Vietnam needs comprehensive economic reform HANOI - Vietnam must implement fundamental economic reforms and cut business costs if it wants to stem a slide in foreign investment, the Asian Development Bank (ADB) said. In its 1999 outlook, the Manila-based ADB predicted the communist-ruled country's economy would grow 3.7 percent this year from an estimated four percent last year, figures in line with estimates from other multilateral agencies. It forecast growth next year of 4.5 percent. Hanoi was committed to prudent fiscal and monetary policy but the slow growth of exports and fall in foreign direct investment would persist, the report said. The bank said lower foreign investment flows and approvals were caused by the Asian economic crisis and disenchantment among foreign businessmen about the pace of reform. It noted Vietnam's high costs compared with the region, uncertainty over foreign currency availability and the lack of transparency in government regulations. ``The domestic investment climate needs to be improved to enhance the country's ability to compete for foreign capital,'' the report said, echoing a common refrain from international donors and investors in the past two years. Vietnam approved foreign investment projects worth $345.59 million in the first quarter of the year compared with $1.07 billion in the same period in 1998. The country approved foreign deals worth $4.06 billion last year but actual disbursements were much less. Pledges were $4.5 billion in 1997 from $8.6 billion in 1996. The report noted the current account deficit narrowed last year to 4.1 percent of gross domestic product from 6.8 percent in 1997, but said this was partly due to slower economic growth and import curbs. It predicted the current account deficit this year would be three percent of GDP. The report gave no absolute GDP figure, but various estimates have put it at around $25 billion. The ADB also urged Hanoi to accelerate reform of state-owned enterprises and the banking system. Reuters - April 19, 1999.