Vietnam to restrict imports to save dollars
HANOI - Vietnam will temporarily
curb the import of goods already made in the country to
conserve foreign exchange, Prime Minister Phan Van
Khai said on Wednesday.
Khai, delivering a government report to the opening
session of Vietnam's National Assembly, which meets
twice a year, gave no time frame or specific details about
the measures.
He insisted communist-ruled Vietnam was not backing
away from efforts to meet international trading norms.
Khai said Vietnam would implement its commitments in
the process of establishing the ASEAN Free Trade Area
(AFTA) along with joining the Asia-Pacific Economic
Cooperation (APEC) forum and the World Trade
Organisation (WTO).
He said the authorities would encourage Vietnamese to
use locally made goods instead of imported products
even though the quality of the domestic items might be
inferior.
It needed to be made clear to local enterprises that the
import resolution would be temporary so firms would
not continue to rely on state protection, he added.
Diplomats said the move would send the wrong signal.
``In terms of international trading regimes they just
cannot do this, although it is not necessarily surprising. It
will not do Vietnam's WTO application any good,'' said
one diplomat.
``The whole effort has been to get Hanoi away from
these ways and part of a process of integrating with the
international community either through AFTA, APEC or
the WTO.''
Hanoi first applied for WTO membership in 1995 but its
accession is not expected for several more years. The
country will formally join APEC next month.
One source said that in its WTO application the
government had reserved the right to slap wholesale
import bans on goods, something it had been rebuked
for.
Vietnam already has a range of barriers and tariffs on
numerous imported goods, although the government has
moved to liberalise the country's trade regime in recent
years.
Khai said the import measure was necessary.
``In order to reduce difficulties in maintaining a stable
international balance of payments it is a must to exercise
thrift with foreign exchange and reduce the trade deficit,''
Khai said in his speech to National Assembly delegates.
Vietnam has undergone a severe dollar shortage this
year, especially because of a plunge in export growth
and a fall in direct foreign investment inflows partly due
to the Asian economic crisis. The government has
refused to disclose the country's level of foreign
exchange reserves.
Another diplomat said the import curbs were probably
intended to not only save foreign exchange but also to
stimulate local production.
He said Hanoi's trading partners should weigh up the
import restrictions in light of what the country had
achieved so far.
``Vietnam has been trying very hard and has put a lot of
thought about what they are required to do under WTO.
We must remember they started this process from
scratch.''
Vietnam remains one of the world's poorest nations with
annual per capita income just above $300. It dumped
central planning policies in the late 1980s and adopted
radical economic restructuring to stave off bankruptcy.
Reuters - October 28, 1998.
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