Forex crackdown has eased market tension: expert 

A staff member counts US dollar notes at a bank in Ho Chi Minh City

The dong has strengthened against the dollar and dollar-denominated deposits have increased over the past week after the central bank clamped down on foreign exchange transactions in the unofficial market. On Thursday, the dollar traded at Vietcombank at VND20,865, down from VND20,880 a week ago.

Thanh Nien Weekly discussed the implications of the move with former State Bank of Vietnam Governor Cao Sy Kiem.

Thanh Nien Weekly: The government is strengthening surveillance of foreign currency trading in the black market. Will it be an effective measure given that the amount of foreign currency held by locals is very big, and administrative measures taken over the past ten years have been unsuccessful?

Cao Sy Kiem: The current measure aims to implement the foreign currency management ordinance which had been issued in the past. However, we did not implement it strictly, and this seriously affected foreign currency trading as well as supply and demand, resulting in speculation.

So, this measure is quite necessary. After strict implementation, the situation in the market is less tense, and the foreign exchange rate is down.


However, the issue is whether the measure is applied for a long time or not, and how ordinary people’s demand for foreign currencies is met. The surveillance tackles those violating the law and speculators who harm the market. Thus this is a normal measure and should be supported.

We have not paid due attention to strengthening activities of relevant agencies to meet the demand of people for foreign currencies. There should be commercial banks or local individuals with licenses, so that people can easily buy or sell foreign currencies to banks at stable prices.

The government has asked the State Bank of Vietnam to come up with a plan for foreign currency and gold bullion management and de-dollarization of the economy, which will be approved by the government in April.

If this is approved, together with the current measure, the problems in the foreign currency market will be dealt with. The market will develop in a more stable manner, and speculation as well as illegal trade in foreign currencies will be prevented.

Would foreign currency trade still continue as an underground activity?

– Obviously, when the surveillance is strengthened, we can expect that the trade in the black market will be disguised and conducted secretly. So we have to take tough measures to prevent it


Nguyen Quang Huy, head of the central bank’s foreign exchange management department, said the foreign exchange market has shown positive developments and the exchange rate has stabilized because domestic exporters who were selling foreign currencies to banks and authorities had adopted tough measures to stabilize the free market.

He conceded that this could affect some people who buy or sell foreign currencies in the free market.

According to current regulations, people can buy dollars at banks to meet their legal needs. However, some banks are still cautious about selling foreign currencies to individuals. People could also use international payment cards to meet their foreign currency spending needs abroad, he said.

The State Bank of Vietnam is considering some specific measures to make it easier for individuals to buy foreign currency cash from banks at reasonable prices.

In fact, one of the main reasons for the problem is the habit of hoarding foreign currencies. Is it easy to give up the habit?

– The habit is due to inflation and difficulties in buying foreign currencies from banks. As the Vietnamese dong is devalued, people buy dollars and gold as a way to protect their assets from inflation. So, we have to curb inflation, and when it is reduced, the dong’s value will increase. And when market management measures are brought into full play, speculation will be limited, helping narrow the gap in the exchange rates between the black market and the official market. When this happens, people will give up the habit.

In addition, our service should be better so that people find it easier to buy dollars from official channels. If it is easy for people to buy foreign currencies for legal needs like studying, traveling and getting healthcare abroad, they will stop hoarding.

However, it is not easy to buy foreign currencies from official channels.

– Yes, that is the current situation. However, the government has asked the State Bank of Vietnam to ensure that people can obtain foreign currency for their real needs even as it tightens controls over foreign currency trading.

The Boys are in town 

(L to R) A. J. McLean, Nick Carter, and Howie Dorough – three members of US boysband Backstreet Boys at a press conference in Ho Chi Minh City Wednesday

Nick Carter and Howie Dorough, two members of the world-famous American band Backstreet Boys, arrived in HCMC Monday for the short Vietnam leg of their This Is Us world tour.

The band is doing two shows in Vietnam: at Military Zone 7 Stadium in HCMC on Thursday and My Dinh National Stadium in Hanoi on Saturday.

The Backstreet Boys are the biggest selling boy band of all time and have been nominated for seven Grammy Awards in their long career together.

Many fans turned up at HCMC’s Tan Son Nhat Airport to give the ‘boys’ a warm welcome when they arrived after 36 to 47 hours in the air.

“I’ve been looking forward to seeing the Backstreet Boys for months. And I just must go to Hanoi to see them,” exclaimed university student Thanh Xuan.

At Wednesday’s morning press conference at the Park Hyatt Hotel, which only lasted for 25 minutes, including the photo op, Thanh Nien Weekly asked the band what they expected out of their visit to Vietnam.

“We expect to give back what we get. We’ve had a great time for 18 years and gained lots of experience. We want to give back the energy and hope they (the audience) have a great time and enjoy our music,” Nick Carter replied.

Ahead of their Thursday show, the Backstreet Boys traveled around HCMC and visited the war museum, Ben Thanh Market and the Cu Chi Tunnels.

“This trip has definitely opened our eyes and taught us things we didn’t know. We had a lot of fun getting out on our first day here. We visited the countryside and spent six hours relaxing by small ponds amid the rice fields,” Carter said.

Also at the press conference, the band announced that they would be touring with New Kids On The Block.

“They’ve done well in the past. It’s a joint venture for us. We’re trying to do something different, create something special. It is the beginning of many new things,” Carter said.

Their world tour, which began in Europe in 2009, is said to be renewing and refreshing one of the most famous boy bands in the world.

A.J McLean said they had been thinking about the band’s direction for a month and decided to go back to what they were best at: pop music. He also said they were thinking of getting a new producer.

This Is Us – Vietnam


An exclusive source has informed Thanh Nien that playgirl Paris Hilton could attend the VIP party held to welcome the Backstreet Boys’ show in Hanoi. The party could take place at the Hilton Hanoi Opera, a property that belongs to the corporation founded by Hilton’s grandfather. Paris is also known as one of the Backstreet Boys’s ex-girlfriend.

Do Hoai Nam, president of Water Buffalo Productions, the promoter who has brought the Backstreet Boys to Vietnam, spoke with Thanh Nien Weekly about signing up the band.

“It took us a year of talks and emails back and forth. Finally, relying on the advice of international lawyers, we signed a very long and detailed contract. The Backstreet Boys made a thousand enquiries about things like the lighting and sound systems, stage design and their accommodation here,” Nam said.

“From the outset we didn’t anticipate making any profit from these concerts. Few international acts come to Vietnam, unlike in nearby countries like Thailand. We want to invite more international bands to Vietnam so that local fans can experience international music and culture. However we don’t hand out free tickets as it would kill our business,” he said.

“Some Vietnamese people spend two to five million dong a week at the discotheques,” he added.

He also told Thanh Nien Weekly about the habits and preferences of the Backstreet Boys. “A.J loves fast food, and Howie D really likes Vietnamese food, especially Bong thien ly xao toi (a vegetable flower fried with garlic) while Nick Carter can spend a whole day with a Play-station. Howie also feasts on parties. On their first day in Vietnam, Howie and his wife escaped from their bodyguards’ phone calls and went out all day,” Nam said.

In their concerts here, the Backstreet Boys will be using the latest Meyer sound system like Madonna, Michael Jackson and Britney Spears.

Ahead of the first concert, the stadium was already teeming with hundreds of bodyguards.    

Nguyen Van Nam of the International Security and Protection Company, which is looking after the Backstreet Boys while they are in Vietnam, said that the huge number of fans could create problems.

“The guys have lots of local fans. “We have to arrange for 20 to 30 bodyguards to be present at every stage of the tour. Their four personal bodyguards are coordinating with us well. There’ll be around 300 security personnel for the concerts in HCMC and Hanoi, checking the fans and protecting the band members,” Nguyen Van Nam said.

These will be the first shows in Vietnam to use a special detector to check the bar-coded tickets and spot any fakes, he said.

Ticket prices range from 500,000 to two million dong. To book tickets and have them delivered, call 1900 6604 in Hanoi or 1900 6608 in HCMC.

Hoan Kiem Turtle to take its status to the grave 


Experts still divided on ways to treat turtle too old and special for conservation efforts

The badly injured giant soft-shell turtle living in Hanoi’s Hoan Kiem Lake, pictured here on February 8, is said to be one of four remaining Rafetus swinhoei specimens in the world. The photograph has initiated a new round of talks on ways to treat its injuries and improve its habitat.

As local and international experts scratch their heads on ways to save an extremely rare and injured giant soft-shell turtle in Hanoi’s Hoan Kiem Lake, it looks set to take its unique cultural and legendary status to its grave sometime over the next decade.

One agreement that has been reached among the scientists is that the environment in the 12- hectare lake needs improving.

“I don’t think there is any one single solution. I think improving the habitat or improving the quality of the environment in the lake is one of the first things that should be done,” said Timothy McCormack, a coordinator with the Cleveland Metropark Zoo’s Asian Turtle Program.

“During the dry season, I think the water level is very low. The pollution makes it seem a lot worse. So you can add more water into the lake to increase the water level and reduce the pollution,” he told Thanh Nien Weekly on the phone.

It is generally accepted that there are only four confirmed members of the species (Rafetus swinhoei) left in the world – two living wild in Vietnamese lakes – Hoan Kiem and Dong Mo – and a captive pair in China that have, so far, failed to produce fertile eggs. One Vietnamese scientist in the forefront of efforts to save the Hoan Kiem turtle, Ha Dinh Duc, has claimed it is the only member of a new species.

The rare soft-shell turtle in Hoan Kiem Lake has played a hugely important role in Vietnamese lore for more than 2,000 years. The Hoan Kiem Lake turtles are traditionally viewed as manifestations of the Golden Turtle God, or Kim Qui. Legend has it over the last two millennia that they have helped design fortifications, thwart enemy armies and produced a number of enchanted weapons.

Photos of the turtle over the past months showed multiple injuries on its neck and carapace, which pushed Hanoi authorities and scientists to rush for solutions to save the animal.


At a workshop on the issue in Hanoi on Tuesday (February 15), scientists continued to differ over the healing methods – removing the turtle from the lake to treat its injuries or remaining content with improving pollution in the lake.

Phan Thi Van of the Research Institute for Aquaculture proposed that the turtle be removed to an enclosed body of water and its injuries treated before it is released back into the Hoan Kiem Lake. Kim Van Van of the Agriculture University agreed with Van, adding that the lake should be dredged and cleaned.

However, McCormack argued that this could harm the animal.

“For the Hoan Kiem turtle, [although] the lake is really polluted, it has been there for many years. It is almost used to that water. If you remove the animal and move it to somewhere else, to a small enclosure maybe with clean water, it may actually make the situation worse,” he told Thanh Nien Weekly.

Deity forever

Conservationists said that due to the advanced age and cultural significance of the Hoan Kiem turtle, it is not considered a candidate for breeding or conserving.

“Given its ‘God’ status, the idea of capturing it to check its sex was a non-starter,” said American Douglas Hendrie, technical advisor for the local conservation group Education for Nature-Vietnam. “So what we have here is a potentially sad tale. The Hoan Kiem turtle is old [and] it will die in that lake at some point, probably over the next decade,” said Hendrie.

“I fear that its cultural value far overshadows conservation interests and concerns, even to the point of allowing the turtle to die without replacement… and thus, the Hoan Kiem turtle does not factor into conservation at this time.”

Given this situation, conservationists have turned their attention to the Dong Mo Lake – a tiny body of water just west of Hanoi where a young, virile male Rafetus swinhoei is watched over by a team of conservationists and a one-armed fisherman who rents the eastern half of the lake. This healthy male may be the species’ last great hope, they say.

Duc, the Vietnamese scientist who has been monitoring the Hoan Kiem turtle for decades, said he would go ahead with his fight for the survival of the giant species.

Despite some remaining rifts with international experts on the issue, Duc has earned their admiration for his ardent conservation work.

“Duc is a positive voice for the [Hoan Kiem] turtle… and his life revolves around this turtle,” Hendrie said. “His heart is in the right place.”

Duc said his relentless conservation efforts have never burnt him out. The only thing worrying Duc was that he was getting old and no one seemed to be prepared to take over his job, he said.

“I have trained some people to work in the turtle conservation field. But they all ended up landing other jobs,” Duc said. “The modern life has made people more and more pragmatic.”

Will Duc’s idealism be pragmatic enough to save the turtle? Animal lovers in general and admirers of the Hoan Kiem turtle in particular are keeping their fingers crossed.

Underworld goes underground 


Interpol red alert subject found safe haven in Vietnam for five years

Bunty Pandey (right) was arrested in Vietnam last October. Police said Pandey had been living in Vietnam under a false identity — Vijay Subhash Sharma, 40, labor contractor—- while running his operations in India

Smuggling, kidnapping, extortion and murders galore – Indian gangster Bunty Pandey had plenty of such crimes to his credit, and was wanted by the Indian police for at least 38 cases – and counting.

Despite an Interpol red corner notice issued for Pandey in 2002, he was nowhere to be found. Since 2002, Pandey had traveled to Nepal, Singapore, Thailand, Cambodia, Laos and Vietnam.

The mystery was solved a few months ago.

He had been living in Ho Chi Minh City for five years with his family and children as a labor contractor and consultant, it was revealed last week during a review meeting held by the southern office of the Ministry of Public Security.

Among the 89 criminals nabbed in the southern region in 2010, the prize catch was 40-yearold Prakash Pandey aka Bunty Pandey. He stayed in Vietnam as Vijay Subash Sharma.

He had obtained an Indian passport from Mumbai in 1999 impersonating as Vijay Subhash Sharma. All his subsequent passports were also in this name making it difficult for Interpol and the Indian police to track him.

The gangster was arrested at a 20th floor condominium of Nhieu Loc Apartment in Ho HCMC’s District 3, where he was living with his wife and two children, police said.

The arrest was conducted on October 22 by a joint force of Interpol Vietnam and Agency No.1 that is in charge of handling foreign-related cases, following intimation from Interpol India saying that Pandey may be in Vietnam.

Thanh Nien Weekly learned that Pandey had not stopped dabbling in crime during his stay in Vietnam, although such activities appear to have been confined to India. He was involved in extortion and blackmailing even when he was here, and the police in India’s Mumbai City had cases on him as recently as in 2009.

In fact, his involvement in what looks like human trafficking came to light the day he was deported to India. A group of 16 Indian nationals were found by local police stranded in a public park in HCMC on November 4, all but one of them without passports or other valid travel document.

They said Pandey had brought them into the country in October 2010, some days before his arrest, and taken their passports and money, promising jobs and work permits in Vietnam. Since their documents could not be found and Pandey had been deported, the workers were also repatriated. Some of the passports may have been submitted for obtaining work permits to authorities in HCMC and may still be with them, Indian embassy officials told Thanh Nien Weekly.

Vietnamese police only said they found the Indian criminal by applying “professional methods.” The Times of India, meanwhile, said police tracked him down via a SIM card issued in Vietnam.

"He had been using a SIM card issued in Vietnam but would not make calls from this number. However, he must have forgotten that he had used the same card while speaking to one of his cronies last year. The number entered our records and we started monitoring it," the paper cited an anonymous police source as saying.

"His phone was being tapped. When the name of a local gangster cropped up, the police was certain that it was Pandey who was using the SIM card. ”

Reports from India say Pandey is being kept in an isolated cell of the Mumbai crime branch’s two-storey lock up.

Indian Ambassador Ranjit Rae told Thanh Nien Weekly that this case marked “a high point of the cooperation and trust between India and Vietnam in general and the police authorities in particular.” He commended the relevant agencies of the Vietnam’s Ministry of Public Security for their support in apprehending Bunty Pandey.

Asked about the trend of Indian mafia members choosing to set up camp in Southeast Asia, Rae said that “It was necessary to step-up cooperation between the law enforcement authorities of concerned countries.”

Pandey’s journey in crime began in his home state of Nainital in Uttarakhand. He came into his own in 1995, when he helped underworld Don Chota Rajan execute the killing of Thakiyuddin Wahid, managing director of East-West airlines, outside the latter’s office. Wahid had refused to pay extortion money.

His crime run continued for years. Mumbai crime branch chief Himanshu Roy said that Pandey severed ties with the Rajan gang in 2002.

The Indian police source told the Times of India: "He lived in a number of countries, including Nepal, Bangladesh, Thailand, Singapore and Cambodia. But mostly he spent his time in Vietnam where he had a work permit and was posing as a labor contractor and consultant."

Higher rates hurting economy 

The Hanoi-based Southeast Asia Commercial Joint Stock Bank (SeABank) on Thursday raised deposit interest rates to 18 percent early Wednesday before reduced them to 13.5 to 14 percent.

Interest rates in Vietnam have soared over the past few weeks after the central bank signaled tighter monetary policies to curb inflation and stabilize the foreign exchange market.

While raising interest rates can help contain inflation, very high rates can hurt the economy, Tran Hoang Ngan, a member of the National Monetary and Financial Policy Advisory Council, told Thanh Nien Weekly. A deposit rate of 12 percent is reasonable, as it is higher than the anticipated full-year inflation rate of 11 percent or so, ensuring that depositors can cover the higher prices of goods.

Thanh Nien Weekly: Each time the interest rates rise, several explanations are offered, such as stronger capital inflow into the stock market, higher inflation, and tightened monetary policies. What about the latest increases?

Tran Hoang Ngan: The higher interest rates are due to increasing inflation and exchange rates. To curb inflation and stabilize the exchange rate, the central bank increased the base rate, pushing up the interest rates in the banking market.

However, the (interest rate) hike should be seen as a short term phenomenon. The central bank should consider bringing them to a reasonable level. In theory, when inflation rises, countries will increase interest rates, but the increase must stand at levels firms can accept. This is where the central bank should come in.

The latest interest rate hike has hurt local production and business, so current levels should not be allowed to continue.

Some say that the capital mobilization capacity of commercial banks is still limited, and that this has contributed to the sharp rise. Would do you agree?

High interest rates are also due to the weak management of commercial banks. They increase the cost of credit for businesses.

Under the mechanism of free interest rates, we apply a policy of negotiable interest rates, which makes banks compete against each other to lure deposits through increased deposit rates.

The banking network has extended after some rural banks turned urban in 2006. Operating on a larger scale, the banks’ expenditures have increased, so they have to raise their interest rates as well. Besides, banks looking to strengthen lending operations increase deposit rates to increase their capital supply. Thus, their lending interest rates increase as does the risk they face.

In general, local banks’ business effectiveness is still low. The prices of banking stocks, which were high several years ago, are now very low. Some banks have seen their stocks falling below their face value. This shows that the banks’ use of capital has not been efficient or effective, and that it is necessary to restructure the banking system, merging weak banks with stronger ones and dissolving those without sufficient charter capital.

In the context of the economy always needing foreign capital, how is credit supply affected?

Our savings now are lower than investment requirements, so we need foreign capital sources. However, there is a problem with this as well. From foreign direct investment (FDI) projects, we expected technology transfer and a reduction in imports. However, after 20 years (of opening the market to FDI) we receive outdated technology, and the FDI sector sees a trade deficit.

Vietnam is one of the countries with the highest interest rates in the world. This will discourage investors and encourage people to deposit money in banks. So, prolonged high interest rates will destroy small firms in the country, causing a shortage of goods, and therefore, increasing inflation again. The central bank should intervene to keep interest rates at a reasonable level.

What do you think is reasonable?

It is the correct thing to do, to accept high interest rates to curb inflation, but not at extraordinary levels. So, keeping the deposit rates at 12 percent is reasonable, ensuring that it is higher than inflation. Our country’s full-year inflation is estimated at 11 percent, so a 12-percent deposit rate can help depositors cover the higher prices they pay for goods.

Inflation in Vietnam is caused by a number of factors not decided by money supply. Some countries have an interest rate policy based on base inflation in which non-monetary factors are not calculated.

For example, prices of crude oil and food in the market are not increasing because of higher money circulation in Vietnam, but because of world supply and demand.

So it is necessary to pay attention to this issue. Interest rate adjustments should be based on the base inflation rate, not the general inflation index (or headline inflation rate that has a larger basket of goods and services).

The latter is a measure of living standards that can be used to adjust wages, but the base inflation rate should come into play in formulating interest rate policies.

No going back 

A boy begs for alms in Kabul

It took Terry Gordon all of five months to decide Afghanistan was not the place for him to be, the rich financial gains notwithstanding.

Gordon left Vietnam after five years, leaving behind an expectant Vietnamese wife to work as Manager for the Supreme Group of companies which supplies food for the 200,000 NATO troops stationed there.

With, as the New York Times recently reported, “the Obama administration …increasingly emphasizing the idea that the United States will have forces in Afghanistan until at least the end of 2014,” there seemed to be no end to another protracted conflict initiated by the United States.

As one of only about 50 white businessmen in Kabul, Gordon felt conspicuously exposed to the dangers of a violence-racked nation.

Speaking with Thanh Nien Weekly shortly after the family reunion on his return to Saigon, Gordon said he had decided to stay on in safe and secure Vietnam, having got an offer to head the IP Software and Business Development division of ATI Telecom.

“I feel guilty not going back to Kabul because I have friends there,” he said ruing the fact that he’d left without saying goodbye.

Gordon’s wife Ta Thuy Ha said she had advised him to stay away from army people and wear clothes like the locals.

“To avoid worrying too much, I did not read about the war on Afghanistan during the time my husband was there. We chatted every night and SMSed during the day. He told me everything except the trips to the South or the North of Afghanistan,” she said.

Ha is not surprised with Gordon’s decision. “After a while he knew it’s not worth staying on in Afghanistan. He told me that whenever he had to travel by car within the city he had a terrible feeling that he did not know what will happen.”

Terry Gordon, one of 50 white businessmen in Kabul, at Mazar-I-Sharing, a city in Afganistan. He has just returned to Saigon after working in Afghanistan for five months. Photos courtesy of Terry Gordon.

Gordon said that in Kabul, he could earn three times as much money as in Ho Chi Minh City, with a 12-month contract netting a six-figure income. With that kind of money, he could have bought an apartment in HCMC soon. But Afghanistan taught him there were things more important than making a quick buck.

Gordon is a former administrative officer in the Australian air force. He came to Vietnam on a holiday and later returned to work as a tour leader for Intrepid, an Australian travel agent in Vietnam.

Gordon said that his wife let him go to Kabul because she knew she had no option. “I missed the time in the army. By the way, I promised her to come back in one year,” he said.

Surviving in Kabul

“The thing that scared me the most was not the Taliban army but kidnappers. White people are prime targets for kidnapping. (And I cannot see who is Taliban and who is not.)“

According to Gordon, wealthy Afghanistan families who could afford to leave have already left. Those who stayed back are the ones who could not afford to leave.

In Afghanistan, he said everyone was out to get what one could and everybody was there for the money.

“They are lovely people but they cannot trust others. They have been constantly at war for hundreds of years,” said Gordon.

He said that to avoid attention, he never used the army car and did not hire bodyguards. He always covered himself with a big blanket just like the Afghans.

I always took along a small package with passport, passport copies, clothes, water and matches in case I had to leave quickly,” he said.

Another planet

Gordon said when he first saw the desert mountains ranges with small green valleys, he felt he was landing on Mars.

Working as an operations manager for the Supreme Group which provides food, catering, logistics, clothes and aviation services to NATO, Gordon said he worked with people from different countries.

To survive there, one has to be good at dealing with people, communication and understanding different cultures, he said.

Gordon said the only thing that made him feel good during the time in Kabul was that the company employed 1,000 local people which helped them support their families. And when his staff met him they put their hands on their hearts and said “thank you.”

Early on in his assignment, Gordon found, much to his dismay, that he had to move from one place to another, which scared him.

He lived in a container tank; in an electronic world, with bodyguards, and protected by high fences, “just like a prison.”

“I counted the days and months and the last month lasted so long. And for the last day, I was counting every hour”. He was lucky that his place was never broken into, but he knows people tried to.

Gordon showed Thanh Nien Weekly pictures of children with old faces as if they’d never had a childhood. He said there were always children offering to take care of his car. At first there were around five street children and when he came back there were around 25 kids waiting for money from him.

He thought of sending Vietnamese people to work in Afghanistan, but reconsidered later. “I would feel guilty if I encouraged people to go where they could get hurt,” he said.

Back in Vietnam, things have changed.

“Before he would get angry easily, but after his time in Kabul, he has become calmer. He has had a lot of time to reflect and now he appreciates life more,” said Ha.

A new chapter 

US Secretary of State Hillary Clinton speaks at a luncheon in Hanoi in July. Her back-to-back visits to Vietnam this year articulated the rising US commitment to bilateral relations.

Hillary Clinton’s back-to-back visits to Hanoi articulated the rising US commitment to US-Vietnam relations. Clinton’s recent announcement “The US is back in Southeast Asia,” struck a chord of surprise for many in the region.

In his farewell interview with Thanh Nien Weekly, departing US Ambassador Michael W. Michalak speaks broadly of the new cooperation between the two countries. The US has publicly opposed the damming of the Mekong River and Michalak articulates an emerging US position toward the Lower Mekong River Basin.

Michalak will leave Vietnam for his next assignment in the first week of January 2011.

Thanh Nien Weekly: How do you view your term as US Ambassador to Vietnam in the scope of your long career as a diplomat?

Michael W. Michalak: My experience as Ambassador to Vietnam has been one of the most interesting and rewarding experiences of my life, and certainly of my 30-plus years with the Department of State. Being able to play a role in moving beyond our painful past and building a strong partnership has been a tremendous honor.

What effects will the damming of the Mekong River in China, Laos and Cambodia have on the Mekong Delta?

During her visit to Hanoi (in October), Secretary of State Clinton discussed the potential impact of proposed dams on the mainstream of the Mekong River with her Lower Mekong Initiative partners in Cambodia, Laos, Thailand, and Vietnam. The Secretary recommended a pause before major construction continues and said the US would sponsor a study of the issue. Hydropower development on the Mekong mainstream is an issue of concern, as recent studies show that even one dam could cause irreparable damage to the complex ecosystem of the Mekong River Basin and pose an immediate and long-term threat to the food security and livelihoods of millions. For Vietnam, upstream dams will reduce water and sediment flows, resulting in saltwater intrusion, soil erosion, and decreased soil fertility, threatening agriculture and aquaculture productivity. The Mekong Delta is Vietnam’s “rice basket,” and Vietnam is the world’s number two rice exporter. This issue has consequences for global food security.

US Ambassador Michael W. Michalak

If these dams are built, how will they impact the livelihoods of those living in Vietnam’s Mekong Delta and in other lower Mekong countries? How will the residents of the Mekong Delta survive if they can no longer make a living farming and fishing?

It is critical to address the livelihoods of the 20 million Mekong Delta residents in Vietnam, 85 percent of whom rely on agricultural activities. The Delta has a higher GDP than the national average—10.2 perent growth in 2008, compared with 7-8 percent national growth. What’s more, Delta rice production accounts for 60 percent of the country’s total export turnover.

While some research is currently underway about adapting agricultural practices to address increased water salinity, for example, more is needed. The US’s Lower Mekong Initiative (LMI) addresses education and environment among its four pillars. The DRAGON (Delta Research and Global Observation Network) Institute at Can Tho University, jointly established by the US and Vietnamese governments in 2008, continues to research Delta ecosystems and sustainable river deltas in the context of climate change.

Do you have any suggestions to promote more effective cooperation between the members of the Mekong River Commission?

In 2009, the US joined with Cambodia, Laos, Thailand, and Vietnam to launch the LMI. These four countries also make up the Mekong River Commission. The purpose of the LMI is to enhance cooperation on issues of regional importance.

One of the ways we have pursued this is through the sister-river partnership between the Mekong River Commission and the Mississippi River Commission. The Mekong River Commission and the Mississippi River Commission both play key roles in managing waterways that are vital to the livelihoods of millions of people. The sister-river partnership enables the two bodies to cooperate and share expertise and best practices in areas such as climate change adaptation, flood and drought management, hydropower impact assessment, water demand, and food security.

Data-sharing among the countries of the Mekong River Basin is key to finding sustainable ways to develop the basin. Last December, the US Geological Survey and Can Tho University brought together scientists and experts from throughout the region to share information on how climate change and human activities could impact the ecology and food security of the basin.

The US remains committed to forging fruitful, long-term ties to all four Mekong River Basin countries.

The recent visits of US Secretary of State Hillary Clinton further strengthened the commitment of Vietnam and the US to ambitious cooperation in the areas of climate change, education, business, security and nuclear energy. Could you please give us more specific details regarding this cooperation?

The two visits by Secretary Clinton to Hanoi, less than four months apart, demonstrate the importance of the US-Vietnam relationship. In just 15 years, the scale of bilateral cooperation has increased dramatically in several areas, particularly in terms of trade, education and security.

During Secretary Clinton’s visit, she witnessed the signing of two very significant commercial agreements—between Vietnam Airlines and Boeing, and between Microsoft and the Ministry of Information and Communications.

Education has been another of my top priorities as Ambassador. And I’m very happy to say that in three years, the number of Vietnamese studying in the US has nearly tripled.

However, let me be clear: there is much work to be done. I agree with those Vietnamese who say that educational reform is key to taking Vietnam to the next developmental level, and the US looks forward to working with Vietnam as it takes the necessary, tough steps to strengthen its educational system.

Both Secretary of Defense Gates, who participated in October’s ASEAN Defense Ministers Meeting-Plus Summit, and Secretary of State Clinton reaffirmed the US government’s interest in deepening security cooperation with Vietnam. Specifically, the US and Vietnam agreed to work bilaterally and through regional institutions such as ASEAN to address such challenges as humanitarian assistance/disaster relief, search and rescue, maritime security, and peacekeeping.

Our two countries also agreed to deepen cooperation in military education and exchanges. It is an area that has developed at a deliberate pace, but one that has great potential and is very important to maintain peace, prosperity, and stability in the region.

On nuclear energy, the US and Vietnam concluded a general Memorandum of Understanding on civilian nuclear cooperation in March. We have not yet opened formal negotiations on the 123 agreement, but we look forward to doing so.

Climate change is an issue both the US and Vietnam take very seriously, which is why we established a joint working group to deal with this global threat. Vietnam is one of the countries that will be most severely impacted by rising sea levels caused by climate change, and we applaud it for its pro-active response.

What do you consider the most significant changes and improvements to the bilateral relationship during your term as US Ambassador to Vietnam?

I think the most significant progress in the bilateral relationship has been made in three areas: our trading partnership, educational exchanges, and security cooperation. Secretary Clinton, in fact, recently said the progress made in our relationship has been “breathtaking.”