Saturday, August 30, 2008

Vietnam's crowded hospitals a haven for pickpockets



Relatives of patients waiting to pay bills at a hospital in Ho Chi Minh City.
Rampant thieving at Ho Chi Minh City hospitals has added to the worries of patients and their families.

Last week, the relative of a patient at Gia Dinh People’s Hospital in Ho Chi Minh City was robbed while he took a shower.

He lost all his money, his cell phone and his trousers.

Many other patients and relatives of patients have reported similar crimes, as thieves and pickpockets apparently target hospital wards, public bathrooms and cashier departments.

HCMC’s hospitals are often crowded with relatives, who help care for the patients and pay hospital fees.

On Monday, a man who was attending his relative at Cho Ray Hospital on Monday had VND20 million (US$1200) stolen as he took a nap at the lobby.

A patient from the southern province of Ba Ria-Vung Tau had VND13.5 million ($810) stolen while at Cho Ray Hospital.

Last week, the relative of a patient at Thu Duc General Hospital also reported a thief had cut his cell phone out of his pocket while he was sleeping.

Guards at the HCMC Children Hospital No. 1 recently apprehended a mother-daughter team caught stealing a cell phone from a patient’s relative.

Daring thieves have even stolen hospital property.

Last month, thieves broke into the administrative office of Cho Ray Hospital and stole money, gold, aphoto camera and a MP3 player, with a total value estimated at more than VND100 million ($6,000).

The hospital said they had previously lost a digital camera from an operating room.

“Thieves often follow people to bathrooms to steal their pants, where people usually keep their wallets and other valuable items,” head of security at Gia Dinh People’s Hospital, Hoang Van Quy, said.

Quy said the guards nabbed a thief last week using this ploy.

The police of Ward 7 in Binh Thanh District, who handled the case, said the girl confessed to stealing another pair of trousers a day earlier.

He said the thieves used other tricks, including masquerading as relatives of patients or hawkers.

“The thieves often travel in groups and visit many hospitals to avoid being detected,” an official from HCMC Cancer and Tumor Hospital said.

Director of Tu Du Obstetric Hospital, Pham Viet Thanh, said thieves had even impersonated hospital workers.

“There have been cases when thieves have followed a patient’s relative into a bathroom and threatened and robbed them,” said Nguyen Van Xuyen, Director of Saigon General Hospital.

Director of the HCMC Children Hospital No. 1, Tang Chi Thuong, said many thefts occurred in the early hours of morning, when the patient’s relatives were sleeping after hours of tending to the patients.

An official from HCMC Hospital of Medicine and Pharmacy, Vu Tri Thanh, said thefts also took place at around 9 p.m., when the patients usually went to sleep, sometimes forgetting to lock the door.

Hospitals react

“We have requested police cooperation to help fight the increasing number of thefts,” said Vo Duy Thuc, an official from HCMC Cancer and Tumor Hospital.

Thuc said plain-clothes policemen now patrolled the hospital on the lookout for nefarious activities.

Their presence had helped reduce the number of thefts in recent months.

The HCMC Hospital of Medicine and Pharmacy said it had installed security cameras at the crowded sections in the hospitals.

“The pictures we record can also be used by police as evidence,” an official from the hospital said.

“We have hired professional security companies to work with hospital security staff to prevent thefts,” said Pham Viet Thanh, Director of Tu Du Obstetric Hospital.

Saigon General Hospital has also installed a bathroom in each patient’s room to reduce the risk of thefts in public bathrooms.

Reported by Thanh Tung – Nguyen Bao

Wednesday, August 27, 2008

Introduction to the Vietnamese Passenger Car Market

DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/8967c3/introduction_to_th) has announced the addition of the "Introduction to the Vietnamese Passenger Car Market" report to their offering.

With a population of over 80 million Vietnam is an attractive market in the ASEAN region. Although GDP-growth rates are impressive (7.6% between 2000 and 2007), with a GDP per capita of 833 USD and an average annual income of 536 USD, Vietnam is still a poor country. It is only a small fraction of the Vietnamese population who can think of buying a car at all.

Vietnams automotive industry is one of the youngest in the region. Local assembling of cars started at the end of the last century and the automotive market has been open for imports of new cars on a larger scale only since 2003. Used cars to a certain age maximum are allowed for import only since 2006. Hence, Vietnams car penetration is one of the lowest in the world, behind all other ASEAN countries as well as India and China. Because of this recent opening, the car park in Vietnam is very young.

The car market is characterized through very high prices which developed in a phase when the Vietnamese government wanted to develop the local automotive industry through protection measures like an import licensing scheme and high customs duties on CBUs. In addition, various taxes and fees applicable when buying new cars, like the special consumption tax of 50%, increase cost substantially.

Notwithstanding the low average income and the very high car prices, the passenger car market is booming since 2007, when new registrations doubled. Both locally assembled and imported cars are in high demand. For certain locally assembled models there are waiting lists for about 10 month. We expect further growth of about 35% annually until 2010.

The Vietnamese governments latest plans regarding import licenses, tariffs, taxes and registration fees are a major factor of uncertainty. While WTO and AFTA memberships will eventually open up the markets and lower tariffs and taxes and the Vietnamese government initially seemed to fulfill demands earlier as expected today all moves are aiming at closing up the market again. With more liberal regulations, the car market in Vietnam might grow much faster than our estimate of 17%.

The distribution structure for new cars is currently shifting to a more organized form OEMs with an assembling joint venture in Vietnam will organize distribution through these joint ventures. This was made possible after these foreign invested joint ventures were granted import licenses for new cars. Other OEMs without an investment in a manufacturing presence also nominate official distributors. Until today, the market for models not assembled in Vietnam was dominated by grey importers and dealers. They will have a hard standing in the future and are expected to focus on special models the official distributors are not selling in Vietnam as well as on used cars. Financing of cars is just developing, with loans being the preferred method of financing. In a market with very high prices, car financing has a high potential.

Vietnam has no own passenger car brand. There are several OEMs active in Vietnam, mostly through manufacturing joint ventures with state-owned companies. Although the market is growing strongly, it is still too small for each manufacturing operation to reach efficiency. This is one reason why prices are still very high in Vietnam. Vietnam is not used as a manufacturing hub in ASEAN or Asia in general. Other countries like Malaysia or Thailand are in a better position in this respect. Operations in Vietnam were set-up to enter the local market, since import of new cars was not allowed for several years. The Vietnamese government wants to develop the automotive industry but local assembling operations at least with foreign investment have failed to generate a high localization rate. One reason is the limited supplier structure in Vietnam.

In line with the size of the car park, the aftermarket is still small. However, it is growing by over 20% p.a. over the next years to 2010. Growth of the aftermarket is driven by the growth in car sales and the aging of the still very young car park. The distribution system for spare parts is just forming. There is no dominating or even larger independent player in a market, where quality is a big issue for customers who can afford and are willing to buy a car at the current price level.

In total, the car market and the aftermarket are both attractive because of high growth rates and a large potential market of over 80 million Vietnamese. However, the market is still too small to justify large scale investments just to serve the domestic market. With further opening of the local market, which will happen in line with WTO and AFTA agreements, using Vietnam as a manufacturing base for exports will be more feasible.

The major risk in Vietnam is the governments policy with respect to the automotive industry. The Vietnamese government is torn between opening up the market so as to allow more competition and to eventually lower prices for customers and the wish to protect the local automotive industry and to limit the expansion of the car park which is leading to traffic jams due to a lack in infrastructure. Due to this lack in overall strategy, there are rather erratic jumps in tariffs and other taxes and fees levied on the import or purchase of CBUs, CDKs and parts. Hence, Long-term planning is difficult and one needs to think in scenarios.

To prepare this market report, we used primary and secondary research methods expert interviews and consumer surveys in particular for the market of automotive parts, which is not covered yet by any substantial statistical data and standard analysis of secondary information available on the topic. Based on our experience and developed competencies we have built proprietary market models to forecast future market development. The report was compiled in the period from March 2008 to July 2008 and hence includes statistical data until June 2008, if available.

Key Topics Covered:

TABLE OF CONTENTS

LIST OF FIGURES

LIST OF TABLES

SUMMARY

1. COUNTRY BASICS

1.1. Economic Development

1.2. Regional Economic Development

1.3. Vietnam, ASEAN and AFTA

2. VIETNAMESE PASSENGER CAR MARKET

2.1. Vietnamese Car Park

2.1.1. Structure of Car Park by Age

2.1.2. Structure of Car Park by Brands and Models

2.1.3. Car Park in Regional Markets

2.2. Passenger Car Sales and Imports

2.2.1. Size of Market

2.2.2. Market Characteristics New Cars Market

2.2.3. Sales Drivers for New Cars

2.2.3.1. Economic Growth and Income Levels

2.2.3.2. Used Car Imports

2.2.3.3. Changing regulatory environment

2.2.3.4. Car Financing

2.2.3.5. Dealership Networks / Distribution Systems

2.2.3.6. Consumer preferences

3. VIETNAMESE COMPONENTS AND SPARE PARTS MARKET

3.1. The Vietnamese Automotive Industry

3.2. Car Production and Components Market

3.2.1. Production

3.2.2. Components Market and Vietnamese Supplier

3.3. Vietnamese Aftermarket

3.3.1. Market Segments Aftermarket (OE, IAM, Fakes)

3.3.2. Market Size Aftermarket

3.3.3. Distribution System for Spare Part

3.3.3.1. Parts Importers and Distributors

3.3.3.2. Spare Part Shops

3.3.3.3. Service Stations

3.3.3.4. Other Supply Channels

4. OPPORTUNITIES AND RISKS

5. APPENDICES

5.1. Vietnamese Provinces

5.2. Districts and Provinces

5.3. Major Vietnamese Cities

5.4. Regulations and Fees for Car Imports

5.5. Sales of Foreign Brands in Vietnam, 2005-2007

6. ABBREVIATIONS

For more information visit http://www.researchandmarkets.com/research/8967c3/introduction_to_th.

Contacts

Research and Markets
Laura Wood
Senior Manager
Fax from USA: 646-607-1907
Fax from rest of the world: +353-1-481-1716
press@researchandmarkets.com

Saturday, August 23, 2008

Vietnam's economic forecast

Arpitha Bykere | Aug 22, 2008

In a recent analysis, Nouriel Roubini argued that the probability of a global recession has increased. Macro developments in the last few weeks suggest that now all of the G-7 economies are already in a recession or close to tipping into one. Other advanced economies like Australia and New Zealand and many emerging markets are also on the tip of a recessionary hard landing.

Trade and financial linkages with the G-7 countries mean that Asia is unlikely to remain unscathed. Asian economies dependent on exports to the US and Europe and having large current account surpluses (China, Taiwan, Hong Kong, Singapore and others) will suffer from the G-7 recession. Those with current account deficits (India, Vietnam) might suffer from the global credit crunch and a sudden stop of capital, which also exacerbates home grown liquidity squeezes (South Korea). ASEAN economies are witnessing record inflation led by food and commodity prices and fuel price hike by some governments (to contain subsidy bill). But external shocks in many of these economies have been exacerbated by domestic factors like strong credit growth, loose monetary policy and undervalued exchange rate fueling domestic demand and asset bubbles, along with fiscal spending boosting demand and subsidies veiling the true costs of consumption. But in spite of inflation risk, central banks delayed or even prevented monetary tightening and currency appreciation in order to support growth as they feared exports would take a hit from U.S. slowdown. Instead they relied on administrative measures like price controls, export restrictions, lower import tariffs (have also recently shown likeness for fiscally stimulating the stock market and domestic demand). However, a stronger than expected U.S. economy and continued growth in Europe and emerging markets (including China), Middle-East till H1 2008 supported Asian exports though export growth did soften from late 2007. So rather than the much anticipated export shock it was the food and oil price shock that threatened (and continues to threaten) Asia’s macro stability. Delayed policy responses to cope with inflation and its impact on growth has raised concerns among foreign investors leading to stock market decline and capital outflows in many countries, and putting a downward pressure on the currencies. This has led many central banks to intervene in currency markets to defend the currency by selling forex reserves especially as higher currency would help contain imported inflation. However, by mid-2008, even export growth has taken a hit while the headline inflation has made its way through second-round price effects via higher wages and transportation costs.

Intra-Asia trade seems unable to offset slowing exports to the G-7 economies since most of it is actually for final exports to the G-7, and also as domestic demand in Asian economies also slows demand for consumer and industrial imports and most importantly the slowdown extends from the U.S. to EU, Japan and Ems like China, Latam. So while a global poses risks to growth, Asian central banks largely behind the curve will continue to face inflation spiral. Loose monetary policy has resulted in negative real interest rates in India, Indonesia, Vietnam, Malaysia, Thailand, Singapore and Philippines. Effect of food and fuel subsidy bill on fiscal balance would also reduce the room for expansionary fiscal policy to prop up demand. Moreover, the recent easing of oil and commodity prices and possibility of their further downward trend amid a global slowdown (especially U.S. and China) might entice Asia to believe that inflationary pressure may be abating. Impact of a global slowdown and commodity price correction on exports may in fact see Asian countries returning to the export-led growth strategy to follow a loose monetary policy and undervalued currency. However, this will only worsen the probability of a stagflation-like environment. In spite of large forex reserves, the impact of these growing macro risks will worsen foreign investor sentiment, posing risks to asset markets, currency depreciation and financing of rising external deficits/slowing surpluses.

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After the stellar 9%-plus growth during 2006-07, India’s 2008 growth forecast has been lowered to 7-8%. In spite of being labeled as a domestic-demand driven economy resilient to global slowdown, the recent investment boom and above-potential growth were rather buoyed by benign global liquidity conditions. The Oil price shock has exposed India’s vulnerability with the trade deficit, expected to exceed 10% of GDP while global financial turmoil and weakening growth prospects have led to capital outflows and downward pressure on the currency. Corporate earnings and capex plans are also at risk amid rising production costs and lending rates, accentuated by global credit crunch and stock market volatility. The 16-year high inflation is partly led by food, commodities and fuel price hike but exacerbated by strong domestic demand, pre-election fiscal spending and credit growth. The Subsidy burden may raise the fiscal deficit to over 10% of GDP. Further, interest rate hikes will severely impact consumer spending and private investment so that only an easing of global commodity prices will be a blessing.

Indonesia’s 6%-plus growth in recent quarters has been buoyed by oil and commodity exports but also domestic private demand and government’s pre-election spending. Commodity prices have also supported energy stocks notwithstanding the stock market decline of over 18% ytd. Nevertheless, capital outflows and downward pressure on the currency reflect the increase in investor’s risk aversion. Rising fiscal deficit, impact of commodity price correction on exports as well as close to 12% inflation pose risk to asset markets and GDP growth. Shrinking current account and balance of payment surplus amid slowing capital inflows are also a concern. The central bank has maintained a tightening bias (taking the interest rate to 9% in August) in order to contain second-round effects of the fuel price increase during May and also to support the currency. But the central bank’s inflation bias unlike its several neighbors is because global commodity demand, especially by China has supported oil and commodity exports so far. The case for domestic demand holding up amid export (both oil and non-oil) slowdown may be undermined by the impact of continued interest rate hike on consumer spending even as fiscal subsidy burden constrains government’s infrastructure and development spending.

Concerns over Singapore’s GDP growth contraction of 6% in Q2 2008 from Q1 has shifted focus from inflation to growth. Exports and industrial production have continued to contract led by slowing electronic exports to US and EU. Subprime exposure and global liquidity crunch continue to impact banks and financial services while higher production costs and tighter credit have caused some correction in the real estate sector. The 7%-plus inflation running at a 26-year high is partly led by high food and oil import dependence and but inflation risk has nonetheless persisted in the recent quarters due to an overheating economy, housing bubble and tight labor market. To aid export-led growth, the central bank may give up or keep on hold its past exchange rate tightening bias especially as global and domestic slowdown are expected to commodity prices as well as domestic input and product markets ahead while further exchange rate appreciation may not be effective in controlling price pressures emanating from the domestic economy. On a brighter note, the govt has enough fiscal room to pump up domestic demand as well as compensate people for higher cost of living. Nonetheless, the impact of slowdown in the previously booming sectors (finance, housing, and manufacturing) may weigh down on domestic demand.

Like Indonesia, Malaysia’s 6%-plus growth has so far been led by strong energy exports as well as domestic demand. But slowing electronic exports and recent correction in commodity prices point towards the risk of declining current account surplus and growth slowdown in the coming quarters. This is especially true as inflation and recent fuel and electricity price hike will impact consumer spending. Investment is also weakening but only partly due to slowdown in manufacturing activity and more so because of ongoing political turmoil. Recent political events have taken a toll on the stock market which is already battered by rising inflation and lower corporate earnings, apart from undermining the use of fiscal stimulus as growth slows. Amid concerns of export slowdown, the central bank has adamantly kept the interest rate on hold at 3.5% and is preventing the use of currency appreciation to control inflation which reached more than a two decade high of 7.7% in July. However, more than the impact of export slowdown it is widely expected that negative real interest rates and second-round price effects via wage inflation, higher production and transportation costs will play a greater role in pulling down growth. This might eventually lead to monetary tightening to prevent a stagflation environment.

Philippines’ growth started weakening in early-2008 led by significant slowdown in exports while consumer demand and fiscal spending have continued to be the bright-spots, boosting Q1 2008 growth by 5.2%. Spike in food (especially rice), oil and commodity prices and strong domestic demand pushed inflation to a 16-year high of 12.2% in July. This has been exacerbated by a weakening currency forcing central bank intervention in the currency markets and a monetary tightening bias. However, as the U.S. economy worsens, a stronger currency might dent exports and also the purchasing power of remittances. But if the central bank follows this to cut interest rates or stay on hold ahead, it will only exacerbate inflationary pressure. The Philippines however has a better fiscal position compared to some of its neighbors to stimulate growth.

Like Malaysia, Thailand is weathering slowing exports to the U.S., inflationary pressure from to food (rice shortages) and oil prices and extreme political risk. Domestic demand is being boosted by govt’s fiscal stimulus largely backed by political considerations. In spite of a 6% growth in Q1 2008, continued interest rate hike to contain the decade high inflation of 9.2% in July may dent private demand and reduce growth to below 5% in 2008. On the other hand, an 18% fall in the stock market since early 2008 signals that political uncertainty has taken a toll on business confidence.

Vietnam’s story has been volatile – it has gone from being the ‘next China’ to the ‘next Thailand’. Apart from the monetary policy of dollar-pegged exchange rate and currency intervention of capital inflows, food shortages and oil price hike have also exacerbated the 27% inflation rate. Overheating concerns in early 2008 were reflected in the import-led trade and current account deficits, credit growth, high fiscal spending, equity and real estate market bubbles and risk of a wage-price spiral. Macro risks emerging from the above-potential growth resulted in S&P and Fitch ratings downgrades. Delayed and inadequate responses to fight inflation heightened investor risk aversion causing the exchange rate to decline by almost 30% in the forwards and black market, leading to expectations of a speculative attack on the currency and taking the stock market down by over 50% ytd. Like India, the central bank worried about the second-round price effects has undertaken delayed yet aggressive monetary tightening and devalued the currency by 2% along with measures to contain asset bubbles and to monitor bank lending. These measures along with govt’s price control, trade restrictions, lower infrastructure spending have helped overeating sources to slow down off late. Growth has also weakened from a high of 8.5% in 2007 to 5.5% by Q2 2008 and is only expected to slow further as U.S. slowdown and oil price correction impact exports and manufacturing sector even as higher lending rates and erosion of real wages affect private demand. Yet, there are calls for further monetary tightening, exchange rate flexibility and administrative measures to control possible risks from the very high negative real interest rates.

Friday, August 22, 2008

Vietnam Remains Attractive For FDI, Says PwC

HANOI, Aug 21(Bernama) -- PricewaterhouseCoopers (PwC) has made public its annual report on world investment, saying Vietnam remains attractive for foreign investors.

According to a report by Vietnam News Agency (VNA), the second PwC Emerging Market 20 Index showed that Vietnam is now ranked 5th most attractive emerging market destination for investments in manufacturing, compared to its number one position in 2007.

The change in rank reflects mostly changes in the selection of the countries PwC considered for the update, PwC's report said.

Based on macroeconomic data, a number of countries studied last year, for example the Czech Republic, Hungary and Saudi Arabia no longer meet the criteria for inclusion in the Model.

On the other hand, three of the four countries preceding Vietnam, namely Egypt, Bulgaria and Serbia did not qualify for inclusion to the index calculations last year, it added.

Amongst the Asian countries in the PwC EM20 Index, India tops the Manufacturing Index, followed by Vietnam, Thailand, Malaysia, China, the Phillipines and Indonesia.

Countries like Vietnam and Cambodia are still relatively small economies, their low-cost bases can some times offer higher margins to manufacturers.

The report said the BRIC countries including Brazil, Russia, India and China continue to offer good opportunities for investment.

The PwC is the world's largest business advisory group, operating in 150 countries and territories. The PwC established offices in Ha Noi and Ho Chi Minh City in 1994.

Wednesday, August 20, 2008

In Vietnam, even ghosts feel inflation's pinch

Tuesday, August 19, 2008

HANOI: Even the ghosts are suffering from inflation in Vietnam this year.

August is the month when Buddhists provide the hungry ghosts of the dead with food and wine and cigarettes and paper offerings that represent the good things in life - cars, houses, motorbikes, stereo sets, fancy suits of clothes.

But like everything else in Vietnam, these brightly colored offerings have risen steeply in price and shopkeepers say people are buying fewer gifts to burn for the dead than ever before.

With inflation rising to 27 percent last month - the highest in Asia - and food prices rising to 74 percent above those a year earlier, Vietnam is suffering its first serious downturn since it moved from a command economy to an open market nearly two decades ago.

Last month, the government raised the price of gasoline by 31 percent to an all-time high of 19,000 dong, or $1.19, a liter, or $4.50 a gallon. Diesel and kerosene prices rose even more. The country's fledgling stock market, which had been booming a year ago, has fallen in volume by 95 percent and is at a virtual standstill.

Squeezed on all sides, people are cutting back on food, limiting travel, looking for second jobs, delaying major purchases and waiting for the cost of a wedding to go down before getting married.

Some village women who traveled to Hanoi to sell special homemade candies for the hungry ghost festival say they have not earned enough this year to return home.

Given this slowdown, Asia's youngest tiger, which had been growing by about 8 percent a year for the past decade, is scaling back its plans for economic development.

Last month, the Asian Development Bank forecast that growth would slow to 6.5 percent this year. Some economists say even that figure is probably too high.

The mood in Vietnam, after years of upward mobility, is tense, said Kim Ninh, country representative of The Asia Foundation.

"I think people are pessimistic," she said. "You sense a tougher environment, a more restricted environment, a more pessimistic environment. It's a moment of turmoil, I think."

People are losing confidence in the ability of the government to manage the economy, several people said. Rumors of price rises have caused panic buying of fuel and rice.

"The government seems confused how to deal with the difficulties and they have been making some mistakes in running the economy," said a young lawyer, who spoke on condition of anonymity when criticizing the government.

Hundreds of strikes at the factories that have been an engine of Vietnamese growth are one of the sharpest signs of discontent.

Some of the factory workers who are leading Vietnam's emergence from poverty are returning to the countryside, according to the local press, unable to sustain an urban life on a factory wage.

"Some people who have been moving from rural areas to seek jobs in industrial zones are deciding that it is not worth it, and people are moving home," said Ben Wilkinson, associate director of the Vietnam Program of the John F. Kennedy School of Government at Harvard.

After a steep reduction in the poverty rate from 58 percent of the population in 1993 to around 15 percent last year, some people - those who have bought their first motorbike or mobile telephone - are slipping back again below the poverty line.

Prime Minister Nguyen Tan Dung told the National Assembly in May that the number of households going hungry had doubled in one year.

Everywhere they turn these days, people in Vietnam see higher prices.

A shoeshine has gone from 19 cents to 25 cents; a good haircut from $1.25 to $1.87; a tiny cup of tea on the street from 3 cents to 6 cents; a one-time-use rain coat from 12 cents to 37 cents, a massage from $4.37 to $6.25. It now costs 12 cents to park your motorbike on the sidewalk, and if you get a flat tire, it costs 12 cents to get it pumped, double the prices of a few months ago.

The costs of housing and construction materials have risen by 24 percent, driving up the price of real estate and rents. High fuel prices have led some fishermen to keep their boats onshore, and the government has stepped in to subsidize them.

As the local currency, the dong, drops in value, people say they are moving their money into dollar-based bank accounts.

Nguyen Minh Phong, an analyst of inflation with the Institute of Socioeconomic Development Research who dabbles in real estate, said his personal woe was that he had 13 brothers and sisters who missed the real estate bubble and now come to him for loans.

In part, economists say, Vietnam is suffering from the worldwide economic downturn and from high inflation that has spread through Southeast Asia.

But they say the problems are also self-inflicted, the result of an overheated economy as Vietnam raced forward with inadequate safeguards.

Too much capital, particularly from foreign investment, has collided with bottlenecks in infrastructure and capacity.

The education system is producing too few skilled and semiskilled workers for Vietnam to move up quickly into more complex manufacturing industries.

In the longer term, most economists agree, Vietnam will continue the transformation it began in the early 1990s with a new policy of economic restructuring called "doi moi" that was decreed in 1986.

Private enterprise was sanctioned and then encouraged, agriculture was freed from government controls, hyperinflation was tamed and Vietnam became, like China, a largely capitalist nation under the control of a Communist government.

Foreign investment boomed as new regulations and tax laws were introduced, business law was formulated and capital market reforms were put in place. The changes were consolidated with accession to the World Trade Organization in 2006.

Vietnamese leaders, with their ambitious targets for growth, are in a hurry to surpass their neighbors and to become, as they put it, a modern and prosperous nation.

With a growing population of more than 80 million - three-fourths of whom are under the age of 35 - this is a nation looking into the future, with ever dimmer memories of its wartime past.

Throughout the years of strict Communist rule, when religion was banned, the ghosts of the ancestors languished, uncared-for and unappeased.

Religion returned to Vietnam along with free commerce and the festival of the hungry ghosts was revived. The two have flourished in tandem, and now both are feeling the pinch of inflation.

"It's terrible right now," said Dinh Vu Hung, 54, who sells paper offerings in the Ancient Quarter of Hanoi. "We make these beautiful things, but the prices have gone up and fewer people are buying them. It's not just us, though. It's the whole country."

Monday, August 18, 2008

Vietnam's great feats of engineering


14:08' 17/08/2008 (GMT+7)


VietNamNet Bridge - The feats of the Vietnamese army’s engineers during wartime are showcased in a little known museum in the capital city.

The Romans perfected the science of military engineering, entrusting every soldier with a sword, spear as well as a shovel. But even Hadrian’s Wall and the imperious Roman roads of Europe pale in comparison to the work of the Vietnamese Army Engineers in the Truong Son Mountains.

The Army Corps of Engineers build and maintain an infrastructure to allow the quick movement of military forces. Their museum in Hanoi begins on the first floor with the decisive battle of Dien Bien Phu. The French position was in a valley, surrounded by high ground that the Viet Minh quickly fortified. A stunning photo of General Vo Nguyen Giap at his headquarters in the mountains above the French stronghold dramatically shows the rugged terrain behind him – craggy peaks and a waterfall cutting the cliff in two.

The trail carved into the hills was used to transport the artillery pieces to the top where they were dug into the hillside to protect them from air strikes. Later, trenches tunneled closer and closer to the French forces. The coloured lights of a diorama depict the ever smaller French held area until a final tunnel, displacing 1,000 kilos of dirt led to the capture of A1 hill. Victory was theirs. The second floor boasts a photo of Long Bien Bridge after one bomb devastated the target – which was quickly repaired. A photo of Haiphong port with a female cadre hauling the ropes while repairing the docks highlights the dedication of the entire population to victory.

One error of judgement of the foreign forces was to underestimate the manpower available to the north, though perhaps we should also speak about womanpower, for they were the glue that held the supply lifelines together. A model of only one of the thousands of rocky hills of the Truong Son Strategic Supply Route (aka the Ho Chi Minh Trail) shows trucks precariously perched on roads hewn out of the hills.

An amazing picture of a truck driving over a gorge on a swaying, corduroy log suspension bridge reminds us of the adage – Army Engineers go where angels fear to tread; with a potential load of 3,500kg and the truck weight we know the bridge was incredibly strong. Army engineers are credited for building, protecting and maintaining this vital lifeline for the troops, and thereby winning the war.

The trail was hazardous duty. It was one of the most bombed pieces of real estate in the world. Needless to say the ever creative Vietnamese used the bomb craters as fish and duck ponds to provide porters, drivers and way station staff protein for their diet. Canopies were made with net, and climbing vegetable vines supplied a camouflage covering and food. At first the trail was only for foot traffic but later in the war, with the acquisition of earth moving equipment it was expanded so it could support truck traffic.

Along with underground storage facilities along the trail, a 5,000 km oil pipeline was built, from the Chinese border to the outskirts of Saigon. By 1975 the north was equipped with tanks, troop carriers and other armoured vehicles which used the trail for the final assault on the south. The third floor displays the work of the Army Engineers today, including the work of the engineers who built the Ho Chi Minh mausoleum. One road connecting Laos to Vietnam and the new Ho Chi Minh highway were largely built by army engineers.

After the wars the engineers’ work continued with a new challenge – land mines and Unexploded Ordinance. The ground floor shows the effects of the UXO on civilian population today. Their expertise in de-mining was vital. During the American War, over 15,000,000 tonnes of bombs and mines were used in Vietnam. The contamination of 66,660 square kilometres covered 20 per cent of the country.

After concerted efforts by the Corps of Army Engineers the land area cleared by 2006 was around 12 per cent. At this rate the country will be cleared by 2070. One recent highway bridge construction unearthed 600 unexploded bombs and land mines. A single road in Quang Tri province was upgraded and 300 live bombs were found in a 1-km stretch.

The sacrifices and spirit of the Army Engineers, men and women; some only teenagers, continues today. Previously it was for the unity of the country and now for the protection of the people from leftover ordinance – an ongoing challenge.

Army Engineers Museum (Bao Tang Cong Binh) 290 Lac Long Quan Huyen Tu Liem, Hanoi

Friday, August 15, 2008

ANOTHER LARGE STEEL PLANT TO BE BUILT IN HA TINH, VIETNAM

Wednesday, August 13, 2008;
HANOI, Aug 14, 2008 (AsiaPulse via COMTEX) -- PowerRating -- Vietnamese and Indian partners will jointly build a 4.5 million-tonne steel complex at a cost of US$5 billion in the central province of Ha Tinh.
The Vietnam Steel Corporation (VnSteel), the Vietnam Cement Industry Corporation (VICEM) and the India-based Tata Steel signed a contract for the project in Hanoi on August 13.
Tata Steel will hold a 65 per cent stake, while VnSteel, 30 per cent and VICEM, 5 per cent.
Located in the Vung Ang Economic Zone, the project will build a cool-rolled steel plant in the first phase, which is scheduled for completion in 2010.
Tata Steel managing director Muthuraman said at the signing ceremony that Vietnam is an ideal destination for foreign investors and pledged to meet all requirements for corporate management, environmental protection and healthy business.
According to VnSteel General Director Dau Ngoc Hung, the agreement will facilitate his corporations move to expand operations and establish long-term ties with its strategic partner Tate Steel the world's 6th largest steel producer - to jointly explore opportunities and market potentials both in and outside Vietnam .
The project is expected to improve Vietnam's position in the global steel industry and fully tap the countrys natural resources, Hung said.
Formosa Group from Taiwan in early July began construction of an iron and steel complex also at the Vung Ang IZ.
The complex is designed to be capable of churning out 7.5 million tonnes of iron and steel a year.
(VNA)
For full details for TATLY click here.

Thursday, August 14, 2008

Vietnam increases overseas investments

Domestic businesses up int’l investments

(13-08-2008)

HA NOI — Accompanying the recent rush of FDI over the past few years has been an increasing number of overseas Vietnamese investments, the Foreign Investment Agency under the Ministry of Planning and Investment reported yesterday.

Addressing a conference to promote Vietnamese overseas investment, the agency’s deputy director Bui Quoc Trung said that as of July 22 this year domestic enterprises have invested in 317 projects a total of over US$2.5 billion, with $1 billion or 40 per cent already disbursed.

The average scale of investment was around $7.8 million per project.

Viet Nam’s overseas projects mainly covered industry and construction sectors at 42.9 per cent of projects and 69.4 per cent of total capital, services at 38.2 per cent of projects and 15.4 per cent of total capital, and the rest in agriculture.

Loaded Laos

Of 41 countries and territories receiving Vietnamese investment, Laos attracted the most, with 123 projects worth over $1.28 billion. It was followed by Cambodia and the US with 34 projects worth $153 million and $71 million respectively.

Viet Nam’s top overseas projects include Sekaman 1 and Sekaman 3 Hydroelectricity Plants in Laos worth $715 million combined. Another oil exploration and drilling project in Algeria was worth $243 million, while the Nam Mo Hydroelectricity Plant in Laos was capitalised at $142 million. The Ha Noi-Moscow Trade Centre in Russia was worth $120 million.

"Overseas investment can bring multiple benefits for the country’s economic development and give Vietnamese firms a change to expand their markets as well as enhance their competition," said MPI deputy minister Cao Viet Sinh at the conference.

Vietnamese investors have many favourable conditions to invest abroad. Decree 78 dated August 9, 2006 on overseas investment says that domestic businesses, both public and private, can automatically invest overseas if they fail to receive a response from relevant management agencies 15 days after submitting in full the required documents.

Growth in the level of overseas investment and the number of projects has confirmed the ongoing efforts of Vietnamese businesses to further penetrate the regional and international economic markets, Sinh said.

The number of overseas projects, however, had not yet matched Vietnamese business desires and abilities, he noted.

Red tape

PetroVietnam deputy general director Do Van Hau said that the company had poured more than $218 million into 20 projects overseas as of June, with 93 per cent of the investment going to exploration and development and the rest to exploitation.

However, it still took the company a few months to complete formalities, which could influence their overseas investment, Hau noted.

He petitioned the Ministry of Finance to consider negotiating with countries where PetroVietnam made investments, and then sign agreements on investment protection, tax incentives and double-tax avoidance to support the company implementing projects. He also suggested that the Government draw up a suitable policy on attracting high-skilled labourers for overseas crude oil projects.

Representatives from Viettel, the military-owned mobile service provider, said that the company has to date invested $44.8 million in four projects in Laos and Cambodia. The company plans to raise the level of investment capital for its mobile service project in Cambodia to $70 million from the current $28 million.

She suggested that the Government offer more incentives to facilitate enterprises making investments overseas. She also called for more support from management authorities, especially from trade counsellors who could provide local firms with updated information about political situation and business and investment climates in markets abroad.

In order to promote overseas investment, Trung encouraged Vietnamese enterprises to explore more investment opportunities in potential markets such as Laos, Cambodia and Russia, as well as seek new markets which were suitable to local enterprises’ capacities.

Strong legal framework and policies on overseas investment were also necessary to encourage enterprises to invest abroad. Overseas investment in key sectors needed for the country’s economic growth like crude oil, coal, electricity, tin and iron productions needed encouragement. — VNS

Wednesday, August 13, 2008

Vietnamese people spend $2bil/year on betting: MOF


15:32' 12/08/2008 (GMT+7)

VietNamNet Bridge – Vietnamese people spend some $2bil a year on football betting, lottery and gambling, cock and buffalo fighting, lottery games on TV and Internet, according to an official from the Ministry of Finance (MOF). The ministry is planning to legalise the extralegal activities, but with very cautious steps.

Illegal gambling everywhere


In a recent survey, MOF found out that illegal gambling activities are being carried out in public under the mode of game shows. The programmes are organised by radio and television, press agencies and internet service providers. The prizes for the programmes are paid in kind or cash with big value after organisers get big profit from the programmes as clients have to pay SMS fees much higher than normal.

The SMS fees for joining the games may reach VND10-15,000/SMS, while the normal level is just VND400/SMS. The financial scales of the programmes are very big. In the World Cup season, organisers can get the turnover of several hundred million VND a day from the messages.

The activities, according to the Ministry of Finance, are illegal if considering the Commercial Law and Decree 37 guiding the implementation of the law.

According to the Ministry of Public Security, illegal gambling activities began increasing in 1996. People bet tens of billion VND on every football match in World Cup season, Euro or British, German, Italian and Spanish champions’ leagues. In the period of 2001-2005 alone, the police discovered 495 cases of gambling involving 4,187 people, seizing over VND10bil, $250,000 and other assets.

Putting everything under control

To date, there are two licenced betting service providers, and both of the organisations are operating in the south.

One of the two is the BCC (business cooperation contract) between the Phu Tho Sports Club and Thien Ma Company, related to horse race betting in HCM City. Under the BCC, valid from 2003 to 2010, Thien Ma and Phu Tho Club will share 55% and 45% of profit. In 2007 alone, the turnover from the Phu Tho horse race course was VND164bil.

The second project is a joint venture between Ba Ria-Vung Tau Travel Company and UK-based Hemlock Services Corporation, which has the legal capital of nearly $5mil. The service provider specialises in dog race betting in Ba Ria-Vung Tau.

As such, the total turnover of the two licenced service providers was just VND170bil, or over $10mil, a very small figure if compared with the MOF’s turnover estimate of $2bil.

Meanwhile, another project, a joint venture with the investment capital of up to $120mil, has not become operational in HCM City, though it was licenced in 1999. Relevant agencies are considering revoking the licence as the Vietnamese partner in the joint venture, the Binh Chanh Construction Joint Stock Company, has withdrawn from the entity.

Another project, which had its licence revoked in 2007, was the joint venture between Hanoi Tourism, Sports and Services Company and French Trotting Promotion. The failed project planned to build a horse race worth $57mil in Hanoi.

The Vinh Phuc People’s Committee also asked the Prime Minister to licence G.O. Max I&D, a 100% foreign-invested horse race company, which plans to inject $570mil in a project in Vietnam.

However, the project will not be licenced until there is a legal framework for this kind of activity.

Legal framework, which one suitable?

MOF is compiling a plan to control gambling activities in Vietnam.

The compiler suggests not licencing more betting service providers in the south, as there are two operational providers already. Moreover, the investors of the two projects will have to increase their legal capital to VND100bil.

The compiler suggests licencing one service provider in the north, the one suggested by Vinh Phuc province. The service provider must have the legal capital of VND1,500bil and build other entertainment systems to serve the public’s interests.

MOF has also proposed licencing a football betting company which has the chartered capital of VND500bil, 100% owned by the state.

Nguyen Ngoc Anh, Deputy Director of the Banks and Financial Institutions Department under MOF, said that as these are not encouraged activities, they should be put under strict control.

Monday, August 11, 2008

First submersible classified by Vietnam Register


00:02' 10/08/2008 (GMT+7)


VietNamNet Bridge - The Vietnam Register (VR) has coordinated with the Russian Marine Register of Shipping (RMRS) to conduct initial inspection and classification for a submersible – the first of its kind in the country.

Submersible TINRO - 2, owned by Ho Chi Minh City-based Cat Long Hai Joint Stock Company, was built in Russia.

Measuring 7.12m long, 2.50m wide and 2.72m high, the submersible is able to dive at the maximum depth of 400m.

The successful classification of TINRO -2 marked a new development step in VR’s scientific and technological research and application.

Saturday, August 09, 2008

Sanyo to build huge Vietnam plant, hire 12,000

Vietnam build a new plant and hire up to 12,000 workers as it steps up production of optical pickups for DVD recorders and other devices.

Construction of the factory in Bac Giang Province will begin in September, with operations expected to start in April next year, a company statement said.

"We expect the total investment in the new firm to be around 95 million US dollars," said a spokeswoman for Sanyo, which already produces optical pickups in Japan, China and Indonesia.

The new firm operating the plant will have capital of 10 million dollars, Sanyo said, adding that sales are expected to reach 300 million dollars for 2012.

"With the growth of the developing markets such as China and with the widespread use of next generation DVDs, Sanyo will gear up to expand share in the ever-growing optical pickup business," it said.

The new firm will be wholly controlled by Shenzhen Sanyo Huaqiang Optical Technology Co. of China, which is 60 percent owned by Sanyo, with the remaining 40 percent held by its Chinese partner.

Sanyo has slashed thousands of jobs and sold non-core operations as part of a massive overhaul in recent years, while increasing its focus on rechargeable batteries and environment-friendly technology.

The restructuring appears to be paying off, with Sanyo reporting in May its first annual net profit in four years.

Sanyo to build huge Vietnam plant, hire 12,000

Japan's Sanyo Electric Co. said Friday its subsidiary in Vietnam will build a new plant and hire up to 12,000 workers as it steps up production of optical pickups for DVD recorders and other devices.

Construction of the factory in Bac Giang Province will begin in September, with operations expected to start in April next year, a company statement said.

"We expect the total investment in the new firm to be around 95 million US dollars," said a spokeswoman for Sanyo, which already produces optical pickups in Japan, China and Indonesia.

The new firm operating the plant will have capital of 10 million dollars, Sanyo said, adding that sales are expected to reach 300 million dollars for 2012.

"With the growth of the developing markets such as China and with the widespread use of next generation DVDs, Sanyo will gear up to expand share in the ever-growing optical pickup business," it said.

The new firm will be wholly controlled by Shenzhen Sanyo Huaqiang Optical Technology Co. of China, which is 60 percent owned by Sanyo, with the remaining 40 percent held by its Chinese partner.

Sanyo has slashed thousands of jobs and sold non-core operations as part of a massive overhaul in recent years, while increasing its focus on rechargeable batteries and environment-friendly technology.

The restructuring appears to be paying off, with Sanyo reporting in May its first annual net profit in four years.

And now, here’s the good news . . .

(08-08-2008)
Foreign visitors are keen to stay in Ha Noi’s Old Quarter. Ha Noi and HCM City have dropped by 35 places or more on the list of the world’s most expensive cities. according to a new survey by the Mercer consultancy company. — VNA/VNS Photo Thanh Ha

HA NOI — The price of everything in Viet Nam seems to have gone up recently, including petrol, food, rents , medicines and transport.

However, in the midst of all the inflation, now comes the good news.

Ha Noi and HCM City have dropped by 35 places or more on a list of the world’s most expensive cities.

This surprising news was revealed in a recent survey by the Mercer Consultancy Company, which annually surveys 143 cities around the world.

It measures the comparative cost more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.

The survey is the world’s most comprehensive cost-of-living survey and is used to help multi-national companies and governments determine compensation allowances for expatriate employees.

According to the survey, Ha Noi now ranks 91st on the list of the world’s most expensive cities, a decline of 35 places on last year - and HCM City has dropped 40 places to rank 100th.

And the reason for this much better rating, according to the survey, is that although Viet Nam has high inflation, the Vietnamese dong has remained stable against the US dollar this year.

Moscow remains the world’s most expensive city for expatriates for the third consecutive year. It scored 142.5 this year compared to 134.4 in 2007.

Tokyo is in second position (from 122.1 to 127) climbing two places since 2007. London has dropped one place to rank third (126.3 to 125).

Sydney is 15th on the list at 104.1 compared to last year’s 94.9 - and Melbourne has risen from 64th to 37th position (from 82.5 to 94.2).

In the Southeast Asian region, Bangkok has fallen from 95th place to 105th place and Jakarta from 55th to 82nd. However, Manila has become more expensive, rising to 110th place from 137th last year. Tokyo is still Asia’s most expensive city. Then there is Seoul, which is the fifth dearest city on 117.7, a small drop on last year’s 122.4.

Hong Kong has dropped from sixth to fifth (from 119.4 to 117.6), but Singapore has risen from 14th to 13th position (from 100.4 to 109.1).

And the Olympic city, Beijing, remains in 20th position, despite having risen from 95.9 to 101.9.

Yvonne Traber, a research manager at Mercer, said that current market conditions have led to a weakening of the US dollar which, coupled with the strengthening of the Euro and many other currencies, has caused significant changes in this year’s rankings.

"Although the traditionally expensive cities of Western Europe and Asia still feature in the top 20, cities in Eastern Europe, Brazil and even India are creeping up the list." she said.

"Conversely, some cities, such as Stockholm and New York, now appear less costly by comparison."

New York has dropped from 15th to 22nd position (from 100 to 106).

According to Tran Du Lich, head of the HCM City Economy Institute, Ha Noi and HCM City are no more expensive than other cities in the region.

"The price levels in both cities is not high if compared with per capita average incomes," he said.

However, he admitted that the price of high-grade hotels, buildings and golf courses in Viet Nam was higher than in many other Asian cities but this was because of demand outstripping supply.

The Mercer survey is considered the world’s most comprehensive cost of living survey. — VNS

Vietnam: Vehicle sales in July up 31% year-on-year; down on June figures

By David Isaiah
8 August, 2008
Source: Automotive World

Vehicle sales in Vietnam numbered 8,458 units in July, up 31% from the 6,474 units sold a year earlier. However, numbers were down compared to June (2008), when 9,749 vehicles were sold.

Passenger car sales increased by 60% year-on-year in July, VietnamNet Bridge reports, citing data compiled by the Vietnam Automobile Manufacturers' Association (VAMA). CV sales, meanwhile, rose by 184% during the month.

Cumulative sales for the January-July 2008 period, comprising those for 16 OEMs, totalled 77,067 units, 120% higher than the figures posted in the corresponding period of 2007. For the whole of calendar 2007, vehicle sales totalled close to 80,000 units.

Toyota led the car market last month, with sales of 2,431 units, 200 vehicles more than it sold in June. Sales were primarily driven by its Innova minivan, which accounted for 1,523 units.

For the first seven months of 2008, the OEM led the 12 OEMs backed by foreign firms, selling 14,941 units. This figure was 50% higher than the number of vehicles sold by the Japanese firm in the corresponding period of 2007.

Other OEMs that posted sales growth last month included Ford, which sold 13 units more than in June, recording sales of 459 units, and Isuzu, which accounted for 304 vehicles, up from 173 units in June.

General Motors' subsidiary GM Daewoo posted a significant drop in sales in July, with only 725 units, compared to 1,009 cars in June. This was primarily the result of a decline in sales of the Captiva SUV, which saw sales drop from 379 units to 119 cars last month.

Honda sales also fell, in this case by 44 units compared to June 2008, down to 746 units. The Honda Civic, however, was the bestselling model in the mid-sized sedan segment, beating both the Toyota Altis and Ford Focus for this position, VietnamNet Bridge notes.

As for CV sales, various manufacturers posted declines last month. Truong Hai, for instance, had sales of only 1,008 units, down from 1,679 in June. Vinaxuki, meanwhile, saw sales drop by 137 units month-on-month.

Industry experts expect sales to soften from this month, due to vehicle price increases resulting from higher raw material costs and the rising inflation in the country. Registration fees too will increase to 15% from 14 August, the government has said. This follows a 36% rise in fuel prices, which came into effect on 21 July.

The Communist government plans further import tax hikes, Reuters says. This levy currently stands at 83%, up from 70% previously. As a result, import numbers fell last month to 3,000 completely built-up (CBU) vehicles, compared with 4,500 such vehicles in June 2008. Cumulative import numbers for the first seven months of this year, however, surged 290% year-on-year to 43,000 units, the report says, citing data published by the government.

Tuesday, August 05, 2008

Vietnam to export 3.5 million tonnes of rice in nine 9 months


Vietnam expects to export 3.5 million tonnes of rice in the first nine months of the year with the August volume estimatedly hitting 400,000 tonnes.

At present, the price of Vietnamese rice ranges between US$620-630 per tonne, while that of Thai rice, from US$700-720 per tonne in the world market.

According to Vice Chairman of the Vietnam Food Association (VFA) Tran Ba Hoan, VFA has made a proposal allowing rice exporters to get loans in foreign currency instead of Vietnam dong to purchase rice from farmers to avoid the Vietnamese dong lending interest rate. With the current rates, exporters have to pay an additional US$12-15 for a tonne of rice each month.

The VFA has also suggested the government abolish rice export duties or increase the levied export rice price from US$600 per tonne to US$800 per tonne.

The Power Elite Playbook-Vietnam

The Power Elite Playbook, Creating & Controlling Chaos - Part Three

By Deanna Spingola | 23 September 2007

America in Viet Nam, Compliments of The People's Voice

America in Viet Nam, Compliments of The People's Voice

World War II presented the perfect opportunity to launch a revolution. Ho Chi Minh mobilized an army of 5,000 soldiers. On September 2, 1945, Viet Nam’s Independence Day, Ho Chi Minh borrowed the sentiments of Thomas Jefferson when he said “We hold these truths to be self-evident. That all men are created equal.” A Vietnamese band played the Star-Spangled Banner and American warplanes flew overhead. U.S. Army officers were adjacent the reviewing stand. Ho thought Viet Nam had a special friendship with the U.S. However, the support given to the Viet Minh by the local OSS hierarchy did not reflect the political goals of the Power Elite who controlled the U.S. government. [1]

France, by written agreement, allegedly recognized Viet Nam as an independent country within the Indochinese Federation and the French Union on March 6, 1946. [2] However, they insisted on setting up a puppet government under the former Emperor Bao Dai of Annam (one of the five political entities of French Indochina, consisting of the central part of present day Viet Nam), who had abdicated his throne in August 1945 for the unity and independence of the country. [3] He was not supported by the Nationalists or the majority of the people. His government was composed of rich landowners. The French also wanted to retain a “small military presence” which amounted to 15,000 troops.

On November 20, 1946, there were clashes between French and Vietnamese soldiers. A French cruiser opened fire on the Port of Haiphong killing almost 6,000 Vietnamese. On December 19, 1946, the French ordered the Viet Minh (League for the Independence of Viet Nam) to relinquish all authority and arms. The Viet Minh responded with a counter attack against the French garrison in Hanoi which began the Indochina War. [4] [5]

By early 1947, the Truman Administration had made decisions and set policy that would impact Viet Nam for the next two decades. Based on the friendliness and past association with OSS agents, Viet Minh leaders had hoped for American assistance and support. Ho Chi Minh had written numerous letters to President Truman and the State Department in 1945 and 1946 requesting America’s help in freeing Viet Nam from France. None were ever acknowledged. He also petitioned the United States following World War I. Both times, his pleas were ignored.

Major Archimedes L. A. Patti of the Office of Strategic Services (OSS) later wrote that Ho “pleaded not for military or economic aid but for understanding, for moral support, for a voice in the forum of western democracies. But the United States would not read his mail because, as I was informed, the DRV Government was not recognized by the United States and it would be ‘improper’ for the president or anyone in authority to acknowledge such correspondence.” Instead, the US helped the French—even offering them two atomic bombs. Stalin was preoccupied with Europe and was detached from the Viet Minh revolution which was influenced by ideological conflicts with Ho dating back to the twenties. [6] In 1950, Ho Chi Minh would eventually be forced to seek support from the USSR and China. [7]

On March 8, 1949, France signed an agreement with Viet Nam under Bao Dai, agreeing to recognize the independence of Viet Nam. Similar agreements were later signed with Cambodia and Laos. The United States gave diplomatic recognition to the Governments of the State of Viet Nam on January 27, 1950 [8] and later to the governments of the Kingdom of Laos, and the Kingdom of Cambodia as of February 7, 1950. [9] America, as directed by Secretary of State Dean Acheson, backed Bao Dai to avoid being an accomplice to French imperialism. The Truman Administration recognized the Bao Dai government, a smokescreen for continued French domination, in February 1950. By March 1950, America applied the “domino theory” to Indochina and used it to justify military and economic assistance to France. [10] Meanwhile France retained control of Viet Nam’s treasury, commerce and foreign and military policies.

With sufficient equipment and advisors, General Giap, a former professor of history, of the Viet Minh converted his guerrilla fighters into a conventional army with six infantry divisions. In September 1950, Truman sent a Military Assistance Advisory Group (MAAG Indochina) to oversee the usage of the $15 million (authorized July 26, 1950) worth of US military equipment given to the French in their fight against the Viet Minh. From 1950 to 1954, the U.S. government (the taxpayers) spent $3 billion on the French war and provided the French with 80 percent of all their war supplies. [11] The U.S. ended up in a proxy war – the French could fight and die and the U.S. taxpayers picked up the bill.

The United States intervention in Korea and France’s struggle were commonly viewed as fighting against “communism” and “containing China.” If France ended the war, the popular Viet Minh would be in power. In 1952 the Viet Minh offered to make peace with the French and wanted to convene a meeting in Burma. The United States strongly pressured France not to consider any peace proposals and the French delegates were recalled to Paris. [12]

In November 1953, the CIA airline, Civil Air Transport (CAT) assisted the French air force airlift 16,000 French soldiers into a fortified base that the French had established in the North called Dien Bien Phu. The United States had also built highways, ports and airfields in Indochina which they later used to facilitate their war efforts. [13]

In mid-1953, the Office of Psychological Strategy (psy-war/unconventional warfare) was dissolved and replaced by an Office of Special Operations. On January 29, 1954, there was a meeting of the President’s Special Committee on Indochina, held in the office of the Deputy Secretary of Defense, Roger M. Kyes. General Graves B. Erskine USMC, new Director of the Office of Special Operations, Department of Defense, gave his Indochina report. Allen Dulles, Director of the CIA, suggested that Col. Edward G. Lansdale (unconventional warfare officer, be added to the Military Advisory Assistance Group (MAAG) in Saigon. [14] He was in charge of the Pacification division, supposedly a civil affairs role. Later, the CIA introduced the Phoenix Program, also under civil affairs jurisdiction. [15] This was a continuation, another phase, of OSS/CIA activity in Indochina. John Foster Dulles was a former president of the Rockefeller Foundation, as was Dean Rusk.

Allen Dulles, brother of John Foster Dulles, was the Director of the CIA from 1953 to 1961. He was a senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller Empire and other mammoth trusts, corporations and cartels. He also served as a board member of the J. Henry Schroeder Bank which had offices in New York, London, Zurich and Hamburg.

“The CIA has been under CFR control almost continuously since its creation, starting with Allen Dulles, founding member of the CFR and brother of Secretary of State under President Eisenhower (CFR, Bohemian Club), John Foster Dulles. Eisenhower chose many of his cabinet members from the CFR, including his Secretary of State, John Foster Dulles, an attorney for Standard Oil. Allen Dulles had been at the Paris Peace Conference, joined the CFR in 1926, and later became its president.” “John Foster Dulles had been one of Woodrow Wilson’s young protégés at the Paris Peace Conference. A founding member of the CFR…he was an in-law of the Rockefellers, Chairman of the Board of the Rockefeller Foundation, and Board Chairman of the Carnegie Endowment for International Peace.” [16]

By April 1954, it appeared that the French were going to lose at Dien Bien Phu. John Foster Dulles, along with the Joint Chiefs of Staff, had ordered two American aircraft carriers to the Gulf of Tonkin equipped with atomic bombs. The French pointed out that those atomic weapons would also destroy their troops in a war of such close conflict. A peace conference was already scheduled. In preparation, a CIA propaganda team instigated a campaign to disseminate fabricated news items stating that the Chinese were arming the Viet Minh in order to connect them to the “world Communist movement.” The CIA believed this propaganda would strengthen their position at the Geneva talks. The CIA circulated Anti-communist articles and rumors to generate hatred of the Chinese, complete with stories of rape. [17]

Vietnamese General Giap defeated the French at the Dien Bien Phu, after a lengthy battle which started on Saturday, March 13, 1954 and ended on May 8, 1954. [18] The inevitable peace conference, the Geneva Conventions were held between May 8 and July 21, 1954 attended by France, the Viet Minh, the USSR, Communist China, the United Kingdom, the United States, and the three Associated States of Laos, Cambodia, and Viet Nam present. [19] The United States refused to sign the Final Declaration which prohibited any further military action against the Viet Minh. Laos, Cambodia, and Viet Nam received their alleged independence and Viet Nam was temporarily divided between at about the 17th parallel with the North assigned to the Viet Minh and the South assigned to the pro French puppet, Bao Dai. [20]

During the Geneva Peace talks it was decided that elections to unite the country would be held in Viet Nam by July 1956. Citizens had one year, according to the elitist’s subjective chessboard, to migrate to the other part of the country. [21]

In June 1954, while the Geneva Conference was still in session, the CIA’s Saigon Military Mission (SMM) arrived to establish a campaign of undercover military and psychological warfare against the Viet Minh. They had a hefty checkbook and unlimited American taxpayer dollars. Yes, our government commits acts of terrorism with your money! They were to carry out “political, psychological and terrorist activities against the native population in the northern regions” – where citizens were struggling to find enough to eat and where Ho Chi Minh’s growing group of revolutionaries was located. With the best-equipped stable of saboteurs, they committed “terrorist acts in Hanoi and surrounding Tonkin. SMM agents polluted petroleum supplies, sabotaged the railroad, tried to destroy the largest printing establishment in the North, bombed the post offices, wrote and distributed millions of anti-Viet Minh leaflets and printed and distributed counterfeit money.” The abundance of fake money created inflation. [22] When the monopoly media describes deadly explosive events in Baghdad, I speculatively surmise that it might be the CIA’s Baghdad Military Mission (BMM), also financed by American dollars.

After the signing of the armistice in Geneva on July 21, 1954, Eisenhower and his Director of Central Intelligence, Allen Dulles (CFR, *Warren Commission, Operation Northwoods, Operation Paperclip) decided to assign paramilitary expert Edward Lansdale who then chose CIA agent Lucien Conein to engage in unconventional warfare. The two men, together with one hundred American soldiers, created the Military Assistance Advisory Group ((MAAG) for Viet Nam. [23] A Military Assistance Advisory Group consists of American military advisors who train the regular armed forces of Third World countries. * It is ironic that Dulles was on the commission to determine who killed the man that fired him from his CIA job and then threatened to break the CIA into pieces.

In 1955, U.S. Air Force Col. Edward G. Lansdale, attached to the CIA, was given a mission: create a pro-American, Saigon-based government led by someone wholly acceptable to the United States. Cardinal Spellman, a religious leader in New York, introduced Ngo Dinh Diem to Allen Dulles, who recommended Diem for the job. Ngo Dinh Diem was an American-educated Catholic. This was a questionable choice considering Viet Nam is primarily a Buddhist country. Bao Dai appointed Diem as his prime minister. Shortly after, playboy Bao Dai who had a penchant for sports cars, women and gambling went into a permanent exile on the French Riviera, compliments of the CIA and American tax dollars. [24] He had a 600 ton air conditioned yacht and managed to amass huge sums of money which he stashed in Swiss bank accounts. Such is the life of installed, compliant puppet leaders in every country.

By May of 1955, every citizen had to decide whether to live in North or South Viet Nam. There was a resettlement feature in the Geneva Accords. Remember Viet Nam was a village-based immobile society. People lived in the same villages for hundreds of years prior to the Geneva Conventions of 1954. In addition to the CIA’s terrorist activities to motivate the unwilling, Conein created “a sense of panic and terror” for those who might wish to stay in the North. He produced publications and propaganda flyers. Leaflets were dropped threatening an American atomic bomb drop on those who stayed in the North if a civil war should erupt. [25] Citizens remembered Hiroshima and Nagasaki!

The CIA spent $100 million to carry out the relocation provision. The CIA determined to resettle sufficient Catholics in the south to create a political base for Diem. To facilitate the move, General Claire L. Chennault, a World War II legend, used his Taiwan-based Civil Air Transport (CAT) which was purchased by the CIA in 1950. They are chartered in Delaware but available for CIA use anywhere in the world. Navy boats carrying 1,000 people for 1,000 miles were also used. Later, organized exodus was cited by the Power Elite and their monopoly media as proof that the Vietnamese didn’t want to live under communism.

Lansdale and Conein convinced six hundred thousand Catholics to move to South Viet Nam, 65 percent of the North’s Catholics. This number also included four hundred thousand who were affiliated with the colonial French, including government bureaucrats, and Viet Minh sent by Hanoi as agents. Weapons and agents were also left in North Viet Nam with an abundance of CIA-supplied counterfeit currency which would instigate an economic destabilization in North Viet Nam. [26] And what about the factionalized recipients of this migration – the agrarian villages and long-time inhabitants south of the 17th parallel? This influx added to the ongoing internal strife and economic and political chaos – imagine if the United States had a deluge of unemployed immigrants – is it possible, could it be – deliberate? The Power Elite arranged this mass exodus but kept it secret. [27]

The U.S. refused to allow free elections to take place in July 1956 because, as even President Eisenhower admitted, Ho Chi Minh would have won the elections by at least eighty percent of the vote.” [28] Ho Chi Minh led the fight for liberation against the French. Ho had established himself as the “symbol of nationalism and the struggle for freedom to the overwhelming majority of the population. Their puppet, Ngo Dinh Diem, announced that there would be no elections four days before they were to occur. So Diem was the de facto, American-installed president as of October 26, 1955.

In further violation of the Geneva Accords, the United States sent 350 additional military men to Saigon. The French were gone – they had a clean slate. The U.S. laid the foundation for future warfare by sending selected Vietnamese to U.S. bases for guerilla training.

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[1] America’s Longest War, The United States and Vietnam, 1950-1975 by George C. Herring, pg. 3

[2] Agreement on the Independence of Vietnam, http://coombs.anu.edu.au/~vern/van_kien/indagree.html, Accessed August 27, 2007 See also Accord Between France and the Democratic Republic of Vietnam, 6 March 1946

[3] Abdication of Bao Dai, Emperor of Annam, August 1945, http://coombs.anu.edu.au/~vern/van_kien/baodai.html, Accessed August 27, 2007

[4] Ho Chi Minh, Heroes and Killers of the 20th Century, http://www.moreorless.au.com/heroes/ho.html, Accessed September 3, 2007

[5] Vietnam War Chronology, http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=515, Accessed August 27, 2007

[6] America’s Longest War, The United States and Vietnam, 1950-1975 by George C. Herring, pg. 13

[7] US-Vietnam (1947-2001), Project: History of US Interventions, Open-Content project managed by Derek, Mike, http://www.cooperativeresearch.org/timeline.jsp?timeline=vietnam, Accessed September 17, 2007

[8] Indochina - United States Recognition of Increased Sovereignty in the State of Viet-Nam: Note From the United States Ambassador-at-Large (1) to the Chief of State of Viet-Nam,(2) January 27, 1950

[9] United States Recognition Of Viet-Nam, Laos, And Cambodia: Statement by the Department of State, February 7, 1950, http://www.mtholyoke.edu/acad/intrel/usrecog.htm, Accessed August 25, 2007

[10] America’s Longest War, The United States and Vietnam, 1950-1975 by George C. Herring, pg. 20-21

[11] The Vietnam War, Seeds of Conflict, 1945 – 1960, http://www.historyplace.com/unitedstates/vietnam/index-1945.html, Accessed August 25, 2007

[12] Killing Hope by William Blum, pg. 123

[13] Ibid, pg. 124

[14] JFK, the CIA, Vietnam and the Plot to Assassinate John F. Kennedy by L. Fletcher Prouty, pgs. 39-40

[15] Ibid, pgs. 64-65

[16] The Council on Foreign Relations and The New World Order By William Blasé, http://www.mega.nu/ampp/blase.html, Accessed August 28, 2007

[17] Killing Hope by William Blum, pg. 124

[18] Ðiên Biên Phú, http://www.dienbienphu.org/english/, Accessed September 7, 2007

[19] Agreement On The Cessation Of Hostilities In Viet-Nam, July 20, 1954, http://www.mtholyoke.edu/acad/intrel/genevacc.htm, Accessed August 25, 2007

[20] Ho Chi Minh, Selected Works (Hanoi, 1960-1962), Vol. 2, Biography of Ho Chi Minh http://www.marxists.org/reference/archive/ho-chi-minh/biography.htm, Accessed August 27, 2007

[21] Modern History Sourcebook: The Final Declaration of The Geneva Conference: On Restoring Peace in Indochina, July 21, 1954, http://www.fordham.edu/halsall/mod/1954-geneva-indochina.html, Accessed August 25, 2007

[22] JFK, the CIA, Vietnam and the Plot to Assassinate John F. Kennedy by L. Fletcher Prouty, pgs. 70-80

[23] The Secret History of the CIA by Joseph J. Trent, pgs. 327-329

[24] Ibid

[25] Ibid

[26] Ibid

[27] JFK, the CIA, Vietnam and the Plot to Assassinate John F. Kennedy by L. Fletcher Prouty, pgs. 70-80

[28] Myths of the Vietnam War by Robert F Turner, The Pentagon Papers Reconsidered, September 1972, http://www.virginia.edu/cnsl/pdf/Turner-Myths.pdf, Accessed August 27, 2007

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