Enterprise claims ‘wrongly fined’ over exhaust gas

Hong Tien Phat Production-Trading Co. Ltd at the HCMC-based Tan Tao Industrial Park has filed a complaint to the city government for what it claimed to be an unjust penalty of nearly VND180 million for pollution-causing exhaust smoke.

The company insisted that it did not emit exhaust gas to a level exceeding the permissible standard as tested by HCMC’s Environmental Crime Prevention and Fighting Police Division. Instead, its emissions were well within the regulatory level, as shown in three independent tests conducted by widely-recognized laboratories.

Pham Thanh Tung, director of Hong Tien Phat, told reporters on Tuesday that test results differed because of different testing practices.

The police had tested exhaust gas samples from a dyeing workshop of the company, and then proposed the city government impose an administrative fine totaling VND180 million because of its air pollution five times higher than the permitted concentration.

Meanwhile, Tung said, the test results from three laboratories invited by the company had shown that the exhaust smoke samples did not exceed the permitted level.

That is because the police used the exhaust gas gauging device imported from overseas measuring the pollution by parts per million instead of milligrams per cubic meter as popularly practiced in Vietnam, according to Tung’s explanation.

The company will also lodge its complaint to the HCMC Police, and then the Ministry of Natural Resources and Environment if no satisfactory responses are given, Tung added.

An environment staff from Hepza – the watchdog of industrial zones and export processing zones in the city - also said that it was important to verify carefully exhaust gas measuring devices before putting them into operation, based on Vietnam’s production conditions, in order to avoid unjust fines.
 
GMS moves to new phase of environmental cooperation

Environment ministers of the six Greater Mekong Subregion (GMS) countries are expected to decide on the program framework for continued regional environmental cooperation when they hold the 3rd GMS Environment Ministers’ Meeting on July 28.

The GMS nations have engaged in regional environmental cooperation since 2006 through the Core Environment Program and Biodiversity Conservation Corridors Initiative (CEP-BCI) and the US$30 million program is expected to end in December. The GMS countries are Cambodia, China, Laos, Myanmar, Thailand, and Vietnam.

Senior government officials representing each of the countries will present progress on the first phase and the strategic framework for the follow-on phase to be implemented 2012-2016.

“The GMS is one of the most economically robust sub-regions of the world with most countries posting impressive growth rates exceeding 5-10% in the past two decades. Much of this growth has depended on harnessing the subregion’s valuable natural resources. The challenge ahead is how to balance inclusive growth with the sustainable use of natural resources,” said Kunio Senga, director general of the Asian Development Bank’s (ADB) Southeast Asia Department.

In the past two decades ADB has approved US$1.7 billion for loans and US$215 million for technical assistance projects with biodiversity conservation components. Since 1992, ADB has been a partner of the GMS Economic Cooperation Program. In the GMS, ADB has provided technical assistance with grants of over US$57 million for specific environmental initiatives.

Malaysia wants to quicken two major property projects

Malaysian Minister of Domestic Trade, Co-operatives and Consumerism Ismail Sabri bin Yaakob is in HCMC for a visit aimed at stepping up work on two real estate projects worth US$800 million.

The minister on Tuesday led a business mission to the City Hall to meet with the city’s chairman, Le Hoang Quan, over the two projects in Binh Chanh District.

One of the two projects is a US$600-million building complex at a 9-hectare site near the crossroads of Nguyen Van Linh-National Highway 50. Licensed in December 2008, this complex includes not only urban and entertainment areas but also a supermall to mainly sell Malaysian-made products. However, the site is not yet ready because land clearance is still in progress.

Platinium Plaza is the second project that was approved in January 2010 as a joint venture between WCT Berhad, one of Malaysia’s largest construction and property development companies, and the local real estate company Dat Phuong Nam.

With a 4-story retail mall and four 33-story buildings comprising two office towers, one hotel and one soho (small office/home office), this US$200-million project will be built in front of the first project’s location.

However, like the first project, the site is not ready now because more than 400 families have not moved.

Decline in steel consumption  

The Vietnam Steel Association has reported a sharp decline in the consumption of steel pipes, cold rolled steel and plated iron sheets in the second quarter of 2011, causing serious difficulties for steel   
 
Nearly 500,000 tons of steel is lying stockpiled in warehouses. Adding to this, many factories are only producing half their capacity. Vietnam Steel Association (VSA) said that steel businesses are losing VND150 billion (US$ 7,143,000) each month.

VSA said that the decline in steel consumption is also due to the fact that state-run companies and governments have cut down on public investment spending.

Consequently, many steel factories have not invested properly and ignored warnings by related agencies. As per statistics, about 30 percent enterprises used old back-dated technologies and only 40 percent moved for advanced technologies in production.

Last year, the local steel sector fetched $1 billion in exports while it spent up to $7 billion on imports of both raw materials and finished products.
 
Footwear exports hit new high
 
Footwear exports last month hit US$600 million, pushing total earnings in the first seven months this year to $3.62 billion, an increase of 30.7 per cent over last year, according to the General Statistics Office.

General Secretary of the Viet Nam Leather and Footwear Association (Lefaso) Nguyen Thi Tong said that with current market prospects, the footwear industry would likely meet its annual export target of $6 billion.

Tong added that the industry had been focussing on the export of high quality products, with low-end footwear sales declining by roughly 46 per cent.

Despite being the world's third-largest producer of leather and footwear, Viet Nam has only recently started pushing its own brands, according to Lefaso Deputy Chairman Diep Thanh Kiet, who said that foreign customers were still more used to Italian and Chinese products compared with those from Viet Nam.

The export of suitcases, bags, hats, wallets and umbrellas in the first seven months of this year reached nearly $730 million, an increase of 35.6 per cent over last year, according to Lefaso.

Lefaso said that such a high increase had helped the export of the leather products become one of the country's ten most successful ventures.

Deputy Chairman of Lefaso Nguyen Duc Thuan attributed the surge to high-profile companies shifting their production operations from China to Viet Nam, whose businesses were expanding their facilities to meet the rising demand.

Viet Nam exports its suitcases, bags, hats, wallets and umbrellas mainly to the US, Japan, France, Germany and Belgium.

Meat prices likely to fall before Tet

The animal husbandry industry in the remaining months of the year will strengthen production to ensure supply of livestock and poultry meat in the domestic market at reasonable prices, especially on the occasion of Lunar New Year, an official said yesterday.

Nguyen Thanh Son, deputy head of the Animal Husbandry Department, said at a meeting in HCM City that demand for meat of all kinds in the later half of the year is estimated at 1.7-1.8 million tonnes, an increase of 4-4.5 per cent over the same period last year.

Prices of livestock and poultry products were forecast to remain high in the second half but would be 10-15 per cent lower than the first half, he said, adding that pork prices would slightly fall at the end of this month.

Prices of livestock and poultry products increased strongly in the first half of the year, with that of pork increasing the most by between 54.1-71.2 per cent over the end of last year, Son said.

He attributed the higher prices to disease outbreaks, increased input costs and a poor distribution system.

The blue ear pig disease outbreak last year and earlier this year, for instance, reduced the number of pigs by 10-30 per cent over the same period last year, leading to a supply shortage in the first half, especially in June and July.

Several problems continued to plague the distribution system, particularly the large number of middlemen, causing a big difference between buying prices at pigsties and selling price to customers, he said.

The country produced 1.68 million tones of meat in the first half, basically meeting the domestic demand.

However, the production situation at different regions was unequal, causing partial shortages and price differences in several localities, he said.

Tran Tan An, deputy general director of Vissan Ltd, and Chau Nhat Trung, general director of Huynh Gia Huynh De Ltd, agreed that to stabilise supply and price of livestock and poultry products, the sector must invest in a value chain that links production to consumption.

However, this was not easy to do in the current situation, they said.

Nguyen Chi Cong, owner of a breeding farm in southern Dong Nai Province, said although pig prices were high, many farmers didn't want to resume breeding or expand production due to the risks involved and the high interest rates charged by banks.

The Government must take measures to ensure farmers get at least 15 per cent profit from their breeding so as to induce stability in the animal husbandry industry, he said.

Participants at the meeting asked relevant agencies to implement effective measures to control diseases towards reducing risks faced by breeders.

They also asked the Government to create conditions for businesses and enterprises in the sector to access long-term bank loans and map out a clear zoning plan for the industry. This would help enterprises feel more secure about their investment, they said.

In the long-term, the Government should build national cold storage facilities to stockpile pork and prevent sudden shortages, Son said.

Pham Duc Binh, deputy chairman of the Viet Nam Animal Feed Association, said the development of local raw material for animal feed must be encouraged to reduce reliance on imports.

Animal feed accounted for 60-70 per cent of production costs, and although Viet Nam was an agricultural country, it had to import most of the raw materials needed, including maize, soybean and meat powder, he said.

Diep Kinh Tan, Deputy Minister of Agriculture and Rural Development, said "the development of domestic husbandry industry in the past years has not met expectation, with its growth rate lower than the increase in demand."

High price fluctuations in the past months have greatly affected consumers, especially low-income earners, he said.

Currently, prices of pork and poultry in the north are about VND10,000 higher than that in the south. "I request enterprises to continue transporting pork and poultry meat to the north to stabilise the market there," Tan said.

He ordered the Animal Husbandry Department to review all aspects of breeder development, including demand and pricing.

Breeding firms have benefited from a lot of preferential policies from the Government, so they considered reducing prices to help farmers, he said.

Past due interest creates judicial minefield

Provisions on the interest that can be collected on past due debts, as contained in the current Civil Code and Commercial Law, are vague and inconsistent, creating challenges for the court system to determine proper calculations of damages. In order to resolve this issue, lawmakers need to review these provisions and establish a uniform method of calculation for interest on past due debts.

On December 31, 2001, the State Bank of Viet Nam issued Decision No1627/2001/QD-NHNN, which provided that "the interest rate for overdue debt must be fixed by the credit institution and agreed by the client in the credit contract, and it shall not exceed one hundred and fifty (150) per cent of the interest rate applicable during the loan term." Thus, if the interest rate were 6 per cent per month during the loan term, then the overdue interest rate could not exceed 9 per cent per month.

The Civil Code, which was revised in 2005, set out a different approach to calculating interest on past due debts, requiring that interest be set according to the basic interest rate announced by the State Bank of Viet Nam, currently equal to 14 per cent, the maximum deposit interest rate that can be paid by commercial banks.

In general practice, a commercial bank usually sets the interest rate for deposits lower than the interest rate for bank loans. The interest rate for deposits may be 14 per cent while the interest rate for bank loans can be anywhere between 20 per cent and 25 per cent. As a practical matter, credit institutions do not generally lend money with an interest rate that is lower than the rate of capital mobilisation, much less the basic interest rate.

Section 2 of Article 305 of the Civil Code states that "where the payment of money by the obligor is late, he or she must pay interest on the late amount for the period of the delay at the basic rate announced by the State Bank at the time of payment, unless otherwise agreed by the parties or provided by law."

Accordingly, when an outstanding debt has generated interest and the parties involved have not agreed to a fixed interest rate, the obligor is automatically liable to pay interest at a rate equal to the basic rate set by the State Bank.

Section 2 of Article 305 therefore favours the obligor. It fails to function as a sanction on the obligor for failure to make timely payments. This is because the basic interest rate set by the State Bank is far lower than the prevailing interest rates charged by commercial banks for loans. It is therefore in the obligor's interest to intentionally delay payment. The obligor is strategically in a better position by delaying payment rather than by obtaining a new loan from a commercial bank to pay a past due debt.

Meanwhile, Article 306 of the Commercial Law provides that "if the defaulting party delays in making payment for goods or services and any other reasonable fees, the aggrieved party has the right to demand interest on the delayed payment at the average interest rate applicable to overdue debt in the market at the time of such payment for the delayed period, unless otherwise agreed by the parties or provided by law."

Needless to say, it is difficult for the parties involved and or even a court to determine the average interest rate applicable to an overdue debts on the market. Which banks' interest rates should be taken as a reference? How many bank interest rates should be used to calculate the average?

As a sanction, however, Article 306 of the Commercial Law works better than Article 305 of the Civil Law. When the average interest rate is high, the obligor would choose to pay past due interest based on the basic interest rate rather than the average market interest rate. Currently, the average is taken from interest rates of various credit institutions and is generally about 150 per cent of lending interest rates.

Courts have not taken a uniform approach in applying either the Civil Code or Commercial Law. A review of some cases highlights the Court's inconsistent application of the law.

Case 1: Under Verdict No386/2007/DSKT dated September 17, 2007, with regard to delayed payment under a civil contract, the People's Court of Hoc Mon District calculated past due interest by multiplying the loan rate by 150 per cent. This method of calculation exceeded the standard set forth in Article 305 of the Civil Code, which states that the overdue interest is the basic interest rate announced by the State Bank of Viet Nam. On appeal, with Verdict No421/2008/DS-PT dated April 29, 2008, the People's Court of HCM City reviewed the contract and based the calculation of past due interest on the loan interest rate.

Case 2: Under Verdict No1200/2008/KDTM-ST of August 11, 2008, the People's Court of HCM City relied on Article 306 of the Commercial Law, but still applied an incorrect calculation of past due interest. While Article 306 provides that overdue interest is based on the average interest rate applicable to overdue debts on the market, the court applied the loan interest rate multiplied it by 150 per cent rather than the average market interest rate. The judgment therefore failed to follow the provisions of the Commercial Law.

Case 3: In Verdict No801/2008/KDTM-ST of June 3, 2008, the People's Court of HCM City applied the overdue interest rate announced by the State Bank of Viet Nam rather than the "average interest rate applicable to overdue debts in the market" as required by the Commercial Law.

Case 4: With Verdict No1743/2007/KDTM-ST of September 20, 2007, the People's Court of HCM City purported to apply Article 306 of the Commercial Law but did not provide a formula for the calculation of overdue interest. The court simply set a fixed rate for the overdue interest.

The calculation of past due interest by courts is therefore inconsistent with either the Civil Code or the Commercial Law.

The laws themselves are irrational, as past due interest based on the basic interest rate set forth by the State Bank of Viet Nam is too low to protect the aggrieved party, setting a rate insufficient to function as a sanction.

While Article 306 the Commercial Law appears to be more rational, the calculation of overdue interest it requires is complicated in practice. In many cases, courts do not arrive at a clear formula for the calculation of overdue interest because the criteria is so vague. In these cases, the average interest rate is not based on the market, but on the perspectives of judges. Lawmakers therefore need to review these provisions in the Civil Code and Commercial Law and provide a uniform method of calculation.

Low interest rates boost dollar loans

US dollar deposits at HCM City-based banks rose only 3.3 per cent in the first seven months of the year, according to the State Bank of Viet Nam's figures, while lending in dollars surged by about 19.2 per cent during the same period, stirring concerns over dollar liquidity in the banking system.

Total outstanding loans also reached over VND790 trillion (US$38.33 billion) during the period, up 7 per cent against last December or 2.1 per cent against the same period last year.

In a recent petition to the State Bank, the Viet Nam Banking Association (VNBA) suggested that capping interest rates that commercial banks can pay on US dollar deposits at 2 per cent – compared to 14-18 per cent for dong deposits – could lead to a shortage of dollars in the system and add to exchange rate instability.

In practice, some commercial banks have reportedly been increasing the interest rates they offer on US dollar deposits beyond the current ceiling of 2 per cent per year, with some customers reporting that they have been offered short-term rates of 3-3.5 per cent and even over 4 per cent for larger sums.

The banks are willing to risk the violation due to the high demand of borrowers for loans in dollars – currently at about a third of the cost of borrowing in dong. Dollar loans currently bear interest rates of, at most, 10 per cent, compared to dong rates of 20-22 per cent per year.

To slow the demand for dollar loans, the VNBA has proposed that the State Bank narrow the eligibility requirements for borrowers.

The State Bank, meanwhile, has said it would keep a close watch over any sharp increases in the number of outstanding loans in US dollars and would take necessary measures to avoid market chaos.

HCM City's 16 commercial banks have held credit growth at less than 20 per cent so far this year in line with Government regulations and kept total outstanding loans to borrowers in non-production sectors (including real estate development, securities and consumer loans) to no more than 22 per cent of total outstanding loans, the State Bank said.

Outstanding loans in the entire banking system by early June had increased by 22.2 per cent from the beginning of the year, while outstanding loans in dong had increased by only 2.72 per cent, according to a State Bank report.

As of July 31, HCM City-based banks held deposits totalling VND860 trillion ($41.7 billion), an increase of 6.7 per cent from the end of 2010, according to the State Bank's HCM City branch. Deposits in Vietnamese dong, meanwhile, had increased by 7.18 per cent.

Vietnamese goods strengthen appeal
 
Better product design and quality at a lower price with a better after-sales service are required to make domestic goods more appealing to Vietnamese consumers, a conference in Ha Noi heard late last week.

At the event, aimed at promoting Vietnamese-made products, Nguyen Minh Phong, head of the economics department at the Ha Noi Institute for Social Development Studies, also said a better distribution network was needed to reach customers in rural areas.

Phong added that the customer's interests should be paramount.

Nguyen Bich Hoan, from Trung Thanh Limited Company, suggested manufacturers employ consultants from respected distribution companies to help firms enhance their profile and reputation in the face of foreign competition.

Better quality was also vital to attracting consumers, she said.

Dinh Thi My Loan, vice chairwoman of the Viet Nam Retailers Association, said domestic consumers needed to know more about Vietnamese products.

In addition to drawing up strategies to better advertise products, producers should also concentrate on after-sales services, Loan said.

Two years after the Government launched the "Vietnamese Use Vietnamese Goods" campaign, consumers had a better view of locally made products, the conference heard.

A recent survey conducted by the Institute for Public Opinion, under the Party Central Committee's Commission for Publicity and Education, revealed that 59 per cent of customers surveyed would buy Vietnamese goods. Meanwhile, 38 per cent said they would encourage relatives and friends to use domestically made products, while 36 per cent who used to buy just foreign-made goods said they would buy more Vietnamese products.

The most popular Vietnamese products were textiles and garments, footwear, foodstuffs, fruit and vegetables, household appliances and home decorations, the survey showed.

Another survey by global market research company Nielsen also showed encouraging results.

Its Vietnamese Goods Trend Survey found that 83 per cent of consumers in HCM City and 95 per cent in Ha Noi were aware of the buy-Vietnamese campaign launched in 2009.

The campaign has had some impact on the purchasing behaviour of consumers in the two cities, with 62 per cent of HCM City residents and 49 per cent of Hanoians saying they would probably purchase more Vietnamese goods.

Thai rice dealers warn against gov't price hike
 
Thai rice exporters are looking for alternative sources of supply in Viet Nam and Cambodia in case the new government makes prices too high for export.

The Thai Rice Exporters Association (TREA) has been crying foul about the newly-elected Pheu Thai's announced policy to allow farmers to mortgage their entire harvest for 15,000 baht (US$500) a tonne for white rice and 20,000 baht ($660) for fragrant, or hom mali, rice, the English-language Bangkok Post newspaper reported.

The association's vice president, Charoen Laothamatas, said if the mortgage programme was revived, the free-on-board price of hom mali would reach US$1,400 per tonne, even higher than the price of Indian basmati, currently the most expensive rice in the world.

"Thai exporters cannot buy such expensive rice for export, they may opt for much cheaper rice from Viet Nam, Cambodia, or Burma as they must maintain their market bases and customers," Charoen was quoted by the newspaper as saying.

"With the ASEAN Free-Trade Agreement, such an alternative would be possible."

Some rice exporters and millers had already established trading firms or representative offices in Cambodia and Viet Nam to buy rice, TREA said.

"We have to accept that Viet Nam's rice quality has improved a lot," Charoen said.

Viet Nam's fragrant rice sold at $650 per tonne, $400 to $500 cheaper than Thai hom mali rice and $150 to $200 lower than pathum thani rice, he said.

Competition from Viet Nam had resulted in hom mali's share of traditional markets such as Hong Kong dropping from 85 per cent to just 50 per cent, he said.

Vietnamese fragrant rice had grabbed a 35 per cent share in Hong Kong and 20 per cent in Singapore, he added.

Thailand is at a disadvantage in terms of logistics, since the cost for shipping a 20-foot container to the US is between $1,700 to $1,800 from Thailand but only $1,350 from Viet Nam.

Rice exports shipping to China cost $320 compared to $100 for Viet Nam.

The Honorary President of TREA, Chookiat Ophaswongse, warned Thailand's rice exports could fall to half if the government had no measures to assist exporters.

"œThe government must support exporters by offering the government's stockpile at special prices or open bidding for the stocks rather than asking only some exporters to bid," he told Bangkok Post.

Thailand exported 6.3 million tonnes of rice in the first half of this year, a year-on-year increase of 58.3 per cent.

It targets whole-year exports of 10 million tonnes.

Prices of rice increased sharply over several weeks due to a surge in the world market's demand for rice, according to the Viet Nam Food Association (VFA).

Across the Cuu Long (Mekong) Delta in Viet Nam, paddy prices rose by VND200-300 per kilogramme even though the harvest of the summer-autumn rice crop is in full swing.

Purchasing price of material rice last Friday jumped to VND8,600-8,700 per kilo for five-per cent-broken rice, and to VND8,45-8,500 per kilo for 25-per cent-broken rice, against the previous week.

Price of finished rice also climbed by the same rate, VND300 per kilo to VND10,150 per kilo for five-per cent-broken rice, VND9,850-VND9,950 per kilo for 15-per cent-broken rice, and VND9,350-VND9,450 per kilo for 25-per cent broken rice.

The association said the increase of the domestic rice prices was due to a promotion of purchasing rice for previously signed export contracts of local rice exporters.

The Viet Nam Food Association said prices went up since July 11, when it suspended plans to buy 1 million tonnes of rice for the national reserve.

It attributed this to the inking of new contracts for exports to Asian countries.

"We are informed that Thai exporters have unveiled plans to purchase rice from Viet Nam," Duong Nghia Quoc, director of the Mekong Delta Dong Thap Province Department of Agriculture and Rural Development, told Viet Nam News yesterday.

"However, so far no rice purchase contract has been signed between Thai traders and Vietnamese exporters in Dong Thap."

Mekong Delta farmers have harvested less than half of the 1.62 million ha they planted for the summer-autumn crop and hope to complete their harvest by early September, according to a meeting held by the Ministry of Agriculture and Rural Development in Can Tho last week.

Exporters have signed contracts to ship 1.3 million tonnes in the third quarter.

In the second half Viet Nam is set to export around 3.2 million tonnes, taking total export of the grain this year to 7 – 7.4 million tonnes.

Vinashin subsidiary hands over 6,500 DWT cargo ship

The Bach Dang Shipbuilding Industry Corp on August 1 handed over a cargo ship to its client, the Northern Shipping Joint Stock Company (Nosco).

The 6,500 DWT ship is one of the twenty ships that the company is building for Nosco’s parent company, the Vietnam National Shipping Lines.

The 102.79m long and 17m wide ship with a capacity of 3,600 HP, built under the supervision of the Nippon Kaiji Kyokai (NK) Register of Shipping of Japan, meets the international maritime regulations.

The Bach Dang Shipbuilding Industry Corp is a subsidiary company of the Vietnam Shipbuilding Industry Group (Vinashin) which is implementing a comprehensive restructuring plan under the policy of the Party and Government.

Thailand is Vietnam’s 10th biggest foreign investor

A meeting to mark the 35th anniversary of Vietnam-Thailand diplomatic ties was held in Ho Chi Minh City on August 2 by the municipal People’s Committee and the Union of Friendship Organisations.

Bilateral ties between Vietnam and Thailand have been developing well over the past 35 years, especially in trade and investment.

Thai Consul General in Ho Chi Minh City, Somchai Powcharoen, said the two countries often conduct exchange visits at all levels and the transport link has opened the door for strengthening cooperation in economics, trade and tourism.

Thailand is willing to work with Vietnam to introduce a “strategic partner” model between the two neighbouring countries, Somchai said.

Two-way trade turnover between the two nations in 2010 reached US$7 billion, helping Thailand place third among ASEAN partners.

Thai businesses are currently investing in 250 projects with a combined registered capital of more than US$5.5 billion, ranking them number 10 among foreign investors in Vietnam.

Thailand has 91 investment projects in Ho Chi Minh City worth US$132 million, and the Bangkok - Phnom Penh - Ho Chi Minh City tourism road has opened new economic development and tourism cooperation between the two countries.

Thailand has also provided technical assistance for Ho Chi Minh City’s urban railway and flood prevention projects.

Work starts on US$29-million office building in city

Hoa Binh Corp. has commenced work on a US$29 million office building project in the city’s central business district.

The MB Sunny Tower project will have 22 floors, excluding three basements, and cover 1,500 square meters at 259 Tran Hung Dao Street, District 1. Viet R.E.M.A.X Joint Stock Co. is the developer and the Military Bank (MB) is the supplier of capital.

Hoa Binh has been appointed the contractor for development of the foundation and basements of the project. The VND50 billion packages will be carried out within a half year.
 
BIC launches online insurance

The insurance company BIC under the Bank for Investment and Development of Vietnam on Monday launched its online insurance service at http:/baohiemtructuyen.com.vn after successfully selling insurance products through automated teller machines.

The website offers many options for customers to buy many kinds of insurance and settle online payment using Visacard, Mastercard, local banks’ cards, and E-wallet.

BIC’s target customers are people with high income, so it introduces various types of insurance such as automobile and motorcycle insurance, accident insurance, apartment insurance and travel insurance.

Besides insurance transactions, the website is also a good source for customers to research necessary information before acquiring an insurance policy such as provisions on insurance premium, insurance conditions, insurance compensation and other related issues.
 
Real estate firms see profit fall extend

The glum market has continued pounding real estate companies, with some listed firms recently reporting more lost profit in the second half.

Phat Dat Property Development Corporation racked up losses of VND14 billion in the first half but its second-half report put after-tax profit at VND22.5 billion.

The company attributed the earnings to the transfer of the sixth floor and basement of The Everich 1 project in HCMC and of a commercial section of Phan Dinh Phung residential project in Quang Ngai Province, plus house leases.

The company has yet to take into account the proceeds from the sale of 200 apartments at The Everich 2 project in HCMC’s District 7.

However, this profit is much lower than what the property developer fetched in the second quarter of last year, which stood at some VND111 billion.

Similarly, having witnessed a 75% decline in its after-tax profit in the first quarter, Dream House Investment Corp. reported its second quarter profit of a meager VND45 million, compared to a hefty VND10.8 billion recorded a year ago.

Thuduc Housing Development Corp. (Thuduc House) and Vietnam House Corp. recently posted profits of around VND16 billion, down from the VND50.8 billion a year ago, and VND1.8 billion, down from the VND19 billion.

Many real estate firms have been struggling to survive this year given the market slowdown and financial constraints, said Le Hoang Chau, chairman of the HCMC Real Estate Association.

Market observers saw across-the-board falls in apartment prices and numbers in the second quarter.

Investors have come up with many solutions such as discount, promotion and flexible payment to attract buyers. Some others have even delayed their apartment project launches to wait for better days.

Cushman & Wakefield, a property service provider, has forecast the apartment segment will continue experiencing poor sales and price decreases toward the year’s end.

AIA reports record first half results

AIA Group Limited, the leading pan-Asian life insurance group, announced a record performance for the six months ended May 31, 2011, with value of new business (VONB) rising 32 per cent compared with the same period last year to $399 million.

Embedded value (EV) increased 11 per cent to $27.394 billion and annualised new premium (ANP) for the period rose 23 per cent to $1.094 billion. VONB margin rose 2.3 percentage points to 36 per cent.

Under International Financial Reporting Standards (IFRS), the group reported profit of $1.314 billion for the period, an increase of 24 per cent compared with the same period in the previous year. Operating profit after tax rose 8 per cent to $967 million.

Mark Tucker, AIA’s Group chief executive and president, said: “AIA’s strong performance across all of our key financial performance measures demonstrates the excellent progress we have made in executing our growth strategy. There is much more to come.”

AIA’s record-breaking performance reflects the group’s success across the region in building its Premier Agency sales force and boosting agent productivity, focusing on helping meet the savings and protection needs of its customers, improving customer experience and retention and on developing new and deepening existing relationships with bank partners.

AIA also declared its first dividend since listing, an interim dividend of 11 Hong Kong cents per share.

“We are pleased to declare our first dividend since our listing last October – an interim dividend of 11 Hong Kong cents per share. This dividend payment reflects the strong cash flow inherent in AIA’s business,” said Tucker. “We are confident in our ability to maintain a prudent and progressive dividend, in addition to being able to self-finance our strong new business growth.”

As well as generating record new business, the first half of 2011 saw AIA become a constituent stock in Hong Kong’s benchmark Hang Seng Index, making it one of the city’s blue chip stocks just over 6 months after its record breaking initial public offering.

“AIA is a story of growth in the most dynamic region of the world. Asia has been our home for over ninety years and it remains the most attractive place in the world to do business given the long term economic outlook and demographic trends which fuel the region’s savings and protection needs.

“The scale of our franchise, our financial strength, our motivated staff and agents, our product innovation and pan-regional expertise are some of the competitive strengths we can deploy to create value from this Asian opportunity. We are highly confident about AIA’s ongoing growth in Asia,” said Tucker.

AIA Group Limited and its subsidiaries comprise the largest independent publicly listed pan-Asian life insurance group in the world. It has wholly-owned main operating subsidiaries or branches in 14 markets in Asia Pacific - Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau and Brunei and a 26 per cent joint venture shareholding in India.

The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the Asia Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It has total assets of $115.782 billion as of May 31, 2011.

AIA Vietnam officially started operations in Vietnam in February, 2000. Over the last 11 years, AIA Vietnam has been focusing on laying a strong foundation for its sustainable growth through the training and development of its human resources with more than 400 staff and 14,000 agents.

AIA Vietnam in line with the AIA Group continues to have strong performances with growth in annualised new premium (ANP) and total weighted premium income (TWPI) of 40 per cent and 21 per cent respectively for the first half of the year comparing to the same period last year. The VONB margin which is one of key performance measures has also increased by 55 per cent to reach 28.2 per cent for the first half of 2011 showing profitable growth momentum.

Currently, AIA Vietnam serves the holders of about 270,000 policies across the country. Until the end of June 2011, AIA has paid out a total of more than VND670 billion for insurance benefits with nearly 110,000 cases.

Property centres brought to account

Sixty-two property transaction centres in Hanoi and 66 such in Ho Chi Minh City were put under Ministry of Construction’s (MoC) inspector microscope in the first six months of 2011.

The MoC inspectors produced 20 punishment decisions with total fines of VND1.6 billion ($78,000). Fines ranged from VND50 million ($2,400) to VND210 million ($10,000).

Many centres did not have sufficient qualified brokerage staff or property project developers made false declarations about ownership capital for project implementation and did not sell products through property centres.

Some centres even illegally appropriated customers’ assets.

For instance, in early July 2011, Hanoi police arrested Galaxy BSG Vietnam International chairman Nguyen Huu Trong for creating a bogus real estate project to cheat customers. The swindled amount came to millions of dollars.

Earlier in June 2011, general director of Urban Infrastructure Development Investment Company (UDIC) property transaction centre Truong Chien Binh was arrested as he was alleged to abuse position for illicit assets appropriation.

UDIC’s deputy general director, the cashier and one staff of UDIC’s property centre were also arrested.

The police later discovered the violators had increased the selling prices of seven apartments under a UDIC housing project including 12 apartments and appropriated the balance which amounted to around VND30 billion ($1.46 million).

Industry experts assumed current sanctions towards property violators were ‘too’ light as fine amounts ranged from several thousands to over a dozen thousand dollars, not corresponding to violators’ marginal profits.

“The recent inspection was to timely unveil violations. Serious cases were tackled in light of current regulations,” said MOC Deputy Minister Nguyen Tran Nam.

According to MoC chief inspector Pham Gia Yen, from now until the year’s end MoC’s inspectors would scale-up spot checks at property transaction centres.

Travel firms eye longer visa waiver for Japanese

Major travel agencies serving the Japanese market want the Vietnamese government to extend the visa exemption period for Japanese nationals from 15 to 30 or even 60 days.

After the hardships in the aftermath of the tsunami and earthquake last March, Japanese tourists now yearn for long holidays, a survey done by the Vietnam National Administration of Tourism and Vietnam Airlines found.

Vietnam Airlines said it plans to increase the number flights a week from Hanoi and Ho Chi Minh City to Tokyo, Nagoya, Fukuoka, and Osaka in Japan from the current 48.

So far this year 268,491 Japanese visitors have arrived in Vietnam, up 11.7 per cent from the same period last year, making Japan the country’s fourth biggest tourism market.

Vietnam seeks to woo more Japanese tourists

The Vietnam National Administration of Tourism, or VNAT, in cooperation with Vietnam Airlines will launch tourism promotion programs in Japan with the hope of attracting more tourists to visit Vietnam, said the country’s tourism leader.

Nguyen Van Tuan, general director of VNAT, told the Daily after a promotion trip to Japan late last month that his administration wanted to strengthen cooperation with Japan, and had requested Japan to include Vietnam in the list of destinations suggested for Japanese travelers.

Besides, some special travel packages for Japanese would be offered in the near future. Vietnam tourism remained positive of the Japanese market despite a fall in the number of Japanese passengers on Vietnam Airlines’ flights, Tuan said.

“There were 268,000 Japanese visitors coming to Vietnam in January-July due to a strong rise in the first quarter (prior to the deadly quake and tsunami), resulting in an increase of 11.7% from last year,” said Tuan.

To attract more Japanese tourists, the Ministry of Culture, Sports and Tourism has presented to the Government a proposal of increasing the duration of visa-free stay from 15 to 30 or even 60 days.

Vietnam reserves to cover only 1.6 months imports

Vietnam's foreign reserves can cover only 1.6 months of imports, the lowest rate among emerging East Asian countries, the Asian Development Bank said in its semi-annual "Asian Economic Monitor" released late last month.

Foreign reserves were now estimated at $13 billion, the bank said.

Continued high current account deficits and low foreign reserves had forced Vietnam to devalue the dong by 9.3 percent in February, making it the only currency to depreciate significantly against the US dollar.

Besides concerns about accelerating inflation -- Vietnam recorded an inflation rate of 20.8 percent in June, the highest in emerging East Asia -- Vietnam's banking system was also threatened by liquidity risks after the ratio of loans to deposits hit 105.9 percent at the end of March, second only after South Korea.

Vietnam, as well as emerging East Asian countries, needed to adopt a more flexible monetary approach in response to potentially persistent and volatile commodity-driven inflation, and greater exchange rate flexibility that could help mitigate the effects of global commodity price surges on domestic prices.

Policymakers could also use structural and fiscal policies to boost supply and increase economic flexibility when responding to commodity price changes.

There was need for greater cooperation to ensure adequate trade in food and energy, effective commodity market regulation, and appropriate macroeconomic policy to manage commodity-price volatility and inflation.

Vietnam's GDP growth rate is forecast to reach only 6.1 percent this year, lower than the Vietnamese National Assembly's target of 7-7.5 percent. It is expected to grow by 6.7 percent in 2012, according to the report.

Surging inflation, a weak post-tsunami economic recovery in Japan, and debt woes in the US and Europe threatened East Asia's economic outlook.

The East Asian region faced risks that also included more volatile financial markets and destabilizing inflows of short term capital, also known as "hot money."

The ADB's economic growth forecasts remain unchanged from April, with East Asia forecast to grow at nearly 8 percent this year and next.

But it has indicated that forecasts for a few countries including China could be downgraded.

Dragon Capital divests from Sacombank

Dragon Financial Holdings Limited, an arm of Dragon Capital investment fund, has announced to sell all the shares of the Ho Chi Minh City-based Sacombank it is holding.

The company, a foreign strategic shareholder in Sacombank – coded STB on Ho Chi Minh Stock Exchange (HoSE), said 61 million STB shares, representing more than 6.66 percent of the bank’s stakes, will be transferred under negotiated transaction method to its partners on August 4-10.

Jui Chang Hen, husband of Huynh Que Ha – first deputy chairman of the board of Sacombank – has subscribed to buy more than 30.672 million STB shares under negotiated transaction during this period, said Sacombank.

A source told Tuoi Tre that in addition to the STB stock agreed to be transferred to Jui Chang Hen, the remaining STB shares that Dragon Capital holds have been dealt to be transferred to the other two foreign partners.

The divestment in Sacombank is just a usual move to restructure the fund’s portfolio to ensure effectiveness, Pham Nguyen Vinh, business development director of Dragon Capital, told Tuoi Tre.

Moreover, the Dragon Capital’s investment in Sacombank has been maintained continuously for over 10 years, far exceeding the average holding period of 5-7 years, Vinh said.

The proceeds means the fund will further its investment in the Vietnamese market, Vinh added.
By the end of last month, Dragon Capital said it had sold its entire stake in Sacombank (STB) to two other foreign companies, ending the decade-long investment in the bank.

The negotiated price of the shares was said to be higher than their current market value on the HoSE then.

However, Dragon Capital was known to have planned to sell its entire stake in the bank since late last year, but it took time to negotiate a price, the investment group's CEO Dominic Scriven told the Sai Gon Tiep Thi newspaper.

Dragon Capital has also sold holdings in Southern Bank and VPBank within the past two years.
But the latest deal took place at the time when STB has faced rumors that it was a takeover target.

The net asset value (NAV) of Dragon Capital-run funds increased by over $ 30 million in June thanks mainly to the 8.5 percent gain in VN-Index of HoSE.

Currently, Dragon Capital is running five funds namely VEIL, VGF, VDeF (VDeF-A, VDeF-B), VPF and VRI.
 
Ministry wants go-ahead for 25 more golf courses

The Ministry of Planning and Investment is seeking government approval to tweak the national master plan for golf development by 2020 by increasing the number of courses to be built from 90 to 115.

The ministry wants to develop 28 more course on a total area of 3,812 hectares, and remove three projects that have failed to meet investment requirements.

The government wants golf courses not to be built on agricultural land but on bare hills and fallow lands.

Vietnam raises coal export tax to 20 percent

The Ministry of Finance has hiked the export tax on all types of coal from 15 to 20 percent in an effort to conserve a dwindling resource.

The move follows a recent report in Tuoi Tre newspaper that 9,500 tons of low-quality coal were recently imported from Indonesia by the Viet Nam Coal and Mineral Industries Group (Vinacomin) to supply thermal power plants in the central and southern regions.

It made Vietnam, a major coal exporter, an importer for the first time.

Vinacomin said Vietnam would have to import 10 million tons a year for domestic use from 2012 and 100 million tons by 2020.

It would also export around 2 million tons each year by 2012, and 20 million tons by 2020.

The ministry said it also plans to increase export tariffs on other commodities like brass, aluminum, and lead.

Vietnam’s property remains attractive: CBRE

Vietnam is still a promising place for foreign property investors despite decreasing trade in the past six months, said a regional research released by CB Richard Ellis Vietnam (CBRE) last week.

Marc Townsend, managing director of CBRE, said Vietnam was slowly becoming a regional player, which is evidenced by international funds who have established presence here and are very comfortable operating in the market.

“As the established investors in Vietnam are still doing deals, investors from outside the region will continue to cast an eye over the opportunities,” Townsend said, adding that foreign investors began to look beyond the traditional, developed, investment markets for investment opportunities in countries in the Asia Pacific region.

The market research company, however, said that bank lending for real estate projects had tightened and that the cash flow was becoming a challenge for a number of developers.

Therefore, many developers in order to resolve the problem of limited credit availability were looking to form joint venture partnerships with foreign investors in order to access capital.

Adam Bury, senior manager of CBRE’s research and consulting department, said that with bank lending being restricted, more Vietnamese developers than ever before were seeking joint venture opportunities.

Bury said there was a notable competition around the region to absorb this inflow of capital as many investors continued to look at the Asian region as an alternative to the weak growth markets.

As an investment destination, Vietnam had plenty of selling points, such as a population density, to attract foreign investors.

“If the age-old problems of access, pricing, and transparency continue to be slowly overcome, we are confident that opportunities for international investors will arise that tempt capital away from some of Vietnam’s more developed neighbors,” Bury said.

The market trend saw some joint venture opportunities since early this year. For example, the Singaporean property group CapitaLand announced in May a joint venture contract with Khang Dien Sai Gon Real Estate Joint Stock Company, contributing 70 percent of the US$70 million required to build almost 1,000 apartments on a 2.9 hectare site in Ho Chi Minh City’s District 2.

The group continued to strengthen its position in the Vietnamese market by spending some US$6 million to take a 65 percent stake in the local developer Quoc Cuong Sai Gon, who owns some 9,000 square meters of land in Binh Chanh District. The project is planned for a condo project with 800 units.

In another project, Malaysian property developer Gamuda Land has recently entered into a joint venture with the local firm Saigon Thuong Tin Real Estate Joint Stock Co. (Sacomreal) to develop an 82-hectare township in HCMC.

The US$215-million Celadon City project is under development in HCMC’s Tan Phu District with a number of apartment buildings for some 7,000 units and other facilities.

In related news to the local property market, the HCMC Real Estate Association (HoREA) hosted a real estate night in HCMC on Friday, talking about the current challenging situation in the market.

Le Hoang Chau, chairman of HoREA, reiterated his standpoint, saying that the government should not classify property development as a non-manufacturing sector because it required different elements such as labor and materials to develop an apartment building.

Chau said the credit crunch had driven a lot of developers into difficulties during the first six months of this year, and many of them were thinking of how to survive rather than to spur growth.

At the event, some participants said the market downturn was offering a good chance to people who want to buy apartments for accommodation as the housing price has decreased because of inflation besides incentives offered by developers.

Most current condo projects are developed on sites which developers bought before the Decree 69 came into force. The decree which requires land use fee to match market price may trigger housing price to increase in the coming time.

Vu Dinh Anh, a financial expert who was a speaker in the event, said buying a house at the moment was a chance to those who do not have to borrow from banks.

In contrast, it would be a burden for those who buy an apartment by using loans because interest rates remained too high, and the housing price had yet come back to its real level.

Dollar shortage to pose danger toward year’s end

The demand for the U.S. dollar is outpacing supply, posing big risks for both enterprises and the economy by the end of the year, experts said at a conference in Ho Chi Minh City last week.

Le Xuan Nghia, Vice Chairman of the National Financial Supervisory Committee, told the conference on Thursday that dollar supply was ample now as borrowers converted their dollar debts to Vietnam dong funds.

But the risk is embedded in such a situation and will pose a big risk when such debts become due by the end of the year, he said.

Experts at the gathering observed that credit growth in the greenback is high, while remittances and foreign investment have declined, prompting foreign exchange volatility by the end of the year.

Remittances sent to Vietnam in the second quarter this year was US$1.9 billion, much lower than US$2.2 billion in the same period last year.

Foreign direct investment in the first six months this year was US$3.3 billion compared to US$3.4 billion in the same period last year.

In addition, foreign portfolio investment has also tumbled to only US$350 million in the first half this year compared to US$1.79 billion in the same period last year, Nghia said.

All such factors would undermine the forex balance in the coming months, with the most serious concern being a rush by enterprises to take out loans in the U.S. dollar.

“Enterprises have rushed to borrow loans in dollars then sell dollars to take Vietnam dong for business, giving way to a big dollar supply and thus stabilizing the forex rate in the last three months. When those loans become due, the dollar demand will be very high,” Nghia said.

The credit growth of the greenback in January-June was 23 percent while that of the Vietnam dong was only 3 percent.

Nguyen Duc Vinh, CEO of Techcombank, said that dollar loans had strongly increased in recent months while dollar mobilization at his bank was on the downtrend.

Therefore, banks recently have offered negotiated interest rates for dollar deposits, at up to 4-5 percent per year compared to the ceiling rate of 2 percent imposed by the central bank.

However, Nghia expected the central bank would stop this practice soon, and said the authority had bought over US$4 billion over the past few months which can be used for intervention in the market in case of forex upheavals.

Vietnamese consumers still optimistic: survey

The confidence index of Vietnamese consumers for H2/2011 lost 13.2 points quarter on quarter but still ranked 3rd regionally after China and Singapore, said a recent MasterCard survey.

The downward trend began in H2/2010 survey for H1/2011 with another 3.4-point drop to 90.3 points from 93.7 points in H1/2010 survey, said the MasterCard Worldwide Index of Consumer Confidence.

According to the bi-annual survey, Vietnamese consumers became less optimistic across all five indicators compared to six months ago with ‘quality of life’, ‘economy’, ‘regular income’, ‘employment’ and the ‘stock market’.

But the index of Vietnam still ranked 3rd regionally, after China (78.3) and Singapore (77.9).

Among 14 Asia/Pacific markets polled for the index, Vietnam was ahead of India (75.2), Hong Kong (69.9), Taiwan (67.6), Malaysia (64.9) and Australia (63.1).

With overall regional average rate of 61.5 points, a 6.5 points drop quarter on quarter, consumers across Asia/Pacific showed that they are concerned about the slow pace of the global economic recovery with a dip in optimism recorded over the last six months.

Though the global economy continues its slow recovery, 11 out of the 14 Asia/Pacific markets polled for the index recorded positive consumer sentiment with stable optimism recorded in emerging and established markets, including China, Singapore, Vietnam, India, Hong Kong, Taiwan, Malaysia and Australia.

However, 10 out of the 14 Asia/Pacific markets experienced an overall decline in consumer confidence when compared to the previous six months, with three markets - Thailand (46.1), New Zealand (42.2) and Japan (15.9) - showing widespread pessimism across the five key indicators.

The 19-year-old MasterCard Worldwide Index of Consumer Confidence is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months based on five economic indicators: ‘economy’, ‘employment’, ‘stock market’, ‘regular income’ and ‘quality of life’.

The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

The latest survey was conducted from 15 March to 27 April 2011 and involved 10,374 consumers from 14 regional markets.

Japan, NZ earthquakes rock sentiment

Overall confidence in the ‘economy’ in the Asia/Pacific region fell from 70.6 to 59.1, with ‘employment’ down from 67.5 to 59.9.

Confidence also fell among consumers on the key indicator of ‘quality of life’ (from 64.7 to 57.0) and the ‘stock market’ (from 65.8 to 58.1), but increased slightly on’ regular income’ (from 71.6 to 73.1).

“While consumer attitudes remain overwhelmingly positive across this Index there is clearly a perception that the recovery from the financial crisis is not going as smoothly as people would like,” said Yuwa Hedrick-Wong, global economic advisor for MasterCard Worldwide.

A battle of brand names

With improved quality and lower prices, products labeled under supermarkets’ names are posing a danger to the average producer whose brand name is yet to be established.

Co.op Mart, Vietnam’s leading retailer, for instance, has 150 products under its name, while Saigon Co.op has six times as many.

Big C has three labels - Wow, Big C and Casino – of its own and Metro Cash & Carry, the first retailer to have its own labels in Vietnam, now has a series of labels such as Fine Food, Fine Dreaming and Sigma.

And this trend is only on the rise. For example, Pascal Billaud, Big C Vietnam’s general director, predicted that one out of four products at Big C in the next three years would have a Big C’s label.

All of this is making many producers worried.

Luong Van Vinh, director of My Hao Chemical Cosmetic JSC, told The Saigon Times that products with supermarkets’ labels enjoy an advantage because they are often conveniently placed to attract consumers as well as have cheaper prices because supermarkets don’t have to spend money advertising and marketing their brands.

“This is making it very hard for other producers to compete,” Vinh said.

Pham Thi Xuan Huong, deputy CEO of Lam Dong-based Ladopharm Pharmaceutical Company, said her company’s sales had declined after the distributors developed their own labels.

“Some distributors even suggested that we should stop selling the products that they also have,” Huong said.

Marketing expert Tran Anh Tuan, CEO of The Pathfinder Company, was quoted by The Saigon Times as saying that retailers’ labels were indeed posing a big problem to producers who don’t have very strong brand names.

But he said these producers must face this challenge and find a way to deal with it. “To compete, producers can improve product quality to strengthen their brand names,” he said, adding that they can also exploit other distributing channels besides supermarkets such as grocery stores.

Execs call for more attention to private sector

In an interview with Tuoi Tre, two leading businessmen urged the government to pay more attention to the private sector to help it develop.

Nguyen Ngoc Bao, deputy CEO of Vietnam Germany Steel Pipe Joint Stock Company, said the government didn’t pay adequate attention to the private sector, despite its contributions to the national economy.

Bao thus urged the government to keep in touch with private enterprises in order to know of their difficulties and provide timely support.

“For instance, one of the most crucial things the government can do for private enterprises is to reduce the ‘unofficial’ fees they are forced to pay while filing for taxes, customs clearance, and business licenses,” Bao said, adding that private firms, especially small and medium ones, also had difficulties in accessing bank loans.

“Although the government has proposed policies to help small and medium enterprises access capital, many firms reportedly still have to pay an unofficial fee to access bank loans,” he said.

As for the National Assembly’s Economic Committee’s recent suggestion that the government should not establish new state-owned enterprises because the existing ones aren’t working effectively, Bao said the government should heed this advice and be firm on removing ineffective state-owned enterprises.

“Unless the government speeds up the reform of state-own enterprises, we won’t have the motivation to develop in the future,” he said.

For his part, Vo Quoc Thang, chairman of the Vietnam Young Business Association, said it was necessary to distinguish between domestic and foreign-invested enterprises, rather than public and private businesses.

It means that the government should invest in domestic firms that are working effectively, regardless of whether they are state-owned or private.

“To this end, we need to focus on improving human resources because only qualified people can bring changes and reform to our country,” Thang said.

Thang suggested improving salary policies to attract capable people.