10 Political, Social and Economic Events of 2007

 

According to the results announced by the President of the UN General Assembly at 22h35 (Hanoi time) of October 15, 2007, Vietnam will be a non-permanent member of the UN Security Council in 2008-2009, receiving 183 votes in favour out of 190 votes (96 per cent) while the number of votes required is 127. Earlier, in his statement made during general debate in the UN General Assembly, Prime Minister Nguyen Tan Dung said, “Vietnam is an active, cooperative and responsible member of the international community.” Observers believed that with the image of the past and the dynamic economic present, Vietnam will play an important role as non-permanent member of the UN Security Council.

 

A year after WTO accession, administrative reform in Vietnam has recorded remarkable progress, contributing to the formation of an open and dynamic government. Most significantly is the downsizing of the State apparatus from 38 ministries in 2002-2006 to 22 at present with distinct functions and responsibilities, and some ministries over multiple industries and sectors have started separating the management role from business activities. Alongside with the streamlining, administrative reform has made progress especially in key areas relating to the livelihood of the people and business activities, such as registration of poor households, residence, transport means, business activities, business bankruptcy, import-export activities, taxation and identification cards. The Prime Minister has asked all State authorities to make public their procedures, formalities and time of their proceedings in favour of the people. With those efforts, Vietnam has been recognized by international organizations as making major progress in improving its business and investment environment.

 

In 2007, the total export of Vietnam reached US$48 billion, 20.5 per cent more than in 2006 and 3.1 per cent over the target set by the government (US$46.76 billion). In particular, 10 export items have exceeded the target of US$1 billion. In addition to 9 traditional items, a new item is mechanics. Three items have exceeded the mark of US$3 billion and two items exceeded US$2 billion. They are: aquatic products US$3.75 billion, rice US$1.48 billion, rubber US$1.41 billion, crude oil US$8.4 billion, textile and garment US$7.7 billion, footwear US$3.9 billion, electronics and computer parts US$2.2 billion, wooden products US$2.34 billion, and mechanics increased from around US$1 billion last year to US$2.2 billion this year.

 

By the end of November 2007, the Ministry of Planning and Investment announced that Vietnam had attracted over US$20 billion in registered investment capital or nearly 68.8 per cent more than the same period last year. This is regarded as a most impressive development of the first year of Vietnam’s WTO membership. 52 localities in Vietnam have attracted foreign investment projects.

 

The trade deficit continues to be a headache for State managers. In 2007 it increased to US$10 billion, 70 per cent more than in 2006. According the Ministry of Industry and Trade, it is the highest trade deficit in recent years. Major imports are automobiles (increased 132 per cent), auto parts (64 per cent), steel (56.4 per cent), steel ingots (37 per cent), and machines and parts (54 per cent). The root cause of the trade deficit is the higher growth of imports over exports. While import demand increases for production and investment, the export value of main items, especially raw materials, decreased and that of manufactured commodities remain insignificant. In fact, the competitiveness of the economy is still low.

 

On September 26, a span of 90 metres of Can Tho Bridge collapsed, burying nearly 200 workers working under it. It was the biggest disaster in the history of the construction sector in Vietnam. Due to its critical nature, on October 6, Prime Minister Nguyen Tan Dung signed Decision 1340/QD-TTg establishing a State Investigation Committee headed by Minister of Construction Nguyen Hong Quan and 10 members including vice-ministers of public security, construction, transport, planning and investment, labour, science and technology, chairman of Vietnam construction federation, Vietnam bridge and road association, National assembly science-technology committee and a Japanese representative. The committee should recommend solutions to the incident and ensure continued safety in the construction.

 

Three successive floods, occurring in September, October and November, 2007 from Ninh Binh down to Binh Thuan province, caused heavy losses to the population in those provinces. The government rushed to their rescue with food and commodities and asked related ministries and authorities to prevent hunger and diseases and restore normal life to the people and education to the children. The government also asked the Ministry of Construction to study a programme of co-existence with the floods in Central Vietnam, and the Ministry of Natural Resources and Environment together with scientists and international organizations to develop a national programme dealing with climate change.

 

Economists and State managers considered 2007 the year with the highest increase in prices (10.9 per cent) adversely affecting socio-economic development, but not yet reversing the economy. It has a strong impact on salaried and poor people. However, foreign experts believe that the price index has not seriously harmed the Vietnamese economy. WB, IMF and ADB representatives expected the Vietnamese economy to continue stable growth of 8.5 per cent this year.

 

Beginning December 15, by Resolution 32 of the government, helmet use is compulsory for motorcycle riders. It is a new era of traffic in Vietnam. In reality, when Resolution 32 was first issued, 90-95 per cent of motorcycle riders on highways already wore helmets. Now, almost 100 per cent of wear helmets even in urban areas. Head wounds have been reduced 40-50 per cent. Since September, the number of traffic accidents started falling and this year the total is reduced by 3.5 per cent compared to last year.

 

According to the report of the Government Inspection Committee, the number of corruption cases brought to trial in 2007 increased by 22.8 per cent. Complaints increased compared to last year with over 49,000 cases settled. Settlements are high in Thanh Hoa, Kien Giang, Thai Binh and Vinh Phuc. While settlements are low in Thai Nguyen, Ca Mau, Son La, Quang Ngai and Hoa Binh. Complaints are high concerning land, especially on land compensation and disputes. The Prime Minister has asked the Inspection Committee to send many delegations for dialogue with the people.