Vietnam govt anxious to push economic reform
HANOI - Alarmed by dimming economic prospects, Vietnam's
government will try to convince the elite
Politburo of the need for quicker reforms in a
meeting on Friday, an official source said.
The source said the government would present
a report to the Communist Party Politburo
during the closed-door meeting outlining dark
days ahead for the country if it fails to move
faster on economic reform.
``The purpose is to give the Politburo a true
picture and convince them of the need for
stronger reforms, as a number of Politburo
members are still very cautious about strong
economic reforms,'' the source told Reuters.
``These members say (such reforms) might lead
to deviation from the country's socialist
orientation and threaten economic and political
independence,'' he said.
Vietnam has repeatedly voiced its commitment
to economic reform, but the source's comments
were a clear indication the government believes
it must move faster to stem the country's
declining economic fortunes.
But that means getting policy through the
19-member Politburo, the most powerful
institution in communist-ruled Vietnam and
which vets all major policy decisions.
While reformers such as Prime Minister Phan
Van Khai sit on the Politburo, most analysts
believe he is outflanked by elderly conservatives
who fear Communist Party control could be
eroded by a complete embrace of free-market
policies.
It was unclear if Khai would present the report.
The Politburo is headed by Communist Party
General Secretary Le Kha Phieu and meets
regularly. Besides Khai, four other government
ministers sit on the Politburo.
Senior government economists have warned
Vietnam needs to move faster on reform to
stave off dire consequences for the economy,
the source said.
``The government's economists have said that
without strong reform moves the country will
face a dark economic situation,'' the source
said.
The meetings will come less than a week after
foreign donors met Khai and other senior
officials to encourage Vietnam to accelerate
reform.
Vietnam, with no stock market and a fixed
exchange rate, has ducked much of the brute
force of Asia's economic crisis.
But the impact on foreign investment and
exports has filtered into the real economy,
compounding existing woes such as a fragile
banking system and growing perceptions that
Vietnam is one of the region's toughest places
to make money.
Gross domestic product is forecast to grow
6.64 percent in the first six months of the year
compared with the same period last year -- a
rate some Asian nations would die for.
But economists point out that Vietnam is still
one of the poorest countries in the world, having
only lifted the lid on deadening central planning a
decade ago.
In addition, unemployment has begun to rise
slowly in urban areas as firms reliant on Asia get
swiped by the downturn.
A key problem for Vietnam was government
policy getting lost in a tangled web of
bureaucracy, the official source said.
``The government has tried very hard to work
out new measures to ease obstacles for
economic development, but implementation at
the lower level faces big problems,'' the source
said.
Government ministers frequently complain about
bureaucrats, who have a fearsome reputation
for holding up policy implementation and making
life difficult for foreign and local businessmen
alike.
By Dean Yates - REUTERS, June 18, 1998.
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