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Southeast Asian Affairs 2005 VIETNAM IN 2004 A Country Hanging in the Balance Michael J Montesano Introduction In 2004Vietnam continued on the path ofpolitical, social, and economic adjustment that has given direction to its affairs since the mid-1980s. The regional and global environments and a number of domestic realities defined the challenges and opportunities before the country. While indicators of progress proved impossible to overlook, close observation of events in Vietnam during the year also offered cause for concern. The period between the end of 2004 and the opening of the Tenth Party Congress of the Communist Party of Vietnam (CPV) during the first half of 2006 may well come to be seen as one in which the sustainability ofVietnam's remarkable economic and social progress of the recent past hung in the balance. Endemic corruption and newly vigorous efforts to confront it, an increasingly active National Assembly, and serious disturbances among ethnic minorities in the Central Highlands counted among the highlights ofVietnam's politics during 2004. In the economic sphere, continued steady growth accompanied worries over the country's public investment strategy, its timetable for accession to the World Trade Organization (WTO), the pace of its equitization of state-owned enterprises (SOEs), and its long-term international competitiveness. The state of Vietnam's education and public health systems only added to these concerns. The year's developments in the area of international relations included Hanoi's success in hosting the AsiaEurope Meeting, continued albeit low-level tensions over the South China Sea and human rights, deepening of the Vietnam-United States military-to-military relationship, and the well publicized, somewhat embarrassing use of Ho Chi Minn City as a channel of escape for a large group of North Korean asylum-seekers on their way to South Korea. Michael J Montesano is Assistant Professor, Southeast Asian Studies Programme, National University of Singapore. 408Michael J Montesano Vietnam's foreign affairs during 2004 thus mirrored Vietnamese affairs as a whole. Historical, ideological, political, and even demographic legacies framed the country's ongoing, almost inexorable integration into the post-ColdWar international economic and political orders. The year raised not only the question of whether Vietnamese efforts at reform and adaptation have been "fast enough" but also the more basic one of whether these efforts have rested on viable foundations. Facing up to Corruption Official and public attention to Vietnam's serious corruption problem reached new levels in 2004. High-profile casualties of this attention included Minister of Agriculture and Rural Development Le Huy Ngo, forced out in June after the revelation of graft within his ministry, and Deputy Trade Minister Mai Van Dau, arrested in November along with his son for accepting bribes in the allocation of textile export quotas for the American market. Similarly, senior officials at Vietnam National Shipping Lines, the fuel-trading arm ofVietnam Airlines, and Vietnam Oil and Gas Corporation (PetroVietnam) suffered dismissal, arrest, or both because of corruption charges raised during the year. In addition to individual sackings and arrests, the country's anti-corruption drive took a number of more general forms. First, the Vietnamese press devoted frequent, detailed coverage to cases of official malfeasance throughout the year. Second, Prime Minister Phan Van Khai took explicit notice of the problem in his opening address to the year-end session of the National Assembly in October. Chatter in Hanoi and Ho Chin Minh City attributed to Khai himself the estimates that corruption cost public investment projects some 20-30 per cent of allocated financing. The Voice ofVietnam reported somewhat euphemistically that that same session of the Assembly addressed "wastage" in capital expenditure.1 Third, plans were made to create a new anti-corruption agency and to replace the 1998 AntiCorruption Ordinance with a tougher, more effective anti-corruption law. Officials of the Government Inspectorate announced that latter measure at a two-day gathering of foreign donors in early December in Hanoi.2 Their audience was well chosen. A number of veterans of aid and development work in the region, now actively engaged with Vietnam, privately remarked in 2004 that levels of graft and greed in Hanoi had begun to recall the norms of Jakarta's New Order...


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