VIETNAM MEETING TO DISCUSS MEKONG PRIVATE SECTOR STRATEGIES HANOI, Nov 26, 1998 (Asia Pulse via COMTEX) -- International donors from the Mekong Project Development Facility (MPDF), leading economic authorities and top business people from Laos, Cambodia and Vietnam gathered in Ho Chi Minh City last week to discuss strategies for accelerating the growth of the private business sector in the Mekong region. MPDF manager Thomas Davenport said MPDF had achieved substantial successes in spite of the stresses of the south-east Asian financial crisis. Representatives discussed how to attract businesses to help operate and finance privately- owned small and medium sized enterprises (SMEs). By the end of this year, MPDF expects to have successfully assisted 14 to 15 private firms get approval for project financing. To date, 10 investment projects, worth US$17.6 million, have received US$4.2 million in financing through MPDF. MPDF has also completed a number of projects improving business services available to SMEs in the three target countries. Co-operating with local educational institutions, MPDF has funded and overseen the development of business training courses for SME managers. An extensive credit training course has already been taken by 400 credit officers. An additional 2,000 credit officers are slated to take the course in 1999. The MPDF says it will expand to local banks in the near future and open a discussion with donors, including the International Finance Corporation (IFC) and the World Bank, to ensure the longevity of its programmes. MPDF is a multi-donor funded operation with US$25 million initiative and is managed by IFC, the private sector arm of the World Bank Group. (VNA) ECONOMY-INDOCHINA: ASIAN FLU SAPS REGION'S GROWTH BANGKOK, (Nov. 25) IPS - Vietnam, Cambodia, Laos and Burma, catching more than just a whiff of Asia's economic flu, are fast becoming sidelined in a regional game of economic survival. While the spotlight has focused on Thailand and Indonesia, the most fragile of South-east Asia's economies, the four Indochinese countries are floundering amid falling foreign investment, inflation and shaky currencies. "At an generic level all four countries are suffering a lot," Peter Brimble, president of The Brooker Group Ltd, said here. "They had relied so much on trade and investment from other ASEAN (Association of South-east Asian Nations) members -- until last year," Brimble said. Malaysian, Thai and Singaporean investors had been key players in projects from manufacturing to tourism and infrastructure in Indochinese countries. But the flows of funds have now slowed or halted altogether. The slide in foreign investment forced Hanoi to acknowledge faltering economic growth. Prime Minister Phan Van Khai recently warned Vietnam that faced its most severe downturn since economic reforms were introduced a decade ago. "We must focus our priorities of investing in developing the struggle against recession and prepare favorable conditions for the coming years," Khai said. The Vietnamese economy is expected to grow only by between 6.1 to 6.7 percent, in contrast to 8.7 percent in 1997. World Bank officials say the final outcome could be as low as 3-5 percent. Faced with reduced state revenues, the government has curtailed infrastructure projects, including roads, ports, theatres and schools. "We must economize by cutting back on public expenses, such as receptions, conferences, seminars and trips, telephone and gasoline bills and car purchases," Khai said. Foreign investment in the first eight months stood at $1.1 billion, a fall of more than 20 percent from a year earlier. "Investor confidence in Vietnam continues to fall and actual investment has returned to the levels of the early 1990s," U.S. Ambassador, Pete Peterson, said in a commentary in the Vietnam Economic Times. "Without continued significant flows of foreign investment, Vietnam will have difficulty financing its development needs in the next century," Peterson said. Across the Mekong River's wide span the Laotian economy, ravaged by inflation and a falling currency, awaits Thailand's recovery. As Laos' largest investment and trading partner, Thailand's economic slide turned into a torrent for its neighbor, even as Vientiane struggles to press on with market reforms. International Monetary Fund (IMF) representative Wayne Camard said Laos' growth had relied on tight fiscal policies and strong inflows of foreign investment. "The Asian crisis has knocked down both these pillars," the English-language Vientiane Times reported Camard as saying. The National Assembly was told 100 foreign private investment projects were given the go- ahead, with a value of 150 million dollars. But overall, analysts say foreign investment was down 60 percent. "Most of the Thai projects have been stalled. There has been little going on in the whole of the investment sector over the past year," a diplomatic source in Vientiane said. Inflation is galloping at 100 percent a year, with the local currency, the kip, having slumped to 4,200 to the U.S. dollar from 2,100 a year ago. With the falling exchange rate, per capita incomes will shrink to just $220, from earlier estimates of $300. Kao Kim Hourn, executive director of the Cambodian Institute for Cooperation and Peace (CICP), says Cambodia has suffered from Asia's crisis and political battles over the past year. "It has been a double blow for Cambodia. Because of the elections and the post-election deadlock, it has put Cambodia into a deeper situation," Hourn said. "It will be in the best interest of Cambodia for the (country's) leaders to put our own house in order," he said. Cambodia's political parties, led by Prime Minister Hun Sen's Cambodian People's Party and Prince Norodom Sihanouk's Funcincpec, have agreed on a coalition government once more. Hourn had warned that "it will be imperative for the government to be formed" in November at the latest. In Burma, a brief flurry with economic liberalization in recent years is now on the retreat. Signs of economic distress emerged earlier this year when the military government imposed sweeping restrictions on imported goods -- especially consumer goods. Later, controls were extended over sugar and rice. But for Burma, which had long been used to being shut off from the outside world, smuggling and the black market economy were quickly revived. "The black market trade could be as large as the formal trade," said the analyst. "Although banned, the shops in Rangoon are full of stereos, TV and radios. And yet you are not supposed to be able to import these things," he said. Growth projections for the Burmese economy of 4 percent for 1998 have been lowed to 2 to 2.5 percent. The situation has been aggravated by Thailand's failure to meet a July deadline for the start-up of a natural gas-fired power station in the western Thai town of Ratchaburi. The gas is sourced from the $1.2 billion Yadana gas pipeline project in Burma's Gulf of Matarban. The junta has mortgaged annual revenues of $200 million to meet new loans and finance its 15 percent stake in the project.