Fwd: United States/Vietnam

Macdonald Stainsby mstainsby at SPAMhotmail.com
Wed Nov 3 01:01:04 MST 1999

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>China's Battle Against Organized Opposition Spreads
>Global Intelligence Update
>November 3, 1999
>U.S. Vietnam Policy Guided by Strategy, Not Economics
>The United States donated over 25,000 tons of wheat to Vietnam Nov.
>2, the largest agricultural donation to Hanoi since the end of the
>Vietnam War. The U.S. donation is another move in its diplomatic
>chess game with China, as both sides maneuver to woo Vietnam. As
>such, these moves are not signs of U.S. confidence in the Vietnamese
>economy, but are instead motivated by strategy.
>Since the Asian economic meltdown, the United States has been
>uninterested in Vietnam's economy. Rampant corruption discredited
>the economic reformers in the government and a resurgent Communist
>Party has reasserted control.
>[ http://www.stratfor.com/asia/commentary/c9908030055.htm ]. Economic
>restructuring by the Party has resulted in increased centralization
>[ http://www.stratfor.com/services/giu/020598.asp ] and state control
>of firms, often at the expense of efficiency. As of March this
>year, Vietnam's state-owned enterprises
>[ http://www.stratfor.com/asia/aiuarchive/b990305.htm ] accounted
>for two-thirds of the country's industrial output, but at least 30
>percent of those firms were operating at a loss. In most countries,
>such major economic difficulties would generally discourage heavy
>U.S. involvement.
>Nevertheless, on Nov. 2, U.S. Ambassador Pete Peterson presented
>the Vietnamese Ministry of Finance with a 25,000-ton wheat donation
>and proclaimed that the U.S.-Vietnamese relationship had reached "a
>new height." Peterson went on to predict that the success of the
>program would lead to further cooperation between the two
>countries. Cooperation would be extremely valuable to both
>sides. For the Vietnamese, the sale of the wheat will bring in more
>than $3 million for humanitarian projects such as rural
>development, dikes and hospitals. The United States, on the other
>hand, stands to gain an increased role in Southeast Asia.
>The end of the Asian economic boom not only renewed the
>geopolitical competition between the United States and China, but
>shook up the old system of U.S. alliances in the region
>[ http://www.stratfor.com/asia/commentary/m9910231510.htm ]. As a
>result, both nations have been working to re-establish links with
>the rest of Asia, especially the Southeast. Vietnam is a key part
>of both country's strategies, as it borders China and Cambodia -
>where the United States has shown increased interest - and maintains
>a claim to the disputed Spratly Islands.
>Vietnam has been the object of entreaties from both sides, as
>Chinese and U.S. government officials have increased visits to
>Hanoi. Visitors have included U.S. Senator Richard Shelby, the
>chairman of the Senate Intelligence Committee and Secretary of
>State Madeline Albright. Not to be outdone, the Chinese set up
>separate meetings in China between Vietnamese leaders, Chinese
>Defense Minister Chi Haotian and delegations from the Central
>Committee of the Communist Party. To top it off, Chinese Premier
>Zhu Rongji is to visit Vietnam in December.
>Aside from the rather obvious gift of grain, the major U.S.
>diplomatic effort toward Vietnam has been the negotiation of a
>trade agreement. Since 1996, the two sides have worked to open
>Vietnam's markets and increase trade with the United States. The
>agreement was finalized in July. However, the Vietnamese postponed
>signing the deal, leading to speculation about Chinese influence in
>Hanoi. At the same time, China was working on its own trade deals
>with Vietnam.
>Meanwhile, the diplomatic dance continues. The U.S. will continue
>to play to its strengths, namely economic benefits such as outright
>gifts like the grain donation, and the promise of increased private
>investment within Vietnam. Economic engagement makes sense for the
>U.S. government, but not necessarily for potential investors. The
>U.S. interaction with Vietnam is based on strategic reality, rather
>than economic reality. The U.S. policy does not mean Vietnam's
>economy has recovered from its past corruption and inefficiency.
>Related Stories include:
>Vietnam Sets Stage for New Government Purge - May 25, 1999
>Missing Assets May Lead to Political and Economic Changes in
>Vietnam - 21 May 99
>Hard-liners Retaking Control of the Communist Party of
>Vietnam - 8 January 1999
>Unrest in Vietnam Shakes Communist Party - February 13, 1998
>(c) 1999, Stratfor, Inc.

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