negotiations. Second, as is regularly emphasised by the Australian Chamber of Commerce in Vietnam (AusCham), the government needs to continue to improve the business environment, most importantly by boosting the transparency, stability and predictability of operating conditions. These two key actions will not only maintain the interest of the outside world in Vietnam, but also greatly assist in the success of local businesses – who will be the biggest beneficiaries of WTO entry over the long run.

 

As for the future, I am very positive about Vietnam’s development prospects. There are many important challenges ahead in Vietnam’s goal to achieve middle income status over the next few years, including aggressively tackling corruption, providing sufficient social and physical infrastructure for development, improving the quality and diversity of the education and training systems, and further reforming the government to become a facilitator of business activity, rather than a major player in the economy. Overcoming these issues will require a commitment to reform, to openness, and to new ways of thinking, on the part of both the government and the society more broadly. However, given what I have witnessed in my time in Vietnam, I am confident that this commitment exists in most of these areas, and hope that all such challenges will be overcome, allowing Vietnam to reach its full potential.

 

From our own perspective, Australia has always had a prominent and diverse commercial presence in Vietnam, and, if the conditions and policies are right, I am particularly keen to see that increase, whether it is in trade, investment or services. Australian firms look to build partnerships with Vietnam for the long-term. The key to continuing to attract this type of investor interest will be: A sound and ever-improving commercial operating environment; and prominent Australian business success stories that I, as Ambassador, as well as my colleagues from Austrade, can point to when we advise the many Australian businesses that come to us for guidance.

 

Australia values its long-standing and vibrant relationship with Vietnam. Links have always been strong in areas such as trade and investment, development assistance, agricultural research and education, and the large population of Australian citizens of Vietnamese descent also strengthens the connection, as does the large group of Australian alumni in Vietnam. In the last ten years, the relationship has also broadened into other important areas including defence cooperation, law enforcement liaison and immigration, and these have added very importantly to the understanding between our two countries. With such strong ties, and in such a variety of areas, I am excited about the potential in our relationship today, and in the years to come.

 

Vietnam has succeeded in an ambitious challenge. It became the 150th member of the WTO in the days it was the host of the 14^th APEC meeting. This coincidence is now a symbol of the new step in Vietnam’s international integration.

 

Vietnam’s economic growth rate is remarkable if Vietnam considers its level and its stability, especially over the past years. According to the SEDP (Social Economic Development Plan) for 2006-2010, this vigorous growth will be maintained for the coming years and it will benefit both the development and the population of Vietnam. This growth has been going together with a spectacular decrease in the poverty rate over the past years, donors and economists alike are unanimous in the appraisal of this success.

 

However, two issues require close scrutiny and some reforms, as the Vietnamese authorities have pointed out in their latest economic analysis - in the SEDP or during last CG meeting in December. The first problem is that the inflation rate, which is high, has kept increasing for the last two years . The second issue is the necessity for modernization of the financial system in order to better meet the need of the real economy to keep on growing at a strong pace. The fight against corruption is, of course, also an urgent task for the Vietnamese authorities.

 

Vietnam is very ambitious in its aim to integrate into the World Economy. The number of reformed and new laws that have been passed is impressive. The difficult part is the implementation of the new laws and newly revised ones. I am convinced that the Vietnamese people will do their utmost to achieve the goal to become a middle income country by 2010. It is really impressive to see how successful Vietnam has been since the start of Doi Moi in developing the country and reducing poverty.

 

We are all impressed with Vietnam's achievements during 2006. Now it is up to Vietnam to maintain its new role as a player on the international arena. I think it is important for Vietnam to ensure that economic growth is sustainable and pro-poor, and that the gap in living standard between the cities and the rural areas is controlled. To ensure this, it is also crucial to guarantee good education, health-care and infrastructure all over the country. Another key area is to make serious efforts to safeguard progress in girls getting proper education, especially in the rural areas. Ethnic Minorities in the Central and Northern Highlands have less access to Education and Healthcare, especially girls and women. The literacy rate is much lower among these groups than for the rest of the Vietnamese people. Transparency in decision-making, a serious commitment at all levels to fighting corruption and gender issues are other areas I would like to underline as important.

 

At this point in time, it would be premature to pass final judgement on the impact, on Vietnam, of the very successful organisation and hosting of the latest APEC summit and the accession of Vietnam into the WTO. Very clearly, however, the organisation of the APEC summit has demonstrated Vietnam’s ability to host a large event of this kind and thus, repositioned Vietnam as a modern, dynamic economy in people’s eyes. More importantly, Vietnam’s role as an honest broker in the very many issues, declarations and documents ensuing from the APEC summit has solidified the Vietnam government’s track record in leading complex, global negotiations.

 

As for VN’s effective entry into the WTO on 11 January 2007, I believe a longer term is needed in order to gain perspective on the true impact of this milestone in the country’s history. Nevertheless, at this point in time, entry into the WTO has already anchored the country’s commitment to the international community, free markets and trade liberalisation. It effectively shows that VN can play a constructive role on the international scene, which will be particularly required in the framework of ASEAN, where VN’s trade team is acting as a facilitator for the development of EU-ASEAN trade relations.

 

The government of Vietnam has recently announced very ambitious economic growth targets for 2007, including a GDP growth rate of 8.2-8.5 per cent. This implies a significant increase with respect to 2006, where growth rates range in the region of 7.5 per cent. Achievement of the country’s ambitious goals will largely be dependent on two factors: on the one hand, Vietnam’s ability to implement WTO commitments in time and in conformity with its protocol of accession; on the other hand, the swiftness of the long-heralded but still sluggish equitization process in key sectors such as banking, telecommunications and energy.

 

2006 was an eventful year of Vietnam. It is a suitable time for Vietnam to continue promoting integration in the world economy, and become an important partner in the international community. The Vietnamese hosting of APEC 2006 is evidence of this. For investors, Vietnam is a profit-making place, and the attention paid by the international business community has never been as high as now. In my opinion, Vietnam should grasp this opportunity.

 

It was also an eventful year in Vietnam-US relations. My top pleasure is how to maintain our increasingly good relationship and develop it in a positive manner. The United States has been a good partner for Vietnam. This can be seen in visits of the US President Bush and Secretary of State C. Rice to Vietnam in November 2006. The removal of Vietnam from the list of country’s of special concerns, and the passage of PNTR for Vietnam are also milestones.

 

If our bilateral relations were a picture, this would be the most beautiful and lively masterpiece, especially in the aspects of trade and investment. According to the Vietnamese Ministry of Planning and Investment, US investment flows into Vietnam reached US$4 billion in 2006. As far as I know, US investors are completing procedures for four big projects in Vietnam. If these projects are licensed in 2007, the US investment capital in Vietnam can be doubled.

 

In fact, the widening trade gap is a worrying trend. Vietnamese exports to the US always outdo US exports. Currently, Boeing is under negotiations to sell airplanes for Vietnam Airlines. If this deal is signed, bilateral trade will be brought to a new high. The year 2007 is expected to bring more positive developments in two-way trade.