Girding for WTO

With Vietnam expected to join the World Trade Organisation in the fall, companies and individuals are scrambling to prepare for economic upheaval. Some enterprises, such as Vietnam8217;s state-owned telecommunications giant, are gearing up for mass layoffs.

But many Vietnamese see a golden opportunity ahead. They are polishing up their resumes and taking crash courses in hopes of contending 8212; and perhaps flourishing 8212; in a more open economy.

Vuong8217;s employer, Trung Thanh Co, for the first time sent managers abroad to learn how Chinese and Japanese companies distribute their food products nationwide. Vuong recently completed six months of studies on business law.

For this nation8217;s 84 million people, the WTO could provide the biggest economic test since Hanoi introduced doi moi in 1986. That policy of 8220;renovation8221; dismantled collective farms and opened up trade, setting the socialist country on a path toward market reforms.

Vietnamese leaders want to secure their WTO bid by November, when they host President Bush and Asian leaders for this year8217;s gathering of the Asia-Pacific Economic Cooperation forum. Together, APEC and WTO are seen here as Vietnam8217;s coming-out party.

Although membership in the 149-nation trading body will open up markets for Vietnam, it also will require the nation to remove barriers to foreign companies in banking, retail and other industries.

8220;My biggest fear is Vietnamese competitiveness,8221; said Tran Dinh Thien, associate professor at the Institute of Economics, a state-run think tank. 8220;The problem is, how do we compete with other, stronger countries?8221;

When asked about the WTO, Danh Dang, 91, let out a stream of thoughts in French and Vietnamese: 8220;The French invaded and dominated here over 80 years. Then the war against the US made Vietnam poorer and poorer. But when Vietnam joins the WTO, it means we can upgrade the whole society and achieve a higher standing in the world.8221;

They hope the WTO will bring more foreign employers, which are highly sought out by young Vietnamese because they generally pay more and offer better benefits. Hien earns about 125 a month as an accountant for a Vietnamese logistics firm, but the Hanoi native says she cannot save much. She spends a fifth of her wages filling the tank of her Suzuki motorbike. Gasoline costs about 2.60 a gallon here.

8220;I know it will be good,8221; Hien said of Vietnam8217;s membership in the WTO.

Not everybody shares her optimism. Despite efforts to reform government-run companies, many remain bloated and inefficient. Economists say the state sector accounted for 38 per cent of the nation8217;s economy last year but created just 11 per cent of the jobs. And now, it is hurrying to reorganise before competition heats up.

At Vietnam Posts and Telecommunications Group, managers are in the process of splitting up their mail delivery systems and telecom services. About 15,000 of the group8217;s 90,000 jobs will be eliminated, starting in the fourth quarter, said spokesman Bui Quoc Viet.

Vinatex, Vietnam8217;s largest state-owned textile and garment enterprise, has moved to privatise 40 of the 57 companies in its group, aiming to raise money from capital markets and operate more efficiently.

But Le Quoc An, Vinatex8217;s 55-year-old chairman, spoke grimly about the entire industry8217;s future. The nation8217;s garment industry has boomed in recent years with about a million workers. Foreign investors have relocated here from China because of Vietnam8217;s low labour costs and cheap land and because of export quotas imposed by the West on China-made clothing. But under pressure from US negotiators, Hanoi agreed to phase out all government subsidies for exporters, including preferential tax rates.

8220;We cannot compete with China. We are trying to survive next to China,8221; said Le.

Two years ago, Le Khac Hiep quit his job as a senior executive at Prudential Insurance Co8217;s office in Hanoi. The 50-year-old, who has a doctorate in physics from Ukraine, teamed up with a few friends and raised about 38 million to build two towers for offices and shopping. From a top floor window of his 22-storey building, Le could see streets of narrow boxcar houses and short buildings. There wasn8217;t an tower anywhere near as tall as Less.

In the last decade of Vietnam8217;s market reforms, Le has made a good living, enough to send his daughter to college in San Francisco. He has even higher hopes for his 12-year-old son. 8220;WTO brings benefits,8221; Le said. 8220;It will be a chance and a challenge.8221;