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."