HANOI, Feb 1 (Reuters) – Vietnam has weathered the global economic crisis relatively well, but the country is still seen as a risky and relatively opaque investment destination. Sovereign 5-year credit default swaps for Vietnam <VNGV5YUSAC=R> are trading at a spread of around 242.50, implying the second-highest level of risk in the Thomson Reuters Emerging Asia Index after Pakistan. The weighted average spread for emerging Asian countries in the index is 134.40. Following is a summary of key risks to watch in Vietnam: * EXCHANGE RATE POLICY Vietnam’s fixed exchange rate policy frequently causes economic pressures to build. The central bank devalued the dong <VND=> in November for the third time since the start of 2008 to relieve pressure on the currency. The bank later said it was prepared to intervene on a "very big scale" to stabilise the dong, but many economists say the central bank does not have enough reserves to allow sustained intervention. The dong’s chronic weakness and the expectation of further weakening led to dollar hoarding, which in turn created more weakness. After devaluing, the government has pressed major state-owned exporters to sell dollars, and persuaded state-run banks to ensure the dollar supply meets demand. It also vowed again to impose penalties for trading the currency outisde the official band. But the November devaluation damaged government policy credibility, as it had repeatedly said it would not allow another devaluation. Analysts say the currency remains overvalued and structural problems have not been solved. However, the risk of a balance of payments crisis is declining. As the economy turns, the inflow of foreign currency is likely to increase, supporting the dong. What to watch: — Markets will be watching to see whether the central bank matches its promise to support the currency with effective action. November’s devaluation dented Vietnam’s policy credibility and this may take some time to restore. Most analysts expect an orderly weakening of the currency in 2010. — A key gauge of pressure on the currency is the gap between black market dollar/dong rates and interbank rates. * CORRUPTION Corruption is endemic in Vietnam at all levels of government, and acts as a major barrier to foreign investment. The authorities had announced aggressive plans to fight corruption, and encouraged the media to act as a watchdog, but these efforts lost steam after several journalists were detained for reporting on major scandals. Progress on corruption will remain a key determinant of long-term investment attractiveness. What to watch: — Vietnam’s rank in corruption perceptions rankings. A strong improvement or decline would influence long-term investment. In Transparency International’s 2009 Corruption Perceptions Index, Vietnam’s score was unchanged from the previous year, giving it a ranking of 120 out of 180 countries. * GOVERNMENT EFFECTIVENESS Corruption, lack of accountability and transparency, and burdensome bureaucracy all impact the effectiveness of the government in formulating and implementing policy. Economic reform and the restructuring of inefficient state enterprises are vulnerable to being undermined by entrenched interests and conservative elements in a government more focused on security.Political analysts say there could be a degree of policy paralysis, or at least conservatism, in the coming year as factions and players jockey for position ahead of the Communist Party’s 11th national congress in early 2011. Important leadership and policy changes generally only happen at the congress, which takes place once every five years. What to watch: — While the government stimulus package has boosted the economy, there are questions over how the budget deficit can be financed, how inflationary pressure can be contained, and how the crowding out of private investment can be avoided. Hanoi has embarked on a plan to trim bureaucratic procedures, and foreign direct investors in particular will watch how that plays out. — Investors often list poor infrastructure as one of Vietnam’s major barriers. The government’s ability to coordinate swift, efficient development in this area is a key issue. * SOCIAL UNREST Vietnam has seen a rising number of strikes, protests and land disputes in recent years, periodically affecting foreign businesses. Disturbances have erupted in rural areas due to state expropriations of land and corruption by local officials. There is no evidence for now that wider unrest is likely, or that there is any imminent risk of the regime being challenged from below. What to watch: — Any sign that a broader national protest movement is emerging out of local disputes. So far, this seems unlikely. — The role of the Catholic church. Catholics have been engaging in periodic protests over church land taken over by the government after 1954. The Catholic Church, while officially shunning involvement in politics, has 6-7 million followers in Vietnam and is well organised. — Territorial disputes in the South China Sea. This issue is highly charged in Vietnam, where suspicion of China runs high. Any move by China to assert sovereignty over disputed islands in the South China Sea, or perceived weakness by Vietnam on this issue, could galvanise broad-based support for demonstrations. * THE ENVIRONMENT Vietnam has great potential as a source of tradeable carbon credits under the Kyoto Protocol, but issues of expertise, transparency and financing have hindered progress. Environmental issues may also become a growing source of popular unrest, as in China. With its huge coastline, Vietnam is recognised as one of the countries that will be hardest hit by rising sea levels, particularly in the rice-growing Mekong Delta. What to watch: — The extent to which the government manages to limit the environmental damage from Vietnam’s economic growth. — Any evidence that extreme weather affecting Vietnam is becoming more frequent as a result of climate change.(Compiled by Andrew Marshall and John Ruwitch)

HO CHI MINH CITY, Vietnam (Reuters) – A Vietnamese court Wednesday sentenced four democracy activists to jail for subversion, drawing fire from Western diplomats who called for their release.

Tran Huynh Duy Thuc, an Internet entrepreneur, was given 16 years in jail, activist Nguyen Tien Trung got seven years, Le Thang Long, a colleague of Thuc’s, was handed five years, and U.S.-trained lawyer Le Cong Dinh, the best known of the defendants, also got five years.

The charge of subversion under Article 79 of Vietnam’s penal code carries a maximum penalty of death.

The case has attracted attention abroad in part because of the involvement of Dinh, who had represented democracy activists as well as a state-backed farmers association, and Trung, who had met U.S. President George W. Bush and Canadian Prime Minister Stephen Harper.

HANOI, Nov 5 (Reuters) – A jostle for influence in Southeast Asia’s emerging Mekong River region moves up a notch this week when Japan hosts leaders from five countries where China and other players have ramped up aid and investment. The two-day event in Tokyo will focus on sustainable development and climate change in a region that includes Cambodia, Laos, Myanmar, Thailand and Vietnam. The Mekong River snakes through a last frontier of emerging Asia, scarred by war and anti-colonial struggles, a region viewed as strategic for its proximity to shipping lanes and abundant natural resources. In recent decades, Tokyo has been the biggest outside source of aid to the sub-region, whose combined population exceeds 220 million and with a total GDP of more than $400 billion. Japanese companies were also among the earliest foreign investors. But China’s global quest for resources, and its outward investment drive of the past decade or so, have enlarged its presence in Southeast Asia. "The Japanese realise — they’ve realised for a long time — that they are just being totally outmanoeuvred by the Chinese," said Richard Cronin, Director of the Southeast Asia programme at the Henry L. Stimson Center, a think tank in Washington, D.C. One of the world’s major river systems, the Mekong starts in the Tibetan plateau and runs 4,800 km through China and Southeast Asia. China will not be present at the summit. DEVELOPING HYDROPOWER The summit will discuss promoting development, while tackling environment and climate change, cross-border problems such as infectious disease, and promoting tourism, a Japanese Foreign Ministry official told reporters on Wednesday. He downplayed the notion of competition. "We don’t need to compete with others. If the region is developed, it will be beneficial to them as well as to us." Japan’s new government has been keen to tackle climate change issues and at a meeting of Japan-Mekong foreign ministers last month, they discussed developing hydropower in a way that would protect the environment and biodiversity. Scientists say a cascade of dams on the upper Mekong in China and further downstream, some being funded by China, threaten to alter the waterway that directly sustains some 60 million people through agriculture and fishing. Since the early 1990s, Japan has led the way in funding the Asian Development Bank’s (ADB) Greater Mekong sub-region programme, which has built roads and other infrastructure. This, analysts say, has laid the groundwork for cross-border economic corridors linking the capitals and major cities. Lately, China has gotten into the act. In Cambodia, for instance, Japan remains the biggest donor but China has become the largest foreign investor. Prime Minister Hun Sen recently hailed China as his country’s best friend. Chinese companies have been investing aggressively in Laos and Myanmar, as well, building dams, harvesting timber, and participating in mining projects. It is the third biggest investor in Laos and the fourth in Myanmar, Xinhua reported. Chinese government aid generally has come without strings attached, making it an attractive choice for some governments in the region, analysts say. Beyond the economics, Cronin believes "it’s about the issue of Asian regionalism. Is it a real thing? Is it going to happen? And if it happens, who is going to be in charge of it, or who’s got the advantage?" (Additional reporting by Yoko Nishikawa, Ben Blanchard in Beijing and Ek Madra in Cambodia; Editing by Bill Tarrant)

HUA HIN, Thailand (Reuters) – India’s Prime Minister Manmohan Singh rebuffed China’s wishes that it bar the Dalai Lama from traveling to a disputed border area, telling Chinese Premier Wen Jiabao the Tibetan spiritual leader was an honored guest.

“I explained to Premier Wen that the Dalai Lama is our honored guest. He is a religious leader. We do not allow the Tibetan refugees to indulge in political activities,” Singh told reporters on Sunday, a day after he and Wen held bilateral talks.

The Dalai Lama plans to make a week-long visit to the Indian state of Arunachal Pradesh which borders China in early November. Singh visited the region earlier this month, also to China’s displeasure.

Beijing reviles the Nobel laureate monk as a dangerous separatist, and has protested against the trip saying it was further proof of the Dalai Lama’s scheming.

HUA HIN, Thailand, Oct 25 (Reuters) – India’s Prime Minister Manmohan Singh rebuffed China’s wishes that it bar the Dalai Lama from travelling to a disputed border area, telling Chinese Premier Wen Jiabao the Tibetan spiritual leader was an honoured guest. "I explained to Premier Wen that the Dalai Lama is our honoured guest. He is a religious leader. We do not allow the Tibetan refugees to indulge in political activities," Singh told reporters on Sunday, a day after he and Wen held bilateral talks. The Dalai Lama plans to make a week-long visit to the Indian state of Arunachal Pradesh which borders China in early November. Singh visited the region earlier this month, also to China’s displeasure. Beijing reviles the Nobel laureate monk as a dangerous separatist, and has protested against the trip saying it was further proof of the Dalai Lama’s scheming. But India, which has been home to the exiled Dalai Lama since he fled a failed Tibetan uprising against Chinese rule in 1959, has cleared the visit. Asked if the plan had changed for the Dalai Lama to travel there, Singh said he was not aware of his travel arrangements — an apparent indication that he still had the green light. The Indian newspaper The Hindu (www.hindu.com) reported on Sunday that China’s embassy in New Delhi had asked the Ministry of External Affairs to prevent the Dalai Lama from visiting Arunachal Pradesh. Singh said he and Wen, who met on the sidelines of an Asia-Pacific summit in Thailand, agreed that both China and India had an "obligation to maintain peace and tranquillity along the border". The two sides have struggled to settle their decades-old border dispute. Each side claims vast swathes of the other’s territory along their 3,500-km (2,173-mile) Himalayan boundary. China lays claim to 90,000 sq km of land on the eastern sector of the border in the Indian state of Arunachal Pradesh. India says China occupies 38,000 square km (15,000 square miles) of territory in Aksai Chin plateau. India and China fought a short border war in 1962 and, despite burgeoning trade in recent years, mistrust remains. Some view China-India rivalry in the context of who will lead Asia. A "calibrated escalation" of the border dispute may also reflect Beijing’s wider concern about a younger, restive generation of Tibetans the Dalai Lama does not control. But the two countries have more at stake now than ever, with mutual trade expected to pass $60 billion next year, a 30-fold increase since 2000. (Editing by Jeremy Laurence)

HUA HIN, Thailand (Reuters) – Leaders from China and Australia discussed on Saturday the issue of an Australian detained in China on suspicion of corporate espionage, but there was no resolution in a case that has strained their relations.

Australian Prime Minister Kevin Rudd said he raised the issue with Chinese Premier Wen Jiabao during an Asian leaders summit in Thailand, expressing concern over the continued detention of Stern Hu, an Australian executive of mining giant Rio Tinto.

Hu and three of his Chinese colleagues were detained by Chinese authorities in early July on suspicion of stealing state secrets. The following month they were formally arrested on charges of stealing commercial secrets, but not the more serious state secrets charge.

“In the discussion I had with Premier Wen I indicated we had continuing consular matters which need to be resolved between our foreign ministries and this included representatives of the Australian company Rio Tinto,” Rudd told reporters.

HUA HIN, Thailand (Reuters) – The East Asia Summit, bringing together the 10-member Association of South-East Asian Nations (ASEAN) and six dialogue partners, will be held in the Thai seaside resort of Hua Hin on Sunday.

Here are some key questions and answers about the meeting.

WHAT IS THE EAST ASIA SUMMIT?

It came into being in 2005 as an annual meeting among leaders of 16 Asian nations, including the 10 ASEAN countries — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — and their dialogue partners China, Japan, South Korea, India, Australia and New Zealand.