Slipping in The 2010 Index of Economic Freedom

http://www.heritage.org/Index/Country/Vietnam

Vietnam’s economic freedom score is 49.8, making its economy the 144th freest in the 2010 Index. Its score has decreased by 1.2 points since last year, reflecting reduced scores in five of the 10 economic freedoms. Vietnam is ranked 33rd out of 41 countries in the Asia–Pacific region, and its overall score is lower than the world and regional averages.

Disappointing result.  Let's reverse the pattern of zig-zag progress. 

China's mining project in Nevada declined by the Obama administration

In a recent New York Time article "Chinese Withdraw Offer for Nevada Gold Concern" reported that China's plan to invest in a mining company in Nevada was denied after Obama administration officials raised national security concerns in the deal. The parallelism of China's intention in Nevada and Tay Nguyen is alarmingly clear; China wants to secure and expand its global supply of precious metals (e.g. aluminum, uranium, zinc), along with its ulterior motive of undermining the national security of other nations. China's investment attempt in Nevada was denied due to its proximity of "the Fallon Naval Air Station, as well as other sensitive and classified security and military assets that cannot be identified,” according to Treasury officials. In the United States all foreigners trying to acquire critical American assets will be examined by a review panel from the Treasury Department. However, the situation in Vietnam is less transparent. Even with public scrutiny and rejection by many experts and officials things can still find its way to move forward, and that is a very dangerous situation in Vietnam. There are no independent panel set-up to review and protect key national resources. At the time of this writing China's mining project in Tay Nguyen is still underway. Why it must be stopped: Bauxite Mining in Tay Nguyen - An environmental massacre.

Sweden and Vietnam: A new partnership Part I

Gripen for India

Gripen for Brasil

Through partnership with Saab AB both Brasil and India will be potential exporters of combat aircraft like Sweden by 2020. Saab also has entered into a partnership with Thailand company Avia Satcom Co. Ltd., to form a joint venture for developing high technology products within aviation and defence. This is a great model for Vietnam to adapt for high-tech economic development, and advance its aerospace industry. To make such partnership possible Vietnam will need to develop the support industries in the area of defense, and doing so enable it to move higher up in the global supply chain. Saab Gripen NG is comparable to Lockeed JSF F-35 (available in 2012 and expected to be in service until 2040). However, it is important to note that the F-35 will be the last manned combat aircraft that the United States will develop, as unmanned aircraft system (UAS) will dominate the future of military and civil aviation.

JSF @ The National Air and Space Museum - Chantilly, VA

Sweden foreign policy and military capability had allowed the country to maintain its independence and neutrality throughout the World Wars and Cold War. During the Cold War, Sweden pursued a security policy based on strong national defenses aimed to discourage attack from its powerful neighbor in the East. In designing its fighter aircraft Draken & Viggen (the older brethrens of Gripen), one of the main requirements was that it must have good short-runway performance that could land and take off on roads and highways, in case Swedish military and airports were overrun. Undersea, the Swedish Gotland class diesel-electric submarines are believed to be the most advanced in the world. In 2005 the US Navy decided to lease the Swedish commanded HMS-Gotland for two years. In the wargaming exercise in San Diego, the HMS-Gotland effectively succeeded in sinking the USS Ronald Reagan aircraft carrier.

In the ultra competitive defense industry, home of the Nobel Prize is willing to share some of its R&D to key partners that will play a major role in maintaining regional security. Thailand has signed on, Brasil and India ventures are in the pipeline. It is time for Vietnam to evaluate the alternatives of being an ardent importer of military arms, and seek out co-development opportunities and partnerships that will cement its independent spirit. Aside from gaining the technical know-how through partnership with Saab AB, Sweden's history offer an invaluable case-study for Vietnam. [I will dwell into more details in Part II of this topic.]

Bauxite Mining in Tay Nguyen - An Environmental Massacre

Seventy-five miles (120 km) west of Van Phong Bay lies the high-land region of Tay Nguyen. It is often called the "Rooftop of the Southeast," because it is the apex of Vietnam-Laos-Cambodia. When North Vietnamese forces gained control of Tay Nguyen on 12 March 1975, the defensive vulnerability of Saigon was exposed, the war then quickly came to an end on 30 April 1975. Many military experts have acknowledged the strategic importance of the region.

Tay Nguyen is an area that contains more than 8 billion tonnes of bauxite reserve, the third largest of its kind in the world or about one-fifth of the world total reserves. Bauxite production is processed into aluminum, where one of the main uses is for weaponry development, (aircraft, arms and missiles) which Vietnam neither consume nor develop at this time. Bauxite mining, therefore, is mainly for export to serve the need and demand of major arms-developing countries such as United States, Russia, and particularly China - the major investor behind the projects in Tay Nguyen. Although anxious to modernize its armed forces, China doesn't want to develop bauxite inside its border. Last year, even with nearly $2 billion USD already invested, China decided to pull the plug at the 11th hour, citing environmental concerns. Since then, China has aggressively and eagerly sent thousands of its workers into Vietnam to expedite the mining projects in Tay Nguyen.

Despite objections from Vo Nguyen Giap and other prominent members of the one-party state, Vietnam's central party still gave bauxite mining the green light. It led to outcry by leading scientists whose findings concluded that the risks far outweigh the benefits. The electrolytic process of turning bauxite into aluminum requires massive amount of electricity, water and gas - up to 16,000 KW of electricity per ton of aluminum produced. Vietnam cannot afford to waste those scarce resources for aluminum at this time. Furthermore, that process produces toxic red mud that will be dumped in the ground. Rainfall would then sunk the toxic waste into the groundwater, streams, and rivers - effectively polluting the entire region's water resource from highland to lowland. Australia is currently the biggest aluminum producer in the world, however, its vast desert and dry weather allow the toxic red sludge to be dumped hundreds of miles away from human habitation. Vietnam is not Australia, and cannot afford to turn fertile land into red desert wasteland. Its tropical climate and heavy rainfall make it unsuitable. Furthermore, to make room for the mining and dumping site, thousands of families would have to be displaced, and thousands more trees have to be chopped down.

The irreversible social and environmental consequences are dead serious. To proceed with bauxite mining would be absolutely irresponsible, a massacre on the grandest scale to the environment. What gives for a few dollars more. What could possibly be more important than national security and interests, environmental care, and care for humanity.

We call on all concerned groups, individuals, officials to engage the parties involved and seek an immediate halt to the bauxite projects in Tay Nguyen. Last year, public opinion and participation had successfully thwarted an ill-conceived plan to build a steel mill project in Van Phong Bay. Can public opinion and the people steer the one-party state in the right direction again?

The Golden Gate of Asia

Public outcry from concerned citizens had led to the rejection of POSCO's plan to build the steel mill project in Van Phong Bay. Fifty kilometers north of Nha Trang, Van Phong Bay is the most eastern point of Vietnam's mainland, where an International Transhipment Port is being planned.  Hopes and ambitions running high at Van Phong Bay. The incident had garnered much attention to the area where many experts believe that it will rival Singapore and Hong Kong as the new Golden Gate of Asia.

The Economist's Special Report on Vietnam

Vietnam has made a remarkable recovery from war and penury, says Peter Collins (author of the Special Report on the future of Vietnam). But can it change enough to join the rich world? "If the Vietnamese were to look at the table of the world's richest countries, they are all liberal democracies. Surely this is not a coincidence.”



Key points:
* In a decade or two, when much of the rest of the world will be ageing rapidly, Vietnam's boomers will still be at the most productive phase of their careers. Currently more than half of Vietnam's population of 87 million people is under the age of 30. And 3/4 of its population is under 35.

* Higher education and scientific innovation were the keys to riches for Japan, South Korea and Taiwan, Vietnam is wooing foreign high-tech firms and inviting rich countries to set up universities and training facilities on its soil. An Australian university, the Royal Melbourne Institute of Technology (RMIT), has already opened state-of-the-art campuses in Ho Chi Minh City and Hanoi. A German university just opened its door in September, and several South Korean technical colleges are planned. The US has agreed to help Vietnam train 10,000 Phd over the next decade, and giving Vietnam priority status for student-visas.

* There is hope that there might be change from within [the Communist Party of Vietnam] once it is seen to have become inevitable. The CPV has allowed some debate about whether it should drop the obsolete “C”-word from its name and become the Labour Party or some such. And perhaps allowing formation of a second party by 2016, or as early as 2011.

* Vietnamese leadership must realize that a market economy works best when there is a free market in politics too, otherwise Vietnam may end up like some other South-East Asian countries, stuck firmly in the middle-income trap it is trying so hard to avoid, and suffering from predatory elites, weak institutions, crony capitalism and a pseudo-democracy. South Korea and Taiwan are clear examples for Vietnam to follow as their democratic transition helped them develop a high-prosperity, high-tech economy of just the sort that Vietnam wants.

* The return of the boat people - former refugees bring back skills and money. The large number of well-educated professionals returning are just what Vietnam needs to relieve its shortage of higher-level skills. Yet in the longer term they are bound to become a force for political liberalisation.

ASEAN & Vietnam

With a population of nearly 600 million people, ASEAN can provide a counterpoint to the rise of China and India, which have a population of 1.3 and 1.1 billion people respectively. The 10- member grouping of ASEAN community combined for the 5th largest economy in the world with GDP of $3.2 trillion, and a market cap of more than $1.2 trillion. In an effort to strengthen regional integration the ASEAN Charter is expected to be ratified before the next Summit in Thailand this December. However, Indoenisa, Phillipines and Thailand have yet to ratify the Charter, citing that the Charter fails to address the issue of human rights and democracy. The Charter which aims to turn ASEAN into a legal entity and a unified community.

In a postive direction, six members of the Association of Southeast Asian Nations (ASEAN) have agreed to set up a common board to trade selected blue-chip stocks listed on their exchanges. The plan was approved at the fifth Asean Exchanges CEOs Meeting held in Vietnam last March. Indonesia, Malaysia, Philippine, Singapore, Thailand and Vietnam agreed that each would select 30 companies to be listed on ASEAN Board. The new board is expected to strengthen ASEAN capital markets and enhance its visibility. It will also help attract more international funds into the region, and more importantly making its way toward a common currency. The unified ASEAN stock market is likely to begin trading in July of 2009. A well integrated economic community of ASEAN will give it bargaining power in a globalized world. A strengthened security community will promote peace and political balance in the region. The goal of ASEAN is to emulate the EU model in community building for mutual benefits and development.

Van Phong: The next Hong Kong, London

Van Phong Bay, located in south central Vietnam (50 km north of Nha Trang) at the heart of Southeast Asia between Singapore and Hong Kong, has the potential to be one of the largest ports in the world. Blessed with a natural depth of 27-41m, it is the only strategic location in Vietnam where a deep-water International Container Transshipment Port (ICTP) can be built. How will an ICTP affect a country's economy? Look no further than Manhattan, London, Singapore and Hong Kong as examples. Proper development and protection of Van Phong will change the landscape of Asia and put Vietnam on the world's map.

In recent development, Posco a Korean company is moving forward with its plan to build a 1,000ha steel mill project right on the harbor of Van Phong, even with Vinashin pulled out of the joint-venture last month. The project is awaiting approval from the government, if approved it would be devastating to Van Phong's future as a mega-port-city. Van Phong is Vietnam's national treasure, and we call on all concerned parties and officials to safeguard it from special interest groups. For the long-term future of Vietnam, Posco's plan is simply unacceptable and should not be approved for short-term gain. A steel mill project can be built elsewhere in Vietnam, so why not work with Posco to find another suitable location? Secondly, Van Phong can serve strategically for national defence, and Vietnam's future naval operations and modern fleet.

Vietnam to host the Olympic?

Japan hosted the Olympic in 1964 (the first Asian country to do so), followed by South Korea in 1988, and now Beijing 8-8-8. When will it be Vietnam's turn to host the Olympic. The new expanded city of Hanoi will invest $18.75 billions USD in infrastructure and public transit from now until 2020, laying the foundation as a future Olympic site. The investment is made in connection with Hanoi's 1,000th anniversary celebration in 10-10-10, the perfect occasion for Vietnam to make formal announcement on its Olympic bid. Despite its current economic downturn and the looming of 30% inflation, Vietnam is set to become a lower middle-income country (GNI per capita $936-$3705) by the end of the year. GDP is expected to grow 7% , and registered FDI estimated to hit record high of $50+ billions this year. Economic achievement is the ticket to host the Olympic Games, and the country is on target to become an industrialized and modern nation by 2020. So 2028 is the ideal time for Vietnam; continuing the trend of two decades apart for the next Asian metropolis to host the Olympic Games.

For now, its modest delegation to Beijing consist of 21 athletes in eight official sports of taekwondo, weightlifting, badminton, table tennis, gymnastics, shooting, swimming, athletics, and 1 demonstration sport of wushu. In comparisons, China has 639 athletes, USA sent 596 athletes, and Thailand with 51. Vietnam first participated in the Olympic in 1952, and its only medal so far came in 2000, a silver by woman taekwondo athlete Tran Hieu Ngan. For 2028, the main concern will not be economic nor infrastructure as Vietnam will be more than ready by then, but how to train athletes to compete at the world's biggest stage. On that front, the Vietnam Olympic Committee needs to set a target of doubling its delegation at each of the next Olympic Games leading to 2028, and to start submitting exploratory bid for 2020 & 2024 to gain experience. The future starts now, and it will require the commitment and dedication of the Vietnamese people, athletes, and everyone involved.