Vietnam: Nuclear plans afoot

During a recent state visit by Kazakhstan’s President Nursultan Nazarbayev and an accompanying delegation, the official news agency announced that Kazakhstan would like to supply Vietnam with nuclear fuel for the production of energy and also hopes to cooperate in the development of Vietnam’s oil and gas industry.

Hanoi has already made deals with Russia and Japan to support its nuclear development plans (although the agreement with Japan has yet to be ratified by the Japanese parliament). In November, the government announced that it will invest three trillion dong (around US$143 million) in upgrading its human resource capabilities in the sector.

Using Russian help, Vietnam plans to build its first nuclear power plant in 2020 – it hopes to have 14 operational power plants by 2030 and has pledged the investment to ensure that it is able to build, manage, and maintain the facility when it opens. Training will be offered to 2,400 engineers and 350 academics and industry experts through cooperation between Hanoi’s Ministry of Science and Technology and the International Atomic Energy Agency.

Most of the funding for the project will come from Vietnam’s stage budget, with a smaller amount being invested by Electricity of Vietnam, the state’s power supplier.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2011 Menas Associates

Vietnam: Hmong history of unrest

The Hmong constitute Vietnam's largest ethnic group, with almost 1 million members throughout the country: predominantly in the northern highlands along the border with Laos and China, but also with large popula¬tions in the central highlands. Large popula¬tions of Hmong can also be found in southern China (3 million), Laos (450,000), Thailand (150,000), and as far as Myanmar.

The Hmong have various lineages and clans and were named the Montagnards, or 'mountain people,' by the French. They have a history of revolt, including against the French in the 1920s.

During the war between the United States and Vietnam, the Hmong in the central highlands and also in Laos worked closely with the Americans against the communists. As a result of this alliance, after the war the Hmong were initially mistrusted and heavily controlled. Numbers fled to camps in Thailand and more than 250,000 now live in America.

They also fought against Laotian forces throughout the 1980s and '90s and were forced to flee to Thai refugee camps. The last Hmong refugee camp was closed in Thailand in 2010 and remaining refugees either relocated to the United States or Australia or were forcibly returned to Laos.

Despite this history the Hmong in Vietnam have been gradually absorbed into Vietnamese society, though there was sporadic unrest in Dien Bien Phu province in 1999 and also in the central highlands in 2001 and 2004.

It seems that the timing of the most recent revolt was not an accident, coming a few days before Dien Bien Phu province was to celebrate the 67th anniversary of the defeat of French forces there in 1954. Celebrations were kept to a minimum as a result.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2011 Menas Associates

Vietnam: 12th National Assembly session

As Vietnam Focus went to press delegates were gathering for the final session of the 12th National Assembly before May's elections. The session will last just over a week and will tackle only five new laws: on the prevention of human trafficking, government cryptography, independent audit, and an amendment and supplement to some articles of the Code of Civil Procedures and the Law on Capital. The body will meet again in late June for the first session of the 13th National Assembly.

One of the first items of business this week was the Vinashin affair. The Assembly has been very vocal in recent months, especially after its November and December session, in which delegate Nguyen Minh Thuyet from Lang Son attempted to bring a vote of no-confidence against Prime Minister Nguyen Tan Dung for his mismanagement of the shipping conglomerate. His bid was ultimately rejected.

Vinashin was again a lead item in the final session, but those who hoped some blame would be assigned within the government will have been disappointed. On the opening day, Deputy Prime Minister Nguyen Sinh Hung, who is the former minister for finance, announced that no individuals or organisations other those already under investigation would be held responsible for the mismanagement of Vinashin and its losses of $4.4 billion.

The Politburo considered that the violations outside of Vinashin itself were not serious and that those involved within the economic group had already drawn enough criticism and would learn from the events.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2011 Menas Associates

Vietnam: Inflation, again

The government's continued fight against inflation could be damaged by the latest devaluation. Inflation rose to 12.17 per cent last month, the highest rate since the government brought it under some control after the peak of 2008, when it reached over 24 per cent.

Inflation stood at over 10 per cent for much of 2010, well above the government target of 7 per cent of the year. While the devaluation may reduce Vietnam's reliance on imports, the burgeoning trade deficit could continue to expand. In January alone it reached $1 billion: imports of $7 billion and exports of $6 billion. The government is target¬ing a trade deficit of $14.2 billion for 2011, up from $12.4 billion in 2010.

Vietnam remains very reliant on imports, especially for consumer goods. In 2008, according to United Nations trade data, it imported $5 billion in steel, $1.5 billion in fertilisers, $2.4 billion in telecom equipment (mostly from China), $11 billion in petrol, and $2.7 billion in gold. However, exports continue to be mostly resource based, such as coffee ($2.1 billion), rice ($2.8 billion), and seafood ($3.8 billion), with oil accounting for $10.4 billion.

Continued government support for exports does not inspire much confidence, especially after the general failure of currency devaluations over the last 14 months either to increase exports or to reduce imports.

Dariusz Kowalczyk, Credit Agricole CIB's senior economist, questioned the government's focus: "It seems the authorities are trying to support exports and to support growth rather than to fight inflation. That's very surprising because inflation is a major problem." Well, one of several.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2011 Menas Associates

Vietnam joins the club

It has been a busy month for Vietnam's leaders. Prime Minster Nguyen Tan Dung jetted off to Korean capital Seoul this month to join G20 leaders for the Seoul summit. Prime Minster Dung attended the summit representing both Vietnam and ASEAN and met again many of the world leaders who had earlier joined the 17th ASEAN meeting in Hanoi, though the meeting gave the prime minister the opportunity to again meet American President Barack Obama. The focus of the G20 summit was understandably to address the post-crisis global economy.

Obama tried to use the summit to address the global imbalance in trade between East Asia, the United States, and Europe, in particular the imbalance between the United States and China as well as China's undervalued currency and build-up of US dollars.

Vietnam's prime minister would have listened with some concern and interest to Obama's proposal for a 4 per cent limit on national trade deficits and suggestion of an apparent 'currency war,' in which several countries are accused of artificially devaluing their currencies in order to drive export growth.

Vietnam and the United States have both seen their trade deficit with China grow hugely over the last 10 years. Vietnam's went from a modest $32 million in 2000 to a worrying $10.5 billion in 2008 and is expected to reach over $11 billion in 2010. Vietnam has also engaged in a series of dong devaluations over the last 12 months in an attempt to bolster its flagging exports and address some of the trade deficit.

Following the G20 meeting, Vietnam's President Nguyen Minh Triet was again joined by many of the same leaders at the 18th Asia-Pacific Economic Cooperation (APEC) summit in Yokohama in Japan.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2010 Menas Associates

Russia and Vietnam sign co-operation agreement

Russia's President Dmitri Medvedev has signed a co-operation agreement with Vietnam's President Nguyen Minh Triet for the Russians to build a nuclear power station in Vietnam, the first for the south-east Asian country.

“If we reach the goals we've set, this power plant will account for a great share of Vietnam's energy market and will allow it to develop as a modern state that not only produces and processes oil, but also uses other energy sources, which is very important in today's world,” said Medvedev.

During a state visit to Vietnam, on the back of a regional summit, the Russian leader said he was looking forward to working with Vietnam and added that the country, “is actively developing in terms of construction, organisation of economy, fortification of defence and security, and also solving social issues. In all these areas Russia will assist Vietnam, which is our close friend.”

The deal, said to be worth more than $5 billion, was commended by Vietnam's president and held up as a sign of how ties between Moscow and Hanoi are strengthening.

“The signing of an agreement on the construction of an atomic power plant in Vietnam demonstrates the special ties we have with Russia and, of course, the deal indicates the confidence which Vietnam has in Russia's technology. We will continue to work together in the oil and gas industry, both in Russia and Vietnam,” said Nguyen Minh Triet.

Source: Tribune Magazine

For more news and expert analysis about Vietnam, please see Vietnam Focus.

Minimum wage to rise again

The Ministry of Labour, Invalids and Social Affairs (MoLISA) has circulated a proposal to adjust Vietnam's complicated minimum wage structure. It puts forth an almost 21.5 per cent increase in the minimum wages of domestic firms and a rise of around 10 per cent for foreign firms.

The minimum wage structure is split into four regions and two enterprise sectors, and foreign enterprises are forced to pay more than domestic firms. The government is slowly trying to bring the difference in wages between foreign and domestic enterprises closer together in order to have one set of minimum wages by 2012 or 2013.

The minimum wage in a domestic firms is set to rise to $43.60 (VND830,000) per month for the lowest bracket and $66.80 (VND1.27 million) for the highest bracket, applicable in Hanoi and Ho Chi Minh City.

For foreign firms the lowest bracket will rise to $57.80 (VND1.1 million) per month from $52.00 (VND1 million) and the highest bracket, again applicable in Hanoi and Ho Chi Minh City, will rise to $78.90 (VND1.5 million) from $70.50 (VND1.34 million).

Of course, many firms were quick to criticise the proposal, especially as this will mark the third increase in less than 18 months. The government also plans to raise the earnings of its public-sector employees.

Benchmark or basic salary?

Strikes in Vietnam are increasingly common and most concern wages more than working conditions.Labour analysts assert that firms use the government's minimum wage as their basic salary, rather than a benchmark below which they shouldn't fall.

As a result many sectors, especially garments and textiles, experience high staff turnover as people move for even a small increase in wages.

The Central Institute for Economic Management (CIEM) argued in a recent report that the minimum wage as set by the state meets only 60 to 65 per cent of workers'basic needs.

A study by the now defunct Institute for Development Studies (IDS) found that the minimum wage in Vietnam was 40 per cent lower than the regional average. Low wages in the public sector have long been blamed for the high level of corruption.

For more news and expert analysis about Vietnam, please see Vietnam Focus.

© 2010 Menas Associates