Donors, investors press for reform HANOI - Vietnam's communist rulers will come under fresh pressure this week to speed up reform to unleash the country's economic potential. Foreign and domestic investors are expected to vent frustration at a private-sector forum in Ho Chi Minh City on Wednesday and donor countries and institutions will subject government reform efforts to a mid-year review in Dalat from Thursday. Development officials and diplomats say Vietnam's report card looks distinctly mixed. There has been significant progress, including soaring exports, rising industrial production, further poverty reduction and a slew of business-friendly legislation. But foot-dragging on reform implementation has meant the overseas perception remains negative and growth and investment flows have failed to pick up from the heady mid-1990s. Foreign investment has fallen from peaks of US$2.8 billion a year in 1996 and 1997 to about US$500-US$600 million last year and further this year. Development agencies such as the World Bank see double the present level as appropriate and sustainable. Paradoxically, it has never been easier to invest. "The conditions for foreign investors have improved in Vietnam over the past three years," said Wolfgang Bertelsmeier, head of the World Bank's International Finance Corp in Hanoi, who will chair the private-sector forum. "But other countries in the region have improved their investment environments faster, so compared with them Vietnam looks less attractive than three years ago." On Friday, US Trade Representative Charlene Barshefsky warned Vietnam that its economy would be "left behind" unless it quickly completed a stalled pact to tear down trade barriers. She said this was particularly true now that the mainland had moved forward in its commitments on market reform. A trade pact with Washington would help overcome negative perceptions, said Andrew Steer, head of the World Bank mission in Hanoi, who will chair the donors' meeting. "Clearly it is something we long to see, because we think it would be very good for Vietnam. It would be good primarily because they could export more, but it would also be good as more American firms would come here and bring technology." Analysts said the decision-making process appeared hamstrung by internal political considerations, particularly the Ninth Congress of the ruling Communist Party due next March. Reuters - June 19, 2000.