Phan Van Khai : a vietnamese leader's vision
The prime minister highlights the importance of
foreign investment and of trade, especially with the
U.S. and China. He also notes lingering obstacles
To drive home his views on Vietnam's prospects
for enhancing trade, investment and the rule of law,
69-year-old Prime Minister Phan Van Khai sat down
for a rare interview on March 5 with The Wall Street
Journal Deputy Managing Editor John Bussey, Far
Eastern Economic Review Editor Michael Vatikiotis,
The Asian Wall Street Journal Editor Reginald Chua
and Hanoi correspondent Margot Cohen. The
discussion took place on the eve of a heavily attended
Asia Society/Dow Jones conference in Hanoi on
Vietnam's business climate. Excerpts:
What are the key areas that you wish to target for investment in Vietnam ?
We hope to attract a lot of investment in hi-tech areas,
so that high technologies will be incorporated in
different industries to be more competitive with foreign
companies. We will [also] focus on infrastructure
development. Say, for example, electricity. In this
sector, during the last few years, demand has grown by
about 10%-15% per year. This year, we'll have to build
a number of hydropower plants and thermal power
plants and gas-powered plants as well. Another
important area is the cement industry. In 2002, we had
to import 3 million tonnes of clinker . . . Also important
is the oil-and-gas sector . . . exploration, exploitation as
well as processing activities . . . And we hope to have
better cooperation with foreign partners in the
production and processing of agricultural products and
sea products for export.
Is the dispute over catfish in keeping with the spirit of the 2001 bilateral trade accord, or BTA with Washington ?
During the two years of implementation of the BTA, the
two-way trade value has increased substantially . . .
During the process of strengthening relations in trade
and investment, we need to overcome any issues that
may arise. We have the good will to settle those issues
with the United States side . . . Representatives of the
Department of Commerce, of the USTR [U.S. Trade
Representative] and other U.S. organizations have been
invited to Vietnam to visit fish-farming areas. Some of
them expressed a position that does not reflect goodwill
and fairness . . . We are ready to cooperate with U.S.
partners for the production and processing of catfish for
export to the States. I think that would be in the best
interest of American consumers, because our catfish are
of good quality and inexpensive.
Is Vietnam dumping catfish on the american market ?
No, Vietnam is not dumping.
What comes after the BTA ?
I think Vietnam's next major step will be to prepare for
membership in WTO [World Trade Organization]. Our
target is 2005. We submitted our application in January
1995. We also have undergone four rounds of
negotiations with the WTO working party. Negotiations
on the trade regime of Vietnam have been completed.
What are the biggest problems facing foreign investors in Vietnam ?
No. 1, our administrative procedures are still very
cumbersome. There are still many doors we have to go
through. You could get approval at the central level, but
you still have problems at the local level . . . with issues
like land. The government would like to pursue the
policy of a one-stop system, with all foreign-investment
projects only having to work with the Ministry of
Planning and Investment . . . The second major
complaint we receive from investors is about unequal
services [dual pricing systems]. Telephone tariffs are
still very high, with discrimination between foreign and
domestic [firms]. Air fares are also different for
foreigners and it's the same with electricity rates.
Reductions have been made several times toward a
single-price system. But our country has recently
emerged from war and a centrally planned economy.
Therefore we have to take it step by step. Otherwise, it
would lead to collapse if we go too fast.
Have you been influenced by China's experiences in joining the WTO and attracting foreing investment ?
In the past, the two countries had a similar economic
policy. So, the experience and lessons from China are
very useful for Vietnam, including policies to attract
foreign investment, better tap internal resources,
develop the private sector and improve the
competitiveness and efficiency of state-owned
enterprises . . . But, each country has its own historical
circumstances. Our lesson is that if we just copy one
foreign model, there's a chance of failure. Therefore,
our policy is to study and learn from selected cases.
Do you worry that China's rapid growth might draw potential investment away ?
China is a very big market for Vietnamese products.
Vietnam's exports to China have recently increased
significantly. Two-way trade by value is estimated to
reach $5 billion in the year 2005 . . . Vietnam needs to
identify the products where we have the best
advantage. Something I always tell Vietnamese
enterprises is [to aim for] high quality and low prices, in
order to be competitive.
Unlike in China, private vietnamese entrepreneurs are not welcome to join the communist party, but party members can do business. How do you esplain this split policy ?
We have different conditions from China. We do
something on the basis of our conditions . . . Party
members in Vietnam are still allowed to run their own
business, but I don't think up to the same extent as
capitalists. For example, in rural areas our party
members still have their own farms, they run their own
businesses. The successful party member/businessman
will be in a better position to help the poor.
Do you think the current corruption trial in Ho Chi Minh City of alleged mafia boss Nam Cam will convince foreign investors that the rule of law will be upheld ?
Nam Cam is a very special case because it is related to
state officials . . . There are some people behind him,
protecting him. The trial reflects that we have very
strong measures to fight against corruption and various
crimes that may occur in our country, and to ensure
compliance with the law.
The Far Eastern Economic Review - March 13, 2003.
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