Spring Economic Forum 2015

The National Assembly’s Economic Committee (NAEC) has announced that the 2015 Spring Economic Forum will take place April 21-22 in central Nghe An province's Vinh City.

In making the announcement, Nguyen Van Phuc, vice chairman of the NAEC said the forum will focus on measures to improve the investment climate for businesses and new legislation related to doing business and investing.

The event is jointly organised by the National Assembly’s Economic Committee, Vietnam Academy of Social Sciences, Vietnam Chamber of Commerce and Industry and the Central Institute for Economic Management.-

Hustle and bustle of fish markets

The border gate in An Giang province has been lively, boisterous, colourful, smelly and gritty with an electric atmosphere during the early months of the year, full of Cambodian traders travelling to Vietnam to buy fish, shrimp and prawns.

At the crossing there is a lot of talk that Cambodia once a powerhouse in the Southeast Asian region for fish exports has transformed into just the reverse, a lucrative export market for the Vietnamese aquaculture industry.

Cambodia has been transitioning into a large prosperous fish market for Vietnamese farmers said Lam The Gioi Customs Department head at the Tinh Bien border gate.

Since the Tet (Lunar New Year) holiday, exports of seafood have been on the uptick with hundreds of tonnes of seafood having made its way into Cambodia via the border crossing.

The selection has been quite varied including snake head catfish, white carp, common carp, grass carp, bighead carp, Spanish mackerel, short body mackerel, salmon, prawn, shrimp, crab, cockle and others.

You name it and it’s regularly being transported to Cambodia via the border crossing he said.

Cambodia has a long history of exporting mainly freshwater fish and related products from its low technology aquaculture farms to other countries in Southeast Asia dating back centuries.

However, according to government officials and traders, stocks of both freshwater and marine fish have been steadily declining over the last few years that have given way to the shift of the country into a leading fish importer in the region.

Year after year they have said Vietnamese exports of live, fresh, frozen, and processed fish have been steadily increasing and finding their way into the Cambodian market as local fish have been insufficient to keep up with domestic demand.

Reliable statistical data on imports into Cambodia is not readily available, because most imports have been sold at urban and rural fish markets as the legal system for importing fish from Vietnam is not commonly used in practice.

Many traders with limited funds use unofficial border crossings to avoid paying the high import fees. Only large scale traders that have the capability and financial resources to transport several tonnes of fish at a time pay the necessary import fees and use the legal method.

In late March, at the Khanh Binh border gate in An Phu district, An Giang province, there were a bevy of trucks loaded to the hilt with fish, shrimp and prawns parked at the Long Binh market.

Immediately, thereafter, a large group of Cambodian traders who were waiting at the Chraythom border gate in Kandal province, Cambodia, swept in and bought the lot and transported all of it to Phnom Penh.

A Vietnamese trader said Vietnamese fish has been selling at VND25,000-50,000 per kilogramme in Cambodia and is quickly becoming a popular menu item and a staple in most all restaurants throughout the country.

Trading has also picked up at the Tinh Bien border gate where fish exports have regularly passed through on its way to Takeo and Kampot provinces in Cambodia reported local resident Nguyen Van Tuan.

Cambodian traders often purchase Vietnamese fish for VND2,000-4,000 per kilogramme higher than it is sold for in Vietnam, Tuan added.

Bui Phuoc Dinh, director of Dinh Nguyet Company Limited, said every day his company collects fish and shrimp in local markets and then resells it to regular Cambodian customers.

Business is booming and the company has on average exported tonnes of seafood to Cambodia daily, Dinh said, which has resulted in creating hundreds of jobs for employees with average monthly earnings of VND4.5 million.

A number of Cambodian traders shared that land for aquaculture has been on the decline as it is being put to other uses. In addition, fishing has become more strictly controlled, making it difficult for aquaculture, they stressed.

Nguyen Van Thao, vice chairman of the An Phu District People’s Committee said Khanh Binh border gate located 70km from Phnom Penh as the crow flies has the added advantage of trade via using river transport.

Consequently, it greatly facilitates traders from both Vietnam and Cambodia and the gate has become a trans-shipment point for all products, including agricultural products and seafood, Thao said.

Currently, the Binh Di Bridge connecting Cambodia to Vietnam is on track to be completed in the near future, which will also benefit traders.

Ngo Hong Yen, Tinh Bien district People’s Committee Chairman said the expansion of Vietnam’s seafood trade to Cambodia has been a positive development for aquaculture providing a readily accessible lucrative market.

Businesses remain ‘vague’ about safeguard measures

Vietnam successfully defended trade safeguard lawsuits related to exported products last year, according to a recent annual report of the Vietnam Competition Authority under the Ministry of Industry and Trade.

For example, India and Thailand removed Vietnam from their list of the countries subject to safeguard duties on raw elastic thread and non-alloy steel, respectively, while the European Commission (EC) stopped investigations without imposing anti-subsidy tariffs on polyester staple fibres (PSF) imported from Vietnam.

Despite gaining certain success, the country’s implementation of protective measures still face a number of obstacles.

Meanwhile exporters and associations have been fully unaware of legal regulations, particularly safeguard measures. Besides, not a few State policies violated the World Trade Organisation (WTO) agreements as a result of limited understanding of trade safeguard measures, causing anti-subsidy lawsuits against Vietnam exported products.

Economic forum to discuss business climate improvement

Continuing to promote improvements in the business climate of Vietnam will be the main focus of the 2015 Spring Economic Forum scheduled for April 21-22 in the central province of Nghe An.

Deputy Head of the National Assembly’s Economic Committee Nguyen Van Phuc stressed the need to speed up investment climate improvement in Vietnam, especially as the country prepares for international integration.

This year’s forum will focus on analysing and assessing the implementation of the 2014 socio-economic development plan as well as putting forward measures for the 2015 plan, Phuc said.

Economic experts and scientists will join discussions on concrete orientations to improve the business climate in Vietnam.

They will provide in-depth evaluations of specific suggested standards for the business climate in connection with the implementation of the 2013 Constitution and a number of newly-issued laws such as the Law on Tendering, Law on Investment and the Enterprise Law.

Opinions from domestic and foreign enterprises are also on the agenda.

The event is jointly organised by the National Assembly’s Economic Committee, Vietnam Academy of Social Sciences, Vietnam Chamber of Commerce and Industry and the Central Institute for Economic Management.

Household appliance market readies to cool off summer

The household appliance market in Ho Chi Minh City is speeding up promotion activities and improving services to attract consumers as the hot summer season quickly approaches.

Enterprises citywide have prepared a high stock volume of cooling products with competitive prices for customers. They have also focused on selling policies and preferential treatment for customers through numerous promotion programmes such as extended warranties, free added services and complimentary gifts.

April and May are hottest months in the southern city, leading household appliances centres to introduce attractive promotion programmes, receiving positive responses from consumers.

Previously, enterprises focused exclusively on low prices and free gifts, but have evolved to prioritise customer service.

The city’s market is expected to enjoy a 15-30 percent growth in April and May, with a particular surge in air-conditioning products.

Vietnam helps Laos develop infrastructure

The Commercial Bank for Investment and Development of Vietnam (BIDV) sealed credit contracts to provide roughly 147 million USD for the construction of two infrastructure projects in Laos.

Accordingly, the bank is lending 26.84 million USD to the Lao Government to build a 97-kilometre road, and 120 million USD to launch an infrastructure development project in a district in Houaphan province.

The loans have a 15-year duration with a three-year grace period at an annual interest rate of 3 percent.

BIDV Chairman Tran Bac Ha, who is also President of the Association of Vietnamese Investors in Laos (AVIL), stated the signed contracts reflect the bank’s efforts to support Lao Houaphan and Xieng Khouang provinces in line with a cooperative agreement made by the two countries’ governments.

Lao Finance Minister Liane Thykeo said BIDV, through its credit offerings, has contributed to Laos’ overall economic growth and cementing the Vietnam-Laos friendship.

The bank will also provide 30 million USD for construction on a dam in Laos after a contract signing event scheduled for May.

The combined value of credit contracts between BIDV and the Lao Government has thus far reached 200 million USD.

Trade villages seek ways to enhance competitiveness

Experts and representatives from trade villages gathered at a recent forum in Hanoi to seek ways to enhance trade village competitiveness in the lead up to the formation of the ASEAN Economic Community, which is slated for the end of this year.

During the event, Chairman of the advisory council for the Vietnam Craft Villages Association Vu Quoc Tuan said as Vietnam is in the group of lesser developed countries in ASEAN, great challenges are ahead for domestic trade villages when import-export tariffs among countries in the bloc will be reduced to 0 percent, allowing free flows of goods from other countries in the bloc into Vietnam.

He stressed the urgent need for craft villages to improve their products in order to compete against foreign goods.

Associate Professor Dr Tran Manh Dat from the University of Hue – Quang Tri suggested for example, alternative materials should be developed for silk weaving villages in tandem with hand-made silk to ensure sustainable development of silk villages.

Other participants said craft villages should review products produced by other ASEAN nations, such as rattan, bamboo, wood, gold or silver handicrafts, while restructuring their production to reduce costs.

Trade village representatives called for incentives for trade villages and establishing an institution to manage their development.

They also suggested amending relevant regulations on vocational trainings to ensure appropriate approaches and durations of handicraft training courses.

Established in 1967, the Association of Southeast Asian Nations (ASEAN) comprises ten members, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Formosa considering four projects in Quang Binh

Formosa group from Taiwan (China) said it is considering investing in four projects in Quang Binh following a recent meeting with provincial authorities.

One of the four projects is a modern large-scale livestock farm covering 600 hectares.

The farm will have an intended capacity to raise 4 million pigs and 100 million chickens, producing 1.5 billion USD in revenue and 20,000 jobs.

Another potential project is a high-class entertainment park with a golf course and two five-star hotels.

A third consideration is in regards to refining ore, and the final would address byproducts from the existing Formosa Steel Plant in Ha Tinh province.

Vietnamese firms attend world’s biggest industrial event in Germany

Six Vietnamese enterprises attended the world’s biggest industrial trade fair—Hannover Messe 2015—in Hanover, Germany alongside 6,500 other exhibitors from 70 countries and territories worldwide.

At the opening event of the fair on April 12, German Chancellor Angela Merkel urged Germany and Europe to boost industrial manufacturing and technological advancement.

She also touched on bilateral trade between Germany and its partner in this year’s trade fair, India, saying it can be improved upon even though Germany is already India’s largest European trading partner.

For his part, visiting Indian Prime Minister Narendra Modi called for more foreign direct investment from Germany and the entire European Union, pledging that the South Asia nation will create a stable economic environment with preferential policies for investors in line with simplified administration procedures and tax reforms.

The 68th Hannover Messe focuses on the five core areas of industrial automation and information technology, energy and environmental engineering, power transmission and control, industrial subcontracting and production engineering, and research and development.

Around 213,000 visitors are expected to turn out for the industrial event, which runs through April 17.

Raising role of domestic firms to ease dependence on FDI

It is urgent to assist domestic businesses to become a strong pillar of the Vietnamese economy, an economy whose growth has been largely fostered by foreign direct investment (FDI) in recent years, experts said.

Since the Law on Foreign Investment was issued in 1987, FDI inflow into Vietnam has strongly affected the country’s economy.

FDI makes up about 22-25 percent of the nation’s total investment and contributes 14 percent of the State budget, said Director of the Ministry of Planning and Investment (MPI)’s Foreign Investment Agency Do Nhat Hoang.

The sector’s contributions to national GDP have also increased over the years, reaching approximately 20 percent in 2014, he said, noting that it creates jobs for more than 2 million people and another 3-4 million indirectly.

During the first quarter of 2015, FDI businesses’ exports (including crude oil) hit 25.1 billion USD and accounted for 70.3 percent of Vietnam’s total export value, he added.

Despite these positive economic impacts on the economy, experts pointed to existing problems in Vietnam’s FDI activities.

According to the MPI’s National Centre for Socio-Economic Information and Forecast, many FDI projects operate in natural resource exploitation, polluting industries and real estate, all of which are undesirable investment fields.

For many years, a number of FDI firms have claimed losses with the intent to use transfer pricing and evade taxes. Following several years of reported “losses”, some of those firms have come to dominate the manufacturing of numerous products such as fizzy drinks, detergents and animal feed, manipulating the domestic market and lowering domestic companies’ competitiveness, the centre said.

Meanwhile, the 25 percent FDI proportion of the total investment is relatively high and indicates weakness in domestic investment, said Deputy Director of the Ministry of Trade and Investment’s Industry and Trade Information Centre Le Quoc Phuong.

Vietnam’s considerable dependence on FDI can also be seen through 70 percent of total exports and over 60 percent of the national industrial production coming from the FDI sector, he added.

Vice President of the Central Institute for Economic Management Vo Tri Thanh said if relevant support is effectively provided, private businesses could become an important pillar of the economy, helping reduce dependence on the FDI sector.

Concurring, Hoang said domestic firms, especially small- and medium-sized enterprises, should form the foundation of the Vietnamese economy. The State should put a greater focus on these companies and offer them optimal policies, incentives and capital and technology assistance.

Deputy Director of the MPI’s Department for Economic Zone Management Vu Quoc Huy suggested domestic businesses learn from the technology, management and promotion experience of FDI firms to improve their capacity. State agencies also need to act as a bridge between the two groups and raise the role of FDI companies, especially large-scale firms, in aiding domestic enterprises.

Tougher competition for apparel sector ahead

Experts have called on apparel enterprises to improve product quality and prepare to face tougher competition in the next five years.

Speaking at the Vietnam Saigon Fabric & Garment Industry Expo (Saigon Tex) 2015 in HCMC on April 9, Hoang Ve Dung, deputy general director of Vietnam National Textile and Garment Group (Vinatex), said Vietnam will sign more bilateral and multilateral free trade agreements, thus offering multiple opportunities but at the same time exposing them to more challenges.

In fact, apparel enterprises have seen competition intensifying in recent times. Some producers performed well in 2014 but have failed to win contracts this year while their employees have left for bigger firms.

“Despite preparations since 2013, we’ve faced cutthroat competition since last year,” Dung said.

He noted that apparel exports have been swelling, from US$25 billion in 2014 to an estimated US$28 billion this year, but some companies have won less orders than expected over the past months, including foreign-invested enterprises.

Dung suggested local companies manage to participate in the value chains to take advantage of the country’s deeper integration into the world; otherwise, they will have to close or sell their factories.

Around 30,000 textile and garment companies have generated jobs for a large number of local laborers and contributed around 15% of the nation’s total export revenue. Vietnam is among the top five apparel exporting countries by volume.

Nonetheless, Vietnam is still heavily dependent on material imports.

Vinatex general director Le Tien Truong said the sector aims to raise its outsourcing ratio to 50% by 2020 compared to 38% currently. The localization ratio targets are 60% this year and 70% in 2020 versus around 50% last year.

Vietnam’s textile and garment industry targets exports of US$50 billion by 2020.

Truong said as the nation needs to import over US$12 billion worth of material each year, there is huge potential for the investors of material production on the domestic market.

According to experts, foreign enterprises are speeding up investments in the sector to take advantage of the upcoming FTAs, including the Trans-Pacific Partnership (TPP). Many companies from China, Hong Kong, Taiwan, Japan and Korea have spent big on garment and textile projects this year.

With around 650 local and foreign enterprises taking part, the four-day expo at Tan Binh Exhibition & Convention Center in Tan Binh District lasts until Sunday.

Expy projects with POSCO involvement face inspection

Transport Minister Dinh La Thang on April 9 decided to launch a thorough inspection into expressway project packages with the involvement of POSCO Engineering & Construction (POSCO E&C) as a contractor.

According to the decision, the inspection team has six members representing the ministry’s departments of finance and science-technology, and Transport Engineering Construction and Quality Management Bureau.

The team will review contractor selection, appraisal and payment at the packages implemented by POSCO E&C to see whether there were irregularities.

The team will propose sanctions against any violations it detects and propose changing regulations to ensure transparency in other similar projects.

The ministry said POSCO E&C won packages A1, A2 and A3 of the Noi Bai-Lao Cai Expressway in the north, and No.3 and 5A packages of the HCMC-Long Thanh-Dau Giay Expressway connecting HCMC and the southern province of Dong Nai.

All those packages were completed and put into operation.

At a news briefing in Hanoi last week, Deputy Minister of Transport Nguyen Hong Truong said the ministry had not found any irregularities at the projects with POSCO E&C’s involvement.

Truong said all the packages won by POSCO were put up for tender in line with international practices and carefully checked by investors. Through the tenders, prices of the package contracts were cut by 15-30% compared to the initial estimates.

Korea’s Yonhap news agency cited Korean police as saying that another executive of POSCO E&C, the construction arm of POSCO Group, was detained on Tuesday on alleged charges of involvement in the creation of a slush fund overseas and taking bribes from a subcontractor.

POSCO E&C was investigated after South Korean prosecutors suspected the firm open a lush fund totaling 10 billion won (some US$9.2 million) and collude with subcontractors to inflate construction costs of the expressway projects it got involved in ASEAN, including Vietnam.

US$12 billion FDI to be disbursed this year

The Foreign Investment Agency (FIA) expects foreign direct investment (FDI) approvals to amount to a total of US$18 billion this year, with more than US$12 billion of it to be disbursed.

The figures are seen obtainable as Vietnam is becoming a favorite destination for global manufacturers, heard a seminar in Hanoi City on April 9 on impact of FDI on Vietnam’s economy.

Do Nhat Hoang, director of FIA under the Ministry of Planning and Investment, told the seminar that the agency hopes FDI disbursements would exceed US$12 billion this year.

Vu Hoang Duong from the Vietnam Institute of Economics said FDI disbursements reached around US$10 billion a year in 2008-2013 irrespective of FDI approvals. This raised concerns that Vietnam’s FDI absorption was weak.

Hoang said Vietnam issued a decree on foreign investment as early as in 1977 but attracted no projects between 1977 and 1985.

In the late 1980s, the nation introduced the Law on Foreign Investment. Then, the U.S. lifted its embargo against Vietnam in 1995, paving the way for foreign companies to enter the country.

The FDI sector is now responsible for 22-25% of the country’s total development investments and 15% of the State budget, Hoang said.

“We can say for sure that Vietnam’s economy would not have achieved high growth if it had been without FDI,” Hoang stressed. “If we want our country to grow, we should open the door to let money in and this source of funding together with domestic capital will spur economic growth.”

Hoang rejected concerns that Vietnam is giving a lot of incentives to FDI enterprises.

Professor Nguyen Mai said Vietnam is becoming a place of choice for multinationals, especially Samsung, Intel and Canon.

Vinh Phuc Province has made breakthroughs thanks to FDI projects. When it was separated from Vinh Phu Province, its annual tax collections totaled a mere VND100 billion but last year the figure skyrocketed 1,160 times.

Another northern province, Bac Ninh, has also changed for the better thanks to the presence of major foreign investors like Samsung, Canon and Nokia.

However, Vu Quoc Huy, deputy head of the Economic Zone Authority, said FDI projects have yet to leave as strong impact on the economy as expected.

For instance, Canon invested over US$300 million in Vietnam in 2001 and had seven suppliers at that time. Now, the firm has over 100 suppliers with local content accounting for over 60% but Vietnamese firms make up nearly 10% of the total number of suppliers.

In addition, the ratio of Vietnamese suppliers for Samsung is below 10%.

The figures suggest that Vietnamese firms have an insignificant presence in the value chains of foreign enterprises. Local enterprises have not been able to produce highly precise spare parts, Huy said.

Strict rule helps prevent monopoly at transferred airports - experts

Aviation authorities and experts have agreed that monopoly would be impossible at airports transferred to investors if administering agencies have effective regulations to prevent this.

There has been concern that transferred airports will be dominated by certain airlines and investors if they are permitted to buy the operation rights to Terminal 1 (T1) at Noi Bai International Airport in Hanoi and Phu Quoc International Airport off mainland Kien Giang Province as planned by the Ministry of Transport.    

Deputy Minister of Transport Pham Quy Tieu told a seminar in Hanoi on Wednesday that the State will raise hefty funding from selling and transferring the operation rights to airports but there should be effective measures against monopoly and proper mechanisms to ensure healthy competition and efficiency of State management at these airports.

The ministry is weighing plans to sell the operation rights to a number of airports to raise funds for other infrastructure airports from investors, said Lai Xuan Thanh, director general of the Civil Aviation Authority of Vietnam (CAAV) told the seminar on allowing private enterprises to operate a number of airports in the country.

Thanh said leaders of the ministry and CAAV have reached a consensus that the State will not transfer or sell all facilities at an airport to private investors though they encourage enterprises of the private sector to invest in airport projects.

Thanh said flight management, airspace and immigration will continue to be under State agencies, particularly at the airports that play a crucial role in defense and security, and that the rights and obligations of investors would be clarified in contracts.

Unhealthy competition and monopoly will be eliminated at transferred airports as flight operation and licensing are still controlled by the ministry. The corporate operator of an airport will not be allowed to refuse an outside carrier, and all the fees and service charges will be decided by the ministries of transport and finance.

Thanh said that the investor will have its operation license revoked and contract terminated if it does not follow the rules.  

The State will apply transparent processes to transfer the operation rights to airports.

Currently, CAAV is working with Airports Corporation of Vietnam (ACV) to prepare contract forms for transferring the operation and management rights to airports.

Luong Hoai Nam, general director of Hai Au Aviation Joint Stock Co, said there is not a common formula to prevent monopoly but there are effective measures to curb the out-of-control expansion of the operators of airports, particularly airlines.

Nguyen Duc Tam, deputy general director of VietJet Aviation Joint Stock Company (VietJetAir), said the private carrier now operates 23 aircraft but has to rely totally on the ground services provided by other enterprises.

Therefore, VietJetAir wants to buy T1 at Noi Bai airport and stakes at ground aviation service companies, Tam said. He added that if VietJetAir had an own the terminal, the airline could turn it into a major hub and contribute more to the State budget.

However, Le Manh Hung, general director of ACV, said private airport operators in the world are prevented from dominating aviation facilities to minimize risks. Many countries do not allow investors controlled by airlines and holding a 5% stake at an airline to participate in tenders for the operation rights to airports.

After the ministry unveiled plans to transfer the operation rights to a number of international airports in February this year, Vietnam Airlines and VietJetAir have expressed interest in taking over T1 at Noi Bai airport while T&T Group Joint Stock Company wants to buy the entire Phu Quoc International Airport.

Most recently, Jetstar Pacific Airlines has sought approval from the Ministry of Transport to purchase the old terminal at Danang International Airport to upgrade it for low-cost services for 20-50 years.

HoREA wants maximum budget condo area unchanged

The HCMC Real Estate Association (HoREA) has proposed the Ministry of Construction keep the maximum area of budget homes unchanged at 70 square meters instead of 90 square meters.

Under the draft decree on social housing development and management already put forward for comment, the smallest unit for low-income earners is 25 square meters while the biggest is 90 square meters. However, the numbers of apartments of 25-30 square meters and 70-90 square meters are limited at 20% of the total number of apartments in a project.

According to HoREA, the minimum area of budget apartments of 25 square meters is reasonable as it can meet the demand of families of four. But the maximum area of 90 square meters is not appropriate in the current situation.

HoREA explained that the goal of developing budget apartments is to meet the basic housing demand of low-income earners in urban areas, not to satisfy the demand of big families.

It will not be fair when a 90-square-meter apartment is used by one household while such an apartment is big enough for up to three families. Meanwhile, budget homes enjoy many incentives like land rent, value-added tax of 5%, corporate income tax of 10% and preferential interest rates.

The building of more small-sized apartments instead will serve more people. Therefore, HoREA proposed the maximum area of a budget apartment should not exceed 70 square meters regulated in the Government Decree 188/2013/ND-CP. The maximum area, according to HoREA, can be adjusted by 10% on either sides and decided by the provincial authorities for each project.

HoREA also proposed the Ministry of Construction offer maximum housing loans worth 80% of the value of the contracts instead of 70% as suggested in the draft decree.

Truong Thai Son, deputy general director at Hoang Quan Real Estate Corporation, told the Daily that the loan rate should be lowered to 4% from the current 5%.

To meet huge housing demand, the Government should create favorable conditions for more people to buy budget homes and consider exempting VAT for those who are only able to rent homes, according to Son.

VNAT seeks to stop foreign visitor falls

Representatives of the Vietnam National Administration of Tourism (VNAT) and the Vietnam Tourism Association (VITA) sat down together on Wednesday to devise promotional programs as a measure to curb a further decline in international visitors to the country.

The meeting was convened after international arrivals fell for the tenth month in March. Participants also discussed simplifying visa procedures to woo foreigners to the country.

Vu The Binh, vice chairman of VITA, said the current top priorities of the local tourism sector are to stop the fall in foreign visitors by launching promotional products and asking relevant agencies to streamline visa procedures.

Binh said VNAT and VITA have worked out some specific promotional programs for submission to the Government for consideration.

Binh noted that to implement the promotional programs, there should be a competent agency to work with ministries and departments over policies to support tour operators.

However, promotions should not last for a long time and tourism authorities need appropriate actions to enhance the competitiveness of the domestic tourism sector.

Discounted tours are just situational solutions and competitiveness improvement should be the long-term goal, Binh said.

According to VNAT, the country welcomed over two million international visitors in the first quarter of this year, down 13.7% year-on-year.

On the contrary, international visitors to other regional countries jumped in the period, according to a source from VNAT. For instance, Thailand saw an increase of over 20% in international arrivals in January-March.

The competitiveness of the local tourism sector has weakened and this is a major concern.

Drought hits pepper yields

The Vietnam Pepper Association (VPA) has forecast output in the country’s big pepper producing provinces may fall sharply this year due to prolonged drought and low-yielding old pepper plants.

VPA painted the gloomy picture after its leaders made two field trips to the leading pepper producing regions in the first quarter of this year, which was the peak harvest season.

VPA found that this year pepper yields would drop 10-15% in Dak Nong and Binh Phuoc provinces, 30% in Daklak Province and 40% in Gia Lai Province. In the southern province of Dong Nai, pepper output could be 10% lower this year than last in Cam My District and more than 55% in Xuan Loc District.

However, VPA expected the national pepper output would not be much lower than that of 2014 when the country yielded 125,000 tons as announced by the Ministry of Agriculture and Rural Development, as production in certain localities have soared.

For example, pepper output in Xuyen Moc in the southern province of Ba Ria-Vung Tau is estimated to surge 50% this year.

High pepper prices in the past years have led to a rapid expansion of the area under pepper cultivation nationwide. The ministry’s master zoning plan for pepper farming is envisaged having 50,000 hectares in 2020 but the actual area has exceeded 60,000 hectares.

Statistics of the ministry showed that Binh Phuoc has 9,000 hectares of pepper but VPA’s surveys found the southern province has more than 12,000 hectares.

A ton of pepper was sold at VND182,000-187,000 in the southeastern and Central Highlands regions yesterday.

Vietnam exported 15,000 tons of pepper worth US$134 million in the first three months of this year, down 23% in volume but up 3% in value compared to the same period last year.

The average pepper export price in the January-February period was US$9,219 a ton, surging 35% year-on-year.

Vietnam now accounts for some 50% of the world’s commercial pepper output.

VN disburses US$10 bln in FDI every year

Viet Nam has become an attractive destination for foreign investment, with Foreign Direct Investment (FDI) disbursement averaging US$10 billion per year over the past 30 years of renovation.

The information was released at a conference on impact of FDI on Vietnamese economy on April 9.

At the event, professionals highlighted the role and contributions of the FDI businesses in Viet Nam’s exports, saying they have helped guarantee foreign currency supply and strengthen national balance of payments.

FDI businesses have made remarkable contributions to the economic development and State budget by meeting the demands for capital and technology.

The businesses' exports accounted for two thirds of the nations’ total export turnover and they created three million jobs.  

FDI, a crucial resource, directly joins and promotes the forming of a number of value added industries such as machines, energy, computers and phones.

Viet Nam should improve its investment environment to attract more foreign investment, some delegates suggested, adding that the nation needs to accelerate the business and administrative reform in the effort.

Supervising State investment in businesses enhanced

The Ministry of Finance is drafting a Decree on supervising State investment and finance in businesses, evaluating effectiveness of their operation and publicly announcing financial information of businesses which the State holds 100% of charter capital and those enterprises invested by the State.

According to Decree No. 61/2013/NĐ-CP, businesses can lower their yearly plan to easily reach the goals or exceed set plans.

In addition, they will be specially supervised in case of losses, the coefficient of liabilities exceeding the safe level as regulated, the incurred losses equal or higher than 30% of the equity or the accumulated losses higher than 50% of the equity or the solvency ratio of debt maturity less than 0.5.

The Draft stipulates specific regulations on financial supervision, evaluation of operation and rankings for businesses which the State holds the entire charter capital, supervising enterprises holding the whole charter capital, joint stock and limited companies.

Draft Decree on State investment at businesses under consideration

The Ministry of Finance is drafting a Decree on State investment in businesses and management and use of capital and assets at businesses.

Earlier, the Law on the State financial resource use and management for manufacturing and operating at business, approved by the National Assembly on November 26, 2014, will take effect since July 01, 2015.

The draft Decree includes six chapters and 47 articles. Besides common regulations, the draft defines specific regulations on State investment in businesses, including the State investment to establish State-owned enterprises (SOEs), adding charter capital for operating SOEs, managing capital and assets at SOEs, managing State investment at joint stock and limited companies.

AirBridgeCargo adds Vietnam to its freight network

AirBridgeCargo Airlines is extending its global network to Vietnam with the launch of twice-weekly freighter services from Hanoi, starting on April 1, 2015.

The flights depart Hanoi every Wednesday and Saturday bound for AirBridgeCargo’s (ABC) hub at Moscow’s Sheremetyevo Airport via Hong Kong. From Moscow, the flight connects to AirBridgeCargo destinations in Europe and the United States.

Asia has developed into a key market for ABC and this development is continuing in 2015. Since ABC’s first flight from the region in 2004 it has increased its market presence in the area by providing reliable services to meet growing demand from major markets such as Hong Kong, China, Japan, and Korea.

“AirBridgeCargo believes that entering the Vietnamese market comes as the logical next step in developing the strategically important Asian market. For decades the world has witnessed how Asia has transformed into the world’s largest manufacturing power, while it has also become one of the largest global consumer markets. Vietnam’s market development is another bright example of the region’s strength and continued potential and we are excited to start serving our customers there. We are confident that the new Hanoi service will complement our existing network and that this will benefit our clients,” said Robert van de Weg, ABC sales and marketing senior vice president.

Meanwhile, ABC’s APAC vice president Joanna Li added that, “Development of point-to-point delivery with our hub model in Moscow will provide our customers with numerous delivery solutions to major cities in Europe and the United States.  Hanoi is our eighth online station in Asia and we aim to become a trustworthy partner that will benefit the Vietnamese airfreight industry. We believe that opening services from Hanoi will bring us new opportunities and challenges, and our team is ready for them.”

Nam A Bank to sell 100 million shares

The Nam A Bank plans to sell 100 million shares in its initial public offering (IPO), with a combined face value of VND1 trillion (US$47.62 million).

A transaction office of Nam A Bank. The bank plans to sell 100 million shares in its IPO. Photobizlive.vn

The IPO is aimed at helping the bank increase its charter capital from VND3 trillion ($142.86 million) to VND4 trillion ($190.48 million).

The State Securities Commission adopted the plan last April 8, after the bank's shareholders agreed to the scheme in March 2014.

Nam A will consult shareholders about a share listing on the stock market at their annual meeting on April 17.

This year, the bank projects a pre-tax profit of VND360 billion ($17.14 million), an increase of 49 per cent over last year. It targets a total asset value of VND40 trillion ($1.90 billion) in 2015, a year-on-year increase of 7 per cent.

Deposits are expected to reach VND23.5 trillion ($1.12 billion), up 16 per cent year-on-year, and outstanding loans are expected to hit VND21 trillion ($1 billion). The maximum bad debt ratio is set at 3 per cent.

The bank also plans to open five more branches and four new transaction offices in 2015.

SC VivoCity opens doors to a prestigious life

SC VivoCity, the one-stop family lifestyle destination mall managed by Saigon Co.op and Mapletree, will open its doors to visitors on April 19, 2015.

Located along Nguyen Van Linh Boulevard in Ho Chi Minh City’s District 7, SC VivoCity embraces the popular features of the iconic Singaporean VivoCity, which has been voted into the top ten shopping destinations of the world in 2011.

With Mapletree’s expertise in developing large-scale projects and commercial complexes throughout Asia, as well as Saigon Co.op’s experience in retail and real estate investment in Vietnam, this partnership is expected to bolster commercial activities in the city, at the same time as offering consumers new services and international retail standards.

With its modern architecture, impressive and striking design, SC VivoCity is sure to become a momentous part of the city skyline, while housing famous trademarks, offering the most popular food brands along with year-round festivals and events that will draw repeated visits from both local residents and foreign visitors.

SC VivoCity is easily accessible and well-connected to other districts via bridges and expressways, being located only five kilometres away from the city centre.

Covering a total area of 41,000 square metres, the five-storey mall offers the latest fashion, entertainment and lifestyle options, as well as a hypermarket, an education centre, and various food and beverage outlets.

It features well-known brands like CGV SC VivoCity, McDonalds’, Harley-Davidson Black Label Saigon South among others.

SC VivoCity aims to create a vibrant, multi-experience destination which will constantly surprise visitors with its mix of unique, ever-evolving and refreshing, new-to-market retail and lifestyle brands and concepts.

Parents with children are always welcome to visit the large rooftop area, which has been turned into a park equipped with a children’s wet and dry playground.

Binh Duong attracts $402m FDI in Q1

The southern province of Binh Duong attracted foreign direct investment worth US$402 million in the first quarter, its People's Committee announced on April 10.

Chairman Tran Van Nam (right) talks with investors. VNS Photo Le Thu Ngan.

Around $255 million is set to be invested in 55 new projects with the rest going into 30 existing ones.

On Friday provincial authorities issued investment certificates for 28 projects worth $304 million.

Binh Duong ranks second in attracting FDI this year behind only HCM City.

The investors are mainly from mainland China - five projects - and South Korea and Hong Kong with four each.

People's Committee Chairman Tran Van Nam said, "To ensure Binh Duong remains an attractive, stable and friendly investment destination, the province will continue to implement measures to improve and better facilitate investment."

He said the measures included mobilising resources to develop infrastructure, especially roads, water supply, and sewerage.

The province's focus was on projects and services that use modern technologies and produce products with high value addition, he said.

"[We will] speed up administrative reform in all aspects and complete and effectively operate a ‘one-stop service' mechanism … to better serve entrepreneurs and citizens."

Cumulatively, the province has attracted FDI worth nearly $21 billion in 2,440 projects.

HCM City’s businesses sign MoUs with Lao, Cambodian enterprises

Some Memorandums of Understanding between Vietnamese businesses and enterprises of Laos and Cambodia were signed during the visit and work by the Ho Chi Minh City delegation of officials in Laos People's Democratic Republic and Cambodia Kingdom on April 6 – 11.

Exhibitions and workshops promoting Vietnamese products were also organized in Laos and Cambodia during the visit. The events attracted more than 300 Cambodia businesses and 200 Lao enterprises.

Vietnamese high quality consumer products and home appliances were highly appreciated by buyers of the two countries.

65 enterprises of Ho Chi Minh City received investment licenses for projects building fertilizer factory, planting rubber trees and banking with the total capital of US$387.9 million by March. Meanwhile the city welcomed four Cambodian projects worth US$1.6 million.

The statistics showed that Laos’ authorities granted investment licenses to 28 Vietnamese companies with the total capital of US$252 million for fields of processing industry; manufacturing; agro-forestry-aquatic products; mining and construction.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR