"Strengthen co-operation, promote integration for the future of a prosperous Asia"

May 21, 2002

The Honorable Pham Gia Khiem
Deputy Prime Minister, Socialist Republic of Vietnam

Excellencies Asian Leaders,
Mr. Chairman,
Ladies and Gentlemen,

At the outset, allow me to express my sincere thanks to the Nikkei Newspaper for honoring me with the opportunity to address the 8th International Conference on the Future of Asia, a prestigious forum in Tokyo, the capital of the beautiful and hospitable country of Japan _ a major political, economic, cultural, scientific and technological center of Asia and the world.

As Asian economies are showing signs of recovery with ever-deepened regional co-operation, our Conference this year, in the wake of China's accession into the WTO, is an opportunity for us to exchange views on the Future of Asia, on regional issues find out ways and means to keep Asia as a center of dynamic growth in the global economy in the 21st century.

Ladies and Gentlemen,

Our Asia today is facing tremendous challenges. The 1997 economic and financial crisis has left behind serious consequences. Given contagion effects of the global recession, especially in the wake of the 11 September event, and the current slow recovery of the global economy and its potential uncertainties, it is hard for us to be fully optimistic about the global economic outlook.

Despite all recent economic difficulties, East Asian co-operation has been vigorously expanded and deepened more than ever with various co-operation mechanisms at different levels and in different fields. The strong development of regional co-operation frameworks, such as ASEAN plus 1 and ASEAN plus 3 have been added by co-operation initiatives between ASEAN and its dialogue partners such as ASEAN _ China Free Trade Area, "East Asian Vision" group initiated by the Republic of Korea as well as the five initiatives of Prime Minister Koizumi. An East Asia of potential and dynamism with an average GDP growth rate of 5.4% in the 1990s compared to the global level of 4%, convinces us of a brighter future of our region.

As an active member of the Asian community, Vietnam supports these initiatives and sees them as inevitable steps in the course of co-operation, reflecting the trend of, and the need and desire for co-operation of all countries in the region. We believe that these initiatives are positive and feasible and will contribute to the promotion of stability and development of all countries. And an effective implementation of East Asian co-operation frameworks and initiatives, taking into account interests of regional countries, will be an important factor to ensure sustainable development for East Asia and each individual nation, including Vietnam.

We are of the view that regional development co-operation should take into account the role and influences of China, a neighboring state that is the 7th largest economy in the world and the 2nd in the region. China has become an increasingly important economic partner of Vietnam in trade, tourism, investment and development co-operation. In the past two years, China has emerged as the third largest trading partner, with the two-way trade volume increasing from US $2 billion in 2000 to US $3 billion in 2001, and one of the major investors in Vietnam. China has helped Vietnam to modernize some factories previously constructed by China in the metallurgy and chemical sectors, and extended credit facilities for many new projects in the mining, textile and other areas.

As economies in transition with a great deal of political, economic and cultural similarities and especially neighboring countries that have long traditional relations and shared land and sea borders, Vietnam and China could explore possibilities for joint development of common resources and co- operation with third parties like in the Greater Mekong Sub-Regional Co-operation Program as directions to further promote comprehensive, long-term and mutually beneficial co-operation.

Vietnam and China are also working together to further enhance bilateral trade relations and to resolutely fight smuggling and trade frauds. The strengthened, deepened and diversified co-operation in the economic, cultural, education and training, scientific and technological between two countries will not only generate economic benefits, prosperity, peace and friendship for the two peoples, but also contribute directly to ensuring peace, stability and common development in the region.

We believe that China's dynamic development and its accession to the WTO last year will bring about vast opportunities or Asian countries, including Vietnam, to access an immense market of over 1 billion people and promote trade and investment and other business opportunities. However, this also poses competition challenges to Asian countries in general and Vietnam in particular. With low costs, large-scale production and good marketing strategy, Chinese goods, especially textile products, may become strongly competitive in major international markets such as EU, Japan, and US and even in our own domestic markets.

China's huge and open market will be more attractive to foreign investment, which is a fierce competition for Vietnam and other developing countries in the region. These are inevitable challenges on capital mobilization, technology transfer, market expansion that Vietnam has to face in our international economic integration and WTO accession process. We are of the view that maximizing internal resources, renewing technology, increasing the quality of human resources, raising the competitiveness of goods and services, improving business and investment environment are vital for the Vietnamese economy to grow. The Vietnamese Government is endeavoring to further improve our business environment and create favorable conditions for Vietnamese enterprises to have access to capital, technology and other inputs in international markets so as to proactively integrate into the international and regional economy. By so doing, Vietnam will rise above challenges and succeed in its efforts to grow and integrate into the world.

Mr. Chairman,

For Japan, Vietnam has had close bonds for centuries in trade, culture and education. Japan is Vietnam's leading partner in all economic, trade and investment areas and has an increasing role and influence in our cause of national construction and development. Japan's assistance to Vietnam, which has been resumed for ten years, is enormous and valuable, not only in terms of capital sources, but also other kinds of support such as policy consultancy, human resources training, environmental protection and technology transfer and so on. And the largest ODA donor, which even accounted for 40% of total ODA committed to Vietnam in the last years, Japan has helped Vietnam construct and upgrade such essential infrastructure as transportation, electricity, water supply and drainage, irrigation, rural development, etc. Japan is the third biggest investor in Vietnam with 338 on-going projects worth US $4 billion in which over US $3 bullion has been disbursed. Japanese investment projects have advanced technology, thereby helping raise the export and competitiveness of Vietnam. Japan's role has been defined and increasingly enhanced in development co-operation programs, namely Great Mekong Sub-Region and West-East Corridor. In addition, Japan is also one of Vietnam's top trade and investment partners. The bilateral relations between the two countries will be further promoted through East Asian co-operation initiatives.

We have recently celebrated the 10th anniversary of the establishment of diplomatic relations with the Republic of Korea. However, in reality relations between the two peoples dated 700 years ago when the first Vietnamese came to resettle on the Korean Peninsula. Today, the relationship between Vietnam and the Republic of Korea is growing towards a strategic partnership as committed and agreed by the two countries' high-level leaders. As one of the top partners in our international economic co-operation and foreign policy with nearly 400 on-going investment projects amounting to over US $3 billion in which US $2 billion has been implemented, the Republic of Korea is also an active member of the East Asian community with an important role and increasing influence on regional co-operation in building an East Asia of peace, stability and prosperity.

After the recent economic and financial crisis, the ASEAN countries have become more aware of the need for strengthening the regional co-operation. The efforts aimed at actualizing the ASEAN Free Trade Area (AFTA), ASEAN Investment Area (AIA), promoting regional and sub-regional co- operation, establishing development triangles, quadrangles and corridors will help ASEAN nations to overcome challenges, effectively contributing to co-operation and common development in the region and the world.

Ladies and Gentlemen,

On the occasion of this Annual Conference on the Future of Asia, I would like to brief you on Vietnam's recent socio-economic developments and policies. During the past 15 years, thanks to the comprehensive renewal policy, Vietnam has recorded extremely important socio-economic achievements. In the year 2000, Vietnam's GDP doubled that of 1990. In 2001, the 6.8% growth rate, though lower than the average growth rate of the previous 5 years, has demonstrated the Government's capability in responding to recent complexities in the region and the world. In particular, in the 1991-2000 period, the export and import volume has increased by 18.4% per year, a relatively high rate. Until now, the total FDI attracted is about US $42 billion, of which half is implemented; the ODA commitments are amounting to US $20 billion with about US $10 billion disbursed.

Vietnam has also made remarkable progress in the social area. With the number of poor households reduced by half in the 90s, Vietnam's success in poverty alleviation has been highly appreciated by the international community. Viewing education as the top national priority, the Vietnamese Government has continued to increase investment in this sector, from about 10% to over 15% of national budget. Education and training have been diversified under various forms such as people- established and semi-public schools, and distance learning to ensure greater access for all. Vietnam is endeavoring to fulfill the compulsory secondary education by 2010. In the health sector, the Vietnamese people have opportunities to get access to better health care services, including private facilities that were not available before. TV coverage has reached over 80% of households and radio programs cover over 90%, even in the ethnic minority languages. In the 90 decade, the number of telephones went up by over 20 times. The telecommunications sector has expanded rapidly. Internet services have also grown strongly at a rate of 130% in the period of 1998-2002.

These important achievements in the social and economic areas as well as in the human development have been acknowledged by the UNDP: Vietnam ranks 101st in Human Development Index (HDI) and 89th in Gender Development Index (GDI) among 162 countries.

The above-mentioned socio-economic achievements are the result of the Vietnamese Government's policy viewing the people as the center of development, maximizing internal resources combining economic growth with social progress. Vietnam is widely recognized as safe destination for foreign investors, businessmen and tourists.

In the coming years, in order to realize the socio-economic development strategy to the year 2010 and Five-Year-Plan for 2001-2005 with the goals of improving the people's material and spiritual life, creating preconditions for building Vietnam into a basically industrial country by 2020, Vietnam will continue with comprehensive reforms in the following areas:

- Step up the administrative reform and gradually complete the policy and legal frameworks with a view to creating a transparent legal environment in line with the market economy

- Carry out the economic restructuring toward industrialization and modernization, rearrange and reduce the number of State-owned enterprises for efficient performance, promote the domestic private sector. The foreign investment sector is considered integral part of the national economy.

- Implement social development programs, such as reducing poverty, creating job, developing education and training, and science and technology, expanding and upgrading public services, promoting social equality and environmental protection

- On the external economic front, Vietnam continues to pursue the policy of active economic integration, diversification and multilateralization of its external relations. To liberalize its import and export regime and open up the Vietnamese market, the Government has committed to implementing the roadmap to reduce import tariffs as agreed with the framework of AFTA. Vietnam recently has completed the process on trade policy clarification and is conducting the fifth negotiation round with member countries and groups on its accession to the WTO. To ensure the effective execution of the Vietnam-U.S. Bilateral Trade Agreement (the BTA), the Vietnamese Government has formulated an agenda for amending regulatory documents and adopted solutions to raise the competitiveness of Vietnamese goods and services. The Vietnam- U.S. Joint Commission was set up to promote the implementation of the Agreement.

The effective implementation of all policies and measures will definitely help foster the socio- economic development in Vietnam and contribute to the growth in East Asia.

Mr. Chairman,

While mentioning recent achievements and bright future for Asia, we can not deny the leading role played by Japan in various areas. Despite difficulties facing its economy, Japan has continued to assert its role by making tremendous and effective contributions to the development of Asian countries.

On this occasion, allow me, on behalf of the Vietnamese Government and people, to sincerely thank the Japanese Government, people, and businesses for their valuable contribution and assistance extended to us over the past decade given the difficult time of the Japanese economy. The Vietnamese Government and people wish to elevate the co-operative relations between Vietnam and Japan to a higher level, an important step to actualize Prime Minister Koizumi's initiative for closer regional partnership in the 21st century.

Ladies and Gentlemen,

Thanks to the policy of bringing into play internal resources as well as effectively using external resources, Asian countries have recorded many economic achievements over the last decades of the 20th century. I believe that this will remain the key to development in the 21st century. Closer regional co-operation and integration will be the most effective catalyst for achieving these results.

For its part, Vietnam will continue with its policy of active integration into the region, attach great importance to the economic co-operation with the East Asian countries, and support all initiatives to enhance regional economic co-operation. We are committed to accelerate the implementation of the socio-economic reforms, further improve the country's investment and business environment so that Vietnam will be an attractive and safe destination for foreign investors.

I would like to wish the Conference a great success. And I hope that this Conference will be an opportunity for us to step up regional co-operation and integration for a prosperous Asia in the future.

Thank you for your attention.

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