(5 Aug 1995) English/Nat

Vietnam and the United States are Saturday finally laying to rest the ghost of the Vietnam war by making peace.

US Secretary of State Warren Christopher is in Hanoi for the first time to open an embassy and officially normalise relations between the former enemies.

American business has been following the normalisation of relations closely - Vietnam is one of Asia's most promising emerging markets.

The Socialist Republic of Vietnam was founded as a communist state with a centrally planned economy and a one party political system.

Communist leader Vladimir Lenin is still honoured in Hanoi, but Vietnam's rulers are trying to reform their economy without losing their grip.

And it's working so far.

The economy grew seven point eight percent last year.

Nevertheless, the old socialist bureaucracy still hampers development with paperwork, corruption and arbitrary rulings that frustrate investors.

And Vietnam is still a some way from joining countries like South Korea or Singapore on the list of Asian economic dragons.

SOUNDBITE:
"I think that the word dragon is kind of stereotyped, it applies to a lot of Asian countries. However, if you look at the economy of Vietnam, it will take Vietnam 10 to 15 years with a very high growth rate, from 10 to 12 percent per year to make it as an economic power as Thailand today. So that is the reality."
SUPER CAPTION: Dinh Thi Hoa - Galaxy Co. Investment Consultant

But Hoa says that nevertheless, Vietnam is starting from a very low base and
smart money will be able to make big profits as the country grows.

Other consultants are even more bullish.

They say US companies have been showing more interest in Vietnam in the few weeks since 11 July when President Clinton normalised relations.

They think Vietnam will soon get favoured tariff status and access to export credits, despite opposition from Republicans in the US Congress.

And businessmen believe Vietnam presents a lucrative market for savvy marketers.

SOUNDBITE:
"The demand for consumer products both in Hanoi and Ho Chi Minh City is tremendous. The Vietnamese are very brand-aware and brand-conscious and are now demanding brand-name products that the Western companies are producing."
SUPER CAPTION: Michael Doyle - Barent's Group

But Vietnam is far from a consumer paradise.

The free market is growing, but more than 80 percent of business capital is still in state-owned companies.

City incomes have improved, but most of Vietnam's 73 (m) million people are poor farmers and income nationwide is only 129 US dollars a head.

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