Talk seeks ways to improve NGOs’ aid activities

Opportunities and challenges stemming from the country’s participation in the Trans-Pacific Partnership (TPP) agreement and the ASEAN Community, and the aid activities of foreign non-governmental organisations (NGOs) in Vietnam were discussed at a talk in Hanoi on May 26. 

Speaking at the event, Phan Anh Son, head of the People’s Aid Coordinating Committee under the Vietnam Union of Friendship Organisations, said that Vietnam has set up relations with around 1,000 NGOs, of which over 500 have carried out programmes and projects supporting Vietnam in numerous fields; including health, education, environmental protection, rural development and settlement of war consequences. 

According to Son, Vietnam’s participation in the TPP agreement and the ASEAN Community affects not only its Government, people and businesses, but also NGOs operating in the country. 

He suggested the organisations base their planning on the information they receive, the actual situation in Vietnam and their resources, to make long-term and sustainable programmes and projects to facilitate Vietnam’s participation in the agreement and the community. 

Tran Viet Thai, deputy head of the Institute for Foreign Policy and Strategic Studies under the Diplomatic Academy of Vietnam, emphasised the role of NGOs in assisting Vietnam’s integration process. 

He said that the organisations should help popularise information related to the agreement and the community to localities and businesses, and help them effectively implement measures related to human resource training, address commercial disputes and increase competitiveness. 

Meanwhile, head of the International Cooperation Department under the Ministry of Agriculture and Rural Development, Le Kim Dung, stated that improving the implementation of issues related to employment and sustainable poverty reduction requires the involvement of many parties, including foreign organisations, in boosting legal and mechanism reforms, and improving the investment and business environment. 

At the event, participants from NGOs and foreign diplomatic representative offices in Vietnam, and Vietnamese ministries, also discussed opportunities and challenges in agriculture, and cooperation potential between NGOs and businesses during Vietnam’s integration process.

Source: Vietnam+

EU-Vietnam FTA: GUE, Greens, and civil society obtain partial but important victory for human rights

The resolution adopted by the European Parliament on 17 April 2014 on the state of play of the EU-Vietnam Free Trade Agreement (FTA) is an important step towards strengthening human rights protection, FIDH and the Vietnam Committee on Human Rights (VCHR) said today. Despite the opposition of the PPE, but mainly due to the effort made by Greens and GUE the resolution recommended the European Commission address key human rights concerns during FTA negotiations with Vietnam.

“ The European Parliament’s Resolution is a clear warning to Vietnam. For Europeans, human rights are essential in all areas, business included” said VCHR President Vo Van Ai. ” The European Parliament calls for the conditioning of the Free Trade Agreement on concrete human rights progress, and for suspending it in case of grave violations. For without the safeguards of freedom of expression and the press, the right to form independent trade unions and civil society organizations, free trade between the EU and Vietnam’s one-party state will only harm the Vietnamese people and prejudice sustainable development.”

Without the inclusion of human rights safeguards any future an FTA risks exacerbating an already serious human rights situation. Vietnam currently holds over 200 political prisoners - the highest number in Southeast Asia. Many of them have been arrested and imprisoned for promoting land and environmental rights and opposing so-called ’development’ projects that have a negative impact on local communities.

The resolution urged the European Commission to conduct a human rights impact assessment in line with the guiding principles of the UN Special Rapporteur on the right to food. By doing so , it also reminded the Commission that the human rights impact assessment must be conducted by an independent body before the conclusion of the FTA and must be conducted in order obligations to avoid and mitigate the potential adverse impact of its trade and investment policies on human rights It also by then underscored the European Commission’s protracted failure to comply with its obligation despite the repeated calls made by FIDH and VCHR.

The resolution also called on the Commission to apply "an approach based on conditionality, so as to offer signing of the FTA in exchange for concrete progress on human rights” with particular reference to freedom of speech of individual citizens, freedom of the media and freedom of religion made in the resolution. Finally, an additional improvement from the European Union practice regarding FTAs is the request made by the European Parliament to see human rights be subject of regular scrutiny including by civil society because of the specific request made to mention them in a the suistanaibility development chapter of the future agreement.

Despite these positive recommendations, FIDH and VCHR regret that because of the lack of support from other political parties, several important measures proposed by the Greens and the GUE were not adopted. Among the proposed measures was the prohibition on investor-state dispute settlement (ISDS) mechanisms and the failure to introduce a clause that guarantees that protection of investments does not take precedence over the state’s human rights obligations.

This is highly problematic. The protection granted to investors and the ISDS mechanisms have allowed the private sector to challenge legislation adopted by a state to regulate in the public interest (i.e. health, environment, human rights). Experience has shown that states have been sued for millions for having adopted legislation safeguarding standards in those fields. Finally, while FTAs grant protection to investors, they fail to effectively protect individuals and communities affected by trade and investments. The right to challenge legislations is given to the private sector whithout clear requirement made to arbitrators to take other interests than investment and trade law into account, without clear procedure for affected parties to submit their arguments and by bypassing internal judicial system

“ A lot remains to be done to ensure an adequate protection of human rights in trade and investment policies of the EU. This is a crucial issue for human rights in countries that engage in FTA negotiations with the EU. It is also a crucial issue for all the European countries in which austerity policies have already had an adverse impacts on human rights” said FIDH President Karim Lahidji. Indeed, On 16 April the European Parliament confirmed that in case of trade and investment disputes, either the EU budget or the EU member states’ budgets will inevitably be graved by important costs because of the ISDS that may be concluded.

Source: https://www.fidh.org/en/region/asia/vietnam/15205-eu-vietnam-fta-gue-greens-and-civil-society-obtain-partial-but-important

From the Field: Vietnamese Anti-Poverty Model May Work Elsewhere

I recently spent a week in Vietnam visiting two successful Vietnamese nonprofits: Thien Chi (TC) and Anh Duong’s (AD). I wanted to explore whether their organizational models were location-specific, or if they—or some aspects of them—could be replicated in other places where we partner with local nonprofits, including Indonesia and Cambodia.

The mission of both of these nonprofits is to raise the most economically deprived families out of poverty within three years, preferably through environmentally sustainable means.

The approach is to provide families with interest-free loans that they repay within five months. Each loan comes with an important support package: a mix of education, advice, and problem-solving tools. Taken together, these efforts produce positive results, and in most cases, go a long way toward ensuring that loans are paid back. Once a loan is repaid, the family is eligible for another. The beauty of this system is that because the loans are short-term, families can start to see the benefits of the program very early on. This is inspiring and keeps the momentum going.

The main strategy is to create alternate sources of income. For example, if the first loan was given to raise chickens, the TC or AD staff might next suggest the family start growing vegetables using a “net house” that reduces the need for expensive chemical fertilizers and pesticides.

A loan recipient in front of her environmentally friendly net greenhouse.

The staff also encourages farmers to adopt environmentally friendly practices, such as using biogas digester systems (fueled by animal waste) for cooking instead of chopping down trees for wood. Both TC and AD use a cash reward system as an incentive for this.

A recently installed biogas system has saved this loan recipient money on buying conventional gas and wood for fuel.

To track impact, a notebook is created for each family. It contains their financial information and is used to record loans and repayments. Each year, the family’s income is noted to see whether the support system is helping. If it isn’t, the staff meets to figure out how best to proceed.

A family with their TC financial-tracking notebook.

These organizations also work very closely with local authorities (they have little choice, given the nature of the political regime). The staff contacts local authorities to determine which families are below the poverty line.

Since TC and AD’s priority is education, they will first approach families with children who are not attending school. The authorities also provide enforcement when people are slow or delinquent in their loan repayments.

All financial activity is recorded in a notebook, and signed off on by the organization, participants, and local authorities.

So, could this sort of model be replicated in other countries? Although tailored to the Vietnamese political and social reality, I feel TC and AD’s model of helping people rise out of poverty has some elements that could work elsewhere.

For example, in Nicaragua, where I spent some time in February, there didn’t seem to be any authority aware of the number of people living in poverty; there was no one keeping track of which families were falling through the cracks. It might be possible to go through various records (medical, school) and piece together that information, but because most rural communities in Nicaragua lack access to health services, such records might not exist. How would one systematically determine which families to help first, and who would enforce authority if necessary? Clearly, there is a cultural difference that might prohibit the same model being used here. However, once a culturally appropriate program was in place, it’s certainly possible to track progress in a notebook.

In Indonesia, which I visited as part of my trip to Asia, it seemed like the practice of tracking progress was seldom exercised. Measuring the impact of programs over time was supported more by anecdotal evidence than hard evidence. The same was true in Cambodia, which I also visited during this trip.

However, the notebook method used by TC and AD could be ideal in both of these countries and in others, as it is cheap, easy to use, and keeps all the records in one location. The loan system with extra support could work too.

These days, more donors and granting institutions want to know the impact of their donations. They often ask those they fund to measure and report results. There are many organizations in the developing world that don’t have the know-how to track their impact so that they can evaluate whether their goals are worth pursuing or if their method is successful. I believe the model used by Thien Chi and Anh Duong is simple enough to adapt to various situations and to other regions.

Source: Standford Social Innovation Review

Developing New Legislation to Govern Vietnamese NGOs

By Karla W. Simon*

At present, there are few NGOs in Viet Nam, in part because the legal and policy framework for their existence is dated and extremely limited. With few exceptions, at all levels of government from the central down to the district, village and commune, only government entities are available to respond to social and economic needs. These include both most ministries and mass organizations such as the Fatherland Front, Youth Union, Woman’s Union, and Veterans Union. These have millions of members and meets a broad range of social and economic needs. The mass organizations are state-managed, staffed and controlled.

The basic legal regime for Vietnamese NGOs (VNGOs) can be found in several laws and regulations. Initially, associations were authorized under the 1957 Law on the Right to Establish Associations. The 1992 Constitution provides for VNGOs by guaranteeing citizens rights to become involved in organizations that benefit society and recognizes international organizations. The Civil Code of Vietnam, adopted in 1996, provides a more detailed system for dealing with domestic VNGOs. Under the Civil Code, a domestic NGO can be legally formed in Vietnam if:

“It is authorized by a competent State authority; has an organizational structure; independently owns and is liable for property; and, independently enters into legal relations in its own name”.

The Civil Code recognizes the following types of not-for-profit legal persons: social and socio-professional organizations, social and charitable funds and other organizations, as provided by law. Requirements for the contents of a VNGO charter are also found in the Civil Code. Given its explicit language, the Civil Code of Vietnam seems to be the leading authority for the right to establish VNGOs and may have superseded the previous law on associations.

Operating under this legal and policy framework there are about 30 officially recognized NGOs that are affiliated with either a government ministry or mass organization. They seem to operate with some degree of autonomy from the government and have been formally sanctioned by the Government. Most are centered around Hanoi. Examples include the Highland Education Development Organization (HEDO), Toward Ethnic Women (TEW), Education For Nature (ENV) and Vietnam Save Association for Disabled Children.

There are three types of such organizations:

• Those that have their origin in mass organizations or other state bodies;
• Groups of researchers that are university or hospital based; and
• Small organizations that work through private operations to meet local needs. TEW, noted above, is one such organization. It has a handful of employees and operates a not for profit handicraft store in Hanoi. It helps to promote village-level, ecologically sound farming projects. The TEW director is a government employee.

It should be noted that for the past few years an inter-ministerial committee in Viet Nam has been drafting a new NGO law. They have produced a number drafts. It appears that the work of this committee has been frustrated by political opposition to the enactment of an NGO law. However, it now appears that Viet Nam is fully committed to enact such legislation and in fact has committed itself to do so in the context of joining the World Trade Organization.

In October 2001, the Government of Viet Nam formally requested the assistance of Vietnam Assistance for the Handicapped (VNAH) and the International Center for Not-for-Profit Law (ICNL) in organizing a two and a half day workshop to examine the current status of NGO law in Viet Nam, in other nations and other related issues. The workshop took place in December in Hanoi and served to help identify next steps needed to enact legislation favorable to the development of strong and effective NGOs in Viet Nam. Participants included two international experts from ICNL – Dr. Leon Irish and Prof. Karla Simon, ICNL’s co-founders, local representatives from INGOs and those in the Government of Viet Nam with responsibility for and interest in the development of a local NGO movement. Funding for the Workshop was provided by USAID.

The Workshop attendees demonstrated a keen interest in the subject and seem to be genuinely committed to helping to put into place a new Vietnamese NGO law. Topics discussed included identifying a series of next steps and the timetable needed to enact a national NGO law. The discussion also mentioned likely roadblocks to enactment and means to address these hurdles.

*Karla W. Simon is Co-Founder (with Leon Irish) of ICNL and General Editor of the International Journal of Not-for-Profit Law (IJNL). She is Professor of Law and Co-Director of the Center for International Social Development at the Catholic University of America and can be reached at simon@law.edu.

US Government Donation Not Enough: Activist

While the US government’s donation of US$400,000 towards a $1 million study into removing toxic chemicals from the environment and cleaning up a site in Da Nang is welcome, it’s not enough, said Len Aldis, general secretary of the UK-Viet Nam Friendship Association.

It is a very small step – and long overdue – on the long road to the eradication of the legacy left by the use of millions of litres of Agent Orange and other chemicals used and sprayed by the US," he said.

In a letter to the Viet Nam News Agency bureau in London, Aldis wrote, "Today in Viet Nam there are over three million living victims including newborn babies, suffering from illness, many with severe disabilities caused through Agent Orange. Of what benefit to them will be the $400,000 or $1 million?".

Bidding for scientific grants: a flawed concept from the outset

VietNamNet Bridge – Professor Hoang Tuy spoke to the Thoi bao Kinh te Sai Gon (Sai Gon Economic Times) about the difficulty scientists are experiencing when trying to win Government grants for their proposals.

I don’t think it’s a good idea to let the Ministry of Science and Technology come up with 95 research topics and then invite interested researchers to bid on the projects.

To build a factory or a highway, the basic technology required in the construction is universal, but the quality and the cost depend very much on the contractor’s proposal.

This analogy is the same for scientific work, except when it comes to comparing the respective goals of a construction worker and a researcher.

Scientists or academics use their creativity to gain more knowledge, and though they have an idea of what might be achieved, often there is no definite goal before the research begins. This is unlike a worker that promises a building at the end of a contract.

Researchers do not know whether their hypotheses are right and so the end result(s) of their work may be radically different than planned.

That’s why funding organisations in developed countries don’t ask researchers to bid in order to receive money. In order to get a grant, scientists and academics don’t promise results, instead, they explain what the research is about, its significance and what they hope to achieve.

I can say governments offering grants for research are not a new phenomena, nor is the competitive nature of bidding or writing proposals to get the funding. What worries me is whether the bidding process will be transparent and fair.

If that was the case, a level playing field must be given to all researchers, be they young or old.

In my opinion, the Ministry should create a special board to carefully study the proposals submitted. Each member of the panel will give their score based on a common set of criteria. The whole process must be conducted openly and carefully recorded.

We all recognise that scientific research plays an important role in the economic, cultural and political life of every nation. Research activities are often conducted by universities or research institutes that specialise in certain areas.

Their research must have funding, sometimes large sums of money donated by the institutes as well as from the government.

In my opinion, if we want to get results from our research then the Government should list some areas of interest and let the experts in those fields decide what research topic they are most suited for.

What I mean is the government will act like a project supervisor and look at how its money should be invested, allowing experts to propose what research should be conducted.

There are many examples of government trying to control this process that have gained few results.

Looking at this strategy, I wonder if this is the best way to fund academic and scientific research. I also wonder if this kind of competitive environment will promote scientific and technological advancement in Vietnam.

Special attention needed for mountainous areas

Dr Phan Van Hung, deputy headof the Institute of Nationalities
NhanDan

Positive impacts
It is of common knowledge that the economy in mountainous and ethnic minority areas has experienced the lowest growth rate as compared to other regions nationwide. One of the major reasons is the shortage of capital for improving infrastructure and developing industrial, agricultural, commercial and services establishments.

The implementation of open door policy and integration into the international economy led the mobilisation of foreign direct investment (FDI) resources and official development aid (ODA) to exploit and promote the country’s potentials and strength, thus speeding up the modernisation and industrialisation of mountainous and ethnic minority areas. Statistics in the 1998-2005 period showed that the areas attracted 459 FDI projects with a total registered capital of US $3,268 million (roughly VND 52,000 billion). These projects contributed to economic development and job creation for people of different ethnic minority groups in many localities.

The mobilisation of ODA capital has also played an important part in socio-economic development and poverty reduction in ethnic minority areas. In the 1998-2004 period alone, ODA capital granted by international organisations through 340 hunger elimination and poverty reduction projects reached US $1,153 million (about VND 18,000 billion).

In the past years, the above mentioned capital was geared mainly in implementing the projects on transport, electric power supply, agriculture and social infrastructure and served as an important source which helped reduce poverty and improve the living standards of ethnic minority people. Following the joining to the World Trade Organisation (WTO) and successful organisation of the APEC Meeting, Vietnam’s prestige was raised to a new height and was marked by a record of US $4.445 billion in ODA pledged by international donors to Vietnam for the year 2007 at the Consultative Group (CG) meeting held in Hanoi in December 2006.

By the end of 2006, the World Bank (WB), countries and international organisations also committed to assisting poverty reduction activities in remote areas with a total of over US $200 million, representing the highest sum so far.

In the coming period, FDI capital is expected to increase as the country integrates deeper in the international economy.

After many years of carrying out economic restructuring towards commodity production, mountainous and ethnic minority areas have created a large quantity of goods for export, including a number of high world ranking items namely coffee, rubber, pepper and tea, bringing about significant source for the country and at the same time improving the people’s living standards. However, this process has faced several difficulties such as unstable prices and obstacles in getting access to large markets including high tax and unequal competition.

In the 1990s, people in mountainous and ethnic minority areas used to plant low yield crops which led to low income and hence widespread poverty. Thanks to the renovation process, there appeared many new plants such as maize, rice, soybeans, fruit trees and sugar-cane trees and poultries and livestock namely cows, chickens, ducks and swans imported from other countries which helped create high economic value to support poverty reduction. Many households have become rich from the application of new seeds and modern techniques. In recent time, many international organisations have deployed the models and projects of sustainable economic development in combination with environmental protection for mountainous and ethnic minority areas.

Among the socio-economic achievements in mountainous and ethnic minority areas, the records in the field of culture are of great significance. During the process of international integration, Vietnam was able buy equipment to transmit radio and television programmes to remote areas in difficulties. This was only a dream in the past.

People living in remote and mountainous areas are now able to watch important political and sport events in the country and in the world which are live broadcast. Through the means of communications, people of different ethnic groups are improving their knowledge about politics, cultures in other countries.

Difficulties and challenges
Of course, international economic integration and development of market economy create negative impacts, increasing poverty and living gap.

Vietnam has made impressive results in poverty reduction, however the gap between the rich and the poor continued to rise. Once the country integrates itself deeper in the world economy, part of ethnic minority people in remote and mountainous areas, who have low knowledge, will find it more difficult to access the market and social services and their income and living standards could be further and further lower than urban areas.

In fact, the goods in mountainous and ethnic minority areas are yet to develop. The scale of production is still small and scattered together with low quality, failing to meet the international food safety and hygiene standards. This means that from now on, their products will find it more difficult to overcome the barriers in terms of high standards in technique and environment. A number of products of high value such as sugar cane, maize and fruits will face critical competition and difficulties.

During the process of exchange and integration, the alien lifestyles and cultures would influence the community of Vietnamese nationalities or change their traditional values and identities. The traditional cultural factors namely languages, houses, architectures, clothes, music, foods, customs and lifestyles would be strongly impacted. Due to economic integration, cheap and convenient industrial products from other countries could fade several traditional crafts such as weaving and casting.

The fact has proved that despite the State agencies and local administration’s efforts in preserving the forest land in recent years, the area of natural forests continued to be violated together with environmental pollution caused by industrial establishments. The balance of economic development and environmental protection is now a great challenge for mountainous and ethnic minority areas.

Suggestions
Based on the recent experience and the trend of deeper international economic integration, it is necessary to implement the following proposed solutions to ensure sustainable development for mountainous and ethnic minority area- provide sufficient knowledge and improve abilities in international economic integration among officials in these areas so as to help them make full use of the opportunities and overcome challenges and accelerate socio-economic development and reduce poverty for people of different nationalities.

- give priority to implementing socio-economic development and poverty reduction projects in ethnic minority areas. The State should continue to invest in building infrastructure and creating favourable conditions for socio-economic development there. Attention should be focused on implementing projects on reducing poverty, raising income and narrowing income gap between nationalities and regions. In addition, stronger measures are needed to fight against crimes, drug related evils, prostitution and HIV spreading.

- raise the efficiency of ODA projects launched for mountainous and ethnic minority areas, ensure that investment leads to practical results and meet the aspirations of ethnic minority people. Implement policies on attracting FID capital, speed up economic growth rate in the areas of favourable conditions and create jobs for children of different nationalities.

- work out overall solutions on social security to support poor people and areas as well as those of high vulnerability, thus limiting the negative impacts and influences during the process of international economic integration and globalisation.

- strengthening national defence, combing well economic integration with preservation of social stability and cultural identities of ethnic groups. Agencies in charge of ethnic minority affairs should understand and meet the legitimate aspirations of ethnic minority people to prevent the dark attempts in using the issue of ethnic minority and religion to divide the national great unity bloc.

International economic integration is creating both big opportunities and challenges for the development of mountainous and ethnic minority areas. In order to make this integration efficient, officials in charge of ethnic minority work need to learn how to make full use of opportunities and overcome challenges. Improving capabilities for them is a basic factor to ensure successful implementation of the Party's renovation and nationalities policies.

2007: Vietnam does not need a big event!

VietNamNet Bridge - At the turn of the new year, Professor David Dapice (from Tufts University and the Chief Economist of Vietnam Program at Harvard University) talks to VietNamNet about the important economic events of 2006.

Some people say 2006 is the most exciting ever for Vietnam economy,with WTO accession, the APEC, the PNTR, the records in FDI, the stock market, etc. You have been following Vietnam economy for decades since the Doi Moi. Do you agree that 2006 is the most exciting year among the last 20 years?

- In my view, the WTO accession was the biggest story of 2006. This is because it not only meant that the leadership agreed that it was important, but also that it signaled to investors that reform would continue and the operating rules in Vietnam would continue to move in the direction of what was normal in most countries.

Do you agree that 2006 is the most exciting year among the last 20 years?

- This year (2006) was certainly very exciting – reaching $10 billion in licensed FDI, joining the WTO and having the stock market go up 170% were all very noteworthy. They marked Vietnam as a serious player, with the Intel and Canon investments showing that even long-term “heavyweights” thought it worth investing here. Smaller things also helped – the APEC summit here, the handling of bird flu (very good in spite of the recent new outbreaks), and growing tourism all suggest that Vietnam will not be “exotic” but “mainstream.” This means a higher level of capital and human flows, but also higher expectations.

Do you think the economic reform in Vietnam was speed up or slow down in 2006? If speeding up, is it because of the WTO pressures, the Party Congress? If slowing down, is it because two much efforts was put in fighting corruption and WTO accession?

- Was reform faster or slower in 2006? I think that preparations for and promises of future reform were more than before, but actual reform was not. The tax changes were not exciting and the new investment law could have been better. Financial opening was begun, but very cautiously. The scandals like PMU 18 were contained but it is unclear if lessons were learned and acted upon. Land prices remain too high and practices of obtaining land remain problematic, though some abuses are now being dealt with rather than ignored. If the promises made are fufilled, it is likely that reform will speed up in the next year or two.

- In VietNamNet, we are surveying the readers’ opinions for the most important events of 2006. Most of the votes are for WTO and changes in the stock market. The VN-Index went up from 300 in January to 630 in June, then quickly down to 420 in July, and jumped to 810 in December. Do you think these up and down movements indicated something of the economy, or mostly the speculation and herding effects?

The stock market boom is exciting, but there is an investment saying that “trees don’t grow to the sky.” If investors are ignoring fundamentals and buying because of momentum (they think the stock price is rising and they can sell to someone at a higher price), there are rising chances for a downturn.

- For some stock, the P/E went up to almost 100.

If a stock earns $1 a share and is priced at 100, the earnings will have to grow VERY fast, because a company like GE earns $15 and sells for $100 [in effect] and has earnings growth of 10% a year, year after year. I can believe that some companies in Vietnam will grow at 20-30% a year for 5-10 years, but what then? After ten years of 25% annual growth, they would be earning $9 a share. What would they be worth then? Momentum may go on for a while, but it usually goes too far and then prices drop, sometimes sharply. In Japan, the stock average is less than half of its peak sixteen years ago.

- The ODA committed to Vietnam went up every year and made a new record of $4.45 billion in 2006. When it will (or should) start to go down? Thailand a couple of years ago said that they no longer need ODA. When will be the time for Vietnam to say that? The foreign debt of Vietnam is over 30% GDP. It is yet over the limit, but does it indicates something?

ODA comes in different flavors. The sweetest is very low interest rate loans (about ½ of 1%), but these are given only to low income nations. About 2010, Vietnam will become a middle-income nation and start getting ODA loans much closer to world market levels of interest rates. The specific efficiency of ODA loans depends on the project, but what is often lost is that even if all of the loans are for “good” projects, it frees up non-ODA funds for “bad” ones. For example, the ADB railway renovation from Hanoi to China will cost only $0.2 million per kilometer, even though many bridges are being rebuilt with new grading and tracks, signals, etc. provided. But the Hanoi to Vinh high speed railway will cost over $30 million per kilometer. Now, even if some of that is for trains, the larger issue is not ODA per se but the overall efficiency of public investment. That has been and (in my view) remains an area that needs much more attention. Even when all of the costs are justified, some investments are just not needed right now, like the Dong Nai airport. It should only be phased in after Tan Son Nhat is further expanded, maybe after 2020. If you build things you don’t use much or which cost too much, the debt burden will become a problem.

- Do you think the WTO accession of Vietnam was delayed because other members had experience in China: many promises are not delivered, so they were more specific in negotiation with Vietnam. Do you think there will be same complains with Vietnam? It may happen from what points of the agreement?

Vietnam faced tough WTO conditions, tougher than previous nations. This is part of a general trend, not confined to Vietnam. However, I think the similarities of China and Vietnam and the difficulty of getting China to follow strictly its WTO promises made it more likely that Vietnam would be treated more strictly. In addition, China has more bargaining power and could press its position more strongly. But I think that Vietnam is already more open and more competitive than it would appear from the tariff data, due in part to smuggling and in part due to the size and geography of the country. For that reason, the WTO agreements will not be burdensome, though some adjustments will be required. While Oxfam is right that the process may not be “fair,” I think they are wrong about the result of the process. I think Vietnam will benefit a lot from WTO accession, and you can already see it in FDI. With a $10 billion target for 2007, that would mean $20 billion in licensed investment in two years! If even half or two-thirds of that is implemented, it will mean at least one million jobs directly and several million more through multiplier effects. If training programs and easy movement (including more attention to reasonably priced decent housing in cities, with nearby schools for the kids) are provided, then even those hurt by WTO will have good options. That means Vietnam will soon need a land and property tax to finance urban services and control speculation.

- The amount of investment from US (including investment via third countries) has been behind others from Taiwan, Singapore, Korea, Japan. There were high expectation for US investment after the US-Vietnam normalization in 1995, then after US-Vietnam BTA in 2000, but there were not yeat a boom. Do you think the WTO and PNTR will help to pull a surge of US investment in 2007, if not, what US investors are waiting for?

FDI is coming from many nations, and that is an advantage. If you are at a dance, it is always better if lots of people want to dance with you. With the Intel and Canon investments, there will be more US and Japanese investments. I think a lot of US investment comes through multinationals that appear in official data as coming from other countries like Singapore or elsewhere. If you counted that as US-sourced, then US FDI is already much higher than the official number. Overall, I would worry less about marketing than about infrastructure, regulation and education. If you get those things right, there will be plenty of investors.

- What do you think will be the most important economic event in Vietnam 2007? Not to mention the “regular” as you say, there will be high GDP growth rate, high FDI and ODA…

The biggest story in 2007? It could be the opening up of banking or the new tax law or further breakthroughs in FDI. I hope it is not the bird flu going pandemic. But really, Vietnam is getting to the point where it doesn’t need one or two big stories, but a lot of advances. You need them in law, education, housing, finance, taxes and public management. If you “just” do sensible things well, you will have rapid AND quality growth that will reduce poverty and be sustainable. A modern country is one that works well for its people. For that, the level of income is less important (because it will rise quickly) than the quality of the process.