Vietnam to start slow as new ASEAN member

Vietnam to start slow as new ASEAN member

By John Rogers

HANOI (Reuter): Vietnam will take time to join in all the
political and economic activities of the Association of Southeast
Asian Nations (ASEAN) after the Communist country becomes the
grouping's seventh member this July.

Economically weaker than its new partners, it will not become
part of the ASEAN Free Trade Area (AFTA) for at least three to
four years, Foreign Minister Nguyen Manh Cam said after talks
last week in Singapore.

But there is no doubt about Hanoi's commitment to integrate
with the region after years of isolation, and Cam said it wanted
to join the broader Asia-Pacific Economic Cooperation (APEC)
forum further down the line.

The government has set catching up with its ASEAN partners --
Brunei, Indonesia, Malaysia, the Philippines, Singapore and
Thailand -- as a major economic target.

"We have to do our best not to get left behind other
countries," Dao Nguyen Cat, editor in chief of the Vietnam
Economic Times, said in an interview.

"We can see membership of ASEAN is one solution to this
problem. We have to try not to be left behind the ASEAN
countries," he said.

The present ASEAN partners are much more advanced than
Vietnam, where national income per head is only $200 a year.

"They (Vietnam) can't stay in if they can't meet the economic
targets," an Asian diplomat here said. "They are under no
illusion about that."

Diplomats say it may be five years -- by which time Vietnam
aims to have doubled income per head to over $400 -- before it
feels its economy can survive tariff cuts of zero to five percent
on most goods by 2003 required by AFTA membership.

"I think all of us accept that they have to be given a grace
period. They're not ready," a diplomatic source said. "They won't
get involved in AFTA for at least five years, based on how fast
they open the economy and how strong their economy is."

Vietnam also faces huge demands on its limited corps of trade
officials and diplomats fluent in English, ASEAN's working
language, and may have trouble staffing the 200 or more meetings
that ASEAN holds at different levels every year.

Several ASEAN members and Western countries, including
Australia, Britain and Canada, are helping train Vietnamese
officials in English.

"They (Vietnam) will probably have to cut corners," the source
said.

But members already saved costs by focusing mainly on projects
in areas of special interest to them, he said. Trade
liberalization and science and technology were areas in which
Hanoi might delay cooperation initially, he added.

Direct costs of ASEAN membership won't break the bank -- about
$2.5 million a year in dues and a levy for the ASEAN projects
fund. But travel costs and hosting meetings will impose a severe
burden for a poor country.

But Vietnam views the costs as just "premium money for the
insurance policy that ASEAN membership will bring", the Asian
diplomat said.

Hanoi sees integration into the region as vital to shore up
its security and reinforce the shift to a market economy that it
began in the late 1980s.

ASEAN members appear willing to accept Vietnam's relative
economic weakness in return for its prospects of fast growth,
targeted at nine to 10 percent this year.

It is a major producer of rice and other farm products and a
consumer market of 72 million people eager to get richer.

"Some see Vietnam becoming the breadbasket of ASEAN, a major
primary producer of the community," the diplomat said.

"Members will be looking for complementarity, industrial goods
against agricultural goods... The ASEAN countries are looking at
getting into the consumer market here."