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2007 Vietnam Report Card

by Jackie Bong-Wright

Economic Milestones

The year 2007 showered Vietnam with significant economic and political gains in the international arena. Vietnam was admitted as the 150th member of the World Trade Organization (WTO) at the beginning of the year after having begun opening its economy to the world back in 1986. Led by exports of over $40 billion, Vietnam in 2007 has so far boasted a growth rate of 8.3%, second only to China’s 10.7%.
According to the World Investment Report 2007 of the UN Convention on Trade and Development (UNCTAD), Vietnam ranks 6th among 141 economies as one of the best places to invest for its low production and labor costs. It follows China, India, the U.S., Russia, and Brazil.
Vietnam attracted $15 billion of foreign direct investments this past year, with 53 countries and territories participating, among them Korea, British Virgin Islands, Singapore, Taiwan, Japan, and Hong Kong. The three top investors in electronics, IT, and telecommunications were from the U.S., Japan and Taiwan. Bi-lateral trade between Vietnam and China has reached almost 10 billion at the end of this year. Vietnam exports crude oil, coal, coffee, sea products, fruits and vegetables to China, while China increased its exports of pharmaceutical products, machinery and equipment, petroleum, cars, fertilizers and motorbike parts to Vietnam.
Last May, 18 leading U.S. corporations, among them Boeing, Chevron, Exxon Mobil, Time Warner, Ford, and General Electric, participated in a trade forum in Vietnam to discuss business opportunities. Others wanted to invest in infrastructure, financial services, information technology, and education.
The Vietnamese Embassy in the U.S. reported that “the country has fulfilled the Millennium Development Goals (MDG), known as One UN Initiative, on poverty reduction and gender equality. It has reduced the poverty, attaining a per capita income of $726 — double that number in 2000. Currently, Vietnam ranks first in Asia and 18th in the world for the number of women elected to the National Assembly.”

Political Advances

In another move forward, Communist Vietnam was elected to the 15-member UN Security Council in October 2007. Ambassador Le Luong Minh will act as Security Council president next year. Thus, after having been isolated from 1979 to 1989 for invading and then occupying Cambodia, Vietnam started down a more successful road. It joined the Association of South East Asian Nations (ASEAN) in 1995 and the Asia-Pacific Economic Cooperation Forum (APEC) in 1998.
Since the U.S. and Vietnam resumed diplomatic relations in 1995, top U.S. officials have visited Vietnam. Former President George Bush, former Secretary of Defense Robert McNamara, former Secretary of State Madeline Albright, President and Mrs. Bill Clinton, former Secretary of State Colin Powell, and President George W. Bush have come to shake hands with Vietnamese officials.
In addition, an average of over 300,000 tourists flock to Vietnam annually. And the 3 million Vietnamese living overseas send to their families up to $4 billion a year in remittances. In a number of ways, Vietnam appears to be a rising star.

Big Challenges Ahead in 2008

But challenges abound. To integrate itself regionally and globally, Vietnam has had to step up efforts to regulate its financial system, improve its relationships with former foes, and make new friends. A legal and administrative framework meeting international standards needs to be put in place. Transportation, telecommunication services, and water and electricity delivery have to be improved. The country’s external debt of $17.2 billion (32.5% of GDP) and its inflation rate of 9.5% have to be reduced. Special attention must be paid to intellectual property and WTO commitments.
The labor area is especially sensitive, and vocational training to meet the increasing demand for high-quality workers has to be upgraded. With 8 million jobless Vietnamese, the Hanoi regime is following Yugoslavia’s old strategy of exporting laborers. That was not new — Vietnam exported hundreds of thousands of workers to the Soviet Union and Eastern Europe as a form of war payments after it unified the country in 1975. By 2005, 500,000 had been sent to Asia, Europe and the Middle East, and Vietnam has vowed to reach one million by 2010.
That system has caused corruption and resulted in the sexual abuses and labor exploitation typical of human trafficking. The UN Resident Coordinator said that he was ready to assist Vietnam in meeting its international commitment to enable Vietnamese with disabilities, ethnic minorities, women and children “to enjoy their rights enshrined nearly 60 years ago in the Universal Declaration of Human Rights.”
Vietnamese workers face hardships at home as well, including low wages and horrific working conditions as well as poor treatment from their own government and from foreign employers. A recent wage increase, ranging from $35 to $55 a month, left workers still unable to sustain a healthy life. There is pressure to allow independent labor unions to be formed.
Recently, American and international lawmakers have protested the numerous arrests of political dissidents in Vietnam and intervened to get four pro-democracy activists from overseas, members of the Viet Tan Reform Party, released back to their countries of origin. The U.S. House of Representatives has passed binding legislation that will tie U.S. foreign aid to Vietnam’s human rights record.
On another front, religious freedom is still viewed by the government as a threat to its power. Amnesty International asserts that Vietnam continues to use criminal laws to harass believers, particularly those from ethnic minority groups. Leonard Leo of the U.S. Commission on International Religious Freedom says that, although Vietnam allows religious worship, it has built a very large fence around it. There have been long delays in processing religious group applications for legal recognition, land confiscations from ethnic protestants, and denial of medical and educational services to religious families.
In early December, Republican Congressman Chris Smith sponsored legislation to put Vietnam back on the list of Countries of Particular Concern (CPC) as a severe violator of religious freedom.
The latest conflict was last week’s territorial and political clash with its big brother, China, which re-established full diplomatic relations with Vietnam in 1991 after having tried to invade its northern region in 1979. Tensions with China erupted over the Spratly and Paracel Islands, an archipelago of over 100 small islands, in a potentially oil-rich area of the South China Sea. On December 2, the Chinese set up a district-level administrative unit in the city of Sansha to manage the two islands under its jurisdiction and claimed them as part of China’s Hunan province.
Wikipedia, the free encyclopedia, explains why numerous territorial disputes have occurred in the past three decades among Taiwan, Brunei, the Philippines, Malaysia, China and Vietnam. They all claim various parts of the South China Sea islands. Regional rivalries add a strategic and geo-political importance to the sea lanes. In 1976, China invaded and captured the Paracel Islands from Vietnam and built military installations on some of the islands, saying that they were only shelters for Chinese fishermen. The dispute has recently included small-arms clashes between Vietnam and China. In addition, several Vietnamese boats have been sunk and 70 sailors have died.
Oil figures prominently. In 1968, the Geology and Mineral Resources Ministry of the People’s Republic of China (PRC) estimated that the Spratly area holds oil and natural gas reserves of 17.7 billion tons, as compared to the 13 billion tons held by Kuwait, making it the world’s fourth largest reserve.
The area’s commercial fishing, moreover, is some of the most productive in the world. In 1988, the South China Sea accounted for eight percent of the total world catch. The PRC says that the area contains combined fishing, oil and gas resources worth one trillion dollars.
Finally, the region is one of the busiest shipping lanes anywhere. Currently, more than half of the world’s supertanker traffic, by tonnage, passes through the region’s water. Tanker traffic through the South China Sea is over three times greater than through the Suez Canal, and five times that of the Panama Canal. Twenty five percent of the world’s crude oil passes through the South China Sea, carrying Middle East oil to Japan and the western United States.
China has filled a power vacuum in the region since the end of the Cold War, after the withdrawal of Soviet navy from Cam Ranh Bay in Vietnam, and the departure of the U.S. Navy from Subic Bay in the Philippines. Since then, China has spent billions expanding and modernizing its navy. Last November, Beijing staged a naval exercise in the South China Sea near the Paracels. If the conflict over the islands turns violent, it could present a grave concern for the United States, which has agreements to defend countries in the region.
According to Carl Thayer of the Australian Defense Force Academy, “China was pursuing a policy of creeping assertiveness in the region, which conflicts with Vietnam’s maritime strategy of maximizing the development of its offshore resources by 2020.”
For the first time, hundreds of Vietnamese in Vietnam, waving Communist flags, and Vietnamese overseas, waving the heritage flag of the former Republic of Vietnam, both protested in front of Chinese embassies and consulates against China’s claim of sovereignty over the two islands. Still bitter enemies in most areas, the two groups of Vietnamese appear to have at least one aim in common in demanding the return of the two islands to Vietnam.
The Vietnamese communities, including students, veterans, former military groups and human rights’ associations, in recent rallies, have called for a boycott of Chinese products and the 2008 Beijing Olympics. 95 year-old Ba Tran lamented: “China has always tried to take over and control Vietnam, but now, they just want to devoure us alive bit by bit.”