COMMENTARY

Project Growth Potential - The economic slump in America, the continued strain in Japan, and growing international concerns over threats to globalization due to these slowdowns, in addition to concerns over terrorism, fuel a desire to keep investments slow and close to home.  

International politics and policies have their effect on how investors view their options. Yet, in a climate favorably perceived for growth -- such as in China -- investors will turn a blind eye and deaf ear to concerns of any kind in order to be near the front of the line.  Investors want only to be able to make a good profit -- even if they need to wait more than 20 years as in China.

Vietnam seems to follow Chinese policies in many ways in spite of its own wariness of China's 2,000 year history of trying to (when it is not actually) dominating Vietnam.  However, if measured by fits and starts, Vietnam's FDI growth seems to have more investment fits than starts.  Even Japan's JETRO now calls upon Vietnam to more closely follow China's path toward capturing FDI.  See dispatch, below.  For a more comprehensive view of this outlook, click here for a full article.

There is a breeze blowing over economic development in Vietnam that seems fresh and sweet when the occasional gusts of ill wind don't overwhelm us. Many important achievements have been made to streamline the licensing procedure, allow more fully foreign invested projects, provide more data from and access to the decision makers, and forming economic alliances with both neighbors and (potentially) strong trading partners.

However, the challenges that lie ahead are not new.  In fact, some are as old as to rival the Doi Moi (Renovation) process itself that first began in 1986.  Frustrations come from thinking a challenge is overcome only to find the need to take the same challenge over -- sometimes more than once.

Planning for success but not achieving it; paralysis by analysis; seeing but not seizing opportunities for change; propagandizing the appearance of success when it is not, and then behaving as if it is real success and expecting others to believe it has been achieved. These are characteristics best left behind from another era long discredited and that has not ever shown any success.

Vietnam has the opportunity to be the regional leader; the window has opened and closed a few times in the past decade.  It is not wise to gamble that it will remain open, or ever open again soon. 

The time is now for both investors and the leadership of Vietnam to make the important decisions that will spell economic success for all. 

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DISPATCHES

Russians withdraw from Dung Quat oil refinery plant

Widely reported in Vietnam but mostly consigned to the back pages, it appears that the Russian partner in Vietnam’s first projected oil refinery has or announced plans to withdraw.  Alternative theories hold that the Russians are being asked to leave.

This refinery was first licensed in 1992 as a joint venture between PetroVietnam and France’s Total. When the State elected to move the site location from southern Vung Tau (in the Greater HCMC region) to central Quang Ngai (near Da Nang), 700 + km from both Hanoi and HCMC, Total sought both to increase the price it would receive for its refined product and to increase the project capitalization from $1.2 to $1.5 billion.

Vietnam refused, and Total withdrew in 1995.  The project remained in limbo until a multinational consortium including America's Conoco undertook a full feasibility study of the project at the new site.  In late 1997 the new consortium backed out claiming the project was not financially feasible.