Seaports are busy on first day of 2013

On January 1, Cai Lan Port in the northern province of Quang Ninh received the first cargo vessel of 2013, the CHUETSU SPIRIT from the Philippines.

The 43,000 tonne ship docked in the port to pick up 35,000 tonnes of wood chips that it will transport to Japan.

The port’s target for 2013 is to process 7 million tonnes of goods, earning at least VND270 billion.

Earlier on New Year, workers from Hoang Dieu Company, a member of the Hai Phong Port Company loaded the first shipment of 2013.

Duong Thanh Binh, Chairman of the Member Council of the Hai Phong Port Company, said it will increase its capacity and improve its service to meet the growing demand of customers in 2013.

The company will strive to handle a total of 18.5 million tonnes of goods in 2013, to either equal or exceed its revenue in 2012.

In 2012, Hai Phong Port handled 18.2 million tonnes of goods, equivalent to 101.1 per cent of their target, and an increase of 3.4 per cent from 2011.

The port’s total revenue reached VND1,300 billion, earning pre-tax profit of VND80 billion - 114.2 percent of its goal.

The port also invested VND294.7 billion to upgrade its capacity.

Saigon Port in Ho Chi Minh City also started 2013 by unloading goods from five ships carrying iron, steel, domestic and exported goods. Around 7,000 tonnes of goods are estimated to go through the port on January 1 alone.

Le Cong Minh, Director General of Saigon Port , said the port will continue to reorganise to meet new demands and increase its effectiveness in 2013.

In 2012, despite lower and unstable good sources, Saigon Port handled 10.5 million tonnes, 105 percent of its target, earning VND855 billion in revenue.

The port gained VND51 billion in pre-tax profit and contributed 89 billion VND to the State budget.

In the night of December 31, Cai Cui Port in Can Tho celebrated its first shipment of 2013.

In the New Year, the port aims to process 500,000 tonnes of goods, up 5.26 percent from 2012, and achieve VND20 billion in revenue.

Cai Cui Port maintained stable growth in 2012 despite the gloomy economic situation. The port handled 475,000 tonnes of goods last year, 4.4 percent above its set target, earning the port 18 billion VND - 5.8 percent higher than expected.

Terminal Number 2 will begin operations in 2013 to manage 20,000 DWT ships. Can Tho Port is also expected to merge with Cai Cui Port.

The Mekong Delta is a key economic region in the country. Since Cai Cui Port opened, transport fees between Can Tho city and other neighbouring provinces, and Saigon Port decreased by $10 per tonne.

Air Astana officially opens direct air route to HCMC

Kazakhstan’s national airline Air Astana has officially announced it will open a direct air route to Ho Chi Minh City on January 2, 2013.

The new service, scheduled to conduct two weekly flights on Wednesdays and Fridays, is expected to promote bilateral trade cooperation and enable more Vietnamese tourists to visit the Central Asia country.

The new route is especially significant considering Vietnam’s accelerated non-tariff negotiations with the Customs Union of Russia, Belarus, and Kazakhstan.

Air Astana has selected Vietway Aviation Company as its official agent in Vietnam, in charge of ticket sales, promotion, and market development.

The company will operate two flights per week, with aircraft stopping over for transit in Bangkok, Thailand.

A representative of Air Astana said that the opening of the route marked the good relations between the two countries and the direct flights would help promote bilateral trade as well as tourism.

Last month Emirates Airline launched direct flights between HCM City and Dubai, with one flight per week on this new route, The Kazakhstan Newsline wrote.

Air Astana officially opened direct flights from Ho Chi Minh City to Kazakhstan, with a frequency of 2 times per week on Wednesday and Friday, by aircraft Boeing 757 (over 160 seats).

Time fly from Ho Chi Minh City Ho Almaty (Kazakhstan) about 7 hours of flight, namely, departing from Ho Chi Minh City at 1 pm and to Almaty at 7: 50 pm.

Air Astana has nearly 60 destinations worldwide, is rated as the best airline of Kazakhstan and the only 4-star airline in Eastern Europe and the countries of the CIS community.

Salt farmers, fishermen elated with price hike

Salt farmers are feeling exhilarated after prices surged in the last few days, said Bui Minh Tuy, deputy chairman of the People’s Committee of Dong Hai District in the Mekong Delta province of Bac Lieu, on December 29.

Traditional black salt is priced from VND48,000 to VND53,000 ($2.3 - $2.5) a gia (about thirty kilograms). The entire 20,000 tons of salt in farmers’ stock has been sold.

Dong Hai District is where farmers produce the most salt in Bac Lieu Province, covering 2,300 hectares.

In previous years, farmers had to resign themselves to selling salt at VND300 a kilogram to local traders as a last resort to have a little money for food. But now they are happy with the support from related agencies in times of natural calamities, which also helped boost production.

In related news, fishermen in the central province of Quang Binh are   feeling elated after a huge haul of tiny shrimp. This is the first time they have caught these shrimps in such a large quantity, said fisherman Nguyen Van Ty from Bao Ninh Commune in Dong Hoi District on December 29.

Every night, thousands of fishing boat with load of 5-7 quintals of tiny shrimps touches ports of coastal communes in Quang Binh Province. A kilogram of tiny shrimp sells for VND25,000-VND30,000, so a boat with two fishermen can earn VND8 million($384) for a night of hard labor.

Mekong Delta farmers eager for Gov’t to stockpile rice

Farmers in the Mekong Delta want the Government to stockpile rice at the earliest as rice prices are continually falling with low demand and harvest of the winter-spring crop still far away.

Farmer Duong Van Chau from Thanh My Commune in Chau Thanh District of Tra Vinh Province still has unsold rice from the autumn-winter crop and is concerned that price will fall even further when they harvest the next winter-spring crop.

At present, price of unhusked rice has dropped to VND5,200-5,300 a kilo and VND5,700 for high grade variety.

Le Van Lam, a sixty-one-year old farmer in Tan Hong District in Dong Thap Province, said he harvested eight hectares of high grade autumn-winter rice with output of 6.5 tons a hectare but the price at site dropped to VND4,650 a kilogram.

Farmers fear the price will further go down in peak harvest time of the winter-spring rice crop, the main crop of the year.

Price of husked rice is also falling with a kilogram fetching only VND6,900-7,350.

Pham Van Linh, from Vinh Long Food Company in Cai Rang Rice Market in Can Tho City, said that rice price has decreased because rice exports have slowed down.

Farmers in the Mekong Delta have seeded more than one million hectares of winter-spring rice crop on 1.6 million hectares. Some have begun to harvest their rice. Several farmers now look forward to the Government’s rice stockpile policy, hoping it will constrain the fall in price.

Experts say that rice stockpile will help farmers feel secure, reduce consumption pressure on businesses and prevent traders from forcing farmers to reduce price.

According to a report of the Ministry of Agriculture and Rural Development, farmers have yielded bumper rice crops in 2012 with total output of 44 million tons, an increase of 1.26 million tons over last year. The rice cultivation area was 7.76 million hectares, an increase of 98,000 hectares year-on-year.

Rice export price in Vietnam has reduced by US$5-10 a ton. The price of 25 percent broken rice now hovers around $375-385 a ton, which is $5 lower than that from India and $155 lower than that from Thailand.

Five percent broken rice is exported at $405-415 a ton, which is $20 lower than the price from India and $130 lower than that of Thai rice.

Fruit growers see profits, huge demand for Tet

Price of various kinds of fruits has increasing rapidly after traders began ordering huge volumes for the coming Tet Lunar New Year in February.

In Ben Tre Province, green-peel grapefruits fetched VND36,000 per kilogram, an increase of VND5,000-6,000 compared to mid December. However farmers do not have enough supply, partly due to the bollworm, which infected the grapefruit crop in orchards.
 
Growers in My Hoa and Phu Huu in Vinh Long and Hau Giang Provinces are rushing to stock for the coming Tet season.

Nguyen Van Khanh from Phu Huu Commune in Chau Thanh District of Hau Giang Province, said that traders offered VND18,000-20,000 a kilogram for grapefruit. If farmers agree to this price, traders will leave a deposit of 30-40 percent.

Meantime, green orange fetched VND16,000-18,000 a kilogram and Hoa Loc mango an exorbitant VND75,000-80,000 a kilogram, which is VND15,000-20,000 higher than last Tet.

Le Van Khai, chairman of Long Tri Mandarin Cooperative in Long My District of Hau Giang Province, said at present the mandarin price has increased to VND22,000-28,000 a kilogram, VND10,000-12,000 higher than in the same period last year.

The cooperative will provide 50 tons of mandarin oranges to the market during Tet. With the current high price, farmers will earn a record VND200 million ($9,608) a hectare.

Agro-aqua-forestry exports increase in 2012

Agro-aqua-forestry in the country increased by 3.4 percent—agriculture by 2.8 percent; forestry by 6.4 percent; aqua products by 4.5 percent and despite difficulties and decline in exports, agro-aqua-forestry exports still remained healthy in 2012, the Agriculture and Rural Development Ministry reported.

Vietnam earned US$27.5 billion from agro-aqua-forestry exports in 2012, a year-on-year rise of 10 percent.

Import of agriculture commodities and fertilizer touched $16.94 billion, whereas in exports the figure reached $10.6 billion.

This is the first time this sector has earned such a high amount since 1993, despite several barriers such as food safety control, rampant deforestation, slow transfer to new model of production, tardy prevention of diseases and natural calamity.
 
Speaking at the meeting, Deputy Prime Minister Hoang Trung Hai stressed that this sector has performed a key role in the country’s economy as it remains healthy with a satisfactory growth rate.

Yet to maintain sustainability, the deputy PM asked the sector to carry out re-structuring plans, remove barriers, expand markets and apply scientific methods in production for better results. Furthermore, the sector should call for more social contributions.

Banks to charge on-us transaction fee from next March

Nguyen Van Binh, Governor of State Bank of Vietnam, on December 28 issued a circular on ATM charges for on-us transactions, or those made on machines of the same bank that issued the ATM card.
 
As per the circular, from next March, banks will be allowed to charge ATM users for on-us transactions, or those made on machines of the same bank.

From March 1 to December 31, 2013, customers will be charged a fee of VND1,000 fee for on-us transactions. From January 1 to December 31, 2014, the fee will increase to VND2,000 and from January 1, 2015 the fee will be VND3,000.
 
Customers are charged a VND3,000 fee when conducting transaction at  ATM booths of other banks; VND100,000 for issuance of an ATM card and annual fee of VND60,000.The circular allows banks to collect fees for money transfer at a maximum rate of VND15,000 per transaction.
 
However, the Governor did not allow banks to impose a maximum withdrawal limit of VND2,000,000 from ATM’s as that rule will inconvenience customers and they will also have to pay on-us transaction fees on every withdrawal.
 
Low-income ATM cardholders are already saddened by transaction fees, and this new fee on cash withdrawals from ATM machines will exacerbate their woes even more.

Major solutions to defuse sluggish real estate market

Converting commercial housing into social apartments and allowing foreigners to buy houses are among the key solutions to defuse the current sluggish real estate market, according to a recent Government draft resolution.

Under the resolution, the Government will adopt policies to encourage social housing development so that low-income groups can afford to buy or rent houses.

The Government will review all ongoing housing projects to decide which ones should continue or stopped.

Besides, the Government will also consider removing barriers against foreigners who want to buy houses in Vietnam in order to defuse the frozen real estate market.

Specifically, the Government will amend the Housing Law towards expanding range of buyers. The revised bill will be submitted to the National Assembly for consideration.

The draft document also says that the Government will instruct and support real estate businesses to restructure their operations.

Other possible solutions include the establishment of funds on housing and real estate investment, of channels for medium and long-term investment mobilization for the market.

Official statistics show that the volume of unsold apartments is huge, with 14,490 apartments worth VND24,500 billion in Ho Chi Minh City. Meanwhile Hanoi has inventory of nearly 5,800 apartments and 3,483 semi-detached houses.

Housing prices are higher than the average income levels of a majority of people. Speculation and high interest rates have also made the problem worse.

Vietnam’s industry rebounds, inventory drops

Ministry of Industry and Trade has announced that industrial manufacturing index in December rose 5 percent compared to the previous month, and 5.9 percent year-on-year.

This year, industrial manufacturing index climbed 4.8 percent over the previous year, of which industrial mining edged up 3.5 percent; industrial processing and manufacturing surged 4.5 percent; and production and distribution of power and gas rallied at 12.3 percent.

The ministry said that industrial manufacturing signaled positive changes in the last months of this year with industrial manufacturing index rising and inventory index dropping. Some industrial industries saw strong growth over the previous year. Of which, ship building and other floating structures soared 136.7 percent; communications equipment manufacturing 48.3 percent; accessories and supplementary parts 39.6 percent; electronic components 23.7 percent; and medicines and pharmaceuticals 14.9 percent.

Meanwhile, some other industrial industries posted poor growth or even declined compared to last year. For instance, clothing inched up 2.3 percent; manufacturing of furniture ticked up 1.3 percent; whereas footwear manufacturing slid 0.9 percent.

Generally, industrial manufacturing index of some provinces and cities under the central government managed to keep the same growth as in   the same period last year. Of which, Ho Chi Minh City posted 4.9 percent; Dong Nai Province 7.2 percent; Binh Duong Province 7.5 percent; Hanoi City 5 percent; Da Nang City 6 percent; and Can Tho City 4.6 percent.

Until the beginning of December, inventory index of industrial processing and manufacturing industry surged 20.1 percent year-on-year. Among the industries that saw an increase in inventory index, vehicle inventory was up 76.6 percent; electric wire and cable 56.8 percent; beer 44.5 percent; cigarette 42.2 percent, motorcycle and light motorbikes 42.1 percent, clothing 41.5 percent; fertilizer and nitrogen compound 40.8 percent; and cement 30.6 percent.

Meanwhile, inventory of milk and dairy products rose 9.2 percent; ready-to-wear clothing increased 7.1 percent; footwear mounted 6.6 percent; while civilian electronic products fell 20.2 percent.

Nha Trang to host int’l sea tourism fair

An international sea tourism fair entitled “Seas, islands, and tourism development” will take place in Nha Trang city this June.

Nguyen Van Tuan, Director General of the Vietnam National Administration of Tourism, said the fair will focus on defining key markets like Russia, Western Europe, Australia, and New Zealand; introducing the tourism services offered in Nha Trang, Quang Ninh and Ninh Thuan; and connecting the fair with Nha Trang Sea Festival.

Many activities have been organised within the framework of the fair, including meetings, seminars, and tours introducing visitors to the coastal provinces’ distinctive cultural specifics and food.

There will also be various promotions, a conference on sea tourism investment, a ceremony for the best hotel, resort, and travel agency awards, and a golf tournament.

The event ultimately aims to showcase Nha Trang Bay—one of the world’s 29 most beautiful bays—for foreign and domestic tourists, and create opportunities for businesses to meet and develop relationships with potential partners.

EU - largest consumer of Vietnamese goods

Vietnamese exports to the European Union (EU) hit US$20.3 billion in 2012, increasing 22.5 percent against 2011 and accounting for 17.7 percent of the country’s total exports.

Major export items included telephone sets that made up 43 percent of the country’s total telephone exports, footwear 36 percent, computers 19 percent, and garments 16 percent.

The US was the second largest importer of Vietnamese goods, consuming US$19.6 billion in value, representing a year on year rise of 15.6 percent and 17.1 percent of Vietnam’s total exports.

Other ASEAN countries ranked third, importing US$17.3 billion worth of Vietnamese goods, up 27.2 percent over 2011.

Japan and China came fourth and fifth, consuming US$13.1 billion and US$12.2 billion respectively.

China was the largest trade partner of Vietnam, exporting US$28.9 billion worth of goods to its neighbor, up 17.6 percent against 2011.

It was followed by ASEAN (US$21 billion), the Republic of Korea (US$15.6 billion), Japan (US$11.7 billion), the EU (US$8.8 billion), and the US (US$4.7 billion).

The forecast of Hanoi’s economy in 2013

Hanoi’s economy in 2013 is predicted to face more difficulties and challenges than in 2012, says Mayor Nguyen The Thao.

The city has called on authorities and sectors to exert more effort to keep its economy on track, he affirmed in a recent interview.

Hanoi has drawn up three “scenarios” for its economic development, with a separate package of solutions for each.

The economy is expected to grow by 8-8.5 percent in the scenario of that the 2012 economy trajectory is maintained. Growth could surpass 8.5 percent in the best-case scenario, or drop below 8 percent if there are more difficulties.

The city predicts a growth rate of 8-8.5 percent based on the analysis of the domestic and global situation, Thao added.

He highlighted solutions to meet the target, saying 2013 will be a year of administrative reform to help businesses and people.

The city will focus on ways to attract investment and create jobs, as well as procedures and supervision of rules and regulations, and firmly handle irresponsible officials.

In addition, the city has instructed authorities and sectors to tighten public spending, and outlined five measures to improve the property market, he said. It will also purchase commercial property to add to the social housing stock.

To reduce burden on the budget, Hanoi mobilised VND900 trillion from credit organisations in the city this year, an increase of 9.2 percent over that of 2011.

However, Thao attributed the slow transfer of non-budget capital for development, especially build-and-transfer (BT) projects, to delays from the Ministry of Planning and Investment.

Therefore, the city plans to publicise a list of BT projects to be carried out.

The Capital Law will provide a legal basis for Hanoi to implement programmes in a more active manner, Thao affirmed.

The city will prioritise and facilitate a number of policies, including those on construction planning, space management, architecture and view, cultural preservation and development, education-training and science-technology development, management and protection of the environment, land, housing and transport, and technical infrastructure development.

Regarding administrative reform, Thao said the city will have multiple solutions such as management renewal, implementation of a single-door policy, pilot e-administration in five districts, reviewing and supplementing administrative procedures, and the inspection of administrative procedure implementation.

In 2013 – the year of administrative rules, Hanoi will develop principles and a sense of responsibility among officials and public servants, especially senior officials and managers at all levels, he affirmed.

Vietnam does not subsidise shrimp farming

The Vietnamese shrimp farming industry has operated according to the market mechanism for years, and it does not receive any government subsidies.

Tran Thien Hai, Chairman of the Vietnam Seafood Exporters and Producers (VASEP), made the affirmation in an interview granted to Thanh Nien newswire on December 30.

Hai said he was surprised upon learning US shrimp producers had lodged an anti-subsidy claim against Vietnamese shrimp imports with the US Department of Commerce (DOC).

He said VASEP has already contacted its members and consulted its lawyers in case the lawsuit is accepted.

However, VASEP has yet to receive any official word from the DOC.

Late last week, US shrimp producers asked the DOC to impose anti-dumping tariffs on shrimp imports from China, Vietnam, India, Indonesia, Malaysia, Thailand, and Ecuador.

Shrimp is one of Vietnam’s major seafood exports, and VASEP predicted that shrimp exports would drop 6.3 percent to US$2.25 billion in 2012.

An uphill battle of national economy

The Prime Minister has recently shown the government’s resolve to keep 2013’s inflation at 6 percent – a task that will entail overcoming a variety of challenges, according to Minister of Planning and Investment Bui Quang Vinh.

During an online dialogue with citizens on December 30, Vinh noted that high inflation is the major concern for not only policymakers and businesses, but also ordinary people. It is the root cause behind the need for a tight financial and monetary policy, ramifying undesired effects for all economic sectors.   

There is no denying that high inflation leads to the depreciation of the domestic currency against the US dollar, high bank interest rates, and losses in business operations.

The government introduced a number of bold measures to keep 2012’s inflation in check. As a result, 2012’s consumer price index (CPI) slowed to just 6.81 percent, a marked improvement on the galloping 18.1 percent in 2011 and 11.85 percent in 2010.

The government has targeted bringing 2013’s inflation down to just 6 percent, which was described as no easy task to fulfil.

Major service and commodity prices will certainly rise in line market trends, Minister Vinh explained, citing increases in the prices of medical, education and transport services, as well as in the cost of coal and electricity, to mobilise capital for reinvestment.

The nature of the market economy means such increases are inevitable. The crux of the matter is that the government plays an important role in managing this mechanism, weighing up the pros and cons of market fluctuations and their broader effects.

“We have tools in hand for calculating the national economic impact of every potential price adjustment. If the government acts carefully and closely coordinates with and between ministries, the 6-percent CPI target will be within reach, and price increases will remain manageable,” concluded Vinh.

Vinh acknowledged 2012 was another difficult year for Vietnam due to the domestic and global economic slowdowns. The Government’s foremost priorities to stabilise the macroeconomy and rein in inflation meant the national economy slowed to a 5.03 percent growth rate, much lower than the National Assembly’s set target.

The government’s measures also resulted in a serious employment shortage. The primary goal of the Party and State – at least while the economy continues to grow - is generating more jobs for its people. But a tight financial and monetary policy made it difficult for businesses to access bank loans, resulting in decreased social demand. A large number of businesses were forced to cut production and lay off workers.  

This is unwanted consequence, confided Vinh.

The minister said that the government is determined to create a stable macroeconomic environment over the medium and long term, no matter the odds.

Vietnam can only attract investment that will fuel steady growth and production and generate jobs when the national macroeconomy is stabilised, said Vinh.

The global economy is expected not to get out of the woods yet in the foreseeable future, inflicting a further toll on Vietnam. Vietnam will therefore continue with the measures adopted to contain inflation and stabilise the macroeconomy.  

Without achieving sound economic growth, we are unlikely to meet the goals of ensuring social security and improving people’s incomes, said Vinh.

In its year-end session for 2012, the National Assembly approved a resolution specifying major socio-economic targets for 2013, including a 5.5 percent economic growth rate.

Positive signs detected in the domestic and global economies make the growth rate target achievable, said Vinh, warning that a higher growth rate would spark high inflation.

The State budget for capital construction will be cut to VND175 trillion, VND5 trillion less than in 2011. Other State capital allocations will also be lower than in 2011.

To make up losses, the government will mobilise capital from new sources. Its tools for doing so include applying an open credit policy to help businesses access bank loans, encouraging private investment, and attracting additional foreign investment through official development assistance and foreign direct investment capital.

Shrimp exports reach US$ 2.25 billion

The Vietnam Association of Seafood Exporters and Producers (VASEP) estimates Vietnam’s 2012 shrimp exports at US$2.25 billion, down 6.3 percent from 2011.

In the first 11 months of 2012, Vietnam’s shrimp exports totaled US$2.06 billion, a year-on-year decrease of 4.7 percent.

Half of the top 10 import markets suffered significant declines, including the US (15.6 percent), the EU (25 percent), Canada (14 percent), ASEAN (22 percent), and Switzerland (11 percent).

VASEP attributed the falling export value to unstable shrimp supply caused by diseases, as well as 15–25 percent increases in input costs.

In the first five months of this year shrimp exports to Japan grew strongly, but the boom was stymied—reducing by 1.5 to 17 percent—when the country began examining all Vietnamese shrimp entering the market.

Shrimp exports to the EU were affected by the region’s economic downturn, while sales to the US market suffered from oversupply and underwhelming demand. Exports to the US are unlikely to recover in the near future, as reserves remain high.

Exports boost the national economy in 2012

This year’s export revenue was estimated at US$114 billion, a year-on-year increase of 18.3 percent over a year earlier.

For the first time in 20 years, Vietnamese exports have recorded a trade surplus worth US$284 million despite the numerous difficulties arising from the global economic downturn.

The impressive figure demonstrates the efforts of relevant ministries, agencies, localities, and businesses to expand markets and maintain sustainable growth.

Dang Thi Phuong Dung, Deputy Head of the Vietnam National Textile and Apparel Association (VINATAS), says the world economy’s fluctuations forced Vietnam’s garment sector to reduce its export target from US$19–19.5 billion down to US$17.5 billion.

She revealed the garment sector successfully fulfilled its set export target export thanks to enhanced competitiveness and lowered production costs. Garment export earnings in 2012 enjoyed a year-on-year increase of 7–7.5 percent, she adds.

Local exporters confronted many challenges in 2012, including a sharp decrease in market demand, lower export prices, higher production costs, and trade barriers.

Foreign-invested businesses made a major contribution to this year’s impressive export growth (including crude oil) earning US$63.9 billion, up 31.2 percent over 2011. Domestic businesses reaped US$42.3 billion, up 1.3 percent compared to the previous year.

Pham Tat Thang, a senior researcher from the Ministry of Industry and Trade (MoIT), says foreign conglomerates like Intel and Samsung have invested more in Vietnam, increasing export value in 2012. The export sector is enjoying high added values from FDI businesses involved in computer and electronic spare part production, he notes.

Thang suggests local businesses should closely cooperate with foreign enterprises using modern technology to create efficient supply chains and give fresh impetus to the national economy.

Vietnam suffered regular trade deficits over the last two decades. 2012 is the first year the country achieved an export surplus, valued at US$284 million. Le Thi Minh Thuy, Deputy Director of Trade, Services and Price Statistics Department under the General Statistics Office (GSO), cites a decline in production and consumption as hidden reasons behind the weak demand for material and equipment imports. However, she says, in the context of current difficulties, the weak demand helps reduce pressures on payment balance and inflation control.

Thuy notes export surpluses are always a set target for every trading activity. The second quarter of 2012 was the only one to record a trade deficit of US$160 million—the remaining quarters finished with trade surpluses that facilitate economic growth, stabilize exchange rates, and increase liquidity.

MoIT Deputy Minister Tran Tuan Anh predicts Vietnam’s export sector will need to overcome a number of challenges in 2013 as major importers like Japan, the EU, and the US are unlikely to achieve full economic recovery. Some producers and processors may find it hard to increase their added value due to rising input costs. He says the trend of increasing international market protection will also pose more obstacles to local exporters.

He stressed the Government’s vital role in helping domestic businesses ease their difficulties through trade promotion programmes and market expansion activities.

According to the MoIT, Vietnamese exports are shifting towards a heavier reliance on processed goods (over 70 percent). Agricultural and mineral products are also enjoying sustainable export growth. Some export items­—such as rice, coffee, seafood, telephones, computers, and electric cables—are securing a firm foothold in foreign markets and gradually earning prestige in the global supply chain.

Commercial banks’ bad debt ratio reaches 40 percent

National Financial Supervisory Committee Deputy Head Dr Le Xuan Nghia has said the majority of  bad debts are currently owed by select commercial banks because of inadequate emergency reserves.

The bad debt ratio of some commercial banks exceeds 40 percent, but this figure has not yet been officially announced, Dr. Nghia says.

He suggests the current liquidity weakness demands merging or nationalising small-scale commercial banks, particularly in rural areas.

Nguyen Thi Thanh Huong, Banking Magazine’s editor-in-chief, emphasised the urgency of overcoming bank management challenges. Internal management systems have not adapted to the illegal operations of several commercial banks, she noted.

Huong also expressed faith in the potential for restructuring or nationalising ineffective banks, saying it will ease the difficulties confronting the central bank.

Vu Dinh Anh, the Ministry of Finance Market and Price Institute’s Deputy Director, is worried by the limited progress made on settling bad debts. He noted that in the time since the first three bank mergers in 2011, only one more—Habubank—Dr. Anh suggested commercial banks should devise their own credit growth plans based on their particular situations and capacities. For relevant management agencies, he said, it is essential to focus on interest rate adjustments.

Pham Xuan Hoe—Deputy Head of the State Bank of Vietnam  (SBV)’s Monetary Policy Department—said macro policy interest rate adjustments should be made according to market trends  and with inflation in mind. He said channels of credit are key to Vietnamese business operations, placing heavy pressure on the central bank. The current low growth environment, the high inventory levels, and the general economic downturn have made accessing bank loans much harder for businesses.. Ensuring an adequate supply of investment capital will be no easy task in 2013.

Hoe proposed the State Bank persist with its flexible monetary policies while monitoring fiscal issues in order to control the consumer price index and promote economic growth. He added a further interest rate cut is needed to accord with market operations.

Dr. Vu Dinh Anh voiced his concerns about interest rate pressure, saying a range of factors dramatically impact businesses’ input costs. Interest rates should be lowered and maximum lending rates avoided to maintain the credit market’s normal operations. Lending rates should be negotiated between banks and borrowers, he stressed.

Economic prospects for 2013

Leading domestic and foreign economists concur that Vietnam will enjoy stronger economic growth in 2013, provided it controls inflation and accelerates the restructuring of both the banking sector and State-owned enterprises.

Despite the difficulties caused by 2012’s global economic slowdown, Vietnam recorded an encouraging economic growth rate of 5.03 percent.

The Ministry of Planning and Investment(MoIT) has outlined three scenarios for the national economy in 2013 based on the forecasted fluctuations of the local and global markets. The three scenarios assume 2013’s GDP growth rate will hit 5, 5.67, and 6.34 percent..

The second scenario - a GDP growth rate of 5.67 percent and an export growth rate of 14.6 percent - has been judged the most probable

Economists are cautiously optimistic about the international economy, noting the Euro debt crisis is gradually easing and political and territorial disputes are approaching settlements. Japan and the US are both enjoying significant recoveries. Vietnam is thus expecting to attract more foreign direct investment (FDI).

Dr Do Van Thanh, Deputy Director of the National Centre for Socio-Economic Information and Forecast (NCEIF), suggests Vietnam should concentrate on eliminating the national economy’s obstacles to investment and seize the emerging opportunities created by the international business environment’s improvements.

The Government should perpetuate its inflation control and macroeconomic stabilisation policies while maintaining appropriate economic growth and ensuring social welfare, Thanh says.

He also stressed the need to help local businesses through taxation and fee policy measures. Promotional campaigns could boost purchasing power and assist businesses with reducing inventories. Vietnam must capitalise on shifts in the flows of FDI and official development assistance (ODA) from Japan and India into Southeast Asia, Thanh notes.

A group of Banking Academy economists have also mapped out three economic scenarios for 2013. They posit GDP growth rates of 4.69, 5.44 and 6.01 percent, deeming the second hypothetical most likely.

Dr Nguyen Thi Kim Thanh, Director of the Banking Development Strategy Institute, says Vietnam’s 2012 export growth was impressive despite sharp consumption demand declines from key importers like the US, EU, and JapanShe says sustainable economic growth requires Vietnam to prioritise increasing total demand and stabilising the macroeconomy.

Credit growth should be bolstered and business expansion hurdles removed, Thanh says. She thinks the central bank should establish efficient channels of capital and consolidate consumer trust for further growth.

Many foreign economists have faith in Vietnam’s 2013 economic recovery, despite preexisting challenges. They predict the country’s GDP will grow by a modest 5.5 percent in 2013.

Dr Michael Krakowski, Chief Technical Advisor of the Macroeconomic Reform Programme in Vietnam (an initiative of the German development and cooperation organisation GIZ) points to the fact that the Vietnamese Government has undertaken drastic measures to stabilise the macroeconomy and maintain sustainable growth.. The country’s banking and business restructuring processes must continue to protect the future of the national economy. He acknowledges Vietnam’s constant economic reform efforts, its improvements to the business climate, and its investment efficiency increases. He also admires the remarkable results achieved by the combination of bank and business restructures and the shifting growth model.

In the 2013 fiscal year, Vietnam will receive nearly US$6.5 billion in ODA from international donors. It represents the confidence Vietnam’s foreign partners place in the national economic outlook.. ODA loans are  valuable resources that help Vietnam address short-term economic difficulties and lay  firm foundations for long-term economic growth.

More FDI poured into property projects

The real estate sector attracted an additional US$1.85 billion in foreign direct investment (FDI) in 2012, accounting for 14.2 percent of the total registered FDI, double last year’s figure.

The Ministry of Planning and Investment’s (MPI) Foreign Investment Agency reports total registered FDI in property projects climbed to US$12.72 billion this year.

The real estate sector recorded the second largest amount of FDI, mostly in the manufacturing and food processing industries. US$494.3 million in FDI was channeled into expanded projects alone.

In 2011, FDI in real estate projects made up only 5.8 percent of the registered total (US$14.7 billion).

Experts discuss ways to boost PPP projects

Economic experts gathered at a seminar in Hanoi on December 28 to discuss ways to implement investment projects in the form of Public-Private Partnerships (PPP).

Speaking at the seminar, Le Van Tang, Head of the Bidding Management Department under the Ministry of Planning and Investment (MPI), said that Vietnam needs US$39 billion each year to develop its infrastructure system. Presently only 50-60 percent of what is needed is met through traditional channels.

PPP is considered one of the most important channels to draw investment from domestic and foreign private economic sectors to develop the country’s infrastructure, he said.

According to participants, to increase PPP efficiency in 2013, the MPI needs to complete PPP policies and call for foreign assistance to develop partnership programmes.

At present, the MPI, Asian Development Bank (ADB) and the French Development Agency (AFD) are preparing a Project Development Fund (PDF) with a loan of US$20 million from ADB and 8 million EUR (US$10.5 million) from AFD.

As part of the Public-Private Partnership Support Project (P3SP), the fund will support State agencies responsible for preparing PPP projects.

54 businesses receive national trademark awards in 2012

The 54 businesses who have been recognised with national trademark awards were announced at a press conference in Hanoi on December 28.

Do Thang Hai - Head of the Trade Promotion Agency under the Ministry of Industry and Trade (MoIT) and General Secretary of the National Trademark Program - reported the program’s council has instructed the Trade Promotion and Agency and relevant agencies to help businesses recognise the importance of building trusted trademarks.

During 2012 participating businesses signed contracts worth more than US$1.58 billion. The program has also conducted more than 40 trade promotion training courses, providing useful information to thousands of businesses and boosting promotional activities in such major markets as the US, Australia, the EU, and Japan.

MoIT Deputy Minister, Tran Tuan Anh said  the ministry and relevant agencies should coordinate assisting trademark development and urge associations to defend the intellectual property rights of potential export items.  

Towards a high quality and sustainable agricultural sector

Deputy Prime Minister Hoang Trung Hai has praised the agricultural sector’s and farmers’ efforts to overcome difficulties and achieve positive results in 2012.

At a conference in Hanoi on December 28 reviewing the sector’s performance and making plans for 2013, the Deputy PM reaffirmed agriculture is s key pillar of the national economy and has an important influence on macroeconomic stabilisation.

Hai acknowledged the sector’s outstanding weaknesses regarding planning and state management.

He asked the sector to continue restructuring reforms, hone its competitive edge, and advance towards higher quality, sustainable agriculture.

He also asked the sector to focus on improving planning methods and adapt production in line with consumer market, and infrastructure. He also emphasised the need to expand the role of associations and collectives to increase farmers’ income.

In 2013, the agricultural sector is aiming to record a US$28.5 billion export turnover with a GDP growth rate of 2.8–3.0 percent.

Minister of Agriculture and Rural Development Cao Duc Phat said the sector will prioritise developing highly competitive products and apply using the latest technology to increase product value.

Tuna exports to France fall

Vietnam’s tuna exports to France earned US$3.56 million in the past eleven months, down 1 percent compared to the same period last year.

The Vietnam Association of Seafood Exporters and Producers (VASEP) says annually, France has to import 8,000 tonnes of tuna, (worth EUR23 million) from Vietnam and other developing countries to meet its growing consumer demand.

Other major exporters of tuna to France include Ivory Coast (accounting for 18 percent of the total volume), the Philippines (16 percent), South Africa (9 percent), Sri Lanka (5.4 percent) and Ecuador (4 percent).

Tuna is only second to salmon and shrimp in terms of export value.

Hue welcomes its two millionth visitor

The Hue Relics Preservation Centre welcomed UK citizen Sandra Noel, its two millionth visitor, on December 30.

Ms Noel has been presented with a certificate, souvenirs, and vouchers to visit all of the centre’s sites. She also won a one night stay for two people at the five-star Ana Mandra resort in Hue.

Spanish tourist Servan Rubio Diego, as the 1,999,900th visitor, was another lucky winner of souvenirs and vouchers from the Hue Relics Preservation Centre.

The giveaways are part of the “Hue Heritage – Week of Visitors” program, which ran from December 24–30. It celebrated the 20th anniversary of UNESCO recognising Hue imperial palace complex as World Cultural Heritage and promoted Hue heritage’s to potential visitorsboth local and foreign.

Phan Thanh Hai, the centre’s director, said the program also offered students and visitors a variety of discounts, culminating in the Royal Night organised for Dai Noi area on December 30.

The program successfully helped attract more tourists, earning more than VND2 billion in revenue—a dramatic increase compared to the previous year.

More Vietnamese tourists choose Thailand

The number of Vietnamese tourists to Thailand has jumped 10-fold in the past 12 years, rewarding the efforts of the Thai Government to attract more Vietnamese visitors.

According to the Tourism Authority of Thailand's HCM City office, more than 530,000 Vietnamese visited Thailand in the first 10 months of this year. In 2000 the number had been a mere 57,000.

Vietnam is the 13th largest tourism market for Thailand. Vietnamese tourists are fairly big spenders in Thailand, said Chutathip Chareonlarp, director of the Tourism Authority of Thailand in HCM City.

Last year it was estimated that 430,000 Vietnamese tourists spent 13.68 billion THB (US$446 million) in Thailand.

Though the figures for 2012 have not been calculated yet, with tourist arrivals rising by 20-30 percent, the amount could top US$500 million.

The average length of stay of a Vietnamese tourist was 6.04 days last year, with an average daily expenditure of THB4,035.

The rate of repeat visitors was reported at around 60 percent.

Thailand has the advantage of low prices and plenty of tourist attractions and entertainment options, and its Tourism Authority actively organises familiarisation trips for media agencies in Vietnam.

The top five destinations for Vietnamese visitors are Bangkok, Pattaya, Phuket, Kanchanaburi, and Udon Thani. Destinations gaining popularity include the northeastern region, Samui Island, and Phuket.

Bangkok has been rated the world's second best city for tourist shopping and third best in terms of value for money by 75,000 travellers covering 40 cities on travel site TripAdvisor.

This year Thailand hopes to get more than 20 million foreign visitors, up from just 16 million two years ago. China, Malaysia, Japan, and Russia are its biggest markets.

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