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Can Vietnam Hatch The e-Commerce Golden Egg?

As the bilateral trade agreement between the U.S. and Vietnam is fast becoming a much-welcomed reality, Vietnamese enterprises are acknowledging that e-commerce needs to play an important role in their business strategy if they are to make any headway in entering one of the world's most lucrative markets.

However, many are realizing that slow Internet access capacity, inadequate IT infrastructure, the high cost of building and maintaining a Web page, and other problems cannot be solved at a grassroots level. Such basic - yet vital - requirements could only be solved by a government-led initiative.

To address these essential needs, Vietnam's Ministry of Trade (MOT) recently submitted to the country's Prime Minister a 10-point master plan to develop e-commerce in the country for the period 2001 - 2005. This is the Government's first step to implement the e-ASEAN Agreement that was signed on April 24, 2000 in Singapore by ASEAN (Association for South East Asian Nations) members.

The master plan calls for Vietnam's ministries and other Government bodies to:

* Build an IT and communications infrastructure
* Increase awareness through training programs on e-commerce
* Develop electronic payment systems
* Establish a legal system to support the e-commerce industry
* Ensure information security and e-commerce safety
* Build industrial and commercial standard systems
* Protect intellectual property and consumers
* Develop e-commerce financial and taxation policies
* Carry out e-commerce pilot programs
* Form a national e-commerce management agency

MOT has proposed that an annual VND100 billion (US$6.7 million) budget be set aside to undertake these projects.

"The project will help the Government appraise the development of e-commerce in Vietnam, outline a concrete plan and create favorable conditions for the future," said Nguyen Huu Anh, head of the Department of E-commerce at MOT.

The plan could soon be accepted by the Prime Minister but "we should ensure adequate and punctual allocation of investment capital in order to complete the project as scheduled" Nguyen added, as capital injection by the Government seems to not always match the speed necessary to execute such high-tech projects.

For starters, the Government will establish a national e-commerce management agency to coordinate with the relevant ministries and other government bodies to carry out the proposed master plan.

For instance, The General Department of Post and Telecommunications will be responsible for infrastructure and the reduction of Internet fees; while the Ministry of Trade, Ministry of Justice and State Bank will take care of legal implications, establishing an electronic payment system to facilitate the development of the e-commerce industry.

It is expected that by the end of 2005, the majority of Vietnamese businesses will be involved in e-commerce, albeit at different levels, and that Government offices will engage in e-commerce for management and monitoring functions.

However, there are still many obstacles to be overcome in order to realize this master plan.

Experts say the monopoly of the Vietnam Post and Telecommunication Corporation (VNPT) is one of the main hurdles that should be removed.

Vietnam Data Communication (VDC), a member company of VNPT, is now acting as the country's only Internet access provider (IAP) and is functioning as an ISP as well. The situation has caused unfair competition for Vietnam's four other ISPs (FPT, Netnam, Vietel and Saigon Postel).

What's more, a VDC-constructed firewall has reduced Internet access speed by 30 percent and has added extra cost to Internet users on the already high-priced Internet and telephone charges in Vietnam.

It is said that there is a big, fat and lazy Dinosaur sitting on Vietnam's Information Highway that will bite everyone daring to pass it. If the Government cannot solve this problem, it will forever be sitting on and trying to hatch what may eventually turn out to be a fossilized egg.