Transcript: Interview with Phan Van Khai

Khai: The significant developments in the relations between Vietnam and the U.S. during the last 10 years have paved the way for the two countries to further advance into areas of joint cooperation including security and defense by sharing intelligence in countering terrorism, trans-national crimes and money-laundering.

Terrorism has become a global threat. To eliminate terrorism from humankind's life and to prevent it from causing catastrophic consequences to innocent people has become a pressing issue that requires joint efforts and cooperation of different countries. Vietnam is not an exception regarding this threat. We have committed to work side-by-side with neighboring countries and with the U.S. in countering terrorism. Vietnam has actively cooperated with the U.S. in some concrete fields, including enhancing security for U.S. representative agencies in Vietnam, strengthening cooperating in fighting money laundering, sharing information on trans-national crimes, etc. At the same time, we call on the U.S. and other countries concerned to work with Vietnam to prevent and strictly punish those who attempt to carry out terrorist acts against Vietnam.

TWP: In the area of trade and economics, Vietnam would like to join the WTO by the end of this year. Reaching agreement with the United States is key to that. How do you think this trip will bring you closer to your goal? Do you expect any significant breakthroughs?

Khai: It is always Vietnam's wish to conclude bilateral negotiations with Vietnam. And a big negotiation team with Vietnam is in the States for negotiation. We wish that the U.S. will conclude negotiations with Vietnam as early as possible.

TWP: Is it likely that you will win entry this year?

Khai: I have very strong hopes that Vietnam will be able to join the WTO. But this should not be the last resort because every year WTO has a ministerial meeting to admit new members. I'd like to emphasize that Vietnam membership to WTO will be beneficial to both U.S. and Vietnam, especially for U.S. businesses, which will have better opportunities to do business in Vietnam.

TWP: Vietnam is moving toward a market economy. But there are areas that discourage investors, lack of transparency in regulations, caps on foreign ownership, lack of market access, especially in the financial services sector. How do you propose to speed reforms in these areas? Will you have any announcements to make in this regard?

Khai: I think during the last 20 years of reform since doi moi [the name given to the Vietnamese economic reform program started 1986], Vietnam has achieved great successes. Important achievements have been recorded, that is, thanks to the sound domestic and foreign policy given the domestic and international context. For the last 20 years of doi moi and reform process, we have drawn a very important lesson that we need to continue the reforms to have success. Political reforms and economic reforms should be closely harmonized. During the last 20 years of reform, the investment climate has been substantially improved. More than $40 billion U.S. has been invested in Vietnam in about 3,000 FDI projects. Besides, ODA has amounted to $23 billion . . . with major donors like World Bank and Japan. Given increasing globalization and competition in trade and investment, Vietnam is required to make greater efforts to accelerate reforms to attract foreign direct investment.

It is our determination to remove any obstacles to foreign investment. Every year the government has meetings with investors. During such meetings we listen to their comments and concerns and we work with them to address issues facing them. Every year we also have two meetings with the donor community. More than one week ago, our deputy prime minister had a meeting with the donor community in Vietnam and at the meeting this year there were less complaints than before.

The rapid growth of about 7.5 percent a year -- and exports increased about 16 percent a year for last 10 years with effective use of ODA -- has been highly appreciated by donors. The implementation of national poverty program has been highly commented by donors. According to the World Bank, Vietnam has set a record for poverty reduction for other countries to follow.

TWP: You noted that political reforms must accompany economic reforms. Economic progress is evident to any visitor to Vietnam. But at the same time, analysts say the space for political freedom has not opened as quickly. Can you address that discrepancy?

Khai: Do you know why we have attained great success in economic reforms? Political reforms are the premise for economic reforms. In the past, Vietnam followed the centrally planned economy. After that, new mechanisms have been introduced with the market economy in Vietnam. That is not purely economic reform, but it should be an important policy decision in terms of political reform. You can see that democracy has been further promoted and improved in Vietnam. In the past, the Vietnamese economy consisted only of two sectors, the state and cooperative sectors. And now many other economic sectors have been established and all the Vietnamese people are allowed to develop businesses in different sectors. Therefore, internal resources from different sectors have been raised to ensure the country's rapid economic growth.