Lee Kuan Yew warns Vietnam about reforms

Lee Kuan Yew warns Vietnam about reforms

HANOI (AFP): Singapore's senior minister Lee Kuan Yew strongly warned Vietnam about reversing its economic reforms Saturday and said there was an urgent need to give better treatment to foreign investors.

The former Singaporean prime minister cautioned Vietnam against isolationism and said during a news conference here he had told Vietnam's leaders that "if you try and reverse, then you are pulling the plug out from the international economy and you go back to the old Vietnam."

He held up his own nation, the largest foreign investor in Vietnam with five billion dollars worth of projects, as a model to emulate.

"I have explained that in Singapore we made sure that investment doesn't fail, we make sure there are good industrial conditions, good workers, power, infrastructure, shipping, telecoms, in order that it would succeed, and that is how we grew."

If Singapore decided to isolate itself, "we would go back to a fishing village, it is as simple as that," he said.

Lee, on a four-day visit, said "you can't be a member of ASEAN and try to run a different kind of economy, you would be left behind."

Singapore and Vietnam are both members of the Association of Southeast Asian Nations (ASEAN), which also groups Brunei, Burma, Indonesia, Laos Malaysia, the Philippines and Thailand.

"Investors have not come here to reconstruct Vietnam, they have come here risking their capital, and they may lose all, on the expectation that the Vietnamese government will provide (favorable) conditions," he said.

As an example, he said Singapore investors should be able to "convert their profits into Singapore dollars, repatriate them, pay for various debts and raw material."

If the Vietnamese continue economic policies that don't encourage foreign investors, "the exterior economy will come to a grinding halt."

Lee said foreign investors in Vietnam should not be considered "hostages" and added, "they are killing them and this is bad news for future investment."

Using Singapore's telecommunications industry as an example, Lee said, "we have not only privatized, but invited foreign partners to inject higher technology and better management."

But Vietnam "is going the other way, taking over the joint- ventures for Vietnam telecoms to own it themselves... they have to look at the rest of the world."

Lee also said the biggest problem for Hanoi "is what they will do with their loss-making enterprises, how do they rid themselves of this problem, privatize, get rid of all or part."

"There are two schools of thought within the government, I am not sure that they have resolved their problem," he added.

He also counseled Vietnam's leaders "to make sure they don't incur more foreign debt than they can service" and to "create confidence in the Vietnamese in the stability of the dong and then mobilize the savings."

Concerning the advice he gave during his meetings with Communist Party head Do Muoi, Prime Minister Phan Van Khai and President Tran Duc Luong, Lee said, "they have listened to me, but I am not sure they have agreed with everything I said."

Referring to the monetary crisis that has been sweeping Southeast Asia since the summer, Lee said countries such as Vietnam and Singapore, which have not suffered as much as their neighbors, must nevertheless "put their house in order."

Lee, who has made a speciality of counseling emerging Asian economies, goes to Beijing after leaving Vietnam Saturday.