LEARNING ENGLISH THROUGH NEWS

WEEK 01 - 2011
esllearning@yahoo.com

THE WORLD THIS WEEK

America's Congress voted to allow gay members of the armed forces to serve openly by repealing "DON'T ASK, DON'T TELL", a policy under which thousands of homosexual men and women have been discharged. It had looked as if the measure might not pass, but eight Republican senators eventually backed it. Barack Obama quickly signed the act into law, though it does not take immediate effect.

Also before Christmas, CONGRESS agreed to Mr Obama's deal with Republicans that extends the Bush-era tax cuts for the wealthy in return for more stimulus spending. The Senate ratified a (muchdelayed) nuclear-arms treaty with Russia. Legislation that would have put the children of illegal immigrants on the path to citizenship, the DREAM bill, failed to pass, and is unlikely to be reconsidered in the new Republican-controlled House of Representatives. - See article http://news.economist.com/cgi-bin1/DM/t/eCUMw0V4QS0BT8C0MKod0Ev

The first tranche of statistics to be released from America's CENSUS showed the population stood at 308.7m on April 1st 2010, a rise of 9.7% from 2000. Texas gained more people than any other state, up by 4.3m to 25.1m, fetching it four more congressional seats in the House. - See article http://news.economist.com/cgi-bin1/DM/t/eCUMw0V4QS0BT8C0MKoe0Ew

Opponents of VENEZUELA'S leftist president, Hugo Chavez, accused him of launching a coup against other branches of government, after the outgoing national assembly approved measures to allow him to rule by decree for 18 months, to tighten government control over universities, NGOs and the media, and to appoint new supreme-court justices. The measures came days before a new legislature with a large opposition minority is due to be sworn in. - See article http://news.economist.com/cgi-bin1/DM/t/eCUMw0V4QS0BT8C0MKof0Ex

In ARGENTINA Jorge Videla, a former military dictator, was sentenced to life imprisonment for the murder of political prisoners following a coup in 1976. His trial came after an amnesty was set aside. Mr Videla complained that former leaders of the left-wing guerrillas whom the army fought are now in the government.

BOLIVIA'S government increased the price of petrol and other fuel by more than 70%, prompting a strike by bus and lorry operators. The government said that the cost of subsidising fuel had risen from $80m in 2005, to $380m, and that cheap fuel was being smuggled to neighbouring countries.

Pressure mounted on Laurent Gbagbo of COTE D'IVOIRE to admit defeat in an election run-off held in late November and cede the presidency to his rival, Alassane Ouattara. At least 170 people have been killed in the election's aftermath. The presidents of three west African countries (Benin, Cape Verde and Sierra Leone) flew to Abidjan, the Ivorian commercial capital, in a vain effort to persuade him to step down--or be removed by force.

The chief prosecutor of the International Criminal Court at The Hague asked it to summon six prominent KENYANS to face charges of inciting violence after the disputed election of 2007, when at least 1,200 people were killed. The six include Uhuru Kenyatta, the finance minister who is a son of Jomo Kenyatta, Kenya's founding president, and William Ruto, a leader of the powerful Kalenjin tribal group.

SOUTH KOREA'S President Lee Myung-bak made a surprise call for a resumption of denuclearisation talks with NORTH KOREA. The North has so far refrained from any armed response to the South's latest military exercises.

Indian officials warned that members of a Pakistani militant group which was blamed for an attack in MUMBAI in 2008 that killed more than 160 people had again entered the financial capital. Security forces in India's biggest cities were put on heightened alert.

The JAPANESE government approved a draft budget for the 2011 fiscal year, which begins in April. It caps new bond issues at just below this year's expected level, but they will still outstrip tax revenues.

The People's Bank of China increased interest rates by one-quarter of a percentage point for the second time in just over two months, the latest in a series of actions taken by CHINA'S central bank to try to tame rising prices.

MIKHAIL KHODORKOVSKY, an imprisoned Russian oil tycoon, was found guilty of stealing oil in a second trial that many saw as a test of the Russian government's stated commitment to the rule of law. America and Germany criticised the verdict; the Russian foreign ministry said: "We expect everyone to mind his own business."

Violence erupted in Minsk after Alyaksandr Lukashenka, the president of BELARUS, was declared to have won re-election with 80% of the vote. Hundreds of protesters, and seven of the nine opposition candidates, were arrested. Mr Lukashenka's main challenger was badly beaten by riot police. In a strongly worded newspaper article, four European foreign ministers said the European Union would not "stand indifferent to gross violation of [its] values."

Nine men were arrested on December 20th in three British cities and charged with conspiring to bomb several high-profile targets in LONDON in the run-up to Christmas. The targets allegedly included the London Stock Exchange and the American embassy.

Vietnam's economy grows 6.8% in 2010, govt says

AP 29 December 2010
Vietnam's government says the country's economy grew 6.8 percent this year as inflation hit double digits. The General Statistics Office says the strong growth was driven by a rise in exports, industrial outputs, services and investments. Last year, the communist country's economy grew 5.3 percent the slowest pace in a decade. The General Statistics Office said in a statement Wednesday that inflation increased to 11.5 percent this year, up from 6.9 percent last year, while the trade deficit increased to $12.4 billion, slightly up from $12.1 billion last year. Vietnam's economy faces challenges as the country battles currency woes. The dong plunged to an all-time low earlier this month on the black market.

Vietnam 2010 growth fastest in three years

AFP 30 December 2010 Vietnam's economy grew at its fastest pace in three years in 2010, according to an official estimate released Wednesday, despite concerns over high inflation, a struggling currency and its current account deficit. Gross domestic product (GDP) expanded by roughly 6.8 percent compared with 5.3 percent the previous year, the slowest rate in a decade, the General Statistics Office (GSO) said in a year-end report. The economy grew 6.3 percent in 2008 and 8.5 percent in 2007. GSO figures showed that growth accelerated throughout this year, expanding in the fourth quarter by an annualised 7.3 percent. "These results confirm the effectiveness of measures and solutions taken firmly and vigorously by the government to prevent economic slowdown and to stabilise the macroeconomy," the GSO report said. The figures beat the government's target of 6.5 percent growth this year. It is aiming for seven percent expansion in 2011. Recovery in industry, construction and agriculture, coincided with stronger external demand to boost the country's growth rate, the World Bank said in a report this month. But communist Vietnam's impressive growth has been accompanied by increased economic risks such as falling foreign exchange reserves, high inflation, a struggling currency, and a relatively high current account deficit, the broadest measure of external trade, the World Bank said. "So Vietnam, despite being one of (the) most dynamic countries in the region, finds itself an exception to the broader emerging market trend of stronger currencies, robust capital inflows and rising foreign exchange reserves," it said. Inflation hit 11.8 percent in December on a year-on-year basis, according to a GSO estimate. The dong has been devalued three times since late last year. Next year the country will follow a more flexible exchange-rate regime while using monetary policy to curb inflation, the central bank said Wednesday. Signalling a possible interest-rate hike and another currency devaluation, State Bank of Vietnam Governor Nguyen Van Giau said the exchange rate will be based on market conditions and interest rates, and should be used to help boost exports and reduce imports. The GSO on Tuesday reported that Vietnam's trade deficit stayed relatively steady at 12.4 billion dollars this year, as exports surged more than imports. Vietnam's donors warned this month that the country's economic

growth will be threatened unless the government can control rising inflation and currency weakness. Ratings agencies Moody's and Standard & Poor's recently downgraded their evaluations for Vietnam over worries about the economy, the banking sector and the problems of nearly-bankrupt shipbuilder Vinashin, a state-owned firm. Foreign investors cite Vietnam's overloaded infrastructure, an under-qualified workforce, excessive bureaucracy and corruption as factors that keep the country from meeting its economic potential. Observers have also questioned a growth strategy that has relied on low-cost labour and resource industries, and have called for reforms in the state sector whose inefficiencies were captured by the Vinashin scandal. Pledges of foreign direct investment fell about 18 percent this year from 2009, with Singapore leading the commitments for new spending, the GSO said. Dispersed foreign capital was up 10 percent from last year to about 11 billion dollars.

Vietnam's Economic Troubles Deepen

VOA 23 December 2010 Vietnam's economic troubles have deepened as its sovereign credit rating has been lowered by a global rating agency for the second time this month. Standard and Poor's Ratings Services announced Thursday that it was lowering Vietnam's long-term rating by one notch to BB minus, putting it on the same level with Bangladesh and Mongolia. Moody's Investors Service took similar action eight days ago, citing the risk of a balance-of-payments crisis and problems at the state-owned ship-building company Vinashin. The lower rating makes it more difficult and more expensive for Vietnam to borrow money abroad. Standard and Poor's said it was acting because Vietnam's banking system has become more susceptible "to a financial or economic shock." It said the country's long-term outlook is negative, meaning its rating could be lowered further in the future. Moody's said last week that Vietnam's problems result from "shortcomings in economic policies" that are "resulting in ongoing macroeconomic instability." It said the government has been too slow to tighten its monetary policy after having successfully stimulated its economy during the global economic crisis. Moody's said Vietnam's debt problems reduce its ability to support state-owned enterprises like Vinashin, which came to the brink of bankruptcy earlier this year with $4.4 billion in debt. The company was unable to make a $600 million payment due on Monday and is asking its creditors to reschedule the debt. Vinashin was once promoted as a prime example of Vietnam's economic liberalization, enjoying rapid growth and expanding into areas ranging from animal feed production to tourist resorts. Its chairman was suspended in July and later arrested on charges of having ignored state regulations on economic management. Six other former top executives of the company also face charges.

Vietnam's Economic Problems Driven by Unchecked Growth

VOA 29 December 2010
The stability of Vietnam's economy is under scrutiny as the country confronts soaring inflation, a growing deficit, a weakening currency and falling foreign exchange reserves. Financial and political analysts say the problems are symptomatic of Vietnam's rapid growth. Vietnam's economy is often cited as one of the most promising emerging economies in Asia. The economy expanded by about 6.5 percent in 2010, continuing a decade of strong growth. But the country finds itself grappling with serious problems, including a trade deficit this year that topped $12 billion.

The trade deficit and inflation fueled by the economic growth have put pressure on the country's currency, the dong. The government, which tightly control's the dong's movement, has devalued it three times in the past 13 months. Yet inflation continues, with consumer prices jumping 11 percent this year. Partly to prop up the currency, Vietnam has spent its foreign exchange reserves, dropping them from a peak of $24 billion in 2008 to $14 billion in September. Tom Byrne is senior vice president of ratings agency Moodys Investors Service in Singapore. He says there is increasing downward pressure on the dong and if reserves drop further, the risk of a debt repayment crisis will increase. "If the exchange rate does weaken further, of course it leads to short-term ramifications on inflation, maybe even more capital flight," Byrne said. "But, over the long term it would help Vietnam's exports gain some competitiveness. But, the key thing is that whatever the authorities do, what we think would support the rating would be greater macroeconomic stability. Strong growth, yes, but probably not so strong that it leads to high inflation." Byrne says government policies favor fast growth, which is good for employment and short-term economic development but not sustainability. Many people fear the dong could weaken further, and they are investing in gold and U.S. dollars which also adds to the pressure on the dong. Moodys and other rating agencies downgraded Vietnam's credit rating this month because of the unbalanced economic data and an announcement that a state-owned ship building company defaulted on a foreign loan. Vinashin, one of Vietnam's largest employers, failed to make a payment on a $600 million loan. The Communist Party Politburo has told the company to restructure. The default raises concerns the government may now be less able to offer financial support to other state-owned enterprises with heavy debts. But Carl Thayer, a professor of politics at the Australian Defense Force Academy, says the decision was likely a political rather than economic one. He says senior leaders probably decided to restructure Vinashin as a show of displeasure with Prime Minister Nguyen Tan Dung's fast growth economic policies. "Vinashin was a showcase of the prime minister. So, it's hard for me not to see this as being political. I don't really think the Vietnamese leadership has made a moral-hazard stance and said 'state-owned enterprises you've got to fend for yourselves'. I mean, there is that sentiment but it isn't dominant because that's shooting yourself in the foot because that's what the government depends on," Thayer said. "They want state enterprises to be effective and they've coddled them. But, Vinishin is just too big to be allowed to go." Last month the prime minister accepted responsibility for Vinashin's problems - its debts are estimated at $4.5 billion. Thayer says the Communist Party Congress in January is unlikely to make any major pronouncements on the economy. And, he says, despite criticism over the economy, the prime minister is likely to retain his position as he has few eligible rivals. "Even when they faced the donor's meeting this year, the prime minister, despite their criticism, and I'm mirroring some of that, was basically saying we can do growth, have macroeconomic stability, and maintain political stability all at the same time. So, he's juggling three balls and the odds are that it looks like one might be dropped. And, that could be the macroeconomic stability," Thayer stated. Financial and regional analysts say that Vietnam's recent problems, including the Vinashin default, may scare off some foreign investors. But Byrne at Moody's says Vietnam's long-term economic outlook is still positive. "Vietnam has made measures, has taken steps to welcome foreign direct investment, and therefore, I think, boost the long-term growth potential. What really gave Vietnam a shot in the arm was the bilateral trade agreement with the U.S. that was signed some years ago, giving Vietnam access to the U.S. market," he said. Byrne says aside from balancing payments, Vietnam needs to improve transparency on economic data and policies. For instance, he says updates on foreign exchange reserves are released much later than other countries at similar stages of development. More information on debt distress and support for state-owned companies, he says,

would also improve the investment environment.

Vietnam Growth Quickens to 7.3%, Adding to Overheating Pressure

Bloomberg 29 December 2010 Vietnams economic expansion accelerated in the fourth quarter, adding pressure on the central bank to curb credit growth to prevent overheating. Gross domestic product grew 7.34 percent in the three months through December from a year earlier, quickening from a revised 7.18 percent in the third quarter, according to figures released by the General Statistics Office in Hanoi today. GDP rose 6.78 percent in 2010, up from 5.32 percent last year. A 27.7 percent jump in lending this year helped drive inflation close to a two-year high and fueled concern a credit bubble may trigger loan defaults. The dong has been devalued three times in the past 13 months, Moodys Investors Service and Standard & Poors cut the nations credit ratings in December, and the countrys biggest shipbuilder is struggling to pay debts. If they keep pushing growth, inflation will continue to be a problem, said Lawrence Wolfe, director of business development at DongA Securities Co. in Ho Chi Minh City. Vietnam should aim for a lower, sustainable rate of expansion, he said. Moodys on Dec. 15 cut Vietnams long-term foreign-currency rating one step to B1, four levels below investmentgrade, citing balance-of-payments risks and debt distress at Vietnam Shipbuilding Industry Group, or Vinashin. The state- owned firm has declined to comment on whether it has made loan payments on time, and Moodys said the nation and its companies will face greater difficulties borrowing money in future. The economys 2010 growth, the fastest since 2007, spurred imports and contributed to a full-year trade deficit of $12.4 billion. The dong was devalued in August to try to curb the gap. The currencys official exchange rate was 19,490 per dollar as of 10:54 a.m. in Hanoi, compared with 19,099 before the most recent devaluation. On the so-called black market, the dong traded today as weak as 21,090 in Ho Chi Minh City, according to a telephone information service run by the state-owned Vietnam Posts & Telecommunications Group. The country is faced with an overheating economy, the U.K.-listed Vietnam Property Fund Ltd. said this month. A report on Dec. 24 showed inflation accelerated to 11.8 percent in December, the fastest pace since February 2009, fanned by the weaker dong and higher food costs. S&P said strong lending growth and macroeconomic volatility have weakened the balance sheet of the countrys banks. It lowered its rating by one notch to BB-, three levels below investment grade, putting Vietnam on par with Bangladesh and Mongolia. Contingent liabilities to the government stemming from the banking system potentially amount to as much as 60 percent of GDP, S&P said. Vinashin had accumulated total debt of about 86 trillion dong ($4.4 billion) as of June, the government said in August. The company will receive interest-free loans to pay its workers, Prime Minister Nguyen Tan Dung said in a statement this month. Bank credit has expanded more this year than a 25 percent government target that the International Monetary Fund said in itself is too high. The State Bank of Vietnam said yesterday that it expects a 23 percent increase in 2011. Credit growth needs to be brought down to about 20 percent, Jim Walker, an economist at Asianomics Ltd. in Hong Kong, said before the release. Policy makers dont have things under control and the central banks interest rates need to rise another 3 percentage points to 5 percentage points, he said. The monetary authority raised its so-called base rate on Nov. 5 to 9 percent from 8 percent, the first increase in almost a year, after the government said curbing inflation was a challenge.

Interest rates need to rise to prioritize controlling inflation and provide some support for the currency, said Kevin Snowball, the chief executive of PXP Vietnam Asset Management in Ho Chi Minh City. Dungs government is targeting economic growth of about 7 percent next year and doesnt expect inflation to exceed 7 percent. We suspect that the government fairly soon will compromise on its growth target, Kevin Grice, a London-based economist for Capital Economics, said in a note on Dec. 27. Industry and construction, which accounted for 41 percent of the economy in 2010, expanded 7.7 percent, todays report showed. Services, which made up 38 percent of the economy, grew 7.52 percent. Agriculture, forestry and fisheries, which accounted for 21 percent of gross domestic product, expanded at a 2.78 percent clip.

Vietnam to Ease Exchange-Rate Rules

The Wall Street Journal 29 December 2010
Vietnam will follow a more flexible exchange-rate regime next year while using monetary policy to curb inflation, the central bank said Wednesday, signaling a possible interest-rate increase and another devaluation of the dong. State Bank of Vietnam Gov. Nguyen Van Giau said the exchange rate will be based on market conditions and interest rates, and should be used to help boost exports and reduce imports, which have put pressure on the country's growing trade deficit. Vietnam's economy remains burdened by inflationwhich hit 11.75% in December, its fastest pace since February 2009and a trade deficit that reached $13.235 billion for 2010. These have undermined the dong, forcing authorities to devalue the currency three times since late last year. Despite such worries, the economy has continued to expand. Gross domestic product grew 6.78% this yearfaster than the 5.32% growth in 2009driven by increased industrial production, the government's General Statistics Office said. The economy grew 7.34% in the fourth quarter from a year earlier. The government initially targeted GDP growth of 6.5% in 2010, and later revised that to 6.7%. But while the government has been focused on delivering robust economic growth, a lack of clear policies and uncertainty about Vietnam's economic stability have raised alarm bells among ratings agencies. Standard & Poor's Ratings Services last week cut Vietnam's local and foreign currency ratings because of concerns about the country's banking system. That came a few days after Moody's Investors Service downgraded Vietnamese government debt, in part because of concerns about the debt woes of state-run Vietnam Shipbuilding Industry Group, known as Vinashin. In July, Fitch downgraded Vietnam's long-term foreign and local currency ratings. The State Bank of Vietnam lifted its benchmark rate on dong-denominated loans by one percentage point last month, and the government has unveiled a series of new policies to ease inflationary pressures, albeit to little effect. The central bank has cut the dong's value by 10% against the U.S. dollar since November 2009. On Wednesday the dollar rate was set at 18,932 dong, though it was still commanding a premium of around 11% at gold shops, an indication that the dong remains overvalued. Mr. Giau said authorities will coordinate monetary policy with fiscal and other macroeconomic measures in an effort to stem inflation and stabilize the economy. His comments Wednesday, published on the central bank's website, came just two days after he said authorities are aiming to keep inflation below 3.5% in the first half of 2011 and below 7% for the full year, while also taking steps to reduce downward pressure on the dong. Vietnam also will diversify the foreign currencies it uses in international trade, Mr. Giau said. Interest rates and exchange rates will be set at "appropriate levels" to ensure the safety of the banking system and effective management of the economy by the central bank. "I think further devaluation

cannot be ruled out yet, given the persistent downward pressures on the dong," said HSBC economist Sherman Chan. "However, I still believe the key is to tackle the current economic concerns, so as to restore confidence, which should subsequently help to stabilize the currency. Showing clear policy objectives would be a good start," she said, adding that these may come after the National Congress meeting in January. Duong Thu Huong, chairman of the Vietnam Banking Association, said the flexible foreignexchange-rate policy won't necessarily mean a further currency devaluation. "The central bank's policy is to always boost exports and control imports," Ms. Huong said. Meanwhile, Mr. Giau said money supply for 2011 is expected to grow 21% to 24%, while banks' outstanding loans are expected to grow 23%. Money supply this year rose 23%, while total outstanding loans rose 27.65%.

LEARNING ENGLISH THROUGH NEWS

WEEK 02 2011 (3 9 Jan 2011)
esllearning@yahoo.com

THE WORLD THIS WEEK

Hopes for a more liberal PAKISTAN were dealt a blow with the assassination of Salman Taseer by his police bodyguard. The governor of Punjab province, the most populous in Pakistan, Mr Taseer was an outspoken critic of religious intolerance and of the country's harsh and arbitrary blasphemy law. His murder compounds the woes of the ruling Pakistan People's Party, which saw its main coalition partner walk out.

In CHINA brownouts, caused by a shortage of coal, afflicted the country. In some provinces power stations were down to just a few days of coal stocks. Government regulations keep coal well under the market price, reducing incentives to get it out of the ground. Harsh weather has compounded the problem.

The worst flooding for decades in QUEENSLAND cut off many cities and towns. Coalmining operations in the Australian state were severely hampered.

HUNGARY took over the rotating presidency of the European Union on January 1st, amid growing concern over media legislation recently passed by the country's government that critics say threatens press freedom. Meanwhile, the EU said it would investigate a number of "crisis" taxes imposed by Hungary on banks and other firms that are mainly foreign-owned.

Boris Nemtsov, a prominent figure in the RUSSIAN opposition, was arrested in Moscow after a demonstration and given a 15-day jail sentence. A day earlier he had criticised the 14-year prison term handed to Mikhail Khodorkovsky, a former oil tycoon who had been convicted of stealing oil.

A food-contamination scandal erupted in GERMANY when traces of dioxin were found in poultry and eggs. Officials said that the food presented "no acute health danger".

The rate of value-added tax in BRITAIN went up from 17.5% to 20%. The opposition Labour Party said it would hit the poorest hardest. Some economists feared the tax rise would threaten Britain's recovery. The government said it was necessary to boost Treasury coffers.

At least 21 EGYPTIANS, mostly Coptic Christians, were killed by a bomb in a church in the city of Alexandria, heightening anxiety among co-religionists across the Middle East who have recently felt beleaguered, especially in Iraq. It was unclear who perpetrated the atrocity. Muslim authorities in Egypt and elsewhere in the region expressed solidarity with their Christian- Arab brethren.

In the run-up to a referendum on secession in SOUTH SUDAN to be held on January 9th, the president of Sudan as a whole, Omar al-Bashir, said he would accept the result if, as expected, the southerners vote to secede.

Dilma Rousseff took office as BRAZIL'S president. She promised to eradicate extreme poverty, control inflation, increase public investment, improve health, education and public security, open doors for women in public life and support political and tax reform.

The UNITED STATES revoked the visa of VENEZUELA'S ambassador to Washington in retaliation for the rejection by Hugo Chavez of Larry Palmer, the nominated American ambassador to Caracas, who had criticised his government.

VENEZUELA devalued the bolivar for the second time in a year, abolishing a preferential rate of 2.6 bolivares to the dollar and unifying the official exchange rate at 4.3.

The 112TH CONGRESS convened in Washington with a cohort of fresh, mostly Republican, faces. One priority of the leadership in the Republican-controlled House of Representatives was to start a debate on repealing Barack Obama's health-care-reform act; a vote on the matter was set for January 12th. In the Senate the Democrats, who now command a smaller majority in the chamber, tried to force changes to parliamentary rules that would narrow the ability of a senator to mount a vote-delaying filibuster.

America's gross NATIONAL DEBT passed $14 trillion for the first time, up by $2 trillion in little over a year. The figure is very close to the current debt ceiling, which Congress must raise if the government is to continue borrowing and avoid a possible default. Some Republicans have insisted they will resist any attempt to increase the debt limit.

An index of WORLD FOOD PRICES compiled by the UN reached a record level in December, surpassing its previous high of June 2008, a year in which the cost of food sparked rioting in Haiti and elsewhere. Unlike then, the prices of some staple cereals such as rice remain relatively stable, though the price of wheat is rising. The increasing costs of other cereals and sugar were the main factors behind the rise in the index.

INFLATION in the euro zone rose to 2.2% in December, the highest since October 2008 and above the European Central Bank's target of close to but below 2%.

Chile's central bank announced that it was committing $12 billion over the next year to intervening in foreign-currency markets in an effort to keep the value of the Chilean peso down. It is the latest shot in the "CURRENCY WARS", in which some emerging economies are using a variety of measures to stop their currencies appreciating. But India's Financial Stability Development Council, at its first meeting, criticised policies that attempt to keep currencies artificially low, which was seen as a dig at China.

More Europeans now use Mozilla's FIREFOX web browser than Microsoft's INTERNET EXPLORER, according to data compiled by StatCounter, a market-analysis company. Firefox took 38.1% of the European market in December, compared with 37.5% for Internet Explorer and 14.6% for Google's Chrome. Microsoft's browser still predominates in America and Asia.

Change occurs at glacial speed

By Ian Timberlake, 9 January 2011, AFP Vietnam's ruling communists gather this week for a key party meeting to choose their leaders as unusual economic burdens threaten dreams of modernisation, and political change occurs at glacial speed. The one-party state is striving to build a "modern industrialised country" by 2020 but faces immediate challenges that include high inflation, currency weakness, systemic corruption and a bloated state sector. "Any new leadership coming in will have no choice but to push greater economic reform," an Asian diplomat said, noting the emerging threat of competition from neighbours such as Indonesia and the Philippines. A socio-economic strategy for the next decade -- to be debated at the secretive five-yearly Congress scheduled to run from Wednesday until January 19 -- pledges to carry out reforms long sought by foreign investors. These include the need for a more skilled workforce, better infrastructure, and more efficient state enterprises. Prime Minister Nguyen Tan Dung has publicly voiced support for such measures. He is seen as having a good chance of being chosen for a second term as the country's most powerful figure when 1,400 party members gather to elect the Politburo which includes top leaders. But critics doubt the will of delegates to radically alter course in a country where everything from trade unions to youth groups and the press are linked to the party. "We don't see any significant change," said Nguyen Quang A, who ran a think-tank until he and other researchers shut it down in 2009 in protest at government attempts to control them. The state economic sector still plays too much of a role 25 years after the "doi moi" reform policy began to open the economy, he said. A communist source -- reflecting a diversity of opinion within the party -- said the biggest weakness of the

Congress is that it will not make the system more accountable to the country's 86 million people. "These people who have been fighting so long, sacrificed so much... they deserve a democratic right," said the source, alluding to his country's wars against French colonialists and the United States. He requested anonymity and said he was not seeking pluralism, but rather reform within the party founded by Vietnam's independence hero Ho Chi Minh in 1930. Greater freedoms, including for the press, would accelerate the country's development, the source said. "Marxism, Leninism and Ho Chi Minh thought are the ideological foundation and the guiding star" for the party, proclaims one of many red Congress banners hanging over Hanoi streets. While Ho and the wars provide a basis for the party's rule, observers say its legitimacy -- despite being unelected -has also stemmed from the country's economic growth and resulting improvement in people's lives. Roads are jammed with motorbikes and, increasingly, cars while wandering vendors hawk everything from fruit to souvenir hats, and shops sell the latest mobile devices and flatscreen televisions. "I am quite happy with my life now, compared to the past," said Chu Thi Ngo, 38, a farmer who sees herself as financially better off these days. If high inflation persists or the economy stops growing at its impressive rates, such positive sentiment could be undermined along with the party's legitimacy, analysts said. In December prices rose 11.8 percent year-on-year, far higher than in Vietnam's neighbours, while the dong has been devalued three times since late 2009. Most other regional currencies have strengthened, and Vietnam's economic instability led donors to warn of a threat to growth. Debate on these issues is likely during the Congress as the party pursues more internal "democracy" that has seen the communist-dominated National Assembly become more outspoken, observers say. Some assembly members called for a halt to a government-backed bauxite mining project, which is controversial partly because of Chinese involvement. They also demanded answers in the case of nearly-bankrupt state-run shipping group Vinashin. While the legislature has become more vocal, Western countries have expressed concern about broader freedom of expression and human rights, which they say could help the country's growth if they were strengthened. The system remains authoritarian but it is slowly changing, said Carl Thayer, a Vietnam specialist from The University of New South Wales. A major change in direction will take a very long time "because the whole system of the Communist Party here has been one of balance and caution," he said.

Vietnam Confronts Economic Quagmire

By Thomas Fuller, The New York Times, 9 January 2011 Hammer and sickle flags are flying here as Ho Chi Minh City, the seemingly irrepressible bastion of Vietnamese capitalism, dutifully marks the start on Tuesday of the Communist Partys National Congress, an event held every five years to chart the course of a country that has witnessed an economic miracle in recent decades. But this time, things are different. In a region where governments are swollen with foreign currency reserves and inflation remains relatively tame, Vietnam is an island of economic instability. The countrys economy is still growing at 7 percent a year, but double-digit price increases for food and other essentials are punishing the working class and contributed to a top credit rating agencys recent decision to downgrade the countrys sovereign debt. Vietnams currency is consistently falling below official exchange rates, creating a thriving black market for gold and dollars. And one of the countrys largest state-owned companies is all but insolvent, brought down by debts that are the equivalent of more than 4 percent of the countrys total output. We are on the edge; theres not a lot of room for mistakes, said Le

Anh Tuan, head of research at Dragon Capital, an investment company here. The Vietnam story will depend much on how much the government understands the root of the problem and can fix it. The problems, say many businesspeople and economists, are rooted in Vietnams continued heavy reliance on state-run companies despite the countrys opening to more private enterprise, which has expanded rapidly and profitably. For years the government considered the vanguard of the economy to be its vast network of state-run companies, large conglomerates that the Communist Party could use to steer the country toward prosperity. The reach of the state-owned companies, even after several waves of privatizations, remains impressive. It would be easy for a consumer here to spend an entire day doing business with the government: paying a cellphone bill, depositing a check at the bank, shopping at a local supermarket, filling a car with gas and lunching at a fancy hotel. But the seemingly intractable problems at Vinashin, the deeply indebted state company, have highlighted the shortcomings of relying so heavily on government-owned enterprises. From its core mission of building ships, Vinashin expanded into about 450 businesses that it failed to make profitable and was ill suited to manage, including spas, motorcycle assembly and real estate. On the brink of bankruptcy with $4.5 billion in debts, the company is now effectively being bailed out by the government: it has been exempted from paying taxes this year and will be given interest-free loans, according to Vietnamese press reports. As a measure of their inefficiency, Vietnams state-owned companies use 40 percent of the capital invested in the country but produce only 25 percent of the gross domestic product. Economists say the opaque way that the government has handled the Vinashin meltdown and the lack of consistency among the top economic officials have eroded confidence in the currency and the market in general. The stock market has been among the worst performing in Asia for the past three years. Economists and businesspeople here are watching the Communist Party meeting to see whether state-run companies will be coddled or be forced to adhere to sink-or-swim discipline. Until now we havent seen many cases of the government letting them die, said Nguyen Thi Mai Thanh, the general director of the Ree Corporation, a large engineering firm that specializes in air-conditioning. Sometimes you have to make an example. Prime Minister Nguyen Tan Dung, who is seeking support for another term at the party meeting, has been quoted in the Vietnamese press as saying that the reform of state-owned enterprises is a key criterion for a market economy. But analysts say attempts at reform may be complicated by the involvement of government officials and their relatives in the businesses. Investors say they are also watching to see if the government carries out longdiscussed plans to reduce a paternalistic web of regulations and restrictions. Fred Burke, the managing director of the Vietnam offices of Baker & McKenzie, an international law firm, offers this example: driving a truck displaying an advertisement through Ho Chi Minh City requires 17 separate government approvals. Companies that want to call a news conference or make an announcement need to get permission from the government. Last year, in what companies see as a misguided attempt to control inflation, the government passed regulations requiring companies to submit the prices of all their ingredients in some consumer products. Mr. Burke, who is part of a government advisory panel on cutting red tape, says there has been backsliding on reform in recent years and describes the management of Vietnams currency as dysfunctional. But he sees signs that the government is trying to reduce paperwork. He also sees higher-end manufacturers coming

to invest in the country. Our business has never been better in terms of quality inbound investment, Mr. Burke said. Indeed, the economy has grown an average of 7 percent a year over the past five years and has grown at a similarly fast clip since the 1980s. That growth has helped deliver unprecedented increases in material well-being: workers earning minimum wage now have motorcycles, television sets, rice cookers and cellphones. But inflation, which is running at about 12 percent, has become a major preoccupation, especially among the poor. How could people be happy? asked Pham Thi Ngoc, a fruit seller on the outskirts of Ho Chi Minh City. Money is losing its value. Those worries have extended well beyond the countrys shores. Moodys, the credit rating agency, downgraded Vietnams sovereign debt last month because of what it described as shortcomings in economic policies, including an inability to tackle inflation. As a result of the downgrade, borrowing has become more expensive. PetroVietnam, the state-owned oil producer, announced last Wednesday that it would postpone a planned $1 billion bond sale because of unfavorable market conditions. Vietnamese companies are reluctant to borrow from banks at lending rates that can go as high as 18 percent. What can a small company do? asked Nguyen Lam Vien, a former employee at a state-owned farm who is now chairman of Vinamit, a food processing company that exports dried fruit and other products. The financial picture in Vietnam is bad, and the government is only responding with painkillers. Still, many foreign investors say they are betting that Vietnams legendary work ethic and a history of overcoming adversity will help it get past its latest setbacks. Theres no way you can understand Vietnam unless you can see the frenetic activity and the happiness thats here, said Peter Ryder, the chief executive of Indochina Capital, an investment company. Its one of the reasons the government gets away with its incompetence. After 100 years of war and starvation, people never thought life would be this good.

The Land of Three Currencies

The Wall Street Journal 04 January 2011 Vietnam is in danger of falling back into inflation. In the annals of easy-money policies over the last decade, Vietnam deserves its own chapter. Hanoi tried to use cheap credit to spur growth while neglecting fundamental reforms. Now it is reaping the consequences. Year-onyear consumer price inflation hit 11.75% last month, a 22-month high. Erosion of the domestic value of the currency has also helped weaken the Vietnamese dong externally. All this is dissuading investors from holding dong assets, and capital is fleeing the country. More could flee if Vietnamese firms have trouble making good on their debt. The stateowned shipbuilder Vinashin defaulted on a $600 million international loan last month. Moody's and Standard & Poor's downgraded the country's debt rating in the past month; Fitch did so last July. Four or five years ago, encouraged by cheap loans, such firms were enjoying the ride. They ramped up investment, which, as the country's Communist rulers intended, boosted GDP growth. The State Bank of Vietnam, the central bank, allowed annual credit growth of around 50% in 2007. The country was itching to follow China's model of investment-led, credit-powered growth. Now the credit expansion boom is leading to a bust. Vietnam saw inflation at 28.3% in mid-2008a 17-year higha rate that makes today's environment look benign in comparison. Workers were striking at factories to demand higher wages, as they saw their purchasing power destroyed.

The aftermath of the global recession temporarily caused inflationary pressures to ease, but with the central bank cutting rates and encouraging lending, it wasn't long before overheating reared its head again in late 2009. In response, Hanoi enacted a law, in effect from last October, that gives the state the power to impose price controls. Foreign businesses complained that the law unfairly targets their imports. As with China, some of the price increases (particularly for food) have been caused by temporary shortages due to poor harvests. Some of it could also be attributed to productivity increases and a secular rise in household purchasing power, typical in a growing economy. But headline inflation wouldn't be increasing at the rate it is without loose monetary policy. Nor would households be saving and transacting in gold and U.S. dollars if they weren't afraid of an increasingly debased dong. Vietnam is again becoming a land of three currencies, as it was in the 1980s when inflation at one point hit nearly 500%. The economic solution is straightforward: the State Bank of Vietnam should be tightening. The central bank did hike its primary policy rate by one percentage point in early November, but judging by the sheer buildup in inflation expectations, the bank is far behind the curve. The problem is that the State Bankwhich isn't independent of governmentremains politically focused on growth. So last month, despite the threat of inflation, it capped the interest rates banks charge for loans, to ensure firms don't run into too much trouble accessing credit. The Communist Party of Vietnam, with its iron grip on power, wants to follow the Chinese model of growth. As Beijing is finding out, an investment-led economy is a liability in a sluggish global economy. Vietnam is in an even more precarious position as it has failed to free up its private sector and encourage productivity growth. If it continues to promote credit growth without such reforms, continuously accelerating inflation will result.

Borrowing costs hit Vietnam groups

Bloomberg 5 January 2011 When state-owned shipbuilder Vinashin failed to repay a foreign loan last month, it capped a dramatic fall from grace for a company once hailed as the model for a new breed of conglomerates spearheading Vietnams economic development. Its $60m debt default has also made life a lot harder for the many Vietnamese businesses desperate for capital to keep up with the countrys economic growth, which hit 6.8 per cent last year. Doan Nguyen Duc, chairman of Hoang Anh Gia Lai (HAGL), one of Vietnams biggest private sector companies, tells the Financial Times that his company faces a much higher cost of borrowing than its peers from other Asian developing countries as it prepares for a $200m five-year bond issue in Singapore this month. Mr Duc says given Vietnams low sovereign credit ratings already below investment grade before last months downgrade by major ratings agencies debt-ridden Vinashins default pours salt on wounds. While he awaits his own companys credit rating, Mr Duc says Vietnamese companies trying to sell bonds in the international markets today are likely to have to settle with yields of 9 per cent or higher, compared with around 7 per cent before. Vietnam sold 10-year sovereign bonds earlier this year at a yield of 6.95 per cent at maturity before the Vinashin fall-out, and rising concern over structural weaknesses in the economy such as double-digit inflation, a sharp devaluation of the Vietnam dong, and rising interest rates, says Tran Vinh Du, a director with Vietnam-based TNK Capital Partners.

The countrys consumer price index jumped 11.75 per cent year-on-year in December, and interest rates have dramatically risen over the past month, resulting in local companies paying up to 20 per cent a year for dong-denominated loans at home. As a result, companies like HAGL a furniture maker turned property developer with a wide range of other investments remain keen to borrow dollars overseas despite rising costs. Interest rates are too high in Vietnam. All companies are thirsty for capital ... so I would borrow [overseas] if the cost is still lower than the cost in Vietnam, said Mr Duc. However, a number of state-owned enterprises have had to put their fund-raising plans on hold. PetroVietnam, one of the biggest state-owned conglomerates, recently postponed a plan to raise $1bn from dollar-bonds, citing Vinashins problems. Vietnam National Coal and Mineral Industries Group also scrapped a $500m bond sale recently. Trinh Hoai Giang, vicechairman of Vietnams Bond Association, says it will be much more difficult for state-owned enterprises to borrow money overseas as Vinashins case signals the governments unwillingness to step in when foreign creditors demand payment from struggling state businesses. Vinashins total debt amounts to around $4.4bn, including a $600m foreign loan and a $750m international bond that the government issued on its behalf in 2006. The government is also giving it a one-year interest-free loan to pay its employees, in addition to a tax exemption on cancelled shipbuilding projects, but has given no indication whether it would eventually help the shipbuilder pay off its foreign debt.

U.S. envoy assaulted

The New York Times, 6 January 2011 The United States lodged an official protest with the Vietnamese government on Thursday over what news reports called a police assault of an American diplomat who monitors human rights issues as he was trying to visit a dissident priest. Michael W. Michalak, the United States ambassador to Vietnam, described the attack on the diplomat, Christian Marchant, as an incident of grave concern. The attack took place Wednesday in Hue, the former imperial capital. Accounts of the episode were sketchy, and the embassys spokesman in Hanoi declined to provide details. But a report by Radio Free Asia, the United States-financed broadcaster, said Mr. Marchant had been wrestled to the ground outside the home of the Rev. Thadeus Nguyen Van Ly, a Roman Catholic priest being held under house arrest as part of a 2007 conviction on accusations of undermining the government. A report by The Associated Press said the police had repeatedly closed a car door on Mr. Marchants legs. Mr. Marchant, a political officer at the embassy since 2007, could not be reached for comment. He is known among fellow diplomats as an ardent advocate of dissident rights and religious freedoms in Vietnam. He was recently chosen to receive the Human Rights and Democracy Award that the State Department presents to an embassy officer. He was attacked less than a week before Vietnams Communist Party is to hold its National Party Congress, a meeting that will decide the countrys leadership for the next five years. A statement by Human Rights Watch said the assault on Mr. Marchant fit what it called a pattern of police brutality in Vietnam. Its clear that Vietnams police are out of control, said Phil Robertson, the deputy director of the Asian division of Human Rights Watch. They beat and sometimes kill suspects in detention, Mr. Robertson said. They brutalize dissidents, human rights advocates and religious activists. They assault citizens over minor traffic

violations. News services quoted a spokeswoman for Vietnams Foreign Ministry as saying that the government was reviewing the episode, but that foreign diplomats had a responsibility to abide by Vietnams laws. Relations between Vietnam and the United States have flourished in recent years. American companies, including Intel, the chip maker, are among the largest investors here. The armed forces of the United States and Vietnam, former wartime enemies, now treat each other like allies, a reconciliation spurred in part by the desire to counterbalance the rise of China. But human rights remains one area where Vietnam bristles at American criticism, recently calling Washingtons assessments of the state of religious freedom in Vietnam biased.

LEARNING ENGLISH THROUGH NEWS

WEEK 03 2011 (10 16 Jan 2011)
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THE WORLD THIS WEEK

A 22-year-old man opened fireat a political event outside a supermarket in TUCSON, killing six people, including a federal judge and a nine-year-old girl, and wounding 13 others. Jared Loughner's alleged main target was Gabrielle Giffords, the local Democratic congresswoman, whom he shot in the head. The shooting sparked a fierce debate in America about whether the heated political rhetoric of recent years was to blame for the incident. But Mr Loughner, described as mentally unstable, seemed to have no obvious political motive. In a speech in Tucson at a memorial service for the victims, Barack Obama called for "more civility in our public discourse".

A Russian report into the air crash last year that killed POLAND'S president, Lech Kaczynski, and 95 others blamed the plane's Polish pilots. It said that they had come under "psychological pressure" from Mr Kaczynski and others to land in heavy fog. Poland's interior minister accepted the report, but said Russian officials had also made mistakes.

At least two dozen TUNISIANS, mainly young civilian men, were killed in protests against unemployment and high-level corruption that continued in at least a dozen towns across Tunisia. President Zine el-Abidine Ben Ali, whom the protesters want to oust, sacked his interior minister, closed schools and universities and enforced a curfew in Tunis, the capital.

Tension rose in EAST JERUSALEM, which Palestinians view as their future capital, when bulldozers began demolishing parts of the old Shepherd Hotel in a district inhabited mainly by Arabs, to make way for buildings for Jews.

LEBANON'S shaky coalition government collapsed after Hizbullah, a Shia party-cum-militia, withdrew its support, allegedly because the prime minister, Saad Hariri, had refused to convene an emergency session to take a stance on the UN tribunal investigating the assassination of his father, Rafik Hariri, in 2005. It seems likely that Hizbullah will be blamed for the killing.

Violence persisted in COTE D'IVOIRE. Olusegun Obasanjo, a former president of Nigeria, joined an array of leading Africans seeking to persuade Laurent Gbagbo to step down after losing November's presidential election. Friends of Alassane Ouattara, the thwarted winner, hinted that he might accept a unity government including some senior Gbagbo people, provided that Mr Ouattara becomes president.

Violence related to drug-trafficking in MEXICO killed 15,273 people in 2010, the government said, up from 9,616 the previous year.

VENEZUELA'S national assembly voted to scrap a law approved last month that would have increased government control over universities. The country's president, Hugo Chavez, who inspired the law, said that he would veto it after it attracted protests from students and others.

Chile became the seventh SOUTH AMERICAN country in the past month to grant diplomatic recognition to an independent state of PALESTINE based on Israel's pre-1967 boundaries.

Robert Gates, America's defence secretary, visited CHINA. The trip had been delayed by nearly a year because of Chinese pique at an American arms sale to Taiwan. During his visit China's army conducted an attention-grabbing test-flight of its first stealth fighter; Mr Gates was assured that the timing was coincidental.

NORTH KOREAN sentries pursued a group of defectors fleeing across the Chinese border and shot dead five of them, according to the CHOSUN ILBO, a South Korean newspaper. China issued no immediate complaint. Across its other border North Korea reconnected a Red Cross-operated hotline with the South, the first direct line of communication the two sides have had since the North shelled a South Korean island in November.

There were a number of devastating FLOODS worldwide. In Brazil at least 335 people were killed by flooding and mudslides near Rio de Janeiro; 40 people died and 1m were affected by rains in the Philippines; more than 2m people were caught up in a deluge in northern Colombia; a heavy monsoon displaced 200,000 people in Sri Lanka; and Brisbane, the capital of Queensland and Australia's third-largest city, was left deserted in the face of raging floodwaters. At least a dozen people died there.

PORTUGAL paid yields of 6.7% on its ten-year bond. This was below both the 6.8% it paid for a similar maturity last November, and the 7% mark at which Portuguese officials admit borrowing costs would become unbearable. Before the auction the European Central Bank intervened to buy Portuguese and other euro-area bonds. With investors betting that Portugal would still need a bail-

out, Angela Merkel asserted that Germany would "support whatever is needed to support the euro". See article http://news.economist.com/cgi-bin1/DM/t/eCU410V4QS0Mo0NvnS0EN

After a deep recession in 2009 GERMANY'S economy grew by 3.6% last year, the fastest pace of growth since 1981. Growth is expected to be slower this year and next because of the crisis in the euro area, Germany's main export market.

America's Agriculture Department reduced its estimate of the STOCK OF GRAINS worldwide and raised its forecast for demand, causing a further jump in the already high price of corn (maize) and soyabeans. Last year's corn harvest in America, the world's biggest producer, was lower than expected, but demand has increased as more corn is used for ethanol fuel. China buys around a third of America's soyabean crop to use mostly as animal feed.

Amid more signs of quickening inflation, CHINA allowed the yuan to appreciate slightly against the dollar by resetting the reference rate. Timothy Geithner, America's treasury secretary, called on China to do more to strengthen its currency. Hu Jintao, China's president, visits Washington, DC, next week.

A presidential commission released its final report into the explosion at a BP OIL WELL in the Gulf of Mexico last April that killed 11 men and caused the biggest-ever civilian maritime oil spill. The commission found fault with BP and its partners: Halliburton, which supplied cement to seal the well, and Transocean, owner of the rig. It also called for "fundamental reform" of the regulatory system that oversees the oil industry and for an independent safety agency for offshore oil drilling. Some of the recommendations will need to be approved by Congress, where Republicans hold a majority in the House. - See article http://news.economist.com/cgi-bin1/DM/t/eCU410V4QS0Mo0NvnV0EQ

The UNEMPLOYMENT RATE in America fell to 9.4% in December, the lowest since May 2009. But the number of new jobs created remained small; employers added 103,000 workers to the payrolls.

Speculation rumbled on about an alleged leak of company secrets at RENAULT related to its electriccar technology. Accusations that China was somehow involved were "baseless and irresponsible", according to a spokesman for China's foreign ministry. The French carmaker kept mum.

Vietnam looks to new growth strategy

AFP 15 January 2011 Once hailed as the next "Asian Tiger", Vietnam's economic growth model is under review as the ruling communists gather against a backdrop of soaring inflation, a struggling currency and a trade deficit. Experts say the woes are in part the result of the country's faltering attempt to build South Korean-style business conglomerates, like Samsung, as highlighted by the near-bankruptcy of state-owned shipbuilder Vinashin. Foreign investors and analysts have pushed for greater state-sector efficiency while warning that the country's impressive economic growth will be threatened unless the government can restore economic stability.

Inflation is higher than in Vietnam's neighbours and the currency has weakened -- driving up import costs -- while others in the region have become stronger because of an influx of foreign capital. A related factor is that Vietnam spends more on imports than it earns from exports -- a discrepancy that has to be financed. The trade deficit last year exceeded 12 billion dollars, official data showed. A socio-economic strategy for the next decade, to be debated at the secretive Communist Party Congress from Wednesday, pledges to tackle these and other risks while shifting the growth model away from a reliance on natural resources and unskilled labour. Nguyen Quang A, an economic analyst, calls the trade imbalance the "chronic symptom, or disease" of Vietnam's economy and says the state-owned enterprises (SOEs) are to blame. "In fact, they contribute a lot of other macroeconomic imbalances" as well, draining the state budget and treated as tools by the government to intervene in the economy, he said. "The SOEs generate the trade deficit," said Quang A. He said that key domestic private-sector industries such as garments, fishing, rice and coffee produce trade surpluses or small deficits but the balance for SOEs is towards imports, particularly of steel and other materials. SOEs account for about 26 percent of gross domestic product (GDP), but use close to 40 percent of resources such as loans, he says, adding that their output grows at only about half the rate of the domestic private sector and foreign direct investment. Another Vietnamese analyst said external financial stability was the country's biggest economic challenge, and agreed that state-owned firms were very much responsible for the economic problems. "The economy will continue to grow... but how to pay the external debt?" asked the analyst, who preferred not to be named. The woes have been dramatically illustrated by the case of Vietnam Shipbuilding Industry Group, more commonly known as Vinashin. The company, whose $4.4 billion debt is about four percent of GDP, reportedly defaulted last month on a loan to international creditors. Ratings agency Moody's last month downgraded Vietnam's government bond rating due fears about the trade deficit, capital flight, reduced foreign exchange reserves, pressure on the dong currency and Vinashin's debts. Other agencies have announced similar moves and experts say the scandal could make it harder for the country to get financing for muchneeded projects such as infrastructure. Vinashin, they add, was one of several large state groups fostered by Prime Minister Nguyen Tan Dung to emulate "chaebol" -- conglomerates which powered South Korea's industrialisation, backed by state funds but run by families. An Asian diplomat said Vietnam envisioned a similar structure. "They want to build their own Samsung. They want to build their own Hyundai," he said, questioning the implementation of that vision. Unlike the chaebol, Vietnam's large-scale groups are state-owned. They include oil and gas giant PetroVietnam and Electricity of Vietnam as well as Vinashin and several others. "The prime minister has used the conglomerates as a key form of development for Vietnam, and Vinashin has been a spectacular failure," said Carl Thayer, of The University of New South Wales in Australia. Observers say Dung was assailed last year by party critics, partly over his connections to Vinashin, but he probably has enough support to keep his job when 1,400 delegates gather at the five-yearly Congress this week to elect the country's top leaders. The government vows there will be no bailout for Vinashin, which Southeast Asia analyst Martin Gainsborough at Britain's University of Bristol sees as a signal to other state groups that budget constraints have been hardened. "Now the emphasis should be on strengthening the micro and macroeconomy," he said.

Vietnam Leaders Signal View on Overheated Economy

Bloomberg News 12 January 2011 Vietnam starts eight days of meetings today that will determine the countrys top leadership for the next five years, signal whether Nguyen Tan Dung stays as prime minister and outline the Communist Partys economic plan. About 1,400 delegates participating in the 11th National Congress in Hanoi select the committee that appoints Vietnams most powerful body, the 15-member Politburo. Investors will follow the proceedings for signs of whether policymakers are prepared to damp a credit boom and prioritize price stabilization over rapid economic growth, which topped 7 percent in the fourth quarter of last year. Theres a kind of relief after the Party Congress, said Carlyle A. Thayer, a professor at the Australian Defence Force Academy in Canberra. You know the pecking order, you know who the winners and losers are and you can make decisions based on that. Dung needs to revive investor confidence after a year that saw three ratings downgrades, two currency devaluations and a 2 percent slump in the benchmark stock index, Asias second-worst performer after Shanghai. Dungs government has lagged behind nations from Thailand toMalaysia in raising rates to tackle inflation, which was at a 22-month high of 11.75 percent in December. For a lot of the market, we just want to feel like someones driving the car, said Matthew Hildebrandt, a Singapore-based economist at JPMorgan Chase & Co. Within a few months we need to see some kind of tangible policy response, whether its hiking interest rates, slowing credit growth, or using other tools. A lending surge of 28 percent last year fueled concern of an eventual jump in defaults. Party delegates this week will decide whether Dung, 61, is reappointed to the Politburo, a move that would secure his return as premier when the National Assembly chooses government officials in May. The ex-central bank chief faced criticism over his management of debt-ridden, state-owned Vietnam Shipbuilding Industry Group, known as Vinashin. Dungs return would indicate stability, said Than Trong Phuc, managing director of investment fund DFJ VinaCapital LP in Ho Chi Minh City. He recommended buying Vietnamese stocks, which trade at 10.1 times estimated 2011 earnings, the second-cheapest in Asia after Pakistan, according to data compiled by Bloomberg. Vietnams at a discount right now, Phuc said. Theres no reason to hold back. If Im an investor, I would buy into Vietnam before prices go up. Stabilizing the economy through curbing inflation and revamping state-owned enterprises are among the partys top priorities this year, according to the 2011-2020 social-economic strategy posted on a government website. The ten-year plan to be discussed this week emphasizes both sustainable development and a rapid growth pace as Vietnam strives to become a modernized industrial nation. Vietnams economy expanded 6.8 percent last year, the fastest pace since 2007, fueling prices as a weakening currency increases the cost of imported goods. Dungs government has devalued the dong three times in the past 14 months to cut the trade deficit, which totaled $12.4 billion last year, amid concern Vietnam may run short of capital to offset the gap. They have to justify their political system in terms of delivering economic results, said Martin Gainsborough, a Vietnam specialist at Bristol University. If you fail to deliver economically, you can start to look quite threadbare. Opposition parties are illegal and Vietnamese authorities have convicted or arrested 39 political dissidents since October 2009, according to the U.S. State Department. Standard & Poors Rating Services cited a lack of transparency when it cut Vietnams credit rating on Dec. 23, a week after a similar move by Moodys Investors Services. Both expressed concern that strong lending growth had weakened the balance sheets of the countrys banks and raised questions about the solvency of the countrys state enterprises. State-owned enterprises account for 40 percent of gross domestic product, according to the government. Vinashin had amassed a total debt of about 86 trillion dong ($4.4 billion) as of

June, according to government figures, equivalent to about 4.8 percent of the $102 billion economy. Vietnam cant continue to waste its resources and capital to feed into bad projects or inefficient companies, because money is scarce, said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi. It really needs to get it together and make this system more efficient and healthier. Most Asian currencies appreciated over the past two years as the region led the global recovery, while the MSCI Asia Pacific stock index is up more than 50 percent. The dong has fallen about 10.4 percent over the period, and the Ho Chi Minh City Stock Exchanges VN Index has slumped approximately 52 percent, in a sign of concern about the direction of policy. The regime will likely digest advice from the international community and slowly shift direction over time, said David Koh, senior fellow at the Institute of Southeast Asian Studies inSingapore. We should not expect any major change of direction, Koh said. Theres always an aversion to quick change and turbulence.

Vietnam's Party Congress blighted by economic woes

AP 11 January 2011 A lone customer approaches two bamboo trays glistening with fresh pig hearts, livers and ribs at Nguyen Thuy Ngoc's stall in Hanoi's busiest market. She pockets the meager $1.50 which will put some food on her family's table but soaring prices are driving buyers away. Even when she does make a sale, the money just doesn't go as far as it used to. This week, Vietnam's Communist government begins its National Party Congress, an event held every five years to select top leaders and set the country's goals for the future. But a lot has changed here since the last Congress in 2006. Then, optimism reigned, and Vietnam was touted as Asia's newest economic success story, sweeping aside a history of isolation and failed collective farming with a surge of capitalism that fueled an average 7 percent annual growth in the country of 86 million. Today, ordinary Vietnamese are grappling with double-digit inflation and soaring food prices, as Vietnam's economy enters an awkward adolescent phase dogged by rampant corruption, clumsy planning and sputtering reform. Ngoc, like many other poor Vietnamese, is unmoved by the red propaganda banners blanketing the capital with slogans declaring: "Long Live the Communist Party of Vietnam." "I think the Party and government should do something to cool the prices down because it's affecting everyone," she says. "The poor can barely afford to buy things just to meet their basic daily needs." In 2006, Nguyen Tan Dung, a reformer from the commercially savvy south, took over as prime minister and the country many outsiders still associate with war and poverty highlighted its rapid development by hosting the Asia-Pacific Economic Cooperation summit, attended by then U.S. President George W. Bush. Soon after, Vietnam joined the World Trade Organization. Vietnam also began a brisk trading relationship with the U.S., with which it fought a bloody war that ended in 1975 when northern forces seized control of the U.S.-backed South Vietnam. The former foe is now one of the Vietnam's top partners with big-name companies ranging from Intel to Ford flocking to invest. But the unyielding desire of top Communist officials to maintain rapid growth rates has not come without pain. Critics say Vietnam remains a difficult place to do business due to a tangled bureaucracy and a lack of transparency. Some of the country's largest companies remain state-owned enterprises, despite promises for faster privatization and economic reform. Many Vietnamese have also lost their trust in the local currency, the dong, which has been devalued three times since Nov. 2009, resulting in many people dumping it on the black market in favor of greenbacks or gold.

But perhaps the biggest blight on this year's Congress comes from mismanagement and corporate malfeasance at one of the government's own conglomerates. State-owned shipbuilder Vinashin is struggling to keep from going bust, leaving the country reeling from recent downgrades by international credit rating agencies. The scandal has been the talk of cafes and Internet chat rooms, especially after the company defaulted in December on the first payment due on a $600 million international loan. Vinashin had $4.5 billion in debt as of June equal to 4.5 percent of the country's 2009 gross domestic product. Prime Minister Dung, who took responsibility for the Vinashin fiasco, is widely expected to retain his position. The three other top government positions to be determined during the secretive meetings include the party secretary, president and national assembly leader. However, no major changes to the government's polices are expected regardless of who is selected. Vietnam's economic future will be debated during the meetings, but Congress organizers told reporters there were no specific plans to discuss the Vinashin crisis. It's that lack of transparency and accountability that got Vietnam into its economic mess to begin with, says retired senior economist Le Dang Doanh, the former president of a government economic think tank. "The problem is with opening up, Vietnam did not continue the reform at the needed pace so the economy is now increasingly vulnerable," he says. "Vinashin is just one example. Who knows whether there are other Vinashins or not." He says a growing trade deficit, especially with China, coupled with inflation and exchange-rate fluctuation also are plaguing Vietnam as the gap between rich and poor expands. Hospitals, schools and other public services lag while the newly rich cram already crowded roads with Rolls Royces and Bentleys. But for people like Ngoc, money is much harder to make and stretch. As the sole breadwinner for her family, she has started bagging handfuls of pistachio nuts, a new item she's trying to push ahead of Vietnam's Lunar new year holiday. She had to stop selling vegetables because there was simply not enough money in it. Now she wonders how long she can keep peddling pork. "All I care about is how to make money today," she says. "I'm not thinking about tomorrow. All I care about is taking it day by day."

Vietnamese leaders deliver mixed messages

By Ben Bland, Financial Times, 12 January 12 Vietnams ruling Communist party opened a secretive, eight-day national congress in Hanoi on Wednesday, with leaders once more giving out mixed messages about the governments willingness to restructure the fast growing yet unstable economy. In his opening address, Nong Duc Manh, the outgoing party chief, said the country must overcome serious challenges including an under developed education system, weak infrastructure, corruption and wasteful spending by state-owned companies if the economy is to continue thriving. Addressing nearly 1,400 delegates, he said the party had learnt that it must seriously prioritise the quality and the effectiveness of growth and sustainable development. However, key documents prepared for the congress emphasised that the state would retain its leading role in the economy, which many investors believe is a major source of the turbulence that has buffeted the country over recent years. Despite growing at an annual rate of 7 per cent over the past decade, Vietnams economy has faced some long-standing challenges, with a chronic balance of payments deficit, profligate investment by the government and state-owned companies and a lack of confidence in the currency, the dong. Macroeconomic policy has undergone violent swings as the government tried first to control inflation, which peaked at 28 per cent two years ago, before moving into stimulus as the financial crisis hit, and then struggling to put the brakes on since.

Last year, the three main credit rating agencies Fitch, Moodys and Standard & Poors downgraded Vietnams sovereign debt, citing concerns about the trade and budget deficits, accelerating inflation, inefficient state bank lending to state companies and a lack of transparency. Nguyen Huu Dung, a delegate from Quang Tri province in central Vietnam, said he believed the congress, which will determine the leaders and policies for the next five years, would open a new era in Vietnams economic development. However, most analysts are yet to be convinced that the congress, which is held behind closed doors apart from the opening and closing sessions, will produce a government that can match the rhetoric with the reality. The analysis of whats wrong is quite easy, said Jonathan Pincus, head of the US government-funded Fulbright economics teaching programme in Ho Chi Minh City. The problem is how to impose fiscal discipline on ministries, provinces and state-owned companies. It will take a lot of political will and I would be sceptical about the governments willingness to do so given its past performance.

Hanoi sends message with military calendar

By Greg Torode, SCMP 12 January 2010 While China last week allowed online bloggers to leak the first images of its prototype stealth jet fighter, Vietnam is revealing its own tricks in the transparency stakes - slipping photos of cutting-edge anti-aircraft missile batteries into a calendar. The photo, accompanying the month of August in the Ministry of National Defence's 2011 calendar, is circulating among Hanoi-based diplomats and military analysts now eagerly watching Vietnam's build-up to counter China's military rise. It appears to confirm that Vietnam has obtained crack Russian S300 PMU1 air defence systems, showing missile tubes mounted on a truck along with Vietnamese soldiers. "We knew it was out there, but this is the first time it's been seen ? it is clearly in Vietnam and apparently operational," one Hanoi-based envoy said. "It is a subtle way of getting the message out: Vietnam's improving its defences." The PMU system has been compared favourably with the US Patriot missile that can target both enemy aircraft as well as a variety of missiles - and is capable of attacking multiple targets at a full range of heights. Vietnam reportedly spent more than US$200 million to clinch the deal with Moscow, its former cold-war patron, two years ago. It has two batteries - a total of 12 launchers and more than 60 radar-guided missiles. China also fields the PMU. The updated air defences appear to plug one of the more glaring holes in Vietnam's military modernisation. While it has brought state-of-the-art Russian planes and ships - and will soon have submarines - its once-feared air defences were widely thought to be falling into disrepair. Backed by then-Soviet technology, Hanoi shot down hundreds of US aircraft during the Vietnam war, including B52 bombers and F-4 Phantoms, deploying telephone-pole sized missiles as well as fire from smaller arms. Analysts believe both the leaking of the stealth photos and the publication of the calendar, filled with more routine pictures of military personnel on parade and regional defence ministers, serve as a timely reminder of the unusual nature of military transparency in a habitually secretive region. While both Vietnam and China have produced formal defence white papers in recent years, much key detail is missing. Leaking details more quietly serves to deliver messages to potential rivals and enemies without unduly angering neighbours. "A country like Vietnam wants people to know what it has got and what it can do, but it doesn't want to be too provocative about it," another envoy said. "As secretive as it still is, at some point Hanoi has to let things slip to ensure its weapons can serve as a deterrent." Just as East Asia lacks any kind of formal security architecture to promote openness and transparency beyond the Association of

Southeast Asian Nations, no register of sensitive weapons exists.

Pursuit of Dizzying Feats Is One for Vietnam's Record Book

By James Hookway, The Wall Street Journal 11 January 2011 Building a nation is a tricky business, what with legal systems to choose, policies to polish and founding heroes to enshrine. Then, as Vietnam is finding out, there's the book of national achievements to compile. Up-and-coming nations have long published books along the lines of the "Guinness Book of World Records," chronicling the feats of their fearless citizens to help provide that sense of national purpose politicians love. India and Malaysia were among the first, shrugging off the yoke of colonialism to bake giant pizzas or weave enormous carpets. Former Soviet satellites including Poland and Ukraine followed, publishing their own national record books. Even the tiny Mediterranean island Malta, population 411,390, published a slender volume, the "Malta Book of Records and Facts." Now Vietnam is stepping up to bat with the "Vietnam Book of Records," published by Viet Books Co., an outfit better known for publishing drab government directories. The new tome is quickly filling up. There's the village with the most portraits of revolutionary hero Ho Chi Minh; the largest model turtle made of dried squid; and, not least, Tran Minh Thiem, a 75year-old pensioner credited with spinning around more times than any other Vietnamese without falling down. Few record-holders embody the spirit of perseverance that marks Vietnam as the wiry Mr. Thiem does. While Americans attempt to set records for all sorts of things, from wearing the most number of T-shirts at one time to assembling the largest collection of toy dragons, Mr. Thiem is touring Ho Chi Minh City's old people's clubs, spinning up to 7,000 times in an afternoon and showing other elderly Vietnamese how to roll back the years. Donning a flowing red shirt, white pants and a gleaming pair of Puma sneakers here at his grocery store in a dusty alley, Mr. Thiem gradually wound himself up for an afternoon performance recently. Moving his feet in precise 90-degree movements, he removed his hearing aid and extended his arms. For an additional flourish, he held a pair of red, folding fans in his hands. "That's to keep the audience from getting bored," he says, and just as well: Mr. Thiem actually turns slowly, and it can take him three or four hours to complete a performance. "After spinning, I can eat more and sleep better, too, but it's not easy for other people to do it without getting sick," he says. At the pensioners' clubs, other people manage only a few dozen turns, he says. Mr. Thiem first caught the spinning bug when a circus visited his hometown near Ho Chi Minh City, the former Saigon, when he was 26. He says he was inspired by the troupe's Cossack dancers and began mimicking their twirling moves. The first day he managed 200 rotations before getting a headache, but then he managed to work up to 500 and then 700 turns. Now, his record is 12,000 turns, "and nobody's going to beat it," Mr. Thiem predicts. Other Vietnamese are also succumbing to record fever, and it's proving a welcome distraction from Vietnam's worsening economic problems, which in recent months have seen a decade-long boom turn into spiraling inflation and a quickly depreciating currency. Le Tran Truong An, publisher of the Vietnam Book of Records, last year appointed an editorial board of 38 people to filter through the growing mountain of applications. It's a lot of work, he says, but "it's much more fun" than what the company usually does. "This is an attempt to recognize the achievements of our people," says Mr. An, an animated fellow perched among the piles of files mounting up in his second-floor office overlooking a crowded Ho Chi Minh City side-street. "Hopefully it will help introduce Vietnam to the rest of the world." It has already introduced Vietnam to the world of records. The 1,000th anniversary of the founding

of capital city Hanoi in October led to a deluge of new candidates, including the 1,000 players who participated in the country's largest-ever soccer match. There was also the country's largest ever parade, which included 31,000 people, including 1,000 representatives from Vietnam's officially designated list of 49,630 national heroes. Then there are the somewhat more free-spirited record holders. One man holds the record for cultivating Vietnam's largest miniature bonsai tree. (It looks suspiciously like a regular tree.) Meanwhile, 61-year-old Luu Van Du rocks out on his electric guitar by picking the strings with his teeth. Many of the current record holders gathered at an annual ceremony at Ho Chi Minh City's Rex Hotel on Dec. 18. Candidates featured in Viet Books' new monthly "Record" magazine include a man who says he can float longer than anybody else in Vietnam and the rather alarming Bui brothers, who rub chopped chili peppers into their eyes. They also can eat a kilo of chilies in 10 minutes. "Chilies are just like any other fruit," one of the brothers, Bui Ngoc Vinh, told the magazine, claiming that he and his brother are now immune to the pain. Few record holders have faced as many obstacles as Vietnam's red-shirted spinning man, Mr. Thiem. Running his grocery store and a small real-estate business diverted him from his spinning. Also his wife, Nguyen Cao Thi, doesn't like his spinning and made her feelings clear on the subject when she married Mr. Thiem in 1975, at the end of the Vietnam War. "If he's spinning he's not focusing on his family, which is what we needed to do at that time," says Mrs. Thi, who helps run the family business in the outskirts of Ho Chi Minh City, now a teeming metropolis of skyscrapers that is home to more than seven million people. She eventually relented in 1999 after Mr. Thiem convinced her of what he says are the health benefits of spinning round and round for hours and hours. He says he hasn't been ill in more than 30 years, but, then, he also doesn't smoke or drink and is a vegetarian. Says the 71year-old Mrs. Thi: "I still worry that people will think I'm married to a crazy person."

Young Chinese and the 'Chinese Dream'

By DIDI KIRSTEN TATLOW, The New York Tines 12 January 2011 No one knows exactly when Chinas economy might overtake that of the United States, but no one should discount the possibility that it might, after it sailed past Japan last year to become the worlds second-largest. So as President Hu Jintao prepares to head to the United States next week for a state visit that many hope will improve badly strained ties, Americans from President Barack Obama to ordinary citizens might wonder what drives Chinese people especially those born after 1980 who will be moving into positions of influence and wealth around the time the shift may take place. Theres still a way to go. Chinas economy is roughly a third the size of the United States $15 trillion. But based on high growth rates in China and low growth in the United States, The Economist magazine estimates the shift may come as early as 2019. Goldman Sachs guesses 2027. Ge Yang is an editor at Umiwi.com, a Beijing-based Web site for and about Chinas post-80s generation, those born in the decade after Chinas economic and social liberalization began. First of all, she says, the majority of post-80s especially those in big cities and with decent jobs dont envy the United States its material wealth. We have all the material things here that America has, like iPhones, which are really, really loved here, said Ms. Ge, a petite, eager-faced 26-year-old. We can get the best of all their goods, so thats not an issue. But we cant do what they do culturally: produce things like Tom and Jerry cartoons, Transformers, Avatar, Inception, iPhones, Barbies. America has things we really, really like, on a cultural level. The post-80s are Chinas first only-child generation, and they happily admit they are prone to selfishness. Yet, generally, they are also searching

their souls, conscious of their historical mission in pointing their country toward a better future and away from the ideology-driven violence and poverty of the past. After the tradition-smashing Communist politics of the first three decades of the Peoples Republic, and three further decades of breakneck economic growth that has destroyed some of the countrys environment and cultural heritage, Chinas young adults are searching for values and moral meaning, said Ms. Ge, who studied Chinese literature at Beijing Normal University. We are not ideological. We are patriotic, we are nationalistic. But then, who doesnt love their country? she asked rhetorically. Were not poor anymore, we enjoy life. We want a life with quality, with meaning, and not just a working life like our parents had. Ms. Ges work at the Web site brings her into daily contact with a broad range of opinion among the post-80s. She predicts the next three decades will see people here pursuing the Chinese Dream. This is a big topic here right now, she said. Its inspired by the American Dream, but different. Americans say you can build anything out of nothing. We believe that you can love your family and your country and return to your cultural roots, such as Confucius. So much was lost in the last 60 years. We want to rejuvenate our values and find our soft power as a nation, she said. Dong Mushi, 29, is a project manager at a state-owned electricity company in Beijing. Hes never been to the United States but says he is far more positive about it than his parents, who, he says, see things through a political prism. Typically for his generation, his own view is shaped by quality of life issues, what he calls true happiness. My parents say the U.S. is trying to control the world with democratic ideology, but I dont think so. I dont like to judge any nation based only on politics. I prefer to see peoples real feelings about living in a country, he said in an e-mail. To me, the U.S. is a country with the most advanced modern culture, a generous place where everyone, no matter where youre from, can find a comfortable life, and I like that, he said. Maybe its because Ive never been there, but I love it. Yang Li, 30, a law graduate from the southwestern city of Chongqing, left China in 2003 and now works in an administrative job at a Swedish university. Both she and Mr. Dong believe the United States is trying to slow or even stop Chinas rise a common belief among Chinese but say thats understandable. Theyre using their ideology to lead the Western world, Ms. Yang said in an e-mail. Thats normal in the economy and in global politics, and China would do the same. Said Mr. Dong: Any nation, if your competitor is growing so fast, of course you want to keep it down because you dont know what it will do to you if you let it grow. I can totally understand this and dont think theyre doing anything wrong. Ms. Yang, Mr. Dong and Ms. Ge all agree that just because China may overtake the United States in gross domestic product doesnt mean itll feel like a rich place. Chinas population is so big that they expect that on a per capita basis it will remain a developing country for a very long time, though with pockets of real wealth. Look at last year when China overtook Japan, it didnt make us feel we were better than Japan. Our average income is still far below theirs, said Ms. Ge. Yet expectations are rising along with incomes, posing a major challenge to the government, and looking ahead, the post-80s want more of a say in politics, she said. People want more competitive politics, to know something about the people who lead the country, to know that they are really excellent in quality like President Obama and not just bureaucrats whom we dont know. Bad things happen in America too, but at least there is a system to supervise the people in power. Here, there is no one who can do this, and if we cant monitor what the government is doing, there are so many challenges, like corruption, it will end badly.

LEARNING ENGLISH THROUGH NEWS

WEEK 04 2011 (17 23 Jan 2011)
esllearning@yahoo.com

THE WORLD THIS WEEK

As protests persisted across TUNISIA, its president for the past 23 years, Zine el-Abidine Ben Ali, fled to Saudi Arabia, leaving his prime minister to try to cobble together a unity government including several former members of the opposition. It was unclear whether this would help restore calm. Several nominees refused to join the new government unless Mr Ben Ali's party was completely swept from power. Officials said 78 people had been killed in street violence in the past few weeks; the opposition said the true figure was several times higher.

A wave of SELF-IMMOLATIONS, to copy the action of a young man who sparked Tunisia's upheaval in December, took place in some Arab countries, including Algeria and Egypt.

In the most lethal attack against the authorities in IRAQ since November, a suicide-bomber killed at least 60 people outside a police-recruitment centre in Tikrit, Saddam Hussein's home town, north of Baghdad. The next day another suicide-bomber used an ambulance to kill at least ten people in Baquba, a city north-east of the capital.

As the polls closed in SOUTH SUDAN'S referendum on whether to secede from the north, preliminary results suggested that the yes vote would exceed 90%.

Italian prosecutors said they were investigating charges that SILVIO BERLUSCONI, Italy's prime minister, had paid for sex with an underage Moroccan-born dancer, among others, and had abused his office by securing her release from police custody. Extracts from the dancer's wiretapped conversations were published in the press, including a comment from one woman that the prime minister had "even become ugly". Mr Berlusconi denied the allegations.

Brian Cowen, IRELAND'S beleaguered prime minister, survived a confidence vote in his leadership of Fianna Fail, the main governing party. He will now lead his party into a general election, probably in March, at which it is expected to take a pounding.

At a meeting of EURO-ZONE ministers in Brussels, Germany's finance minister, Wolfgang Schauble, squashed hopes of an immediate relaxation in the rules governing the use of the EURO440 billion ($593 billion) rescue fund created last May. The European Commission had earlier called for an increase in its lending capacity.

It emerged that British and Russian police were investigating the activities of four Russian government officials assigned to the EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT. The bank said it had lifted immunity from prosecution for the four.

Doctors took congresswoman Gabrielle Giffords off the critical list, though she remains in a serious condition. After the Tucson shootings, and a well-received speech by Barack Obama calling for more CIVILITY in American politics, congressmen made an effort to tone down the rhetoric; some even urged their colleagues to abandon the usual party seating divisions at next week's state-of-the-union address.

Hu Jintao visited America. After a fractious few months that have brought differences to the fore over arms build-ups, currency policy and other issues, the Chinese president and his American counterpart were at pains to stress the benefits of the relationship between the two countries. CHINA agreed to $45 billion in trade and investment contracts during the trip. Mr Hu said that China and America should "respect each other's choice of development path".

The Association of South-East Asian Nations called on Western countries to lift sanctions on MYANMAR, now that Aung San Suu Kyi was free and a parliament about to convene.

Barack Obama's administration relaxed restrictions on travel to CUBA by academic, religious and cultural groups and indicated that it would permit more charter flights to the island. Americans will now be allowed to send money to Cubans to support "private economic activity". STEVE JOBS worried investors in Apple by taking immediate medical leave, the chief executive's second such absence in less than two years. Mr Jobs was diagnosed with cancer in 2003, though he did not reveal his condition for nine months, and had a liver transplant in 2009, which was reported three months after the operation. No reason was given for his taking leave this time.

Meanwhile, APPLE posted another strong set of quarterly earnings. In the three months before Christmas it sold 16.2m iPhones, almost twice as many as a year earlier, and 7.3m iPads, around 20% more than had been expected. Sales of iPods were 7% lower, at 19.5m.

Higher gas bills, more expensive air fares and the rising cost of food, notably vegetables and cereals, were factors behind an unexpected jump in Britain's INFLATION RATE for December, to 3.7%, another consideration for the Bank of England as it ponders whether to raise interest rates this year.

In CHINA the rate of inflation in December stood at 4.6%, lower than November's 28-month high of 5.1% and easing some of the pressure on the government over politically sensitive price rises. China's GDP grew by 9.8% in the fourth quarter from a year earlier, a more rapid pace than was

expected. The economy expanded by 10.3% for the whole of 2010.

BRAZIL raised its benchmark interest rate, already the highest among big economies, by 50 basis points, to 11.25%, to combat surging inflation.

The International Energy Agency raised its forecast of the world's demand for OIL this year and warned that economic recovery could be hampered by oil prices, which are at their highest level in more than two years.

Leaders re-elected amid economic woes

The Wall Street Journal 20 January 2011
Vietnam's Communist Party reappointed Prime Minister Nguyen Tan Dung to its elite Politburo at a secretive congress Wednesday, in a move that paves the way for the nation's top leader to serve a second term, despite economists' concerns about his willingness to apply tough measures to tackle double-digit inflation rates. Political analysts say the decision of the party's 175-person Central Committee to reappoint Mr. Dungwhose second term as premier requires confirmation by the country's National Assembly in Mayindicates Vietnam will likely continue its pro-growth policies. In recent years, that has meant plowing billions of dollars into subsidizing lending programs and other state-driven spending plans to maintain rapid expansion despite bouts of inflation. Across much of Asia, inflation has become a hot-button issue. It also has spurred fears about whether government efforts to prevent sudden price rises will stunt regional growth, which has helped drive the global recovery. China last week introduced new reserve requirements to slow credit growth and imposed selective price controls in some areas, while India began importing onions from Pakistan and banned the export of many kinds of rice, pulses and cooking oils to contain inflation. In Indonesia, authorities have called on residents to grow their own chili peppers in an effort to help limit price rises of the nation's key ingredient. But Vietnam presents a troubling vision of what can happen in other fast-growing parts of the world if policy makers fail to put on the brakes in time. Vietnam's inflation rates steadily increased in 2010, hitting 11.75% on year in December, and worsening a crisis of confidence in the dong currency, which already had been hit by a series of devaluations. Vietnamese individuals have responded by buying up dollars and hoarding gold, or speculating on land in the hope of retaining their savings. Private businesses, meanwhile, have struggled to compete with powerful state-owned enterprises for bank loans as policy makers belatedly try to slow credit growth, which expanded more than 27% last year. "With inflation hitting double digits and the stock- and foreign-exchange markets so unstable, people are speculating on land to try and get higher returns," says Vu Quyet Thang, who runs a travel company, Hoang Viet Travel, in Hanoi. "It's difficult getting credit, too, but with some new faces in government hopefully the problems can be resolved." Not much seems to be changing, though. The Communist Party's conclave is a grand event held once every five years, and is celebrated with giant red-and-gold billboards and murals up and down the length of Vietnam. The outcome is largely prearranged, people familiar with its workings say. This time the party appointed its chief Marxist theorist and head of the national legislature, Nguyen Phu Trong, as the party's new bossa move analysts said would strengthen Mr. Dung's hand. Another high-ranking candidate for party boss, Truong Tan Sang, who is widely perceived as one of

Mr. Dung's main rivals, was expected to move to the largely ceremonial post of president. Both Mr. Dung's and Mr. Sang's positions will likely be confirmed by the rubber-stamp National Assembly in May. The challenge for Vietnam's leadership is to adjust its policy to better contain the debilitating effects of inflation, as rising energy and food prices in global markets threaten to put further upward pressure on prices at home. "A lot depends on how much Mr. Dung's ears are burning from what he has been hearing in the Central Committee," says Carlyle Thayer, a Vietnam scholar and professor at the Australian Defence Force Academy at the University of New South Wales. Mr. Dung, 61 years old, in recent months has faced stinging criticism and a leadership challenge over his handling of Vietnam's boom-bust economy. Since taking power in 2006, the former central bank governor and security chief has encouraged state-owned enterprises to expand into large conglomerates to keep large parts of the economy in Vietnamese hands while the country opened up more to foreign investment. But state-directed lending bred inefficiency and reckless expansion at many stateowned companies, and one, Vietnam Shipbuilding Industry Group, came to the brink of collapse this summer after amassing $4.4 billion in debt. Mr. Dung went before a televised session of Vietnam's National Assembly to acknowledge his shortcomings in the debacle shortly before the concern, better known as Vinashin, defaulted on a $60 million repayment on a $600 million syndicated loan, potentially making it more difficult for Vietnam and its companies to raise money offshore. Vinashin officials couldn't be reached to comment. Vinashin's debt problems triggered worries about the viability of Vietnam's other state enterprises, which account for about a third of the economy, and for the stability of the banks lending to them. Moody's Investors Service last month downgraded Vietnam's government debt to B1 from Ba3 after similar downgrades from Standard & Poor's and Fitch Ratings. Now, with inflation again rearing its head, economists say Mr. Dung faces a decision over whether to give up the party's ambitious growth targets and tighten monetary policy or risk a deeper crisis. Many economists say Mr. Dung should tackle price increases first, which will help shore up confidence in the faltering dong, then the private sector will help drive growth. He also may face increasing pressure from the party's policy-setting central committee to do more to contain inflation in coming months and deal with rising scrutiny from the country's legislature. So far, it seems that despite the party's concern about inflation, the committee is sticking to its target growth of 7% to 7.5% for 2011 to 2015, up from 2010's 6.78% growth ratea rapid pace economists say will make it difficult for government to get inflation back into single digits, let alone hit its own target of 7% this year. "It's difficult for the party to let go of its mind-set," says Nguyen Quang A, who headed Vietnam's only independent think tank, until its founders closed it in protest after it was prohibited from examining the Communist Party regime.

Vietnamese journalist finds his voice

By Ben Bland, Financial Times 19 January 2011 Hes been fined, threatened with the sack and his website has come under sustained attack from sophisticated hackers over recent months. But Nguyen Anh Tuan, founder and editor-inchief of VietNamNet, one of the countrys most popular online newspapers, is not easily deterred. Before the crucial five-yearly congress of Vietnams ruling Communist party, which ended on Wednesday, VietNamNet was one of the few publications that dared to promote debate about government policy and the partys leadership selection process. We have discussed many sensitive issues never seen before in Vietnam, such as how to organise the congress, choose the best leaders and reform the economy, says Mr Tuan from

VietNamNets office in central Hanoi. Like all Vietnamese media newspapers, magazines and television VietNamNet, which attracts about 4m readers a week, is owned by the state. Yet, driven by Mr Tuan, a former student and fellow at Harvard as well as a Communist party member, it has become one of a handful of publications testing the boundaries of freedom of speech in the country. Vietnam, which regularly jails probing journalists, enthusiastic bloggers and democracy advocates, tends to come toward the bottom of global press freedom indices. Subjects such as democracy, human rights and high-level corruption remain taboo and Communist party censors hold a weekly meeting with senior editors where they criticise transgressions and guide coverage. Yet in a boisterous market with hundreds of rival state-owned publications, individual editors and reporters still have some leeway to push the limits. Although VietNamNet is owned by the information and communication ministry, it generates revenue from advertising, online games and the provision of market research data. This financial independence has given Mr Tuan greater room to cover sensitive issues such as economic reform, internal Communist party politics and the increasing tensions with China over the disputed Paracel and Spratly Islands in the South China Sea. Despite growing public anger over Chinas regular seizure of Vietnamese fishermen around these islands, Vietnams leaders, who are close to their fellow Communists in China, tried to play down the issue for a long time. VietNamNet landed in hot water in December 2007 after publishing a series of punchy articles about the islands, which are thought to lie above large reserves of oil and gas. Some leaders [were] very angry with VietNamNet and asked for the editor to be changed, says Mr Tuan. We were fined 30m Vietnam dong ($1,500). At the time, he was in the US, writing a paper for Harvards democracy-promoting Kennedy School of Government on the development of electronic media in Vietnam. Despite his advocacy of reform, Mr Tuan says he has many friends in government and some of them stood behind him, allowing him to return to his job. After that we continued to publish articles on the South China Sea and step-by-step, our leaders recognised we were a good voice to support them to negotiate with China, he explains. From time to time, government officials ask VietNamNet to calm down or remove articles, as happened during a visit by Wen Jiabao, the Chinese premier, to Hanoi last October when they pulled a piece on the South China seas. But Mr Tuan is pleased that the government has changed tack over the past year, becoming more vocal about perceived Chinese aggression in the South China Sea and raising the issue at high-level international meetings, in defiance of Chinese demands that the dispute be solved on an exclusively bilateral basis. In addition to irritating the pro-China lobby, VietNamNet has made other enemies. In recent months it has been attacked by hackers who have taken down the website and stolen information, says Mr Tuan. Last year Google, the search company, and McAfee, the antivirus software provider, claimed that unidentified groups linked to the government were using malicious software to bring down websites and spy on thousands of Vietnamese internet users claims dismissed by the government as groundless. Mr Tuan says that the investigation into these latest attacks is ongoing but that he doesnt believe the government is behind them. The 48-year-old has clearly been influenced by ideas picked up in the cafs and bookshops of liberal Massachusetts he proudly wears a Harvard signet ring and hopes that democracy, transparency and more freedom of speech will come to Vietnam one day. Vietnams leadership is decided in secretive party meetings before and during the congress and Mr Tuan has called for more openness in the selection process in order to choose better leaders. He wants to see leaders who have integrity, vision and practical experience outside of the inward-looking world of Vietnamese politics. If we choose leaders like that, Vietnam will be lucky. And the Communist party will continue to lead our country more strongly.

In Vietnam, Politics Lag While Growth Jumps

By SETH MYDANS, The New York Times, 17 January 2011 The main message of Vietnams Communist Party congress is the absence of burning issues it will deal with under a leadership secure in its dominance but also constrained by an inflexible system and the power of vested interests. The leadership changes to be announced at the end of the eight-day session on Wednesday involve members of the inner circle whose jockeying for power has had more to do with politics than ideology. A political report is expected to include wording that could enhance the role of private enterprise in an economy hobbled by inefficient state-owned enterprises. The outgoing party chairman, Nong Duc Manh, listed some of the countrys continuing ills in his keynote address at the opening of the congress, which takes place every five years. Quality, efficiency and competitiveness remain low, he said. Bureaucracy, corruption, wastefulness, social vices and moral and lifestyle degradation have not been prevented. The congress comes amid economic problems that have sharpened a debate over the pace of changes in a country with high growth but with underlying problems of undeveloped infrastructure, a maze of bureaucracy, corruption and a poorly qualified work force. The government is facing great challenges with the trade deficit, the budget deficit, the current account deficit and high inflation, and the problems are not easy to solve, said Le Dang Doanh, a leading economist in Hanoi. He also talked about the hardships of farmers who are suffering from the countrys rapid growth as developers buy up their land for industry, housing and golf courses. We have a totally opposite situation from the past, when the Communist Party of Vietnam was taking land from the landlord and distributing it to the farmer, he said. Now the Communist Party and the government are taking the land from the farmer and handing it over to the private sector. The government has kept tight control of the press and has come down hard on dissidents, particularly those who have had contact with prodemocracy groups abroad. There has been a wave of arrests in recent months, Internet controls have tightened, and users have reported difficulty in logging in to Facebook. It was not clear whether the crackdown, which appeared to be aimed at controlling debate in advance of the congress, would ease in the future. Political analysts find themselves this year in the unusual position of tamping down expectations that the congress will produce significant results, warning against what one called over-interpreting the outcome. The key significance of the congress is an occasion when access to top jobs and patronage is circulated, said one analyst, Martin Gainsborough, a Southeast Asia specialist at the University of Bristol and author of the 2010 book Vietnam: Rethinking the State. Policy documents are policy documents, and where Vietnam goes is dependent on a whole range of more political factors, he said. The product of a cumbersome system of compromise and consensus, the political report can only be taken as a guide to policies whose direction will be shaped in the future by competing vested interests and political agendas, he and other analysts said. Their ability to make macroeconomic and microeconomic levers actually work is quite weak for a whole range of reasons, Dr. Gainsborough said. The problem is if the party has to act whether it will act, or when they tell people to jump whether they will jump. He added: Theres always a sense that people are careful not to upset someone more powerful than them. Another analyst, Hung M. Nguyen, director of the Indochina Institute at George Mason University in Fairfax, Virginia, echoed this view, saying the report would represent only policy ideas. The question is implementation, he said. There will be resistance from

entrenched interests. But they need the Communist Party resolution as an umbrella and justification to try to make changes. Change will be incremental, the analysts said, as a generation of leaders with their roots in the war gives way to men and women who may have been educated abroad and are more comfortable in the world of the open marketplace. A more articulate, more educated urban middle class and a more outspoken and assertive rural population will change the nature of Vietnamese society, if not its political structure. Over the past two decades, Vietnam has been one of Asias fastest-growing economies, averaging about 7 percent growth a year, and per capita income has risen to $1,200 in this nation of 86 million people. While the leadership has made it clear that it will not tolerate talk of multiparty democracy, it is democratizing its one-party structure with small changes toward a more participatory and pluralist system. These changes may include an increasing number of candidates in local elections or direct election of some party officials who have previously been appointed. In addition, the congress was expected to invite businesspeople to join the Communist Party, modernizing it to include peasants, workers and businessmen. With the party and government now firmly committed to a free-market system, debate includes different interpretations of the socialist part of the countrys guiding economic principle, market forces with a socialist orientation, Mr. Hung said. How far do you go in reforming the economy? he said, describing the debate. Are you really going to go deeper into the market system? And if you do, will you be disoriented from socialism? So there is some tension.

Vietnam Reserves Fell to $13.6 Billion, Citigroup Says

Bloomberg News 21 January 2010 Vietnams foreign-exchange reserves, the level of which has sparked concerns about the stability of the countrys economy, fell to about $13.6 billion by the end of last year, down from $14.1 billion in September and $23.9 billion in 2008, according to Citigroup Inc. In December, the International Monetary Fund said Vietnams reserves were low at 1.8 months of prospective imports at the end of September, without giving an overall figure. Moodys Investors Service cited Vietnams reduced level of foreign- exchange reserves as one of the main reasons it downgraded the countrys debt rating in December. We expect foreign-exchange reserves will stagnate for longer, Hong Kong-based Johanna Chua and Ben Wei of Citigroup wrote in a research note dated today. Citigroup anticipates only a modest recovery in 2011, they said. Market expectations of a weaker dong and faster inflation have driven capital flight, Moodys said last month, predicting that reserves will decline further under existing policies. Vietnams reserves have been hurt by a delayed policy response to external imbalances such as the trade deficit, a lack of liquidity in the countrys currency market and disappointing foreign investment inflows, Citigroup said. Foreign-exchange reserves may increase to $13.8 billion this year and $17.1 billion in 2012, Citigroup said. Vietnamese interest rates will have to rise further to help boost foreign-exchange reserves, Citigroup said. The State Bank of Vietnam raised its benchmark rate to 9 percent from 8 percent in November, and Citigroup predicted today an increase to 11 percent in the first half. Arresting the erosion of foreign-exchange reserves will be a gradual process, Chua and Wei wrote. Foreign-exchange pressures persist. The dongs official exchange rate will probably be devalued by another 3 percent in the first quarter, they predicted. The reference rate for the currency, around which the dong is permitted to fluctuate by 3 percent on either side, was cut by 2 percent in August. The dongs official rate as of 12:04 p.m. today in Hanoi was 19,498 per dollar, while on the black market it traded today as weak as 21,020,

according to a telephone-information service run by the state-owned Vietnam Posts & Telecommunications. With a shortage of dollars, arbitraging on gold prices and macro instability, the Vietnamese dong has been under pressure, Chua and Wei wrote. Dong confidence is still fragile.

Vietnam Must Erase Balance-of-Payments Deficit, Moodys Says

Bloomberg 19 January 2011 Vietnam needs to eliminate its balance-of-payments deficit and stabilize its foreign reserves at an adequate level before an upgrade of the nations credit rating outlook, Moodys Investors Service said. Vietnams lack of transparency and communication by the government of its financial and economic policies is a risk, Thomas Byrne, senior vice president at Moodys, said in Singaporetoday. The ratings company last month cut the long- term foreign-currency rating to B1 from Ba3, with a negative outlook. A primary concern is the risk of a balance-of-payments crisis, which we think has become elevated because of the balance-of-payments deficits in the past three years, and the rundown of reserves, Byrne said. Containing in inflation would help, he said. Moodys view on Vietnam contrasts with its outlook for most of Asia, where it has upgraded ratings for countries such as Indonesia and China. Asia Pacific sovereign ratings are mainly on a stable to upward trajectory and are not expected to suffer from contagion from Europes debt crisis, the company said today. Governments in the region have less reliance on external financing and generally more rapid fiscal consolidation has led to debt stabilization, Byrne said. Looking at Asia as a whole, we do not see any contagion from the euro zone periphery due to lower levels of gross government debt and more favorable growth prospects.

Moodys cut Vietnams sovereign credit rating in December, citing the risk of a balance-ofpayments crisis and a drop in foreign reserves as inflation accelerates and the currency weakens. A balance-of-payments crisis basically means that somewhere in the economy you cant pay what you need to pay in hard currency and you need to find it somewhere, said Matt Hildebrandt, an economist at JPMorgan Chase & Co. in Singapore. Usually that somewhere is from the International Monetary Fund, or its a huge devaluation in the currency.

Vietnam's most expensive noodles

By Alastair Leithead, BBC News 21 January 2011 As the communist country of Vietnam increasingly embraces the ways of capitalism, the gap between rich and poor is rapidly expanding. I have had some odd days, but Sunday in Hanoi was certainly a very odd day. It started off with me gawping at a preserved and somewhat waxy-looking man, then there was a taste of Vietnam's most expensive soup - and a sight of its most costly car. I dropped in on the inaugural meeting of the Harley Davidson owners' club before getting a touch of realism, supping local beer cross-legged on the floor of a locals' restaurant. Uncle Ho Chi Minh, Vietnam's founding father, supposedly asked to be cremated rather than to lie - as he does - in the middle of a darkened mausoleum, surrounded by soldiers who impatiently usher visitors to complete one lap briskly, in silence, hands out of pockets, hats off. Hundreds of Vietnamese people - and tourists - queue all the time to see him, just as he was when he died more than 40 years ago. The Communist Party here does not like change but, with skyscrapers going up around Uncle Ho's memorial, change is coming to him. The next stop was for "pho" - the breakfast staple, a noodle soup that fuels the nation and

steams from big pots in the cold Hanoi air, usually selling for $1 (0.60) a bowl. But we were not going to any old street-food joint, we were to sample the country's most expensive pho at $35 a bowl. Two Porsche 4x4s were parked outside the restaurant. I did not even know Porsche did 4x4s. The restaurant owner talked us through the quality of his Japanese beef, the cleanliness of his kitchen and how much the rich are willing to stump up to slurp down Vietnam's priciest soup. One diner admitted he had had the house special and, when I asked him his profession, he almost apologetically told me he worked for the government. We were eyed suspiciously by a party Central Committee member slipping out of the door and into his Mercedes, as our minder sampled the produce, admitting later it was not $35 better than her usual breakfast spot. The "party" also likes to be in control. This is not a communist country that we might imagine from the 1950s or 60s. Yes, the red flags are flying - on every street corner - but the hammer and sickle flutters across the road from the Chanel store, the old-style propaganda posters on guard near Louis Vuitton. Even the minders laugh and shrug when you ask how ideology and modern reality sit together. They seemed surprisingly straight with us - honest about the idiosyncrasies - I supposed at the very least I was expecting them to be formal and stern, maybe even evangelistic. The restaurant owner explained his interpretation: "The shell is communist but the guts are capitalist," he said. We had seen the shell - the collective of comrades at the Party Congress unanimously agreeing on the country's new leadership. "Any objections?" the speaker asked with a cursory glance. Of course not. Questioning the system is not tolerated. But then all the fighting and bickering, debating and arguing, happened behind closed doors. And we had seen the guts - a morning with one of the country's richest men did that - his multi-million-dollar development (soon to be the tallest building in central Vietnam), his seafront hotel and condo blocks at $2m a flat, his industrial parks and his aim to make even more money by replacing the shirt and shoe factories with high-tech electronics. "If the party goes a different way from the people of Vietnam, then surely they cannot survive," he bravely quipped. And there was plenty of confidence about the 26-year-old who showed me round the custom-built Rolls Royce Phantom which stared snobbishly out of the showroom, sneering down its bonnet at the hawkers who passed by wearing their old conical bamboo hats. He oozed bling. You can afford a gold mobile phone and diamond-encrusted watch when you own a dealership selling cars as expensive as these. And the Harley Davidson club? "You'd never see so many high-end bikes in one place anywhere else in the world," one of the gnarled expat members explained to me. And it is certainly an expensive habit. Bikers are supposed to be rebellious. In a way here I guess they are, but their engines just roared money at the poor of Hanoi. A day with the haves when there are so many millions of have-nots. After the excitement, I met a local journalist for a drink. She described the intimidation and late-night calls, the phone taps and tails. Those who challenge the party end up in jail. The shell is still strong. The principles preserved in Uncle Ho's vault still prevail. There is a knack to making money here, there is a system. But as cash pours in and the economy heats up, change is unstoppable. The party can try to ride it and guide it, but it would take a firm hand indeed to hold back the tide.

Petrolimex plans 2011 IPO, Vietnam Airlines looking too

Reuters 21 January 2011 Vietnam's top fuel distributor, Petrolimex, plans to go public this year, selling up to 7 percent of its shares, and flag carrier Vietnam Airlines wants to speed up its privatisation, too, company officials said on Friday. The comments may encourage investors watching for signs the country's new leadership will reinvigorate the stalled process of restructuring the state sector. "We submitted the equitisation plan to the government in late December and it now

awaits approval," Vuong Thai Dung, deputy general director of Hanoi-based Petrolimex, told Reuters. Vietnam has been selling off parts of its state-owned enterprises for the past two decades, calling the process "equitisation" rather than privatisation. In most cases the government keeps a dominant stake. In the past four years, however, the process has virtually ground to a halt as market conditions in Vietnam soured when the economy overheated and the global financial crisis hit. The government has pledged to step it up again this year. Petrolimex, or the Vietnam National Petroleum Corp, controls about 60 percent of the country's fuel distribution network. It is Vietnam's second-largest non-bank company by assets, worth more than 10 trillion dong ($513 million), Dung said. It plans to sell stakes to employees first and will select strategic partners after that, he said. Unlike in other countries, where IPOs and stock exchange listings happen at the same time, in Vietnam there can be a delay between the two steps of months or even years. The firm said in a statement on Thursday it made a pretax profit of 1.21 trillion dong ($62 million) last year. It did not give a comparison for 2009 or a target for 2011. National carrier Vietnam Airlines also wants to advance its plans to go public, said spokesman Le Hoang Dung. "Vietnam Airlines has proposed that the government speed up the pace of the privatisation process," he said, adding there was no timetable yet. Around 140 state-owned companies sold stakes to the public last year, down from 640 in 2006, state media have reported, citing Finance Ministry data. The delay was due to administrative procedures, said Nguyen Hoang Hai, general secretary of the Vietnam Association of Financial Investors. Hai's group has urged the government to accelerate the process. "Asset valuations, especially property, and inflexible targets for stake sales have hindered the process," Hai said, adding unfavourable conditions on the domestic and international markets also contributed to the delay.

Vietnam Airlines: big ambitions

Ben Bland Blog, 17 January 2011 State-owned Vietnam Airlines wants to turn Hanoi and Ho Chi Minh City into major gateways for the wider Indochina region, challenging the dominance of Bangkok and Singapore. In an interview with the Financial Times, Pham Ngoc Minh, the flag carriers chief executive, said he was looking to expand connections with Cambodia, Laos and Myanmar, as well as adding new routes and more flights to Europe. Minh said: We have our strength in ourdomestic market but, at the same time, we hope that as we develop Hanoi and Ho Chi Minh City, they become major gateways for the sub region. Vietnam Airlines already has a 45 per cent market share at Cambodias Siem Reap airport, which is the dropping-off point for the ancient temples around Angkor Wat. Minh is aiming to ensure that Vietnam Airlines becomes the network carrier of choice for the growing number of tourists visiting Cambodia and Laos. The launch of more direct flights to China, Japan, Europe and the United States is a necessary first step. Direct long-haul connections to Vietnam are still patchy, with no flights to London yet, for example. Minh said it was a priority to launch flights to London this year. Vietnam Airlines is looking at both Heathrow and Gatwick airports, but the big question mark over the more centrally located Heathrow airport is the availability of slots. We cant start up with two flights a week if you start with this frequency in London, you cant survive. I think we will start with around four flights a week, at least, as its convenient for both business and leisure travellers. Its very difficult to get slots in Heathrow, as we expected. But we will try our best to have a London flight hopefully by the end of this year, he said.

Business links between Vietnam and the UK are growing, albeit from a comparatively low base. Apart from China, Vietnam regularly comes top of surveys of the most attractive investment destinations for British companies, such as this one by the UKs trade promotion body. A growing number of wealthy and well-connected Vietnamese are also sending their children to be educated in the UK, including many scions of the ruling Communist elite. Yet, in terms of trade relations, the UK is still behind the likes of Japan, which has been cultivating closer economic ties with Vietnam as part of a government drive to boost exports. One example of this approach is the Japanese government-backed Mitsubishi Regional Jet, which Minh said could potentially fill a gap in the market for 100-seat, high frequency, shorthaul planes. Vietnams president, Nguyen Minh Triet, has already stated that Vietnam is considering buying the new jet as part of a wider agreement that would see Mitsubishi shift some of its manufacturing and technology to Vietnam. No further details about a deal have been reported. Minh confirmed that Vietnam Airlines was looking at the Mitsubishi Regional jet but he stressed that there are a lot of other manufacturers in this area, which include Canadas Bombardier and Brazils Embraer. Although Vietnam Airlines enjoys a monopoly position, Minh is keen for the government to free up the market and relax the existing ceiling on domestic fares in order to promote the wider development of the air travel sector. Gradually a roadmap to free up control of fares in domestic market would attract more investors. I would hope the day comes when the Vietnamese community will see their chance to invest in the airline business, Minh said But monopoly state control over Vietnams airports and airport services such as refueling will make life difficult for private operators, especially in an industry where profit margins are so tight. While visiting Vietnam, Giovanni Bisignani, director general of the International Air Transport Association, the main industry body, warned on Friday that Vietnam cannot take its bright future for granted. He said: Vietnamese aviation must be built and supported by sound policies that take into account that this is a dynamic industry where change is the only constant.

LEARNING ENGLISH THROUGH NEWS

WEEK 05 2011 (24 30 Jan. 2011)
esllearning@yahoo.com

THE WORLD THIS WEEK

Egyptians faced lawlessness on their streets on Sunday with security forces and ordinary people trying to stop looters after days of popular protest demanding an end to President Hosni Mubarak's

authoritarian 30-year rule. Throughout the night, Cairo residents armed with clubs, chains and knives formed vigilante groups to guard neighborhoods from marauders after the unpopular police force withdrew following clashes with protesters that left more than 100 dead. The protests bore many hallmarks of the unrest that toppled the leader of Tunisia two weeks ago, although the arrival of army troops to replace the police showed that Mubarak still has the support of the military, the country's most powerful force. Army tanks and tracked vehicles stood at the capital's street corners, guarding banks as well as government offices and the Interior Ministry headquarters. State security fought with protesters trying to attack the building on Saturday night. A suicide bombing at MOSCOW'S Domodedovo airport killed 35 people and injured more than 100. There were no claims of responsibility but suspicion inevitably fell on Islamists from Russia's restive north Caucasus, who have been responsible for previous terrorist attacks. President Dmitry Medvedev sacked several police and security officials for failing to prevent the attack.

A week of political drama in IRELAND saw Brian Cowen, the prime minister, step down as leader of his party; the Greens withdraw from the coalition government; and the accelerated passage of financial legislation. An election is now likely to be held on February 25th, two weeks earlier than planned.

In BRITAIN Alan Johnson resigned as Labour's shadow chancellor for personal reasons. He was replaced by Ed Balls, a more pugnacious political performer. Andy Coulson, chief spin doctor to the prime minister, David Cameron, also stepped down as a long-running scandal over phone-hacking allegations at the NEWS OF THE WORLD, a tabloid newspaper once edited by Mr Coulson, refused to die.

Three people were killed in anti-government protests outside the prime minister's office in ALBANIA. Prosecutors issued arrest warrants for six members of the republican guard.

PORTUGAL'S president, Anibal Cavaco Silva, won re-election with over half of the vote. Some speculated that he could use his power to dissolve the Socialist government should Portugal seek an international bail-out.

There were signs of an end to HAITI'S political impasse when a member of the ruling party said its candidate, Jude Celestin, would withdraw from a run-off election for the presidency, leaving it to be contested by Mirlande Manigat, a constitutional lawyer, and Michel Martelly, a popular musician. This followed strong pressure from the United States for Mr Celestin to withdraw.

A French ship began laying an undersea fibre-optic cable from Venezuela to CUBA. It will bring fast broadband to Cuba for the first time.

In CANADA Ed Stelmach, the Conservative premier of Alberta, announced he would resign despite enjoying a huge majority in the legislature. He was insufficiently right-wing for many in Canada's most conservative province.

Barack Obama used his STATE-OF-THE-UNION speech in Congress to call for more investment in

research and infrastructure in order that America can compete with a surging China and India, saying their rise was another "Sputnik moment" requiring clever innovation. He also proposed a five-year freeze in discretionary spending, and more defence cuts.

The Congressional Budget Office forecast that this year's BUDGET DEFICIT would swell to a record $1.5 trillion, $400 billion of which is down to the tax-cut and unemployment insurance package passed by Congress in December.

Rahm Emanuel's run to be mayor of CHICAGO was stuck in the sands when a court ruled he did not meet residency requirements and should be struck off the ballot. Illinois's Supreme Court ordered that his name be printed on voting sheets while it considered the matter.

There were also large demonstrations in Sanaa, the YEMENI capital, demanding that Ali Abdullah Saleh step down as president. He too has been in power for 30 years.

In TUNISIA, a fragile transitional unity government struggled to restore order, promising elections in six months. Some people suggested that General Rachid Ammar, the army commander who is credited with persuading Mr Ben Ali to flee, should replace the current prime minister, Mohammed Ghannouchi, a technocrat who loyally served under the previous regime.

Hamid Karzai, AFGHANISTAN'S president, opened a new session of parliament, four months after elections that he claimed were fraudulent. Last week Mr Karzai said that the new parliament would be postponed pending further inquiry into the voting; he complained of being pushed into the inaugural session by "foreign hands".

AUSTRALIA'S government announced plans to finance the repair of an estimated $5 billion in damage wrought by recent flooding.

CHINA introduced unexpectedly tough measures to cool the property market, including bigger downpayments and a requirement that local governments set price targets. Shanghai announced a limited property tax.

Protesters in THAILAND took turns swamping the streets of Bangkok, again. First came around 30,000 anti-government redshirts to demand the release of their movement's leaders, who were arrested amid last year's paralysing demonstrations. A smaller number of yellowshirts, who have supported the government of Abhisit Vejjajiva in the past, raised their own voices in protest two days later on the ground that it has not shown sufficient spine in a border dispute with Cambodia.

America's FINANCIAL CRISIS INQUIRY COMMISSION produced its final report into the events that led to the banking system's meltdown in 2008. It concluded that the crisis was "avoidable" and spread the blame far and wide among policymakers and bankers. The commission's Republican members delivered a dissenting report, which gave greater weight to global factors.

THE DOW JONES INDUSTRIAL AVERAGE stockmarket index pushed above 12,000 on January 26th for the first time since June 2008.

In an effort to boost confidence in its banking sector, SPAIN ordered all listed banks in the country to increase their minimum core-capital ratio to 8% of risk-weighted assets by the autumn. Some unlisted firms may need to raise their buffers even further. The government also adjusted regulations to allow it partially to nationalise Spanish CAJAS, or savings banks, that are undercapitalised by taking equity stakes in them for up to five years.

European finance chiefs breathed a sigh of relief as the first bond issued by the euro zone's European Financial Stability Facility was snapped up by eager investors. The EURO5 billion ($6.8 billion) maturity attracted total bids in excess of EURO40 billion; traders reported that they could not remember such strong demand for such a big bond issue.

JAPAN'S long-term sovereign credit-rating was downgraded a notch by Standard & Poor's to AA-, the first cut since 2002, because of concerns about the country's high debt burden.

BRITAIN'S GDP decreased by 0.5% in the fourth quarter of 2010 compared with the previous three months. The initial estimate surprised most economists, who had forecast at least some growth, and reignited fears of a "double dip" recession. The heavy snow that blanketed Britain in December was cited as the main reason for the slowdown.

The IMF updated its estimate for GLOBAL GROWTH this year; it now thinks the world economy will expand by a slightly higher 4.4%. The fund expects the price of oil to average $90 a barrel in 2011 and other commodity prices to rise by 11%.

Barack Obama asked JEFFREY IMMELT to head a new presidential panel on jobs and competitiveness. The boss of GE previously worked on the advisory board on economic recovery chaired by Paul Volcker, which winds down next month. Mr Immelt called on businesses to join a national effort to spur growth, but his appointment was derided by a big group of tea-party backers, which called Mr Immelt "the king of crony capitalism".

There was speculation that Eric Schmidt might like a job in the Obama administration after he announced that he was stepping down as GOOGLE'S chief executive in April and handing over the reins to Larry Page, Google's co-founder. Asked about his future intentions, Mr Schmidt, who will become executive chairman in the spring, said he was committed to the company "as long as it's exciting".

Figures for 2010 showed that GENERAL MOTORS sold more vehicles in China than in the United States for the first time.

Vietnam Inflation Surges Ahead of Lunar New Year

The Wal Street Journal 24 January 2011 Vietnam's inflation posted another double-digit rise ahead of the Lunar New Year, adding pressure on authorities to raise interest rates to slow the nation's growth and curb pressure on its currency. The nation has struggled to deal with several economic stresses, fueling concerns about the government's ability to manage fiscal policy as the trade deficit balloons and the Vietnamese dong remains persistently weak, bucking a trend across the region. The consumer-price index rose 12.17% in January from the same month a year earlier, outpacing the 11.75% increase in December, and the fastest pace since February 2009, the General Statistics Office said in a statement Monday. Compared with a month earlier, the index rose 1.74%. Vietnam's inflation figures are based on data for the first 24 days of each month. The rise in the CPI in January mainly stemmed from higher prices for education services, food, housing and building materials, the General Statistics Office said in the statement. Demand for consumer goods and materials traditionally rise toward the year-end and ahead of the Lunar New Year, which falls in early February this year. "With this inflation pace, it will be impossible for the country to keep its inflation for this year at 7%. This high inflation growth will also make it hard for banks to lower their lending rates, and hence companies will still face difficulties to expand production," said Le Tham Duong, an economist with the Ho Chi Minh City Banking University. The government is aiming to keep inflation at 7% this year, compared with 11.75% last year. But that target seems increasingly challenging, as the government appears unwilling to switch off its pro-growth policy and instead pursue more moderate expansion in order to bring about economic stability. The government has forecast economic growth of 7% to 7.5% this year, after it clocked gross domestic product expansion of 6.78% in 2010. During the five-yearly Communist Party congress earlier this month, members agreed to target annual economic growth of 7% to 7.5% between 2011 and 2015. The trade deficit last year hit $13.24 billion, and combined with higher consumer prices has damaged confidence in the local currency and prompted the government to devalue the dong three times since November 2009. ANZ Bank said in a note that there is a risk inflation could hit the high teens later this year if authorities fail to lift interest rates. "Most critically, escalating inflation would lead to a loss of confidence in the local currency and a shift from dong-denominated assets to U.S. dollars and gold. This would put more pressure on the currency given that Vietnam's meagre reserves cannot finance a widespread shift out of the dong," ANZ said. ANZ said a sharp upfront increase in lending rates to around 20% would stabilize the economy sooner, while also delivering a shorter slowdown in economic growth. The central bank lifted its benchmark rate on dong-denominated loans by 1% in November to 9%, but has vowed to cap interest rates on such loans at 14% in 2011.

Vietnamese clients wax poetic over ear picking

By John Boudreau, Mercury News 23 January 2011 To most Westerners, the idea of paying someone to stick little scoops and tweezers into their ears is downright unnerving. To Vietnamese, it's an art. Though the procedure may sound like torture, men line up day in and day out to experience this unorthodox probing. It's part of the country's pampering culture and is offered in corner barbershops, the oases where Vietnamese while away hot afternoons with luxurious shampoos, relaxing shaves and facials. But it's the picking that elicits moans of ecstasy.
Many returning Vietnamese-Americans head straight to these barbershops, or "hot tocs," after

disembarking from long United and EVA Air flights at Tan Son Nhat International Airport. "It brings a lot of happiness," said Silicon Valley resident Nguyen Tuong Tam, who always heads to a hot toc upon arriving in this city, also known as Saigon. He likens a good ear picking to good sex. Indeed, fans of ear picking gleefully talk about "ear-gasms." There is a spot near the ear drum that, when touched the right way, "tingles," said 26-year-old ear picker Nguyen Thi Le Hang. "For one person, it may just be a tickle. For another person, it's a mindblowing experience." In fact, the ear has a G-spot, said Dr. Todd Dray, an ear, nose and throat surgeon at Kaiser Permanente Medical Center-Santa Clara. "The skin in your ear is super thin -- it's paper thin," he said. "It's very sensitive. And there are a lot of nerves that converge in the ear."

That explains why some customers have been known to blurt out, "Will you marry me!" Ear pickers usually ignore such exclamations as they would words of endearment from a drunk. Just as a shampoo in Vietnam is more than washing hair -- it's also head massage, shoulder massage and a refreshing facial -- ear picking is more than cleaning the ear. It helps reduce the tensions of living in the bustling, horn-honking metropolis of 9 million people, fans say. Though the practice is mostly popular among men, some Vietnamese women enjoy regular ear pickings, too. "Everybody is afraid the first time -- but after, it's, 'Oh my God!' " said Katie Dang, a 20something singer who spends time in the United States and Ho Chi Minh City. "The men do a very good job. But the women are better. They have the magic hands." Ear picking has long been practiced in Vietnam and other Asian countries. And a few Vietnamese barbershops in San Jose have quietly offered the service. But in recent years, practitioners in Vietnam have elevated it beyond simply removing ear wax to an experience on par with massage, said Hien Nhan, a former Californian who owns Lido's Spa in Ho Chi Minh City. Those offering the service range from a guy with a chair along a busy street to airconditioned barbershops with several ear picking specialists and shops where the staff wear alluring uniforms. A picking and a shave can cost as little as $2, plus tip. It's not uncommon for ear pickers to give a customer Vietnamese coffee or tea before he settles in. He then reclines in a barber chair, tilting his head to one side. The ear picker, frequently a young woman wearing a head lamp, begins to gently probe. "Some people like it really soft, others like it to hurt," ear picking proprietor Nhan said. "It's like a massage." After scooping up some ear wax, she scrapes it onto the customer's hand as a way to show off her handiwork. The tools include a tiny razor to shave hairs, a miniature shovel-like device to scoop up wax, tweezer-like objects to scrape the inner ear and little cotton balls on sticks that are twirled inside the ear to tickle the skin. The overall effect is so soothing it's not uncommon for customers to doze off. The procedure, ear pickers say, takes about a week to learn but months to perfect. Those who become highly skilled develop a following. Ear pickers ply their trade with a mix of intense concentration and flirtation -- one reason men often don't want girlfriends or wives to know about their ear experiences. Frisky ear pickers sometimes blow into customers' ears. There are stories of customers leaving wives for ear pickers and a life of in-home ear pleasure. But all this ear fun can have unintended consequences. Ear specialist Dray cautions against unsafe ear picking. If implements are reused without being sterilized -- which is common in many shops -- customers can be exposed to a variety of viruses and even Hepatitis B, though that's relatively rare, he said. Too much ear picking can leave ears dry and itching. And if done improperly, ear picking can pack wax deeper into the ear, causing an infection called otitis externa, or swimmer's ear.

"It's like smoking or drinking beer," said Truong Phung, a 44-year-old professional who visits a bare-bones barbershop every two or so weeks. "Some of my friends say it's not safe, but I still come here. They do it without any license or insurance. If something bad happens to you, I don't know what they could do." Dray, however, said the risks from ear picking can be greatly reduced by a few simple precautions. "If you bring your own instruments, and you have found someone who is good at it," he said, "go for it."

Change in Vietnam
The Asahi Shimbun 25 January 2011 In Japanese eyes, what kind of country is Vietnam? For the older generation, Vietnam evokes images of winning its war of national liberation against France and the United States. For the young generation, Vietnam might be a cheap vacation spot where they can buy cute bric-a-brac. Of late, Vietnam is gaining attention as a potential buyer of nuclear power plants and Shinkansen trains. But, the Japanese don't know much about Vietnam's political system or its society. And now in Vietnam, the Communist Party that single-handedly rules the country has held its party congress, which takes place once every five years, and selected as its new general secretary, Nguyen Phu Trong. This is the first change of party leader in 10 years. In the 10-year plan adopted by the congress, the leaders intend to carry on the annual 7-8 percent average economic growth, and become an industrialized country by 2020 by nearly tripling the GDP per capita to $3,000 (249,000 yen). Vietnam's currency is losing value, inflation is on the rise, fiscal and trade deficits are increasing. The national shipbuilding company is in a management crisis, and investors are losing trust. It has been a quarter of a century since the country began its "doi moi" policies of creating a market economy. Despite great progress economically, the income disparity is growing larger. The people are disgruntled by corruption that permeates the government. For the new administration, its immediate task is to purge itself of this corruption, ease the disparity and manage economic policies. In contrast to economic growth, progress in political-social reform, in things like democratization and human rights protection, tend to be extremely slow. It seems that within the party, there was much debate about the latest shuffling. Almost nothing of what was actually said has been made public, and a review is impossible. There is no end to the incarceration of anti-government activists and repression of religion. According to Reporters without Borders and its ratings of countries and journalistic freedoms, Vietnam ranks 165th among 178 countries and regions. The new administration needs to embark upon an ambitious doi moi in its political and social reform, as well. In that sense, the general election scheduled for May is gaining attention. The right of people to stand for office is limited, so just how many non-Communist Party nominees and nominees without support from party-related organizations manage to gain office is a thing to watch. There were less than 10 percent in the last election. For Japan, Vietnam is a promising market and a place for investment. The Kan government seems intent on living or dying by the Trans Pacific Partnership agreement, and Vietnam has already started negotiations with other countries about its entry. Japan is also seeking cooperation in national security, with an eye on China's rapid military expansion, and intends to start a joint development project with Vietnam for rare earth minerals. Japan and Vietnam consider each other as "strategic partners for peace and prosperity in Asia." If so, the Japanese government should also encourage Vietnam in its democratization and political

reform efforts. Japan should occasionally point out to Vietnam things that may not necessarily sit well, like human rights issues. That kind of attitude should, in the long run, lead to a better relationship between the two countries, and help create a stable Vietnam.

Vietnam official linked to Australia graft probe

By Peter Smith, Financial Times, 25 January 2011 The former governor of the Vietnamese central bank has been linked to an Australian police investigation for allegedly receiving bribes from a banknote printing company that is halfowned by the Reserve Bank of Australia. Securency, a joint venture between the RBA and Innovia Films, a UK-based specialist film-maker, has been under investigation by the Australian Federal Police for 20 months over allegations it made payments to agents in a number of countries that are suspected of having been used to pay kickbacks to government officials. A person with direct knowledge of the probe said Securency had allegedly bribed Le Duc Thuy, the former governor of the State Bank of Vietnam, by paying tens of thousands of dollars in fees for his son to attend an overseas university. When contacted, Mr Thuy declined to comment on the allegations. It is common practice for foreign companies looking to gain business in Vietnam to pay the overseas tuition fees of government officials children. The bribery allegations, first reported in Melbournes The Age newspaper on Monday, could strain diplomatic relations between Canberra and Hanoi. Although he left the central bank in 2007, Mr Thuy remains a key government economic advisor, chairing the national financial supervisory commission. The alleged bribe paid to Mr Thuy was one of a number of alleged financial inducements made by Securency to win banknote printing contracts in Vietnam, the person added. It is also alleged that Securency paid more than A$15m in commissions to a Vietnamese government official in return for help winning contracts. Securency allegedly paid the commissions into Swiss, Hong Kong and other bank accounts, the person added. Securency is chaired by Bob Rankin, a former RBA assistant governor who is the central banks chief representative in Europe. The RBA has three further representatives on Securencys eight-man board. Mr Rankin in 2009 requested Australian police investigate Securency when allegations surfaced that its agents had paid kickbacks to government officials. At the time the RBA said: The board of Securency has measures in place designed to ensure the maintenance of high standards of integrity in the companys operations adding that regular audits of the these measures have found no evidence of non-compliance. Securency referred all inquiries about the case to the RBA. The RBA and Australian police declined to comment while the investigation continues. Australian law prohibits local businesses from making payments to overseas officials to win contracts. Australias Department of Foreign Affairs and Trade said: Australia has a robust anti-corruption regime that prohibits bribery and creates a culture to deter corrupt behaviour. Australia and DFAT officials overseas must report any credible information that they receive about Australian companies bribing foreign public officials, it added. Canberra has so far resisted calls to launch a parliamentary inquiry into Securencys conduct in international markets. The RBA and Innovia last year said they planned to sell their holdings in Securency. The campaign group Transparency International ranked Vietnam 116th in its latest global corruption perceptions index.

Vietnamese cash in on cross-border exchange

By Ben Bland and Tim Johnston, Financial Times 28 January 2011 Vietnamese consumers frustrated by years of high inflation and a depreciating currency have devised a new cross-border arbitrage scheme to earn some extra cash ahead of next weeks Lunar New Year holiday. The latest ruse came to light after Cambodian banks such as ANZ Royal, a joint venture of Australias ANZ, noticed a sharp increase in dollar withdrawals, particularly from ATMs near the Vietnamese border. Bankers eventually worked out that Vietnamese customers were travelling to neighbouring Cambodia, withdrawing dollars from an ATM at the official dong-dollar exchange rate and then converting the greenbacks back to dong at the superior black market rate. In spite of impressive economic growth rates, persistent instability has undermined faith in Vietnams currency, the dong, which trades against the US dollar at a discount of up to 10 per cent in the vibrant black market. Customers of Vietnamese lender Techcombank which charges much lower overseas withdrawal fees than its rivals have been at the forefront of the scheme, making instant, risk-free profits of about 5 per cent, but bleeding many Cambodian ATMs dry of dollars. Stephen Higgins, ANZ Royals chief executive, said Techcombank customers had taken some $13m out of his banks ATMs. Across Cambodia, theyve probably taken out at least $30m from ATMs, which would have netted them a profit of a million dollars in a couple of weeks, essentially risk free, Mr Higgins said. They were turning up with perhaps 12 different ATM cards. Normal people dont turn up with 12 ATM cards, he said. It was causing our ATMs to run out of cash. ANZ Royal and Acleda, another large Cambodian bank, have now blocked all dollar transactions on Techcombank cards. A spokeswoman for Techcombank said that while these withdrawals were legally valid, it was raising its fees for overseas transactions to prevent large cash withdrawals which could lead to black market currency trading. The concept of cross-border arbitrage is not new to Vietnams black-market entrepreneurs. With little confidence in their own currency, the Vietnamese are among the worlds largest consumers of gold, which is often used to price and pay for property. When the government limited gold imports in an attempt to control soaring inflation in 2008, there was a big increase in smuggling from Cambodia, as dealers took advantage of the fact that gold was trading in Vietnam at a premium to the world market price.

Youth violence grows in fast-changing Vietnam

AFP 30 January 2011 Tran Huy Hoang stares in shock at the images of four Vietnamese teenagers slapping and kicking a girl whose hands try to shield the blows. "How could schoolgirls act so much like gangsters?" asks Hoang, the father of a 14-year-old girl, as he watches the video clip -- apparently filmed by another teenager -- posted on the YouTube website. The girls pulled off their victim's T-shirt and bra, leaving her half-naked. It was one of several clips showing violence among Vietnamese youth that have circulated on the Internet over the past year, sparking concern about the media's role and a breakdown of family-centred social values in the rapidly modernising society. "The traditional values are vanishing while new values are not enough to replace them," said education expert Pham Toan, 80. Sociologists say there is no data to capture trends in the violence but it appears to be

increasing as social mores change, although the problem is not confined to Vietnam. "We have to accept the fact that youth violence seems to become more popular," said Hoang Ba Thinh, a professor of social work at Vietnam National University. Influenced by Confucian values, Vietnam's young people traditionally had respect for teachers, parents and the elderly. Rich and poor alike were taught the value of labour rather than of money itself, said Toan. "If a piece of rice fell from the bowl to the floor, the elderly in the family would remind them that a grain of rice was a seed of gold," he said. Parents now have less time for the family as they pursue material wealth, he said. "In the society now, people only pay attention to earning money and spending it rampantly," said Toan. Now, even though traditional moral principles are taught at school, those virtues are not reinforced at home because parents are focused more on improving their lifestyle, and this leaves youngsters confused, he added. After years of poverty following the country's reunification in 1975 at the end of the Vietnam War, communist Vietnam in 1986 began to embrace the free market under economic reforms known as "doi moi". The move eventually led to a growth rate among the highest in Asia, and a per capita income that is now about 1,200 dollars. During wartime and the period of economic hardship that followed, "people were more humane, more passionate and ready to share with each other both sweetness and bitterness," said Trinh Hoa Binh, from the Institute of Sociology. People are now so burdened with worries over covering their cost of living, "just a minor car accident or a bad glance can easily result in violence," he said. While foreigners still see Vietnam as one of the safest countries in Asia, locals are increasingly concerned. Youth violence became a hot topic in online news sites over the past year in Vietnam, where nearly 20 percent of the 86 million people are between 15 and 24 years old. In one of the more serious cases, a 15-year-old boy in southern Dalat city was stabbed to death by two other grade nine students, VNExpress news site reported. The motive for the killing was unclear. There were nearly 1,600 cases of violence in and outside schools in the 2009-2010 academic year, according to Ministry of Education and Training figures cited by Lao Dong newspaper. More than 2,400 students had been reprimanded for their acts while hundreds were temporarily suspended from school, it said. The unrest stemmed from the students' lack of "life skills, self-restraint and appropriate behaviour to solve minor and simple quarrels" the report said, citing the ministry. Along with weaker parental supervision, young people are subjected to "rampant violent images" in the mass media, online games and films, Binh said. But Vietnam lacks effective social organisations for helping to improve the situation, Toan said. "I think we are now living in an irresponsible society, with people tending to stay away from community and public activities," he said. The main social organisations -- such as those for youth and women -- are linked to the state, with few independent non-governmental groups. For 36-year-old mother Luu Thi Mai, proper parental care is the answer. "I give her my best care, teaching her right from wrong, sending her to a good school with well-behaved students," the office worker said while waiting for her daughter outside a public school in Hanoi. But just in case of trouble, Mai said she still sends her 11-year-old girl to karate classes -- "not to attack others, but to know how to defend herself".

LEARNING ENGLISH THROUGH NEWS

WEEKS 06 & 07 2011 (31 Jan. 14 Feb. 2011)

esllearning@yahoo.com

THE WORLD THESE TWO WEEKS

The 30-year-long reign of EGYPT'S president, Hosni Mubarak, resigned on Friday, as hundreds of thousands of Egyptians filled the centre of Cairo, calling on him to step down. The Supreme

Council of the Armed Forces is now running the country. It said it would appoint a committee to propose changes to the Constitution, which would then be submitted to voters.

TUNISIA'S interim president assumed the power to rule by decree, as the interior ministry suspended the former ruling party, the Constitutional Democratic Rally. Its officials will no longer be allowed to meet and its offices are to be closed down.

KUWAIT'S interior minister resigned from the government following revelations about torture in prisons. The Kuwaiti emir accepted the resignation after critics called for political reforms in the wake of demonstrations in Egypt and Tunisia.

The head of the SUDANESE government, Omar al-Bashir, accepted the result of the secessionist referendum in ten southern provinces that is expected to lead to the formation in July of an independent state, which will probably be called South Sudan. According to the final count, 98.8% of the almost 3.9m registered voters approved the split.

BRAZIL'S new government announced cuts of 50 billion reais ($30 billion) in budgeted spending for 2011, as it seeks to cool an overheated economy. Inflation for January was 0.8%, taking the annual figure to 6%.

CAMBODIA'S prime minister said that skirmishes with THAILAND around a disputed site on their border had escalated into "a real war". Both sides engaged in artillery and heavy-machinegun fire. The area under contention is tiny but surrounds an 11th-century Khmer temple complex designated as a World Heritage site. Cambodian troops apparently fortified the temple.

A Taliban suicide-bomber attacked an army recruiting camp in Mardan in north-west PAKISTAN, killing and injuring dozens of people.

The UN issued a special alert about the drought afflicting CHINA this winter. China's official media called it the worst drought in 60 years. The state media also claimed that Shandong province, the most important centre for wheat, has had its worst season in 200 years. China has been selfsufficient in grains, though demand is huge. If it starts to import wheat, world prices are likely to rocket.

TAIWAN said it had arrested one of its generals as a spy for China. General Lo Hsien-che is thought to have been working for the mainland for at least five years. Relations between Taiwan and China have improved under Taiwan's Kuomintang government.

NORTH KOREA and SOUTH KOREA sent military delegations to meet in the demilitarised zone, their first such encounter since the North shelled the island of Yeonpyeong in November, killing three civilians. The South's cheek-turning was for naught: the North Korean colonel and his attache stormed out of the meeting, leaving the talks in a state of "collapse"--and perhaps angling for further concessions.

INDONESIANS were shocked by two attacks against religious minorities. Four members of the Ahmadi sect were beaten to death by a mob of orthodox Muslims in western Java while police stood by, doing little to protect the victims. In central Java, meanwhile, a mob burned down Christian churches.

Prosecutors in ITALY asked a judge to put Silvio Berlusconi on a fast track to a trial on charges of paying for sex with an underage prostitute and abusing his office to cover it up. Mr Berlusconi called the charges "disgusting". But the judge is expected to give her approval, and the trial could begin within months.

FRANCE'S president, Nicolas Sarkozy, told his cabinet to take their holidays at home. This came after scandals revealed that the prime minister, Francois Fillon, accepted free boat and plane trips from Egypt's president, Hosni Mubarak, and the foreign minister, Michele Alliot-Marie, had taken flights paid for by a friend of the former Tunisian president.

Doku Umarov, a notorious Chechen terrorist leader, said that he had ordered last month's suicidebombing at MOSCOW'S DOMODEDOVO AIRPORT, which killed 36 people. The Russian police arrested the siblings of the man they claim was the suicide-bomber.

In a speech in Munich, DAVID CAMERON claimed that "state multiculturalism" had failed and had led many Britons to live segregated lives. The British prime minister wants to foster a stronger sense of national identity. He made his speech on the day that the English Defence League, a far-right group, marched through Luton, a town with a large Muslim population.

After a month of protests in JORDAN, King Abdullah sacked his government and appointed a new prime minister. Opposition leaders, who want the king's powers curbed, said this was not enough.

With demonstrations continuing in YEMEN, Ali Abdullah Saleh, the country's president, announced that he would step down in 2013 when his current term expires and that he would not hand power over to his son.

IRELAND'S prime minister, Brian Cowen, called an early general election for February 25th. He is

standing down; his Fianna Fail party is expected to lose badly. Standard & Poor's set the scene by downgrading Ireland's credit rating by one notch, from A to A-.

The IRISH GOVERNMENT said it would expel a RUSSIAN DIPLOMAT after an investigation revealed that six Russian spies in America had used stolen Irish identities. Russia threatened to retaliate.

America and the European Union imposed sanctions on officials from BELARUS, after December's stolen presidential election. They also promised aid to opposition groups seeking to oust Belarus's president, Alyaksandr Lukashenka.

Assets worth $5.7m belonging to Jean-Claude "Baby Doc" Duvalier, a former dictator of HAITI, were frozen after Switzerland implemented a new law making it easier to confiscate the wealth of foreign politicians. Mr Duvalier returned to his country last month after 25 years in exile, and faces criminal charges there.

INDIA'S former telecoms minister was arrested in a corruption scandal involving the sale of licences for mobile networks. Andimuthu Raja, an ally of the ruling Congress party, resigned in November when it emerged the licences had been sold for less than they were worth, potentially costing India $38 billion in lost revenue and tarnishing the clean image of Manmohan Singh, the prime minister.

MYANMAR'S dictator, Than Shwe, chose not to run for the post of president, who will be elected by the country's new sham parliament. Presumably he will continue to exercise power behind the scenes.

Concerns that the instability in Egypt could affect shipping in the Suez Canal and disrupt oil supplies from the Middle East caused OIL PRICES to rise further, with Brent crude topping $100 a barrel in London for the first time since 2008. Oil traded at a lower price on the New York Mercantile Exchange, partly because of a build-up in oil inventories at a big storage facility in Cushing, Oklahoma.

An official first estimate showed that AMERICA'S GDP increased by 3.2% in the final three months of last year, as consumer spending rose by 4.4%, the fastest clip since the start of 2006. The economy grew by 2.9% for all of 2010.

NYSE EURONEXT and DEUTSCHE BORSE announced they were in advanced merger talks. The deal would see shareholders in the German exchange hold a majority stake in the new company. The two have a history: in 2006 Deutsche Borse launched a takeover bid for Euronext, which operates the Paris and Amsterdam exchanges among others, but lost out to the New York Stock Exchange. Earlier, the LONDON STOCK EXCHANGE and TMX, which runs the Toronto bourse, said they would merge their businesses. Both exchanges are popular listing venues for mining and commodities firms.

NASDAQ confirmed that it had found malware files on a web-based service it offers to companies to store and distribute financial data. NASDAQ's stockmarket trading platforms were unaffected. There was no evidence that hackers had accessed any company documents, but news of the attack, coming soon after electronic permits were stolen in Europe's carbon markets, raised further questions about cybersecurity at electronic exchanges.

In one of the biggest investments to date by a Chinese company in North America, PETROCHINA said it would pay $5.4 billion for a 50% stake in unconventional-gas assets held by Encana, which operates in western Canada.

American regulators proposed changes to the way bankers are rewarded. Larger banks would be legally required to defer 50% of EXECUTIVE BONUSES for three years or more and link the payments to performance (some banks have already introduced similar changes). They would also have to determine which of their employees trade in areas that could inflict substantial damage to the bank, and ensure that their compensation schemes discourage excessive risk-taking.

AOL agreed to buy the HUFFINGTON POST, an online newspaper and news aggregator, for $315m. The HUFFPO was founded by Arianna Huffington, a wealthy pundit, as a liberal voice on the internet. Some of the unpaid bloggers that contribute to the site wondered if it would remain distinctive. Ms Huffington will be in charge of a new unit at AOL that integrates its news, entertainment and socialmedia content.

Ahead of NOKIA'S announcement of a new business strategy, a memo written by Stephen Elop, its chief executive, was leaked. In it Mr Elop compared the Finnish mobile-phone company to a man on a "burning platform" deciding whether to jump into "icy waters". He also admitted that Nokia was "years behind" in the market for smartphones.

China's central bank raised its benchmark INTEREST RATE by 25 basis points to 6.06%, its third increase since October as it tries to tackle rising inflation.

An investigation by American road-safety officials concluded that the problem of sudden acceleration that led to a huge recall of TOYOTA cars was not caused by the carmaker's electronic systems, as claimed in hundreds of lawsuits. Sticking foot-pedals and floor mats accounted for some of the mishaps, but most were caused by "pedal misapplication", or motorists mistaking the accelerator for the brake.

Vietnam delusion endures

By GWYNNE DYER, The Japan Times 30 January 2011 Communist party congresses are generally tedious events, and the 11th Congress of the Vietnamese Communist Party (Jan. 12-17) was no exception. The changes in personnel at the top were decided by the elite inner circle of the party long before the congress opened,

and the rhetoric was in the same wooden language that communists always use. The nation must "renew the growth model and restructure the economy to speed up industrialization and modernization with fast and sustainable development," outgoing party leader Nong Duc Manh told the congress on opening day. "The strategy is to strive toward 2020 so that our country will basically become an industrialized nation." Novel approach, isn't it? The talk was all about fighting inflation and corruption (there's quite a lot of both those things in Vietnam), while maintaining a high economic growth rate (6.8 percent last year). Ordinary people are struggling to maintain their standard of living (although they are far better off than they were 20 to 40 years ago), and resent being bossed around by the communist elite but they feel helpless to do anything about it. In other words, it's not all that different from the situation in, say, Thailand, just a little to the west, apart from the fact that the economic elite in Vietnam are Communist Party members and their businessman cronies. Thailand is technically a democracy, but if you are a rural "red shirt" in Thailand, your views on those in power will be little different from what many Vietnamese peasants privately hold about the Communist Party. It's a more traditional elite in Thailand, but it clings to power just as tightly, and rewards itself even more lavishly. So what was it all about? Why was there a 15-year war in Vietnam (1960-75) that killed 58,000 American soldiers, and between 1 million and 3 million Vietnamese? The U.S. government insisted at the time that it was about stopping communist expansionism in Vietnam before it swept through all of Southeast Asia. The communists, who controlled North Vietnam, said it was only about reuniting the country. Who was right? In retrospect, it's clear that the communists were telling the truth. They won the war in Vietnam despite all the efforts of the United States, but the "domino effect" in the rest of Southeast Asia never happened. In fact, the Vietnamese communists never even tried to knock the dominoes over. Apart from invading Cambodia in 1978 to drive out the Khmer Rouge, a much nastier group of communists, from power, communist-ruled Vietnam has never sent troops abroad or interfered in the internal affairs of other countries in the region. After a decade, all Vietnamese troops were withdrawn from Cambodia and Hanoi virtually no influence there today. As for some vast communist plot to overrun Southeast Asia, it was never more than a fantasy. Indeed, within four years of uniting Vietnam, the communist regime in Hanoi was at war with communist China over a border. In a perfect world, most people would probably prefer to spare their country the burden of a generation of communist rule, but Vietnam is not a disaster, and it is no threat to anyone else. So, how did three American presidents allow themselves to be misled into fighting such a pointless, unwinnable war? Dwight Eisenhower, John Kennedy and Lyndon Johnson were all intelligent men, and Eisenhower also had much experience at the highest level of military and diplomatic decision-making. To varying degrees, they all fell for a strategic vision of the world that was mere fantasy, driven by ideology. Or rather, in Eisenhower's case and to some extent also in Kennedy's, they found it politically impossible to resist the demands of those who did live fully within that fantasy. So American foreign policy had little connection with reality for several decades, and a lot of people died. The point is that this sort of thing happens all the time. The "war on terror" now is functionally almost indistinguishable from the anti- communist crusade of the 1950s and 1960s, although the actual wars involve much lower levels of casualties. For Vietnam in 1960, read Iraq in 2003 or, perhaps, Iran the day after tomorrow. It doesn't only happen to Americans, of course. The various British invasions of Afghanistan in the 19th century were driven by the conviction that the rapacious Russians wanted to seize Britain's Indian empire, although the thought hadn't even occurred to the Russians. Germans spent the decade before the First World War worried that they were being "encircled" by the other great powers. But these

delusions mainly afflict the great powers, because weaker countries cannot afford such expensive follies. They have to deal with reality as it is which is why the Vietnamese communists, for example, never dreamed of trying to spread their faith across the rest of the region. They were and are pragmatic people with purely local ambitions, so the resolutions of the 11th Party Congress are of little interest to anybody else.

What next after the Vietnam congress

By Bruce Gale, The Straits Times (Singapore) 09 February 2011 Continuing economic instability, a tense relationship with China, and no prospect of political relaxation. These are some of the main conclusions it is possible to draw about the outlook for Vietnam this year after the country's ruling Communist Party ended its five-yearly congress last month. Because the proceedings of the secretive congress are not open to the media, observers have little choice but to draw their conclusions based on the content of official speeches and the results of the elections to key positions. Nearly 1,400 delegates heard speeches by key party members before voting for the new 200-member Central Committee. The latter then selected a new party leader and the 14 members of the allpowerful Politburo. For those seeking some indication that the government would move to give priority to fighting inflation rather than promoting rapid growth this year, the opening remarks of several leaders at the congress held out some hope. 'We must pay attention to the quality and efficiency of growth and sustainable development,' outgoing Communist Party chief Nong Duc Manh told delegates. The new appointments announced after the congress, however, tell a different story. Last year, the Vietnamese dong experienced two devaluations. Ratings agencies also downgraded the country, expressing concern that strong lending growth had weakened the balance sheets of the country's banks. They also raised questions about the financial health of the country's state enterprises. Vietnam's economy grew by 6.8 per cent last year. But inflation has been rising, reaching an annualised rate of 11.75 per cent in December. Middleclass citizens have responded by buying gold and speculating on land. The reappointment of Prime Minister Nguyen Tan Dung to the Politburo last month implies that the pro-growth policies that produced these problems will remain largely unchanged. Indeed, the Prime Minister's position appears to have been strengthened. This is suggested by the fact that his main rival, Mr Truong Tan Sang, is to be shifted to the mainly ceremonial post of president. The appointment of Mr Nguyen Phu Trong, the party's chief Marxist theorist and an ally of the Prime Minister, as head of the national legislature also appears significant. These appointments will have to be confirmed by the rubber stamp national legislature in May, of course, but there seems little prospect of an upset. The fact that the Prime Minister did so well came as something of a surprise. Mr Dung had taken much of the blame for the virtual collapse of state-owned shipping conglomerate Vinashin in August last year. This was because many observers - both inside and outside Vietnam - saw the debacle as being the result of official expansion policies designed to ensure that large parts of the economy remained in Vietnamese hands while the country was opened up to more foreign investment. Mr Dung even appeared on local television to apologise. Vinashin had ratcheted up debts totalling US $4.4 billion (S $5.6 billion), equivalent to 4.8 per cent of the economy. Official statements at the congress gave few clues about the future direction of foreign policy. But the fact that many senior military and security officials gained promotions does suggest a hardening of attitudes towards China. Against this is the fact that Mr Nguyen Phu Trong, a hardliner with a reputation for being pro-

Chinese, became the party's secretary-general. But Mr Trong may not be as influential as his position suggests. Many observers consider him to have been a compromise candidate, designed to bridge the differences between two more powerful figures - Mr Dung and Mr Sang. One area where Mr Trong does appear to have solid support, however, is his hardline stance towards the media. At the beginning of the congress, Mr Dinh The Huynh, the editorin-chief of Nhan Dan, the Communist Party's official news outlet, joined other leaders of the party hierarchy in calling for an end to 'all forms of pluralism'. Mr Dung followed this up with an executive decree banning local journalists from using unnamed confidential sources in their reports. A fine of US $2,000 will now be imposed on journalists who publish articles that are 'not in the interest of the people'. Communist Party officials still appear to be smarting from local media revelations in 2006 of corruption involving high-ranking officials in the Transport Ministry. Clearly, the political relaxation some observers believed would come after the congress no longer seems likely. Just where all this will lead is hard to say. Local military hardliners may well find it difficult to pursue a tougher line against China if an ongoing crackdown on local dissidents undermines efforts to develop a stronger relationship with the United States. Meanwhile, further macroeconomic instability this year could bring Vietnam's foreign investment boom to a halt. More broadly, Vietnam may also provide Asia with a timely lesson on what can happen to an economy that persists in pursuing growth while ignoring the threat posed by inflation.

Danangs masterly mayor

By Ben Bland, Financial Times Blog, 8 February 2011 Think investing in Vietnam is all about Hanoi and Ho Chi Minh City? Think again. Danang, Vietnams fourth most populous city, has been booming over recent years, thanks to its great geography, nestled between jungle-covered mountains and miles of sandy beaches. While the beautiful setting has spurred tourism resorts, villas and golf courses proliferate on the beachfront road south of the city a growing number of factories have been established here to take advantage of Danangs location in the centre of Vietnam. Danangs success is also down to the single-minded leadership of Nguyen Ba Thanh, the head of the local government, says Peter Ryder, chief executive of Indochina Capital, an investment firm that has pioneered a number of high-profile developments in the city. He says: Danang is regularly voted the best place to do business in Vietnam. It has the best infrastructure by far of any major urban area and the growth in per capita income has been ahead of other places in Vietnam. Nguyen Ba Thanh is the nearest Vietnam has to a Lee Kuan Yew. Like Hanoi, the capital, and Ho Chi Minh City, the main business centre, Danangs economy has been growing way above the national trend rate of around 7% over the last decade. From 2006-2010, the citys economy grew at around 11% per annum and it is targeting 13.5%-14.5% growth over the next five years. In contrast to the chaotic, traffic-clogged streets of Hanoi and Ho Chi Minh City, travelling around Danang, a city of 900,000 people, is a breeze, with wide boulevards, ring roads and bridges in all the right places. The decent infrastructure, combined with the stunning setting, is helping to attract a growing number of tourists and developers. A golf course designed by Colin Montgomerie, and backed by Indochina Capital, sits next to another course designed by Greg Norman, and backed by VinaCapital, a rival investment group. (Nick Faldo is getting in on the act 20 miles north, in a village called Lang Co). Small apartments in luxury beachfront developments are being sold for around $100,000 for a 50-year lease, while high specification villas are being picked up at over $1m, according to people working in the local property market. The vast majority of the buyers are the first generation of Vietnamese second-homers, mostly from Hanoi (where they like to pay in cash) and Ho Chi Minh City (where they prefer credit).

But the rapid pace of construction has inevitably stoked fears about overdevelopment. A number of large projects have been halted ostensibly for lack of financing although local cynics say that some speculators only want to give the impression of construction in order to get hold of the land before flipping it for a quick profit. Ryder says: Were definitely concerned about over-building on the beachfront. What weve done has been unique enough so it will still wind up doing well. But we dont have any plans to do any new projects. Another developer argues that demand from cash-rich, wealthy Vietnamese who want a combined holiday home and investment will continue to support further development in Danang. With the currency continuing to depreciate against the dollar, inflation accelerating and the stock market in the doldrums, many well-off Vietnamese still feel that property is their best bet.

In the heart of Hanoi, a dizzying mix of capitalism, Communism and great food
By Mike Eckel, The Canadian Press 9 February 2011 Close your eyes in the streets of Hanoi's Old Quarter and you'll experience two sensations. The first is the ear-splitting cacophony of conversation, cars, clamour and chaos. The second is the realization that closing your eyes for very long in such a crowded place can be unwise, unless you enjoy being jostled, bumped, hustled, shouted at, or maybe even knocked down. Such is the Vietnamese capital, lurching into the 21st century with the swirl of unfettered street capitalism set to the music of Communist proclamations. Everywhere people are buying, selling, hawking goods and offering services, while nationalistic music and announcements about keeping streets clean play in the background. Six million people live in this former colonial metropolis; add hundreds of thousands more who jammed the city last fall for the celebration marking its 1,000th anniversary, and you sense that Hanoi is spinning into a new era. This is not to say that traditions are endangered. The Old Quarter is arguably the epicentre for the city's connections to its past. Wander its criss-cross of streets with tall trees, narrow buildings, louvred windows and people's lives spilling onto sidewalks and you'll discover a district known as 36 Streets, named for the craft guilds that populated the neighbourhood over the centuries, mixing Vietnamese and Chinese merchants and artisans together. Silk Street (Hang Gai), Silver Street (Hang Bac), Sails Street (Hang Buom), among others, all offer their crafts and other goods for tourists or locals. The Old Quarter's oldest building, the Bach Ma (White Horse) Temple, dates back to Hanoi's original incarnation as the imperial city of Thang Long Soaring Dragon. For culinary traditions, Cha Ca La Vong is a nondescript restaurant on Cha Ca Street that's been serving up one dish for more than a century. Sit down at a communal table shared by random guests common language not required and forget the menu. Waiters bring out tabletop, gas-fired stoves in which chunks of marinated, turmeric-coated whitefish are fried in oil by patrons themselves along with dill, chives and other greens. Dump the mixture over rice noodles, top with peanuts and wash it down with a draft beer known as bia hoi. The fish itself doesn't deserve many superlatives and tourists have pushed up prices, but it's still worth the experience. You can also find bia hoi at the corner of Luong Ngoc Quyen and Dinh Liet streets, where backpacker tourists outnumber the Vietnamese sitting on the stools. Pho is the dish Vietnam is best known for a steamy broth of beef or chicken with noodles, greens, star anise and spices. It's served up everywhere, and everyone has their own spice secret. Order a bowl from a sidewalk vendor, squat on a plastic stool a foot or so from the traffic, savour the broth and watch the crush of people go by. You can also sop up good soup in quieter, though less interesting settings in the indoor comforts of the chain restaurant Pho

24. Vietnam is one of the world's top coffee exporters, and it's known for bitter, super-strong coffee, lightened with condensed milk. You may also see ads for ca phe chon, the coffee famously brewed from beans that have been digested in one end, then out the other by weasel-like animals known as civets. Real civet coffee is extremely expensive, so beware of imitations, which are extremely common, particularly in areas frequented by tourists. Hanoi's noise doesn't yet rival that of its larger southern counterpart, Ho Chi Minh City, but it still can take some getting used to. If the incessant beeping of motorbikes and cars pushing through the streets aren't enough, there are the exhortations blaring from the pole-mounted loudspeakers, courtesy of the Communist Party, which remind listeners to keep the streets free of trash, not to mention the eternal supremacy of the party. The blare of slogans like the "Vietnamese Communist Party Will Live Forever!" may inspire you to learn more about Ho Chi Minh, the revered revolutionary leader who died in 1969 but who lives on through ubiquitous admonitions like "Live, Fight, Work, Study." A massive museum west of the Old Quarter features Ho's biography in a series of displays that are Cold War-archaic and mildly informative. Despite sometimes bizarre exhibits (one display compares the cave where Ho hid during the Second World War to a human brain), the respect and admiration the Vietnamese people express toward Ho is genuine. Just a block away is another structure you could easily find in Moscow's Red Square: Uncle Ho's mausoleum, where his body is embalmed for public veneration. Like his comrade Lenin, Ho had no interest in being turned into museum display, but party leaders spurned his request. For older Vietnamese, the mausoleum is a site for honouring Ho, and visitors are expected to behave respectfully, as if visiting a funeral parlour. If the Old Quarter din gets overwhelming, stroll down to the edge of the quarter until you see Hoan Kiem, the Lake of the Restored or Returned Sword, and marvel at the smallish 19thcentury pagoda called Thap Rua (Turtle Tower), which appears to float on the water when illuminated at dusk. Mind you, the crowds will be thicker at the lake's north end, walking over the Sunbeam Bridge (The Huc), a red pedestrian bridge that leads to an island where the ornate Jade Mountain Temple (Den Ngoc Son) stands. Just across the street from The Huc is the epicentre for another of Vietnam's most authentic art forms: water puppetry. Accompanied by live music performed on traditional instruments, the puppeteers at the Thang Long Water Puppet Theater stand in the water, behind a bamboo curtain, using poles to move wooden dragons, farmers, long boats, kings and other figures through the water. During some festivals, the dragons will breathe smoke and fireworks, as well. During the millennium celebration last fall, the government spent a fortune on festivals, fireworks, concerts and propaganda all aimed at bolstering Vietnamese pride and showcasing the renewal of a city that was bombed repeatedly during the 1960s and '70s. While the Old Quarter connects to Hanoi's past, it is otherwise a city that's soaring into the future. Some would say it's about time.

The new middle east: intellectuals and democracy

By Ramin Jahanbegloo, OpenDemocracy, 03 February 2011

Whatever the outcome of the tumultuous events in Egypt and elsewhere in the middle east, it is clear that the region is entering a new phase in its history. This era of change, a century after some Arabs started thinking of their independence from Ottoman and European rule, is also a defining moment of intellectual history. For it is in such historical momentsthat writers and thinkers - Arab, Turkish and Iranian - have an opportunity to prove whether they have become critical enough to help transform their societies in a democratic direction.

The role of public intellectuals in any society is indeed one of the elements crucial to its development. Yet for many decades the region has been held back by intellectual elites who surrendered their critical independence to the dogmas of ideologies such as MarxismLeninism and Islamism. The result is that these intellectuals have been less agents of enlightenment than handmaidens of power, who have to a great degree merely reinterpreted local political realities in accord with their purposes rather than putting ethical and critical issues at the heart of their scholarly and professional activities. This approach involved a kind of contract, whereby some intellectuals became the icons of discontented, disillusioned and frustrated generations - in return for allowing themselves to be used by political parties and Muslim clergy as instruments of organisational power and political control. Instead of speaking truth to power (asVclav Havel and Edward Said put it), they chose to spread ideological messages: a role that reflected their view of themselves as guardians of the "true" vocation of socialist, nationalist or communalist movements, as against what they saw as corrupt politicians willing to make unacceptable political compromises. As intellectuals in the middle east put overarching narratives of modernisation - whether framed in terms of liberalism, nationalism, fascism or socialism - ahead of democracy, what could appear as oppositional intellectual practice was made to serve the quasi-theological dogmas of states and party or movement politics. These narratives could not succeed even in their own terms, in great part because they were anchored in western ideologies and could find no deep roots in middle-eastern societies. The unfolding of their monumental distortions and failures on the ground opened the way to Islamism as the only credible option. The various influential Islamist movements have formed their own elites, whose close resemblance to their secular opponents suggests that a wider process of de factosecularisation is underway that makes support among elites for radical Islam in countries such as Egypt, Iran and Turkey less rather than more likely. The implication of these trends is that authoritarian modernisation has run its course in the middle east. In Turkey, the retreat of Kemalism under the AK partys non-theocratic Islam has allowed a more open society to emerge; in Iran, a young and vigorous civil society is searching for a non-violent and secular democratisation of the Islamic regime; and now the Arab world is again showing a remarkable potentialfor mass mobilisation against oppression and in favour of democracy. The developments both of ideas and on the ground in the middle east pose a new challenge to public intellectuals there about their role in relation to the democraticevolution of their societies. Do they have more to offer than political opinions or a contract with power; can they also respond to changing circumstances with an ethical engagement that allows them via practical reason rather than as political agents - to struggle against all forms of tyranny Indeed, the true struggle of public intellectuals in the middle east today is the moral and nonviolent one against injustice and oppression and for democracy. Thisstruggle requires courage, and cannot be surrendered to any political elite, for it means moving to a higher ground beyond particularistic interests in order to create and to support new democratic spheres. The question of non-violence is indeed crucial, for - as the events in Cairos Tahrir Square on 2 February 2011 again show - violence needs to be tamed and transcended for societies to achieve democratic maturity. As the movement of peoples across the middle east again puts questions of progress and democracy on the agenda, intellectuals have a vital new role to play as part of the change that they seek - this time, free of the shackles of the past.

A fraudulent American university

By Neeta Lai, Asia Sentinel, 07 February 2011 More than 1500 foreign students are beseeching consulates across the United States to stay in the country, some wearing electronic ankle bracelets to track them, after US authorities blew the lid off a scam perpetrated by the dubious Tri Valley University (TVU) in Pleasanton, California. The university had aided what authorities described as the illegal immigration of 1,555 foreign "students" most of them Indians from their countries to the US, operating from ramshackle premises in the San Francisco Bay Area and randomly transmitting lectures over the internet to "students" across the US rather than physically holding classes. Although TVU was based in California, investigators say its 'students' were scattered throughout the country, from the East Coast to the Midwest to the Deep South. The reach of the operation helped TVUs founder a Chinese-American woman named Susan Su to mint millions in tuition fees by issuing fraudulent visa-related documents to aspiring immigrants. Most paid up to US$2,800 per semester to TVU, some as much as US$16,000 up front for a full course to obtain a degree. Intriguingly, most of the students appear to have known that TVU was a shady operation that offered illegal immigration. Internet forums were abuzz with complaints and forewarnings by erstwhile "students" about the outfits dubious dealings. Regardless, such ominous signals were ignored by the students, which led to their victimization. To gain admission, students have to clear an obstacle course of qualifying exams such as the Graduate Record Exam, the Graduate Management Achievement Test and the Test of English as a Foreign Language. If the student is accepted, he or she is issued an F-1 student visa by the US consulate. However in recent years, to exploit the immigration fervor amongst the Indians, many universities have devised clandestine ways to waive the GRE/GMAT requirements. The students were instead asked to pay thousands of dollars for dubious programs like the Optional Practical Training (OPT) and Curricular Practical Training (CPT) as a shortcut to get employment after a college degree. TVU went a step further by offering the students jobs even before they could acquire a degree. They were offered OPT/CPT from day one which meant that the "students" could technically start "working" from the first day of college. According to US regulations, for a student to maintain an active immigration status, he or she must show proof of reasonable progress towards completing coursework and physically attending classes. However, such formalities were clearly dispensed with at TVU. The TVU issue has acquired a diplomatic hue between Delhi and Washington with the US authorities threatening to deport the duped students. Delhi has also objected to the radio tagging of a few of TVUs students. Such `tagging involves fitting the person with ankle monitors linked to a GPS (Global Positioning System) to help federal authorities track their movements. Such devices, say experts, are normally used on criminals and convicts as an alternative to confinement during a pending investigation. The desperate students say they cannot be blamed for enrolling in a university recognized and accredited for accepting foreign students. They say they should thus be allowed to seek transfer to other universities to prevent loss of face back home and loss of money. Even as the future of these hapless students hangs in the balance, experts point out that the TVU scam raises larger questions about the entire system. Namely, the lack of rigor involved in vetting Indians migrating to America and the laxity of American authorities in allowing "diploma mills" to masquerade as "universities". For instance, the TVU boasted on its website that its mission "is to make Christian scientists, engineers, business leaders and lawyers for the glory of God, with both solid academic

professionalism and Christian faith, therefore to live out Christ-like characters, value and compassion in the world, to make an impact and shine as its light." But in reality, it didnt even have a proper campus and was instead remote controlling its shady dealings mostly over the internet. "The TVU case should serve as a wake-up call for Indian students aspiring to go and study in American colleges," says Prakash Kaushal, a student counselor at Delhi University. "The case highlights the need for a rigorous process to guide the exponentially growing number of Indians applying to study abroad." Ironically, TVU is not the only American "university" which has taken overseas students for a ride. In another scam that created global headlines in 2000, many Indian students alleged they were duped by the University of Phoenix for "failing to meet the requisite mandatory academic standards including study-group meetings as instructional hours". The US Department of Education fined the university $6 million for the offence. A federal whistleblower/false-claims lawsuit filed by two former Phoenix admission counselors alleged that the university had "improperly obtained hundreds of millions of dollars in financial aid" by paying its admission counselors solely on the basis of the number of students they had enrolled. This amounted to a clear violation of the Higher Education Act that prohibits distributing financial incentives to admission representatives and pressuring its recruiters to enroll students. In an adverse economic climate, foreign students who must pay fees almost three to four times higher than the amount paid by domestic students are naturally considered a prized catch. "Universities intent on growth in these officially austere times are particularly reliant on foreign students," says a counselor with the Australia-India Council in New Delhi which facilitates the movement of Indian students to Australian colleges. "To start with, they are crucial to the finances of cash-strapped universities. They are often clever and industrious. Besides, taking a big slug of students from other countries gives universities a more international flavor, enriching the mix and broadening the experience of local students in the process." While theres nothing wrong with that ambition, experts say a system of checks and balances should also be inbuilt into the process to prevent frauds. "Any application to a Foreign University/Institution must be accompanied by a No-Objection Certificate issued by the concerned embassy in India," says the counselor. Similarly, the Missions of the concerned countries should certify the genuineness of the educational institutions of their respective countries. This list should be posted for Indian students on the website of AICTE (All-India Council for Technical Education) which is the supervising body for all such transactions." Other experts add that to ensure further transparency, a foreign university or institution should also submit an annual report to AICTE giving details of the number of students admitted, programs conducted, total fee collected, number of students awarded degree, diploma and any other information the body may ask for.