US drug enforcement agents train Vietnamese police

"Stay close to the walls, and don't expose yourself," the American adviser told the Vietnamese officers as they advanced into a building, weapons drawn. The scene this week was reminiscent of a South Vietnamese Army training camp in the 1960s, but these Vietnamese officers were anti-narcotics police, and the adviser was an agent from the US Drug Enforcement Administration (DEA). For a week and a half, a team of DEA agents and US military medics have shown 80 Vietnamese police, customs officials and border guards the American way to conduct a drug raid: planning, entry and arrest techniques, self-defence and emergency medical care.

Communist Vietnam now has close diplomatic and trade relations with the United States, its enemy during the Vietnam War, and the country's Ministry of Public Security seems happy to accept American help in fighting the narcotics trade.

"The drugs problem is an international problem," said Joe Boix, a square-jawed DEA firearms instructor from Phoenix, Arizona, who was leading the training. "It's all the same no matter where you go." Vietnam is a waypoint on international narcotics-smuggling routes and has a serious heroin problem with the number of addicts particularly high in its north-west, where heroin is smuggled in from neighbouring Laos. Inside Vietnam itself, opium poppies, once grown widely, were stamped out by the government in the 1990s, according to the UN, but Laos produces a small amount of opiates each year, and nearby Burma is the world's number two producer of heroin, after Afghanistan. In recent years, Vietnamese drug users have branched out from using heroin to ecstasy and methamphetamine although authorities said none of these synthetic drugs were produced in Vietnam. Authorities reported record drug busts, with the Cong An Nhan Dan, or People's Police, newspaper claiming police had seized 83 kilograms of heroin and 89,000 amphetamine pills so far this year.

In the past two months, six women have been arrested in Vietnamese airports smuggling heroin to or from Australia. In May, four Chinese men and an Indonesian were caught trying to cross into China with 9 tons of hashish hidden in a shipping container full of jeans. "Our main thrust is to go after the international organizations," said Jeff Wanner, the DEA's liaison officer in Hanoi. "This training is to help [the Vietnamese] deal with their internal problem, but we want to go after the bigger organizations, international in scope." The DEA office in Vietnam is not permitted to carry out hands-on operations, but Wanner said the office exchanges intelligence on drug activity with Vietnamese agencies. The training in Hanoi was very hands-on. In classrooms belonging to a firefighting academy, DEA agents ran through physical arrest exercises with Vietnamese officers, forcing "suspects" to lie on their stomachs, handcuffing them, then moving them to a squatting position and pushing them to their feet.

Captain Luu Duoc Cuong, a border guard from the northern province of Cao Bang, said the techniques were similar to Vietnamese ones but with a few differences.

"In America, once the suspect has surrendered, if he begins to resist, to be difficult or doesn't listen, you can shoot him," Cuong said. "In Vietnam, if he's surrendered but doesn't listen, you still can't shoot." In the parking lot, where a plywood mock-up of a house was constructed, Boix coached teams of Vietnamese agents in forcibly entering the house and then, one by one, clearing each room and arresting suspects. "Slice the pie!" Boix called out, using a term that refers to the way a pair of agents, standing at the corners of a door, visually divide the room inside as they scan for targets. Two agents drew their guns on a colleague role-playing a suspect, shouting in Vietnamese, while an interpreter translated for Boix's benefit: "Police! Hands up!"

A moment later, shots rang out. Paint pellets splattered on plywood walls. Some minutes later, Boix reviewed the raid with his students. "In the first incident, there were two misses in very close proximity," Boix said. "We must make every shot count, so no one is injured unnecessarily and we go home safe to our families."

"It's exciting for them to be able to actually pull the trigger and try to pretend like there are bad guys coming at them," Wanner said. "This is what we all trained for."

by DPA

Vietnam inflation hits 27 percent, trade gap widens

Vietnam's annual inflation rate hit 27 percent in July, the government said Thursday, as rocketing food and fuel costs saddle its economy with one of Asia's toughest battles against rising prices. The figure was only a little higher than June's 26.8 percent, but the government's decision earlier this week to hike retail petrol prices more than 30 percent is thought likely to push inflation still higher. Other official data Thursday estimated Vietnam's trade deficit for the January-July period at 15 billion dollars as imports surged more than 50 percent.The figures come after the Asian Development Bank on Tuesday warned Vietnam to take decisive measures to avoid the kind of economic meltdown suffered by Thailand in 1997, which triggered the Asian financial crisis.

Vietnam was once widely hailed as Asia's next economic tiger, but has been battered by double-digit inflation, a ballooning trade gap, tumbling share prices and worries about the banking sector and its currency, the dong. In July alone, food and beverage costs rose by 44.7 percent year-on-year, while the price of the staple food rice and other grains was up 72.7 percent, the state-run General Statistics Office said in a preliminary report. Prices for housing and construction materials were up by 24.9 percent, clothing and footwear was up 10.9 percent and pharmaceuticals and health care costs rose by 9.5 percent for the month. For the first seven months of the year, the consumer prices index has risen by 21.28 percent, the figures showed. The statistics office's trade figures showed imports in the first seven months totalled 51.9 billion dollars, up 56.8 percent year-on-year. Exports rose 37.7 percent to 36.9 billion dollars. The communist nation spent 8.2 billion dollars on importing equipment and machinery, a rise of 40.3 percent.

With large oil reserves but no operating refinery, the country used 7.8 billion dollars to buy petroleum products, a rise of 90.7 percent amid record high global energy prices. Vietnam earned 6.8 billion dollars from selling crude oil, a rise of 52.2 percent against the same period last year. Footwear sales earned Vietnam 2.8 billion dollars, up by 18.4 percent. The country's export turnover from this sector might change as the European Union on Wednesday decided to end preferential tariffs for Vietnamese-made footwear and some other goods. The trade deficit for July alone stood at 700 million dollars. The government has said it has given top priority to fighting inflation and lowered its 2008 economic growth target to seven percent. According to the government website, the public sector, including 15 major state enterprises, have cut more than two billion dollars in costs from almost 3,000 projects scheduled for this year in a bid to help reduce inflation. The Asian Development Bank forecast Vietnam's economic growth would slow to 6.5 percent this year and then hit 6.8 percent in 2009, from 8.5 percent last year.

China warns ExxonMobil to drop Vietnam deal

China has warned US oil giant ExxonMobil to drop an exploration deal in the seas off Vietnam and said the project could threaten any future mainland contracts, a Hong Kong newspaper reported Sunday. Diplomats in Washington have contacted senior figures in the world's largest oil firm to protest the deal, which they say could be a breach of Chinese sovereignty, the Sunday Morning Post reported citing unnamed sources close to the US firm. "If it was simply a legal question it would be easy," one of the sources told the newspaper. "Vietnam would probably prevail in international mediation. But it's political, too. China's concerns make the situation much more complicated for a company like Exxon... China is a very important player in the international oil industry." The dispute involves a preliminary co-operation agreement between state oil firm PetroVietnam and ExxonMobil covering exploration in the South China Sea off Vietnam's south and central coasts, the report said.

The Chinese protests are based on Beijing's historical claim to huge swathes of the South China Sea, the report said. Last year, China criticised a joint deal between Vietnam and British energy giant BP near the disputed Spratly Islands in the South China Sea, saying the area has been an "indisputable part of Chinese territory since ancient times." The report quoted Vietnamese Foreign Ministry spokesman Le Dung saying it needed to be "clearly asserted" that Hanoi's dealings with foreign oil partners fell entirely within Vietnam's legal rights and sovereignty. China and Vietnam -- who in 1979 fought a short border war after Vietnam expelled the Beijing-backed Khmer Rouge from Cambodia -- also fought a brief naval battle in 1988 near the Spratly Islands.

Korea, India, Vietnam Currency Interventions May Fail

South Korea, India and Vietnam will fail to halt declines in their currencies by using intervention because their economies are slowing and trade deficits widening, said Morgan Stanley, the second-biggest U.S. securities firm. Central banks in each of the countries have “repeatedly'' been buying and selling foreign-exchange this year as their currencies have weakened, Stewart Newnham, a research analyst at Morgan Stanley, wrote in a note to clients. The won, rupee and dong have all fallen at least 5 percent in 2008, threatening to quicken inflation by increasing import costs. Korea, the world's sixth-biggest holder of foreign-exchange reserves, pledged today to take “stern action'' to stabilize the won.

“Their intervention will ultimately fail,'' Hong Kong- based Newnham wrote in the note, which he confirmed by telephone today. ``The best they can hope for, in our view, is to engineer an orderly decline through a `smoothing operation.' And maybe Vietnam cannot even achieve that.'' The won has fallen 10.2 percent this year to 1,042.85 per dollar according to Seoul Money Brokerage Services Ltd. It is the second biggest loser against the dollar in the period of the 10 most-traded Asian currencies outside Japan. India's rupee has weakened 8.7 percent to 43.165 and the dong has slipped 5 percent to 16,846.50. Minister Dismissed

Korea's currency snapped two days of losses today, gaining 0.7 percent, after the Ministry of Finance and the Bank of Korea said they will use foreign-exchange reserves to stabilize the won and ``take strong necessary measures if the imbalance seems excessive.'' President Lee Myung Bak today dismissed Vice Finance Minister Choi Joong Kyung, who was in charge of currency policy, as part of a wider cabinet reshuffle. “By far, the strongest pressure is on the Vietnamese dong'' due to its limited foreign-exchange reserves, Newnham wrote. Morgan Stanley estimates Vietnam's reserves to be $27 billion, India's $302 billion, the world's fourth biggest, and South Korea's $258 billion. Vietnam will be forced to “realign'' the dong, Newnham said. Traders are pricing in an 18 percent decline in the coming year to 20,500 per dollar, according to offshore 12-month non- deliverable forwards. Accelerating inflation has pushed so-called “real rates,'' which are interest rates accounted for inflation, towards zero or negative levels because ``interest-rate stances are not sufficiently tight,'' Newnham wrote.

Korea's benchmark rate is at 5 percent and Vietnam's at 14 percent, compared with inflation of 5.5 percent and 26.8 percent respectively.

India's policy rate is at 8.5 percent, compared with its wholesale price index at 11.63 percent. “Their interest-rate and exchange-rate policies are not internally consistent for currency intervention to be regarded as credible,'' Newnham said in the note. Banks in the three countries are ``showing signs of discomfort and this could feed through into foreign-exchange weakness,'' Newnham wrote, citing high loan-to-deposit ratios, a shortage of dollars onshore and property loans.

ANZ to become locally incorporated in Vietnam

Australia and New Zealand Banking Group (ANZ), which is Australia's third biggest lender, is rapidly expanding its banking operations in Vietnam. It plans to open four new outlets in Vietnam and has received approval in principle from the government to incorporate locally, which means it will be able to offer the same type of services to customers that domestic lenders can provide.

"ANZ regards expansion in Vietnam as one of its highest priorities in Asia," says Alex Thursby, ANZ's group managing director for Asia-Pacific. "Incorporation is the natural next step in our growth strategy. The newly incorporated bank will extend ANZ’s distribution to meet the needs of Vietnam’s growing affluent population who are looking for more convenient access to bank branches, as well as products such as mortgage loans, credit cards, car loans and better savings and investments."

ANZ says it will retain its existing foreign bank branch in Hanoi. The new ANZ retail outlets will be established over the next four years in Hanoi, Ho Chi Minh City and other cities.

"ANZ's proposed growth strategy in Vietnam represents a welcome expansion of the bilateral investment relationship and also sends a clear signal to investors that Vietnam is open for business," Australian foreign minister Stephen Smith said, according to an ANZ press release.

ANZ opened in Vietnam in 1993 and has branches in Hanoi and Ho Chi Minh City, as well as a representative office in Can Tho Province. ANZ says it introduced the first ATM in Vietnam, completed the first project finance deal and was the first to establish a leasing business. ANZ’s interests in Vietnam include partnerships with Vietnam’s leading securities and investment banking company Saigon Securities Inc (13.9% equity stake), and with Vietnam’s leading joint stock bank Sacombank (10% equity stake).

ANZ’s new licence comes after a 15-year presence in Vietnam under a foreign bank branch licence. Permission for local incorporation of foreign banks in Vietnam follows Vietnam’s accession to the World Trade Organisation in 2007, which has encouraged the communist country to open up to foreign investments. The establishment of ANZ’s new bank in Vietnam remains subject to approval by various regulatory authorities.

Vietnam's students pray for luck in high-pressure exams

Hundreds of thousands of Vietnamese students Friday sat university entrance exams, kicking off a nail-biting season when family nerves are frayed and police are deployed to ferret out cheats. All week students have flocked to Hanoi's ancient Temple of Literature, where mandarins were once trained in the Confucian classics, to pray for luck and burn incense at the country's oldest university. "Last year I failed the exam, so I spent the whole year studying," said 18-year-old Tran Van Lam of northern Thai Binh province, who said he wants to study engineering at the Hanoi Polytechnic University. "I really hope I'm luckier this time. If not, I'll try again next year."

More than 500,000 students are due to sit maths, physics and chemistry exams on Friday and Saturday assembled in 24,000 rooms throughout 974 examination centres, competing for places at 92 universities, institutes and colleges. Learning is highly valued in Vietnamese society, yet many complain about a tertiary education system constrained by funding shortages and a less-than-open academic environment.

Communist Vietnam, where two thirds of people are under the age of 30, is struggling to cope with surging demand for higher education, and several foreign universities now offer degree programmes to fill the gap. Foreign education experts often complain of too much knowledge-cramming and a culture where the idea of students questioning their teachers is still sometimes frowned upon as a sign of disrespect. Overseas Vietnamese have a reputation as academic high achievers, yet many are reluctant to come home to teach in a system where faculty staff typically earn 150 dollars a month and work at several institutions.

Many feel stifled by a system where classes on Marxism-Leninism and Ho Chi Minh Thought are mandatory and many political topics remain taboo. Professor Jim Cobbe, a Fulbright Scholar teaching economics at the University of Danang, said that while academic standards vary widely, many universities lack adequate teaching materials and equipment. Another problem, he said, is that "the incentive structure for academic staff is highly counterproductive because it encourages them to teach as many hours as possible because that's how they raise their income."

Foreign business groups have complained that the often poor quality of universities will stifle Vietnam's economic growth and say they can't find enough graduates in finance, management and information technology. The European Chamber of Commerce here has recommended Vietnam lift restrictions on setting up foreign-invested educational establishments. This year, the Ministry of Education and Training has launched an ambitious programme to produce 20,000 PhDs by 2020, many of them foreign-trained, and there are plans to set up "international-standard universities."

Despite the current limitations, competition is fierce for university places and has often fuelled rampant cheating and graft. In recent years police raided photocopy shops mass-producing tiny cheat-sheets and arrested a ring that used bluetooth mobile phone earsets hidden under wigs to feed answers to people sitting the exams. This year the Ministry of Education in an urgent message warned exam organisers that the papers are "top secret" and urged them to "ensure maximum security in printing, management and distribution." At the largest exam halls at Hanoi's University of Natural Science, 50 police will keep an eye on 17,500 students taking exams -- and even the officers will be barred from carrying mobile telephones.

by AFP

ANZ thinks big in Vietnam

ANZ has stepped up its expansion into Asia with plans to incorporate a new wholly owned bank in Vietnam and open at least four branches by the end of the year. The nation's fourth-biggest bank has had a 15-year presence in Vietnam. It has branches in Hanoi in the north and Ho Chi Minh City in the south, plus a representative office in Can Tho Province. It also has a 13.9 per cent stake in Vietnam's leading investment bank, Saigon Securities, and a 10percent interest in Sacombank, the country's leading joint stock bank. The latest move follows relaxation of foreign investment rules after Vietnam's acceptance last year into the World Trade Organisation.

ANZ's group managing director Asia Pacific, Alex Thursby, said expansion in Vietnam was one of the bank's highest priorities in Asia. "The newly incorporated bank will extend ANZ's distribution to meet the needs of Vietnam's growing affluent population who are looking for more convenient access to bank branches, as well as products such as mortgage loans, credit cards, car loans and better savings and investments," Mr Thursby said.

In an investor tour last month, ANZ fleshed out chief executive Mike Smith's plans to become a super-regional bank, where profits from the region would grow from their current level of 7 per cent of group earnings to 20 per cent by 2012. A slide presentation said the growth projections implied a jump in Asia-Pacific net profit from $182 million in the first half of the current financial year to $1.5 billion. The number of branches throughout the region would treble from 99 to about 300, while the ATM network would expand from 155 to about 1000.

Vietnam, with 85 million people, is well-developed with a bankable population concentrated in Hanoi and Ho Chi Minh City. There is an emerging affluent class of about 820,000 people. ANZ said in a statement yesterday it would retain its existing foreign bank branch in Hanoi to support its development of Vietnam's institutional market, including debt capital markets and project and structured finance opportunities. The new ANZ retail outlets would be established over the next four years, starting in Hanoi and Ho Chi Minh City but spreading into other cities.

ANZ is among the first wave of foreign banks to be granted in-principle approval to incorporate locally in Vietnam. The bank opened for business in Vietnam in 1993, introducing the country's first ATM and its first project finance deal. The proposed new bank remains subject to approval by various regulatory authorities. Foreign Minister Stephen Smith, who is currently in Vietnam, welcomed the ANZ initiative. "ANZ's proposed growth strategy in Vietnam represents a welcome expansion of the bilateral investment relationship and also sends a clear signal to investors that Vietnam is open for business," he said.

Richard Gluyas, The Australian, 3 July 2008

United States and Vietnam: the Fact

Expanding Relations U.S.-Vietnam relations in recent years have expanded into an increasingly broad number of areas. Nothing demonstrates this more clearly than Prime Minister Nguyen Tan Dung's June 24, 2008 visit to Washington for the fourth top-level visit between our two countries in four years. During this visit the United States and Vietnam worked together on a broad range of shared concerns including human rights, education, energy and climate change, food security and economic integration.

Vietnam continues to become more integrated in the global economy since joining the World Trade Organization in the beginning of 2007. Vietnam is expanding its role in regional affairs following its hosting of the Asian-Pacific Economic Cooperation (APEC) Leaders' Meeting in November 2006. Vietnam's diplomatic profile has grown since assuming a non-permanent seat on the United Nations Security Council in January 2008, and the United States would like to see closer U.S.-Vietnamese cooperation within the United Nations. Vietnam is working with the United States in areas such as combating transnational crime-including fighting the drug trade and human trafficking-and minimizing the threat of emerging infectious diseases, and there is broad support in Vietnam for continued improvement in relations with the United States. Another sign of the deepening relations between our two countries is the rapid increase in travel between the United States and Vietnam: over the past three years the number of Americans visiting Vietnam has grown by 151%, while the number of Vietnamese citizens traveling to the United States is up 176%. Last year, the United States issued visas to over 8,000 Vietnamese students, an increase of 359% since 2005.

A friendly handshake represents a new relationship page. Image: Reuters.

Vietnam's government continues its path of economic reform, greater integration with the global economy and its quest to transform Vietnam into a market-oriented economy. One of its biggest immediate challenges is tackling high inflation while maintaining economic growth. The public and the National Assembly are also increasingly pressing for action to deal with such critical issues as corruption, infrastructure, energy and education. In the last decade, the United States and Vietnam have improved their bilateral economic relationship by implementing new agreements on trade and investment. The 2001 Bilateral Trade Agreement helped set the stage for the success of subsequent bilateral and multilateral negotiations that led to the United States extending Permanent Normal Trade Relations to Vietnam in December 2006 and Vietnam's entry to the World Trade Organization on January 11, 2007.

In addition, on June 21, 2007, the two countries signed a Trade and Investment Framework Agreement (TIFA). These agreements have greatly enhanced commercial opportunities for U.S. companies. Since the Bilateral Trade Agreement took effect in 2001, our bilateral trade relationship has increased more than eightfold, with two-way trade topping $12 billion in 2007. In order to further strengthen the bilateral economic relationship, the two countries agreed during Prime Minister Dung's visit on June 24, 2008 to launch negotiations of a bilateral investment treaty, which will help promote cross-border investment by significantly strengthening the legal protections afforded to investors under the BTA.

Vietnam has made some progress on its human rights record, particularly in expanding religious freedom, although serious concerns remain. The United States and Vietnam maintain a constructive Bilateral Human Rights Dialogue, which included recent commitments to revise Vietnam's criminal code in conformity with international standards and to allow foreign news outlets to open offices in Ho Chi Minh City. The most recent Human Rights Dialogue held in May 2008 also included discussions urging Vietnam to end its use of "national security" provisions such as Article 88, used to detain dissidents for activities considered legal acts of free speech under international norms, and to release all political prisoners, including Nguyen Van Dai, Le Thi Cong Nhan, Father Nguyen Van Ly and two journalists arrested in May for having reported on official corruption. The United States continues to urge Vietnam to allow greater political freedoms and to make additional improvements on religious freedom.

The United States and Vietnam have maintained excellent cooperation on demining issues and continue to work closely to achieve the fullest possible accounting for Americans still missing from the Vietnam War. We also continue to broaden our bilateral relationship in such areas as law enforcement, counter-narcotics, military and regional security cooperation, nuclear non-proliferation, climate change and environmental protection. The United States and Vietnam are working to develop an intercountry adoption agreement that ensures the best interests of the child, respects his or her fundamental rights, and prevents the abduction and trafficking of children, including U.S. assistance to facilitate Vietnam's early accession to the Hague Convention on Intercountry Adoptions. Eighty-five percent of all U.S. Official Development Assistance to Vietnam focuses on health issues, and our cooperative efforts to prevent and treat HIV/AIDS and combat Avian Influenza are the hallmarks of our bilateral health relationship. The United States is providing International Military Education and Training to Vietnam and using Economic Support Funds to help ethnic minorities in the Central Highlands. We have also discussed the possibility for a Peace Corps agreement with Vietnam. The United States has engaged actively with the Vietnamese on various regional and global issues, particularly in light of its non-permanent UN Security Council seat in 2008-2009.

Office of the Spokesman, Washington, DC, June 24, 2008