Vietnam's healthy economic growth prompts cautious optimism for future
Hanoi - The Vietnamese economy achieved its targets in several key sectors in 2002 for the first time since the Asian economic crisis of 1997, prompting cautious optimism for the future amongst local and foreign observers.
According to official statistics, Vietnam posted economic growth of seven percent in 2002, compared with 6.7 percent in the previous year. In 1997, growth slowed to 5.5 percent, in a period when its Asian neighbours were suffering the full force of the regional crisis.
"A number of important sectors are this year recording faster growth, showing the best results since the regional crisis of 1997," said Pham Chi Lan, vice-president of the Vietnam Chamber of Commerce and Industry.
Lan, however, deplored the fall in the value of foreign investment of around 50 percent last year.
"It is the only sector which was quite disappointing in 2002," she said.
Agricultural production expanded five percent from 2001, in spite of prolonged flooding in the Mekong Delta, the country's main rice growing region.
Other key indicators were in line with
government targets, notably industrial production which rose 14.4 percent and inflation, which was restrained at four percent.
The long under-exploited tourism industry also had an impressive year with the number of foreign tourists rising 12.8 percent to 2.63 million, the highest number since the regional crisis.
After a good start to the year, tourism further benefited from a perception of good security in the country, with the threat of terrorism in the region highlighted by the October bomb attack in Bali.
"Compared to last year, the number of guests has increased by 25 percent in the months of October and November," said Alfonso Romero, general manager of Hanoi's Melia Hotel.
Vietnam's integration into international markets is more difficult to assess.
A bilateral trade agreement between Vietnam and the United States which came into force in December 2001, has seen trade between the two former enemies rise 60 percent in 2002 to $2.5 billion.
But at the same time, Vietnam's overall trade deficit trebled to $2.77 billion.
The country is nevertheless becoming a favoured destination for business in the Asia-Pacific region, according to Political and Economic Risk Consultancy (PERC), based in Hong Kong, notably because of the small risk of terrorist attacks by groups such as al-Qaeda.
"Our belief is (economic growth) is essentially founded on the expansion of capital investment and the mobilisation of labour, said economist Le Dang Doanh in the Dau Tu (Investment) newspaper. However, he also underlined the slown progress in improving the business environment.
The business environment, particularly the legal system, continues to be a barrier to foreign investment, despite the surface appearance of change.
Foreign businesses rushed into Vietnam after the lifting of the US trade embargo in 1994 but many left in frustration four years later.
Today, "the perception of the market is better than before. The investors are looking to the long term and the Vietnamese authorities are working tremendously hard," said a European expert.
Agence France Presse - January 02, 2003.
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