The Vietnamese government said Saturday that four journalists had been stripped of their accreditation because they wrote and edited false information on an anti-corruption case and had defended colleagues arrested for their coverage of the case. They journalists "directly wrote articles... edited and approved, without checking sources, news and articles with seriously untrue information concerning the PMU18 case," said a statement on the government's official website. Public outrage was sparked in 2005 when the media unveiled a corruption case in the transport ministry's PMU18 infrastructure unit, where officials allegedly embezzled funds and used money to bet on football. The scandal led to the resignation of Vietnam's transport minister.

In May this year, journalists Nguyen Van Hai and Nguyen Viet Chien, who were particularly active in covering the case, were arrested over accusations of "power abuse" and "false information", sparking a media outcry. Newspaper Thanh Nien immediately wrote that "honest journalists must be freed" while Tuoi Tre said its reporter was "paying the price for his news on... a matter which is not yet over but which unravels in a very strange manner."

However, the papers ended their protest two days later after receiving a warning from the government, sources said. But earlier this month, four leading journalists at the two newspapers were stripped of their press cards by the government but given no concrete reason why. But on Saturday, the government explained the four had "instigated objections against legal protection agencies for investigating and arresting journalists Nguyen Viet Chien and Nguyen Van Hai" in several articles.

International human rights groups and observers have condemned Hanoi for the arrests, saying they are a serious violation of press freedom. American ambassador to Vietnam Michael Michalak on Wednesday raised his concerns, saying: "We think this has a negative effect on other journalistswho want to report whatever story they can find. We hope that as soon as possible the government will publish a full explanation of exactly what were the charges they found out and what were the results of their ultimate investigation." 9AFP 23 August 2008)

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Vietnam, where car prices are already among the world's highest, is planning to raise taxes by up to 20 percentage points as part of efforts to cut fuel consumption and reduce traffic congestion. Under a draft law, a special consumption tax would be raised to 60 pct for consumers who buy cars with 2.0 to 3.0 litre engines and 70 pct for cars with engines bigger than 3.0 litres, from 50 percent now, the Finance Ministry said in a report on Thursday. "The tax increase is aimed at encouraging consumers to protect the environment and saving fuel," the Finance Ministry's report said. The new tax regime is expected to be approved by the National Assembly, the country's legislative body, in November this year. In addition to the consumption taxes, car buyers are also subject to a registration fee of up to 15 percent and 83 percent import tariffs for imported vehicles, making car prices in the Southeast Asian country one of the world's most expensive.

Despite the steep price tags, which see the popular Honda Civic sedan retailing at nearly $40,000, the country's automobile sales more than doubled so far this year to more than 77,000 vehicles compared to the same period last year as more moneyed consumers traded motorcycles for cars. Vietnam, with a population of more than 86 million, has only about 1.1 million cars and 21 million motorcycles but the roads are too congested to accomodate more cars. At the annual car show, officially named "A Dream Comes True", that kicked off in Hanoi on Thursday, thousands crowded around the latest models from foreign car makers that have opened factories in Vietnam including Ford, Toyota, Honda, Mercedes Benz, Fiat and Isuzu.

In the emerging economy where annual per capita incomes still remain under $1,000 per year, owning a car is still a distant dream for many. "I wish it would come true one day," said Tran Hoang Anh, a student in Hanoi as he admired a sleek Mercedes SLK sport car on display at the show.

(Reuters, 21 August 2008)

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Soaring food and fuel prices have driven annual inflation in Ho Chi Minh City, Vietnam's business centre and the country's largest city, to 27.5 percent this month, the city's statistics department said on Friday. Consumer prices this month in the city are expected to rise 2.09 percent from July when prices were only 0.54 percent above June, the Statistical Office of Ho Chi Minh City said in its monthly report. A 36 percent increase in domestic fuel prices on July 21 prompted analysts to predict Vietnam's inflation would hit 30 percent this month, the highest level in Asia.

The report said transport, posts and telecoms fees in August would rise a combined 20.9 percent from the same month last year, compared with the annual rise of 11.8 percent in July. Food prices in the city of 8 million people would soar 84 percent this month from last August, less than 89 percent in July as the summer-autumn rice crop harvesting has nearly finished in the nearby Mekong Delta. Consumer prices in Hanoi this month will rise 1.9 percent from July, faster than the monthly growth of 1.7 percent in July. The consumer prices in Ho Chi Minh City and Hanoi are early indication for Vietnam's inflation. The government's statistics office is expected to release the country's inflation data next week.

Last week Vietnam cut petrol prices by up to 5.3 percent, but its impact will not be seen in August monthly inflation data as statistics agencies stop compiling data on the 15th day of each month to calculate the consumer price index. The Finance Ministry has said it would continue to cut petrol prices if world oil prices further decline. U.S. light crude for October delivery CLc1 dipped 10 cents to $121.08 a barrel by 0222 GMT, after jumping nearly 5 percent on Thursday amid a broad-based rebound in commodities. (Reuters, 22 August 2008)

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THE Socialist Republic of Vietnam declared its independence on Sept 2, 1945. The declaration came at the tail end of a famine which began in 1944. The famine still haunts the consciousness of many who were alive then. An estimated two million Vietnamese, or 10 per cent of the population then, died during the famine. By comparison, three million Vietnamese were killed during the Second Indochina War, from 1954 to 1975.

The causes of the famine are hardly in dispute. In 1940, the Japanese army occupied Vietnam but left Vichy France in charge of its administration. By the terms of the May 1941 Franco-Japanese treaty, French Indochina had to supply grains to Japan. From 1941 to 1944, Vietnam supplied 700,000 to 1.3 million tonnes of padi and maize to Japan, roughly equivalent to 50 to 80 per cent of its grain production. And a fairly significant acreage was forced into the production of jute, hemp, cotton and castor-oil plants - also for Japan - thus reducing food production. The wartime destruction of roads and other transport infrastructure made it difficult to transport excess food from southern Vietnam to the north. What ensued was tantamount to genocide.

Many victims walked long distances to provincial capitals, and thousands marched on the capital, Hanoi. Survivors resident there then tell of long lines of ghost-like figures trooping into the city. Hanoi families often found corpses in front of their homes. Huge pits were dug in rural areas near Hanoi for mass burials. The wages paid to burial workers went down by the day, and in Hanoi people were soon burying bodies just for a bowl of gruel. The dead in rural areas were left in the open to rot because people did not have the strength to bury them.

Extreme conditions drove many people to extreme behaviour. The vomit of one became the food of another. People followed horses and oxen to eat the dung or to search for the occasional undigested pieces of food in the dung. Food in the mouth was not necessarily secure, because there were frequent fights to force food out of mouths. People stole, robbed and killed for food. One family that made cakes for sale reports how it made cakes from earth to guard against theft. Customers would pay for the earth cakes and redeem them for real ones later elsewhere. There are stories of how infants were eaten up by hungry dogs. Parents would leave their children at home to go look for food, only to find blood and bones in cribs when they returned.

Vietnam has not set aside a special day in the year to remember the victims of the 1945 famine. The narrative of Vietnam's independence and reunification often mentions only in passing this dastardly crime inflicted on the Vietnamese.

What purpose would a special day serve? Food security has again become a matter of concern. Vietnam is now the second top rice-exporter in the world. The government enforced a suspension of rice exports earlier in the year, but it has been lifted since. Then there are the higher frequency and intensity of natural disasters that strike Vietnam every year, in particular the typhoons that bring flooding, damaging crops and harvests.

Still, in a global economy, Vietnam's obligations to export rice must be observed but remembering the famine will encourage people to plan for a rainy day. Steady growth over the past two decades has brought about levels of consumption that are unreal and even unsustainable. Vietnam now has only US $20.7 billion (S $29.4 billion) in reserves, roughly equivalent to the government's annual budget. One day, the good life will come to an end and the Vietnamese will wonder where all the money has gone.

The Vietnamese government should think about how the entire country, not least the government itself, can put aside more in reserves - not just in money but also in kind - in times of abundance. It should think too of a more comprehensive scheme of security, especially food security.

The writer is a senior fellow and Coordinator of Regional Strategic and Political Studies at the Institute of Southeast Asian Studies. (By David Koh, The Straits Times, 21 August 2008)

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ALTHOUGH torrential rains and overflowing rivers have wreaked the worst flooding in decades to Vietnam in recent days, the country is in fact doing rather well economically. Vietnam is on the brink of becoming a middle-income country. It will become one when it attains a per capita income of US $1,000 in 2010. This will be a huge achievement for the formerly war-ravaged country. The per capita income of the Vietnamese population rose from US $250 in 1995 to US $835 last year, according to the World Bank. Vietnam achieved these huge gains for its population after retaining its position among the best-performing economies in the world for the past 10 years. The Vietnamese economy grew at 7.3 per cent annually from 1995-2005, and its per capita income grew 6.2 per cent a year.

Yet, there is a lingering misperception that Vietnam was among on the list of least developed countries (LDCs) in the years following the end of the Vietnam War in 1975. At that time, Vietnam had narrowly avoided appearing on the United Nations' list of LDCs, a roster on which Cambodia, Laos and Myanmar still figure. In an attempt to correct the wrong impression, the United Nations Conference on Trade and Development (UNCTAD) said in June 2003 that Vietnam was never an LDC. There are three core criteria for determining which countries can be considered 'least developed'. These are low income, economic vulnerability, and human capital weakness.

In 2003, Vietnam met the first criterion of being considered an LDC because its per capita income was under US $750. The country did not wholly satisfy the second criterion of economic sustainability. However, Vietnam managed to escape classification as an LDC because it performed well in the third criterion, which measures a score on the 'Human Assets Index', which is an indicator of nutrition, health and education.

Vietnam's large population also helped it escape the LDC label. For countries to be added to the list of LDCs, their population must not exceed 75 million. In 2003, Vietnam's population was 80.2 million, which makes Vietnam a large developing country. UNCTAD argues that large developing countries, although still prone to poverty, are better able to create development strategies than small low-income countries, which are more vulnerable to external shocks and face a greater risk of remaining poor.

For Vietnam, the LDC label would have been a severe drawback in its effort to present itself to foreign investors as a dynamic developing country, and not a basket-case economy. The dubious LDC status does bring some benefits such as substantial duty-free and quota-free access to US markets, and those of other rich countries. But the very perception of an LDC as a basket-case tends to put foreign investors off.

Vietnam is on the threshold of becoming a middle-income country in just two years from now. The reason for this extraordinary success was the realisation by the ruling Communist Party of Vietnam that it must withdraw from business and open the economy to foreign investment. As a result of that policy, the government has reduced its involvement in manufacturing from 52 per cent in 1995 to 35 per cent in 2006. But the withdrawal of the state from business is not a complete explanation of the country's remarkable success. Alongside the adoption of market reforms, the government encouraged participation of the domestic private sector, and began welcoming foreign investments as early as 1986. Vietnam is earning rich dividends from those early reforms. Even before the country joined the World Trade Organisation (WTO), exports were the principal driver of its economic growth. When the country did eventually join the WTO in January 2007, it did so on the basis of solid, all-round economic performance.

So, if the Vietnamese economy is showing some signs of slowing down this year, it does not indicate that the growth saga is ending. Vietnam's gross domestic product growth for the first half of this year was about 6.7 per cent, according to Vietnamese government figures. Should Vietnam maintain the momentum, it can achieve its target of 7 per cent economic growth in 2008. This may be possible because of its efforts to curtail inflation and the trade deficit. Vietnam grew at 8.5 per cent last year, marking the third year of above 8 per cent growth. However, the Economist Intelligence Unit has revised downwards its forecast for real economic growth to 6.2 per cent in 2008 and 6 per cent in 2009, the slowest pace of growth in a decade. This is because growth in consumption is expected to be slow this year as bank credit is tightened and incomes are battered by inflation. However, Vietnamese industrial production has expanded rapidly, rising by 16.5 per cent in the first half of this year.

In any case, major foreign investors seem to agree that in spite of short-term economic worries in Vietnam, the country's longer-term prospects are still attractive. For instance, the Japan External Trade Organisation said recently that Vietnam was likely to be the best production site in Asia over the next five to 10 years. Nine out of 10 Japanese businesses in Vietnam say they would expand their operations in the country in the next one to two years. Little wonder that the country received foreign investments worth US $31.6 billion in the first half of this year, 3.7 times the amount committed during the same period of 2007. However, actual disbursements are often slow, especially for large infrastructure projects.

The World Bank says that to do better, the Vietnamese government must, first, completely reform the banking sector. Secondly, it must establish regulations to govern infrastructure development and fill shortfalls in the supply of power, water and transportation. A third priority would be to create a social security system for healthcare, pensions, and unemployment benefits, and improve the quality of education. Fourthly, Vietnam must provide better protection of the environment. Fifthly, the public administration must become transparent, efficient, and accountable. And finally, Vietnam must enforce the Anti-Corruption Law. The Vietnamese government is not expected to fulfill all these difficult tasks before 2010. But, Vietnam must begin to act on all the tasks in order to show that it is implementing meaningful, and not cosmetic, reforms.

All said, Vietnamese growth has been extraordinary. In the early years of reforms, the country reconstructed entirely on its own effort and without much multilateral development assistance. Even though more bombs were dropped on Vietnam during the 1960s and 1970s than in Europe during World War II, Vietnam was not the beneficiary of any funding package such as the Marshall Plan, under which the US poured billions of dollars to help the Europeans. War-ravaged Vietnam has scripted an entirely Asian way to growth. With Asian social, corporate, and family values intact, it has shown that its most important resource is its people, who are hungry for a better life and are willing to work hard to get it. (By Harish Mehta, The Business Times Singapore, 19 August 2008)

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UNTIL recently, Vietnam was an old-fashioned cash economy. Whether it was individuals buying big-ticket items such as houses and cars, or companies servicing their payrolls and accounts, almost every transaction was in cold hard cash. Usually this was the Vietnamese dong or US dollar, but stories abound of big purchases using gold. Even today, many companies continue to rely on cash, as fewer than 10 per cent of Vietnam's 85 million people have bank accounts. Economic reform has brought about dramatic change in the financial services sector. In particular, sophisticated financial instruments have been introduced.

Vietnam's accession to the World Trade Organization (WTO) in January 2007 was a catalyst for wide-ranging changes to all aspects of doing business. The legal and tax systems are being reformed, and the role of the private sector is being strengthened. The result has been a rapid flow of foreign investment, and the banking and finance industry has stepped up to meet the challenge. Where once the position of the state-owned banks was unassailable, new private players have significantly increased the range of services available.

Foreign banks now can set up 100 per cent foreign-owned subsidiaries, and some have formed strategic alliances with local banks to rapidly gain greater access to the market. For example, HSBC this year became one of the first foreign banks to receive in-principle approval from the State Bank of Vietnam - the central bank - to set up a locally incorporated subsidiary. HSBC also owns a 15 per cent stake in Techcombank. The economy can be best described as in transition from cash-based to non cash-based. Challenges remain in terms of paying salaries through bank accounts, ATM services and the use of debit cards, as these types of transactions started gaining popularity only a few years ago.

The Vietnamese banking industry remains heavily regulated by the central bank. Also, the government tightly controls foreign exchange transactions by individuals and companies, and the Vietnamese dong is not freely convertible. As a result, cash remains the principal form of payment for wages and purchases, with the US dollar an alternative.

However, opportunities more than make up for the challenges of doing business in Vietnam, which is one of the most under-banked countries in Asia, with a huge market waiting to be served. New services designed to meet the needs of business clients have emerged, and market conditions have prompted international banks to develop innovative solutions for corporate customers. One example is HSBC's establishment of electronic links with the major state-owned local banks, and using their branch networks to collect and distribute cash.

With an increasingly active capital market, it is even possible for companies to consider an initial public offer. Vietnam now has two exchanges. On the Ho Chi Minh Stock Exchange, which has been in operation since 2000, the number of listed companies has quadrupled in the past three years. On the Hanoi Securities Trading Center, smaller companies with capital of 10 billion dong (S $860,000) or more can be listed.

Foreign companies seeking to expand into Vietnam can be confident that the financial tools they rely on elsewhere are now available. It is important to realise that many of these advanced products and services were not in place just five years ago. Everything in Vietnam is changing - and, more significantly, changing fast. (By Tan Siew Meng, The Business Times Singapore, 19 August 2008)

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Rising Mekong floods upstream may cause landslides and deep inundation in southern Vietnam but the seasonal floodwater would also bring farmers good crops of rice and fish, the government and officials said on Tuesday. The government said rescue forces must be ready to move people from dangerous areas in southern Vietnam, where the Mekong river reaches the South China Sea after traveling more than 4,000 km (2,500 miles) from Tibet through Laos and Cambodia. Four people have been killed in flooding and landslides in Laos, where the Mekong river has hit its highest level in at least 100 years after several months of unusually heavy rain.

"Floods in the Cuu Long River Delta happen every year, so people are used to taking preventive measures for crops and life," Le Van Banh, director of the Mekong Delta-based Rice Institute, told Reuters by telephone from Can Tho city. "In the past floods caused problem to transportation and it was hard for children to come to school, but in recent years Vietnam has built protective dykes and residential areas above the flood-peaking level," he said.

About 20 percent of Vietnam's 86.5 million people live in the Cuu Long River Delta, the Vietnamese name for the Mekong river, which produces more than half of the country's paddy output but supplies more than 90 percent of its commercial rice.

Rice growers say they will get extra income from fishing when flooding is high and after they end the summer rice harvest. Flood waters also clean up alum, pests and rats from fields while bringing more fertile soil. "Since the floods are to wash away alum, we expect the yield of the next winter-spring rice crop to be good, at least on par with this year," Banh said. The winter-spring crop, the Delta's top yielding, produced 10 million tonnes of paddy in April with a yield of 6.2 tonnes per hectare, prompting the government to raise Vietnam's annual rice exports by 13 percent from earlier targets.

Seasonal floods appeared slowly in the Delta in July, a month earlier than usual. But this week flood waters are rising faster from heavy rains upstream two weeks ago, including the downpours that caused flash floods in northern Vietnam. "Floods are forecast to rise above the average level in many years," said meteorologist Vo Thanh, head of the weather station in An Giang, one of the Mekong Delta's main rice growing provinces. Waters are expected to rise to 3.5 meters (12 feet) above sea level at Tan Chau gauging station on Friday, or 0.1 meter below the Alarm Level Two, which indicates inundation and danger of river bank and dyke erosion but towns are still protected.

In 2000, the Delta experienced the worst floods in four decades as waters rose to more than 5 meters, killing nearly 500 people, more than 300 of them children. Since then the government has launched a campaign to protect life and property, having built 82,000 new homes, relocated 110,000 families or 80 percent of those living in dangerous areas, and opened swimming class for children and teachers. However, about 30,000 families living near rivers are still facing risk of landslides, according to provincial figures. (Reuters, 19 August 2008)

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