How ASEAN's newest member is coping<\/p>\n
Not all has been smooth sailing for Vietnam in its first year in
\nASEAN. Pham Cao Phong explains why.<\/p>\n
Vietnam became the seventh member of ASEAN in July 1995. This
\nmarked a new development in the country's integration within the
\nregion. It was the first time in the 50 years of its existence
\nthat the Socialist Republic of Vietnam enjoyed good relations
\nwith all South-east Asian countries. Furthermore, it became a
\nmember of a regional organization and comprehensively
\nparticipated in its activities politically, economically and
\nculturally.<\/p>\n
In order to play a meaningful role in the regional grouping,
\nVietnam established an ASEAN Department in the Ministry of
\nForeign Affairs and a National ASEAN Committee. Headed by a
\nDeputy Prime Minister, the committee -- a unique institution
\namong ASEAN countries -- has the responsibility of co-ordinating
\nthe activities of all national institutions in their
\nparticipation in ASEAN and helping other institutions enrich
\ntheir knowledge of the organization.<\/p>\n
With this mechanism, Vietnam has not only gradually integrated
\ninto the association but has also actively participated in ASEAN
\nactivities such as the fifth ASEAN Summit and the first Asia-
\nEurope Meeting.<\/p>\n
The most important task Vietnam successfully undertook in its
\nfirst year in ASEAN was to work out an import tax reduction
\nprogram in order to meet its responsibilities as an AFTA member.
\nOn Dec. 10 last year, the country said it would reduce import
\nduties on 1,622 products in the 1996-2006 period so as to adhere
\nto the CEPT agreement.<\/p>\n
The program has had no negative effects on tax collection as
\nVietnam has made adjustments to its tax collection policy.
\nBesides import duties, Vietnam now also levies indirect taxes
\nwhich have helped to increase the volume of tax collected.<\/p>\n
Moreover, with lower import duties on certain products, mainly
\nconsumer goods, the smuggling of such products has been reduced,
\nand the government has been able to collect a number of taxes
\nwhich it had not managed to in the past.<\/p>\n
Along with the increase in export turnover, the above-
\nmentioned measures will ensure the usual revenue from tax
\ncollection. It is estimated that in the first six months of this
\nyear, the import tax collection from ASEAN countries was around
\nUS$5 million, the same figure as last year's.<\/p>\n
The fact that 50 percent of imports from ASEAN countries
\nalready enjoy import duties of or below 5 percent indicates that
\nin a few years' time, the reduction of import duties on more
\nproducts will have little or no impact on industrialization in
\nVietnam. Vietnam will reduce import duties on products which may
\naffect industrialization in its end stage. Furthermore, the flow
\nof ASEAN products can be viewed positively as a means of helping
\nVietnam counter the dumping of Chinese goods, creating a balanced
\nmarket and enabling some industries to develop.<\/p>\n
Vietnam is enjoying the benefits of its integration into
\nASEAN. This at a time when there is a worldwide trend towards
\nregionalism and globalism. Vietnam has been successfully pursuing
\nan open-door policy externally and carrying out market-oriented
\neconomic reforms internally. It has diplomatic relations with all
\ncountries of the world and is gradually entering the world
\neconomic system. Trade with other ASEAN countries is 32.4 percent
\nof its total trade (1995 figure).<\/p>\n
Moreover, relations between Vietnam and other ASEAN countries
\nhave greatly improved since 1992 when Vietnam and the ASEAN
\ncountries exchanged a number of visits by high ranking officials.<\/p>\n
Nonetheless, joining ASEAN is not without problems. Vietnam's
\nunderstanding of ASEAN as an organization is still poor. As
\nVietnam lacks the necessary information regarding
\nASEAN's co-operative programs, it cannot participate fully in
\nASEAN activities. More importantly, despite announcing its
\ncommitment to the Treaty of Amity and Cooperation, signed in Bali
\nin 1976, Hanoi is not so certain whether it accepts the rules of
\nthe game, all the written and unwritten norms of ASEAN.<\/p>\n
Secondly, the wide gap in economic development between Vietnam
\nand most of the other ASEAN countries presents some difficulties
\nfor Vietnam. Even though it is on the way to being a market-
\noriented economy, the effects of a subsidized economy are still
\ndeep and cannot be erased overnight. Red tape is still rampant.
\nBesides, Vietnam's low GDP per capita, only one-third of
\nIndonesia's and one-seventieth of Singapore's, prevents Vietnam
\nfrom actively and positively participating in all ASEAN economic
\nco-operation programs.<\/p>\n
Thirdly, there is a lack of qualified people within the
\nVietnamese bureaucracy who have a good knowledge of ASEAN and can
\nspeak English fluently. Most Vietnamese were trained Soviet-
\nstyle. The market-oriented economy requires them to be retrained
\nand equipped with a knowledge of marketing, auditing, world
\npolitics, and even English -- the working language of ASEAN.<\/p>\n
Vietnam's quick integration into ASEAN is generally
\nappreciated. However, it will have to make great efforts to
\nintegrate more fully in the coming years if it is to benefit much
\nmore from its membership.<\/p>\n
Pham Cao Phong is a Research Fellow at the Institute of
\nInternational Relations, Hanoi, Vietnam.<\/p>",
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