[Vnbiz] Not on Vietnam but may shed light on the inflation debate....a readers rsponse from

[Craig Stevenson]

Dear CACC:

Frankly, aren't oil reserves for VN nearing elimination.  Without resolution
of the Spratley's (Sorry I do not know the VN name) crucial to any real
further discussion of this.  Really, despite high costs at present shouldn't
we be discussing taxes to be used for other generation of enrgy resources,
alternatives.  Subsidy might lessen the blow to the consumer which is
important to offset wage increase demands and perhaps to subsidize
fertilizer to farmers etc to offset domestically produced food costs for the
same reason.  Any talk of subsidy should also speak of taxes in the same
manner marked to prices in the market.  Perhaps, oil rises and subsidies
kick into place, oil falls and subsidies lessen or taxes kick in at certain
prices which go earmarked to an energy indepndence fund, etc...

Phong, in all reality, wouldn't current events seem to imply that the
concept that "markets rule and should rule" is undermined to the very large
imbalances in a world economy that isn't actually, fully dependent upon
market forces.  All intervene in every market to varying degrees.  Further,
it might be that the curent "market-supremacy model", built for/from
political expediency in an era of the cold war, that currently
philosophically reigns, might not actually be relevant, or lasting, in a
world where, despite how we (would, might) prefer it be, doesn't exist in
reality.  A peg distorts the market, as does a tax, as does financial
globalization, inequality, interdependence, and speculation unfortunately.
Might it not be that neither Hayak nor Keynes is right.  Of course neither
should VN reutrn to a command economy, especially after the distribution of
wealth effects of late, nor should it blindly follow a market rules
philosophy. I believe the world misunderstands  the nature (and certainly
misjudges the implications) of the fundamental shifts that could occur quite
quickly do to global imbalances and I guarentee possible movement doesn't
likely tend toward free market liberalism.

Craig
On Sat, Mar 8, 2008 at 12:39 AM, Tran Dinh Hoanh <tdhoanh at gmail.com> wrote:

> [ Vietnam Business Forum ]
>
>
> Dear brother Phong,
>
> Oil will never be a "market economy."  At least not in our lifetime.  Oil
> is a global monopoly.  Oil price is a monopoly price determined by OPEC.  So
> the price of oil is not really ruled by supply and demand of a market
> economy.
>
> That is why in a year when the American citizens paid exhorbitant prices
> for gasoline and gas price rose continuously (and still rising as of
> now), Exxon had a 41-billion-USD profits in 2007, the largest profit in the
> US corporate history.  Four largest oil companies had more than 100 billion
> USD of profit in 2007.
> http://www.usnews.com/articles/business/economy/2008/02/01/exxons-profits-measuring-a-record-windfall.html
>
> And the US government is STILL subsididing US oil companies.
>
> Vietnam oil is controlled by two monopoly arms in import and export.  And
> the monopolies won't go away anytime soon because of the important role of
> oil in the national security and economy and becasue the monopolistic nature
> of the global oil industry.
>
> So any talk about "market economy" and the law of supply and demand in oil
> is unrealistic.   It is "supply and demand" in a distorted and monopolistic
> environment.  What we need to do is to understand the monopolistic character
> of oil industry to structure production, distribution and pricing in a way
> that is fair and good for citizens and the national economy, and not to
> allow absurd things happen like in the US--the government subsidizing oil
> companies, and in a year when citizens pay rapid price increases, oil
> companies post record windfall profits.
>
> Have a great day!
>
> Hoanh
>
>
> On Fri, Mar 7, 2008 at 7:32 PM, <Hong-Phong_Pho at ita.doc.gov> wrote:
>
> > [ Vietnam Business Forum ]
> >
> >
> >
> > Dear anh Hoanh:
> > It's happen.  Vietnam exports cheap rice and imports more expensive,
> > higher quality rice. Supply and demand.
> > I think  you meant to say why should Vietnamese citizens pay more for
> > gas than Lao citizens.  I don't think they do, unless the Lao are
> > subsidizing even more.  Vietnamese importers are paying world market price
> > or higher because they are not able to buy in high volume for lack of
> > storage capacity.
> > Vietnamese consumers are paying world market price minus any subsidies
> > because although Vietnam produces crude oil, it imports refined products,
> > and because the crude oil that is exported and the refined products that is
> > imported are both commodities.
> > California produces oil.  Californians pay more than most for gasoline.
> > Japan supplies the world with cars, yet cars are very expensive in
> > Japan.
> > There are many other ways to deal with inflation that's better than
> > subsidizing gasoline with oil revenue.  Lowering import tariffs and other
> > taxes on gasoline, for example.  A stronger VND should get the consumer you
> > more gasoline per dong.
> > But the important point here is that we shouldn't encourage Vietnam to
> > slide back into command economy mode after all the progress toward a market
> > economy.  Even if PetroVietnam and Petechim, etc. are still SOE's, they
> > should be able to make their business decision free of undue government
> > interference.
> > Cheers,  HPP
> >
> >
> >
> >   *"Tran Dinh Hoanh" <tdhoanh at gmail.com>*
> > Sent by: vnbiz-bounces at mail.saigon.com
> >
> > 03/06/2008 09:05 PM   Please respond to
> > vnbiz at vietlinks.net
> >
> >    To
> > vnbiz at vietlinks.net  cc
> >   Subject
> > Re: [Vnbiz] Not on Vietnam but may shed light on the inflation
> >  debate....a readers rsponse from
> >
> >
> > --
> > Tran Dinh Hoanh, Esq., LLB, JD
> > Washington DC
>
>
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