FPT brings IT expertise to State Audit Office

FPT Corporation will support the State Audit Office of Viet Nam to implement information technology (IT) in the 2014-20 period.

Under a recent strategic co-operation agreement, the company will bring advanced technology to administrative management and audit operations and provide the state agency with IT and telecoms services at preferential prices.

The agency hopes the co-operation will help build modern IT infrastructure and boost auditors' IT skills.

Hai Phong Port handles 17m tonnes of goods

The total quantity of goods shipped through Hai Phong Port in northern Hai Phong Province reached 17 million tonnes in the first 10 months of this year.

According to the port's general director, Nguyen Hung Viet, container cargo exceeded 740,000 TEUs (twenty-foot equivalent units).

The port was expected to distribute the largest volume of goods, over 24 million tonnes, among the northern ports in 2013. It would gain some VND1.9 trillion (US$90.48 million) in turnover by the year-end.

VietJetAir offers discount for ANZ customers

VietJetAir said yesterday it would offer a 30 per cent discount to all ANZ credit card users from now until January 31, 2014.

The promotion is a collaboration between VietJetAir and ANZ to provide cheaper tickets to customers.

The number of discounted tickets is limited to 100 tickets per week.

Life insurance market to surpass annual growth target

Viet Nam's life insurance segment is expected to exceed its annual target of 15 per cent with 19-21 per cent growth in the previous three quarters, a senior industry official says.

This year's revenues for this segment is estimated at more than VND21.15 trillion (US$1.01 billion), Viet Nam Insurance Association general secretary Phung Dac Loc said at a two-day conference that opened yesterday.

The "Viet Nam Insurance 2013 – Capturing Viet Nam's Fast Growing Insurance Market" conference is organised by IBC Asia, a division of Informa Plc, the largest publicly owned organiser of conferences and courses in the world.

The non-life insurance segment is expected to meet the 10 per cent growth target for the year, although it saw a negative growth rate of minus 5 per cent in the first quarter.

However, the segment rallied in the second and third quarters with growth of 5 per cent and the third quarter sees 8.6 per cent growth. It is expected to post revenues of VND25.034 trillion ($1.19 billion) this year.

The country would celebrate 20 years of Vietnamese insurance market development next month, Loc said, adding the demands on life insurance and health insurance has increasing rapidly in the past time.

Over the past 20 years, there were 20 million school students, 5 million labourers, 1.5 million auto owners, 7 million motorbike owners, 200,000 business owners and more than 6 million other people who have joined life insurance schemes.

Many foreign-invested companies in transportation, telecommunication, oil exploitation, electricity, tourism and shipbuilding sectors have also purchased insurance, he said.

Organisers said the conference aims to provided a platform for insurance companies and finance organisations to capitalise on the Vietnamese market.

The conference will focus in particular on the latest strategies in product development, designing effective marketing campaigns and establishing cohesive distribution channels.

Among the topics discussed yesterday were the strengthening of regulatory frameworks to support further development of Viet Nam's insurance market; growth potential of the life insurance segment; mergers and acquisitions (M&A) and impact of the restructuring process on the insurance industry.

Jack Howell, chief executive of Prudential Viet Nam, said the Vietnamese insurance market is relatively small now, but poised to grow in the near future.

He said, "strong GDP growth will help drive the Vietnamese insurance market and a strong distribution system will help drive growth for firms in Viet Nam."

The market growth needs to incorporate anticipated product needs based on the economy and demographics, Howell said.

Along with sales, companies are responsible for educating consumers on the value of life insurance and financial planning since it (customer education) a is key pre-requisite to customer acquisition, he said.

Education will help to ensure that the market enjoys sustainable and responsible growth, he said.

Le Hai Phong, executive director and chief financial officer of Bao Viet Holdings, said that the insurance industry played a relatively weak role in the Vietnamese economy, but has the capacity and potential to expand and contribute much more.

He said there were still many gaps between local practices and international best practices that need to be narrowed, especially in capital management, risk management and International Financial Reporting Standards. Industry regulators in Viet Nam should ensure consistency and enhanced transparency, he said.

Today, conference participants will continue their discussions on raising insurance awareness in developing markets, the future of micro-insurance and private health insurance development in Viet Nam.

Fisherman opt for makeshift canal over costly fishing port

Head of the fishing port Tran Sau has said local fishing vessels prefer to use small canals for handling fish and maintenance over Tien Chau Fishing Port.

The port, located in Tuy An District of central coastal Phu Yen Province, was designed to receive around 300 fishing vessels with a total of 6,000-10,000 tonnes of fish per day.

Located near the small canal, daily deliveries to the port have dropped to a mere 200 tonnes of fish per year, only 3.3 per cent of the facility's total capacity, he said.

This trend has rendered the port a wasteful infrastructure project, he added.

Pham Quang Quam, a local fisherman who spoke with Lao Dong (Labour) newspaper, explained the depth of the 1.6-km stream, which leads fishing vessels to the port, was so low that it was too difficult to enter.

The dock of the port was also 2-3 metres higher than the broadside of fishing vessels, he said, adding that alluvial sendiment had caused the low sea levels.

Fishermen are not finding it hard to load or unload fish, he said.

A lack of fishing-related logistical services at the port, including sorting and processing facilities, was one of the major reasons why fishing vessels were ignoring the port, he said.

Meanwhile, the small canal now frequented by fishing vessels, run by several local dealers, was being used by fishermen to sort and preserve their fish, he said.

The port submitted to the People's Committee of the district to finance a fisheries logistics service to lure more fishing vessels, but no feedback has been received, he said. Sau also added that an inspection team from the Ministry of Agriculture and Rural Development had visited the port earlier this month.

The Tien Chau Port, worth VND27.9 billion (US$1.3 million), was funded by State budget and put into use in July 2006.

Regional forum tackles petrol woes

The ASEAN Council on Petroleum (ASCOPE) Conference and Exhibition opened yesterday at HCM City's Sai Gon Exhibition and Convention Centre with the participation of Deputy PM Hoang Trung Hai.

Held every four years, alternating between member countries, the event is one of the most important activities of ASCOPE.

It showcases the ASEAN petroleum industry to the world and provides a forum for the regional and global petroleum industry to discuss new technologies, petroleum economics, co-operation in energy security and environmental concerns.

This year, the three-day conference and exhibition hosted by Viet Nam Oil and Gas Group (PetroVietnam), includes the theme of "Innovation and Co-operation – The Way Forward."

It has attracted about 120 international and local exhibitors and 300 conference delegates.

In his welcome message, Deputy PM Hoang Trung Hai said, "We are living in an era overwhelmed by rapid economic growth, rising populations and accelerating urbanisation, which increase demand for oil and gas resources."

"Viet Nam is fortunately endowed with potential oil and gas reserves of which proper investments and exploitation have helped the country secure sustainable development and an energy supply," he said.

Hai added: "How will the ongoing global climate change impact natural resources? What can we do to preserve, on the one hand, and utilise, on the other, such valuable resources?"

He went on, "And how does the oil and gas industry contribute to future economic growth and energy security of each and every country? Those are not the only concerns for Viet Nam but for the entire region."

During the three-day exhibition, leading companies of the oil and gas industry will showcase tools and technologies for oil and gas exploration, production and transportation; equipment for energy resources; metering and control; and automatic process control systems, and local area networks.

They will also demonstrate integrated operational systems for plant management; software and innovative projects for oil and gas facilities construction; a wide variety of fittings; and protective equipment and services for oil and gas complex.

In addition to pavilions from members, there are also booths from Russia, the US, the Netherlands, France, Norway and the Middle East.

Other conferences will also be organised during the event to focus on the pressing issues of the oil and gas industry and provide timely insights into ASEAN petroleum business and challenges as well as solutions.

ASCOPE was established in 1975 as an instrument for regional co-operation among ASEAN countries.

ASCOPE-member countries are represented by their respective national oil companies or authorities in charge of petroleum issues.

Hanoi to ensure goods supply for Tet

The Hanoi People’s Committee has pledged to make preparations ahead of the upcoming Lunar New Year (Tet) to balance supply and demand of goods and stabilise prices of staple commodities.

The city has ordered businesses to proactively conduct surveys and source commodities from other localities in addition to local products.

Thirteen businesses that have registered to join in the price stabilisation programme are set to sell their goods at 610 outlets across the city.

From now until the Tet holiday, Hanoi will see three supermarkets and 150 mobile fairs working to serve the demand of low-income and rural people.

At a working session with the People’s Committee on November 28, Deputy Minister of Industry and Trade Ho Thi Kim Thoa requested the city to focus on staple commodities and intensify market control to ensure food safety.

In the periods before and after Tet, Hanoi consumer demand increases 15 – 18 percent compared to other months, and mainly for food, confectionery and soft drinks.-

Manulife survey suggests poor planning likely to lead to future hardship

A gaping savings hole between the expected savings and actual retirement needs of Asian investors points to financial hardship in retirement for many, according to the latest Manulife Investor Sentiment Index, released last week.

The survey, based on 3,500 interviews across seven Asia markets, affirms retirement planning is the most cited financial priority among Asian investors. However, many are leaving it too late and nearly half say they have no financial plan for their retirement at all.

As a result, a large proportion of investors are relying on fall-back options, such as extending their working life or relying on their children’s support, which may not prove reliable.

“For anyone leaving it until later in life to start planning for their retirement, making up the shortfall will become harder and harder. The reality is that, without a clear plan, it won’t be alright on the night," said Robert A. Cook, President and CEO of Manulife Financial in Asia.

Pensions also became a hot issue in Vietnam recently. In October, the Ministry of Finance (MoF) allowed some insurers to carry out voluntary pension insurance in Vietnam with Manulife emerging as one of the few insurers capable of meeting the MoF's tight requirements in term of financial capacity, management systems and human resources to provide the product.

Currently, only 21 per cent of elderly people in Vietnam enjoy a pension, highlighting that the need for Vietnamese employees to participate in voluntary pension insurance is very high.

According to the survey, Asian investors on average expect to depend on retirement savings for an average of 19 years, but the amount they claim they will have saved by the time they retire will cover only 13 years – a six-year shortfall. In some markets the gap is even higher, rising to 13 years in Japan.

And since Asians are living longer and commonly underestimate their longevity, it is highly likely that for many the retirement gap will end up being even greater.

The survey also pointed out that many Asian investors are either leaving their retirement planning too late or not starting to plan at all. Of those who have started planning (55 per cent), about one-in-five did not start until a few years before retirement, while another quarter waited either until having children or until their children had finished school. Of the 45 per cent of investors who do not yet have a plan, nearly half said they would wait until their children had finished school or until they were nearly retired, while another fifth said they did not expect to start at all.

Reflecting the lack of robust retirement planning, many investors appear to be relying on factors that may be out of their control, like health, the job market and other people being willing and able to help, said the survey.

Across the region an average 55 per cent expect to continue in full-time or part-time work during so-called retirement. This response was even higher in Indonesia (68 per cent) and Singapore (69 per cent). About one-in-five expect to rely on their children for financial support. This was particularly evident in Hong Kong (21 per cent) and Malaysia (42 per cent).

Korean food giants look to Vietnam to expand materials sources

As part of their continuing expansion in Asian markets, Korean food giants have growing demand for materials from Vietnam.

In September, Korea’s CJ Group signed a memorandum of understanding (MoU) with the People’s Committee of southern Ninh Thuan province to develop chili-growing in the area.

The plan is split into two phases. In the first CJ is experimenting with a one hectare area through 2014.

In the next the two sides will discuss cooperation in growing a large scale chili area over 10 years, or longer. About 3,000 local farmers are expected to be involved with an estimated output of 3,000 tonnes of dried chilies per year, from 12,000 tonnes of fresh chilies.

The Korean group is also considering building a chili processing and packaging plant in the province. It aims to also produce different sauce products once material production is stable.

CJ Group experts would provide high-quality chili varieties and technology transfer, as well as guarantee appropriate purchasing prices from farmers.

“In the past, Japan was our top material market, but now this is moving to Vietnam. The deal with Ninh Thuan is only one of several prominent investments in the country. Alongside chili, CJ is also working on farming cabbage, as these two products are staples in making kim chi,” said Lee Ho Yeon, a CJ Group procurement expert.

“Strict production, delivery, and good quality control are of paramount importance at CJ,” Lee added.

Leading Korean retailer Emart is also looking to diversify its material supply sources.

Emart assessed the quality of vegetables and lobsters from Vietnamese producers and was reportedly not pleased with the results.

“Vietnamese firms need to improve their production standards and redesign their packaging to convey the message of quality to their consumers and import partners,” said Lee Chang Hun, in charge of procuring food and agricultural products for Emart.

Lee said Vietnamese instant coffee brand G7 and several household appliances in Emart only account for 2 per cent of similar imported product volumes at their stores and that online sale of Emart products in Vietnam stands at more than $660,000 per year, and is forecast to increase sharply in the coming time.

Regarding Emart’s plan to open its first mega-supermarket in Vietnam, Lee said their joint venture with local partner U&I is seeking suitable partners in Hanoi and Ho Chi Minh City to push up the plan.

General secretary of the ASEAN-Korea Centre Chung Hae Moon said there are great efforts by countries in Asia, particularly in Southeast Asia, to realise the ASEAN Economic Community by 2015.

“Korean firms need to reach strong, sustainable agreements on material supply with Vietnamese firms to effectively tap the region’s development opportunities after 2015,” said Chung.

Soc Trang provides sweeping opportunities for wind power

The Mekong Delta coastal province of Soc Trang, located some 240 kilometres from Ho Chi Minh City and 60km from Can Tho city has immense potential as a wind power generation hub.

With a 72km long coast and the estuaries of Tran De, My Thanh and Dinh An, the province has enormous potential for the development of processing industries, tourism and shipping services, and particularly wind power.

In the province’s coastal districts, wind velocities at a height of 60 metres average 6.3 metres per second. It was estimated that with some $3.45 billion in investment Soc Trang could host wind farms capable of producing 1.177 gigawatts of electricity.

The districts of Tran De and Cu Lao Dung and Vinh Chau town have been specifically earmarked for wind power development.

Field surveys in Vinh Chau town’s coastal areas conducted by Enercon Group - a global wind power equipment manufacturer, found the area had huge potential for wind power development compared to other locations in the Mekong Delta.

A source from Enercon revealed the group would take the plunge and begin procedures for a one billion euro/2,600 megawatt-capacity wind power investment project in Soc Trang.

According to Germany’s EAB Group, Vinh Phuoc ward and Vinh Tan commune also located in Vinh Chau town are the best places for wind power investment.

The Soc Trang Provincial People’s Committee has given in-principle agreement for eight wind power investment projects in the province with a combined capacity of about 1,000MW.

These include the Tran De district-based wind power farm project by Lien Nghia Investment JSC with an estimated capacity of 565.4MW, Vinh Chau town wind power farm project owned by a consortium consisting of local partner Traseco and Germany’s EAB Group with an estimated capacity of 120MW, Cong Ly Soc Trang wind power farm owned by Cong Ly Construction-Trade-Tourism Limited in Vinh Chau town’s Lai Hoa commune with an estimated capacity of 200MW and Quoc Vinh Company Limited’s wind power farm project in Vinh Chau town’s Vinh Hai commune with an estimated capacity of 120MW.

Despite economic difficulties in the past year, Soc Trang has managed a robust pace of growth. In 2012 the province’s gross domestic product (GDP) registered a 9.1 per cent growth compared to the national average of 5 per cent.

Soc Trang is drafting its wind power development plan for the 2012-2020 period with a vision towards 2030 which will soon be submitted to the Vietnamese government for consideration.

Can Tho intensifies IP construction

In the past years, the Mekong Delta city of Can Tho has made great efforts to transform itself into a regional industry, trade and services hub. Strings of investment projects and programmes have been underway, striving to constantly improve the local investment climate, promote the transformation of the economic structure, further develop material growing areas and train quality human resources.  

The city authorities have attached special importance to industrial park (IP) development providing the bedrock to spur provincial socioeconomic development.

From January to October this year, Can Tho’s export processing zones (EPZs) and industrial parks (IPs) attracted six investment projects worth $20.5 million in total committed capital while 19 existing projects received $20.7 million in supplemental capital. Two other projects are also expected to locate to Can Tho’s EPZs and IPs while an existing project will seek supplemental capital before the year’s end.

Can Tho’s EPZs and IPs are home to 208 projects covering 564.9ha of land for industrial production with a total committed capital of $1.85 billion of which disbursed capital amounted to $842 million, tantamount to 45.5 per cent of total.

Of them, 186 domestic investment projects registered $1.6 billion worth in total committed capital and $677 million in disbursed capital, equal to 40.5 per cent of total. Twenty-two direct foreign investment projects reported a total committed capital of $182.4 million. Disbursed capital reached 90 per cent of total committed capital, equivalent to $165 million.

Of existing IPs in Can Tho, the 135 hectare Tra Noc I IP has leased out its land for industrial production to investors with a total registered capital of $383.5 million across 122 projects. Tra Noc II IP, covering 157ha, reported an 86 per cent plus occupancy rate with 58 investment projects worth $575 million in total registered capital.

Besides these two IPs, another six IPs are under construction in the city.

Hung Phu I, Hung Phu 2A and Hung Phu 2B IPs are located just 4km from the centre of Can Tho. Adjacent to these IPs is the state-of-the-art Cai Cui seaport which can receive 10,000-20,000 dead weight tonnage ships, while road links intersect with National Highway 1A.

These IPs are located just 12km away from Can Tho airport and 11km from Can Tho port.

Priority investment areas in the IPs are mechanical manufacturing, electrical and electronic assembling, agricultural and seafood processing, frozen and tinned poultry and meat products; building material production, pharmaceuticals and cosmetics, and other processing industries; transport and import-export business.

Thot Not IP, 60km north of Can Tho, faces National Highway 91 in the south and Hau River in the north, and remains convenient for both land and waterway transport. Adjacent to major agricultural production areas in the delta region like An Giang, Dong Thap, Kien Giang and Can Tho city, the IP boasts fertile agricultural and seafood resources.

The IP welcomes investors in agricultural and seafood processing and mechanical engineering serving agriculture and rural areas as well as urban development.

Besides these six IPs, Can Tho is engaged in planning the 600ha O Mon IP and 400ha North O Mon IP which are positioned in O Mon district, 20km from the heart of Can Tho.

Construction of these six IPs has lagged behind schedule due to land clearance woes or capital shortages on the part of investors. Can Tho Export Processing and Industrial Zones Management Authority asked the IP developers to provide a report on their problems in order to allow their difficulties to be resolved, helping speed up the pace of construction.

For the IPs which still source developers, Can Tho city is calling financially capable investors to come on board to build IP technical infrastructure, from there helping the province attract more investors serving socio-economic development.

In 2013, businesses based in Can Tho EPZs and IPs expect to rake in $1.387 billion in total revenue. This included $1.028 billion in total industrial production value and $358 million from trade services. Their total export value was an estimated $538 million.

In the long-term, Can Tho believes it would see a bright outlook in attracting investment to its EPZs and IPs as the city’s investment environment has been steadily improved.

The Vietnamese government recently focused on upgrading and developing technical infrastructure in the Mekong Delta region, particularly the transport network. Many key national-level utilities have been built in Can Tho, such as Can Tho international airport, Can Tho bridge, Cai Cui seaport, the road in the south of Hau River and O Mon power generation complex. The results of these giant construction works provide a major opportunity for the city to catch the eyes of investors.

Vinh Long prepares for investment wave

The Mekong Delta province of Vinh Long, 136 kilometres from the southern economic hub of Ho Chi Minh City, offers a wide range of investment attraction advantages.

Vinh Long is a fertile agricultural land with convenient transport links for trading with Southwestern provinces and cities. The province lies at the lower section of the Mekong River and between the Tien Giang and Hau Giang rivers.

The province has a dense network of rivers and streams, linking Vinh Long through the estuaries of Tieu, Dai, Ham Luong, Co Chien and Dinh An. These characteristics have made Vinh Long an important location in the development strategy of the Mekong Delta region and the southern key economic zone.

Vinh Long is located between the economic hubs of Ho Chi Minh City and Can Tho city, 43 kilometres from Tra Noc international airport.

Like many other provinces and cities across the country, Vinh Long has a temperate climate that is suitable for aquaculture, rice cultivation and many other high value crops. With an annual yield of one million tonnes of rice, 500,000 tonnes of fruit and 200,000 tonnes of aquatic products, Vinh Long is an ideal place for agricultural processing industry investors.

In addition, Vinh Long is known for famous traditional craft villages such as brick and tile, porcelain and pottery, embroidering and knitting and weaving sleeping mats. Many of these products have been shipped abroad. The province is also famous for long-standing cultural and historical sites like Van Thanh Temple, Van Xuong Cac, Tien Chau Pagoda and Cong Than Temple.

The province is also considered one of the Mekong Delta’s human resource training centres, with universities, colleges and vocational training schools which pass thousands of graduates each year.

In order to make land available for investors, Vinh Long has planned to set up three industrial parks (IPs) at Binh Tan, Dong Binh and An Dinh, and 13 industrial clusters in districts and the city of Vinh Long with total area of 1,600 ha. The province has planned and will call for investors for the trade-service-urban centres in Vinh Long city’s wards 2, 4, 8 and 9 and big markets in districts. Hoa Phu, Binh Minh and Co Chien IPs have been put into operation, with Hoa Phu IP offering 20 ha of industrial land in the second phase. Meanwhile, 50 per cent of the Binh Minh IP’s area has been occupied.

According to Dang Quang Tan, vice head of Vinh Long IPs Authority, the province’s IPs have attracted 33 projects worth VND3.2 trillion ($152.4 million) in domestic investment and $121 million in foreign direct investment. The authority is proposing that the provincial people’s committee approve in principle a $30 million textile-garment-dyeing project invested in by a South Korean group at Hoa Phu 2 IP and $14 million tyre export recycling project at Binh Minh IP.

“We target to fill Hoa Phu 2 and Binh Minh IPs by 2015,” said Tan.

In order to reach the target, Vinh Long will encourage new investment through existing investors, apply flexible land lease payments, simplify administrative procedures and co-ordinate with other agencies to call for investment, said Tan.

Pham Thanh Khon, vice director of the local Department of Planning and Investment said “In addition to our geographical location, land, plentiful materials and skilled workforce, Vinh Long attaches special importance to providing a favourable, safe and reliable investment environment for investors and always highlights the role of businesses in provincial development. Vinh Long always gives the best incentives for investors.”

Manufacturing-processing attract most FDI capital

Processing and manufacturing industries attracted as much as four fifths of foreign-invested capital in the first 11 months of this year, accounting for nearly 16.1 billion USD.

It is noteworthy that many major corporations raised their investment in the country, reflecting their growing confidence in the investment and business environment in Vietnam , according to Do Nhat Hoang, Director of the Foreign Investment Agency.

The RoK’s Samsung Group is a typical example, as apart from investing 5.7 billion USD in Bac Ninh and Thai Nguyen provinces, it is working on a plan to build a thermoelectricity plant in the central province of Ha Tinh . The group has also shown interest in several projects on airport, ship building and oil refinery.

Also in recent months, the Nghi Son oil refinery, invested by Japanese, Kuwaiti and Vietnamese investors, in the central province of Thanh Hoa saw an additional 2.8 billion USD in investment.

According to statistics released by the Ministry of Planning and Investment's Foreign Investment Agency, a total of 20.8 billion USD in foreign direct investment (FDI) was poured into Vietnam in the first 11 months of 2013, 54.2 percent higher year-on-year.

Over 13 billion USD of the amount came from 1,175 newly licensed projects and the remaining 7 billion USD was from additions to the existing 446 projects.

The FDI flow has also reached 53 out of the total 54 provinces and cities in the country. The northern midland province of Thai Nguyen took the lead with 3.357 billion USD, accounting for 16.1 percent of the total capital. Thanh Hoa province and the northern port city of Hai Phong followed with 2.9 billion USD and 2.6 billion USD respectively.

Of 54 countries and territories investing in Vietnam , the largest investor remained Japan with total capital of almost 5.7 billion USD, accounting for 27.3 percent of total invested capital in the country.

Singapore and the Republic of Korea ranked second and third, with 4.2 billion USD and 4.1 billion USD respectively.

FDI disbursement in the period was estimated at 10.55 billion USD, up 5.5 percent from the same period last year.

Strengthening governance of monetary policies

According to experts, in Vietnam, the issues of credit flow circulation and the process of handling bad debts should be continued and solved with different policies, including monetary policy. Report by Vietnam Business Forum.

To implement the socio-economic development plans for 2014 and 2015, approved by the National Assembly in its ongoing 6th session, the State Bank of Vietnam (SBV) has held a conference to collect comments, analysis and evaluation of the economic experts from ministries, research institutes, and universities on the economic status and the effectiveness of the policies in recent years, accordingly forecasting the trends, to make recommendations and propose solutions on the macroeconomic policies in general and monetary policy in particular for 2014 and 2015.

In the very last months of the 2013, although the production and business activities still remain tough, the macroeconomics and the currency markets have exposed many positive changes. The economic growth is higher in each quarter; it is more likely to achieve the growth rate of 2013 from 5.2 percent to 5.4 percent. The inflation rate continues to be curbed at 6.5 percent, lower than the 6.81 percent rate in 2012; the interest rates is sharply declining; the exchange rates remain stable; the dollarisation of the economic is declining; and the country's foreign exchange reserves are enhanced. However, the experts said the issue of credit flow circulation and the process of handling the bad debts should be undertaken by many other policies, along with the monetary policy.

According to the forecast of the macro-economic situation, many experts believe that the economy in 2014 and 2015 will be improved, compared to 2013, because the economic growth has signs of recovery and the export activities and foreign direct investment will be enhanced after Vietnam signs the Trans-Pacific Partnership agreement (TPP).

However, others agree that inflation should not be ignored because risks may rise during the process of implementing the measures to support economic growth and increasing the budget deficit ceiling to 5.3 percent. The production and business activities are still facing challenges and the capital absorption of the economy remains weak; therefore, to achieve the economic growth targets of 5.8 percent as required by the National Assembly, the Government should come up with different solutions from many other ministries and authorities to promote the credit flows in the economy.

Sumit Dutta, CEO of the HSBC Vietnam, said that Vietnam has a sound economic foundation due to the young population, high literacy rates, rapidly declining poverty rate, high urbanisation rate and the least devaluation of the country's currency in the region. This makes foreign investors have a positive assessment of Vietnam's economy.

Therefore, Sumit Dutta recommended that the establishment of the company to handle the bad debts be a good solution in the current context, but the SBV should note that the restructuring of the banking capital requires a higher awareness of risk management issues.

According to Cao Sy Kiem, president of the Small and Medium Enterprises Association, the SBV has been back on track with the goals of a central bank of stabilising the purchasing power of the currency and controlling the inflation and this is a good signal for the economy.

He further said the SBV has implemented monetary policies based on the market principles to ensure transparency and create consensus of the business community and investors.

However, Kiem, a former governor of the SBV, said the tasks of the central bank will be more difficult; for example, it is required for a series of comprehensive solutions on the dollar and gold-related issues as well as the handling of the bad debts as a central objective of the entire banking sector.

Sharing the same views with Kiem, Le Xuan Nghia, director general of the Business Development Institute, said that the SBV should pay particular attention to handle bad debts and strengthen governance in accordance with the international practices, as well as facilitate the supervision and transparency of the information to enhance the confidence of the market in the operating processes of the monetary policy and banking activities.

IFAD grants 33 mln USD loan to Vietnamese farming

The International Fund for Agricultural Development (IFAD) will provide 33 million USD in preferential loans for Vietnam’s sustainable agriculture development, especially climate change response and credit for poor farmers.

An agreement to this effect was signed by Vietnam’s Ambassador to Italy and Permanent Representative to IFAD Nguyen Hoang Long and IFAD President Kanayo F. Nwanze in Rome on November 27.

Speaking at the event, Nwanze hailed Vietnam as a role model for its success in reducing poverty by accelerating the development of its agriculture sector, adding that the loan is to help Vietnamese farmers become more resilient to crises, including climate change.

Ambassador Long expressed hope that IFAD and Vietnam will strengthen their partnership in the future, declaring that Vietnam will make the most of all the international assistance that it receives.

In an interview granted to the Vietnam News Agency, the ambassador revealed that next month Vietnam will negotiate with IFAD on a 14 million USD loan for climate change adaptation in the Mekong Delta provinces of Ben Tre and Tra Vinh.

He said IFAD highly values Vietnam’s efforts in effectively using loans over the past 20 years, especially in poor and mountainous regions.

The IFAD’s loan commitments to Vietnam manifest its trust in the country’s poverty reduction cause, Long concluded.

The United Nation’s IFAD groups 165 member countries, working primarily to mobilise capital from advanced nations to help low-income earners in developing countries with production and nutrition supply.

IFAD has financed Vietnam since 1991 with low-interest loans of 40-50 years that have been channelled to farmers, fishermen, disadvantaged women and ethnic communities.-

Hai Phong defines socio-economic development measures

Removing difficulties for businesses and speeding up restructuring are just some of the key measures that the northern port city of Hai Phong has decided to promote in a bid to facilitate its socio-economic development in 2014.

During a November 27 conference reviewing the task performance in 2013 and outlining key directions for 2014, Secretary of the city’s Party Committee Nguyen Van Thanh underscored measures to further social and cultural development, ensure social welfare and increase local income.

The city will also enhance administrative management efficiency and urban development, while stepping up the programme of building new rural areas, protecting the environment, strengthening science and technology renovation and improving human resource quality, he pledged.

In 2014, Hai Phong will strive to record GDP growth of 8-9 percent compared to 2013. It targets a 6.4-7.4 percent rise in the industry and construction sectors and 9.6-10.7 percent in the service sector.

The city will work to handle 53 million tonnes of goods through its port, and to earn a 16-17 percent increase in export turnover.

Meanwhile, the city will exert efforts to lure about 5.2 million visitors and offer training to 74 percent of local labours.

In 2013, Hai Phong is in the top three localities leading the country in attracting foreign direct investment. It currently hosts 362 valid FDI projects worth a total 8.27 billion USD.

The city was also one of the first localities to carry out examinations to recruit public servants in an open and transparent manner, including the rector position for the Hai Phong University – the city’s largest academic institute.-

Ho Chi Minh City sees hope of economic recovery

Positive changes are being recorded in Ho Chi Minh City’s economy, with good growth rate in the trade and service sector and signs of recovery in industry production.

The assessment was given during a recent conference held by the Municipal People’s Committee to discuss the socio-economic, cultural, defence and security issues that faced the city in November and looking ahead to the last month of the year.

Participants at the event noted that total turnover of the city retail sector in November is estimated to reach 54.9 trillion VND, up 4.3 percent over the previous month and 12.2 percent year on year.

The result has pushed the 11 month figure to 548.5 trillion VND (25.77 billion USD), a rise of 12.3 percent over the same period last year.

Meanwhile, the city posted a 5 percent month-on-month rise in its November industry production index, recording a year-on-year increase of 6.1 percent for 11 months. Construction materials, food processing and metal production are among sectors that saw strong growth in the month.

Recovery has notably been seen among businesseses, with the number of newly-established firms increasing by 7 percent over the same period last year and the number of dissolved companies down 3.6 percent.

According to Dao Thi Huong Lan, head of the municipal Department of Finance, budget collection is another positive aspect that the city has seen. In November, Ho Chi Minh City collected about 204.2 trillion VND (9.6 billion USD) for the budget, fulfilling 86.2 percent of the estimate, up 8.6 percent year on year.

However, attendees also pointed out socio-economic difficulties that the city faces, including a 39 percent drop in registered capital of newly-founded enterprises.

Meanwhile, export turnover has seen 12.9 percent fall year-on-year. Except for earnings from crude oil, total exports of the city in November are standing at 1.65 billion USD, down 3.1 percent over November and 7.7 percent over the same period in 2012.

In the first 11 months of this year, Ho Chi Minh City earned 24 billion USD from exports, a decrease of 7.3 percent year on year.

The municipal People’s Committee held that the reason behind the fall was a decrease in crude oil export, which saw a 13 percent decline in volume and 3.8 percent in value.

Besides, price drop of some export earners, especially agro-forestry and fisheries products, also one of the negative factors, it said.

In December, the key tasks that the city has defined to fulfil its 2013 target include exerting more efforts in investment disbursement, speeding up progress of state-invested projects, especially key ones.

Ha Nam: One billion USD FDI target feasible

The northern province of Ha Nam can reach its goal of one billion USD in FDI attraction by late 2013, said Nguyen Van Oang, director of the provincial Department of Planning and Investment.

For a locality that only started to attract FDI in the last 6 or 7 years, the expected one billion USD figure is considerable.

It is feasible to obtain this thanks to favourable commitments the province has given to foreign investors, Oang said.

The province pledges to ensure the supply of electricity, human resources as well as security for investment projects. Local leaders are always ready to talk with businesses, joining hands with them to tackle emerging difficulties.

Ha Nam has so far counted more than 130 valid FDI projects worth around 850 million USD. This may exceed the set target if some RoK projects go as schedule.

Among foreign investors operating in the province, Japan posts the highest number with more than 40 projects and nearly 60 percent of the total investment capital. It is followed by those from the Republic of Korea with 16.4 percent; the Netherlands with 7.7 percent; and Singapore with 4.3 percent.

Vietnam, RoK trade ties see positive growth

Vietnam’s export value to the Republic of Korea (RoK) over the first 10 months of 2013 reached 5.49 billion USD, up 25 percent year-on-year. The figure is expected to increase to 7 billion USD by the end of the year, the Vietnam Economic Times has reported.

A fleet of 50 RoK firms came to Ho Chi Minh City on November 22 and will visit Hanoi later this week in a bid to further boost the two-way trade between Vietnam and the RoK.

According to the Deputy Director of the Trade Promotion Agency under the Ministry of Trade and Industry Bui Thi Thanh An, the RoK has become one of the largest and most important trade partners of Vietnam.

Last year, two-way trade between Vietnam and the RoK stood at 21.12 billion USD. Of this amount, Vietnam raked in 5.58 billion USD from exports to the RoK while its import value reached 15.54 billion USD.

Vietnam mainly imports computers, electronic products, machines and devices, garments and plastic materials, while shipping crude oil, coal, aquatic products, and woodwork and garment-textile products to the RoK.

Garment and textiles play a key role in bilateral trade ties, with total export value of 1.35 billion USD over the first 10 months of 2013, an increase of 49 percent year-on-year.

In comparison to 1992, two-way trade between Vietnam and RoK in 2012 rocketed 42 times, already surpassing the set target for 2019, according to RoK Consul General in Ho Chi Minh City Oh Jae Hack.

This is a significant growth, he said, adding that two-way trade in the same period between RoK and ASEAN and China increased by only 7 fold and 30 fold respectively.

The positive figure not only demonstrates the important role and position of Vietnam in the RoK’s import-export plans, but also shows the huge potential for Vietnamese goods entering the RoK market.

Vietnam and the RoK hope to lift two-way trade to around 70 billion USD by 2020.-

Banks reluctant with fish processing

Many banks have refused to lend money to fish processing companies in the Mekong Delta regions due to their ineffective management.

For many years, credit institutions in the Mekong Delta invested mostly in rice and aqua-products, which make huge profits through exports. However, the State Bank of Vietnam's Credit Department director, Nguyen Viet Manh, said the loans for aqua-products have sharply decreased and bad debt are rising, forcing banks to extend their debt payments.

In the first nine months of the year, outstanding loans for rice processing increased by 27.35% compared to the end of 2012, while the figure for fish processing is only 3.77%.

Even loans for Tra fish, one of the key products from the Mekong Delta, only increased by 1.74%. Only shrimps are able to retain some of the attention when its outstanding loans increased by 31.19%.

Banks have recently shown reluctance to invest in the fish processing industry because the market is in recession. In addition, several bankruptcy cases filed by fish processing companies, such as Bianfisco, Phuong Nam and Song Hau, have made banks think twice.

According to a representative of BIDV, banks are able to give loans at low interest and companies are in need of capital, but successful transactions are few due to lack of trust. "If they would do a better job of managing their funds, without making investments in the real estate, then their situations might not be so bad." he said.

In order to solve this problem, said the representative of BIDV, banks should continue to give preferential loans to processing industry for export and leave it to the SBV to handle the bad debt in the sector.

Moreover, banks have complained about low value collateral and asked the SBV to create a special mechanism for such cases. Meanwhile, the government must carry out inspections to classify credible and profitable firms and lift the loan limit, they commented.

Railway operators to narrow operations because of big losses

Vietnam Railways announced to stop operation on five rail lines in the northern and central region from January 1, 2014 due to their loss-making business.

The corporation said these trains have been making an average loss of up to VND90 billion (USD4.3 million) per year. They are among 180 pairs of trains being operated by Vietnam Railways.

The trains to be decommissioned operate in the the five routes of Vinh-Dong Hoi, Dong Hoi-Hue, Gia Lam-Dong Dang, Yen Vien-Ha Long and Long Bien-Quan Trieu.

In 2012, the Yen Vien-Ha Long train route suffered from a loss of VND23.5 billion (USD1.1 million), and the Vinh-Dong Hoi route saw losses of VND22.6 billion.

The 106-km Yen Vien-Ha Long route’s revenues reached less than VND4 million (USD190.4) per day, accounting for only 5% of its daily expenses. Meanwhile, the revenues from the Dong Hoi-Hue route were VND14 million per day, equal to 22-28% of their daily expenses.

An official from Vietnam Railways said that these trains were all meant for short transport, but have to cover high costs for the operational expenses. At the same time they faced fierce competition from other means of transport. These trains mainly served passengers who did not want to go by another form of transportation for one reason or another. Many passengers only take the trains to go for around 10km and then pay the fees of VND10,000 (USD0.5).

Earlier, Vietnam Railways carried out measures to improve their operations, but the situation has not become better.

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