Vietnam Launching Austerity Measures In Bid to Quality for International Help
Û÷.ÐÊ'7 HANOIÛÓVietnam, eager to re-jxlturrt to the good graces of the inter-.national,lending community, has an-;E*;nbunced a series of tough economic austerity measures aimed at reduc-iitg the countryÛªs budget deficit. E-J; holding down wages, increasing tax Û¢collections and cutting government -spending. ' ' -</br></br>The most dramatic change, which åÈ took effect in March, was a revaluation of the currency, the Vietnamese > :donfe. to bring the official rate more SÛª- in line with the black market rate. In 5- latef March, the official exchange -rate,was set at 4,500 dong per U.S.' dollar, only marginally lower than the black market rate of 5,000 tol.</br></br>The steps, most of which have not yet been fully implemented, follow a 19-point,economic formula prescribed by the International Monetary Fund (IMF), as the fundÛªs condi-tionslfor allowing Vietnam to (I requalify for economic assistance af->1 ter four years of ineligibility.</br></br>At the same time, Vietnamese officials said they are watching events in other countries, such as Venezuela, where IMF austerity programs have sparked social unrest.</br></br>While the IMF recommended that all the steps be taken immediately, Vietnam is introducing them in stages. That is being done in an attempt ' to minimize the impact on the pub-. ticÛÓparticularly in areas such as unemployment, which is expected to rise if state factories are allowed to go bankrupt at the same time the Û¢' government begins laying off civil servants.