Business Beat

Business Beat

Walter Blocker, chairman of the American Chamber of Commerce in Viet Nam, hit the nail on the head. "American businesses know a market economy when they see it; Viet Nam is just as much a market economy as many the US classifies as market economies," he wrote in a letter sent on behalf of more than 700 American companies doing business here to US Secretary of Commerce, Donald Evans.

But it seems the US Department of Commerce doesn’t agree. According to its Import Administration’s Office of Policy, "While Viet Nam has made significant progress on a number of reforms, our analysis indicates that Viet Nam has not successfully made the transition to a market economy." This means for the catfish anti-dumping proceedings, the department might use prices and costs in a third country instead of those in Viet Nam. and nothing would be more absurd and arbitrary if the final ruling forces the use of such prices and costs on catfish growers here.

Farmers here know for certain they receive no subsidy from the Government to grab a share of the US market. Therefore, as Virginia Foote, president of the US-Viet Nam Trade Council put it, the US Department of Commerce’s classification that might be used for other anti-dumping cases is a setback to the process of trade normalisation between the two countries.

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For the first time, the Government has not set a fixed target for the economy for next year. It realises that amid global uncertainties, targets are prone to be missed while on the other hand, forecasts under different scenarios would be helpful for business planners in improvising plans.

In his report to the National Assembly, Prime Minister Phan Van Khai presented two such scenarios for economic growth in 2003 and urged delegates to adopt both of them for flexibility. The first envisages a GDP growth of 7.5 per cent – only however, in the event of no major global "disturbance" – while the second seeks a more achievable 7 per cent.

For both, the Government should work hard to achieve major changes, including a shift in economic structure, and improvement to the country’s competitiveness and business environment. Focus for next year would be on the development of small and medium enterprises, and not major corporations like before, because the former is thought to have the most potential to create jobs and adjust to unexpected difficulties. Another new effort is the creation of a better legal framework to enable the development of various markets, especially the capital market.

When there is a realisation that in a market economy, one can only provide forecasts and not targets, solutions are needed at a macro-level to help the economy weather storms and fulfil its potential.

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Local manufacturers can only wring their hands in helplessness in the face of rampant smuggling that leaves no sector unaffected. The situation has been worsened by smuggling and corruption now seeming to go hand in hand, feeding each other at the expense of the economy. Cases discovered so far provide a staggering picture: in the first nine months this year, nearly 66,000 cases were detected, involving goods worth VND324 billion US$21 million.

Anti-smuggling efforts will now shift to the domestic market which according to many, is a more difficult task. Deputy Prime Minister Vu Khoan said it is unacceptable that while anti-smuggling forces are doing all they can to stop smugglers on the borders, smuggled goods are put on sale brazenly. The ease with which such smuggled goods are distributed to end-users is only fuelling more smuggling.

But with a system of distribution based on household businesses, it is a daunting task to take smuggled goods out of circulation. and corruption could be a factor again because there is no reason to believe it won’t collude with domestic smuggling.

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There is talk that the executive committee of the HCM City Association of Advertisers has tendered its resignation. The reason? That it could do nothing to protect its members in the face of the new restrictions on outdoor advertising.

But it seems the city authorities are having second thoughts on the ban on almost all forms of outdoor advertisements. They are working on a draft regulation that allows the licensing of many forms of outdoor advertising. Those advertising means of transport, for instance, would be allowed.

However, the hard stance would continue on graffiti advertising – telephone numbers sprayed on walls or classified tutoring ads stuck on lamp posts. Fines would be imposed for distributing fliers on streets; those hawking stuff like rat poison using speakers on bikes will have all their equipment confiscated besides fines.

The fine-tuning is timely and should be welcomed.

VNS