Coffee and rice price drop risks downturn in Vietnam HANOI - Sharp falls in foreign investment and world prices for its key agricultural exports are endangering Vietnam's otherwise promising growth prospects, Deputy Prime Minister Nguyen Tan Dung warned MPs yesterday. But a sharp increase in world prices for oil and gas meant the value of Vietnam's exports was still well up on the same period last year, Mr Dung said in a keynote address at the opening of parliament that focussed overwhelmingly on the economy. But the fall in rice and coffee prices threatened the purchasing power of 80 per cent of the population who still live in villages and small towns and with it future economic growth, he warned. Mr Dung said Vietnam had recorded some very promising economic statistics for the first four months of the year despite the ``large number of difficulties that exist and the weaknesses that have been put right only belatedly.'' Gross domestic product (GDP) grew at an annualised rate of 5.6 per cent in the first quarter while industrial production for the first four months was up 14 per cent on the same period of 1999. Rice production of 9.2 million tonnes was 2.7 percent up on last year. But world rice prices were down 86 per cent on 1999 and coffee prices had fallen 58 per cent. The government was taking steps to try and protect farm incomes, he said, but domestic prices were also down. The consumer price index, which is dominated by essential foodstuffs, fell 2.1 per cent in the first four months of the year. The sharp rise in Vietnam's receipts from its offshore oil and gas fields over the past 12 months kept exports high at US$4.2 billion (HK$32.7 billion). Exports for the first four months of the year were 34 per cent up on the same period in 1999. But Mr Dong warned that there was a continuing slowdown in foreign investment, which stood at just $260 million in the first four months, 55 per cent down on the same period of 1999. He said the government would put amendments to the foreign investment and oil and gas laws before parliament during its new session. But he warned other steps were also needed to curb the slowdown in foreign investment and praised initiatives by some municipal and provincial authorities to attract overseas investors. Mr Dong bemoaned the slow implementation of government policy, particularly on privatisation. ``Several policies, which have been given their institutional framework, have run into many difficulties and inefficiencies,'' he complained. During its month-long session, parliament is also to discuss amendments to the criminal, and family and marriage laws. Apart from the inaugural address, debates are held behind closed doors. AFP - May 10, 2000.