Attracting crucial investment to Vietnamese northwest

Deputy Prime Minister Nguyen Xuan Phuc has highlighted north-western Vietnam’s 25.6% poverty rate - triple the national average - while speaking at a December 14 conference on promoting investment in the region.

Phuc said 70% of the region’s districts are classified poor and the region is home to half of Vietnam’s special disadvantaged communes.

He urged conference participants to focus on mitigating the flaws in the region’s investment environment to make it more attractive to much-needed official development assistance and non-governmental organisation projects.

The region must find ways to fund infrastructure development, agricultural reform, and human resources training.

 ODA and NGO funding could determine the viability of achieving Vietnam’s millennium development goals, Phuc said

The northwest region has abundant natural resources and beautiful landscapes that should be harnessed to propel regional development.

Phuc and local leaders also heard businesses report results from their recent surveys of the region’s investment environment.

Vietnam attends Cambodian Export-Import Fair

The 8th Cambodia Import-Export and One Village One Product (OVOP) Exhibition 2013 opened in Koh Pich Convention and Exhibition Center in Phnom Penh on December 15.

The four-day fair  has attracted 322 companies from 18 countries including Vietnam, Laos, Myanmar, Thailand, China, Japan, the Republic of Korea, Italy, France, Belarus, the UK, and South Africa.

On display are different kinds of agro-aqua-forestry products, processed food, coffee, garments and textiles, fashion designs, electrical and electronic products, home electrical appliances, industrial machinery and equipment, chemicals, ceramics and building materials, wood products and handicrafts, consumer goods, tourism products, and trading services.

At the opening ceremony, Cambodian Deputy Prime Minister Keat Chhon said that the event provides a good chance for domestic and foreign import-export businesses to boost bilateral and multilateral trade promotions, introduce products and expand their markets.

During the fair, a series of activities including business and investment forums, seminars, and talks will be held.

CPI expected to rise 0.62%

Inflation in 2013 is likely to register approximately 6.15%, below the 8% level set by the National Assembly’s socio-economic development resolution and within Government target of 6–6.5%.

The consumer price index (CPI) increased in June and hit record monthly highs of 0.83% in August and 1.06% in September. It eased once more in October (0.49%) and November (0.34%).

A recent survey revealed credit organisations expect December’s CPI will rise around 0.62% from November readings. Respondents believe the Government has inflation under control.

The National Financial Supervisory Commission concurs, forecasting inflation in 2013 will not exceed 6.3%.

This is the second year Vietnam has contained inflation below the NA’s and Government’s targets.

Vietnam has not let ongoing international economic difficulties distract it from proactively working towards macroeconomic stability, contained inflation, and sustainable economic growth. The annual inflation rate fell from 23.02% in August 2011, to 7.5% in August 2013, to 5.78% in November 2013.

The same credit organisation survey recorded expectations of single-digit inflation -6.74% - in 2014. Keeping the rate below the NA’s set 7% target still presents a challenge.

Credit organisations say State price adjustments will directly impact inflationary movement in 2014. Additional inflationary pressures could come from higher economic growth target (5.8%), loosening State debt budgetary limits to 5.3% of GDP, and issuing more Government bonds.

First fair for start-ups in Hanoi

Hanoi will host Vietnam’s first fair dedicated to start-ups (HATCH Fair) on December 21–22.

The event aims to promote the nation’s developing business community by connecting consultants, investors, and partners. It will introduce a range of projects and potential business partners to interested investors in the hopes of encouraging cooperation and collaboration.

The fair will also hold a conference on Vietnamese and international start-ups featuring renowned speakers discussing how start-ups fit into the wider business community, sourcing investment for small and medium-sized enterprises, and the experiences of Vietnamese start-ups on the world stage.

Economists said domestic businesses lack experience and need support to compete successfully on international markets.

Statistics reveal  only 20% of the 300,000 new businesses that open annually survive beyond their first three years.

HATCH Program Director Pham Quoc Dat said businesses need to proactively explore alternative funding sources from their very beginnings if they wish to avoid the perpetual struggle to survive. HATCH’s products and services can help businesses take that first step.

Detailed information and event registration is accessible via http://fair.hatch.vn./.

Vietnam-Japan cooperation in software development

Vietnam’s FPT Software and Japan’s Recruit Technologies have signed a memorandum of understanding (MoU) on software development cooperation in the 2014-2016 period.

Accordingly, the two companies will focus on medium-term and long-term cooperation. Recruit Technologies will authorise FPT Software to conduct projects and supply software development services.

At a signing ceremony in Danang on December 15, FPT Group General Director Bui Quang Ngoc affirmed that Recruit Technologies has chosen Danang as a development centre in line with FPT group’s development strategy.

FPT will continue to invest in Danang’s high-tech infrastructure development and its University and other regional universities will develop human resources to meet the city’s demands, Ngoc said.

Since 2012, FPT Software has implemented its mandating of software exploitation services together with Recruit Technologies in support of Japanese projects.

The newly-signed MoU is expected to help FPT Software expand its operation in Japan – the most important market in its global strategy – targeting to earn US$200 million from now to 2017.

Van Huu Chien, Chairman of the Danang City People’s Committee, said the city always welcomes Japanese investors, especially in the field of information technology for mutual benefits.

Danang is twined with Japan’s Yokohama and Kawasaki cities.

Rattan, bamboo processing have potential for large-scale production

The rattan and bamboo processing industry should be developed on an industrial scale in the future, according to experts.

The opinion was voiced during a seminar held by the Viet Nam Wood and Forestry Product Association and the Agro-Forestry, Seafood Processing and Salt Industry Department on Thursday.

Experts said the rattan and bamboo processing industry has the potential to develop many kinds of consumer products on an industrial scale, according to the Vietnam News Agency correspondent in northern Son La Province.

Viet Nam has 1.4 million hectares growing bamboo trees and 30,000ha of rattan trees, mainly in Thanh Hoa, Lam Dong, Nghe An, Son La and Yen Bai provinces.

Experts said this large volume of material which could process many kinds of products for export and local consumption.

Demand for using of rattan and bamboo products has also increased on world markets, they said.

Nguyen Ton Quyen, deputy chairman of the Viet Nam Wood and Forestry Product Association, said Vietnamese exports of rattan and bamboo products have had advantages due to their cheaper labour prices and production costs against other regional countries and traditional products.

However, those products have faced competition from counterparts made by regional countries, said Quyen.

Local enterprises have lacked knowledge about fashions and demand for rattan and bamboo products in export markets, had lower outputs and had no export strategies on large scales, he said.

Further, Nguyen Manh Dung, director of the Agro-Forestry, Seafood Processing and Salt Industry Department quoted the Mekong Bamboo Programme as saying that the world bamboo market reached US$12 billion in 2009 and is expected to increase to $17 billion.

That is a good news for industrial bamboo processing enterprises throughout the world, especially firms in Viet Nam and China, Dung said.

However, most local firms in the rattan and bamboo processing industry are small sized enterprises and have not had enough capital to update their technology and expand production, he said.

To enter the world market, local firms should change the structure of their operations by 2020, offering a mix of 30 per cent traditional products and 70 per cent new products, the experts said.

With the new structure, the industry expects to take in $1 billion from exports, including $700 million from products that are processed on an industrial scale, they said.

The industry should also promote advertising and market research for products.

It should also develop support industries for the processing to increase its value, quality and competitiveness of the product, they said.

SBV ends rate-lowering race

In an effort to stop unhealthy competition among banks, the State Bank of Viet Nam has issued a regulation that would prevent banks from offering loans at lower rates than deposit rates.

As capital has piled up at banks, some banks are offering lower borrowing rates in an effort to extend more loans to businesses.

Nguyen Phuoc Thanh, deputy governor of SBV, said if the lending rate was too low, many businesses could take deposits from one bank and re-deposit them in another bank to get benefits.

SBV said this practice was increasing the volume of bad debts, leading to low liquidity and even losses.

Le Tham Duong, head of the HCM City Banking University's Business Management Department, said banks were seeking ways to attract customers, regardless of price.

He said that a regulation was needed to ensure fair competition among banks.

However, several other commercial banks said the regulation was inflexible, citing the need to lower rates to attract customers.

They said banks would not necessarily suffer losses because they can offer other loans at a higher interest rate to compensate for the loans with low interest rates.

In addition, not all customers are allowed to get the preferential lending rate. Only customers in good standing who meet bank requirements can qualify.

Banks said that SBV should create a more flexible policy and ask banks to closely monitor the purpose and use of loans.

If banks did this, then businesses would not be able to make re-deposits in other banks to receive benefits, they said.

Beer prices rise as Tet approaches

With Tet (the Lunar New Year) still seven weeks away, beer prices have already started to rise.

A sales agent on Nguyen Van Nghi Street in HCM City's Go Vap District said prices of brands like Heineken, Tiger, and Saigon Special are higher than a month ago.

A carton of Heineken beer was sold for VND385,000 (US$18.8) last week compared with VND370,000 ($18.1) in mid-November.

Breweries increased prices by VND10,000-20,000 (50 cents-$1) per case in December.

A wholesaler said the price hikes were due to a 7 per cent increase by Viet Nam Brewery Limited (VBL), the manufacturer of Heineken and Tiger beers.

The price at the gate of a carton of Heineken is VND352,000 ($17.2). After passing through intermediaries, it rises to VND390,000 -395,000 ($19.1-19.3) by the time it reaches the consumer.

Phan Dang Tuat, chairman of Sai Gon Beverage Co (Sabeco), said the prices of the company's two main products, 333 and Red Sai Gon – which account for 80 per cent of Sabeco's production – have not risen.

"We have no plans to hike prices of these beers during Tet," Tuoi Tre quoted him as saying.

Speaking at a meeting held by the city Department of Industry and Trade on last week's Wednesday, its deputy director, Le Ngoc Dao, asked VBL to report on its beer production and distribution.

He also ordered it to ensure agents keep prices stable and publicise them.

Nguyen Thanh Dat, VBL's public relations manager, said the company has 41 first-level sales agencies in the city and fully meets their demand "so there is no shortage of supply."

But on Wednesday last week prices of brands like Heineken, Tiger, and 333 continued to rise.

At a shop on Dao Duy Anh Street in HCM City's Phu Nhuan District, 333 beer was sold for VND225,000 ($11) per carton and Tiger for VND380,000 ($18.6), up VND5,000 compared with a day earlier.

Investors play it safe with shares, savings

Shares and bank deposits are seen as being safe investments in 2014, said banking and financial experts during an online-investment forum hosted by BizLive.

Quach Manh Hao, head of the finance and banking department at Ha Noi National University's Economics College, explained that in the current context, if an investor considered interest vs risks, savings appeared to be a popular choice.

However, Hao argued that attempts to revive the economy were supposed to be implemented and take effect in 2014, which would set up better expectations on the stock market and the value of securities might then rise.

"Thus, if you are really seeking opportunities, savings and shares suit you, albeit I rather prefer shares of high liquidity," Hao said.

Meanwhile, Le Xuan Nghia, former deputy chairman of the National Financial Supervisory Committee, advised investors to have alternative channels for money. One part should go to the stock market, which naturally responds to the first signals of economic recovery. The other might be located at banks to enjoy interest rates that secure their sum. Regarding the savings option, the Central Institute for Economic Management (CIEM)'s Deputy Director Vo Tri Thanh added that the central bank monetary policy and foreign exchange appeared to be more supportive for Vietnamese dong than for the US dollar.

However, Thanh remains concerned that risks would still be present because of attempts to revive the economy through public investment, which might result in unstable factors due to ineffective policy management and collaborations. The potential lack of stability would then reduce the attractiveness of the dong. While experts did not make clear about the possibility of a strong recovery on stock markets, they agree that the hastened reform of State-owned enterprises and expanding free trade agreements would encourage capital inflows.

Gold jewellery exports to be tax-free

Export taxes on gold jewellery and fine works are to be eliminated, while the tax on material gold will be set at 2 per cent beginning January 1 next year, reports www.thesaigontimes.vn.

Current export taxes on both material gold of less than 99.99 per cent purity and jewellery gold of over 80 per cent purity is 10 per cent, which was set in 2011. These taxes, however, were said to have damaged the industry.

Additionally, the new 2 per cent tax for material gold is only to be levied when the State Bank of Viet Nam allows companies to import or export material gold, said Nguyen Thi Thanh Hang, of the Tax Policy Department, the Ministry of Finance, quoted by www.thesaigontimes.vn

Viet Nam has only two companies that export gold jewellery, PNJ and SJC.

PNJ is a jewellery exporter that has engaged in exports for many years. However, Nguyen Thi Cuc, deputy general director of PNJ said, as quoted by www.thesaigontimes.vn, that jewellery export sales only contributed some 6 per cent to her company's total revenues, as export profits remained low.

According to data, Viet Nam has some 12,000 gold trading companies, most of which work on a small-scale and are eligible to trade only gold jewellery, not gold bullion.

The Viet Nam Gold Trading Association noted that the export tax for gold jewellery was zero in Thailand, as their gold jewellery industry consistently registers a high export turnover of some $3 billion annually.

Omani businesses seek to collaborate with VN firms

Twenty Omani companies and groups are visiting Viet Nam this week, December 15-20, seeking investment and collaboration opportunities with Vietnamese businesses.

According to Thoi Bao Tai Chinh Viet Nam online, the Omani companies operate in electronics, agriculture, textile, leather processing, construction, telecommunications, publishing and food production.

The Embassy of Oman and Viet Nam Chamber of Commerce and Industry will tomorrow host a meeting for Vietnamese and Omani businesses, in a bid to introduce Vietnamese small and medium sizes enterprises to Middle Eastern and Arabian markets.

HSBC names winners of financial planning competition

A team of three students from the Banking University HCM City and Foreign Trade University HCM City has won an HSBC Vietnam competition aimed at promoting financial skills among university students.

The ECLIPE team comprising Hoang Vinh Nguyen (Banking University), Kieu Tuan Dung, and Nguyen Quy Ngoc came up with the most effective plan for given situation of a household with assets and income planning for children's education and parents' retirement among others to grab the first prize of VND50 million (US$2,230) in the Young Financial Planner's Competition.

The second prize of VND30 million ($1,400) went to the LEO term of Hoang Thi Tram Anh, Nguyen Trung Hieu and Lam Thi Hang from the Foreign Trade University, HCM City.

Around 2,500 participants from Ha Noi, Da Nang, Can Tho, and HCM City took part in the three-month-long contest to test their newly-acquired financial skills.

Ha Noi to host country's first fair for start-up businesses

HATCH! Fair, Viet Nam's first fair for start-up businesses, will be held in Ha Noi on December 21-22 to promote the country's developing business community.

The fair will introduce a range of projects and potential business partners to interested investors in the hopes of encouraging cooperation and partnerships.

Economists have said that domestic businesses lack experience and need support to successfully compete on international markets.

Of note, statistics reveal that only 20 per cent of the 300,000 new businesses that open annually survive beyond their first three years.

HATCH!Programme Director Pham Quoc Dat said businesses need to proactively explore alternative funding sources from their very beginnings if they wish to avoid the perpetual struggle to survive. HATCH's products and services can help businesses take that first step.

Steel output reaches 5 million tonnes in 2013

Vietnam’s total steel production output was estimated at over 5 million tonnes in 2013, a 2.7 percent increase year-on-year, according to the Vietnam Steel Association (VSA).

In the year, Vietnamese steel exporters are expected to ship abroad about 2.5 million tonnes of steel and steel products, generating a total revenue of over 2 billion USD.

The main markets for Vietnamese steel products, mostly construction steel, are the US, Thailand, Indonesia and other Southeast Asia countries.

The VSA forecasts steel production and sales will remain unchanged next year, edging up a negligible 2–3 percent from 2013’s figure.

Exports to Chile to gain momentum thanks to FTA

Vietnamese exports to Chile will benefit from tax incentives as of January 1 next year in compliance with the Vietnam – Chile Free Trade Agreement (FTA), which is hoped to spur bilateral trade turnover.

The countries inked the agreement on November 11, 2011 , and its amended version on May 20 this year.

Two-way trade in the past five years has grown by an average 27 percent. According to the Vietnam General Department of Customs, the country exported 176.9 million USD worth of commodities to Chile in the first 10 months of this year. The figure included 9.99 million USD from rice, nearly 23.4 million USD from textile and garments and almost 61 million USD from footwear.

However, both countries’ managerial agencies said that their trade performance hasn’t matched potential.

Director of the American Market Department under the Ministry of Industry and Trade (MIT) Nguyen Duy Khien pointed to the fact that Chilean enterprises prefer to do business with partners from countries having FTA with Chile. Therefore, their trade with Vietnamese businesses hasn’t been promoted in the past.

Under this FTA, Chile will remove 99.62 percent of its tariff lines within 10 years. Right after the agreement takes effect, 83.54 percent of tariff lines on Vietnamese goods will be cut down to 0 percent.

In return, Vietnam also pledges to remove 87.8 percent of tariff lines on Chile ’s goods within 15 years.

Chile is considered as a gateway to other Latin American markets. Thus, experts from both sides said that the FTA will open up a large number of investment and trade opportunities for their businesses.

Business continuity planning reduces losses in disasters

The outcomes of a project on evaluating natural disasters’ risks and building a business continuity plan (BCP) for concentrated industrial parks (IPs) in ASEAN countries were the highlight of a workshop held in Hanoi on Dec. 13.

Dau Anh Tuan, acting head of Vietnam Chamber of Commerce and Industry’s (VCCI) Legal Department noted that around 60 percent of surveyed small and medium-sized enterprises (SMEs) in central provinces of Nghe An, Da Nang and Khanh Hoa said they had suffered from damages due to natural disasters. Among them, 30 percent said they were seriously affected and 5 percent reported very serious losses.

He attributed this to the fact that most businesses did not make any preparations to cope with natural disasters, without any emergency response plans.

Yoshiyuki Tsuji, a representative from the Japan International Cooperation Agency (JICA), said the BCP project benefits not only businesses and IPs but also other sectors, adding that the quick recovery of industrial production thanks to the project can help local residents resume normal life faster after disasters and maintain budget revenues through tax and fees.

The project will collect and analyse information on natural disasters risks, concentrated industrial clusters, infrastructure of distribution systems and essential utility providers in 10 ASEAN nations to share among regional countries, the JICA official said.-

HCM City’s 2011-2013 remittance nears US$14 billion

Total overseas remittance into HCMC is estimated at nearly US$13.7 billion between 2011 and 2013, which has helped improving the balance of payments, increasing foreign reserve, and boosting economic growth, said a leader at the People’s Council meeting on Monday.

Vice Chairwoman Nguyen Thi Hong said at the opening ceremony of the 12th congress of the council that in 2013 alone, overseas remittance via the city’s commercial banks and economic organizations has totaled US$4.6 billion, leaping 21% year-on-year.

Apart from the U.S., Europe, South Korea and Australia as main sources for remittance, the amount remitted from China has also picked up this year, representing some 5% of the total value. The amount sent by overseas Vietnamese to their relatives makes up the biggest proportion, while that from local guest-workers accounts for only about 20%.

As for the city’s finance-banking over the past three years, Hong said that the prudent administration of the monetary policy associated with the tightened fiscal policy and the flexible forex rate policy had been introduced to contain inflation, stabilize the macro economy, improve liquidity of credit institutions, and help local enterprises get bank loans to maintain production.

In the 2011-2013 period, Hong said, the gross domestic product (GDP) growth averaged out at 9.6% annually, with the service sector posting the highest growth of up to 11.1% annually. Meanwhile, she said, industrial manufacturing and construction rose 7.5% and agro-forestry-fishery product industries grew 5.7% annually.

The city’s GDP per capita has reached US$4,513 annually at present, 1.4 times higher than the amount of US$3,199 in late 2010, Hong reported.

The city set a target of GDP growth of 10.6-11.9% annually on average for the next two years. The total investment capital is projected at roughly VND754 trillion, or some US$36 billion. The city also strives to raise its GDP per capita to US$4,800 in 2015.

Lazada announces strong investment in e-commerce

E-commerce company Lazada yesterday said it had made a huge investment in business development, including boosting online sales services in Vietnam and other Southeast Asian nations.

Lazada has attracted a combined investment sum of US$250 million from Tesco PLC, Access Industries, Invest AB Kinnevek and Verlinvest to speed up e-commerce activities in Indonesia, the Philippines, Thailand, Malaysia and Vietnam such as customer analysis, brand development, distribution channel management and commodity diversification.

Declining to reveal specific sums to be given to lazada.vn, Christopher B. Beselin, managing director of lazada.vn, informed at a briefing yesterday that the new investment would be carried out in line with the firm’s development plan from time to time.

“Thanks to the new investment, lazada.vn will change the strategy in goods delivering and receiving, sales policies and competitive price arrangement for products on sale on its website,” he said.

In particular, lazada.vn from this month will apply the policy of exchanging and returning products within 30 days instead of 14 days like before. Customers can return goods they have already purchased without paying any costs to get back their cash or take other items depending on their demands. Besides, lazada.vn will diversify products of all customer segments and open customer centers in Hanoi, Danang and HCMC early next year.

According to Beselin, after nearly two years of pouring money into the local e-commerce industry, this is the market that his firm encounters the most challenges. He ascribed the difficulties to the fact that local consumers have yet to believe in online shopping services and they are not ready to switch to this shopping activity while prices of products of the service are also a problem.

E-commerce activity in Vietnam is still in the initial development period like the e-commerce model in China five years ago. At present, the firm has not been profitable but it still stays here because it understands that investment in the Vietnamese e-commerce industry is a long-term strategy, he explained.

To deal with the challenge in consumer confidence and customer hesitation in switching to the e-commerce model, Lazada plans to launch the “Lazada street ambassador” program next year by taking its staff members to the streets, shopping centers and cafe shops to promote the benefits of the new shopping model.

Founded by German Rocket Internet Group specializing in investing in Internet services, Lazada is active in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Lazada.vn welcomes over 50 million visitors monthly with more than 25,000 items on offer after entering the Vietnamese market in February last year.

Fuel imports keep falling on lower demand

The fuel import volume has been falling steadily, indicating a weaker domestic demand.

Statistics from the General Department of Customs show trading firms imported over 246,000 tons of fuel in the first two weeks of November, down 27% from the same period last year and dragging the import volume from the year’s beginning to November 15 down 23% to nearly 6.4 million tons.

The import of DO 0.05S dropped the most with a fall of 33.5% to over 2.76 million tons. Its average price also fell strongly to US$921.7 per ton compared to US$959.7 in last year’s same period.

Similarly, the petrol import went down by over 20% in volume and 3.2% in price.

Tran Minh Ha, sales manager at Saigon Petro Co., Ltd, told the Daily yesterday that there were many reasons for the declining fuel imports in the past time.

The first reason is the increasing fuel supply from Dung Quat oil refinery. Saigon Petro has also cut the import by 30% this year and bought fuel from the local refinery instead.

Secondly, the local consumption declines as enterprises encounter many difficulties and scale down production.

Le Dinh Loi, deputy head of the HCMC Customs Department, said that the department’s main revenue was fuel import tax and thus was affected this year due to the falling import.

Statistics of Dung Quat oil refinery posted on Quang Ngai newspaper showed that the refinery produced and sold 5.65 million tons of products until November 8, hitting the year’s target 54 days ahead of the plan.

Meanwhile, according to Vietnam National Petroleum Group (Petrolimex), the fuel volume sold on the local market in November was 6.77 million cubic meters, falling by 2% year-on-year.

According to unofficial statistics, Vietnam consumes 15-16 million cubic meters of fuel each year.

In related news, fuel trading firms are losing VND768, VND618 and VND998 for every liter of petrol, diesel oil and kerosene sold respectively as the 30-day average import price has risen on the increasing price of finished products in the past days.

However, such losses are partly covered by the price stabilization fund.

Despite the losses, trading firms still maintain high discounts for their agents with VND600-700 per liter.

Unsafe food problem continues in Vietnam

Recent inspections have found several samples of local chicken and some types of imported fruits and vegetables to be unsafe, and many pigs to be fed with banned substances.

The Ministry of Agriculture and Rural Development's Department of Agro-forestry-Fishery Quality Assurance conducted an inspection of over 9,000 packages of imported fruits and vegetables with a and almost 700,000 tonnes of 90 goods between October 30 and November 5.

Tests on 96 samples of fruits and vegetables showed that 88 of them were safe. Eight samples or just over 8% contained pesticides above the acceptable levels, including mandarin oranges, beets and carrots.

However, the department did not clarify where the samples came from. Currently, most imported fruits and vegetables to are from China.

Nguyen Nhu Tiep, director of the department, said inspection of cattle and poultry in the northern region over the past 11 months found that four out of 54 tested chickens contained campylobacter spp, one of the main causes of food borne bacterial diseases in many developed countries.

Two out of 40 tested samples tested positive for chloramphenicol and four out of 40 tested samples for furazolidon, both banned in Vietnam. Four out of 40 tested samples contained the antibiotic tetracycline above the acceptable levels.

Worries about the unsafe food is of special concern to the public as Tet nears and consumption increases.

Reports by 15 cities and provinces across the country showed that 25% of establishments that produce and trade in agricultural products were classified at level C, failing to meet requirements, but re-inspection was not widely conducted.

The ministry’s inspectorate is coordinating with the Ministry of Public Security’s Environmental Police Department (C49) to inspect some households in Dong Nai Province that have been rumoured to use beta-agonists clenbuterol and salbutamol, which is banned from usage in Vietnam, in raising pigs.

“The slow improvements in food safety are the result of the inefficient operations in branches and agencies, especially inspection forces,” Minister of Agriculture and Rural Development, Cao Duc Phat, commented at a recent meeting on agricultural products food safety and quality.

From now until Tet, food safety will be the ministry’s first priority to ensure quality for consumers, he added.

National economy to face challenges in 2014

Despite Vietnam experiencing a period of positive economic growth towards the end of 2013, the National Financial Supervision Commission (NFSC) predicts local businesses will continue to face tough challenges in the coming year due to their tight budgets.

The NFSC reports consumers’ purchasing power has not much improved, with the consumer price index (CPI) in November increasing by only 0.34% compared to the previous month - a record low since 2009.

The Commission attributes the modest growth to a weak consumer demand in 2013 and the impact of adjustments in the prices of public services and essential goods. However, this year’s inflation rate will be below 6.3% in 2013, lower than last year’s.

Industrial production has remarkably improved over the last few months of this year, but there remain obstacles to overcome. The Index of Industrial Production (IIP) in 2013 is estimated at 5.8%, almost the same as in 2012, but lower than the previous two years. The 11-month IIP already hit 5.6%, or 0.5% higher than in the same period last year.

The General Statistics Office (GSO) has announced that Vietnam’s 11-month IIP was 16.2% higher than last year’s corresponding period figure, with the purchasing managers’ index (PMI) earning more than 50 points in October thanks to an increase in new export orders.

The State-owned sector has slightly increased by 3.6% in export revenue, but the direct foreign investment (FDI) sector by 23.5%.

Improvements in the local production sector have led to an increase in imports, particularly of machinery and equipment, and a drop in the number of suspended businesses while new businesses are taking shape.

In fact, the national economy is still in a bind as credit growth remains at a low level (only 7.18% by October – or 60% of the year’s set target), with small-and-medium-sized enterprises (SMEs) seeing a minus credit growth.

Budget collection in the past 11 months was about VND701,760 billion, or 86% of the set target for the whole year, while the budget overspending might account for 5.3% of GDP, or 0.5% higher than expected. It seems budget collection in both medium and long-term periods are below par.

Judging from improvements in inflation control and macroeconomic stabilisation, along with a sharp increase in FDI inflows since early this year, many foreign investors are still interested in the local market.

Over the past 11 months, the amount of FDI reached US$20.82 billion, up 54.2% from a year earlier. About US$10 billion was already disbursed, 5.5% higher than in the same period last year, contributing to ensuring a stable supply of foreign currency as we;; as stabilising the foreign exchange rate.

Regarding the local monetary market, the NFSC is hopeful that the State Bank of Vietnam (SBV) and commercial banks will further focus on settling bad debts to help businesses iron out snags and get easier access to bank loans.

The SBV’s statistics show that by September, credit organisations had restructured about VND300,000 billion in debts, accounting for 10% of the total debt outstanding, including around VND101,000 billion through preventive funds of credit organizations between 2012 and September 2013.

The central bank has warned that about 60% of debts are likely to turn into bad debts if they are not restructured.

By November 15, 2013, the Vietnam Asset Management Company (VAMC) had dealt with bad debts worth VND17,300 billion. It is expected to settle another VND30,000-35,000 billion by the end of this year.

The international payment sheet in 2013 is forecast to present a surplus of US$1.5-2 billion. This is the second consecutive year that Vietnam has produced a surplus thanks to rising overseas remittances and trade revenues.

Airport fences to reinforce runway security

All 21 airports across Viet Nam are expected to install security fencing in the next few years in an effort to set up a safety corridor for both the airports and surrounding residential areas.

In an interview with Tuoi Tre (Youth) newspaper, head of the Transport Ministry's Civil Aviation Authority of Viet Nam Lai Xuan Thanh said only a few of the nation's 21 airports have proper fencing.

This lack of fencing could result in people or animals walking onto airport runways, and threaten the airport security, he said, noting that at some airports, staff were mobilised to keep animals off runways when planes to land or take off.

The shortage of airport fencing also caused households in surrounding areas to expand onto airport property and consequently, having been built too close to the airport, were vulnerable to sound pollution and other problems.

For example, late last month and last Monday, two houses in Ward 5, HCM City's Go Vap District, that are situated near Tan Son Nhat Airport, had their roof tiles blown off by passing airplanes.

For a long time, people living near the airports have complained about when airplanes are landing or taking off.

Tuoi Tre (Youth) newspaper reported that in 1975, Tan Son Nhat Airport had been planned to cover an area of 3,600 hectares, but due to a lack of vision and improper planning, parts of the airport lands were allocated for people and organisations. Yet today, the airport covers an area of 1,500ha, hosting about 400 flights daily.

According to Go Vap District's Urban Management Department, in 2002 the HCM City People's Committee approved a proposal by Tan Son Nhat Airport for the removal of local houses to create a five-metre safety corridor for the airport.

People living in the corridor would not be able to build new houses and could not receive land-use rights certificates because of delays of house removals, said Le Hoang Ha, vice chairman of the Go Vap People's Committee.

Vice director of HCM City's Planning and Architecture Department Nguyen Thanh Toan said it was necessary to set up an airport safety corridor, but site clearance and land acquisitions might cause trouble for local residents.

Moreover, it was difficult to allocate funding for the removal and resettlement of area families, he said.

The case of planning for Tan Son Nhat Airport raised the issue about planning at other airports, as well as the living standards for people living nearby airports.

Thanh from the Civil Aviation Authority of Viet Nam said that the Minister of Transport asked the Aviation Corporation of Viet Nam to make plans and arrange funding to build fences at all of the airports.

Fencing requirements would cost about VND1 trillion (US$47.6 million), he said.

He noted that Viet Nam only had space for airports and their neighbourhood, implying a maximum height of buildings should be set, though no minimum distance has been set from the airport to residential areas to avoid impacts of sound pollution.

The ministry is to study and issue criteria for controlling noise at airports.

Ministry helps modernise farm production

The Ministry of Agriculture and Rural Development had exerted great efforts to build brands for Vietnamese farm produce and created favourable conditions for domestic firms to manufacture agricultural machinery over the last three years, Deputy Minister Nguyen Thi Xuan Thu said at a meeting earlier this week.

She added that the efforts were made under the Vietnamese people use Vietnamese products campaign.

Thu said several models had been tested to improve agricultural production, including public-private-partnership, to help the sector meet global challenges in food security, have greater access to technology and link farmers to markets, the meeting heard.

The creation of large-scale paddy farms by having farmers co-operate with each other to realise economies of scale was another model implemented with the aim of improving produce quality and reducing post-harvest losses.

For the last three years, the ministry also worked with the Viet Nam Bank for Agriculture and Rural Development to fund domestic enterprises in making 10,000 units of agricultural machinery.

This campaign succeeding in making farmers aware of the benefits of using Vietnamese products, and the machinery makers also learnt to better understand and respond to the needs of farmers, the meeting heard.

Le Van Hanh, a farmer with the Thien Tay Co-operative in central Quang Tri Province, said, "When we bought a made-in-Viet-Nam harvesting machine worth VND240 million (US$11,280), farmers could borrow VND150 million ($7,000) without paying interest for two years from the Agribank's Quang Tri Branch.

"If the weather is good, a farmer can get about VND70 million ($3,300) per year, and we can repay the loan after two years."

Truong Cong Dung, deputy director of the bank branch, said that since June 2011, they have lent VND1.8 billion ($84,600) for local farmers in the province to buy 12 made-in-Viet-Nam harvesting machines.

Agriculture Minister Cao Duc Phat said that in the coming years, his ministry would concentrate on improving quality of several agricultural produce including rice, coffee, cashew and pepper to better serve domestic and foreign consumers.

Ensuring food safety and hygiene would continue to be a top priority, he said.

The ministry also planned to enhance connections between farmers and enterprises to step-by-step build an internationally recognised brand for Vietnamese rice, he said.

Speaking at the meeting, Nguyen Thien Nhan, Chairman of the Viet Nam Fatherland Front Central Committee, said that the main task of the ministry in the coming time should not only be to ensure food safety and hygiene, but also provide more preferential policies for farmers to purchase harvesting machines.

The ministry should also offer greater support for domestic enterprises to manufacture agricultural machinery of high quality at low cost.

Finally, a thorough assessment should be made of the three-year campaign to have Vietnamese people use and buy Vietnamese goods, in order to identify areas it has been effective and where improvements are needed, he said.

Japan ODA flows mainly into transport

The transport sector has received the largest amount of Japan's official development assistance (ODA) loans in Viet Nam, totalling approximately 80 billion yen (nearly US$780 million) in 2013, according to the Vietnamese Ministry of Transport.

By the end of this year, the Japanese Government has assisted the Vietnamese transport sector in completing 18 projects, with a total investment of $2.34 billion.

The Japanese government has also helped to carry out 28 ongoing projects with a total investment of roughly $7.42 billion. Further, Japan has cooperated with other sponsors to fund three projects with investments of nearly $4 billion.

In mid-year, the Ministry of Transport proposed 29 projects that would receive ODA loans from Japan in the period 2013-15 with a total investment of 470 billion yen ($6 billion).

The list includes large-scale construction on urban transport facilities, highways, seaports, airlines and railways.

Besides projects with additional loans, there are 15 major projects, such as Long Thanh International Airport in southern Dong Nai Province and Bac-Nam (North-south) highway from Nha Trang City in central Khanh Hoa Province to Phan Thiet City in central Binh Thuan Province.

According to Dau Tu (Viet Nam Investment Review) online newspaper, the project for the first flyover highway on belt road No 3 in Ha Noi City, linking Cau Giay District's Mai Dich and Hoang Mai District's Phap Van, would be the latest one in the list of projects, which is expected to borrow capital from the Japan International Cooperation Agency (JICA) in part one of the fiscal year 2013.

It is reported that JICA approved a draft loan agreement for the project in mid-year.

The Thang Long project management board is assigned to prepare the project by the ministry. As quoted in the newspaper, board general director Vu Xuan Hoa said the total length of the road was 5.364km.

Joint project supervisor Oriental Consultants-Kei of Japan and Tedi-Apeco of Viet Nam suggested constructing the second flyover highway on belt road No 3 with four lanes and a speed limit of 100km/h.

They estimated that the total investment of the project would be VND5,343.4 billion ($254.4 million). This included the cost of construction, at VND3,696 billion ($176 million) taken from the ODA loan of JICA. The project was expected to be finished in 56 months, with 28 months of construction.

"Built based on the standards of urban highways, it will link belt road No 3, which has seen the largest number of vehicles in Ha Noi from Thanh Tri bridge to Thang Long bridge, as well as connect national roads No 1, No 5, No 6 and No 32 with the Noi Bai International Airport," Hoa said.

Meanwhile, construction of the new T2 terminal at the Noi Bai International Airport is also listed to receive capital in part 1 of fiscal year 2013. This is a major transport project in Ha Noi that the ministry had sped up so it could be finished in 2014.

Currently, the ministry and JICA decided to allocate capital for three projects in part two of fiscal year 2013, consisting of a highway from HCM City to Dong Nai Province's Dau Giay (third loan worth 17 billion yen, or $165.4 million), Da Nang-Quang Ngai highway (second loan worth 30 billion yen, or $291.9 million) and Lach Huyen Port infrastructure construction project in Hai Phong City (second loan worth 19.3-21 billion yen, or $187.7 million).

Deputy minister Truong Tan Vien said that these were important large-scale projects that could change trans-regional transport in the area.

"When the State has faced budget difficulties, ODA capital from Japan, with low interest rates, will still play a significant role in the coming years," he said.

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