II - POLITICAL OUTLOOK: Indochina 1994-95

Summary

Vietnam

The best news for Vietnam during 1993 was the withdrawal of the U.S. veto on multilateral lending. Although the embargo on bilateral U.S.-Vietnam economic relations was renewed, U.S. firms are now allowed to take part in projects funded by multilateral aid. Vietnam can at last look forward to assistance to build its infrastructure. A meeting of donor countries in November resulted in pledges of US$ 1.86 billion, more than what was expected. The World Bank gave a glowing report of the economic reforms implemented so far and the way Vietnam's economy has performed since the cut-off of Soviet assistance.

As the influx of foreigners increases with the start of lending by multilateral agencies, there is heightened concern over the negative social consequences of reform and liberalization. There is frustration at the top levels of the party over its inability to improve law enforcement and stem evils such as corruption and smuggling, which are undermining reform. These matters, together with the related issue of declining party membership and morale, are expected to feature prominently in the first ever midterm party conference now rescheduled for January 1994. The conference is likely to see leadership changes, though these will probably not be major. Some Central Committee members may be purged and there may be a few additions to the politburo.

Vietnam

Land Area: 330, 300 sq km

Population: 72.3 million (1993 estimate)

Capital: Hanoi

Type of Government: Communist people's republic

Head of State: President Le Duc Anh

Prime Minister: Vo Van Kiet

Currency Used: dong

US$ Exchange Rate on 30 November 1993: US$1 = 11, 110 dong

Also expected to feature at the mid-term conference would be the relationship between party and government and the role of the party in economic life. This is because entrenched party interests have been frustrating attempts at reform. The problem is a pervasive one because there are over 12,000 state enterprises and what happens to them touches on political nerves everywhere.