"Vietnam and the Future of Asia"

June 9, 2000

H.E Mr. Vu khoan
Minister of Trade, Vietnam

1. At the outset, I would like to express my sincere thanks to Nihon Keizai Shimbun Inc. for inviting me to this prestigious conference and to discuss with the distinguished participants here the future of Asia in the New Millenium.

This Conference is held at an opportune moment in the transitional year between the 20th and the 21st centuries. At such a moment, it is only normal that everybody wants to predict the future in order to seize new opportunities as well as to confront with emerging challenges. However, it has never been simple to predict the future, especially in such a changing world with full of unpredictability. It is my hope that, with all the wisdom that this gathering has, we shall be able to get useful ideas of the future of our continent.

2. Looking back to the 20th century, we can see two milestones in the history of Asia: first, a number of Asian countries, after the World War II, defeated colonialist powers and regained independence; and second, many countries achieved marvelous development, over the last decades of this century, hence, were popularly named Asian Tigers or Dragons.

Unfortunately, as our continent bid farewell to the 20th century, it was hit by severe regional financial-monetary crisis, and this led to hasty announcements of the collapse of the so-called "the Asian Miracle". But, a couple of years later, Asia has been recovered as impressively as a phoenix rising from the ashes.

Could this be attributed to the economic foundations built by the Asian people over the past decades that would promptly be brought into full play as soon as the financial-monetary environment is improved?

Could this be explained by a well-known resource that Asia is endowed with: an abundant source of diligent, creative and well-trained labour?

Could this be the result of the cooperation, though not completely without deficiencies, among Asian nations and between them and the outside?

Finally, could this be accomplished by such bold reform measures that Asian countries have been taking on the basis of painful lessons drawn from the crisis?

3. Although the Asian economic recovery is still ongoing and has not even been enough strong and sustainable in some countries, we do have grounds to be optimistic, or at least not to be pessimistic, about the future of the region.

In any case, Asia is the world's largest market with billions of population, a region of rich and diversified natural resources, a crossroads of world important trade routes and especially is endowed with an abundant source of diligent, skilled and receptive labour. In the last few decades, Asia has built up firm socio-economic foundation and infrastructure that could not be easily shaken during the recent crisis. Moreover, Asia is judged to be relatively more stable in comparison with others parts of the world. In such a context, though there remain factors leading to instability, intra-regional cooperation among the Asian countries within the framework of ASEAN, East Asia, as well as that between Asia and other continents such as APEC, ASEM, ALAF, etc. have been increasingly strengthened.

4. However, this does not mean that it will be all smooth sailing for Asia. On the contrary, Asia is facing many difficulties of which some are of a global nature, others inherent nature of Asia.

In spite of difficulties in forecasting the world in the New Millenium, it has been widely agreed that humanity will witness a multitude of scientific and technological advances resulting in the establishment of a knowledge-based economy. Regrettably, Asia has not yet become the center generating such advances but has mainly applied American and European achievements. Moreover, many countries are fighting against backwardness or in the process of industrialization. Additionally, quantum leaps in science and technology call for greater efforts to be made to further develop human resources, some thing that not all countries are capable of doing. Unless these shortcomings are successfully addressed, Asia would likely be left further behind.

Globalization along the line of trade, investment and services liberalization has also posed great challenges to many Asian countries, especially those who are not competitive. UNCTAD conference held in Bangkok, February 2000, pointed out that "globalization also raise the risk of marginalization of countries, in particular the poorest countries...Income gap within and among countries remain wide, and the population living in poverty is increasing. Asymmetries and imbalance in international economy have been intensifying. Instability in the international financial system continues to be serious problem and requires urgent attention". The recent devastating financial-economic crisis in Asia has testified to the above. Such a situation requires adequate attention of and equal co-operation among countries as in today's increasingly interdependent world no country can benefit from imbalance, including developed countries. This is not to mention social unrest, potential conflicts between nations, social and environmental concerns, which may impede Asia's sustainable development. Without a close cooperation in addressing the said challenges, we would find it difficult to ensure a bright future for our region.

5. Vietnam is an integral part of Asia; she enjoys opportunities of Asia and experiences also difficulties thereof.

Over the last decade and more, Vietnam has recorded important and significant achievements, in the course of implementing the Doi moi (Renovation Policy). We have been able to maintain relatively high GDP growth rate (averaging 7.4% a year in 10 years successively); from a country deficient in almost everything, Vietnam is now self-sufficient in basic commodities, notably food. At the same time, our export has been growing at the average pace of 18% a year, more than USD 36 billion of FDI and USD 15 billion of ODA have also been attracted from 1993 to 1999. Another encouraging progress has been proudly reported in alleviating poverty, bring the percentage of poor households, by Vietnamese standard, from 30% (1992) down to 13.7% (1999).

To our regret, the regional turbulence has seriously affected Vietnamese economy. Partly due to the crisis' negative effect, Vietnam's economic growth rate, thought positive, has somewhat slowed down.

Realizing opportunities and attendant challenges as she enters the New Millennium, Vietnam is making preparations to intensify industrialization and modernization and at the same time continue our Doi moi (Renovation) policy and active integration into the region and the world.

Along that line, we advocate creating favourable conditions conducive to the development of enterprises in all economic sectors. Since last May, when the new Enterprise Law was promulgated, in Ho Chi Minh City alone, 1700 enterprises have been registered. In agriculture, a new form of farm economy has seen the days and developed.

The reform of State enterprises has been intensified, reducing their number from 12,600 in 1992 to just 5700 in 1999 and to a target of about 2000 by 2005. Similarly, equitization process has been accelerated. Loss-making businesses will be sold, contracted out, or dissolved. In this connection, a stock market will be put into operation at an early date.

In such the same vein, in May, our National Assembly passed the amendments of and additions to the Law on Foreign Investment in Vietnam and the Law on Oil and Gas, creating a more favourable business environment for foreign investors. In addition to developing and completing the legal system, our Government has placed the highest priority on administrative reform.

We are working out a roadmap aiming at reducing import tariff, gradually eliminating non-tariff barriers, setting up national treatment regime in conformity with our commitments under AFTA and preparing for the Fourth Session of the Working Party on Vietnam's Accession into the WTO.

All in all, renovation and integration policy is now being promoted and Vietnam will continue to be a "promising land" for cooperation and investment.

6. In our international relations, we attach great importance to developing close cooperation with Japan - our biggest ODA donor, first-ranking trading partner, and one of the top FDI investors in Vietnam. We greatly values the Japanese continuous supports for the renovation process in Vietnam. The summit meeting on the occasion of the visit of our Prime Minister Phan Van Khai to Japan last Spring represented a new milestone in the long-lasting cooperative relationship between Vietnam and Japan, resulting in according of MFN tariff to each other; the establishment of the Working Party on Investment Cooperation, the granting of Yen denominated credit, the implementation of Myazawa Initiative, human resource training.

Nonetheless, we realize that the economic cooperation between our two countries is still not commensurate with our potential and aspirations. From the first place in trade with Vietnam, two-way trade value between Japan and Vietnam is now lower than the EU; and Japan still ranks third among investors in Vietnam.

We also attach great importance to our bilateral co-operation within multilateral framework such as ASEAN + 3 (China, Japan and ROK); ASEAN + MITI, especially in developing the Mekong subregion, building physical infrastructures, enhancing human resources.

May I take this opportunity to express our thanks to Japan for its supports to our renovation process.

On the threshold of a New Millennium, we are looking forward to joining hands with you to bring our economic and trade relations to a higher level and thus contributing to Asia's brighter future.

Thank you for your attention.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.