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HOW serious are the problems in Vietnam’s banking sector? Problem is, no one really knows. Confidence in the banking sector has been shaky since Aug 20, when prominent banker Nguyen Duc Kien was arrested on corruption charges.

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JUST how serious is Vietnam about restructuring its state enterprise sector? In the wake of the stiff sentences handed out to executives of troubled state-owned shipping giant Vietnam Shipbuilding Industry Group (Vinashin) last month, the answer might seem obvious. Unfortunately, things are not quite so clear cut.

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WILL Thailand’s floods be Vietnam’s gain? That certainly appears to be the view of Ho Chi Minh City’s Gon Tiep Thi newspaper, which recently published a report saying that many Japanese firms are considering moving their Thai operations to Vietnam.

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WHICH do you deal with first, inflation or economic growth? That question faces policymakers all over Asia these days. Soaring food costs continue to push up consumer prices at a time when governments are increasingly looking for ways to stimulate growth in response to another global recession.
In Vietnam, however, the dilemma is particularly acute.

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ARE Vietnam’s economic planners finally getting the economy, particularly inflation, under control? Figures recently released by Hanoi’s General Statistics Office show that economic growth slowed significantly in the first quarter of this year as the central bank raised key interest rates in a long-delayed attempt to tackle rising prices.

Key Political Risks

Vietnam has a relatively stable government, but there are growing concerns about the health of the nation's banking sector. The main external risk relates to territorial disputes with China over islands in the South China Sea.


  • Signs of instability in the banking system. According to the central bank, bad debts now total 8.6 per cent of outstanding loans, double figures published in March 2012.
  • The extent to which senior officials are willing to promote greater accountability and transparency in ailing government enterprises, and the degree to which the local media is permitted to report corruption cases.
  • Territorial disputes in the South China Sea that lead to a revival of anti-Chinese sentiment, including major demonstrations.
  • Efforts to improve relations with the United States in the hope that this would help counterbalance Chinese influence.
  • Social unrest arising out of land disputes and the corruption of local officials.

About Me

My name is Dr Bruce Gale and I am a senior writer with the Singapore Straits Times. I studied at  LaTrobe University (BA Hons) in Melbourne and later at the Centre for Southeast Asian Studies at Monash University (MA). My PhD thesis, which focussed on Malaysian political economy, was completed at the Malaysian National University (Universiti Kebangsaan Malaysia) in 1987.

From 1988 to 2003 I was Singapore Regional Manager for the Hong Kong based Political and Economic Risk Consultancy (PERC). 

I have written several books and articles on Southeast Asian affairs, including Political Risk and International Business: Case Studies in Southeast Asia (Pelanduk Publications, 2007). Books on language include Mastering Indonesian: a guide to reading Indonesian language newspapers (Pelanduk Publications, 2008)

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