Key pepper growing regions look to sustainable development

Representatives from the Southeast and Central Highlands regions gathered on June 18 to discuss measures to sustainably shape their peppercorn industry.

Participants considered conforming to proven technical processes a key action.

Accordingly, regional provinces should plan pepper plantations and manage production in collectives to boost experience sharing and cut costs.

Growing, processing and preservation methods require thorough research and careful application and agricultural promotion programmes need to be launched more often.

Concerning related commercials activities, local authorities and producers ought to strengthen business links with major and demanding markets such as the EU, the US and Japan, and seek new markets from the Middle East and Africa.

Meanwhile, domestic enterprises working in the sector should work to strengthen their connection with growers to build direct purchase networks across the regions.

The forum also set a target for Vietnam to have 50,000 hectares of peppercorn plantations nationwide by 2020, 81 percent of which will concentrate in the two regions. Thus, annual total yield is expected to reach 140,000 tonnes, 90 percent of which will be high-quality, and overall export revenue will be recorded up to 1.3 billion USD.

Vietnamese peppercorn plantations have increased substantially to 86,000 hectares in recent years. The industry is now facing difficulties posed by rapid plantation expansion, intensive farming and poor techniques.

The nation posted a total pepper production of 152,000 tonnes in 2014.

Binh Duong records $1.1 billion trade surplus in two quarters

The southern province of Binh Duong ran a trade surplus of nearly 1.1 billion USD in the first six months of this year, according to the provincial statistics department.

Of the total revenue, the province raked in 8.5 billion USD from exports, up 16.6 percent from the same period last year; 7.2 billion USD was contributed by the foreign investment sector and 1.5 billion USD from the domestic economy.

Major exports included wooden furniture with a total revenue of 1.7 billion USD, shooting up 15.7 percent and accounting for 12.6 percent of the provincial exports.

Meanwhile, free trade deals signed with the Republic of Korea and the Eurasian Economic Union (EAEU) helped increase the value of garment exports to 904 million USD, rising 11.2 percent against 2014’s first two quarters.

Increase in export revenue was also seen in footwear (741 million USD, up 16.4 percent) and ceramic products (nearly 51 million USD, up 6.6 percent).

Through June, the province spent 7.4 billion USD on imports, up 16.9 percent from the same period in 2014. Of the amount, nearly 6 billion USD was spent on imports of foreign investment sector; the import value in the domestic economic sector was nearly 1.5 billion USD.

HCM City: ODA disbursement on the rise

The 2011-2015 disbursement of official development assistance (ODA) in Ho Chi Minh City achieved 99.5 percent of the original goal of 26.57 trillion VND (about 1.23 billion USD).

The figure showed a 213 percent increase compared to the 2006-2010 period, according to the municipal Department of Planning and Investment.

Since 2011, the city has raised about 49.6 trillion VND (2.3 billion USD) worth of ODA capital for 13 new projects and three ongoing projects.

Of which, non-refundable aid hit 122 billion VND (5.7 million USD) and the remaining were loans and soft loans.

ODA capital contributes an average of 20-30 percent of the city’s budget to infrastructure development each year.

Non-life insurance firms lack qualified actuaries

Non-life insurance companies in the country are faced with a shortage of actuaries who meet national standards, according to the deputy general secretary of Viet Nam Insurance Association.

Beginning in January next year, non-life insurance companies are required to use actuaries who meet national standards, including being a fellow of international actuary societies, having at least five years of work experience and at least two certificates in the field issued by international actuary societies.

Only one actuary in the country meets these standards, according to Ngo Trung Dung, deputy general secretary of Viet Nam Insurance Association.

He spoke at a workshop held yesterday at the International University-HCM City. The country has 30 non-life insurance companies, 17 life insurance companies and two reinsurance companies, Dung said.

No university in the country offers training in actuary, he said, adding that the International University-HCM City should be a pioneer in training.

It should co-operate with other international universities to offer training, he said, adding that incomes of actuaries are high.

The country's insurance market has seen rapid development. Within the last five years, the market's growth rate reached 16 per cent, including 11.9 per cent for non-life insurance.

Last year, the total revenue from insurance was around US$2.6 billion. The total assets of insurance companies were $7.7 billion.

The workshop, held by the association in co-operation with the International University-HCM City and Viet Nam Insurance Association, provided information about a relatively new statistical method called chain ladder. This method is used to estimate outstanding claims, whereby the weighted average of past claim development is projected into the future.

Vietnam-EAEU trade pact brings political, economic benefits: professor

The recent conclusion of the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU), encompassing Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, brings both political and economic benefits for the involved parties.

The remark was made by Professor Evgeny Kanaev at the ASEAN Centre of MGIMO University – one of the most prestigious educational institutions in Russia for young people with international interests – as quoted by Sputniknews.com

The Professor said cooperation between Russia and Vietnam has become more sustainable and the bilateral comprehensive strategic partnership facilitates the expansion of all-around economic links with other ASEAN member states.

He added that Vietnam has proved itself to be an active member of multilateral cooperation in the regional and international arena.

The Association of Southeast Asian Nations, of which Vietnam is an important member, is striving to become the 4 th biggest economic region in the world and enhance its influence on global political and economic progress, he said.

The signing of the trade pact enables Vietnam to balance external and trade relations with foreign partners and is a significant move towards strengthening ASEAN common policies and increasing the country’s position in the association and beyond, he noted.

HCM City businesses promote investment in Russia

Since a free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) was signed, many businesses in Ho Chi Minh City have stepped up their investment in Russia.

As a potential market, the investment flow is likely to be full of promise.

This September, Russia will open a light industrial zone in Moscow to welcome Vietnamese enterprises, especially those from Ho Chi Minh City.

The six main areas that Russia is calling for Vietnam’s investment in the park are garments and textiles, wood processing, aquaculture, telecommunications, electronic components, and construction.

Duong Ngoc Minh, President of the Hung Vuong Joint Stock Company who has more than a decade of experience of doing business in Russia, spoke highly of this market’s potential.

Minh noted that his company aims to develop logistic services to serve Vietnamese exporters and creates links with local supermarkets.

Hung Vuong will also work with Russian seafood processors to move the commodities from Russia to Vietnam for processing for re-export to third countries.

Minh says his company “will set up a system of depots in the industrial zone for Vietnamese exporters to Russia. We hope that next year we will also build a cold storage facility with a capacity of 15,000 tons while the depots for other types of products will cover 50,000 square meters.”

Pham Phu Cuong, deputy director general of the Vietnam National Textile and Garment Group (Vinatex), said there are about 40,000 Vietnamese workers in Russia, most of whom were in Moscow.

Cuong who is also the Chairman and Director General of Nha Be Garment Corporation comments, “Vietnamese garment companies have pledged to invest in trading and the construction of workshops. Once the industrial zone is completed, we will likely be able to generate stable jobs for more than 10,000 workers there. We will also build accommodation, workshops, and even kindergartens to help Vietnamese workers live in the best possible conditions.”

Vietnam’s timber products and fine art articles are other items also much sought after by Russians.

Vo Truong Thanh, chairman of the Truong Thanh Timber Processing Company, said, “We’re doing business in Russia which is abundant in wood materials, especially oak. If we have an affiliate in Russia, we’ll send workers and there will be more opportunities for success. I expect this to be an investment project.”

If Vietnamese enterprises invest in Russia, they will enjoy many advantages in favorable methods of payment between the two nations, the available human resource of Vietnamese people living in Russia, the zone’s location, about 50 km from Moscow, and other preferential treatment policies.

Nguyen Thi Hong, deputy chairwoman of Ho Chi Minh City’s People’s Committee, noted, “The city has assigned the municipal department of industry and trade to check on which businesses have been investing in Russia and which ones have plans to do so. We already have a list of companies doing business in Russia.”

The establishment of a light industrial zone in Moscow is the first step to open new prospects for investment and trade development between the two nations.

Steel businesses strive to compete in integration process

Soon after Vietnam signed a free trade agreement with the Eurasian Economic Union EEU, domestic steel businesses are likely to compete fiercely with foreign rivals, especially those from Russia and the Commonwealth of Independent States which are enjoying zero duties.

Nguyen Van Sua, Vice Chairman of the Vietnam Steel Association (VSA), said with current competitive capacity, the domestic steel industry finds it difficult to compete with cheap steel products from China.

Since early this year, Vietnam has imported more than 2.3 million tonnes of steel from China worth over US$1.2 billion, up nearly 80% in volume and 45% in value against the corresponding period of last year.

According to the VSA, nearly 4 million tonnes of steel worth over US$2.3 billion were imported into Vietnam in the first four months of this year, up 30% in volume and 11.2% in value. Major exporters included Japan (more than 735,000 tonnes), and the Republic of Korea (RoK) (over 520,000 tonnes).

Meanwhile, Vietnam exported only 779,000 tonnes of steel, earning nearly US$577 million, down 14.2% in volume and 15.2% in value.

It shows a trade deficit of US$1.7 billion for the steel industry.

Trade experts warned that with current pace, especially after FTAs with the RoK and the EEU come into effect, the steel industry will come under strong pressure from countries like the RoK, Russia, Belarus and Kazakhstan which have a long-lasting steel industry and enjoy import duties of zero when exporting to Vietnam.

To keep a firm foothold on the home turf, domestic businesses should maintain production by raising their competitive advantages and product quality, lowering prices and sustaining after-sales services, Sua said.

The VSA also urged the Government to help the steel industry build safeguard measures such as conducting anti-dumping investigation into the sale of home-made steel products to protect domestic businesses, Sua added.

Eurasian trade deal promising

The Vietnam-Eurasian Economic Union Free Trade Agreement signed on May 29 is expected to offer ample opportunities and tough challenges to Vietnamese businesses.

According to the agreement, Vietnam will have great opportunities to sell strong products to the Eurasian Economic Union (EEU), encompassing Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan. Aquatic products, garments, and leather will be the key beneficiaries of the deal as they enjoy zero per cent tariff.

Dang Phuong Dung, Vice President and Secretary General of the Vietnam Textile Association (VITAS), said that before signing the free trade pact with the EEU, Viet Nam had an average export value of about US$17 million in garment products to each member countries of the union, accounting for 2 per cent of the total national export value of textile and garment, partly due to high tax rates for imported garments to the countries.

Dung is upbeat about Vietnamese textile and garments' market share in the union after the pact, predicting that the two-way garment trade will grow by 50 percent in the first year of the agreement's implementation and 20 percent over the next five years, Vietnam News Agency reports.

Viet Nam would become the union's fourth biggest provider of apparel from the current eighth place, she said.

Thanks to the signing of free trade deals between Viet Nam and South Korea, the EEU and the EU, a wave of foreign capital had entered the garment and textile sector from the outset of this year, broadening opportunities for Vietnamese products, she added.

Dung remarked that the agreements would create favourable conditions for Vietnamese enterprises and products to approach foreign markets and enhance trade promotion activities, and enterprises could gain good results right now. They would need time to approach markets and reach agreements with their foreign partners.

As for enterprises in the textile and garment industry, they also need to make efforts to increase their competitiveness.

On the contrary, the deal would bring major competition to the Vietnamese steel sector as Russian steel had low production costs and high quality, said Nguyen Van Sua, Vice Chairman of the Viet Nam Steel Association.

Each year, Russia produces 70 million tonnes of steel using advanced technologies. Each tonne of steel billet produced in Russia costs 50 kilowatt hours of power, while Vietnam consumes 10 times more to produce the same.

Furthermore, most Vietnamese steel enterprises are small-scale operations and lack the backing of advanced technologies.

Sua suggested that Vietnamese enterprises need to expand knowledge of international trade, and the Government should deploy legal trade tools to protect and support local steel production.

Pham Chi Cuong, former chairman of the association, said only large steel producers that have the ability to export their steel products would have the advantage of price, market, and capital to acquire competitive ability after the FTA. The number of local large steel producers was not many.

Phan Dao Vu, a representative of the Viet Nam-Australia Steel Company, said local steel producers would face many challenges following the FTAs, especially in a situation of non-recovery in the local real estate market and a slight increase in demand on the home market.

Domestic steel makers would have difficulties selling their products due to competition from the member countries of the union after the Viet Nam-EEU FTA, he observed.

Container truck rush affects property sales in HCM City

Buyers are staying away from new apartment projects in the eastern area of HCM City largely because of container truck traffic on nearby roads heading toward Cat Lai seaport in District 2.

Cat Lai seaport in District 2 is the biggest container seaport in the country with more than 10,000 trucks every day.

The eastern area, which extends from Sai Gon Bridge toward Dong Nai and Ba Ria – Vung Tau provinces, includes district 2, 9 and Thu Duc.

Modern infrastructure, including highway and flyover bridges, has been built in the area, to accommodate the increasing number of buildings.

"With the huge number of big trucks, the area's traffic has become worse, and residents hesitate to live there," Associate Professor and Dr Nguyen Trong Hoa, former head of the HCM City Development Research Institute, was quoted as saying in the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

"The traffic situation is the worst problem for real estate businesses. Big trucks travelling the entire day on the long stretch of road is not good for residents," the director of one real estate company said.

In a recent report, District 2 leaders announced that only 25 per cent of new urban projects have residents. Within the next five years, they will try to double the number of residents in those projects.

A representative of the municipal Master Planning and Architect Department said centres that receive big containers, like Cat Lai port, should have a railway system to transport commodities.

However, in the Viet Nam Seaport Master Plan up to 2030, Cat Lai would be the only port for southern provinces, while Cai Mep – Thi Vai Port in the Ba Ria – Vung Tau Province would be an international and regional port with good conditions.

Investment in a railway system should be for Cai Mep – Thi Vai, not for Cat Lai.

"The railway system requires a high investment, but it needs a long time to return the capital. So, it will be used for long-term development," Hoa said.

"Cat Lai Port is still very important for HCM City as well and southern provinces. Investment for a railway system for the port is not possible," Hoa added.

Upgrade for economic zone

The Nghi Son Economic Zone in the central province of Thanh Hoa is expected to become a multi-sector industrial complex focusing on petrochemical refineries and basic industries in the near future.

Under a recent decision issued by Prime Minister Nguyen Tan Dung to amend the zone's operational regulations, the basic industries that will be further developed include steel, shipbuilding and repair, electricity and construction material, as well as consumer goods and high-quality agro-forestry and fisheries export-processing industries.

The complex will help create jobs and promote training as well as improve the quality of local human resources. It will also gradually be developed into a high-quality regional human resources training centre.

Nghi Son, currently spanning more than 18,610ha, will be expanded to cover 106,000ha, including nearly 66,500ha of the mainland and island and more than 39,500ha of water bodies.

The mainland and island will comprise the entire Tinh Gia district, three communes of Nong Cong district and three communes of Nhu Thanh district.

As mentioned in the decision, additional efforts must be made till 2025 to improve the economic zone's (EZ) business climate, implement key socio-economic infrastructure projects and attract more domestic and foreign investors.

It is hoped the zone will see comprehensive development in industry and services, and commercial, financial, cultural-social and tourism sectors after 2025, while ensuring security and defence.

Green and modern urban areas will also be developed within the Nghi Son EZ.

The Nghi Son EZ, established in mid-2006, is about 200km to the south of the capital city of Ha Noi. It is now home to 134 projects, including 124 domestic projects, with a total registered investment of VND96.9 trillion (US$4.5 billion).

In 2014, the zone attracted 41 new domestic projects with a total registered capital of more than VND3.1 trillion (US$145.7 million), and three foreign-invested projects worth $40.5 million. That same year, it generated VND18 trillion ($846 million) in revenue and created jobs for about 63,000 people.

It also houses the Nghi Son seaport and the Nghi Son oil refinery and petrochemical complex, the largest of its kind in Southeast Asia and the largest foreign direct investment project in Viet Nam with a registered capital of more than $9 billion.

Banks to guarantee Sacomreal property projects

Saigon Thuong Tin Real Estate Co. (Sacomreal) signed agreements with OCB, ACB and HDB banks on Sunday to guarantee its property projects, following Article 56 of the Law on Real Estate Business, which will take effect on July 1.

OCB committed to guarantee all Sacomreal-invested products, including the recent Jamona City project in District 7, while ACB committed to guarantee products of Jamona Riverside in District 7 that will be on sale in the third quarter.

HDB will guarantee products of Carillon 3 project in Tan Binh District which will be announced in the third quarter.

Pham Nhat Vinh, chairman and general director of Sacomreal, said if developers failed to hand over residential houses as agreed in the lease-sale contracts, the purchaser may request the guarantor to return the advance and other payments made to the investors.

"The property market will then develop more transparently and sustainably. The provision ensures that developers are financially viable and greater security is provided to buyers," he said.

"Sacomreal's signing with banks prior to Article 56 taking effect has shown our strong commitment to buyers about the projects' quality and progress," he said.

At the signing ceremony, the company announced the sale of 117 land lots covering an area of 90-220 sq.m each of the Jamona City project in District 7 after the first sale of all of its land lots.

State Bank approves TFC acquisition to Maritime Bank

The State Bank of Vietnam (SBV) has approved the Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank) to acquire the Vietnam Textile and Garment Finance Joint Stock Company (TFC).

The decision will be put into effect on July 6 and TFC will be converted into the Maritime Bank Finance Company Limited (MSB-FC).

The bank will take over all assets, rights and legal obligations associated with the TFC as well as the principles of ensuring the rights of employees and customers who currently have financial affairs with the company.

As of May 31, the company had VND673.6 billion (roughly US$30.9 million) in total assets, VND598.7 billion (nearly US$27.5) in total capital and VND10.5 billion (US$481.530) in pre-tax profits.

The acquisition of the TFC by Maritime Bank will facilitate the strategy to promote retail banking as well as customer segmentation, which the bank has persistently pursued.

The direct acquisition is an important move whilst undergoing the process of building the Maritime Bank into a multifunctional and modern bank, capable of providing comprehensive financial services to meet the diverse needs of consumers.

Maritime Bank will also complete its official merger with the Mekong Development Bank in the second quarter.

Two investors eye cargo terminal project at Cat Bi

Hop Thanh Mineral & Investment Joint Stock Co. and VietJet Aviation Joint Stock Company (VietJetAir) are looking for support from the Ministry of Transport to invest in a cargo terminal project at Cat Bi Airport in Haiphong City.

In late March, Hop Thanh wrote to the ministry proposing joining forces with Airports Corporation of Vietnam (ACV) to develop and operate the cargo terminal at the airport in the northern city.

VietJetAir submitted its petition to the ministry on May 12 suggesting that around six hectares of land be allocated to it to build the terminal and a technical center for aircraft.

According to the ministry, at a meeting with the two investors on June 15, Deputy Minister of Transport Pham Quy Tieu told ACV to coordinate with the Public-Private Partnership (PPP) Unit to decide on an investment format of the project.

Early this year, ACV began construction of a passenger terminal project at Cat Bi at an investment of VND1.5 trillion (US$68.8 million). The project is planned for completion in the last quarter of 2016.

* VietJetAir on June 15 clinched a cooperation agreement with Saigon Beer, Alcohol and Beverage Corporation (Sabeco) for brand development and sales promotion campaigns.

Under the agreement, VietJetAir will sell products of Sabeco to customers on its domestic and international flights. Sabeco will cooperate with the no-frills carrier in promotion, marketing and customer care programs.

Nguyen Thi Thuy Binh, deputy general director of VietJetAir, said in a statement that the cooperation between the airline and Sabeco would provide customers of the two sides with more added value.

Meanwhile, Pham Thi Hong Hanh, general director of Sabeco, said the partnership with VietJetAir would enable the corporation to better serve customers and introduce its products to more buyers.

VietJetAir now operates 25 Airbus A320 and A321 aircraft for 150 daily flights on 30 domestic and international routes linking Vietnam and Singapore, Thailand, South Korea, Taiwan and Cambodia.

Vietnam Register: Fuel consumption test fee won’t send car prices up

Vietnam Register and automakers have said the fuel consumption test fee planned in the Ministry of Finance’s draft circular for autos of no more than seven seats will not send prices of these cars up.

Under the draft circular on the fees for emission and fuel consumption tests and energy labeling for autos of under seven seats, the ministry plans to collect VND16 million for a fuel consumption test of gasoline cars and VND16.5 million for diesel autos.

The test fee is part of the regulation which became effective on January 1, 2015 and requires under-seven-seat autos, either locally assembled or imported, to have energy labels before being sold.

Such labels are printed by automakers after being verified by Vietnam Register and stuck on cars before being delivered to buyers. Therefore, to have energy labels, automakers and importers need to test fuel consumption of cars.

According to auto firms and Vietnam Register, fuel consumption tests can be combined with emission tests to help cut costs. This is also mentioned in the draft circular of the ministry, which says only the emission test fee is applicable to autos registered for both fuel consumption and emission tests.

Besides, the tests are applicable for just one sample of an auto product, not all autos of the same type. For instance, one of the 20,000 new Innova cars assembled by Toyota Vietnam is tested.

Therefore, the overall costs including that of energy labeling which automakers and importers have to pay are not considerable. The cost of issuing a fuel consumption certificate for every car model is just about VND100,000.

As explained by a representative of the ministry, the fuel consumption fee will not be charged on car users but manufacturers and importers. The ministry said in a statement released on June 15 that such fuel consumption tests were not compulsory to car owners.

The ministry confirmed that the fuel consumption fee is not imposed on car owners and buyers, or every car manufactured, assembled and imported. Only organizations and individuals wanting to have their under-seven-seat cars tested fuel consumption will have pay the fee.

The fuel consumption fee is not new as it does exist in Circular 195/2011/TT-BTC on emission tests of autos issued on December 26, 2011, the ministry said.

ACV says Danang airport expansion urgent

Airports Corporation of Vietnam (ACV) has underlined the urgent need to expand Danang International Airport in Danang City to meet an upsurge in arrivals, especially of international visitors, says a report recently sent to the Ministry of Transport.

ACV said the third largest international airport in Vietnam after Tan Son Nhat in HCMC and Noi Bai in Hanoi will be overloaded in the coming years if it is not expanded soon. The corporation noted the number of passengers going through Danang has registered an average annual growth rate of 14% in the past years.

In 2014 alone, the airport handled five million passengers, increasing 16% year-on-year, and international visitors accounted for over nine million of the total, soaring 53% compared to the same period last year, VietnamPlus reports, citing the corporation.

The number of passengers at Danang airport is forecast to reach six million next year, over nine in 2020 and 20 million in 2030.

Le Manh Hung, general director of ACV, said the number of passengers at Danang airport could rise to 6-8 million passengers a year from 2015. “The airport will certainly be overloaded in the next few years if the number of passengers going through the airport continues to grow strongly as in previous years.”

Therefore, Hung said building one more terminal at Danang airport is a must as it will help meet surging demand for air travel to and from the airport in the commercial hub of central Vietnam. The new facility will enable the airport to have separate terminals for domestic and international services.

The new terminal is planned to go up in the area of the old passenger and cargo facilities of Danang airport. The consulting firm ADCC will add the location of the new terminal to a revised zoning plan for the airport and this plan will be submitted to competent agencies next month.

The new terminal is designed to have floor space of 40,000 square meters, two separate arrival and departure floors, 40 check-in counters, nine boarding gates, four boarding bridges and five baggage conveyor belts.

ACV estimated the expansion plan would require VND3.2 trillion (more than US$147 million), including VND2.39 trillion for construction and equipment costs and VND300 billion for site clearance.

The corporation is seeking approval to join forces with a consortium of Thang Long Airport Services Corporation (TASECO), AOV Investment Corporation and Hanoi Construction Corporation (HANCORP) to form a joint stock company to implement the expansion project. ACV plans to contribute 10% of the new company’s chartered capital and the remainder will be covered by the consortium.

Hung said private investment would help speed up infrastructure development and improve service quality at Danang airport.

ACV expected the new passenger terminal would get off the ground in January next year and be completed in June 2017, four months ahead of an APEC summit in Danang City.

Earlier, the consortium of TASECO, AOV and HANCORP sent the Ministry of Transport a plan to develop a new passenger terminal at Danang airport with annual handling capacity of four million passengers.

The existing passenger terminal at Danang airport was put into use in December 2011 at a cost of more than VND1.3 trillion. It has total floor space of 36,600 square meters, nine boarding gates, four boarding bridges, 40 check-in counters and eight baggage conveyer belts, and can handle up to six million passengers a year.

At present, three local airlines and 10 foreign carriers offer scheduled and chartered flights a day linking Danang and 25 airports around the globe with some 140 take-offs and landings.

Finance ministry seeks to improve G-bond sales

The Ministry of Finance is seeking measures to reverse a decline in demand for government bonds.

Speaking to the Daily via email, Phan Thi Thu Hien, deputy director of the Department of Banking and Financial Institutions under the ministry, said Circular 36 sets a limit on bank loans for share and G-bond investment, leaving an adverse impact on equity markets.

The ministry and the central bank have reported to the Government and proposed solutions to revitalize the interest in G-bonds.

The ministry is considering issuing bonds both in Vietnam dong and foreign currencies, offering various tenors and improving bond issue processes to attract investors. It expects to strengthen technical solutions to facilitate bond trading, meet with investors and cooperate with the central bank to enforce fiscal and monetary policies to help maintain macroeconomic stability, Hien said.

Since 2012, the ministry and the central bank have shared information and cooperated to supervise the monetary and stock markets and bond issues.

The participation of credit institutions in the capital and G-bond markets is in line with international practices as they are the most important investors.

Regarding the sale of US$1 billion worth of G-bonds to Vietcombank, Hien said that sales of foreign-currency bonds on the local market are one of the measures to raise capital for the State budget and development investment.

By May 15, the ministry had met only 26.7% of this year’s G-bond sale target, tumbling 48.3% year-on-year.

Mismatched numbers of household businesses

The General Statistics Office put the number of household businesses nationwide at 4.65 million last year but the figure given by the General Department of Taxation was 1.6 million.

Dau Anh Tuan, head of the Legal Department at the Vietnam Chamber of Commerce (VCCI), said at a conference in Hanoi last week that according to data of the General Statistics Office, Vietnam had over 4.65 million household businesses in 2014 and 4.53 million this year.

Tuan said the household business sector had contributed significantly to Vietnam’s growth over the past 10 years. By 2014, the sector had created jobs for some 7.9 million people.

“This is a big number but in reality it might be bigger,” he said.

 Nguyen Thi Hanh, head of the Tax Management Division at the General Department of Taxation, said as of December 31 last year, the department had issued tax codes to over three million household businesses. However, only 1.61 million of them are operational while the remainder are not though they already have tax codes, Hanh noted.

The different figures caused confusion among attendees at the conference. Many wondered whether the different numbers had led to a miscalculation that just a small number of household enterprises had gone bust in recent years.

Hanh said statistics were collected from different sources, so different agencies would have different data.

She explained the General Statistics Office used the number of business registration certificates granted to households while the General Department of Taxation relied on the number of tax codes.

“One individual has one tax code but can do business at three different locations,” she said.

However, it is unclear why the differences are huge.

Representatives of the Business Registration Management Department under the Ministry of Planning and Investment gave no explanation about the figure differences.

Vu Tien Loc, chairman of VCCI, said at the Vietnam Business Forum 2015 in Hanoi early this week that the private sector was responsible for half the country’s gross domestic product (GDP), with household businesses contributing over 33% of GDP.

A household business is defined as a Vietnamese person, a group of people or a family runs a business, registers business at a location and uses no more than 10 staff. They have no seals and are responsible for their businesses via their businesses’ assets, according to Article 49 of Decree 43 on business registration issued by the Government in 2010.

Disbursements in home loan program still slow

Just a quarter of the VND30-trillion (US$1.37 billion) the Government approved for a home loan program benefiting low-income people has been disbursed though the program was launched two years ago to support the sluggish real estate market.

By end-May, banks had pledged to lend VND14.1 trillion, with VND8.8 trillion of it for individuals and households and the remaining VND5.3 trillion for investors of 37 housing projects, said Nguyen Manh Ha, head of the Housing and Real Estate Market Management Department under the Ministry of Construction.

VND7.6 trillion, or 25.4% of the total, had been disbursed, with VND5.5 trillion of it going to 17,600 families and individuals and VND2.1 trillion to 33 projects.

Banks sped up lending to the real estate sector in the final months of last year and the first five months of this year. According to reports of banks involved in the home lending program, they had by end-May boosted lending by 200% against August 31, 2014, or before the Government issued Resolution 61/NQ-CP fostering the lending program, with loans for households and individuals alone surging nearly 250%.

However, Ha admitted it is tough to apply for a loan in this program.

First, the borrower must sign a home lease or purchase contract with the investor, meaning that they have to find out apartments eligible for the program. Nonetheless, many localities, especially Hanoi and HCMC, lack low-cost housing projects or commercial projects with small units priced at less than VND15 million per square meter or VND1.05 billion each unit.

In addition, the investor has found it hard to take out loans from the program if they still have bad debt.

Second, aside from requirements from the Ministry of Construction, the borrower has to meet the criteria set out by the State Bank of Vietnam and lender banks.

To speed up disbursements of the VND30-trillion program, relevant administering agencies will order local authorities to simplify procedures and shorten the approval time for low-cost apartment projects.

Foreign investors eye Vietnam real estate market

Foreign investors are seeking new investments in real estate projects in Vietnam with attention on those at good locations in Hanoi and Ho Chi Minh City, according to Saigon Giai phong newspaper.

The trend began in late 2014 and has become obvious this year, as the date the new law on housing takes effect is nearing. The law will allow foreigners and overseas Vietnamese to own houses in Vietnam.

Savills Vietnam Managing Director Neil MacGregor said while Vietnam is at the trough of its real estate cycle, many other Asian markets are at the peak of their cycles. The Southeast Asian country is well-positioned for a big number of investors to take advantage of the market recovery, especially in the hotel and office segments, he added.

According to Savills Vietnam, many foreign investors are excited to buy houses in Vietnam, especially those from Singapore, a leading nation in foreign direct investment (FDI) in Ho Chi Minh City, followed by the Republic of Korea and Japan.

As a result, the high-end property segment is attracting attention. The demand for high-end apartments is continually rising. The price of renting a flat in one of the tallest buildings in Ho Chi Minh City is estimated at 36-42 USD per one square metre per month – an incredible increase from several years ago.

According to the Ministry of Construction’s Agency for Management of Housing and Real Estate Market, Ho Chi Minh City had about 1,600 successful real estate transactions in May, up nearly 6 percent from the previous month, and is expected to reach 1,700 in June. Hanoi saw 1,650 successful transactions in May and hopes to have 1,700 in June as well.

The rising demand for home ownership in Vietnam from overseas Vietnamese and foreign investors is expected to create major momentum for the local real estate market.

The Housing Law 2015 states that foreigners with current Vietnam visas are allowed to buy property in the country, as are foreign investment funds and banks, Vietnamese branches and representative offices of overseas companies.

Such property must be in commercial housing developments and not in areas that limit or ban foreigner access.

For investment projects with separate houses for sale or lease, foreign organisations and individuals may not own more than 10 percent of the total number of units within any given administrative area.-

Supermarkets help boost farm produce exports

The presence of many giant retailers in Vietnam is expected to create new distributing channels for domestic agricultural products, giving local farm produce more chances to enter foreign markets, according to the Nong nghiep Vietnam (Vietnam Agriculture) Newspaper.

During the last 16 years, Big C, the French supermarket chain under the umbrella of Casino Group, has exported Vietnamese goods, mainly garments, farm and aquatic products and rattan fine art products to Casino branches in various countries, with around 1,100 containers each year, said Ho Quoc Nguyen, director of public relations at Big C Supermarket.

According to Nguyen, shrimps, fish and cuttlefish have been sold to Casino branches in France, some South American countries and Indian Ocean nations, while dragon fruit has been shipped to France.

He said that in the coming time Big C will continue exports to Casino branches as this is one of the key business activities of the retailer.

Metro Cash and Carry Vietnam (Metro Vietnam) has cooperated with relevant agencies to increase local farm produce exports to foreign countries since mid-2013. In the last six months of 2013, Metro Vietnam purchased 6 million USD worth of agricultural products to provide for stores in the Metro chain worldwide.

In 2014, the supermarket exported 7 million USD worth of vegetables and fruits such as garlic, ginger, passion fruit and rambutan as well as sea food.

Although Metro Vietnam is transferring its wholesale business to Berli Jucker Corporation of Thailand (BJC Thailand), the export of agricultural products will continue, said Phillip Bacac, managing director of Metro Vietnam, saying that demands for Vietnamese sea food are growing in Metro chain worldwide.

Furthermore, there are an increasing number of supermarket chains selling Vietnamese products abroad. Last year, Saigon Coop sold a raft of farm produce to Singaporean NTUC FairPrice supermarket chain, including rice, fruits, vegetables and processed products such as instant noodle. Particularly, the partnership between Saigon Coop and FairPriceCoop to open the Xtra hypermarket has created favourable conditions for Vietnamese products to enter stores of this Singaporean supermarket chain.

Aeon Vietnam, though a new comer to the Vietnamese market, is quick to ship Vietnamese products to Japan.

Recently, retailers in foreign countries have organised a number of promotion programmes and exhibitions to introduce Vietnamese farm produce, which is a boost to local exports.

In addition, some supermarkets are building their own cultivation areas to supply farm produce meeting safety standards, with Metro Vietnam as an example.

Export activities boosted by retailers’ distributing channel will make great contributions to fostering relations between businesses and local residents, paving way to form high-quality and safe material areas.

Vietnam-EEU trade pact brings political, economic benefits: professor

The recent conclusion of the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EEU), encompassing Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, brings both political and economic benefits for the involved parties.

The remark was made by Professor Evgeny Kanaev at the ASEAN Centre of MGIMO University – one of the most prestigious educational institutions in Russia for young people with international interests – as quoted by Sputniknews.com

The Professor said cooperation between Russia and Vietnam has become more sustainable and the bilateral comprehensive strategic partnership facilitates the expansion of all-around economic links with other ASEAN member states.

He added that Vietnam has proved itself to be an active member of multilateral cooperation in the regional and international arena.

The Association of Southeast Asian Nations, of which Vietnam is an important member, is striving to become the 4th biggest economic region in the world and enhance its influence on global political and economic progress, he said.

The signing of the trade pact enables Vietnam to balance external and trade relations with foreign partners and is a significant move towards strengthening common ASEAN policies, and increasing the country’s position in the association and beyond, he noted.

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