[governance-vn] Opening Vietnam

[Vern Weitzel]

Subject: 	WSJ: Opening Vietnam
Date: 	Mon, 15 Sep 2008 19:57:18 +0700
From: 	nguyen mai <henmoc at gmail.com>



   Opening Vietnam

**FROM TODAY'S WALL STREET JOURNAL ASIA**
/September 15, 2008/

Good economic stories are in short supply these days, but they are out
there. Look to Vietnam, where the government has just given the go-ahead
for a significant liberalization of its banking sector.

Two foreign banks, HSBC and Standard Chartered, received permission last
week to incorporate locally as 100% foreign-owned enterprises. The move
lifts restrictions on the banks' ability to open branches, limits that
have effectively prevented them from marketing aggressively to local
clients. It's also consistent with the agreement Vietnam inked with the
World Trade Organization ahead of its accession in early 2007.

That's good news all around. Greater competition should encourage
state-run banks to improve their risk controls, products and customer
service. Eventually, that dynamic will strengthen the country's
financial system against external shocks. For the foreign banks, Vietnam
offers a new and growing market to tap at a time when the global economy
is slowing.

Last week's announcement is one in a series of recent liberalization
moves. Since it joined the WTO, Hanoi has cracked open its insurance
market to foreign companies. It has also been cutting away at its
tariffs on goods such as textiles. That's in contrast to China, which
negotiated generous exceptions to free trade in some services when it
joined the WTO and still strictly limits foreign investment in stock
broking and other areas.

This isn't to say that Vietnam is a fully open economy, or that it will
be anytime soon. It's too early to say whether other foreign banks will
receive similar permission to incorporate locally. But at least for now,
Hanoi has taken a solid step forward. Foreign investors and local
banking customers will be the big winners.

http://online.wsj.com/article/SB122141400912733323.html?mod=googlenews_wsj

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