- Maximum payments set for Vietnam public speakers - Foreign bankers still expect Vietnam devaluation ------------------------------------------------------ Full story Maximum payments set for Vietnam public speakers 02:27 a.m. Aug 03, 1998 Eastern HANOI, Aug 3 (Reuters) - Vietnamese officials with aspirations to join a lucrative public speaking circuit have had to think again due to a new set of guidelines capping appearance fees at just 100,000 dong ($7.60). The new ruling, issued by the communist country's finance ministry, will be applied to everyone up to top communist party officials and government ministers, a finance ministry official said on Monday. The official said payments for speeches for officials from commune levels would be limited to the lower sum of 30,000 dong ($2.30). A commune is an administrative area that comprises a number of villages. The evening news on national television devotes much of its coverage to national and local conferences and meetings, which are very common in Vietnam. ($1 - 12,994 dong) ------------------------------- Full story Foreign bankers still expect Vietnam devaluation 10:24 p.m. Aug 02, 1998 Eastern By Dean Yates HO CHI MINH CITY, Vietnam, Aug 3 (Reuters) - Foreign bankers in Vietnam said they still expect a small devaluation of the country's dong currency in the next two months, although they add that pressures against such a move have grown. Many foreign bankers had expected the government to permit a 5-10 percent downward adjustment of the non-convertible, fixed currency in either June or July. But the government has said repeatedly in recent months it believed the exchange rate was adequate to meet the needs of the economy. Foreign economists have said the dong was overvalued and should be adjusted down to boost export competitiveness. The dong is allowed to trade 10 percent on either side of a pivotal rate, which on Monday was fixed at 11,814 to the dollar. It has remained glued to the bottom of that band, close to 13,000, since Vietnam permitted a small devaluation in February, when the official rate was adjusted by 5.3 percent. A poll of five foreign bankers in Vietnam showed all now expected a rate adjustment within the next two months. ``The pressures are building. There is complete disequilibrium in the market and no one is willing to sell dollars,'' said one foreign banker. ``I still think we are a good six weeks away and my feeling is they will delay as long as possible, not for any particular reason, but because a devaluation is not positive news for any country, it shows you are under pressure.'' All foreign bankers said the interbank market was illiquid, as the dong stayed pinned to the bottom of its trading band. Some said they had noticed a shortage of dong in the banking system, especially since the central State Bank of Vietnam suspended one-way dollars for dong swap transactions in May. Foreign banks could previously swap dollars for dong with the central bank for periods of between two weeks and three months. The central bank has not said when it would resume the deals. One foreign banker said a concern for Hanoi could be inflation, which is forecast to come in at under 10 percent this year, markedly higher than 3.6 percent in 1997. In a country where a large number of people live around the poverty line, any downward rate adjustment would mean higher prices for some imported essentials. A prolonged drought in the first half of the year also put pressure on local rice prices. An additional concern could be foreign currency debt at state-run firms, although Hanoi has not released any figures. ``Our treasury people are going into the interbank market struggling to buy dollars and dong. There is just no volume with this rate, it is completely dead,'' said one senior banker. Another foreign banker said: ``The whole thing is guesswork but everyone knows they must do something, probably a 10 percent adjustment at the moment because exports are down and this is the dead period of the year regarding crops.'' The main rice and coffee harvests -- Vietnam's two top commodity exports -- are not due until later this year. Total exports are forecast to grow 10 percent this year from 22 percent in 1997, partly reflecting the economic turmoil in some of Vietnam's key Asian markets. The country manager of one foreign bank said Hanoi appeared unperturbed by the market pressure for a rate adjustment. ``I believe they don't feel they are in a hurry and Nguyen Tan Dung says he doesn't think a devaluation is needed, so for personal credibility he'll wait a couple of months,'' he said. Dung, who was appointed governor of the central bank in May, is also deputy prime minister in charge of the economy and a member of the communist party's elite 19-person Politburo. - - - - (Note: This is the third in a monthly series on Vietnam's foreign exchange market and banking sector. The reports are issued on the first business day of each month) ------------------------- AUG 3 1998 US seeks closer ties, not bases PORT CALLS BY WARSHIPS TO PHILIPPINES MANILA -- Washington seeks closer military ties with -- but not bases in -- the Philippines under an agreement allowing a resumption of visits by US troops and warships, US Defence Secretary William Cohen said yesterday. Some six years after the US pulled out of its last base there and shut down the oldest US military facility in Asia, Mr Cohen will be making the case for its return in the form of port calls and joint exercises. He meets Filipino leaders today to press for Senate ratification of a visiting-forces agreement which establishes the legal status and spells out the rights of US military personnel in the Philippines. If ratified, the agreement opens the way for a resumption of large-scale US-Filipino military exercises and visits by US warships. He said: "We're not looking for bases. To the extent we can have exercises consistent with what we have throughout the region, that would be desirable." The Americans are encouraged that President Joseph Estrada and Defence Secretary Orlando Mercado, who voted to close the bases in 1992, have endorsed the agreement signed in February by former President Fidel Ramos' government. But leftist groups, campaigning against the move, are expected to demonstrate during the Cohen visit. The Estrada government argues that the agreement is needed to strengthen the 1951 Mutual Defence Agreement, under which Washington pledges to come to Manila's aid if the country comes under attack. Joint military training has been cut back severely since the base closures. They are now limited to small-scale programmes involving no more than 20 US military personnel at a time. Washington has beefed up its military ties with Singapore, Thailand and Malaysia through port calls and joint exercises. -- AFP ------------------------- AUG 3 1998 Taiwan party cuts ties with China over killing The DPP burns its bridges following what it sees as China's coldness to the murder of one of its officials TAIPEI -- Taiwan's main opposition party, outraged by the kidnap and murder of a party official in China, has decided to return to its hardline policy on the communist mainland by closing the door on bilateral exchanges. "The death of Lin Ti-chuan and the cold response from China to our demands have made it necessary for us to reconsider our mainland policy," said Mr Yen Wan-chin, director of China affairs of the pro-independence Democratic Progressive Party (DPP). The DPP formerly banned links with the mainland but recently decided to open full contacts and improve ties. After Ms Lin's death, it demanded that Beijing allow Taiwan to send officials to the mainland to help her family. It also asked that China ensure that Ms Lin's body -- rather than cremated ashes -- be sent home. Meanwhile, members of the victim's family threatened yesterday to go on a hunger strike to stop the mainland authorities from conducting an autopsy on the body. It is a widespread belief in Taiwan that the soul of the dead person would be disturbed if the body is dissected before burial. Ms Lin, a councillor in Kaohsiung, was kidnapped in Liaoning province by three Chinese who demanded a ransom of US$200,000 (S$340,000). Her body turned up in the mortuary of a hospital in Haicheng city early on Friday. She had apparently died from an injected overdose of sedatives. Her boyfriend, Mr Wei Tien-kang, who was also abducted and drugged, later told police that he suspected that his business associate in China, who had been pressing him for a US$700,000 payment for an order, was behind the abduction. The DPP had given Beijing till 5 pm on Friday to respond to its demands, or the party would suspend its links with China and all cross-strait exchanges. But one of Beijing's top negotiators with Taipei on Friday snubbed the demands, denouncing them as an attempt by some people in Taiwan to create a political incident out of the matter, local news media reported. The DPP denied this. Mr Yen said: "Our requests are not unreasonable. They are all based on humanitarian considerations. But the communists just gave us the cold shoulder." Party legislator Chang Chun-hong, who had been asked to form a task force over the case, said after discussions that the DPP had decided to suspend its links with China. "We will mobilise our lawmakers in the legislature to boycott all Taiwan's cultural, sports and social exchanges with the mainland," he said. -- Reuters, AFP
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