© 2002 International Monetary Fund January, 2002 IMF Country Report No. 02/5 Vietnam: Selected Issues and Statistical Appendix This Selected Issues and Statistical Appendix on Vietnam was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the ‘member country. It is based on the information available atthe time it was completed on November 9, 2001, The views expressed in this document are those of the staff team and do not necessary reflect the views of the goverament of Vietnam or the Executive Board of the IMF. The policy of publication of staff reports and other documents by the IMF allows forthe deletion of ‘market-sensitive information. ‘To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to Publicationpolicy@imf.org. Copies of this report are available to the public from Intemational Monetary Fund « Publication Services 700 19th Street, N.W. « Washington, D.C. 20431 Telephone: (202) 623 7430 + Telefax: (202) 623 7201 E-mail: publications@imf.org + Internet: hitp://www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C.tL. sit INTERNATIONAL MONETARY FUND VIETNAM Selected Issues and Statistical Appendix Prepared by David Cowen, Olaf Unteroberdoerster (both APD), Nita Thacker (PDR), and Noriaki Kinoshita (FAD) Approved by Asia and Pacific Department November 9, 2001 Contents Government Revenue Reform .. A. Introduction... B. Recent Trends and Developments. C. Need and Scope for Improvements in Revenue Performanc D. Possible Improvements Foreign Currency Deposits in Vietnam—Trends and Policy Isses -.c.eceeeeeeel ‘A. Introduction. B, Dollarization in Vietnam—Stylized Facts CC. Dollarization and the Role of Currency Versus Assets Substitutio D. E. . Benefits, Challenges, and Costs of Dollarization Policy Implications. Private Sector Development in Vietnam. A. Introduction. B. Private Sector Development in the 1990s C. Recent Measures to Foster Private Sector Development D. Challenges Ahead .. Trade Reforms and Export and Import Performance.. Introduction. Recent Developments in Export Performance in the 1990s. Import Performance in the 1990s. eforms papeContents Page Figures ILL Foreign Currency Deposits Indicators 1.2 Foreign Currency Deposits, Exports, Interest Rates and Reserve Requirement 1.3 Openness and Financial Indicators. IV.1_ Comparative Perspective on Trade IV.2 Export Indicators... IV.3_ Exchange Rate Indicators SeSRSS Boxes LI Medium-Term Fiscal Framework and Revenue Reform... TL1 Currency Versus Asset Substitution —Two Basic Approaches to Explaining Dollarization. Tables L1 General Government Revenue 12 Government Revenue by Sector . 13 Comparison of Value-Added Tax and Import Tariff Efficiency... IL1 Deposit Money Bank Deposits, 1999-200; 1.2 Foreign Assets of the Banking System. IIL1 Registered Enterprises Under the New Enterprise Law hy Regian IL2 Sectors to be Controlled by Government Ownership IV.1 Schedule for Removal of Quantitative Restrictions on Imports, 2001-03 . IV.2_ Commodity Composition of Exparts, 1993-200. 1V.3 Commodity Composition of Imports, 1993-2001 . Basic Data... Statistical Appendix Tables Gross Domestic Product by Expenditure Categories at Current Prices, 1994-2000...55 Gross Domestic Product by Sector and Ownership at Current Prices, 1994-2000. Gross Domestic Product by Secto: at Constant Prices, 1994-2000 Consumer Price Inflation, 1995-2001 Gross Value of Agricultural Production at Constant Prices, 1995-2000 Production of Food Staples, 1995-2000. Industrial Crop Production and Livestock, 1995-2000. Gross Value of Industrial Production at Constant Prices, 1995-2000. Industrial Production by Sector of Ownership at Constant Prices, 1995-200 10. Population and Employment, 1995-2000... 11, Total and Nonstate Employment by Sector, 1995-2000 12, Employment in the State Sector, 1995-2000. 13. Summary of General Government Budgetary Operations, 1995-200) yen aways14. 15. 16. 17. 18. 19, 20. 21. 22. 23. 24. 25. 26. 21. 28. 29. 30. 31 32. 33. Summary of the Tax System, Contents Page a RSSeIAARIS Iss! Government Revenues, 1995-2001 Government Expenditures, 1995-2001 ... Treasury Bills and Bond Issues, December 1996-September 2001 Monetary Survey, 1996-2001. Balance Sheet of the State Bank of Vietnam, 1996-2001 Consolidated Balance Sheet of Deposit Money Banks, 1996-2001 Distribution of Credit, 1996-2000. Overdue Loans of Deposit Money Banks, 1996-2001 . ‘Nominal and Real Interest Rates, 1996-2001. Exchange Rate Developments, 1995-2001 Balance of Payments, 1995-2000. Merchandise Exports by Commodity, 1995-2000 Merchandise Imports by Commodity, 1995-2000 Direction of Trade, 1995-2000 Commitments of Foreign Direct Investment, 1995-2000 Disbursements of Foreign Direct Investment, 1995-2000 Foreign Direct Investment by Country of Origin, 1995-2000 External Debt and Debt Service Obligations, 1995-2000. ‘Summary of Normal Tariff Schedule 1999-2001 ‘Common Effective Preferential Tariff (CEPT) Rates, 1999-2001. uy RESS SaI. GovERNMENT REVENUE REFORM’ A. Introduction 1. This chapter reviews the factors behind developments in government revenue over the past five years (1996-2000). This period encompasses Vietnam’s continued transition to a market-based economy, the Asian financial crisis in 1997, and, towards the end, high world oil prices, which have led to both temporary and permanent changes in the revenue base, Understanding the nature of these changes is important for several reasons in the context of the current PRGF-supported p:ogram. First, itis key for assessing prospects for maintaining fiscal sustainability, as stronger revenue performance will be needed to cover stepped up spending for reducing poverty and for the envisaged structural reforms. Second, it is critical to designing improvements in tax policy and administration to shore up the revenue base. Third, it may help in better targeting technical assistance. B. Recent Trends and Developments 2. Vietnam has maintained a cautious fiscal stance, but with a weakening revenue trend. During 1996-2000, the overall government budget deficit (on a cash basis and excluding onlending) averaged 1 percent of GDP and the level of public debt (including the state-owned enterprise sector) stayed in the range of 55-65 percent of GDP. This compares with an average budget deficit of 2% percent in the first half of the 1990s. At the same time, however, government revenue declined as a ratio to GDP. In the three years leading up to the Asian financial crisis, this ratio averaged 22% percent. Over the period 1997-99, government revenue fell by 3 percentage points to 19% percent of GDP (Table 11). It increased slightly in 2000 to around 20% percent, but due largely to a temporary run up in oil revenue associated with high world oil prices. Tax revenue, in particular, continued to decline, indicating that despite a start of an economic rebound in the second half of 1999, tax buoyancy remained constrained. It suggests that structural as well as transitory factors explain the recent deterioration in revenue performance. 3. The most significant changes in Vietnam's revenue performance since 1996 have been a gradual decline in tax revenue, an increased dependence on oil revenue, and a further drop in revenue from the state sector. Detailed data on government revenue by type and source reveal the following main developments in the second half of the 1990s. By type of revenue © Tax revenue declined by 3 percentage points of GDP to around 15 pereent in 2000, mainly on account of trade taxes and the associated tax relief and concessions granted to enterprises. The initial drop in 1997 (the largest as a ratio to GDP) was likely due to the effects of the Asian financial crisis, with the fall in import ' Prepared by David Cowen and Noriaki Kinoshita.and export duties accounting for nearly two-thirds of the reduction in tax revenue.” Significant tariff reductions were also made starting in 1996 as part of Vietnam’s ASEAN Free Trade Area (AFTA) commitments, which required the application of low tariffs to goods that did not compete directly with domestic production. However, a further sizeable drop in import duties and charges in 2000, when nominal import ‘growth outpaced nominal GDP growth (in dong) by greater than a factor of four, suggests that the fall off was also due to structural factors, such as poor customs administration.’ Based on official estimates, the weighted average import tariff rate stayed virtually unchanged in 1999 and 2000 (at around 15% percent). However, import duty collections declined as a ratio to GDP from 3.6 percent in 1999 to 3.1 percent in 2000. © Other taxes remained relatively flat as a ratio to GDP, including the value-added tax (VAT), which was introduced in 1999.* © Nontax revenue also stayed fairly constant (4-4% percent of GDP) until 2000, when it jumped to 6 percent of GDP. Most of this change was due to the larger natural resource surcharges collected on petroleum production, mainly stemming from higher oil prices. The rest is related to smaller nontax collections resulting from a rollback in minor administrative charges and licensing fees. By source of revenue * Vietnam has become dependent on oil as a major source of revenue, Between 1998 and 2000, oil revenue jumped by 2 percentage points of GDP to an estimated 6% percent in 2000, reflecting 28 percent and 26 percent increases in volume of crude oil exports and petroleum product imports, respectively, and higher ‘world prices. As a result, by 2000, more than one-third of government revenue was 2 Import growth (in dong terms) averaged 8 percent a year during 1997-99, compared with 38 percent during the previous three-year period. > A 1999 technical assistance mission from the Fund’s Fiscal A ffairs Department identified the major weaknesses in customs administration as (i) a large element of discretion in import valuation; (ii) an extensive application of suspension regimes, which resulted in customs duties and other taxes on imports being collected after goods cleared customs and thus put revenue at significant risks; and (iii) insufficient resources devoted to post-clearance controls and audit. “The VAT, along with a special sales tax (excises levied on cars, gasoline, cigarettes, beer and other alcoholic beverages, and a few other items), replaced a cascading turnover tax. Prior to 1999, collections of the turnover tax was relatively stable, except in 1998, when domestic demand weakened sharply as a result of the Asian financial crisis.derived directly from taxes and charges on crude oil exports and petroleum product imports.* On the production side, oil revenue increased by 3 percentage points of GDP between 1998 and 2000, aided by a near doubling in the average export price (in US. dollars).° On the consumption side, while petroleum product imports were also up nearly 250 percent (in U.S. dollars), oil revenue from this source decreased by 4 percentage point of GDP, as the government at times reduced duties to soften the impact of high world oil prices on domestic prices. * The revenue contribution of the non-oil state sector is declining. Data broken down by taxpayer are incomplete, but available data since 1997 suggest a further slow but steady reduction in the contribution of state-owned enterprises (SOEs) outside the oil sector to total government revenue. In particular, revenue derived from the corporate income tax on the non-oil SOE sector fell sharply between 1997 and 2000 (Grom 46 percent to 33 percent of totel collections) (Table 1.2). Despite the economic slowdown, the corporate income tax collected from the non-state sector stayed constant as a share of GDP during 1997-2000, suggesting greater resiliency of this sector to the slowdown and its potential as a source of revenue during the recovery. Likewise, the sharp fall in foreign direct investment (FDI) during 1997-99 had little direct impact on government revenue performance. During this period, most existing foreign invested enterprises (FIEs) continued to operate in Vietnam, Also, many were already benefiting from investment incentives and tax exemptions and holidays, which minimized their overall contribution to government revenue (equivalent to 1— 1% percent of GDP) 4, The government’s revenue base is expected to continue to shift from production- or income- to consumption-based taxation, owing to the relative ease in administration and better structuring of incentives in support of growth. Moreover, itis consistent with te envisaged direction of structural reforms, which is likely to see growth in the state sector outpaced by that in the nonstate sector over the medium term. Increasing reliance is expected to be placed on indirect taxation. In terms of the efficiency of current VAT and custom duties collections, Vietnam shows signs of both strength and weakness compared with other countries in the region (Table 3). Domestic VAT efficiency is comparatively good, but import VAT efficiency is poor for the region, which is not surprising given the large number * On the export side, the government currently collects a corporate income tax, a charge on the use of natural resources, and an after-tax dividend from PetroVietnam—the large, state owned petroleum conglomerate. In total, the governments take is about one-half of the value to total crude oil exports, the rest of which is retained by PetroVietnam to fund its operations. On the import side, the government levies import duties on all petroleum products, an excise on gasoline (currently 15 percent), and a VAT (10 percent) on all other products. * Oil revenue is highly sensitive to changes in prices; currently, an increase in oil prices by US$1 per barrel raises government revenue by % percentage point of GDP.of ad hoc exemptions currently granted on the VAT for number of imported goods. As would be expected, import tariff efficiency is similarly poor in Vietnam, suggesting problems with customs administration. Overall, both VAT and customs administration will need to be strengthened, as discussed in Section D below. C. Need and Scope for Improvements in Revenue Performance 5. A substantial improvement in revenue performance is needed, for Vietnam to maintain a sustainable fiscal position while ensuring adequate funding for the envisaged costs of structural reforms and in sectors critical for poverty reduction, Under the baseline scenario described in Box I.1, publie sector debt would be expected to rise from an estimated 63 percent of GDP in 2000 to 72 percent in 2003, then begin to gradually fall through 2006, taking into account the impact of envisaged SOE, banking, and trade reforms. In line with this scenario, revenue would need to increase from the current level to the range of 21~ 22 percent of GDP. Oil revenue would be expected to pull back to the range of 5-6 percent of GDP based on the recent price forecasts and production trends. Thus, non-oil revenue ‘would need to rise by as much as 2 percent of GDP from its current level in the next three to four years. 6. The medium- to long-term impact of structural reform on government revenue is expected to be positive, as the reduction in barriers to trade and to business entry should further foster nonstate activity and improve the prospects for sustained growth (see Chapter IM). However, over the near term, government budgets will not only need to take into account the temporary rise in expenditure associated with SOE and banking reforms, but the temporary (and in some cases permanent) fall in revenue associated with SOE and trade reforms. 7. The net impact of structural reform on government revenue from the non-oil SOE sector is likely to be negative in the near future. First, as the financial health of many non-oil SOEs remains poor and the restructuring process for most is just starting, government revenue from this source is expected to further decline in the near term (on the positive side, the 1,400 or so newly equitized SOEs envisaged by end 2003 could perform better, and thus, serve as a larger potential—albeit limited—source of government revenue in the medium term), Second, the SOE sector is also expected to be affected by banking and trade reforms, which could have some temporary negative revenue consequences. Under the planned restructuring of state-owned commercial banks (SOCBs), SOEs may face harder budget constraints, which could constrain output. Also, trade measures aimed at removing quantitative restrictions (QRs) on imports, reducing import tariffs, and freeing up trading activity (on both the import and export side) are likely to be felt hardest by the SOE sector, which has benefited the most from the relatively high level of protection under past trade regimes.Box L1. Vietnam: Medium-Term Fiscal Framework and Revenue Reform ‘Over the medium term, the budget will need to accommodate the costs of structural reform and ensure adequate funding for the sectors critical for poverty reduction, while keeping public sector debt at a manageable level. Meeting these goals wll require a moderate path of fiscal consolidation, entailing a decline in the overall defi (excluding onlending, but including the current costs of reform) from between 3-4 percent of GDP in 2002 and 2003 to 2 percent by 2006. With steady implementation ofthe envied fe reforms, the augmented budget deficit (including onlending and era: Neio-Term Fal Framework | the total costs of reform) is projected to rise from 5 percent of |@_———— GDP in2001 tothe ange oF 89 percent of GDP in 2002 and 2003, but to drop back to 5 percent of GDP by 2004. Even with ‘temporary widening of buget det, revenue wll need to stay in the range of 21-22 percent of GDP over the medium term ‘to ensure that the government has adequate funds for its share of the reform costs, as well as for critical spending on education and health and in operations and maintenance of a growing Daring 2001-04, the costs of SOE and banking reforms and associated social spending are tentatively projected to total about 12 percent of GDP, comprising: SOE reform [Lact eect + The capital costs, estimated to total 2 percent of GDP, are mostly in the form of absorbing nonperforming loans (NPLs) owed by SOEs to be equitized or restructured. They also include the cost of resolving losses in market value ‘of physical assets, and dealing with bad debt of SOEs not currently covered under the equitization plan. The NPLs of SOEs that are not slated for reform will be dealt with through the SOCB reform. ‘+The current costs, 2 percent of GDP, cover mainly severance payments to redundant workers and interest on newly {issued government bonds for debt absorption. Banking reform ‘iin Pe Seco Debt +The capital costs, 7 percent of GDP, are chiefly for the » Covers) provisioning for remaining NPL in the SOCBs owed by SOEs and from raising the capital-asset ratio of SOCBsto | international standards, and restructuring the joint stock banks. ‘+The current cost, 1 percent of GDP, is mostly for interest on newly issued government bonds to finance the capital costs. Publi sector debt would remain manageable, provided the growth of new SOE debt is capped at about the nominal growth, | Scmrataecmateruiain | vate eg ea lglg abt ie rate ofthe economy through strengthened financial discipline ee ee and SOCB reform, inter-enterprse debt is resolved with minimal | [aGiwrnedone dex Ti Gnense elder @ SOE fiscal cost and the budget position improves overtime, As of Ved nits ng en-199 ako SOE be ¢end-2000, the level of public debt of Vietnam was about ee 63 percent of GDP (staff estimate), including bank debt but excluding inter-enterprise debt of SOEs, The government's domestic debt (3 percent of GDP) is very small, and its external debt (27 percent of GDP) is all on concessional terms. Reforming the SOF sector will result in the government taking on some SOE debt, which by itself would not increase the level of debt of the public sector as 2 whole, Public debt is projected to peak at about 72 percent of GDP by 2003, and stabilize thereafter, ‘The sustainability of public debt depends critically on the success of strengthening tax policy and administration, curtailing the growth of SOE debt, and improving the budget position If, for example, the budget position were to worsen because of a continued decline in noa-oil andlor tax revenue (as a share of GDP), rapid expansion of SOE debt, and further deterioration of banks” asset portfolios (cach of which might be associated with a delay in the reform of SOEs and SOCBs and a worsening of their financial plight), the required bank financing of the deficit and interest costs would rise significantly, Assuming the government's oil revenue moderated and non-oil revenue stayed at current levels c., wit total revenue staying around 19% percent of GDP), public sector debt would rise to around 80 percent of GDP by 2006,8. However, the net impact of reform on government revenue from the nonstate sector should be positive over the medium term. The removal of QRs and replacement with tariff3 on a number of imports by 2003 could provide a boost in revenue. More ‘generally, bilateral and regional trade initiatives are expected to result in a broad-based reduction in tariff rates, but this could be parlly offset by a larger volume of trade, Several ‘other factors may counteract the immediate negative consequences of structural reform on ‘goverment revenue. First, the expansion in small and medium-sized enterprises (SMEs) and ‘upswing in FDI as a result of the new Enterprise Law and amended Foreign Investment Law should lead to a further broadening of the tax base. However, bringing this activity into the revenue fold could take time if the system of investment tax incentives needs to be revised and if new tax measures need to be introduced, given the current weaknesses in tax policy and administration (in particular, the introduction of the VAT or some form of presumptive taxation on SMEs, as discussed below). Second, structural reform in general should improve overall efficiency and competitiveness and the financial performance of firms. D. Possible Improvements 9. For revenue performance to take full advantage of prospective structural changes, improvements in both tax policy and administration will be needed. In response to the Vietnamese authorities” request, a technical assistance mission from the Fund’s Fiscal Affairs Department (FAD) recently reviewed areas for improvement and the needs for future technical assistance in tax policy and administration. The mission’s main findings are summarized below. 10. With respect to tax policy, the scope for raising tax rates is limited, but the design of several taxes, in particular the VAT, can be improved. Issues of fairness and ‘equity in the treatment of foreign and domestic investors and high income taxpayers also need to be addressed. In the area of tax administration, recent efforts have concentrated on recruiting additional staff, providing technical training, computerizing some existing procedures, and implementing of a modern taxpayer identification number system. However, the basic organization of tax administration is still cumbersome and in need of further modernization and computerization.’ 11, Drawing on the work of the recent FAD mission, the main drawbacks to tax policy and administration are as follows: 7 Vietnam’s tax network is overseen by the General Department of Taxation headquarters in Hanoi and comprises 61 provincial tax offices (PTOs) and 620 district tax offices (DTOs). ‘The PTOs have both operational and supervisory functions, in their administration of tax obligations for 70,000 medium- to large-sized enterprises and oversight of the DTOs. The DTOs administer the tax obligations of the other taxpayers, which comprise around ! million small enterprises (mainly household businesses) and 10 million farmers.12. -10- VAT: Among the major deficiencies in the VAT is the treatment of goods subject to the special sales tax (SST), which in most cases are exempted from the VAT. This complicates the VAT rate structure and leads to two regimes for determining VAT tax liability. Other drawbacks to the current VAT policy and administration are the allowance of presumed VAT credit on purchases from business that do not issue invoices and the requirement that each branch of a firm file a separate VAT return. ‘The ad hoc reduction in the VAT rate from 10 percent to 5 percent for a few items (see Summary of the Tax System) in 2000 has also resulted in foregone revenue and raised concems about VAT integrity. Other taxes: The corporate income tax needs to provide more uniform tax treatment of foreign and domestic enterprises. In some respects, Vietnam treats foreign investors more generously than domestic firms: the standard rate is lower (25 percent versus 32 percent); foreign investors enjoy a tax refund on reinvested profits; and only domestic firms are subject to the 25 percent surtax on excess income, On the other hand, profits remitted abroad by foreign investors are subject to a withholding tax. Also, the individual income tax needs to brought more in line with international standards by revamping the withholding tax on wages and other types of income and eliminating the supplementary income tax, which effective raises the top marginal rate despite its recent reduction. The authorities have already committed to revising the VAT law to reduce the number of rates and exemptions, to be made effective in the 2003 budget. The recent FAD mission recommended a number of other improvements as follows. Tax policy With respect to the VAT, broaden its base by taxing goods subject to the SST, and cease the practice of imputing VAT credit on purchases without invoices. Also, streamline exemptions from the VAT, SST, and customs duties. Under the corporate income tax, bring about a more uniform treatment of foreign and domestic enterprises and tighten tax incentives for investment, in particular by reducing preferential or discriminatory practices for foreign investors. In addition, streamline the individual income tax, including withholding allowances. ‘Tax administration Introduce self-assessment procedures gradually, as part of the modernization strategy, beginning with the creation of a pilot office comprising improved programs in tax services and education, new collection (i.e., filing and payment) procedures, stronger collection enforcement systems (including appropriate penalties and appeals), and more effective audit programs, especially for VAT refunds.* Ona broader scale, simplify basic VAT administration, including streamlining the criteria for subjecting enterprises to the VAT under the invoice method by introducing a simple criterion (e.g., annual tumover), developing a new mechanism that allows firms with multiple branches to file a single VAT return, and designing and implementing new audit systems and refund programs supported by computerization, * Over the medium term, develop a strategy for modemizing tax administration, including the design and implementation of a computerization project (during 2001- 05) aimed at achieving this objective. Also, to increase effectiveness of computerization, conduct a comprehensive review of the organization and procedures of tax offices. Furthermore, customs administration will need strengthening along the lines earlier recommended by the Fund. 13, Tax incentives for investment also need to be tightened. Like many other countries. in East Asia, Vietnam provides generous investment incentives in the form of tax holidays and preferential corporate income tax rates. While it is recognized that these incentives are difficult to resist given the competition to attract investment, experience shows that tax holidays are a particularly inefficient method of promoting investment in new enterprises, ‘The medium-term goal should therefore be to rationalize various preferences and broaden the tax base. 14, Vietnam has much room for substantially broadening the revenue base by simplifying its tax system. Further improvement in tax policy and administration would not only lower the costs of compliance and collection, but also enhance the confidence of both foreign and domestic investors. In light of recent revenue trends, taking the necessary steps to improve the tax system will be critical in the near future if Vietnam is to remain on a path of medium-term fiscal sustainability.-12- ‘Table 1.1. Vietnam: General Government Revenue 1996 1997 19981999 2000 By type of revenue. Total revenue and grants 29 ‘Total revenue 2a ‘Tax revenue 185 VAT I/2/ 4d Corporate income tax 37 Individual income tax Os Excises (special sales taxes) 7 Import and export duties 56 Other taxes 3.0 ‘Non-tax revenue 39 By source of revenue: Oil revenue Crude oil 3/ Petroleum products 4/ Non-oil revenue Tax Corporate income tax VATiexcisesicustoms duties 5! VAT Excises Import and export duties Non-tax Crude oil 3/ ‘Nonoil state-owned enterprises Foreign-invested enterprises on-state enterprises Lonery ‘Taxes on international trade 6/ Others Grants 06 ‘Memorandum items: Ratio of import duties to total imports 103 Ratio of import VAT to total imports Sources: Ministry of Finance; and staff estimares. 1 Prior to 1999, turnover tax. 2/ Starting in 1999, includes import VAT. 3/ Consists of corporate income fax, income from natural resources, and profit after tax. (Gn percent of GDP) 28 202 198 200 «196 19.2 158 154182 38 33043 37003637 os 0s Os 1S od 43 4136 21 24 20 42 42 40 410 47 28 24 UT 11s 156 145 128 123 26 8 23 13 16 2822 28 243 S40 «5246 120 120010 2100 181 04 0s om 370 41S 29 4! Consists of import duties, excise on gasoline, and VAT on other products. ‘1 Breakdown only available for 2000, 6/ Includes import and expor: duties, import VAT, and other taxes on trade.-13- Table 1.2. Vietnam: Government Revenue by Sector Domestic VAT Corporate income tax TT TO9R 1999 2000 1997 1998" 1999 F000 (in percent of total) Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 SOEs 499 $24 $2.1 49.0 455 45.2 393 334 Lottery 102 9.3 103° 111 14 28° 22033 Crude oil Los oe 8H MTS 6B 43.B FIES 185 158 149 172 70 64 49 63 Non-state 244 226 228 228 172 182 167 132 (in percent of sectoral GDP) Total 300027 37°36 3746 State sector L/ we 52 48 470 470 420047 Crude oil os 883 668 37.0 40.8 FIEs . 36 38 29°23 «1S 22 Non-state 1413 13013012013 Sources: Ministry of Finance; and staff estimates, 1/ Prior to 1999, turmover tax. 2/ Includes SOEs and lottery‘able 1.3. Selected Asian Countries: Comparison of Value-Added ‘Tax and Import ‘Tariff Efficiency Year Total VAT. Domestic VAT Import VAT Tariff Main Tn percent Efficiency Inpercent Fificiency Inpercent Efficiency Average In percent Efficiency of GDP. of domestic of imports rate 17 of imports demand a 2) B20) @ GFA) © — ova) @) (9) (108) Vietnam 2000 10.0 40 0.40 27 0.27 22 0.22 16.2 55 034 Bangladesh 1998/99 29 0.19 12 0.08 88 0.59 22.2 116 0.52 z China 1999 al 0.24 29 ory 68 0.40 164 47 0.33 * India 1999/00 os - - 329 18.4 056 Indonesia 1999/00 27 027 16 0.16 45 0.45 88 14 0.16 Phitippines 2/2000 2.8 0.28 16 0.16 27 0.27 8.0 28 0.36 Sti Lanka 2000 36 0.29 19 O15 3.0 0.24 16.0 38 om ‘Sources: Vietnamese and other country authorities; and staff estimates 1/ Figures for closest available year, 2/ Based on GNP rather than GDP.- 15 IL FOREIGN CURRENCY DEPOSITS IN VIETNAM—TRENDS AND POLICY ISSUE: A, Introduction 15. _ Asin a number of developing and transition economies, foreign currency deposits (FCDs) have become an important feature of monetary developments in Vietnam. Rising FCDs are typically associated with the increasing use by residents of foreign currency as a medium of exchange (for transactions) and/or as a store of value (for investment purposes), and are usually referred to as dollarization. However, there are no reliable data on foreign currency in circulation in Vietnam (although the amount involved is believed to be substantial), so that a comprehensive analysis of dollarization is not feasible. This chapter is focused on developments in FCDs as a proxy for dollarization. It reviews the FCD trends, analyses the causes, and assesses the benefits and policy challenges. The chapter concludes that in terms of policy implications, the gradually increasing (albeit moderate) dollarization in Vietnam appears to be largely in line with the country’s growing monetization and closer integration into the global economy. While this trend should not be resisted through administrative means, policy makers need to address the resulting challenges regarding prudential supervision, exchange rete management, and monetary policy. B. Dollarization in Vietnam—Stylized Facts 16, _ Measured as the ratio of foreign currency deposits (FCDs) to broad money, dollarization in Vietnam first fell sharply from its peak 72000 ‘Vietwane:Dollarization, 1990-2001 o in 1991 of 41 percent, en {awe incre in FCDS following macroeconomic oo otis US. li) 8 (esa) stabilization, Within two years, | 12m this ratio fell to 23 percent and | 100 stabilized in the range of 20 to x 24 percent in the mid 1990s. to » ° Ratio of FCDeto oud ney (pret) Starting in 1997, the ratio has risen to more than 34 percent by August 2001. By io I) AS 51H HT 9H) OD am international comparisons, a while remaining ina medium Snes Vceemone sori an Fins range, dollarization in Vietnam has increased to significant levels (Figure I1.1) * Prepared by Olaf Unteroberdoerster.-16- Figure IL1. Vietnam: Foreign Curreney Deposits Indi ‘Ratio of Foreign Currency Deposits to Broad Money Il u iam 01995 Vietnam: Cumulative Ineresse in Foreign Currency 2900 5 Deposits and Annual Remittances, 1995-2000 100 | (Calon of US. dll) 1600 4 a00 | enmnay BREEDS 1.200 ‘ 1.000 \. 00 0 00 * [ of + 19952” GE SBTIZ «ORI (09.12—2000.12 Sources: Viemamese aubrities, ard Fund staf esas.-17- 17. Avvariety of factors have influenced FCD developments. Hyperinflation in the early 1990s caused the sudden steep increase in dollarization ratios in 1991. Spillovers from the Asian financial crisis in 1997 were also associated with an uptick in dollarization. Specifically, spreads in ex-post real returns in favor of foreign currency over dong deposits peaked during 1998, primarily mirroring dong devaluations in the aftermath of the Asian crisis, and thus contributed to an increase in the dollarization ratio from 21 percent in September 1997 to 26 percent one year later. However, the increase in dollarization during 1999-2001, a period of relative macroeconomic stability, appears to be multifaceted, and four factors have played a role. 18, The first major factor is the reintermediation of foreign currency previously held outside the banking system. For the most recent upswing in dollarization, the strongest increase, by far, was recorded among households. In particular, during 2000, their FCDs were almost doubled to USS Fans orrenay Dep 3.1 billion. Over the past 1% = Foreign Corency ipsae years, households have accounted for 80 percent of the total increase in FCDs. (Table IL1). Yet, in comparison, remittances have increased more gradually, and contributed only partially to the strong increase in FCDs (Figure Il.1). Moreover, with tight controls in place on all capital account transactions, 9512 Ha 19732 Jomi2 190912 moa inward capital flows may have Sows: Vienamese arbors and Fund stl ries, been limited, Overall the sharp increase in households’ FCDs is believed therefore to reflect renewed confidence in the banking system, and was facilitated by the lifting of regulation on the opening of foreign currency accounts in 1999.” Also pointing to the role of increased confidence is the fact that nearly all the increase in household FCDs has been in the form of time deposits. Finally, the preference of foreign currency deposits among households is likely to reflect also the relative thinness of the financial market and the lack of altemative interest-bearing financial instruments in Vietnam (Vetlov, 2001). . Ser i ° The new regulation entitles resident individuals to open and maintain foreign currency (time and savings) accounts, to hold foreign currencies received in a number of ways {including in the form of remittances), and to make various kind of payments in foreign currency (SBV Circular No. 01/1999/TT-NHNN7)..-18- 19. The second main factor is the differentials in ex ante real returns and portfolio and risk diversification motives. In particular, periodic expectations of a dong devaluation, in part fuelled by the real appreciation of the dong intermittently since early 2000, tended to coincide with rising dollarization. With devaluation ‘Vena Dolrzton and Real ive Rahanys Rate expectations, households and amar 20g 201 enterprises have sought protection of wealth and Red esocadge purchasing power in FCDs. ~——a With nearly 80 percent of all ECDs in the form of time J deposits, such investment and Raine FeDee diversification motives, as a ign) explained in more detail below, may have played a primary role as opposed to mere money demand factors typically associated with current return differentials. Moreover, enterprises, which hold the bulk of short-term dong deposits, are estimated to have switched out of dong into foreign currency deposits, particularly during the first four months of 2001, when the dong appreciated by a total of 2.2 percent in real terms. 20. ‘The third factor is the strong export performance during 1999-2001, when quarterly exports nearly doubled, compared with the previous three-year period average (Figure IL.2). This factor coupled with a lower surrender requirement (first reduced in 1999 from 80 to 50 percent and then in 2001 to 40 percent) has allowed many exporters, who are also importers, to retain a larger share of their foreign currency earnings in order to self- finance their growing import activities and reduce related exchange rate risks. tis also noteworthy in this context that, by end-August 2001, more than 40 percent of all FCDs were held with Vietcombank, the main bank for international trade transactions. Moreover, in recent months this bank accounted for up to two thirds of the increase in FCDs in the entire banking system, 21. ‘The fourth factor is the virtual elimination of the dong-dollar interest rate differential, which bad previously been very much in favor of dong deposits. The rate differential was reduced from 3 percent in mid-1999 to the range of 0 to % percent since early 2000, making FCDs more attractive (Figure II.2). Dong deposit rates may have been lowered in part to help maintain banks’ profitability, particularly when nonperforming loans ‘were mounting, and in part as a result of ample liquidity in the banking system at the end of 1999. Continued restrictions on banking competition may have also contributed to the overall lowering of dong deposit rates, as foreign banks are not permitted to offer dong deposits in excess of 25 percent of their capital to non-borrowing households and enterprises.-19- Figure I1,2, Vietnam: Foreign Currency Deposits, Exports, Interest Rates and Reserve Requirements 500) Vietnam: Quarterly Increase in Foreign Currency Deposits 7" “ eS ean ™ er ae 4,000 on 3,500 oa on 100] amiyegen ° to: ° awn . ATE : ve vee 19963 19969 19973 HTD IRS 199 19883 19999 20003 20009 ALS Sources: Viewares aur en Fad estimates, Demand Deposit Interest Rates “Sanuary 1998-August 2001 re {9982 WOR IeHRAD 19992 19986 199910 20002 20006 200010 20012 20016 Sout: Viemasee noi and Fura exis. sigs in Reserve Requlrements since the Beginning of 2000 Deng: Foreign eueney deport “Applicable demand wd Applicable to foreign eureaey time deposits and deposit deposits and deposit sbstues Sabeattes witha matiry of witha atu of ess than 12 [ese than 12 meth ‘ons ‘Sia ake beginning 5 peeent (3 perentforBank 5 percent of 2000 for Agrealtare and Development GARD) ‘Geiobe 10,2000 Tnsreao to & percent Decerber 1, 2000, ‘neease to 12 percent May 1, 2001 Decrease 03 percent Increase to 15 percent (2 perent for BARD)22. On the other hand, recent administrative measures to curb the increase in FCDs appear to have been ineffective, Aimed at making FCDs less attractive to banks and depositors alike, the State Bank of Vietnam (SBV) raised in three steps the reserve requirements for FCDs to 15 percent in May 2001 (Figure II.2). The ceiling on interest rates on FCDs of enterprises continued to be in the range from 0.5 percent a year for demand deposits to 3 percent a year for time deposits over six months. Moreover, foreign bank branches are prohibited from offering FCDs to Vietnamese households. Despite these steps, FCDs continued to increase rapidly during January 2000 to August 2001. C. Dollarization and the Role of Currency Versus Asset Substitution 23. In order to explain dollarization trends, it is useful to distinguish between two motives for the demand for foreign currency. The first is currency substitution, which ‘occurs when residents hold foreign currency as a means of payment. The second is asset substitution, when residents hold foreign currency denominated assets for investment purposes, rather than as a means of payment. 24. Currency substitution is typically attributed to periods of hyperinflation (as explained in more detail in the Box II.1), when the cost of using domestic currency for transactions becomes very high. This phenomenon helps explain Vietnam’s experience in the carly 1990s when dollarization peaked at 41 percent as a result of hyperinflation, but then declined to about 20 percent in 1995 following the return to macroeconomic stability, However, since then, dollarization has gradually increased even though inflation has remained low and the exchange rate relatively stable. 25. This in turn may be due to increased asset substitution which is determined by risk and return characteristics of domestic and foreign currency assets, Thus, even when the expected exchange rate is stable and inflation is low, foreign currency denominated assets may be preferred as they protect against a possible (but unexpected) return of macroeconomic instability. As suggested by the calculations in Box II.1, Vietnam’s past episodes of inflation and real exchange rate volatility could form expectations on future volatility that result in hypothetical dollarization ratios broadly in line with the ratios observed in recent months. 26. Asset substitution could also lead to higher dollarization as a natural consequence of increased trade and economic integration (Figure II.3). As more openness tends to result in a stronger exchange rate pass-through, trade integration would lead to higher inflation volatility and lower volatility of the real exchange rate.'° As a result, ° At the extreme, for example, if the exchange rate pass through were equal to one, the volatility of the real exchange rate would be zero, as exchange rate changes would be matched one-for-one by changes in the inflation rate.-21- Box II.1, Currency Versus Asset Substitution—Two Basic Approaches to Explaining Dollarization Curreney Substitution ‘The standard analytical framework for currency substitution has been a money demand equation augmented by expected exchange rate changes and foreign interest rates.' Such an approach aims at measuring the opportunity cost of holding domestic versus foreign currency. The degree of substitution is then determined by relative rates of return deriving ftom interest rate differentials between foreign and domestic currency and expected exchange rate changes. This approach has been useful in explairing large upswings in currency substitution during, periods of macroeconomic turbulence, when retum differentials or the opportunity cost to hold domestic. currency are high. However, itis less successful in explaining the persistence of high rates of dollarization when macroeconomic stability returns and return differentials subside, For example, many Latin American countries have experienced continuously rising eurreney substitution ratios even after the return of macroeconomic stability Savastano, 1996). By comparison, the experience in transition economies has been more mixed, Poland and the Baltic states experienced significant reductions in currency substitution ratios as inflation retured to single digit levels (Sahay and Vegh, 1995). Asset Substitution Based analytically on the minimum-variance portfolio approach (Ize and Levy-Yeyati, 1998), asset substitution would be determined by the volatility of inflation (inc-easing the riskiness of domestic currency assets) and the real exchange rate (increasing the riskiness of foreign currency assets in terms of domestic currency). Subjecting investors toa risk-return trade off, the attractiveness of domestic relative to foreign currency deposits increases ceteris paribus when inflation volatility declines relative to real exchange rate volatility. In ‘other words, for given inflation volatility, a decline ofthe volatility of the exchange rate would inerease asset substitution, as it would enhance the benefits of hedging wealth with foreign currency assets, Thus, dollarization levels could remain high ina period of macroeconomic stability and low return differentials ifthe expected volatility of inflation remained high relative to the exrected real exchange rate volatility. Based on these considerations, and assuming past episodes of inflation and exchange rate volatility determine expectations, the ‘minimum-variance approach to a portfolio of dong and foreign currency assets would imply an underlying rate ‘of dollarization for Vietnam that could be as high as 50 percent, Assuming that past memories of hyperinflation are fading and taking into account only data for 1994 tothe present (a period of relative macroeconomic, stability), the implied dollarization ratio would be about 30 percent—broadly in line with the ratio observed in recent months. “Vietaanns Measures of wnderjingdalaization based on assed subst (fue 2001 1990-2001 1994-2001, 1998-2001 Variance (quately change in CP, p) sae 294 2a Variance (quarterly REER, €) 2932 iat wa Covariance (CPI, REER) 598 136 tor ‘Underlying dllarizaon (MVP, in perceat) U/ 3 3 2» “Source: Vieimamese authorities IMF, Information Note Syemy and Fund aad eximates 1 Based on lv and Levy Yeyat (1998), the minimam-rarnce portato allocations vied the following dllazation raod ocign curency denominatd cet to veal assets:d~ Varig) * 2 Cow(pe) [Var (+ Vae(@) +2 Cov (pe " For a recent literature overview see Balino etal. (1999) or Vetlov (2001).-22- domestic currency assets would become more risky relative to foreign currency assets, which in turn would induce investors to increase the share of foreign currency assets in their portfolios (see Box II.1). Indeed, Vietnam experienced a rapid increase in economic integration with the rest of the world during the 1990s; the share of trade, as measured by the ratio of imports and exports 0 GDP more than doubled from 44 percent in 1990 to 94 percent in 2000. Also, the exchange rate pass-through tended to increase (as indicated above), with the contemporaneous correlation of quarterly inflation and changes in the dong- USS. dollar exchange rate increasing from 0.06 for the period 1993Q1-2001Q2 to 0.33 for the past 3% years. 27, The more recent increase of dollarization in Vietnam appears to be due primarily to asset substitution and the increasing integration with the global economy." Data on FCDs corroborates this view. First, the ratio of demand deposits to total FCDs declined from 29 percent at end-1999 to 17 percent at end-August 2001. This shift coincided with the rapid increase in household FCDs during 2000, nearly all of which was attributable to time deposits, However, data on FCDs can only provide a limited assessment of the extent of dollarization in Vietnam. First, reliable estimates on the amount of U.S. dollar currency in circulation are not readily available.'® Second, information on cross-border deposits held at banks abroad, which can be considered close substitutes for FCDs, is incomplete at best. However, data from the BIS suggest that Vietnamese cross-border deposits played a minor role and were relatively stable during 1999-2000, increasing by US$24 million to some US$139 million at end-2000, which was equivalent to less than 3 percent of FCDs in the Vietnamese banking system, Third, due to statistical inadequacies, the measure of FCDs may include holdings of non-residents (Agenor and Khan, 1996; Buchs, 2000). D. Benefits, Challenges, and Costs of Dollarization 28. The increase of FCDs in the Vietnamese banking system, particularly since late 1999, has clearly enhanced the opportunities for reintermediation and financial 1 Alternatively, one might attribute the persistence of a certain degree of dollarization to switching costs (Mueller, 1994). However, switching costs are considered high for currency, but they may be less significant for interest bearing deposits, which are used as a measure of dollarization here. Note that in many empirical studies, these two components have typically been Iumped together in a measure of currency substitution or dollarization (Catao and Terrones, 2000) because of insufficient data on foreign currency in citculation. Previous research in the Fund and elsewhere has found data from the U.S. Customs ‘Currency and Monetary Instruments Reports (CMIR) to be informative in this respect. This, data, which is not available for Vietnam, would permit to calculate cumulative net inflows as a proxy for the stock of U.S. dollar currency circulating in a given country. The accuracy of the estimate would depend, however, on the Iength of the cumulation period and the absence of outflows, which are unrecorded.-2B- deepening. Moreover, it has strengthened banks’ financial performance. Overall, banks have been cautious in extending foreign currency loans domestically, and have placed the bulk of FCDs as deposits with banks abroad (Table 1.2). These deposits have provided banks with a stable source of income, particularly considering the burden of nonperforming loans on banks’ income position. It is noteworthy that one percentage point in the interest rate margin eared on FCDs at end-2000 would have been equivalent to about 3 percentage points in terms of retum on banks’ equity. 29. Allowing residents to hold FCDs also enhanees the credibility of the macroeconomic policy stance in Vietnam, by giving a greater role to market forces and avoiding direct intervention in asset allocation decisions of the private sector. Because the cost of monetary indiseipline and intervention increases with the degree of dollarization, the government should thus also be more credibly committed to stronger financial policies. 30. Perhaps the most important challenge of dollarization concerns banks’ safety and prudential supervision. Dollarization may add to banking sector vulnerabilities, arising from a currency mismatch of deposit and lending activities, and from exchange and credit risks; the share of nonperforming foreign currency loans to total loans is roughly twice as high as that of dong loans (Figure IL.3)."° Moreover, especially in the case of state-owned banks, the potential volatility of FCDs could give rise to liquidity problems and represent potential claims on Vietnam’s official reserves. The coverage of FCDs by gross official reserves has declined substantially over the past five years from over 140 percent at end-1996 to below 60 percent at end-August 2001 (Figure II). 31. Dollarization also implies a loss of seigniorage revenues for the SBV, to the extent that it arises from currency substitution. While some seigniorage is earned from bank’s required reserves in foreign currency at the SBV itis lost from the foreign currency in circulation, As noted above, no reliable data are available on the amount of foreign currency in circulation. However, assuming the ratio of foreign currency in circulation to deposits in foreign currency is the same as that in dong, foreign currency in circulation would be equivalent to D 42 trillion, representing about 10 percent of GDP at end-2000. With ‘3 The interest rate ceiling on foreign currency loans, which was only lifted effective June 1, 2001 (nearly a year after the ceiling on dong loans was replaced by the base rate mechanism), might have prevented banks from accurately pricing risks associated with such loans, thereby contributing to the relatively high share of NPLs in this segment.‘monetary aggregates programmed to grow by about 20 percent on average, this form of seigniorage losses would amount to 2 percent of GDP a year.'* E. Policy Implications 32. Dollarization in Vietnam appears to be largely a result of the country’s deepening monetization and closer integration with the global economy, particularly in recent years, Administrative measures to reduce dollarization should be avoided as this could give rise to renewed disintermediation, In particular, reserve requirements should be ‘more uniform so as not to limit or distort the intermediation of banks, albeit within prudential bounds. Moreover, increased interest rate flexibility, applied to both foreign currency loans and deposits, would allow banks to more accurately price risks involved and improve resource allocation. 33, Accepting dollarization, however, means that the SBV will have to address new challenges in prudential supervision, as well as a broader set of parameters in designing the appropriate monetary and exchange rate policies. In particular, prudential regulation on net open foreign currency positions needs to be strictly enforced and the quality and maturity of banks’ foreign currency assets monitored carefully. While the limited role of foreign currency lending in Vietnam is reassuring given banks’ weak credit risk management, the liquidity and quality of banks’ foreign assets as a counterpart to FCDs will need to be monitored. Supervision needs to be strengthened to maintain the public’s confidence in the banking system. While systemic liquidity risks could be addressed by a higher reserve requirement on FCDs, this latter should not impede bank intermediation and thus add to a foreign liquidity squeeze. Moreover, the SBY should set aside all required reserves on FCDs and should not consider them freely usable gross official reserves.'* "4 Similar calculations are discussed by Fischer (1982). Seigniorage losses tend to be highest for developing countries with rudimentary peyment and financial systems and thus a high ratio of currency in circulation to GDP. Therefore, seigniorage losses in percent of GDP should be expected to decrease over time as the financial system becomes more sophisticated and reliance on cash transactions declines. 5 For this reason and in line with the standard definition of international reserves (BOPMS5) to cover only readily available and unencumbered reserves, FCDs of deposit money banks held at the SBV are subtracted from gross official reserves when calculating net official inteational reserves (NIR) under the PRGF-supported program.-25- ‘gure LL.3. Vietnam: Openness and Financial Indicators 120 0 oa Vietnam: Dollarization and Openness . 1990-2000, ‘Trade S,_ in percent of GDP. +. (ettscale) Foreign cuceney deposits in percent of broad money 1990 1991" 1992” 1993 "1994 1995" 1996” 1997 1998” 1990 " 2000 Sources: Vietnamese autoriios V/ Measured es the sum of exports and imports (Cob), 0 3s 30 Tmilions of US. dlrs 5500 + 4500 | Ratio ofreserves to FCDs 3.300 2500 1.300 300 ‘Vietnam: NPLs based on VAS, in Percent of Total Lo: Foreign currency loans a . ue poet Dong loans 6 : fame ‘ Tq” smog!” Song 200009 20mQ” 2I01Q1 NLA once SBV; an Fed eines Viet: Grove Offical Reserves and Forign ‘currency Depot, 198-201 FCDs 140, ‘ele) in percent (right sate) Reserves (lot seals) “ 1995.12 1996.12 1997.12 1998.12 1999.12 2000.12 2001.8 Source: Vietnamese authorities, and Fund stafT estimates.-26- 34. On balance, the exchange rate regime should be flexible, given the prevalent role of asset substitution in Vietnam. Fixing the exchange rate under asset substitution, as with higher capital mobility, would further limit the SBV’'s scope for independent monetary policy."® At the same time, the scope for using a flexible exchange rate as an instrument to reduce dollarization is limited over time. As the exchange rate pass-through is expected to increase with Vietnam’s growing openness, the riskiness of foreign currency assets would decline along with the volatility of the real exchange rate. 18 tt should be cautioned, however, that to the extent currency substitution persists a reduced flexibility of the exchange rate remains justifiable. This is because currency substitution tends to increase exchange rate volatility. As a result, the exchange rate in a floating rate system will be more sensitive to expected changes in the money supply and other variables affecting the money market. For a more detailed discussion on appropriate exchange rate regime in response to various economic shocks under currency substitution see Berg and Borenzstein (2000).-27- References Agenor, Pierre-Richard, and Mohsin S. Khan, 1996, “Foreign Currency Deposits and the Demand for Money in Developing Countries,” Journal of Development Economics, Vol. 50, pp. 101-118. Balino, Tomas J.T., and Adam Bennett and Eduardo Borenzstein, 1999, “Monetary Policy in Dollarized Economies,” IMF Occasional Paper 171 (Washington: International Monetary Fund). Berg, Andrew and Eduardo Borenzstein, 2000, “The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies,” IMF Working Paper WP/00/29 (Washington: International Monetary Fund). Buchs, Thierry, 2000, “Currency Substitution in the Russian Federation (1992-1997),” MOC-MOST : Economic Policy in Transitional Economies, Vol. 10, pp. 95-110. Catao, Luis, and Marco Terrones, 2000, “Determinants of Dollarization: The Banking Side,” IMF Working Paper WP/00/146 (Washington: International Monetary Fund). Fischer, Stanley, 1982, “Seigniorage and the Case for a National Money,” Journal of Political Economy, Vol. 90, pp. 295-313. le, Alain, and Eduardo Levy-Yeyati, 1998, “Dollarization of Financial Intermediation: Causes and Policy Implications,” IMF Working Paper WP/98/28 (Washington: International Monetary Fund). Mueller, Johannes, 1994, “Dollarization in Lebanon,” IMF Working Paper WP/94/129 (Washington: International Monetary Fund). Sahay, Ratna and Carlos Vegh, 1995, “Dollarization in Transition Economies: Evidence and Policy Implications,” IMF Working Paper WP/95/96 (Washington: Intemational Monetary Fund). Savastano, Miguel A., 1996, “Dollarization in Latin America: Recent Evidence and Some Policy Issues,” IMF Working Paper WP/96/4 (Washington: International Monetary Fund). Vetlov, Igor, 2001, “Dollarization in Lithuania: An Econometric Approach,” Bank of Finland, Institute for Economies in Transition, Discussion Papers No. 1 (Helsinki: Bank of Finland).-28- ‘Table ILL. Vietnam: Deposit Maney Bank Depots, 1999-2001 Ga ton of done) 199 72000 3001 te fae SD Ns (Gy ope of porion Energies Dong Sports MS £8 5 97 94 BO 8 a3 Forel cree) depais 2/ 2214338382 of whch: demand depots m3 one a oe Bs wo 2 Bs oorhote 3 ong deposi 266506091288 Foregn caency depois 4 me 70 1 336 451 78 SSSA ‘of whiks demand depos os 07} B83 kt Depot states (ng) 5 we nsw? 2 eae oa (Change ince begining of the yes) ieee ong deposi 400 tS ss ska Feng een depot 2 Io 31 42 ao 8a Hewett 2 ‘Dong epi 40043 48337 wos Foreign cency deposi a? a4 6S os 27 wk Depot setts (eng) Id 38 2302122 (Foreign earency deposi by bak) Tor Bs 502 SSS Rm ‘Vietcoban (YCB}) me 2 Ma 281 es D352 ak Ibeomban (C8) 6678 M4 9g tae BenkfoeAgrcalesn8 Ram Development BARD) —«-23—= 2S 2732 aaa Beko este an Dovlorent IDV) a9 4339S 7968s Othe a) M2 6 tes Oakes aa (xcge cure deposi by bark pert of tt) Tota tooo impo 1020 10891990 tan tooo a9. Vietombank ao 03 a7 27 49 89 417 ms Incombank thr MS STOKE ST ‘VHARD 52 490 «SI SS 5383 SS apy 90 307378 e Skea Others M7 3928288 ‘Percentage sharin nts of foreign eureney poss sce Deng ofthe yar} Tout 1001000 1000 1000 109 19991000 Vieonbank 373 alg LT dora Icom 783k ‘VBARD oe 42 6387565 BDv Me 38 ak) Sd tes ms 385 9 E83 Me nis of US ols, mes iestad hen) Menerantum tem: "ese cunency posts Enepises 352 ele gms gm rst toss aan 29 Bomahoiie Nels 1522 20692368 093288 3c 5682 Demand depos in pecent of te foreign amen epeis) 2a MS BE seat ‘Soares: Sate Bank of Viewam: 8 nd at extiate, {Based on monetary rey comping 6 t-te commercial SOCBS) and 63 on-te ret sttons 2 Adjsed for enti belling of fries eanency depos sabsias at VCB abou 4S pete wr) 5 Retard toa aves deposi ch mony evan beso he aking sem. | Adjusted for ouaeolélding of espn ciency deport sbtinte at YC (abut 55 pret fsa an st ID (ll deposit sumated be lb hoorhai 5) Adj for epi stata: VCB an BIDY (2, dol enominted bs ire bari).-29- Table 11.2. Vietnam: Foreign Assets of the Banking System (in millions of U.S. dollars) 1998 1999 2000 2001 Aug, Foreign Assets 3445 5,542 7.770 8.744 Deposit with banks 3,146 3.764 5,824 6,558 State Bank of Vietnam 2,000 1,860 1,779 2,085 ‘Commercial banks 1,146 1,904 4,045 4,472 Other 299 1,778 1,947 2,186 State Bank of Vietnam 98 1,562 1,734 1,826 Commercial banks 201 215 213 360 Memorandom item: Exchange rate (dong per U.S. dollar) 13,890 14,025 14,501 14,993 Source: Vietnamese authorities.-30- TIL. PRIVATE SECTOR DEVELOPMENT IN VIETNAM"? A. Introduction 35. This chapter reviews recent trends in private sector development in Vietnam. It draws upon work done by the World Bank Group and in particular the IFC, and looks ahead to areas where policies will need to be strengthened to accelerate private sector development (PSD). The government's medium- to long-term economic development program emphasizes the commitment to creating a fair business environment for both the state and nonstate sectors. Given this and the current direction of reforms, the private sector is expected to play an inereasingly important role in new business formation, employment creation, and output ‘growth. Also, poverty reduction in Vietnam aver the last decade was derived from land- based and agricultural-led growth, but there are physical limits to this pattern of growth, Thus, poverty reduction in the future will require more rapid rural and urban growth that is labor-intensive and export-led, with the private sector as the engine of growth. Removing the current impediments to PSD will also help protect macroeconomic stability, through further increasing government revenue, expanding trade opportunities, and increasing Vietnam’s resiliency to supply shocks. B. Private Sector Development in the 1990s 36. Currently, the private sector accounts for around 40 percent of GDP in Vietnam'® (compared with 50 percent in China), but mainly in agriculture and for only one- third of industrial output. Its rapid growth in agriculture-based activity started in the late 1980s and was initially fueled by the policy of Doi Moi (or economic renewal), under which Vietnam began to make significant strides in liberalizing the agricultural sector. Prior to Doi Moi, agriculture was collectivized, and private sector activity in most other sectors was negligible, unrecorded, and/or disallowed, Under Doi Moi, most input and output prices ‘were decontrolled, agriculture decollectivized, the exchange and trade system partially liberalized, and foreign direct investment (FDI) allowed (initially joint ventures only). Reforms were guided by new laws promoting domestic and foreign investment, as well as a commercial law. 37. Progress in PSD in the early and mid 1990s was slow because of policy ambivalence, and stalled with the onset of the Asian financial crisis in 1997. Even though FDI inflows were very large in the mid 1990s, Vietnam's business climate was increasingly at a competitive disadvantage vis-a-vis the region, in part because of opaque and burdensome "7 Prepared by David Cowen. '8 ‘This measurement comprises mainly the domestic private sector (household enterprises and farms and small and medium-sized enterprises). It also includes a portion of the mixed Ge., joint ventures with ownership from more than one sector) and foreign invested sectors.-31- legal and administrative regimes. With the Asian crisis, FDI flows plummeted,"” and investor sentiment tured negative, given limited progress in reforming state-owned enterprises (SOEs) and the exchange and trade system. Private sector activity in Vietnam was still constrained by an entrenched bureaucracy, a non-transparent tax and regulatory framework, and an uneven playing field in terms of market access, foreign exchange and bank credit availability, and operating costs. Entry to many business sectors was prohibited or allowed only in the form of joint ventures with SOEs. Even when private sector participation was permitted, private businesses faced other administrative hurdles, which raised the costs of doing business in Vietnam. C, Recent Measures to Foster Private Sector Development 38, Since early 2000, and in a bid to promote economic recovery, the government has taken a series of actions aimed at improving the investment climate for a more fair business environment. These actions in 2000 included notably passage of the new Enterprise Law and amended Foreign Investment Law. This was followed in March 2001 by the adoption of a three-year SOE reform framework that provides for equitization, liquidation, and merger of a significant number of small and medium-sized SOEs; and by implementation of trade opening measures, including the announcement in May 2001 of a five year import-export regime that significantly advances the removal of a number of quantitative restrictions on imports in sectors dominated by SOEs (see Chapter IV). In addition, the government is pushing ahead with financial sector reform, including liberalizing interest rates, restructuring the banking system, and establishing a stock exchange, all of which should aid PSD. 39. The key provisions of the new Enterprise Law were aimed at easing business entry. Under the new law, business licensing requirements in 145 (out of 400) sub-sectors ‘were lifted in 2000, making establishment of private firms considerably easier. Decree 30, also issued in 2000, led to revocation of a further 61 licenses and permits. The removal or modification of business licenses in an additional 50 sub-sectors is expected by end 2001. Business registration costs also have been cut significantly and the approval process shortened from 1-2 months to 10 days on average, and even less for small enterprises and in urban areas, As a result of these changes and with effective implementation of the new law, an estimated 26,000 small and medium-sized enterprises (SMEs) were registered in the period January 2000 through August 2001 employing more than 500,000 workers (some SMEs are newly established companies, but many are household enterprises that have been upgraded or other enterprises that previously operated unofficially or illegally). This represents a 60 percent increase in registered SMEs since January 2000, when the Enterprise Law came into effect. Total registered capital is equivalent to around USS2 billion, or '? Staff estimates show total nonstate investment declining from around 20 percent of GDP in 1996 to 14 percent in 1999, then rising to 16 percent in 2000. FDI is estimated to have fallen from 7% percent of GDP in 1996 to 2% percent in 1999 and 2000.-32- 6 percent of GDP. Concentration of newly registered SMEs has tended to be in urban areas and in the southern part of the country, especially in the Ho Chi Minh City region (fable 1.1). The Enterprise Law will be supplemented with a decree on SMEs by end 2001. Existing provisions in the Enterprise Law on the use of land-use rights as collateral for bank loans will also require stronger enforcement and greater transparency to ease credit conditions for SMEs. 40. Amendments to the Foreign Investment Law sought to improve the climate for Foreign Invested Enterprises (FIEs) by mainly streamlining previously complex FDI procedures and leveling the playing field vis-a-vis the SOEs. The key provisions allow: the automatic registration of export-oriented FIEs, purchase of foreign exchange by FIEs to make payments within certain limits, mortgaging of land by foreign bank branches, and the provision of government guarantees on certain types of infrastructure projects and. ‘encouragement of investment by overseas Vietnamese.” These guarantees, in particular, aided the conclusion of contracts for large oil and gas projects, the negotiations of which had been protracted, Furthermore, the dual pricing system, which largely discriminates against FIEs, has been rolled backed recently with a reduction in price gaps most notably on telecommunication and electricity tariffs. 41, Arresolution, adopted by the Central Committee of the Party in August 2001, calls for an accelerated phase out of the dual pricing system (much of which was originally authorized to take place 1999), as well as further streamlining of licensing and administrative procedures for FIEs. The resolution also notes the need for a common and simplified legal framework and tax system for domestic and foreign investors. The number of sectors permitting FDI would be expanded and include import and domestic distribution services. In addition, land clearance procedures for FIEs would be simplified, land-use right certificates issued to FIEs operating in industrial parks or export processing zones, and, on an experimental basis, land- use rights made transferable to certain foreign investors. More generally, revisions to the Land Law, which will come into effect soon, are aimed at easing local government control over allocating land and granting land-use certificates to households and enterprises, giving overseas Vietnamese the right to buy houses with attached land-use rights, and aligning compensation for nationalized lands with market value. 42, In view of the poor financial conditions and inefficiencies of many SOEs, the government adopted a five-year SOE reform plan in March 2001, with annual targets specified for 2001-03. Final approval of the reform framework was given by the Central Committee in August 2001. The objectives of the plan are to reduce losses and improve competitiveness. Around 1,800 out of the mare than 5,500 SOEs will be subject to enterprise-specific reform measures, mostly through equitization (1,400), divestiture (140), of liquidation/closure (220). An additional 200 enterprises will face merger/consolidation. ‘The focus of this reform is on equitization of small to medium-sized SOEs in terms of state © The original decree was approved in 1998,capital (11 percent of total) and SOE debt (10 percent of total). However, these SOEs are estimated to account for 31 percent of total SOE employment, as more capital intensive, heavy industry sectors will remain under state dominance (Table 11.2). 43. Recent financial sector reforms should also ease some of the constraints faced by the private sector in terms of accessing bank credit, securing foreign exchange, and, eventually, raising new capital. © Availability of bank credit: ‘The joint stock bank (JSB) sector, where operations have been geared toward serving the private sector, is gradually undergoing a period of consolidation Since 1999, eight JSBs have been either merged, consolidated, or liquidated. Under current plans, the number of banks will be halved over the next two years to fewer than 25. By then, the JSB system should be financially sounder and better supervised, and more capable of meeting credit needs of viable SMEs. Because of the ongoing bank restructuring and owing to tighter credit risk management, credit sgowth from the nonstate banks (the JSBs, as well as joint venture banks, foreign bank branches, financial companies, and the Central People's Credit Fund) has been significantly lower than from the banking system as a whole.”* Over time, however, effective banking reform should help to make more credit available at lower interest rates. * Access to credit under market-related interest rates: Interest rate caps have been wholly or partially lifted—for foreigr currency loans, the caps were removed in June 2001 and for dong loans, the margins above the base lending rates, which came into effect a year earlier, appear to ofter banks adequate flexibility to price risk and SMEs better access to credit. Under the current structure, the bands above the dong base rates are 4 percent (on an annualized basis) for short-term loans and 6¥% percent for long term loans. Allowing land use-rights for collateral should also help make credit accessible to SMEs, and requiring SOEs to undergo bank credit risk assessments (like other borrowers) should also make room for credit to SMEs. * Access to foreign exchange through liberalization of the exchange system: The foreign exchange surrender requirement was reduced from 80 percent to 50 percent in 2! Based on official estimates as of end 1998, loans to the nonstate sector by the state-owned commercial banks (SOCBs) were about three times those by the JSBs. However, they represented only about 40 percent of the SOCBs’ total outstanding loans, compared with 70 percent of the JSBs’ loans. More recent data broken down by type of borrower from each sector of the banking system are unavailable. 2 Tn 2000, nonstate bank credit and total bank credit expanded by 14% percent and 38 percent, respectively; during the first eight months of 2001, the trend continued, at 4¥% percent and 14% percent, respectively.34. ‘August 1999 and to 40 percent in May 2001. As part of the amended Foreign Investment Law, the foreign exchange balance requirement for FIEs was lifted in May 2000 (previously, FIEs were required to balance payments and receipts in foreign exchange, unless they were granted special exemptions). Under the same set ‘of amendments, the tax on profit remittances of FIEs was reduced from 10 percent to 7 percent.” Under the current PRGF-supported program, the authorities have agreed to submit a recommendation to the National Assembly to eliminate the tax for FIES by March 2002. * Vietnam's stock exchange was established in Ho Chi Mink City in July 2001: Currently, only seven companies are listed on the exchange.” As of end- August 2001, total market capitalization was US$20 million (0.1 percent of GDP) and daily trading volume was under USS0.5 million. Larger companies would like to list on the exchange, but at present cannot meet the main requirement of disclosing audited financial statements on international standards. Currently, FIEs cannot list on the exchange, but the goverment has recently called for regulations allowing transformation of these enterprises into joint-stock companies on an experimental basis, creating conditions for them to be eventually listed. 44, Plans are also underway to give local authorities greater autonomy in business regulation, A draft government decree is being considered that would grant greater autonomy to the Ho Chi Minh City People’s Committee in terms of business investment licenses and procedures, land price determination, and provincial budget execution. Already, business registration procedures operated by the local planning and investment service have been streamlined and automated, with licenses to domestic private enterprises granted in as little as one day. D. Challenges Ahead 45. Despite the recent improvements, private sector development still faces remaining impediments in Vietnam. The government's ten-year socioeconomic development strategy (2001-10), which was endorsed by the Ninth Party Congress in April 2001, envisages a more level playing field for the private sector. However, it still calls, for a leading role for the state sector, including continued state protection of and investment in certain key industries. In China, a change in leadership attitude that led to an explicit recognition of the private sector as an important component of the economy (at the Fifteenth Party Congress in 1997), along with earlier steps in clarifying the legal framework, have been 23 For overseas Vietnamese who invest in Vietnam under the Foreign Investment Law, the tax rate is 3 percent, and for a small class of foreign investors, the rate is 5 percent (see Summary of the Tax System). * The stock exchange has also floated several special treasury and bank bond issues.-35- seen as key in fostering rapid expansion of private registered firms in the 1990s (from 100,000 in 1991 to more than 1.3 million today), 46. Access to bank credit by the private sector remains an issue. Interest rates have been substantially decontrolled. However, credit risk management by banks needs to be strengthened, which is a key element of the government’s banking reform strategy, in particular by the four large state-owned commercial banks. In addition, a more vigorous effort will be needed to meet targets set by the government in consolidating the JSBs. Lending to the private sector should also benefit from steps being taken to further simplifying the use of land-use rights as collateral. Crowding out by the state sector is also expected to diminish, as policy-based lending is being supplanted by explicit government guarantees or direct budget support (e.g,, through the Development Support Fund). For SMEs, however, access to bank credit will also require that many of them strengthen corporate governance by clarifying their ownership, adopting stronger accounting methods, and disclosing more fully and accurately business practices. 47. In addition, SOE reform needs to be accelerated, SOE reform is critical to PSD, as a number of small to medium-sized SOEs are to be equitized and the sector as a whole is operated on a more commercial basis. However, this reform needs to deepen, in particular for large enterprises. With recent approval of the reform framework by the Central Committee, the government has instructed to relevant ministries and agencies to proceed with full implementation of the SOE reform plan. The legal changes are expected to speed up the equitization process, which thus far has lagged considerably in terms of the reform plan’s first-year targets. Critical to this effort will be clarifying of guidelines for resolving bad debt and handling labor redundancies arising from individual SOE restructuring, The equitization process itself is expected to be strengthened by end year through the planned removal of caps ‘on shareholdings in equitized SOEs by individuals and legal entities; in addition, the responsibility for issuing, selling, and registering shares is being removed from SOE management. The government is also committed to publishing a detailed roadmap of SOE reforms. 48. The legal and administrative framework is unclear and governance is a concern, As the authority of ministries and agencies and of central and local governments is often overlapping or ill-defined, government decrees issued by competing bodies at times are inconsistent, which invites selective interpretation and enforcement. New and amended laws often await implementation guidelines, which slows reforms. These problems tend to further complicate an already weak court system and lead to bureaucratic entanglements. The extent of corruption is thought to be widespread, raising the costs of doing business. Stronger institutions are needed that have clear cut authority to promote business development and to enforce the rule of law. Also, less discretion should be taken by the bureaucracy in implementing policies. In a recently finalized draft program for administrative reform (2001-10), the government notes that the biggest challenge to developing a clean, stable, and efficient administrative regime is to tackle longstanding problems of excess bureaucracy, red tape, and corruption. Under the reform program, plans are being formulated to streamline central and local government operations, strengthen personnel training and management, and more clearly delineate tasks and responsibilities, including on the issuance of legal and administrative directives.-36- Table ILL1. Vietnam: Registered Enterprises Under New Enterprise Law by Region / Number of Amount of Share in 1999 of enterprise registered Industrial ‘Industrial Total capital output establishments 2/ population (in percent of total) Total Red River Delta 24.0 29.5 207 378 2.0 ‘North East 6.0 99 37 96 16 North West 06 03 03 16 29 North Central Coast 33 3.6 33 177 131 South Central Coast 59 75 Sa 82 85 Central Highlands 19 10 10 29 53 North East South 46.6 425 $3.7 88 184 of which : Ho Chi Minh City 36.0 283 274 3 66 Mekong River Delta 98 37 10.3, 13.5 au Sources; Ministry of Planning and Investment and General Statistical Office Statistical Yearbook 2000. 1/ Through August 2001 2/ Local business establishments (excluding agriculture and service sectors), including state-owned and foreign invested enterprises.‘Table MIL 2. fetnam: Sectors to be Controlled by Government Ownership 1. Business Oriented State-Owned Enterprises (SOEs) State monopoly SOEs Explosive materials ‘Toxic chemicals Radioactive materials National power transmission grid International and national communications backbone Cigarettes, Full or controlling state ownership of SOEs Food wholesale trading Petrol and oil wholesale trading Power generation ‘Mining of important minerals Production of some mechanical and electronic products Joformation technology products Ferrous and non-ferrous metal production Basie chemicals Fenilizers Plant protection products Cement Construction industries Important consumer goods and foodstuffs production Pharinaceutical chemicals and medicines Air transport Railways Ocean shipping Monetary trading, Insurance Lottery Basie telecommunications 2.Public Ud lity SOEs State monopoly SOEs Printing of money and value papers Flight control ‘Maritime control Radio frequency management and distribution ‘Military hardware and weaponry for national defense Enterprises entrusted with special national defense tasks Enterprises operating in strategic locations and combining economic ‘operations and national defense tasks in accordance with ‘government decisions Full or controlling state ownership of SOEs ‘Technical inspection of large transport vehicles Publication of academic books Political papers and books ‘Current event and documentary films ‘Management and maintenance of the national railways and aitpocts Management of watershed irrigation system Planting and protection of watershed forests Water drainage in large cities Read management and maintenance Bus and coach stations Important waterways Production and supplies of other products and services as provided tor by the government -Le- ‘Source: Government Resolution No. 05-NQ-TW on the Continuation of the Restructuring, Reforming, Developing and Improving the Fifciency of State-Owned Enterprises (September 24, 2001).-38- IV. TRADE REFORMS AND EXPORT AND IMPORT PERFORMANCE” A. Introduction 49. Trade liberalization and export development have been central to Vietnam’s continuing economic transition. To this end, Vietnam has pursued a multi-pronged approach to gradually reducing trade barriers and increasing the outward orientation of the economy. First, by joining the ASEAN Free Trade Area, AFTA, in 1996 Vietnam made a commitment to eliminate tariff and non-tariff barriers vis-a-vis the other member countries. Second, the bilateral trade agreement with the United States is expected to be ratified by the National Assembly in November, and other bilateral trade agreements are under discussion. Third, Vietnam is vying for membership in the World Trade Organization (WTO), which requires a commitment to simplify import controls and reduce the level of import protection Despite the high degree of trade restrictiveness throughout much of the 1990s, however, both exports and imports expanded rapidly. This reflected generally adequate competitiveness, high levels of foreign direct investment (FDI), and the liberalization of the agricultural sector following Doi Moi. By 2001, exports account for half of GDP and are broadly diversified, in terms of structure and trading partners, Vietnam’s openness (measured in terms of the ratio of exports and imports to GDP) is twice the average of all PRGF-eligible countries. This chapter examines the recent trade initiatives, and the decade-long trends in exports and imports. B. Recent Developments in Trade Reforms 50. During 2001, Vietnam made substantial progress in liberalizing its trade regime. In April 2001, with a view to providing a more stable export-import environment, the government announced a Five-Year (2001-2005) Import-Export Regime.”* This provides a road map for elimination of QRs, tariff reductions, and other trade measures. On, October 3, 2001 the U.S. Senate passed legislation implementing the landmark bilateral trade agreement between the United States and Vietnam (the agreement was signed on July 13, 2000) marking an important step toward WTO accession.” Vietnam’s National Assembly is expected to ratify this agreement when it meets in November. Meanwhile, ?5 Prepared by Nita Thacker. 26 Contrary to previous years when only annual changes to the import-export regime were announced, 27 | meeting of the WTO Working Party on the Accession of Vietnam was held in ‘November 2000 and an Inter-Ministerial Committee has been set-up to guide and monitor progress on WTO accession.-39- preparations are being made to reach bilateral trade agreements with other WTO members and align existing bilateral agreements and modify Vietnam’s laws to meet WTO standards. Key trade reforms in 2001” 51. Quantitative restrictions: The program for eliminating QRs has been accelerated compared to commitments under the PRGF-supported program: . Effective May 1, 2001 QRs on 5 items*°—paper, clinker, granite and ceramic tiles, alcohol, and passenger vans with 10-16 seats—were eliminated ahead of schedule and replaced with tariffs (see Table IV.1). © Atthe same time, the target dates have been advanced for most other items, including construction glass, remaining stee! products, and vegetable oil, to end- December 2001 and QRs for two additional items—motoreycles and certain parts thereof and passenger vehicles with up to 9 seats—are now scheduled for removal by end-December 2002. © — QRs on cement will remain until end-December 2002, as initially planned. © By the beginning of 2003, all but 2 items—sugar and petroleum products—will no longer be subject to QRs. 52. Tariff reductions under AFTA: Ordinance No. 28 announced on June 6, 2001 outlines changes in tariff lines consistent with the commitments under AFTA. These changes are effective from January 1, 2001: © 713 items have been transferred from the Temporary Exclusion List (TEL) to the Inclusion List (IL), leaving 1,200 items still in the TEL (under AFTA all items are expected to be moved to the IL by 2003). © Forthe items in the IL (a total of 4,986), 65 percent are subject to a tariff rate of 0- 5 percent and the remaining 35 percent to a tariff rate of 520 percent (under AFTA tariffs on 97 percent of tariff lines will be reduced to at most 20 percent by 2003 and 0-5 percent by 2006). 28 Vietnam currently has bilateral trade agreements with several countries including most Asian countries, the European Union, some transition economies and Australia and New Zealand. » For trade reforms before 2001, see SM/98/6 and SM/99/104. °° The last two items are new and were not included in the original list.53. Other measures: In addition, © Quotas on rice exports have been eliminated and anyone registered to export food and agriculture-related goods can now export rice freely. © Garment and textile quotas will continue to be announced (currently 25 percent of the {quota is auctioned off), and will be increased annually and eliminated over the medium term, © Arevised tariff schedule was announced for 2001, partly to reflect the tariffs for goods on which QRs were removed"! (Statistical Appendix, Tables 32 and 33). ‘Notwithstanding this, only about | percent of line items continue to have rates above 50 percent. © The surrender requirement has been reduced from 50 percent to 40 percent effective May, 2001. © Trading rights have been further liberalized for foreign firms. © Foreign invested enterprises can now buy foreign exchange from commercial banks in Vietnam for their imports. United States Bilateral Trade Agreement (USBTA) 54, Normalization of Vietnam’s trade relations with the United States began with the lifting of the trade embargo in 1994. This move was followed a year later by the restoration of diplomatic relations in 1995, and the first waiver of the Jackson-Vanik emigration provisions in 1998. Under the USBTA expected to be ratified by the National Assembly in November, the U.S. will extend temporary most-favored nation status (MFN, also known as normal trade relations or NTR status) to Vietnam, so that imports from Vietnam will face significantly lower tariffs when entering the United States.” The USBTA also provides for reciprocal nondiscriminatory treatment of U.S. exports to Vietnam. The key features of the USBTA are: © Trading rights: Liberalize trading rights for U.S. firms in three to six years. © Tariffs: Reduce current tariff rates on a limited range of industrial and agricultural items (about 250) by 30 to 50 percent over three years. 2! ‘The tariff rate of 120 percent introduced in 2001 is imposed on certain alcohol related items. 2? Imports from Vietnam have faced tariffs of up to 40 percent, or more than 10 times higher than that faced by most other nations.-41- © Quantitative restrictions: Remove QRs on most products in three to seven years, but back loaded for steel and cement (after six year) and petroleum products (after seven years). © Intellectual property rights: Apply WTO-consistent protection for intellectual rights in 12-18 months. © Banking services: Allow U.S. equity in joint ventures (with up to a 49 percent stake). After nine years, allow 100 percent U.S. owned subsidiary banks. Also allow US. equity in privatized Vietnamese banks at the same levels as Vietnamese investors. Phase in right of U.S. banks to accept dong deposits on the same basis as domestic banks over eight years for business clientele and ten years for retail depositors. © Nonbank financial services: Allow 100 percent equity in financial and other leasing after three years. low joint ventures in three years and 100 percent U.S. equity in five to © Other services: Allow immediately 100 percent U.S. equity in a range of technical services, including in legal, accounting, engineering, computer-related, and construction areas. © Trade-retated investment measures: Phase out all WTO-inconsistent measures (e.g., local content requirements) in five years. © Transparency: Publish all laws and decisions governing issues in the agreement, establish administrative or judicial tribunals for review, and provide the right of appeal. ‘The impact of the USBTA on Vietnam 55. Impact on trade: The major impact is likely to be on exports from Vietnam which will enjoy MEN status. Vietnam’s exports to the United States increased from US$95 million (2.3 percent of total exports) in 1995 to USS770 million (6.7 percent of total exports) in the first 9 months of 2001. The principal exports are seafood, textiles, footwear and agricultural ‘g00ds, including coffee, most of which are items that under MFN enjoy duty-free treatment (zero tariffs). Thus, the USBTA is likely to result in increases of commodity exports and exports of labor-intensive manufacturing with large differences between the MEN and non- MEN tariff rates. Using the Global Trade Analysis (GTAP) model, the World Bank has estimated that exports to the United States are likely to double in the first year of MEN status, as USS. tariff rates on Vietnamese exports will fall from their non-MEN average of 40 percent-42- to less than 3 percent.” In particular, Vietnam’s clothing exports are expected to increase dramatically. Vietnam exported less than US$40 million in apparel to the U.S. in 1999, while garment exports to Japan and the BU totaled US$300 million and US$640 million, respectively. Based on the experience of Cambodia—which was granted MEN status in 1996—the World Bank estimates that clothing exports could increase as much as ten-fold in the first year after receiving MEN status.” Another item likely to benefit from the USBTA are marine exports from Vietnam. The U. S. has already outpaced Japan to become the biggest importer of seafood from Vietnam accounting for 27.2 percent (or US$324 million) of total exports of seafood from Vietnam in the first nine months of 2001. 56. _ Impact on services and capital flows: The liberalization of the services sector, including tourism and construction in the short-term and financial services, including banking and insurance services over the medium-term, are likely to lead to a considerable increase in foreign direct investment (FDI). Also, FDI in light industry has been rather modest to date and this is likely to benefit from the USBTA. 57. Impact on the SOE sector and factor productivity: SOE enterprises in the textile and footwear sectors are already facing increased competition from China and private domestic firms that have been forming joint ventures with foreign partners. The further opening up of the economy combined with other ongoing trade reforms” is bound to increase competition and force restructuring on the SOE sector. Also, increased capital inflows are likely to increase investment in textiles, food processing and fisheries, all of which have a large potential but have hitherto seen relatively small foreign investment. C. Export Performance in the 1990s 58. Vietnam's exports have increased almost five folds in the last 8 years, from about USS3 billion in 1993” to over USS14 billion in 2000 and are expected to top USS15 billion in 2001. Exports are now broadly diversified in structure and in trading, partners. During the same period, Vietnam’s openness (measured in terms of exports plus imports as a ratio of GDP) improved relative to its neighbors, with the exception of the Philippines and Malaysia, to reach 94 percent in 2000 (Figure IV.1). Export performance in the 1990s can be roughly divided into four periods: (i) from 1993-97 when exports were increasing at an average rate of 30 percent; (ii) 1998 when export growth plummeted to only ® The Effect of the United States Granting MEN Status to Vietnam, by B. Fukase and W. Martin, World Bank, 1998, ™ The Viemam-U‘S. Bilateral Trade Agreement, CRS Report for Congress. 35 Trade reforms under the AFTA and recent removal of quotas will also have a significant role in this context. 3 Data prior to 1993 are poor and hence not included in this analysis.© ” -43- igure IV.1. Vietnam: Comparative Perspective on Trade EXPORTS OF SELECTED ASIAN COUNTRIES danuary 1997 Ocaber 200], ‘December 1998100) ee a aR OPENNESS OF SELECTED ASIAN COUNTRIES 4983-2000 (a percent of GDP) or Te TE we Ta Sources; Dats provided by the Vietamese autores and Fund staf estimates. LY Measured as expore pis ipods, in percent of GDP TF oF ry * 302.4 percent; (iii) post-1998 when growth rebounded to average 24 percent in 1999-2000, and (iv) recently a slowing of export growth with the global downturn, Based on Vietnam's export performance over the last decade and assuming maintenance of competitiveness and continued transition to a market economy, Vietnam’s medium-term export outlook remains promising even though the near-term outlook is clouded by the global slowdown. Rapid export growth prior to the Asian crisis (1993-1997) 59. Vietnam's export growth was very strong, averaging 30 percent during this period. The contributing factors were the elimination of export barriers (including quotas) in order to encourage sales to convertible currency areas since 1989, adequate competitiveness, some FDI in export-oriented industries, and the steady growth in import demand in most trading partner countries. This record outperforms export growth of most of its Asian neighbors (Figure IV.2) and was accounted for primarily by non-oil exports: © _Non-oil export growth averaged about 35 percent, with exports of garments and. footwear increasing most rapidly and their shares in total exports increasing from 8 percent in 1993 to 15 percent in 1997, and from 2 percent in 1993 to 15 percent in 1997, respectively, replacing coffe: and rice as major export earners (apart from oil). ‘© Oilexport value rose at an average rate of about 14 percent, with most of the increase due to higher export volumes (an increase of 78 percent) with a price increase that was relatively modest (Table IV.2 and Statistical Appendix, Table 25). The share of oil exports continued to remain the largest, averaging about 21 percent of total exports. © Export volumes of coffee, rice and rubber continued to increase so that despite fluctuating prices, they remained important in terms of their contribution to growth. ‘© Diversification of trading partners also increased. Starting first with regional markets, Vietnam made inroads overtime into European and U.S. markets. © The principal trading partner during this period was the Asia and Pacific region which absorbed 70 percent of Vietnam’s total exports until 1995; however starting in 1996 the share of this region has been declining. Japan and Singapore were the main trading partners in the Asian region (Statistical Appendix, Table 27). ‘©The share of exports to Germany, United Kingdom and the United States (after the trade embargo was lifted in 1994) steadily increased during this period. As a result, Vietnam has gained market share in these countries. In fact, in 1997 Vietnam’s exports to these countries increased when exports of most Asian countries were declining,-45- Figure IV.2. Vietnam: Export Indicators FOREIGN TRADE ‘anuary 1993 - October 2001 45 F (month cota tn billons of U.S, doUas) “ as 30 10 os o aa eae Ta a TP 983 oe 9s ie 3 ee 20 201 0 0 ‘PRICES OF SELECTED EXPORTS. as f March 1996- October 2001 i Gomondh toa, year-on-year percentage change) 100 Pa ° 2 os as 100 SR NTL IT = ‘Sources: Data provides bythe Viewameseathoctls, and Fund satfestimate,-46- Slump in exports in 1998 Reflecting the adverse impact of the Asian financial crisis in 1997/98 and Vietnam’s close link to the region, exports increased by only 2 percent in dollar terms. Exports suffered across the board and mainly from the terms of trade shock, due both to lower oil prices and a decline in other commodity prices as a fallout from the Asian crisis; and from a relative loss in competitiveness as the dong appreciated in real effective terms, compared to all the other currencies in the region (Figure 1V.3): © Oilprices fell by 32 percent, so that despite an increase in export volume of 26 percent in 1998, oil export receipts declined by 13 percent. © Weak demand for Vietnam’s exports from its Asian neighbors affected by the financial crisis resulted in a decline in exports of 34 percent in 1998 and the share of exports to this region declined by over 20 percentage points. * However, the decline in exports to Asia was more than compensated by the near doubling of exports (mainly non-oil) to the European Union and the United States contributing to the small but positive increase in exports compared with most Asian countries that had negative export rates, Export rebound (1999-2000) 60. Overall exports increased by an average of about 24 percent in 1999-2000, as the region began to recover from the erisis and also reflecting the dramatic increase in oil prices from about US$11 per barrel in January 1999 to US$28.4 per barrel at end-year 2000. © Asaresult, oil export receipts almost tripled between 1998 and 2000 from USS1.2 billion to US$3.5 billion, respectively. + Non-oil exports registered an increase of 16 percent, but this is only half of the average experienced in the mid 1990's. © Among non-oil exports, the share of garments, footwear, handicrafts, and marine products has remained robust. © Growth in exports to the European Union and the United States (which are mainly non-oil) was much larger than that to the recovering Asian countries, indicating a continued trend to penetrate these markets following the redirection of trade achieved uring the crisis years. Slowing export growth in 2001 61. With the weakening in the global environment, export growth during the first 10 months of 2001 slowed substantially to only 9 percent, compared with 26 percent during the same period last year. This performance is in line with the slowing of external demand-47- Figure IV.3. Vietnam: Exchange Rate Indicators agree. ie Oe e710) 10000 a0 EXCHANGE RATES Ssnuary 1997 - October 2001 ‘2000 Nomina sive charger wegen) 1000 0 7 ica change ae a Tse 30 1000 REST TART TT TATTOO TAN ET ier So 3 0 201 “0 ro ‘Gone 1997100) 1 10 o SS NIC BT RTT ET TAN RIL BETA TIL OT TNO i Ea 20 er Sources: Data provided by the Vietamese athe; nd Fund a estimates 1 Estimated for Septmber and October 200and in keeping with the regional trend of falling export growth; competitiveness has been broadly maintained through flexible exchange rate management and stable domestic prices. * Much of the decline can be explained by a decline in oil prices from a peak of USS34 per barrel last November to USS22 per barrel in October this year. Oil export volumes in September and October have also been disrupted (exports from January— August averaged 1.4-1.5 million metric tons) by repairs at some oil wells. © Growth in non-oil exports was 12.5 percent in the first 10 months, almost half the ‘growth rate achieved last year although still higher than for most other Asian countries. © Among non-oil exports, coffee and garment exports showed a rebound in growth compared to the same period last year while exports of marine products which were ‘growing very rapidly until August seem to have come down quite dramatically in September and October. This may reflect the higher freight insurance costs in the wake of the September 11 events. The slump in non-oil commodity prices has also depressed exports such as coffee and rice. © Japan remains the largest importer of Vietnamese exports, with China, Australia, Singapore and United States being the other large buyers of Vietnamese goods. © Despite the broad diversification in export structure and trading partners, experience so far in 2001 suggests that Vietnam is now more vulnerable than a decade ago to shifts in global demand and world commodity prices. D. Import Performance in the 1990s 62. Inline with exports, Vietnam’s imports have quadrupled over the past eight years, from about US$4 billion in 1993 to nearly US$12 billion in 1999 and are expected to reach US$ 14 billion in 2001. Imports seem to have reacted to the Asian crisis faster than ‘exports—perhaps due to administrative controls—with imports declining by 0.4 percent in 1997 compared with the previous year, and to an average growth of 42 percent during 1993-96, Import performance in the 1990s could also be divided into four periods (covering slightly different years): (i) from 1993-96 when imports were increasing rapidly; (ii) 1997-99 when imports plummeted and recovered only slowly towards end-1999; (iii) 2000 when imports increased again rapidly; and (iv) 2001 when imports began slowing. Strong import growth prior to the Asian crisis (1993-1996) 63. Very rapid import growth during this period (42 percent on average) was associated with a rapid GDP growth and high FDI inflows. This record outperformed import growth of most of its Asian neighbors. © With rapid economic growth, petroleum imports increased at an average rate of about 14 percent, while non-oil import growth averaged almost 50 percent (Table TV.3).-49- Among non-oil imports, imports of machinery and equipment increased most rapidly with the share in total imports increasing from 25 percent in 1995 to about 33 percent in 1996,” driven mainly by the large FDI flows during these years. Imports of textile yarn, and leather and garment material which forms an important input for the export industry also showed significant increases. About 70 percent of all imports came from the Asia and Pacific region; the share of imports from European Union countries averaged about 10 percent (Statistical Appendix, Table 27), The share of imports coming from Taiwan POC and the USS. steadily increased during this period. Import compression in 1997-99 64, The severe impact of the Asian crisis was most evident in the resulting compression of imports. After the dramatic growth in the previous 4 years, imports plummeted, falling by 0.4 percent in 1997 and 0.6 percent in 1998, growing slightly by 0.8 percent in 1999. This was achieved primarily through a tightening of trade and exchange restrictions as the authorities attempted to protect the foreign exchange position, and also through a substantial depreciation of the exchange rate in 1998. Among the main factors that kept imports compressed were: ‘The plummeting of KDI inflows as most of the Asian countries, the principal source of FDI, were hit by the crisis. FDI fell to under 3 percent of GDP in 1997 and 1998 compared with almost 8 percent of GDP in 1996. ‘The tightening of ad hoc exchange controls, including the requirements of consistency with the business registration and funding for imports only by importers” ‘own foreign exchange, and the imposition of a foreign exchange surrender requirement of 80 percent in 1998, Reflecting both depressed investment and the imposition of quantitative restrictions, imports of key inputs such as steel, cement, and machines, and equipment remained flat, or declined dramatically. Imports of light manufacturing, including leather and garment material and textile yarn, were more resilient as Vietnam was able to redirect exports to the EU. The share of imports coming from the Asia and Pacific region increased marginally during this period; however within this region the share of imports from Singapore have declined steadily and have been replaced by imports from China and Taiwan POC. >? Breakdown prior to this year is not available.-50- ‘+ Imports of FIEs declined by 17 percent in 1998 reflecting the low FDI flows, but increased by almost 30 percent in 1999 as the region began to recover. Import recovery in 2000 65. With Vietnam’s economic rebound, overall imports grew by 30 percent in 2000. © The oil import bill doubled in 2000, reflecting the jump in oil prices from an average ‘of USS18 per barrel in 1999 to almost US$29 per barrel in 2000. Also, demand for petroleum increased reflecting a recovering economy so that volume of imports increased about 18 percent. * Along with a pick up in domestic investment, the recovery was also evident in an increase in imports of machinery and equipment, steel and electronics items. At the same time, imports of textile yarn and leather and garment material remained robust. Slowing import growth to date in 2001 66. Import growth has slowed so far in 2000 in tandem with exports. In the first 10 months of 2001, the year-on-year growth in imports fell to only 5 percent, both for oil and non-oit imports. + While a decline in oil prices has bcen a factor, growth in petroleum import yolume has also been modest at just over 4 percent, reflecting a slight slowing in Vietnam’s economy. ‘© Imports of machinery and equipment declined while steel imports are flattening out indicating slowing investment. Cotton and textile yarn imports are also down reflecting a declining extemal demand for apparel, especially in the wake of the September I events; however, imports of leather and garment material remain robust. * Clothing and electronics imports (as final use items) are down despite increases in income levels (given positive real GDP growth), reflecting weaker consumer confidence. 67. Vietnam’s imports appear to have adjusted rapidly in 2001 to relatively modest exchange rate movements and to domestic demand. The Vietnamese authorities have begun to ease trade and exchange restrictions and, as noted above, QRs have been removed from several items, and tariffs for AFTA imports have been reduced. The surrender requirement has been progressively reduced, 10 40 percent currently. These actions suggest diminished scope for administratively containing imports and greater reliance on market forces to moderate import demand,-S1- Table IV.1, Vietnam: Schedule for Removal of Quantitative Restrictions on Imports, 2001-03 Item o Group Original Date Actual or Revised Date Paper 2001 Removed May 1, 2001 (Clinker and cement Clinker December 31, 2001 Removed May 1, 2001 Cement December 31, 2002 No change Construction white glass December 31, 2002 December 31, 2001 Granite and ceramic tiles December 31,2002 Removed May 1, 2001 Remaining steel products, December 31, 2002 December 31, 2001 Vegetable oil January 1, 2003 December 31, 2001 Aleohol Not scheduled for removal Removed May 1, 2001 Motorcycle (new) and certain parts Not scheduled for removal Passenger vans 10-16 seats ‘Not scheduled for removal Up to9 seats ‘Not scheduled for removal December 31, 2002 Removed May 1, 2001 December 31, 2002 ‘Source: Prime Minister Decision 46/2001/QD-TT¢ on the Management of Import and Export of Goods in the Period 2001-2005,Table IV.2. -52- (In millions of U.S, dollars, un‘ess otherwise indicated) nam: Commodity Composition of Exports, 1993-2001 1/ 1993-97 1998 1999-2000 2001 1/ Average ‘Average Total exports, 3,744 9365 12,995 12,710 (Growth in percent) 301 24 2 9.0 Non-oil exports 4,644 8,132 10,197 9,918 (Growth in percent) 354 53 16.0 125 ‘Composition of exports Crude oi 1,100 1,232 2,798 2,792 (Geowth in percent) 13.9 “13.2 68.6 19) Coal 100 102 98 119 (Growth in percent) 24.0 “3. 4.0 23 Rubber 144 127 156 129 (Growth in percent) 312 335 19.8 23 Rice 602 1,020 846 337 (Growth in percent) 25.8 172 And 42.1 Coffee 366 594 543 546 (Growth in percent) 60.7 21.0 13 334 Marine products 568 858 127 1,216 (Growth in percent) 239 99 308 42 Garments 729 1,450 1819 1,707, (Growth in percent) 599 75 126 137 Footwear 377 1,031 1426 1,527 (Growth in percent) 330.1 68 18.7 3d Handicrafts 90 vn 203 192 (Growth in percent) 33.0 83 48.7 49 Electronics| 440 497 684 522 (Growth in percent) 13.0 39-205 Other 1615 2,342 3,199 3,623, (Growth in percent) 28.1 27 249 238 (in percent of total exports) Crude oil 19a 13.2 212 22.0 Coal 17 1 07 09 Rubber 25 14 12 10 Rice 105 10.9 67 27 Coffee 64 63 43 43 Marine products 99 92 93 96 Garments 127 15.5 141 13.4 Footwear 66 110 ia 120 Handicrafts 16 12 15 1s Electronics 77 53 52 4a Other 28.1 25.0 a5 28.5 Sources: Vietnamese authorities; and Fund staff estimates. 1/ For 2001, January-October only.-53- Table IY.3. Vietnam: Commodity Composition of Imports, 1993-2001 1/ lo millions of U.S. dollar, unless otherwise indicated) 1993-96 1997.98, 2000 20011 average Average ‘Tova imports Tats 11,820 15200 12988 {Growin in percent) 25 03 29 48 Non-pecaleam rapors 6.865 10638 132 11434 (Growth in percent) 93, oa Ba 52 ‘Composition of imports ‘Pexoloum 78 oon 2,058 1584 (Growth in perens) 14d 1s 953 “i Ferilzer 405, 5 503 275 (Grown in percent) 204 36 33 2 Insecticide 27 8 14 1B? (Growth in percent) 3B Wo 30 Suet and rex 38 332 82 ‘Growth in percent) 312 82 383 218 cemest 21 18 (Growth in percent) 607 ‘Mounyeies 2 331 cl sia (Growth in percent) 2 85 ‘Motorcars and wucks 2 13 ‘Growth in pereen) 506 ‘Wheat Flow 2/ 16 (Growth in percent 48 ‘Texte yam 2 23 198 (Growth in perm) 19a 32 ‘Coven! 101 13 {Growed in pereen) es no 2343 Leather and gatment mati 338 1334 1303 (Growth in percent) 313 217 350) (Cigarete material 2 94 12 {Growth in percent) 65 273 Machinery and equipraent 1948 2.482 {Growth in percent) “Bs aa Blecuonies 3/ 639 869 Grovah in percent) 360 ower 4? sat 5.836 518 ‘Growth in percent) 23 7 93 (a percent of toalimporis) Petroleum 105 as 135 120 Ferilzer 54 39 33 21 Insecticide to rat a9 or Stee an irom 4s 46 53 6a Cement ul 02 Motaeyeles 58 28 52 35 Motorcars and wcks 20 to 09 Wheat flow i oa o4 Textile yar 20 1s 13 15 Cotton ut 08 07 ag “Leather and garreat atrial 26 a a 102 Giearee material u ag 7 ‘Machinery andl equipment 356 167 163 Wa Eleconics 53 37 43 Other 508 02 370, 426 ‘Soureas: Viewamese auhortes; and Fund staff esciates, 1 or 2001, Janaary-Oetaber only. 2/ Det available only for 1985 and 1996; avenge growth rate i or 1996 ony, 5y Det eailable from 1999 onwazas only | Figures aze not silly compurable since commodity composition is non-unifoxaerss years, Aepeating oa the breakdown avalable fo diffrent year545 Vietnai ‘Nomi! OD8 (2000): USS303 bition GDP per capi (200) USS390 Popalnion 230077 aulon Fan quot ‘SDR $25.1 milion 1s 19s 898 82000 Ea ea! GDP (aneul percentage change) 9s 93 82 a2 88 Tacs eutpt 1s M2 Bs 1s 89 ‘Saving-nvesment balanee (in percent of DP) Bs 40s 69 46 a 1 ‘Grove nto esiog Be TS wl esa (Grose capil oration mi) Sa? na 8 Ati som! przemsege Sang) Period serge a 32 a a 17 Entofpeiod as 36 a6 a2 a5 GDP dear a 55 mt 30 as Government badget (in pscen of GDP) 2 “Tua venue ue a 20 198 92 aT Grants a7 os as 08 as OF al tapendnusexclsingoiedicgandcpitaleoscteirms) = 233 BL BUS BL Of whet, surat exspendire fests 163 Wes ‘Overall cal blanc ncading rants excldig oieeding) a5 32 3 on a8 3 Money an ered (anual pewentage change, end of pig) 3 Braud money ne a6 8390 Crete econ 8M me es Ineret rte (in percent 28 of prod} "Tree ons depos (hutch) 2 ot a 97 «0 43 Shore ending les tn nee) 23 ira) wat myn OB Curren account inieing oi wns) (in milione of US. cls aes 2 6ne is oe Ain perceutof DP) a 39 “62 as 2 ‘Eorts of gods (onal preniage change, US. dla terms) B20 2S Bp m2 Inport of pods (anual pereriage change, US. dic ters) au 25 12 a BS Foreign exchange reserves in lone of US. li, ex of ptog) (Gost fii servos, ochng 25 lames nes ant 30 “in wks of next years pas of goods and neni eves) 32 ea 72 6s 6 86 ‘et iteatonlrreves, ssn ld He tos 8H Ia. External debt (a percent of GDP we nl me BE Converse carey 5 Bo 7793 [Nanesoverbie aescy su ao BL Brom 08 Deb-servce ratio (geet of expos of gods and seta rise) Dent dae aa ns naa no pe Debt pad 7 36 ca 3 ws 35 xchange rte (dong per US. dla) Perod avenge uae 14038 gus sages End ofperion Uns 480 ages Tamas Rea eflecve exchange ne (cual percemags change) Pevioé serge ss 66 as a 65 a8 Endofpe a 37 a7 oO Be Memerardum es: “GDP fintrons of dong a eure make iets) nes amos tes Per apta GDP (in ZS doles) 28 nT 381 39 oi 90 Sources; Dea provid by the tori and sa estists dod projections. 1 Yearonsearshange inthe gos value of nds OD, Cubes. 5) orzo0b based un expanded monetary survey (Sate Bank of Vise (BV; and ES cred instintins, fo previons prods, bse original motetary survey BV an 8 ret inaisons). “T Poadoa clu reseetlng was concen ey 1998, Rescuing ofthe Rain dor ws conclude in Sepiember 2009 2 smiparbe tems tothe 19 Para Cub essed 7 ies te an somponent of feign ett ivement nd eter private sector borowing, ad host debt,-55 STATISTICAL APPENDIX ‘Table 1, Vietnam: Gross Domestic Product by Expenditure Categories at Current Price, 1994-2000 1/ 1994 99s 96 97 1938, 1998 2000, ‘ica Eat abilion of cen) Consumption gest 157270 gash as He aaa 30.80 Pate issa58tgea0 soy Tasous asa THI Gaerne: ist Rm ssi Ts 281 Investment 4548362517680 ATSE ATS go s.827 ‘Grom apt frion fas Seis? Tigo? hse TSS] aa SST (Change in ocks wast 3s dB sims 1326 i 3970 Domestic demand 193,000 So1gs] 589838 BBRAIS IRIN 5.0 Net exports aos B32 ae gata -t0 6 ‘Eepons Gps) 55965 LU083S Hass .910 9856 Aa aL Inpors S182 1703s 4s 159358 SZEL USE 381.749 Statistical aaerepancy2/ sap ngs S707 an 93 3 90 or miso ROS SES 6L OG Soop 139 pecan of GOP) CConsuingtion ne as ne ms ws 134 130 Prate mT 35 ms 7s m9 62 655 Goverme: 83 32 Ba ms 16 1 63 Avesment ass 2. 2 23 a0 28 nes ‘Gross expiration 2a 2s 363 167 nD 237 ma Change woeks a fe 13 be 20 tb 20 Domestic demand oss aoa 1082 aos vena wos Net export “3 ads ssa a2 a3 28 23 Epon 382 367 at 36 us soa ss ingore ase su ST 508 22 aa 562 Staite discrepancy 2) 3s a 0 a3 42 oa (eam percentage canes) CConrupioa 28 164 aos na BL 64 2 Peale isa 284 302 Ts BI 6s 86 Goversmest Ba m2 212 m3 7 SE 2 evesoneat sr 66 no 6 182 sa Is ‘Ges apitaltmaion aa Ee) Bo ma 163 34 83 Domestic demand 2a 20 ns wa 6 os Expons ss a0 m3 18s as aos impos sa 249 30 182 2 192 cor 23 232 188 153 su os, ht (Conmituronto nominal GDP prow inpecen) Domestic demane us uns ves ros a3 wo Prats compton as mI 610 83 455 st Foe capa fron 52 Bs 22 m2 Iss Br Change in soeks 32 as aa a8 1 29 Netexpore 23 30s aa ey a Stati! dserepaney 27 106 210 43 33 as oor o0.0 ao 1a (oa Souce: Geer Sts Oc. 1 Data ar te ofl revisions of istic GDP asumaes. 2 Diftence between progasion an espendce- bused erates of GDP, he eer of which re unsere o be mere acorie36+ STATISTICAL APPENDIX ‘Table 2, Vietnam; Gross Domestic Produet by Sector and Ownership at Current Prices, 1994-2000 1/ 1994 198 1996 9 1998 1999 2aeo offs dabilionsof don) Garon: Domeste Proaet, i7es38 akg RANG SE BSUS SHR seg BD ‘Sie ‘nes “94977 least ags7aeaugs4527 (excdig ste wanagene) 2 682899927 tgsIO 82887 as 2a sea Nene lassi 615622 SHSS_ BSI. NASDIS BHD) Agriatare fase 2354 sO Lak ‘Sate 2102 Sa 308 3688 Noaeme ems 388 ROD TS TRS Industry and construction S130 sng7s 10059 117299137959 62.95 ‘sate 36240 38 ISSN G85 Norte 35200 aie S312 GTS 6008 Servius yams tongss—LIs.6uS 32203 ESAS anaso TL ‘Sue eyo) “S62t6 598275 UK HBT TBS (eroding state ivagemear) 2 i609 4798850383 exs0D T3088 Noneate Bg Mes? Meee SL 85708 ‘Woke drei wade sols aap ats agg 50s 4400 ale and renames Bs Bes 8776807 og 1345 Trasor, storage and eonsmarication Tiss 97103806 et ‘Rosneal meres Gio dpe Ses Saas sas? ‘Scletifesein and tetmalogy rs is tao mine 2s eal exate services sas aes? S388 sas in Publis ati, defence and compusorysocsluecity G48 8278 BIT 10H6] 8A B95 Eveston a ining fais 829) 9887s. Mel Heal sod soc work ns Soa S007 a3 357 Ss Otte eves Sus yous 876008713808 Me inpeven of GDP) State sce soa 402 338 aos 400 387 0 (rch sate management) 2 65 365 Bes sa 307 3s uaa Nonstate sector 339 9a er 505 0 a3 eto Agricuttare a m2 ae 238 28 254 ns ‘Sate 2 12 B a 1 1 Nonsae 262 260 26s 2 247 24 Industry and construct mas as 7 aa ns sas 366 Site la? Ms tas 1s isa iss Nossae 1a re 5 16 ma 136 Servees 87 nN as 22 4u7 ‘on ey ‘Sate 22 2s a 239 Bs m2 (creating te meagan} 2 205 203 208 206 302 193 enaate Ws ws 183 182 82 m9 ‘Whole andrei ade 69 isa 159 86 155 at as Hote and evar aA 38 36 35 a4 a4 3a Tanpor, sora and earmasicaton 40 a0 38 49 39 33 40 Faget lcernediation 13 20 13 1 i 19 19 Sieve actives an estzlogy 06 ag os 06 os os as Real ee services su se 50 2 4 46 a Pubic aman, diese and conpuley society 36 Be 35 33 33 25 2 Edsstion al wag 36 Bes 36 36 a7 as 33 ethane Wook 15 ts 3 4 1 v4 te fie services 25 ul 2 35 aa a3 32 ‘Source: Geral Sisal ie Daa ae le oficial rent afi GDF estima. 2) Sue manegect odes pale admanseatin, defen, and compulsory soil sett- ST STATISTICAL APPENDIX Gross Domes Prodt by Sato at Catt Pies, 1998-2000 oie (tation ofdoog 1994 cone ce) sie sn ou wos 230 sim sane ser Bm aot Bist as ice i and meer py Waele dea eae Inger kee Rosen verne veosas Longe ons Exton mong sa Obeenn 7 oe Dot Petuc BME MSS MR HIB wT MSD ‘Rel GDP, al psenage can) Coneuston a2 00 a8 as ea fiver a a wt (er tan re sa BOR z 2 Bo Sete x A 8 ten s Q cae 2 3B éucasn nd i Ba 36 - Sane Gen Stina ates, ti Sexe mane des ali wiiron, eae deploys sy-58- STATISTICAL APPENDIX “Table 4, Vietnam: Consumer Price Inflation, 1996-200) 1! (ave average st 12-menth peretage anges, les obese let) Fo Detast a ‘oe — oven Geet fied Suen ed pore) Seren 1865 Daserr ne eke « oF dome a B20 m8 fe a 1686 Decne as a 3a 2 doence a a 36 3 1o57 Decor 38 aa 36 te Avene 2 a 40 on 1904 Dacre bs na 46 Avenge a a “9 : as Notes Ov nn mi Ger AD Cates sia Foaig Tepes Oe sss ed ‘Sugles fied aad Goneeat nds cam camino fens Wevenpemen 10) 1600 a mow maa “ce a 2° tea ee rn so wat & 14 o se Ranuy Rak 87S 8B 23 az as “3 oo io 46 Mich 1989 0 se s “ a 45 er asl BLE 16 Ma, ss as ue a aa a sf My masa 43 oo a a2 3 2 oe Pes SI dm man 4204 ss 43 as “o ie 2 SI sty mz 4a as sa 4 a my n as 53 deme 128 a1 ln 32 as 38 a ts 22 4s Serarber wns La oe as as 3a 3 a ae 8 34 Oar 922 ALB ts a a Se B ie au Bowne 970 2012s u 24 a a ss 13 20 Deemer 03023 os 28 8 se 28 le as Aveage is 4d 33 ir so 38 n as 3 2 a aca semuty ok ssa la uw a a 03 Femmy 1274786 B uw is Mas 18 Noch 212 BL b at ‘6 53 oo 14 aot A 22 kB at as “8 03 u My 7 Bn is a a 2 oa re se as S28 ts a i as a 16 iy a Ss lL uv a u 46 3 ir ape 4200 48 to 4 1s 2a Semenber 83 Ea moa 2 3 1 a Omir UA 3ST ry “2 22 su 2 a Newne 982 Me 8a 2 ce 2 st 2 as Demmer ne 0523 20 os aa 46 is u peme 73D wv os iB a6 uy 1s 20 Pamary ar area aa as ey a a3 Ps Beery ao Lu a3 36 a 1 Maa 33372 16 20 02 a to Fs sar ta 33 ts 16 20 os 30 oo 2 May Sa stk 19 rm at 2 ae a3 ees a a we 2 hy 3 ng 933 Ls ry a3 2 vp oa a 0 a os an mo 88 10 Septeaber to u as oa Le 1a no 8s 1 Oster oe as as oa 06 nh os 18 a Sous: Geen Sail Of nd teas Beng i aay 95, te CP ides eed ming new meted atic ite! weiss ne tens he aoomes 2 Bocecing ly 00, ewe cua eben cones we rgd Hower, fete ust Cis ae, he Feros wept dined nem 2 Begin in 996, dead tens ‘esa enmace-59- STATISTICAL APPENDIX ‘Table 5. Vietnam: Gross Value of Agricultural Produetion at Constant Prices, 1995-2000 99s 1996 197 1998 1999) 2000 Estimate (in billions of dong, at constant 1994 prices} Total 79,812 83,967 39,958 93,502 100,283 105,368 Food crops $4034 56,814 59,942 62,257 56,323 68,937 Paddy and other cereals aang 44,654 45,593 49,060 52,738 54,938 Vegetables and beans 4.984 5,088 5.44t 5,682 5,987 5,891 Fruits 5,378 5,688 6,132 6,091 5,193 5,638 Other 1,362 1384 4775 1424 144 1,470 Industrial erops 12,188 12,806 14381 15,042 16,624 17,923 Animal husbandry 13,629 14,347 15,465 16,204 17,337 18,505 al production) Food crops or os 66.8 66.1 654 Paddy and other cereals 528 32 52.8 52.6 52.1 ‘Vegetables and beans 62 64 61 59 56 Fruits 10 68 65 62 63 Otser W 1s 15 14 La Industria crops 152 183 161 166 170 ‘Animal husbandry Wt mW 173 173 116 (Annual percentage change) Total 66 52 uA 39 5a Food exops 5.0 Sa 55 39 39 addy and other cereals, 47 60 43 53 42 ‘Vegetables and beans 100 21 69 44 09 Fats 17 20 78 07 12 ner 61 16 283 “198 18 Industrial crops 176 54 136 34 105 18 ‘Animal husbandry 48 53 78 48 70 67 Source: General Statistical Office-60- STATISTICAL APPENDIX “Table 6 Vaan: Produson of Rosd Sapa, 195-2000 199s 1996 wet 198 98 220 Esme (Gena fs) ‘Ttaproductin van wae angle se By prance Ble psy aye mess ‘Seana nao sso ota ce “30, O39 ‘me 7 Sate see Ta08 758 the Cats ie equate it) ast 34 2708 ‘ie lee es 3) S50 Spas sou Mase vst ast va Seestpeits ver wn uae Com 2057 20s om Pooce Nort taste toe aots gas atma Some iiss ghetto (dona pretge ge} ‘Tout pndston| «0 a 4a 1 Resyutty 3 3 Pia ” Spree ep 87 oa b a Winerenp sa Fa 7 sm eee zest its) a sr as 36 ‘ee 05 oA a4 " wi Sree ptt a on ry wa so Cine as ua 282 . aa Pritt Gnowands otnecae aaare ett a a ] By proce ey joe m3 te 168s Sree Ba Tomah len na ‘iach Sou kes Bat ba a Winer te tee wie oneranin uo tn au tn suse ‘is es ss rey a Soe ite Se Pa a ms a came a 6 st Be Bs byron ‘on pom nae as ams an . son foo es S241 vas vw (onstage tae) By pretace ‘i gety ar a » 40 a 43 Seay a a so oe 6 2 doce 3 3 3s 3 3 cr esp 3 2» 30 33 M 3s Me a Fe 3 23 a a Shes potea ss Ss 8 oo bs ea cane fs 38 3 3 6 3 dy rego i a 33 a6 a6 3 Soak 4 3 a5 3 M capt patacon Tous Gena weaperpe) 03a) wat ee Gar tat bw ae wal ald Onesies ts sta ‘ingot al atrieetain) 9S “3 et tt ‘ot sap (334 133 ona un nt m3 ie Wee tes TS ia ai Stes ma iota 82 a Telstra pigeon) "38 6 8 2 = L apie ao a a a o Sues Minny of Agate and ese ae Gl ltl Oi: sin estes-61- STATISTICAL APPENDIX ‘Table 7. Vietnarn: Industrial Crop Production and Livestac, 1995-2000 1995 1996 1897 1998 1999 20 ste de thossad of ei tons) Pradecon of wnneal cops Conon es 2 “ no m2 asa ate rn ise a Ms no a 75 so as 8 os Sugueane ois nar nga. se 1.6 Pena saa sna 13 seo Sit 3529 Soybeans iss 133, nso M63 ery Mis Toscan ma as ma 33 388 na Praia of prem crops Te a2 a8 22 366 03 wes afte aio san ans 53 sa ena athe m7 was 65 135 287 219 Costa 16s bits bins ase 1962 a8 Pere 3 10s 10 80 3a 20 (anal prcetage change) cea 2 S60 os use o as 358 70 Ret 6 6 3 as Sopscae 43 iret a ma Pests a2 33 6 109 Soyteas a5 wa 03 a8 “Towese 2s na 6 a6 Te 196 ta ed 35 Cate 36 a he x0 (Go tusas oases) Area cateted ofsamuactops 6919 55641 oat ras ‘ceten 115 150 182 Bs see us eo us 67 Rub 04 3 itt 38 Supweine mus a0 250 20 Puanta 29 a7 mas 2s Soybeans mut hoa Lost i394 ‘obese v7 29 253 ma Arn culvtod of press crops TOL sua 36 oa “en 6 762 or Ta Cote 6 aso ot m0 aster ame mo ans ja Cera ims v8 ues ia Pepper 70 18 38 wm (noua: pe etre, a mess) cote a or os a 10 o Ite 20 1 ie aa 2 is Rua, 23 60 a a a 2 Sapecase a8 0 aa 8 si6 03 Peat 1b 1 ta “ 1S ta Sopher to Lo uh ue u a Toho 10 19 1 13 ky u t us 26 03 “7 oe ao Cotte RD 13 2 i ies 1 uber oa os 85 as os a (Goins ody Lick ‘Bae 30 30 2s so a0 2 cess 35 as a6 40 a 41 Pg ove two maa ol) tes 169 ne rat 19) ma Pray wi sta 0s M68 ves 63 maces Minty of Aub nt Foes and Gener usta OF.“Table. Vietuam: Gross Vahe of Industral Producton at Coss -62- STATISTICAL APPENDIX Pres, 1998-20 1 1995 1996 399 198 199 2000 Eeiate ‘alin of dang, teas 1998 prices) Mining Bs 60 183 6 264 eat fa 19 2 23 Oita gas los ns 208 ay Metal oes on a 02 aa ‘Stone and ober ing a 3 ie a ‘Manufacturing 2 ao 135 13 oad ard beverages 20 09 a7 ae Cigars tobacco 40 2 ae 56 Teves ad garment ot 38 B65 is Tense a2 6s a4 oa Gamers 29 34 52 60 Leste acing and rocesing 36 45 13 89 ‘Wood i piper prods 5a 33 6 1 ‘ood paedce 33 32 32 37 Paper i 2 35 a eating, copying. pbtihing 1 is 20 22 (Chemical asd pensleun products sa 6 58 no (Coke sr peoleum 0 02 oa ot Chenicals si 3 97 9 aber ar plasis 2 28 34 68 Nonmeallie product 92 on us a4 Meal predic st 70 00 us Meal pres ba 4a so 38 Products ade of es a 23 so «1 Maetunery and equpmert te ts +0 1 (Compuer an fee egupment on 00 7 st (ier achinery te espe 1 15 2 26 Bleceie and aeesoni poets Bs a a7 Redo, TY, telecom equips, 24 40 46 Medial insrents a2 oa o4 ‘Other eleesic and elecvoe prods UL 3 29 a7 ‘Veticies and wanes equines 34 34 63 92 Assembling und epiing of note eles is ry is 2 “Trapt equipment b 2 as 1" urine and oer 20 23 38 43 Fariture 1s 22 aa a2 eer a a a 0 etic, gas and water 62 3 05. 116 leswiciy a ga s8 6s os 06 ‘Waseem os 38 ta 10 ‘Total oe. ust 16s 193 ining Bs Is aa 133 65 3 it sad gas Ba 137 Bs wo 13 oe Manufacturing Bs 10 ibs iat 107 nr Food and beverages R9 Mae 109 14 33 4s “Teles an rents 464 7 iat wo aa 2 Meal products us 7! sy mos 19 Eteeve and eeewoni products sez as 14 132 Vebces and wansor equ! oo i Bs 460 ctr, gos and water wes 1 1s te 7 os ‘Total 43 Ma BE Bs ine is? Source: General Sutsial Ofc, 1 Dee to relsicton of intial selves, previouty published indus sector dats ae not camparable wit asin is tbl,-63- STATISTICAL APPENDIX ‘Table 9. Vietnam: Industrial Production by Sector of Ownership at Constant Prices, 1998-2000 1 1995 1996 1957 1998, 1999 2000 Eximate (nbilions of dag, at constant 1994 prices) “oval industrial production 103,375 118,097 134420 asia 168,749 195,321 State secor 31.991 $8,166 69,483 7.208, Central 35920 38411 35677 48395 Local 38071 19755 23786 24813, Nonsate sector 25,451 28.368 33.403, 32007 Cooperatives 650 ‘ssa 859 1978 Private 2277 2702 3,383 Bus Howsebold 38.191 18977 21.983 Mixed sais 10.280 Foreign invested sector 31562 33514 sit ‘of which: ol and ges 12ast 20.512 21,876 {exclaing oil and) 13.095 7.982 47.535 (Qapercent of total industrial production} State sector 303 493 80 89 a4 20 Cena 328 258 31s 302 287 24 Local 1s 167 166 159 49 146 Nonstat sector 246 140 2A 21 ng 24 Cooperatives os 26 os ne 08 Private 22 a4 24 22 22 Housebolé 16 151 war 38 n0 Mixed 42 50 55 35 BI Foreign invested sector 2 267 289 320 347 385 (exclading oi ed 25) 146 162 184 208 ms 13 (mua percentage change) ‘Total industrial production is 442 Bs 1s 116 157 State seetor Be ng 108 47 s4 nh Centat 140 2 99 82 60. 107 Loos! 26 93 27 6a 43 150 Nonstate sector 2/ 185 us 95 25 308 183 Cooperatives 52 98. 4 253 Private 26 155 ag. 93. Household 3 38 87 36 Mixed 365 249 ns Bo Foreign vested sector 24 32 a no 186 (exeluing oi and gas) 263 292 28 208 252 Sources: General Statistical Office; and staff estates. 11 Duet reclassification of intustist activities, previously published intustial sector data are nat comparable withthe data inthis tebe, 12 Growth rate for 1995 covers both amsiate and foreign invested sector,-64- STATISTICAL APPENDIX ‘Table 10, Vimar: Population and Ersployment, 1998-2000 1) 1998 1996 199 1998 1999 2000 Ca vousna of ern, buried) 386 nas o5a86 t657 ge {acm pcenage change fe 16 ts 1s la wean 14938 15.420 sass ison 660 fans pavenge change) 36 32 37 3s a ul sas nm sn seis S986 (Gana pranege change) 12 12 cc 08 a8 “Teta empty 00 ssa an a7 ‘Unemployment te st ey 68 7 (dn pret total popu) 07 a ar a4 a6 ma 9 na mm 769 res yea su sia a9 sos son sos a3 6 o #2 #2 2 sos ant ws we ‘Ave and ove a 30 Toul ergs so ae ee 02 “a 465 stows of pct) Teta employe 34,590 sags amr sat 6206 ‘Neate ste su sm Seon sus S270 Stes 5083 3287 3a 303 tale ‘Goverment 1258 ‘Cenzal 2a Coal = Sie eneries Les Ceatal oot taal Ey (Ge poms wal employment) Nowa see oa oa wa ou 04 cue Sue stor Be Ss a8 49 36 oe ‘Govemet 3a a : : ~ Casal on oe : Local 29 ae ‘She eters 32 32 Cent 3 se oat 2B 22 (asl prensa) “ott enpymat a as 3a 2s La ecw eter 26 3 33 2 is Ste sector a a a a6 us 08 ‘Govt! 6 L Cea Ms a0 Local a mn Sue eters 36 36 ‘ect ia us : Lol a as ‘Sours; General Stil Off (O80) and Minky of Labour Ina, Sok Aue (MOLISA} an ea etn. Leia n 1936, ploy diecast ite Sts of Eau» Empepmenin Ptnam (MOLISA). revs, a eprint vaio Stee! Yarbois (G0), 12 Auli sea adn one bas of he 988 an 1999 cen 5y mad ce ad sme oer ous aze cies fo: waa gis 1 Fort ee in tn sen spn ales {St 9 ec an eles 1855 yard SA eee by GSO,-65- STATISTICAL APPENDIX “Tebe1, Vitam: Total and Nonstate asaya by Sete 198.200 9s 1986 9 ioe 0 200 eine (inna peo) so a7 reset asa 6308 ec and coy a mans sen aa on ny omemein ‘sa 2s : se 0 ie hea By 283 Sass Secncton os os 0 ‘de eng, nd aoe 248) ane nanometre 008 GB 1 2 (ne pecssge cin) “toa, aren a rey ta 2 a : a Indu season 3 o o te Agi tc le “Fate ange nd soe Elichan tei ince sda ‘Apts er ad fey Tage water ‘Apiniuey Seen an wey Bing od ssorei Se espa nd earns 2. Nontutemployment ‘Tot oot ponent Secon, sete an ary ‘ey “np wl aes “nen pot ‘hpesiy fc ry Asiatic and reey Bcyedeonmsion teers mens Eetenan feu sere of 3a ase apmer ooa copayment tn ooumnd dng 198 yes) east ease es ven 0 ae Base (dona pose sang) ae 53 ta (Goa een om) 7 as ~ (npc ofa enna enpeet) Sout Gre! Sia Oe Cr ni Esta Meagan: nd ity Lao lis and Sec Ain ORSAY and all 1 egauingin 195, prt an a pate inte Sto Lou Blom Pemam (MOLSAD. Dindade cing ndcueryngred eer a 5 Siar acted ce Enpyet od Coa dsl pwanem and tonne out-66- STATISTICAL APPENDIX ‘Table 12, Vaca Employment inthe Stat Sector, 195.2000 1995 19% 19 1998 1398 ano Betrate do tounade of pes) “Tota employment 3053 oe sa sae aan ‘roa na fs 2a on a 2s m2 Tatusty al ersten ast ton de 130 10 ‘ey “38 a sot a is Cenavon m 26 38 st v7 ‘re aspera eros 3 an an a0 as ‘rade 196 ne is aa ro ‘Trap ad coments 198 20 1 18s mm eve ea, wists a 2 on 06 107 1.100 cst a on 7 8 fe Since z 2 2 0 2 Cues, a 008 pact 2 2 2 3s 3s obi eth 83 168 a 0 i cote oe ais “at “a 0 (ta pect of ta ate eco ply) este an rey 92 29 7 2 os 66 Tecan scotia me ss a asa 362 x62 “rage tanpor, ad sommaniatns a 13 23 a ua 1 cain, ea, eect ad a) 30s 310 sh se saa ns one ns BS. Bt ne mo be (eau preps change) ‘Toalemoleynast a au “1 36 us 26 ‘Rescue ad oesy 2 au a6 oa ae a Iibty a seen eo 2s ss ss 26 a8 “ead, waa, al coramicins bo so 36 48 a8 a3 ‘Eda, baleen and it 47 a ae Sa 3 09 Othe 12 2 os aa rr 46 (Ga tous ang perm) Average nomial age ra “0 52 or 2 6 suey 38 vos Mt 8 oer on Comarcon “ 2 a x a ™ Astouare 368 a 2 sie see 355, ‘rasp = ois bn 304 1288 ass Trace 0 2 oe 72 8 “as Edveaion 310 oa 05 ast 301 2 Sohaoe 361 bos 35 a sis a (Cant, aan pats xT 0 3 0 0 26 Pabst a we “0 0 som 520 Site eansgeneat st 50 as 4 oH sa Fans emedicn wor Ma Average rl wage growth 2? as M45 12 os ar Todi) on 150 ae 13 07 Canaan fs 20 19 ss “3 ‘Agicute 55 a2 a 3a oo “Tragonaton oe 76 7 43 22 Tce na we ae a6 4D Ebueaten os Ia aa er 48 Seine m3 es 6 163 63 (Cur, aan porte 30 57 na a3 25 Pub best se pa 1 1 a ‘Sate management o7 no an a maa Final emediton nz cour pe atin we a a 73 Bn “7 Sourer:Geratl Satta Obs (G80); nd mat ese, 1 Cat came, ning pyran ie, boms payment scl ay contac. 2) Nominal wage oor eed by conse pit nica,-67- STATISTICAL APPENDIX Saminary of General Government Budgetary Operates, 19962001 1/ ant a ee deen of done Revenue nd grate bs we esa moms ser ses ‘Reems Sis fe as ws Cres “Ferevee wo a 7 Sa a a estat verse us ing Bn 1st Se is conn 16 ts 26 a 3 o 0 Teal expeettre oan erlesing se a3 ne mas sa (cdg onetig Sis wt na He ‘ea ae ‘Const expenttae Bs 3 3 Bo St 6 sa ate expenses Bee se Soo a: Bs eel feta poets ld 29 3 3 ul 2 ut ‘a ‘ate a at 1 i B ul a ‘Ca expedient ne a 2a 28 ms ae ‘eri clang os ie © 3 1 a woe conteoey oo oo a aa ba oy a oped sts fsa 8 v0 oo wo Py “ wo bo ‘era Gee balanes exucing cueing api cats teen) 2 as as 33 Oven eal bao nlc 33 13 Ss az ist “Atgueted Eee (loing lend a pl oat fem) G Rr) S20 ag Faacing a 3 8 ws ws 28 ‘eas e) 2 os te a a ia Bug stn au a bs sa a4 Nests" 2 oe ‘6 Ey E Reig 0 v1 Pa we ae i ‘Denanenens 2 a 12 Ms. 6 ‘Aventetan pil) a0 z a 30 1 2 (apenas of0DF, aa ns 08 ana be oan us ne 8 a moe ie B27 i i us ia 13 12 re a st 38 re re ta a oo 0 oe of a oe a a ‘Toul eapecture esis) on ae me as miss se isceg oe) Be BL ae a Be BL Bh ‘Cora pene ike ns ie ier bs 83 ise Cet octet tpn ma ie 187 ii 3 es lores ra en) ie 10 as oe 0 to 2 cop epee elendng ss a as 2 as 12 os Comey te a wo oe a a0 a ‘Overal na alan nscale) os 4a a 2 (ani fl also eneas! ab 33 Br a3 Financing os or a8 1s wu 4s 4s “Been 2 a ia a ak 1 a Baskegeen 08 4 a 33 Te 88 Noobs 5 4 a3 a bs 1a 1 ee) oe a 28 a 3M au a (Gels ong ules odes inte) rpendnoe aagd ai “a as a 3 a “epee of GDP) 15 to 2 a ie agenda il Me ssi ao Me ass 22 “fap S1CDP) 6 “0 ao a oa as a Toul sci expense (pert of GDP 1! se 3 a Scr Min oFeressosines an eins, cao 1Y Sens ae se api cst of aking duced ene im, 5c soil et ob ors esas 24 len 07 pre ofS, 1998 {1 citron boon ue Eni wut saa oven he eye 199d bk ei $SrDowese nobel acing desolate ssa pe Seif desne expendi citrus by lest wis be cn ne geal hid a exe San he above budge eston, ‘Sater tte eel nl penn nn utc eS wd ang Psi ay ani) su tt cas istered wares ls (ged contd gemsng pope m ey nto a plopmey cle ote al al eal ping fan ed wag, nde wv oe ‘Spal space oxi alwacg ms eat on pots paoa nee opictce, Casta ab ele) ed War ees Exe fal cpetns-68- STATISTICAL APPENDIX ‘Table L4, Vietnam: Goverrament Revenues, 1995-2001 1995 1996 1399 tose 1999 2000 2001 Bude (tnvshons cfd) ‘oval reves and pasts ssa ea esa Do ws 907 62 Twerevenie 400 303 297 55 603, oa 659 ‘Carorateincome tax! 14 oa ine ma 4s 198 208 Indica inoome x os 18 1s us 1 is 1 Caplal ser charge 3 1s 1 7 ts ts us Ld and boesing 03 oa 03 03 03 08 as emae ox 02 03 08 03 04 oa os “Taom ie eater of popertiae M 19 10 10 a8 as ‘Teron and userght a3 03 os 03 02 02 Vale add tx (VAT) 2° ua m1 hs ne 72 ma ie Baris 25 as 45 56 45 3 SF Slaughisr tw 3 a an oa 00 ae a0 00 ‘Agricul ox is W Wy 20 20 18 1s Teepe ad export axes Ba ust os 189 rey as 150 Othe taxeson cae 00 2 Do Ls 10 a1 02 Otc tes “9 GB 1a ts n M4 en Nona revenue us ne Ba 132 18 287 18s oer and cages 33 4 36 sh 46 Renal ofland as os as 05 04 Income fom natural resources as 34 33 36 87 61 [Netoroi after x 2a 1 29 87 £2 Cepia sevens 08 os a8 a8 os Oe 21 a 34 28 rea Cross 16 1s 26 u 24 1 w (pirant of GDP) ‘Total revemve and grass 23 ns 208 202 198 aun 189 Taxrvemse ns 135 158 184 182 us Ha ‘Copan income tx 33 30 36 at 36 4s Indica income ae 02 a5 os as 38 oa Capital vez cage o6 03 os 04 03 03 [and sd ous a an on on an 0 oi “ices a a on on on a1 “Taxon ie wane of popetias a3 03 03 02 82 ‘Taxon ind userght 2 on 1 ot on 99 vat2’ Py ai 3a 33 a 30 38 ess i 17 as 1s a 12 12 Sloupaer nx oo 09 bo 20 oo 00 00 Agricultura tax 67 97 os 95 as 04 03 Igor nd exports 35 56 3 al 38 31 3 the axescn bade 00 as 00 04 02 oa 0 Oteriaxes 2 os a8 oe 03 03 00 Nomex revenue sa 38 rey 42 40 82 40 ‘evans charge 2 uh as 12 10 Revaloflne on 02 ca 1 a ‘Income rom marr resmures 10 ul u oo ui 16 13 Nec proitater xe os a6 7 20 1 Cepia revenues 03 22 02 22 a1 Our 07 12 os 07 oa Gams 35 os 08 06 06 04 as Seurce: Misr of Financ Budge Deparancat and sa esa 1 Prot ax pric to 199. 2 Tamar x pie 1998, 3 Abolised ia 1998,-69- STATISTICAL APPENDIX ‘Table 15. Vitam: Government Expenditures, 1998-2001 1995 1995 997 98 1999 200 2001 Budget tr (onsiions of aes) “Total enpenure ca Pai) ss os 6 788 aso 7 64 “Tal cere expan (casas) as a3 a3 59 ss 69 m0 (Geol adminoratve eves sa es u 7 6s 6 6 onan erices 40 42 as ae as Sa ss Sosa sence: 1a 203 ny 2a 286 2 ut ‘stesion 47 ss 12 77 80 107 09 Hel ah 28 2 3 Bi a7 37 Sora nbsiies ba a2 62 87 36 "3 m5 one 38 39 3 50 ss es 6s ter acrctres expedite 2! ne 6 me a 17 i 26 loz panera) 23 27 19 2 2 i “3 Forest 1a 2 03 03 a ls 2 a0 08 Aree 2 4 20 00 . emesis Ks 13 to a (Capa expendi ad oniending ne va 264 259 38 #0 aa Copia expentiaze irae 35 ws 203 267 36 Ba8 Oniening as iv 3 s4 7 toa wa Cotingeary as eo 00 a0 a0 eo a {dnperent of GDP} “Toto expenire (oh ba) m1 Ms as ass a4 ‘Toul carat open (casibai) 86 na 163 us ry Iss 4 Gene adnate services as 23 23 re 1 Ls rr Beanara sence i ts 14 3 12 38 Gg Sova setest 30 3 13 es ba 13 estan 21 20 23 : 2 a3 a Heald 10 lo 10 as a8 a9 on Social bales a2 a0 25 24 28 26 2 Otier Vs ua rv 1 La ts te te oniere expends si 5a 45 a 39 43 49 Ivers psy (id) 3 ta os es as 7 a8 ‘orig 06 os 23 02 Docenie a3 a8 a 3 Capital expen ad nlening ss 6 a 2 ss 102 os “Cail expeniane 53 57 62 57 a 73 2 Gnening a2 as 2 us fa 2a 3 Cconsegeey 00 00 oo oo 00 00 os Souesee Misary of Finance, Bulget Deparment ant ea eins 1 vclaes caren scat cons of tate owned epi an baking tor efor, 2Y Indies Sefer expenses,-70- STATISTICAL APPENDIX ‘Table 16. Vietnam: Treasury Bill and Bond Issues, 1996-2001 1/ (in billions of dong, unless stherwise indicated) (ones “Treasury Bonds (rwo-veat)2/__Treayury Bonds (fivesyer) 2 ‘Auction date Amount Average —-Ead-month = Amount. Average End-month Amount) End-monti fold yield outstandingstock sold =—=sleld— oustanding stock sol outstanding sto 1996 December ° 324 92 20 1,260 1997 December 3 oo 2918 132 1204836 1998 December 369 lis 372 m BO Als 1999 January 66 us 3.787 ° 6al8 February oo us 3831 537 Iso 6683 Maret 258 no 4983 1.366 no 795 April 2 2 4a 874 Bo 7909 May 201 993970 341 Bo 8037 1307 1507 Tune 380 36 ° 7,858 1988 3.865. July 328 94 ° 7.470 103 4495 August 297 9a 0 77002 0 495 September 410 79 0 6,639 0 4895 Ocwber 400 6s ° 6341 0 4886 November 333 3 ° 6141 0 4496 Decesber ° e 6,003 0 sa36 2000 Janusry 2s 60 o 6,009 0 4886 February 350 60 > 6,009 0 4896 March on 57 . 5924 0 4836 Aprit 61s 57 ° 5.683 0 4496 May 200 54 o Sazi 0 A495 June 56 su 0 5,280 bo 486 uly 665 50 o S32 8 486 August 325 5 0 5023 0 ase September 190 Sa ‘ 4408 0 4886 Oetober 540 52 c 3.889 0 4896 November 87 53 c 3438 0 486 December 2 54 « 3,367 0 486 2001 January 85 34 4 3167 a 496 February 230 4 6 2,580 0 4896 March 505 38 0 1214 8 4496 April 210 35 May 48 35 June 305 35 sly 40 55 - " ‘Aust 180 50 - September 310 58 “Memorandum ites: 1998 1999 18913817 28 34 Total stock of deb (in tlions of dong, end of peed) (in percent of GDP) Sources: State Bank of Vietnatn and Ministry of Finance; exd staf estimates 11 Tnadetition to these erouns, D 246 billion in shorerterm zaurty bills were auctioned duting 1995.9, Treasury bil of varying maturities have also been placed dizectly with the public throug the Ministry of Finance's real network 2/ Beginning in Apri 2001, deta not ported, 31 As of end-March 2001,-71- STATISTICAL APPENDIX ‘Table 17, Vietnam: Monetary Survey, 1996-2001 1/ 99895799 200 tot a ar inition ofcong emt of pes) Det foreign sets 4a 240 S22 TRS MKT HA 987m twa Foreign set glz78 dT SENOS? IBS tas Pevegn ais 100-9988 IES 6318388 er [Net domestic assets ws 668 fe. site east oats Domestic edt (st fsa se us? 197308918828 elas on goverment ata Bole 2847S TS Credit he enon oo aa 127 Le 80S? aga ‘Clas om sie eerie 268 sel 2-79 oka 9 lsd Chins anor sears oat Hs $4 85 OO 8 50 otter sem net 49 98 46S led 187 288 ma a0 ‘toad money sue ls SWS RL aes aS HS of which sal epost Sis 755 WU] S07 Ie 2D aM Daag iguiity mo 3 6s Ts M82 AS Kes H6AT TL Cuareney oceans ld S930 9s Deposits wa Sta 13a ur Gat 1003 asso tts Dec depose mi wt S85 580842 TOL Ot deposs 1672 a2 S31 sea Fovegn currency depts wo IBS 35890 dS SST Cinzia of US. dolla) isn 17836 B06 41248 S381 Sm Sus: Aingerent oft! gu) me BSS Bi TEE (ual pore cans) Coudito ta eeoxony wl 6 tet wel Ak Chains mentees ni bs Bs m7 Cains anes srs u7 es ioo a9 BS ans ‘Broad maney 2) nr wl 386 wo M303 which: tol dapesis da M3 Be 3 ist sis Dan iit a7 no M6 90k 362 26 ‘urverey ouside banks le ué MS 6 OHS Deposits BS ws M60 ma ome 2 Bs Foveighcrency depots iyo mo as Ss) te sa (Chae in prc af bepoing of yur bod mazes) Net foreign assets 65 ks TS 97 Sk ss Net dome atest iss? BL 2168 17 os as 583 ‘Netela aa government os 0848 490087 a8 tl) tsi Credit tote enor W20e oR. re Yelosty3) 420038 8S 2S 2H Maney mpi 4 2023388 Carney dng deposits in percent) 4 653 HS DTS SDS (Carrey tor depose in persen) s3 0045 057 MAH 924 GTB ‘Ses State Banc of Viera at eats 1 Dat fr 196.1998 congriefnr tatowaed come haks snd 24 nnsine-cwred gk Data ers 1999 anna congue esate ovned cages bike nt $3 ema ered nae “Teclades Dion ecapitlizion of sateen creel baths (SOC) in Ootber 1995, ser whi Bozeman of SOCB were wien Fon elf fhe govemment and swapped fr govenzrnt ety in SOC 3 Velo emeateed eter of GDP endo vid oad mney (MD). ney tile ieteasiec a te rao of rod xaney(N-72- STATISTICAL APPENDIX ‘Table 18, Viewam: Balance Sheet of the State Bank of Vietnam, 1996-2001 1998 19979981998 ot) gg March lune —‘Sepl Dec March ene Aug (la nllons of dong, end of pesiod} Net foreign assets Mo 9s at S447 dO taka Foreign nots yo se LOSE SLI S97 $848 S22 ST Foreign Ublites 600-620-072 HLL St Netdomeste assets 2 et SEDO DT Net domestic ret no 9 eS 53 SE ke 3s "Net claims on goversmert 52 40-63 02S R43 gS Cains on berks 77 68 6S WSLS RMS ‘Claims on enterprises ac ‘rink sre sstutons o1 02d tw Otberitems, set S20 $437 6883 Dt Reserve money 2258 -R7 RDS SRD SDD BS TBE ‘Cumeney in cixelation BE 329 EDS STH STB Beck depots Te 9333S 23 ORR ‘Vault eas mug 37002233 2a ak as 22 Requzed reserves 1/ a7 490058) 58) 6298 ek? aces reserves 1! 4236 $3078 S138 esa Otber deposits 06 02 09 90a ‘Anau peosatage change) [Net foreign assets a6 Ms oe dT 78tdst [Netdomeste asses ua 38 $2 9k 300259 28S 962 10K [Net domes credit ais 86 WEL $33 BLS 27S TES DHS 2827 HRD ‘Net lai on government m1 223 968 2165 21208 6839 20610 IL aly LIB Claim om banks Bs A119 Sk2 689 GAE RS BRO. SRD 36D ‘Reserve money i SoS 488508 S48 250269 HS 363 ‘Gareneyinctclation ws joo 917859309 2k oe a2 Bank deposits 192 r ms 09-89 BL 58 (Change in percent oF begining of your seserve money) Net foreign assets nd 6 76ST Net domestic assets By ss os 22 BS 9387 uD aS es ‘Net domestic crest nu? 635280 6129 E387 9 Osa Ofwhick Netclsins ongovemme = $136 G4 ASS 16 e971 gets ss ‘Memorandum te Gros oes eserves (in rilkons of US. dallas) 27 1671857176521 2,790 «857 OKT 1030 2.896.086 3.495 Gnweeks ofnextyeats impor)! 64722 KS AL 79 BE BB RH DTH Sources: State Beak of Vietnam; aod taf estimates. Stat etna 11 Exchdes foreign otsency counterpst of goverment reign curenty deposit atthe Stee Benk of Viewam, 4 Imgons of goods and noafactor services.-B- STATISTICAL APPENDIX 1: Consoldated Balance Shect of Depot Money Banks, 1996-2001 1! 19697981899, 2000 200 Mack Tae Sept Dee Machu Ae (dation of dang, end pesos) [Net foreign seats 02 168 ADSI Saw Foci ams ba 3 7a 7 AT 2 OTR Ha Fei ities wo 7-87-8287 85 47-99-1930 [Net domestic sets 42542 6K 9871989 LHR 282 TDR ‘Net domesti rec me commercial bs sao 2747S SK tags M43 SOS 1887 TeHs ITB ‘Ne reito goversment “aod R28 42S 37 dws Cre tothe ese sos 302727 MLS saS EET GES TTBS Ste ener ded OBL S579 AO e489 TAT Ober sesore Mo N35 S84 GS OTHE STO ‘Ofwhich labman fina ination 0°09 01 «8g Bak eres 9398 98 9S 33S wR TS eet es Sts Bak of Viet 4136-420 116 120 DSS? MAS 89-160 Capita and esr 20420 cue “gs 20), toe te ara tsa aa (rte tem me S737 240 a2 136 a ne ns Deposits 41S 562543) ts20 ORG Dong depots 36) S14 753 Se BLE SAL D0 OSB OTT Ia Dead deposi 02004722 “Tie depose io m9 Hi a7] Sad SE SST TOL Foreign carey depose 28713802 SSD TORT (Aaa pervanage cage) rect toh enemy mo m6 167 BL 388 es Sate enerries ns 186 ns rom ite Otter vers 31s 418 wo 405 het un Stat Bank of Views 9 33 8 ns na Total depen 467 MI a mand ‘Bong depts berg aT a wa 188 Daman epost e889 43 m2 00 ‘Tine cepts 6 ws 360 21 400 sign ereny depose 0420288, - os 576 S30 Meera tem Foreign carey depos Gnmalices ofS. dlls) 118015001738 328356399 aes ARSE Sas S6T7 5981 (ancl percerage eas) 2) ms Bs lao ssa S09 S 30 (Goperent of wl epats) guy 32og RTD S Hata a (ehangeialions of US. cola) 3° m6 3025 am F287 Sources: Sate Basic of Viewamy a8 enna 1i Data for 1996-1998 cose fz enone omar beaks 24 sonse-oaned Barks Data ors 1999 anwat comps se sate one com aks an 83 nesta cw eins /Twaivemanthprcerage carats 5 Chae ance the Begining ofthe es,-74- STATISTICAL APPENDIX “Table 2, Vita: Distebun of Cra, 1986-20002 96 ee ee) (ition fang en of pio ot ei asa ry aah ase agae ssa ‘cea ii fie RG Boies on ne Ris Set if ue wacom cmb asp son tess Tomecongres Boe state en ecard hy the aa c so sit onan soe oe * Phen a To een apr am ese mes ‘ae on a OS Celt munity saemetsarcecittuls 86 ee ene om Re aee a ‘ear ts nase meat rane es Behemene tas CeStcttoyeacemcomenitins as peo 660 CRAM ote Pr er ‘heme Me Bs Be Moats supe me 02 24 2 as Beha oo BM ide cl pte cme ns wo mz one no orcs MGR BF Resco m8 ib cee ae tin Mo Resi ase ccere eS ese Bde wh Te dom as assem Saat encore ce a S93 8 OR Sas cumin fone S me IB ed ta oy ate owned eo Ds Ba 130 Hea ie is Shorea panaenes rr ‘Agitated bry indo nd ener ‘ey “ieee a conmenenans aie ‘depen oe zed be ene) Fade aaporean e canes is BS 1 gin, sm enn wo fort sid ni a VEO ae nee ee Second ase om 95 amare 2s oa tn ocr nth Gs Pepe CieTable 21. Vietnam: Overdue Loans of Deposit Money Banks, 1996-2001 1/ 2/ -75- STATISTICAL APPENDIX 1998 19971998 1999 2000 Aug. (ln billioas of dong, end of period) Deposit money banks 8697 10,490 15,111 15,578 16,514 16,858 Four largest state-owmed commercial banks 6471 7.813 10,902 11,403 12,344 12,745 Other banks 2227 2,677 4209 417541704113) (da percent of total loars) Deposit money banks 93 124 «120 TS G8 Four largest state-owned commercial banks = 1.0 120—Ss«L«WWB_ 1D 9H 98D Other banks 42 BS 14 189 90 81 87 BB (da percent of total bank assets) Deposit money banks SS 74 68 6H SA SDS, 53 Four largest state-owmed commercial banks «= «64 TGP SB SA SB SS SS Other banks 26 85 OR LO SA STC (in percent of total overcues) State-owned enterprises 4420-48 387 Cooperatives 71310 Joint-stock companies na 487 467 Joint ventures 06 06 LL Private sector 417115 166 (is pezcent of total ans to the sector) State-owned enterprises 7B 8679 Cooperatives 27 402381 Joint-stock companies 74 343367 Joint ventures 10-1220 Private sector 49 Bl 77 Sources: State Bank of Vietnam; and stat estimates. 11 Based on nonstandard classification of nonperforming loans, Which tends to underestimate the actual amount of bad. ‘oats. Until 1999, includes the four largest state-owned commercial banks and 24 nonstate-owned banks. Beginning in 2000, based on the four largest state-owned commercial banks and 85 other ereit instittions 2/ Beginning June 1999, data on ereit to the economy (including overdues) by sector of ownership no ‘onger compiled by the State Bank of Vietnam in consolidated balance sheet of depesit money banks.“Table 22, Vietnam: Nominal and al Interest Rates, 1996-2001 (operat per yer, end i per) 9 er a r 00. 2a Vian ue Sep Be Wie Dan pee Mar Tow Sep Dee MA Nay ney Rg Sa anal ere rater epost rates Demat depress 62 46 5458 55 S552 RTT ak zona Sumpdquem(anceman) bowels 91 RY 94 98 97 97 9A OL SL 4M 736A ST SH aR A a 555 Feri cuneny dean paste tl kth te 28S eet eT ara ocigncuaeney dep (sem) SoS) ar a9 494748 dS SH 2 AE dw 4D 373202 ending aes 1 ‘Worn apa (at een) 19127182, 1807S TTT A LOB 9H 93 929d BO aed pal (mao rm) 3 lo ts ts9 184 152 TO 27 L7H T2931 Jd 03 Foreign emency hams Os las asus 9578 1782S TOD. DDG SA HASH SH BS BS eat intrest ates 27 Deposit rates Demand sepsis, etree: 23 a7 11-20-26 38 3S OF 1738s 432k BH 32H BAS Sivigdepoiseeermmiy toubolly S141 30-20-1268 OS TK 22 AD SS GLOGS GS G7 GO SK SRD Fog caeney dana pss We 63 a2 at -1 BO) 39 AS AY SS a DSO a 53977 tas 98 ee ten dros) Mo ae Ist 66 40 02 34 62 GH 74 eT 9 GOH Working eal (St tn) 7 BS te 48 SH Sk AG ADH LTP BSA GOR EME BHR KF Working api ae re js fo eve atbton) Pe Fac pel (eis ee) ho $8 lt ie 6s 39 $4 RA 9H HLTA AB ao HE ey PWS OL 96 ore cen hat RDS oud WB 93-20 A SH 2 do U2 SES RETR HM Stomerandus tems Inert af be 46 Sk 52 SD 50 ASG THY TS SST kD SS soe Seok 4227 aks 8D Sh BN a) 47 24 23 M3 da AS 42 OE 42 0208 Cone infin a? foo a7 ge S282 ds ak GRR Be TS ty 22 e118 eB Technet (deen) 5 Mtoe 0 MS ee me 0) G6 TALS 2 HLS YS DTS Ba -9L- Snoee She Rank of Vion an fT 1 Aveo four pes ee ed amare has 2 Mewar wd rept o wot ete eth al of ach ua aod wage nly ain dng tht une wig et lef, Real eet aes a fri camency dws an oe ar ade it solange ate dees whe me farm illence benwen ee es wk oil ane and bout ce mth gs At 4 Aven shy btn Br rece gurer mo sna lp SAeetge destin daring reseing uater saad XIGNAdd¥ T¥OLLSILWLS“7 ‘Table 23. Vietnam: Exchange Rate Developments, 1995-2001 STATISTICAL APPENDIX 1995 199619971998 999-2000 2001 (Twelve-month average; 1990 = 100) Effective exchange rates Nominal 422-439 51467 3a DF Real 129° BLl 1383641370381. (Annual percentage change; - depreciation) Nominal 56 4028 37-9504 0.62 Real 65 66 34 BL 6S 2B (lo units indicated) Dong per USS. collar, end of period 11,015 11,150 12,292 13,896 14,028 14,514 15,033 Dong per US. dollar, 12-month average 11,038 11,033 11,706 13,297 13,944 14,170 14,749 3¢ Dong per SDR, end of period 16372 15,889 16,585 19,566 19,254 18,910 19,225 Dong per SDR, 12-month average 16,739 16,017 15,631 18,038 19,066 18,687 . (Annual percentage change, - deprecietion) Dong per U.S. dollar, end of period 03 220-102-0983 Dong per US. dollar, 12-month average = 0601 GAG AV Doug pet SDR, end of period W529 44180 16 rs? Dong per SDR, 12-month average 67 43 24 S40 ST 20 Soarces: Vietnamese authorities; and IMF, Infarmation Notice System, and staff estimates. 1/ As of end October 2001, unless indicated otherwise, 2/ As of end-August 2001, 3/ For the period January to October 2001.-78- STATISTICAL APPENDIX ‘Table 24, Vietnam: Balance af Payments, 1995-2000 (Gn milions of US. dollars, unzs etherwise indicated) 199s 1996 1897 1998 199 2000 inate ‘Cerreotaccouat balance see 4067 ass 2 Encluing ofl ramet fuss Siz 58 56 ‘Vadeblaee isis oat 2.089 ae Expons fo Sigs oss sed gaa Inport, fob. ose 19346) nge EXOT Naw tr secvies et) a 39 7 sais Recents zss0 zens as 208s Pontes Biss Bs 33310 fnvesoren income (a) 29 “7 61 6B 429 Recess 36 40 16 13 Paes HS 567 02 ‘Transrs (nt) on 1200 es 1a 1s Proate a Koso ne 950 sa Official is. 150 aS m BL Capital acconns balance 2326 Lee 216 sa am (Gas Sega czas invert (FDI ino 2216 2am so 710 00 equ) i387 20 so x0 Lae dsbucetes 90 560 8 480 DI lous repayments 3 am a oo Media a ong ter ans (2) 333 98 ms was Dinzvemeris 483 ™m Lor 1036 ‘ODA wa 19, 36 S30 70 ‘Sonar ens 254 5 ast 6 Scheded smrieton 5 or an al ‘So serm capi (rt) an na 6 1.036 Errors and emia 28 1 a m7 ar (Overal balance ot ast 4 sm us Fioauciog By 4 st us (Change net foreign ste of te Stat Bask of Vetum(insese) 390) as iM of which Cange nt srensional eves ° 0 3a ‘sof Pae ere (x), 92 a 2 Ober NIR 82 ss ot Acar and reseed 48 ns 36 Debeslie Js ° 4b 991, Financing gop ° ° a a 6 ° ‘Memorandum fem (Grose ssl eerve indo gold ists ia rss tes 30 Tr weske of nex yea port 36 68 2 6s et 86 [Reo to tare enera deb pecan) 2° wea 2882 wea STS 54 (Cues cous bala npr of GDP) 288 31D “62 39 45 U1 ‘clang ofcal wares 2s Bia 9 as 40 17 port rowel (aaa pecans change) usa au 246 at 22 232 por vale growth (aul percentage change} al 28 1 ti as Soures Viennese auurils: an al eimates and projection, 1 London Ci eskesling was ence incl 1998, Resourcing of he Ruslan deb was cncaed jn Septem 2000 ox omaha he 1998 Parc Cu resuecling “1 Shoe dt by seating msvay refers o mast ans ling dove he net psig-79- STATISTICAL APPENDIX “Table 25. Vietnam: Merchandise Exports by Commodity, 1995-2006 13s 1986 97 1998 0 2100 ein ailins 9 US, dat eles thers indented) Tonsley fa. 8 aH ass 36s ns0) ats (cca pegs) as ant 6 ta bt s (Geisieget) ane so om ane sits rosie ‘emul peas case) 3S BS 2 $3 a 188 Cruden eae toms 12 200 alae (60a) 7393 sus pus ae itvaie (US) Bs 1 "01 at cout oo us mu wm % os Vere tbe) aan 366 ass ae 320, 2a. Ustvane U5) * = 2 2 » % abner 1 vst a us "ola (00 ts) i Bs i 2 Unita (SS) ams Las ou on 85 ee 6 as 0 10 © "ete 00 a wa 003 3388 smo aa Unita (USS) oe 2S 2s x Be cttee as a we ea sss so "ate (00 es) 2 Be 2 32 a mu Unita (SS) ae 1410 um Sst 126 a Marine predct (align ens) a ss 12 os ne 8 Garments a ase ts 130 ve as Reoiweat mo a om to tas aes Handorats » ” my a us a lecteaiegonis ad exmgnacets “0 wn a8 1 ower am aon aa 230 ane sen tapered ef aga) crea ws Py 136 na ea ered cat 7 en a i 8 oF aber rn aa ui 14 a u Ree os ay os 109 % “6 Cote 109 46 sa a si 3 ie pice 8 be 92 ‘a 12 Garments S 187 te ass rest Bi ects a 2 107 ua m2 1 Handi 6 fis B 2 is 6 lero gods compet 4 3 si ss ner a3 23 24 20 nt "3 (co pecs pit of mth inte te ofepars) cet 6 u an 82 2 Coa 2 os at ot 00 usher a a a7 0 2 Rice 6 03 Ls 3 a Coee 4s n a a1 a Neste pice a i or 12 * Game a a ae 2 b Frorett 5 a 36 a a Pansies 92 a a os os sei pode nd spent be os 7 tee i és ai 2 2 8 Sources My of Td Caste Of: a tales.-80- STATISTICAL APPENDIX “Toble26 Vtnam: Merchandise Inpores by Coma, 19532000 1995 se 180 a 1998 200 aos of US dts na ewe ie) ‘ott igper ssn gee vm ngs nae vsa00 ‘ev erst ca Bs ms 3 ey 18 a Parle prose (pti de) nm hor ie ep: ase “ume (39 0) 381 5 eas. cas, nas em ‘es me UBB) as ie ee m1 ” be “Yolen 08 ron) 2.508 26 a8 ame ass ‘nels (USS) m m4 ie ra Invectelde “ 2 hs a 2 "lune 0) 30 oo 2 ok ive (ren 228 eae sie Sl dina ss ea se 9s as "Yates 00 es ane 1 saat am 238 Ui (8S Ms 38 Ses a en "line (00) ass a oe 8 slater) ° a 6 2 “Volume (000 sai) a0 am ut a so 107 nrale (S8N0 a8 a o os 1 36 "elu (Wo ae) 2s i Mae i 3 ple (USS oo sn 488 as arse Whaat tue ss so a @ 2 w "atane (0 os) u 6 i ™ 9 te ‘Unto (Se) ms © Ds en ve BI “Tenuate 1 se a a ‘ote 260) 7 Bo a M6 mie (SS) 207 18 a0 a Lanter and ent materi as 2 Co = 08 ase Ceres sei (nents) 8 ” wo » “ ua Matinee aod auipantGcudngareat) 2087 908 um ae ‘pos aan ote ae ame soa est san 4897 taper flea enn) Pesiepotice “ 2 8 2 " bs feces a a a in °° Belmdeon a “ ue * 5 a cove ie a a 3 nor ts is fe i it a « steer oo os ua os 3 a San fn ve o “ 4 o Gone a ° a ” is on ” ont a nt ns a “o a Seuses Min o Fae nf Cones Of: eis-81- STATISTICAL APPENDIX ‘Table 27, Vietnam: Direction of Trade, 1996-2000 |! (lapercent of wal expan or impor) 585 1996 57 1w98 1999 2200 Exports Intl onsen regina 660 oa ora wt na wa ‘apa 368 23 382 50 8 1 ang Koop SAR at 3 a2 2 ts 22 Koes a 3 45 i a 2 Sinascare 23 ve ma aa a a Fronce 3 2 28 si bs 26 Genatay a0 a as 32 so a aly to 03 fe 28 23 us Nediande ts 20 23 2s a a Swern uh 3 36 te 36 12 ited Kingtom ia 0 23 a2 4s 33 ‘ier Eng Garin) 27 03 ta aa & a8 as Urute Snes 31 28 32 62 a 2 Canade 0 oa 0 ta 3 uF ‘onic Yo a3 2 sa 4 58 ‘Net Zeatnd 00 a 02 a 02 a Developing coutses ao 36 28 169 166 386 ‘Cina (asd 68 a7 52 22 30 106 Tnsnese 19 as os or as fe Malaysia ry " 4s 19 a 2a Paiiynes os te 2 42 38 a3 Rosie a5 2 vi os 02 a8 Taian POC ui 14 B as 32 52 Tait 19 re 26 24 2 2 Otter 88 o u ue m9 aa Imports Total ews ogi as os 652 881 sa Soar na 1 aa ua ie Hing Keng SAR 31 a 3a as 33 Kare 15a a as ma na Singapore ns 182 tsa nha 123 Bronce 38 BT a8 23 23 Gennany x 2s 2 32 cay ty 7 io 0 1 1 Netheands oa os os oa a3 Swizerans ry) fe res os os “United Kingdon os os 03 to a (Ofer Bexope Gadusalizes} 27 08 ta 18 23 a4 Unies Sais 14 a2 22 as 25 Guade 03 03 a a a3 ‘sssalia 2 12 P 21 a ‘New Zesane a 02 a oa a4 Developing sires ss sa2 m3 as 416 ses Chine (ated) ‘40 30 35 Est 56 Sa Sndosese a 3 17 a 2 22 Maley. cs rr 20 33 33 as Prine oF 03 a a3 08 as Ruse 18 a la 24 ta a ‘Taman POC wt 3 was 08 no aL ‘eaiand sa “4 50 33 38 $2 Other no es cd 1 30 os Mencrnden ies Beye Una pert us 103 6 mt 208 196 epee a 38 xd 10a 36 a ASEAN xpos 26 wa as Bs 2 167 Tegan ma ret ia 2s 9 287 Souex Css Oe; ME, Drstion af Trade Stasis, na alee. Fe 19982000, emda ofc parte cote dat. 2) Defoe ae Ant, Balgian Derr, Fan, Geese, clr, fant, Locersoar, Nosy, Prag, Sp, od Swedes, $V as PDR aod Mya bepsoing in 997 ad Cetin 195,-$2- STATISTICAL APPENDIX ‘Table 28. Vietnam: Commitments of Foreign Direct Investment, 1995-2000 1/ 1995 1996 197 1998 1999 2000 (da millions of U.S. dollars) Industry 3 3,049 1840 350 839 Heavy industries 1319 1,422 984 607 451 Export processing zones 2/ 2 246 208 Light industries aig 889 455 186 9 25 Food 466 492 193 37 2 R Ol and gas ° 3 3: 1358 3 1231 Construction 54 824 2 161 24 40 "Transportation and communications 319 735 1,961 305 137 8 Real estate 2,505 4,079 596 908 163 B Hotels and tourism 907 140 130 786 8 B Office property and apartments 1,598 3,939 a6 13 120 0 Agricultore, forestry, and fisheries 633 348 333 142 ng 2 Services 285 2 252 297 190 96 Total 7,496 9329 4345 4,021 1,704 ana (in percent of total) Industry 41s 327 38.0 492 295 Heavy industries 243, 182 203 265 1B Export processing zones 02 26 43 Light industries 109 98 98 46 104 139 Food 62 53 40 14 14 34 if and gas 00 06 1 238 25 582 Construction 78 88 147 40 ns 19 ‘Transportation and communications 50 81 219 16 81 04 Real estate 334 437 123 2.6 98 Li Hotels and tourism 1 15 37 9s 28 1M (Office propecty and apartments a3 2 86 31 70 00 Agriculture, forestry, and fisheries a4 37 69 35 69 44 Seevices 38 24 52 74 n2 4s Toul 1000 100.0 2000 100.9 1000 1000 Sources: Ministry of Planning and Investment (MPD) and State Bank of Vietnam; and staff estimates, 1 As reported by MPI. Includes investments by domestic joint ventare partners 2/ Data incomplete ftom 1998 onwards-83- STATISTICAL APPENDIX ‘Table 29. Vietnam: Disbursements of Foreign Direct Investment, 1995-2000 1/ 1995 1996 1997 1998 1999) 2000 (ia millions of US. dollars) Indosiry 801 1,326 922 335 so Heavy industries 314 701 431 424 4s Export processing zones 34 88 a 49 i“ Light industries 267 363 28 182 326 Feod 186 14 164 78 Las ‘Oil and gas 567 261 375 345 205 Construction 3 407 198 182 221 ‘Transportation and communications 155 101 80 106 28 Real estate 23 488 att 340 299 Hotels and tourism 261 2 233 128 164 Office property and apartments 172, 261 237 212 135 “Agriculture, forestry, and fisheries 0 24 124 192 208 Services 120 6 n 7 87 ‘Total disbursements 2341 2,496 2878 2,246 2,041 1988 “Toral disbursements: staff estimates 2/ 2276 ov 800 700 800 (a percent of total) Industry 342 458 46.1 410 409 465 Heavy industries 134 192 ms 218 208 27 Export processing zones 14 56 31 19 24 07 Light industries na 16 26 100 89 165 Food 80 46 60 3 87 6a il and gas 22 18. 91 167 169 105 Construction 57 105 Ma 88 24 3 “Transportation and communications 66 33 38 36 52 14 Real estate 185 169 10 209 167 133 Hotels ané tourism. n2 6 79 lo 63 34 (Office property and zpertmnents 14 $3 31 106 104 68. Agriculture, forestry, and fsries 56 46 al 85 34 106 Services 5 38 24 34 35 45 Total 100.0 1000 100.0 tooo 100.0 100.0 Memorandum iter ‘Tora disbursement (in percent of GDP) 1.3 10. 107 83 72 65 Sources: Ministry of Planning and Investment (MPD; and staf estimates 11 Data on disburseinents classified by industry as reporied by MPI. Caleulated as (otal reported disbursements less equity eontibusion of domestic partners. Thus, data include domestic borrowing oy the jeiat venture, Data are subject to extensive revision. 2/ Staff estimates are based on reported foreign equity inflows plus foreign borrowings by joint ventures, as reported by te State Bank of Viemam. Por 1998-2000, also based on other indicstors of investnsat inflows.-84- STATISTICAL APPENDIX Table 30. Vietnam: Foreign Direet Investment by Country of Origin, 1995-2000 1/ Commitments _ ———Disbursements_____ 1995 1996 1997 1998 1999 2000 Ga llions of US. dotlers) Singapore 969 3,046 $32 315 257 258 Taiwan POC 934 683 280 213 193 362 Korea 67 978 686 29 27 125 Japan 1412 827 80 509 436 400 British Virgin Islands 800 1,431 228 13 66 12 Hong Kong SAR 158 463 241 153 146 192 Malaysia 199 93 174 ist 123 89 ‘Thailand mm 130 276 2 19 28 United States S24 152 275 65 45 8 France 148 ior 390 93 us 3 Avstratia 10s 49 7 21 34 28 Other 1,301 1377 455 314 389 213 Total 7.496 9,329 4845 2,246 2,041 1,959 (in percent of total) ‘Singapore 29 2.7 110 40 126 13. Taiwan POC 125 73 58 95 95 185 Korea 9.0 10.5 14a 98 106 64 Japan 188 89 165 26 214 20.4 British Virgin Islands 107 153 47 50 32 12 Hong Kong SAR 21 5.0 5.0 68 72 98 Malaysia 26 10 36 67 60 45 Thailand 3.6 14 37 37 10 la United States 70 16 37 29 2 38 France 20 1 18.4 Ad 5.6 27 Australia 14 os o. 09 7 14 Other 4 148, 94 140 19.9 109 Total 100.0 100.0 100.0 100.0 100.0 100.0 Sources: Ministry of Planning and Investment (MPI); end staff estimates. 1/ Data as reported by MPI. See Table 29 for qualifications.-85- STATISTICAL APPENDIX ‘Tobie 31. Vietnam: External Debt and Debt Service Obligations, 1998-2000 I 1995 1996 1997 1998 1998 2000 Estimate Clo millons of US, dollars, end oF period) ‘Totat convertible curreney debt stock. otas 3797 9578 9.847 9,955 gis ‘Medium: and long-term debt stock 6368 9,188 sam 9,199 L387 Public sector (convertible debt only) 4865 5,562 5,508 5978 8619 Of which State-owned earerprises 2° 238 885 974 187 IMF 377 482 31 355 Private sector 1,898 3,823 3,665 3221 , DI reiated 1,796 3248 3,248, 2,884 21537 Other 102 319 418 337 231 Short-term deb stock 781 1,005 393 om ss 528 ‘Total external debt service 1.044 1,300 1.495 1,863 1,798 1gi2 Princigal 752 880 ose L219 1373 1490 Inverest 22 420 ‘440 ‘446 425 492 Public debe 585 1,005 sis asa 70 m4 Principal 693 693 656 03 310 an Inveres: 133 305 262 250 m7 303 Private debe 139 295 803 1,081 1138 Prinepal o 182 as 863 949 Interest 39 rey 194 18 es (Gn pereent of GDP) Total debe servioe so 53 56 61 63 63 of which: public 4a 41 34 3 27 26 “Total convertible currency debt stock 348 387 383 363 342 393 of which: public 21s 204 208, 203 210 284 in percent of exports of goods and nonficior services) "Total debe service wt 9 128 Bo 8 2 ‘of which: public a Ba 15 a 43 45 “Total convertible curency debt stock. 376 s20 823 68 65 of which: pub 500 76 460 425 503 (Memorandum ite: ‘Nonconveribe Russian debe 3/ loser 10207 10326 10.515 10515 ° Sources: Vienemeve authors: and sta estates 11 Canvertble currency debt only. 2 Incudes loans wo state-owned enterprises not clase elsewhere 3 nmilions of wansferable rubles, Resiooturing of nonconverle Rusian debt was concluded in Sepiectber 2000,-86- STATISTICAL APPENDIX Table 32. Vietnam: Summary of Normal Tariff Schedule, 1999-2001 1/ Rates in 1999 Rates in 2000 Rates in 2001 Bands Number oflines: Bands Number of lin Bands Number of lines umber percent number percent number percent 0 1,965 324 0 2929 320 0 2070 324 1 usd 101347 1 17027 3 37h 62 3 3816.0 3 M9 5S 5 616 (10.2 5S 579 10.7 5S 877 106 10 44874 7 7 08 7 3 00 15 38 LO. 10 5198.2 10 550 86 2 SHB. 12 2 00 2 3 00 30663109 15 7912 15 ell 400 617102 18 1 00 2 50279 so 57498 2 S16 BL 25 5 On 60 3406 25 3 00 300663104 100 2 08 30° 633-100 35 1 00 40 678 = 10.7 40 7 105 45 2 00 45 2 00 so 5699.0 50575 9.0 53 1 00 60 no 02 60 12 02 80 2 00 80 9 Ol 100 so 08 100 488 120 8 on Total 6056 100.0 Total 6341 100.0 Total 6380 100.0 ‘Number of bands, 12 19 19 Average 2/ 15.5 134 Standard deviation 2 17.7 18.1 Source: Ministry of Finance. 1/ The normal tariff rates are termed preferential in the official schedule, There are also nonpreferential tariff rates about 50 percent higher than these rates, which are applied to imports from countries without a trade agreement (or not in the process of negotiating one). 2/ Based on actual trade flows.-87- STATISTICAL APPENDIX Table 33. Vietnam: Common Effective Preferential Tariff (CEPT) Rates, 1999-2001 1/ Rates in 1999 Rates in 2000 Rates in 2001 Bands _Numberoflines: ~ Bands _Number of lines: Bands Number of ling number percent number percent number percent 0 4,523 42.7 0 1,690 39.9 0 1763 354 1 2 23 1 1537 1 am 34 3 38283 300 59 300 33367 4 1 0.0 4 0 00 5 962193 5 S61 157 5 783 «18S 7 3 On 7 2 (06 1 00 02 10 676136 10 261 13 10 5313S 12 1 00 1s 470 13.2 1s 12930 Is 13327 20 2807 2 «1072S, 20 (944 18.9 25 24 OF 25 3 03 30 309 30 n 47 38 3 On 35-280 6.6 40231 65 40 82 19 45 1 00 45 1 0.0 50 3 Ol Total 3,567 100.0 Total 4,233 100.0 Total 4,986 100.0 Average 2/ WW 73 Standard deviation 1 10.6 10.7 Source: Ministry of Finance. 1/ Under Vietnam's current ASEAN Free Trade Area (AFTA) agreement, 2! Based on actual trade flows,1. era tae Faced Enteric Tak (ep Rept sone cot once ra ners (evga ie es orcoumnons om copii oa 12 Spee toe Ta Y¥__ Vietnam: Summary of the Tax System as October 1, 200 “Ts secs oan Inti net ene O50 ya acme ele ‘econ xy cog apd prching es baie Counc oe pe igen chal le, teal proces {ote seapadaston ee Many ace ESD ind esnpewcarerwoiing wt seespreeen aati (Nitin) eit aes tien sateate Tener wimengs as 0 (lb an oo ‘5 won) espa commisss Fu es a ra 2 wn =88-tenet npn erp, soy obee Uidins ft, protean how sin tat fr npn peat ‘Seni aon orem no ke a desn of el prvi Starts stsog epee be ee aE ‘Sctamne eathrien Vrms ternal bom pens yer (encima psa tec Bee ‘inet ming) (cand eatin gcc pee yet {taste Fer Basen Cropton a (BCC) V._ Vietnam: Summary ofthe Tax System ag October 1, 2001 ot detoe st ems (yen einen ev es oe abe at mtg yt (Soot buns ent incme eed em i a ‘ovr fecal nes he acatte esron Sate werent posal osc ols nell fr ns ae ee ei ee ny conical offre sree Taso cos tegen ca tal es IEEE ato coats o hogan (BOT eon ‘tating ivormen pojes (eaireaion sn ee png (ere rstecnn ng {Capitan en rte {ian ar range ely se Drosera orn (Ghteehpng erat pein tet exp pee patna eg pac igi {eh ncn i Ft an api [ps edna ya whe cpet ance the ein ya (02 eden yen erated fener we lasso 29 ean a et me co om capac sone ie {Sewanee mt int Sa gn ecm non chan e). roten, at nc, ‘he el cesses ne Ee dtl heck et ‘come ree balkay Teele ib ebm acon een Tom ne crn ad etn ey rept ems feo iwc sony peta wie eget a gre [evra te he arn iy pepe ones ‘Sitio and arama aa 08), 425% ‘ed by auf ane (Fo eens ssn 5% 0 ol weed deg ce - 68°LV. Vietnam: Summary othe Tax System as October 1, 200 “exten tno (epee et 20% may be conse Bo eae rene rd [Shyer Ye een, ms (Spf sci so ey ose be eempinn ow () 007 870, and 9 rec in ive eenungnes mesa eh ‘Spee ve nasi ch wa oes (oun secoceses pes a one ec eset sate at Copriocee Te pd ar nse ree aig seen eae pj yaa Cae ae To (ean reed iat ye (Camano epee CC acer hed Lev fie reindeer ioe (6) 18 pentarrinred npr nh eorat bce eof [pyrogenic aatey arin Se (e)steateineiea pees tt joys (02% bpm ree mang on oe (Write (0) a ence aig onthe {Ghat 3 of pose Beep don mat epee 30% 0 penn ce crs ig snl Vee ae renee (rterhenyndey ss cn sean ree (Gonpleain oon mierieatecanme cot, leimrare ofan {iar in arate mae (Gbps wie hes orien any anes® evecare a tt pr ed -06- {hata 0% psa ep {prc orn eo mie pd tty {irom ae, Srey, nd tes (misc a pine a trv echcommoneson mest (opine nde (neta neuen deepen {owas of ae sort meat (i) pedo of eae fr i ele {chown ad we remanent poe (chao 870 and BT pee jes sem tata ce aed tein bn,139, Conte tae Tan Ftc Cott ine conan sem (VAS Met oe le euler mip dem Gus wh regia a a VAS ‘Steins ere its te pas 124 cap Tocte ai ‘Asin. seine ape eben come aca cme rg ives fot (einen so os om epee) Ve Vietam: Summary of the Tax System as Octaber 1, 2001 Tor detec ncn Adie cone ln inpaeto: “Gxt se cei coumic epics achat et ite re pase Pre cme espe eee a at of Thess ince ih socom nds Fj dept of staan (ron sodhe neyo pies mein a hss etn rhe ne psf pan ene ss itcadenh “mera come acing ry, espa ier oe poston 4 ‘ral come Fm capi (9 2 rece sere oon a pes, 75 ogc ciao wie apt aun octal -16-V. 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