Danang inks Thai agreement

The central city of DaNang and Thailand’s Khon Kaen Province on January 16 signed a Letter of Intent to establish cooperation in tourism, education, culture, investment, and trade.

Danang, located in the central region of Vietnam, and Khon Kaen, at the end of the East-West Economic Corridor linking Myanmar, Thailand, Laos and Vietnam, also agreed to boost investment and trade via the East-West Economic Corridor.

They have seen modest trade exchanges in previous years. Their export-import turnover was about US$ 31.2 million in 2012. Only one company from Thailand has so far invested in the central city, while three enterprises have opened representative offices in Danang.

Danang University also officially included the Thai language in its curriculum in 2006.Danang hosted 3.1 million tourists last year, of which 750,000 were foreigners. Only 45,000 tourists from Thailand visited the central city and other destinations in the central region.

FTA promotes Vietnam-Chile agricultural trade

The Vietnam-Chile Free Trade Agreement (FTA), entering into effect early this year, will usher in a prosperous future for agro-forestry and husbandry exchanges between the two countries.

The assessment was recently made by the Chilean Bureau for Agricultural Studies and Policies under the Chilean Ministry of Agriculture, noting the above commodity categories constitute 10.7% of bilateral trade turnover.

Agro-forestry and husbandry trade turnover totalled US$60.2 million in 2012. Chile earned US$48.4 million from exports to Vietnam and purchased US$11.8 million in imports—annual improvements of 23.8% and 34.3% respectively.

President Truong Tan Sang and President Sebastian Pinera Echenique at signing ceremony of free trade agreement in November 2011

In the first nine months of 2013, Chile’s agricultural exports were valued at US$37 million, up 3.2%. It imported US$17.3 million worth of comparable Vietnamese products, up 166%. Chile’s key export commodities included forestry products (62.2% of total export turnover) fresh grapes, and wine.

The FTA specifies 72% of Chilean exports to Vietnam will enjoy zero tariffs and the ratio will increase to 83% within the first 11 years. Meanwhile, 83% of Vietnamese exports to Chile will be granted import tax exemptions immediately.

The bureau said the FTA will be most beneficial to Vietnam’s fresh fruit, pork, and beef product exports.

Toshiba eyes Vietnam’s smart grid investment

The leading Japanese electrical and electronics group Toshiba has announced a multiple-country smart grid business plan that includes Vietnam.

Toshiba is aiming to develop a 700 billion yen global electricity transmission and distribution (T&D) business servicing Japan, Brazil, China, Malaysia, and Vietnam.

The group’s recent purchase of Indian Vijai Electricals Ltd T&D arm marked the first step towards fulfilling its ambitions.

The newly established subsidiary Toshiba Transmission & Distribution Systems (TTDI) will act as a design and support hub for the global T&D business.

TTDI will operate in high voltage direct current (HVDC) power transmission, static var compensators for high voltage networks (SVC), and railway power supply systems.

Toshiba has positioned the new company as its core base for expanding the T&D business throughout India and into the global market.

Da Nang attracts US$295 million in FDI

By December 2013 Da Nang city attracted 279 foreign direct investment (FDI) projects capitalized at US$3.3 billion and generated more than 38,000 jobs.

The city granted investment licenses to 42 new FDI projects with total pledged capital of US$48.4 million and 17 existing projects with additionally increased capital of US$246 million.

Despite global economic fluctuations, FDI businesses in Da Nang namely VBL, Coca Cola, TCIE, Viet Hoa Electronics, have continued to expand their operations. Their revenues are estimated at US$450 million for 2013, up 8.43% compared to 2012’s figure, contributing US$56.5 million to the state budget.

In addition, remarkable progress was also seen in the city’s Official Development Assistance (ODA) capital attraction with 11 ODA valid projects totaling US$697.81 million.

VNDirect joins hands with Singapore firm

Brokerage firm VNDriect announced last week a strategic partnership with CIMB Securities International (Singapore) Pte Ltd, the investment banking and securities brokerage arm of leading ASEAN universal bank CIMB Group.

The two partners will collaborate on the provision of equity research, sales, and trading, corporate advisory and capital markets services in Vietnam.

VNDriect is ranked in the top three for market share on the Hanoi Stock Exchange and in the top five on the Ho Chi Minh City Stock Exchange.

“Vietnam has been one of the best performing frontier markets this year and is steadily putting in place measures to enable foreign investment. Having a presence on the ground is crucial to deepening our market insight to leverage opportunities for clients,” said Carol Fong, CEO, CIMB Securities.

The partnership will see VNDriect and CIMB Securities establish a Vietnamese equity research team in Ho Chi Minh City to deliver professional research and analysts reports to their customers, using the combined expertise of over 110 research analysts, international industry specialists and regional economists from all over Asia Pacific.

President hails entrepreneurs in difficult year

President Truong Tan Sang has praised Small and Medium Enterprises (SMEs) for their efforts in maintaining their growth and overcoming difficulties in international economic integration.

The remark was made during the President’s meeting with 130 SME representatives in Hanoi on January 16.

Delegates briefed the President on a range of obstacles they faced in 2013, including sluggish production, harsh competition and difficulties in loan access while acquiring support from the relevant agencies to better loan access and favourable tax in helping them farewell.

In his address, the President said in addition to proposing relevant ministries and sectors to help tackle difficulties, the SMEs need to enhance their inner strengths to gain better results in 2014 and contribute to Vietnam’s economic growth in general.  

Vietnam expects positive world economy in 2014

Experts at a seminar in Hanoi on January 16 believe international economic trends in 2014 will positively affect Vietnam.

Attendees evaluated recent Party, National Assembly, and Government efforts to stabilise the macro-economy, contain inflation, ensure social welfare, and address the potential issues hindering 2013–2014 socio-economic development targets.

They talked about Vietnam’s strategic breakthroughs despite limited resources, resuming growth, increasing investment in infrastructure development, and effectively deploying sufficiently qualified human resources during economic restructuring.

Deputy Head of the Central Economic Commission Bui Van Thach emphasised the broad consensus forecasting an international economic recovery in 2014.

The International Monetary Fund (IMF) predicts global GDP growth will rest at 3.5–3.6% compared to last year’s 2.9%. Economic powers like China and the US continue to grow.

The Eurozone has started resolving its public debts while the Asia-Pacific remains as dynamic as ever. The US and Japan intend to focus on investment in Southeast Asia.

The seminar surveyed expert opinions to help shape Vietnam’s future approach to its economic and growth model restructuring goals.

Beer flows into market ahead of Tet

The domestic beer market this Tet holiday will not face any shortages or price hikes, thanks to a 30% supply increase, confirmed beer producers around the country.

Vietnam Investment Review (VIR) quoted Le Ngoc Dao, Deputy Director of HCM City's Department of Industry and Trade, as saying that the reported retail shortage over the last few days in HCM City is a ruse – the supply for this Tet had in fact increased by 20-30%.

Owing to this, there should be no shortages. Consumers must be careful when buying beer and not get tricked into paying more than they should, she said.

The Sai Gon Beer Alcohol Beverage Joint Stock Corporation's (Sabeco) yield this Tet has increased by 20% compared with last year. Moreover, the corporation has already distributed the holiday orders to their distributors and retailers.

Guaranteeing sufficient supply for our distributors and not increasing the price has stabilised the market, chairman Phan Dang Tuat told VIR.

The Hanoi Beer Alcohol Beverage Joint Stock Corporation (Habeco) who accounts for 80% of Hanoi's beer market, said that it will supply more than 140 million litres of beer this Tet, a year-on-year rise of 13%.

Director Nguyen Hong Linh said that this will be more than sufficient to meet demand and there will be no case of shortages, he affirmed.

Like Sabeco, Habeco said they do not increase the price of any of their products.

It costs about VND190,000 (US$9) per barrel of Hanoi Beer. The company also ordered their distributors to strictly adhere to the price structures.

A company that supplies famous brand-name beers also confirmed they intend to meet the demand and keep the price stable.

The VIR report attributed the meeting of this extra demand, to the efforts of the Ministry of Industry and Trade (MoIT).

In particular, MoIT Deputy Minister Ho Thi Kim Thoa, who since the beginning of November last year, was ensuring companies implement measures to stabilise the market over Tet.

In addition, the companies were required to report their production and sales, she added.

Vietnam takes on inflation by expanding credit

Vietnam plans to cautiously expand credit growth to 12-14% in a bid to facilitate companies, boost the national economic revival and tackle inflation.

The State Bank of Vietnam’s Directive, issued this week, detailed the central bank's policies to support commercial banks in expanding credit and to relocate loans to the prioritised sectors of agriculture, rural development, exports, auxiliary industries, small and medium enterprises and applied technologies.

Although the policies fall in line with the 12-14% credit growth target, the central bank affirmed it will be flexible in order to reflect actual changes in the economy.

This level of caution is advisable since the entire banking system made a concerted effort to reach the target of 12% credit growth last year.

SBV will also maintain a close watch on foreign loans to stabilise and minimise the long-standing problems with foreign exchange.

The central bank's strategy will focus on debt control this year. The bank is determined to finalise the legal framework and the inspection and supervision mechanism to handle non-performing loans (NPLs) in the system.

Recognising the need to apply regulations to secure the banking system under international standards, the central bank announced earlier this year that it would not delay the deadline for implementing NPL regulations any further.

However, road maps for certain criteria will be amended, so banks can be better prepared. Circular 02/2013/TT-NHNN is scheduled to go into effect on June 1, 2014.

Circular 02, which strictly regulates asset classifications, levels and methods of risk provisioning, and the use of provisions to handle risk in the operation of credit institutions and the branches of foreign banks, was initially planned to be implemented on June 1, 2013.

While lobbying hard and pushing enquiries at the central bank, commercial banks have also attempted to clean up their balance sheets by selling debts to the Vietnam Asset Management Company (VAMC), a wholly State owned company managed by SBV.

In the Directive, the State Bank of Vietnam declared it will issue policies to facilitate VAMC's operation.

In order to stabilise the foreign exchange market, the central bank aims to encourage a shift from the "mobilising-lending" model to the "buying-selling" model.

Central bank governor Nguyen Van Binh announced last month that he will manage the foreign exchange rate flexibly, within a 2% margin, this year.

In 2013, SBV planned for a 1% margin in foreign exchange management, but the actual margin was about 0.6%.

This year, SBV will maintain tight control over the gold market, especially for gold bullion. Policies are expected to be created to secure the legal rights of gold ingot holders while encouraging the public to sell their gold holdings in order to mobilise these holdings for use on socio-economic development initiatives. In 2013, the central bank sold 1.82 million taels (69.9 tonnes) of gold bars through 76 auctions. They will continue the sales this year in an attempt to further stabilise the domestic market and address imbalances between supply and demand.

Almost all of the auction proceeds went to credit institutions to help close their outstanding gold deposits. Part of the proceeds was sold to gold firms to meet market demand.

These regulatory attempts slashed the local value of gold to VND34.6-34.7 million (US$1,641-1,646) per tael at the end of 2013, down VND12 million (US$569.28) per tael, or 24%, compared with the same period in 2012.

How to tighten public investment?

Scattered public investment causes policymakers major headaches and costs major national economic losses. Resolving the issue is no easy task.

At a recent Vietnam Fatherland Front Central Committee conference in Hanoi, Minister of Planning and Investment Bui Quang Vinh pointed out public investment’s excess expenditure helped fuel the skyrocketing inflation in the past years.

“Who are responsible for inefficient investment?” he questioned, blaming the uncertainty on loopholes created during State decentralisation and lax management at the grassroots level.

Leading economists concur with Phuc’s view but are far less united on how best to address the problem.

Public investment is a major headache for lawmakers when the "Give' and 'Take' mechanism still exists

Vietnam, only recently emerging from low-income nation status, needs large infrastructure investments—but its sporadic nature has caused alarming unsettled debts.

At a National Assembly (NA) Standing Committee meeting in September 2013, Ksor Phuoc, head of the National Assembly’s Ethnic Council, implied money has been wasted building State agency offices resembling “palaces” or “tourist sites”.

NA Deputy Tran Du Lich urged localities to change their public investment philosophy, extravagant offices and luxury cars are indefensible considering current economic difficulties and should be abandoned in favour of “road, school, or hospital projects.”

Tightening public investment was fiercely debated at the December 2013 National Assembly session. NA Deputy Truong Van Vo stressed the necessity of legislating individual responsibility in public investment management.

He said laws like the Law on Corruption Prevention and Control and the Law on Thrift Practice and Waste Prevention must be respected and enforced.

NA Deputy Huynh Van Tiep identified legal loopholes in project appraisal, implementation, and management that lead to massive wastes of capital and human resources.

Clarifying the rights and responsibilities of agencies, organisations, and individuals is imperative, he said, adding transparency in public investment management should also be encouraged.

Tiep insisted leaders ostensibly overseeing any resource misuse or flagrant inefficiency must be disciplined for their wrongdoing. Serious offences deserve criminal prosecutions.

Fellow NA Deputy Nguyen Thi Hong asked the government to explicate clear public investment project criteria that takes the solvency of individual agencies and localities into account.

Many projects underwhelm expectations with delays caused by capital shortages or misuse following completion.

NA Deputy Pham Trong Nhan sees the crux of the matter as clarifying the relationship between socio-economic development goals and the appraisal of investment plans in a fair and objective manner.

He also underlined the need to carefully distribute annual investment allocations among regions and between short and long-term plans.

Employers organisations work to increase effectiveness

Employers organisations need to work to ensure industrial relations continue operating smoothly at local levels and help improve the interests of businesses, as stated at a Hanoi conference on January 16.

The conference marked the launching of a pilot programme on increasing the effectiveness of employers organisations at the provincial level, which is also being run by the Vietnam Chamber of Commerce and Industry (VCCI) and the International Labour Organisation in Viet Nam (ILO).

Tran Thi Lan Anh, deputy head of VCCI's Bureau for Employers' Activities said that currently the ability of employers' organisations in helping enterprises to ensure calm industrial relations and improve HR management policies remains limited.

She added that the organisations have not been developed enough to become a focal point for employers to exchange experiences and offer mutual support by creating programmes to improve industrial relations.

Yoon Youngmo, senior technical expert from the ILO, said employers organisations should seek to form and maintain their connections and cooperation with a strong network of local HR managers to learn from them and benefit from their support.

Dang Dinh Quan, chairman of the Business Association of northern Hung Yen province, stressed the need for capacity building for local employers organisations, as these organisations lack experience and support from the Government.

He cited the case of the Hung Yen Province Business Association as an example. The association, while recognised as working more effectively than most provincial business associations, had faced difficulties, since its operation was self-funded and without support from other sources.

Nguyen Huu Doan, chairman of the Business Association of northern Hai Duong province agreed, saying that local employers organisations had worked on their own and received little support from the local government. Therefore, the organisations' operation could not be as effective as they might be.

The VCCI's capacity building programme aims to help provincial employers organisations to better serve in representing employers by encouraging them to work more closely with their provincial Department of Labour, Invalids and Social Affairs, as well as local trade union to deal with labour-related issues, including labour disputes and strikes.

Employers organisations are expected to collect data and studies on employers' operations and their views, so they might make recommendations to local governments on labour-related legal issues and policies. They are also supposed to work as service providers to employers by offering legal support, training and consultation on labour issues.

The Business Associations of Vinh Phuc and Hung Yen provinces and the Hanoi Export Processing and Industrial Zones Authority have been chosen to be the first employers organisations to benefit from the programme.

Vietnamese businesses eye Bangladesh market

The Ministry of Industry and Trade (MoIT)’s Africa, West Asia and South Asia Market Department has urged Vietnamese businesses to expand their export activities to Bangladesh , a major market in the South Asian region.

According to the department, to increase exports to the market with nearly 90 percent Islamic consumers, Vietnamese businesses will be required to familiarise themselves with the consumers’ unique taste.

Agriculture employs more than 45 percent of the Bangladeshi workforce. The country’s main exports include garments and textiles, agricultural products, seafood and leather.

From 2008-2012, bilateral import-export turnover enjoyed a six-fold increase, from 65 million USD to 390 million USD.

Vietnam has maintained a constant trade surplus since the very beginning of the relationship.

In the first 11 months of last year, the country earned 446.4 million USD from exports to this market, a year-on-year surge of 42.3 percent.

Its best performing export commodities were fibre (33.6 million USD), garments and textiles (19.6 million USD), and machinery, equipment and spare parts (8.7 million USD).

Vietnam also sells clinker, mobile phones, leather and footwear to Bangladesh , while buying garment and textile materials, pharmaceutical products and seafood from this market.

Bangladesh is making every effort to encourage more foreign investment by keeping labour costs amongst the region’s cheapest, protecting its low land rental rates, and introducing a range of investment incentives.

Meanwhile, Vietnamese businesses have faced tough competition from their Bangladeshi counterpart thanks largely to preferential European Union policies for products made in Bangladesh .

However, Vietnamese businesses can take advantage of these mechanisms, seizing investment and production opportunities in Bangladesh to boost their exports to the EU.

Vietnamese enterprises should also invest in Bangladeshi agricultural and mechanical engineering, and industries that serve agriculture, said the Africa, West Asia and South Asia Market Department.

Vietnam and Bangladesh officially established their diplomatic ties in 1973. While Bangladesh opened an embassy in Hanoi in 1993, Vietnam waited ten years to inaugurate its own embassy in Dhaka .

The two countries’ Joint Committee for Economic, Cultural, Scientific and Technological Cooperation conducted its first session in Hanoi in 2006. Dhaka hosted the second session in 2013.

Both nations have signed 16 agreements and protocols governing diplomatic, economic, trade and investment cooperation.-

2013 trade promotion programme supports local firms

More than 6,800 domestic enterprises were helped to participate in trade promotion activities through the national trade promotion programme in 2013.

The news was announced at a conference held by the Ministry of Industry and Trade (MoIT) in Hanoi on January 16, which reviewed the programme’s operations during the year.

According to representatives from the Department of Trade Promotion (DTP) under the ministry, over 280,000 commercial transactions were implemented in 2013, with the total value of signed deals and memorandums of understanding reaching over 1.4 billion USD and 7.7 million USD respectively.

In addition, the fair activities hosted by the programme attracted more than 1.8 million visitors with sales revenue exceeding 380 billion VND (17.86 million USD). The programme provided remarkable assistance to trade associations, helping enterprises expand their market in the country and abroad.

Last year, the State distributed 70 billion VND (almost 3.3 million USD) to the programme to implement support activities for domestic enterprises, said the DTP.

Its management board has asked the MoIT to approve the first period of the 2014 national trade promotion programme, which will include 117 projects at a cost of 30 billion VND (1.41 million).-

Hanoi to regain high growth in industrial sector

Hanoi will regain high growth in its industrial sector this year with a 5 – 5.5 percent increase in the Index of Industrial Production (IIP), according to Director of the municipal Department of Industry and Trade Le Hong Thang.

At a conference on January 16 to launch tasks for 2014, he said the added value of the sector this year is expected to rise by 8.1 – 8.9 percent from 2013.

To realise the targets, the department will continue to remove obstacles for businesses and facilitate the production of industrial goods that Hanoi is renowned for. It will also encourage the development of support industries and international cooperation, Thang said.

In 2014, the sector is set to improve handicraft quality and the competitiveness of craft villages that produce products in demand. It plans to speed up infrastructure building and investment promotion, along with completing industrial zones and clusters, he added.

Hanoi’s IIP increased by 4.5 percent in 2013 while the sector’s added value grew 7.49 percent from 2012 to nearly 31.8 trillion VND (1.5 billion USD).-

HCM City sees lowest power loss nationwide

The Ho Chi Minh City Power Corporation will strive to maintain power loss below 5.3 percent in 2014, which was the rate recorded in 2013.

In order to fulfil the target, the corporation, which posted the lowest power loss out of all the Electricity of Vietnam (EVN) units in 2013, will roll out best operational modes and handle overloaded transformers, among others.

The corporation will continue implementing programmes to raise public awareness of power saving and safety across the city.

It will focus on the building and upgrading of underground electricity networks, striving to complete 38 projects that began in 2013 and 34 others to be launched this year.

Along with several projects to improve the quality of power supply, the corporation also plans to establish smart grids this year.

Last year, the city saved a total of 519.78 million kWh, exceeding 47.2 percent of the target set by EVN and making up nearly 20 percent of the total energy saved by the group.-

Da Nang: Spring fair aims to boost consumption for Tet

As many as 320 kiosks selling various types of commodities are taking part in a spring fair that opened on January 16 in the central city of Da Nang.

The products, which include foodstuff, leather, apparel, handicrafts, electronics, flowers and bonsai among others, come from 150 domestic manufacturers and companies from Thailand and Cambodia.

The fair creates room for the producers to exchange experience, seek partners and expand markets, said an official from the provincial Department of Industry and Trade which is hosting the activity.

The week-long event also helps promote the campaign Vietnamese prioritise using Vietnamese products.

The involved businesses were asked to showcase high-quality products at reasonable prices in a hope to encourage locals to purchase goods ahead of the Tet holiday.

On the sidelines of the fair, local authorities held talks with their counterparts from Thailand’s Khon Kean province and signed letter of intent to establish cooperative relations between them.

Nam Dinh thermal power plant operational by 2020

The Republic of Korea’s Taekwang Power Holdings Co., Ltd will work with authorities from the northern province of Nam Dinh to accelerate the construction of a thermal power plant in Hai Hau district so that it can be put into use by 2020.

The 4.5 billion USD power plant, which is 95 percent funded by Taekwang and 5 percent by Vietnamese partners, will cover an area of 251 hectares in Hai Ninh and Hai Chau villages.

The plant will have four turbines with a combined capacity of 2,400 MW. Two turbines with a total capacity of 1,200 MW will be built in the 2016-2017 phase, while the two others, of equal capacity, will be built in the 2020-2021 period.

It will operate under a BOT (build-operate-transfer) scheme for 25 years, with revenue expected to reach 25 billion USD.

The RoK company has completed two negotiation rounds on the BOT contract related to selling and purchasing electricity and coal with Electricity of Vietnam (EVN) and the Vietnam National Coal and Mineral Industries Group (Vinacomin) respectively.

It also worked with the local Department of Natural Resources and Environment and the Hai Hau district’s People’s Committee to discuss various issues on land acquisition, ground clearance and land registry mapping, Taekwang Chief Representative Park Hyang Soo told Chairman of the provincial People’s Committee Nguyen Van Tuan at a recent meeting.

Chairman Tuan asked Taekwang to complete procedures soon to carry out the construction of Thinh Long bridge utilising the RoK Government’s official development assistance (ODA) capital to serve the plant.

Taekwang is arranging financing, contracts for the plant, especially BOT contracts, as well as approving the feasibility report.-

2014 economic outlook under discussion

Experts sat together at a workshop in Hanoi on January 16 to review the economic performance in 2013 and forecast trends in 2014.

The event, co-organised by the Party Central Committee’s Economic Commission, National Assembly’s Economic Committee and National Economics University, also evaluated the current policies to stabilise macroeconomics, curb inflation and ensure social welfare, as well as emerging matters while implementing the 2014 socio-economic development goals.

Participants at the workshop discussed the strategic breakthroughs in the context of limited resources, put forth drastic measures to accelerate institutional building, resume growth and create a stronger momentum for infrastructure building.

Policies on training, the effective utilisation of high quality human resources, as well as those to bring into play resources for economic restructuring were also tabled.

Deputy head of the PCC Economic Department Bui Van Thach said in 2014, the global economy will be likely to witness higher growth than in 2013.

The International Monetary Fund (IMF) has forecast global GDP will reach 3.5-3.6 percent this year, higher than last year’s figure of 2.9 percent, thanks to relatively high economic growth in top economies such as China and the US and the recovery of the Eurozone nations.

Additionally, Asia-Pacific continues to be a dynamic region, while more foreign direct investment will be poured into the Southeast Asian market.-

2014 promises a bumper year for agricultural exports

Economists are predicting significant expansion for Vietnam’s agricultural exports in 2014, Hanoi Times online newspaper has said.

It quoted the Vietnam Fruits and Vegetables Association as saying 2014 promises another bumper year for vegetable exports, which have experienced annual growth rates of 20 percent to 30 percent in recent years.

The Vietnam Pepper Association (VPA) in turn has forecast that the export volume of the spice will be around 125,000-130,000 tonnes with total revenue remaining relatively unchanged from 2013 at 900 million USD.

The revenue forecast is a rather conservative on the basis of the assumption that pepper prices were stable in 2013 and will not increase in 2014, hovering around 120,000 VND a kilo throughout 2013.

For rice exports, the Ministry of Agriculture and Rural Development and the VFA said the export outlook will be likely to remain unchanged compared to 2013. However, Vietnam will face tougher competition from Thailand and other major rice suppliers in Asia.

I ndia will remain the world’s leading supplier and a strong rival of Vietnam this year.

The VFA said despite falling demand in Southeast Asia, Vietnam is still in a position to win government-to-government export contracts with regional countries.

China, Vietnam’s biggest rice importer, is forecast to continue its high level of imports, yet economists warn of trade risks from the market.

The VFA said Vietnam’s rice exports will reach around 6.5-7 million tonnes this year.-

Experts seek ways to improve FDI efficiency

Selecting high quality and added-value projects using modern technology, particularly in the fields of information technology and biotechnology serving agriculture, is one of the measures to continue improving the efficiency of FDI attraction in 2014.

The suggestion was made by Deputy Minister of Planning and Investment Nguyen Van Trung at a recent workshop on foreign direct investment (FDI) in Ho Chi Minh City.

He also stressed the need to effectively implement the Government’s Resolution 103/NQ-CP dated August 29, 2013, on orientations to improve FDI attraction, use and management in the coming time.

In this resolution, the Government entrusted the Ministry of Planning and Investment (MPI), in coordination with relevant ministries, agencies and localities, to draft many bills, including the revised Investment and Enterprise Laws.

The effective implementation of the resolution is very significant for improving the investment climate and raising Vietnam’s competitiveness in FDI attraction, contributing to the growth and sustainable development of the economy, Trung stressed.

Director of the MPI’s Foreign Investment Department Do Nhat Hoang said investment policies must be coupled with incentives, which are applied uniformly in all sectors and localities.

Localities should pay attention to small and medium-scale projects in line with each economic sector and locality; encourage, facilitate and strengthen links among FDI businesses and between them and domestic enterprises, he said.

He also suggested making plans to lure FDI by sector, field and partner in line with the advantages of each region and sector, ensuring overall national interests and economic restructuring under a new growth model.

Deputy Minister Trung affirmed that FDI has added an important source to Vietnam ’s economic development investment, helping the country improve its production capacity, renovate technology, increase export turnover and change the structure of export commodities, he said.

Since Vietnam began luring FDI 25 years ago, the capital has actively contributed to the nation’s growth and development achievements, he added.

Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign-Invested Enterprises, highlighted the FDI sector’s great contributions to Vietnam ’s economy, especially when the world economy and global FDI are yet to recover as expected.

The exports of FDI businesses (excluding crude oil) fetched 81.1 billion USD in 2013, up 26.8 percent against the previous year and accounting for over 61 percent of the country’s total export turnover. They posted a trade surplus of 13.9 billion USD compared to the country’s figure of 863 million USD.

However, many experts said that the country’s FDI attraction has not yet created a development momentum for domestic businesses and FDI enterprises are yet to have great influence on their local peers.

FDI activity over the past time has revealed some shortcomings such as the poor quality of foreign-invested projects, few projects using high technology, and transnational corporations’ limited investment in production chains.

In addition, many FDI businesses have used outdated technology that pollutes the environment while some others have shown signs of transfer pricing to evade taxes, causing budget losses, they said.

According to Mai, the MPI has announced that more than 500 FDI enterprises stopped operations with a total investment of nearly one billion USD, and many business owners returned to their home countries.

Therefore, the ministry needs to make more synchronous and rapid renovations in the State management of FDI in the direction of creating more favourable conditions for investors and businesses, he noted.

By the end of 2013, Vietnam boasted nearly 15,700 valid FDI projects, with a total registered capital of more than 230 billion USD, of which over 112 billion USD was disbursed.

Last year alone, the country had 1,275 new foreign-invested projects with a total registered capital of 14.27 billion USD, and 472 projects raised investment with a combined additional capital of 7.3 billion USD. FDI disbursement was estimated at 11.5 billion USD, up nearly 10 percent against 2012.

Argentina chooses Viet Nam as priority market for exports

Argentina has chosen Viet Nam as a priority export market for 2014 and 2015 under a plan to diversify its markets unveiled on Tuesday.

According to the plan, the Argentine Government has rolled out a list of 24 priority countries, including nine Latin American nations and 15 of the world's emerging dynamic economies, including China, India, Indonesia and Viet Nam.

As part of efforts to lift exports to US$94 billion this year and $101 billion by 2015, the Argentine Government will launch a series of trade promotion activities, said Minister of Industry Debora Giorgi.

She said it will send enterprises to 252 international fairs, 70 trade promotion delegations to foreign countries and welcome 22 delegations of foreign importers.

At the same time, more credit will also be offered to home exporters, the minister added.

Hoa Phat Steel sales increase due to new manufacturing complex

The Hoa Phat Steel Co said it sold 698,642 tonnes of steel last year, a year-on-year increase of 14.2 per cent.

The result helped the company improve its market share by 1.5 percentage points to 15.2 per cent.

The company attributed the achievement to the steady operations at its new Hoa Phat iron and steel complex in northern Hai Duong Province, which is expected to increase output to 1.15 million tonnes annually from 2014.

DongA Bank installs advanced ATMs to prevent theft

The joint-stock DongA Bank has installed 250 new ATMs that use advanced technologies and offer new services and greater protection to users.

The new ATMs, put into operation around the country on Tuesday, employ anti-skimming technology. Skimming refers to stealing personal information from card using card readers.

At the DongA Bank ATMs, customers can also deposit cash in their accounts — up to 200 notes of different values at a time, with the machines being capable of taking photos of the notes.

Tran Phuong Binh, general director of the HCM City-based bank, said more conveniences will be added to these ATMs so that they would act as an "auto bank," offering services like foreign currency exchange and payment for e-trading transactions.

On this occasion, the bank also opened a branch in HCM City's Hai Ba Trung Street, enlarging its network to almost 150 branches and transaction offices.

Delta to restructure agricultural sector

Although the Cuu Long (Mekong) Delta achieved a high economic growth rate last year, the area still needs to restructure its agricultural sector to attain competitiveness, Deputy Prime Minister Vu Van Ninh has said.

Speaking at a seminar held in Can Tho on Wednesday, Ninh said that the delta's provinces should review production plans and focus on products in high demand.

In addition, more farmers should switch to high-value crops and reduce the number of rice fields, he said.

Last year, the delta produced more than 24.8 million tonnes of paddy, up 500,000 tonnes against 2012, and more than 3.4 million tonnes of seafood, up 4 per cent against 2012.

However, the delta's key produce, including rice, tra fish, shrimp and fruit, continue to lack high competitiveness, according to participants at the seminar.

For example, farmers suffer a loss of about VND1,000 per kilogramme of tra fish because of the high cost of input materials and the low selling prices for the fish.

Transport infrastructure as well as labour quality and training are other major problems in the delta, meeting participants said.

Speaking at the meeting, Nguyen Phong Quang, deputy head of the Southwest Region Steering Committee, said he had asked the Government to issue more government bonds to implement the delta's major projects, particularly the Quan Chanh Bo Canal that would enable sea vessels to enter the Hau River.

Quang has also petitioned the Government to resume the construction of the Trung Luong – My Thuan Expressway project, which is urgently needed to improve socio-economic development in the delta.

At the seminar, the steering committee said the delta's 2014 goal would be a 9-10 per cent economic growth rate and US$11 billion in export value.

The committee said that it also aimed to reduce the number of poor households from 7.2 per cent in 2013 to 6 per cent this year.

Last year, the delta achieved an economic growth rate of 9 per cent, two times higher than the national rate.

Also last year, the number of poor households in the delta fell by 2 per cent, while the rate was less than 2 per cent in the country.

Exchange removes limitations on trading shares

The HCM City Stock Exchange will remove trading time limitations on shares controlled from January 20.

Accordingly, the shares will be traded during the entire session but will be categorised as "Controlled." In addition, shares under special control will only be traded during the afternoon session.

Controlled shares include those with charter capital below VND120 billion (US$5.6 million), those making losses over two consecutive years, those with accumulated losses exceeding the charter capital, or those that have halted operations for nine months or more.

In addition, shares under special control include those continually violating regulations on information disclosure or in cases where the exchange sees the need to protect shareholder benefits.

Shares that the exchange has put under control have seen declines in liquidity, which do not reflect the market's actual demand and make it difficult for companies to raise funds.

SSIAM recognised as Viet Nam's best fund management firm

SSI Asser [S1] Management Company (SSIAM) was granted the award for Best Fund Management Firm in Viet Nam by the Asia Asset Management magazine.

SSIAM is the only Vietnamese company to simultaneously receive prizes for "CEO of the year" and "CIO of the year" for its general director Le Le Hang and deputy general director Nguyen Thanh Tung.

This is the second year in a row that SSIAM was honoured.

Banks lure depositors with Tet offers

Banks are rushing to launch promotion programmes to attract depositors amid increasing withdrawals of money by the people for spending and payments during Tet (the Lunar New Year).

The interest rates being offered are quite low, ranging from 6.5 to 7 per cent annually for one-to-six month deposits, 7.5 to 8.3 per cent for 6-12 month deposits, 8.3 to 9 per cent for over 12-month deposits.

The deposit rates are almost the same across banks, which mean banks need other tools to retain their depositors, or to lure new clients.

Techcombank has launched a programme from January 06 to March 31 this year, in which deposits are being accompanied by thousands of gifts worth VND5 billion (US$236,966).

The Asia Commercial Bank and Vietcombank are offering rewards worth VND2 billion ($94,786) and VND9 billion ($426,540) in value, respectively.

Many banks are also offering better customer care services to depositors. For example, customers wishing to open saving accounts need not come to the bank. Instead, the bank staff will come to the customers' homes to complete all necessary procedures.

Some other banks are even visiting major depositors present Tet gifts or to invite their big clients to the end-of-the-year party.

Bankers said that these programmes are designed to take advantage of the capital flow, especially when people receive end-of-the-year payments, Tet bonuses and overseas remittances. Banks are also aiming to use new deposits to settle due accounts and to prepare capital reserves for next year's operations.

Experts say that deposits and savings are seen safe investments in 2014 as the central bank's monetary policy appears to be more supportive of the Vietnamese dong.

The head of the Finance and Banking Department at Ha Noi National University's Economics College said that if an investor considers the interest rate versus risks, savings appear to be the popular choice.

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