Low-income housing to be constructed

The Ha Noi People Committee ordered two construction companies – Thu Do Investment and Trading Joint Stock Company and Thai Binh Finance Investment Joint Stock Company – to build low-income housing projects.

Thu Do company will be responsible for building a 17,909-square-metre project located in Xuan Dinh Commune in Tu Liem District.

The complex will help the capital city meet its housing demand for low-income residents.

Thai Binh company has been assigned to build a 9,605-square metre low-income housing and resettlement complex in Hoang Mai District.

This month the Housing and Urban Development Corporation (HUD) also plans to build a low-income housing project that will have 4,000 apartments in Me Linh District.

Up to now, there are about 3,856 apartments for low-income people built in Ha Noi.

Ha Noi will construct about 15,000 low-income apartments in accordance with the capital's 2010-15 construction plan.

Steel prices on the rise
 
Steel prices has seen a sharp increase of VND300,000 per tonne in the past few days.

This surge is attributed to the fluctuation of the US dollar and the increasing demand for steel in November and December, said the Institute for Market and Price under the Ministry of Industry and Trade.

In the first half of October, steel consumption reached only 283,000 tonnes, down by 200,000 tonnes compared to September.

Vietnam welcomes Swiss investors
 
Vietnam will continue to create favourable conditions for Swiss investors and firms to do business in Vietnam, State Vice President Nguyen Thi Doan said.

Speaking to almost 100 business people from Vietnam and Switzerland at a business forum in Vevey on Oct. 22, Vice President Doan stressed that Vietnam’s competitive advantages and the government’s incentives offer golden opportunities for Swiss firms to promote their investment and trade in the Southeast Asian nation.

Switzerland has strengths in capital resources, technology, industry and services while Vietnam has a broad consumer market, human resources, and great potential for agricultural production, she said, adding that although there were differences in development levels and incomes, the two countries have complementary economies.

Investment and trade between Vietnam and Switzerland has seen rapid development since the two countries signed a trade agreement in 1993. The European country lists Vietnam as an aid recipient of priority in the Mekong region. Switzerland has provided non-refundable aid and preferential loans to Vietnam’s projects on environmental protection, administrative reform, agricultural development and education.

Switzerland has 76 projects operating in Vietnam with a total registered capital of US$1.45 billion. Major corporate groups such as Nestle, Novatis/Ciba and Holcim, have generated more than 2,000 jobs for Vietnamese people.

Vietnam’s goods, including seafood, coffee and apparel, are sold on the Swiss market, while Switzerland exports chemicals, pharmaceuticals, steel, ferrous metal, equipment and watches to Vietnam.

Bilateral trade in key exports maintains growth, but business cooperation has not yet matched the two sides’ potential, Mrs. Doan said.

The Vietnamese Vice President Doan is scheduled to attend the 13th Francophone Summit, which will take place in Montreux , Switzerland on October 23-24.

Contract signed for Lao Cai cast iron plant
 
Vietnam-China Mineral and Metallurgy Co., Ltd (VTM) and Kunming Iron and Steel Group Co. Ltd (KISC) signed an engineering-procurement contract (EPC) worth 160 million USD on Oct. 22, starting the Lao Cai cast iron and steel project.

In the first phase during 2010-2012, the US$337 million project plant will build a cast iron workshop able to churn out 500,000 tonnes of cast iron a year.

During the period, a refined steel workshop with an annual capacity of 500,000 tonnes of steel ingot will also be built as part of the plant in Bao Thang district, the northern mountainous province of Lao Cai.

In the second phase (2012-2015), a steel-rolling chain, with a capacity of 500,000 tonnes of steel per year, will be installed. The capacity will be raised to 1 million tonnes later.

The plant will use iron ores tapped from the local Quy Xa mine, Vietnam’s second largest iron ore, which has reserve of 122 million tonnes.

Once operational, the project is expected to double Lao Cai’s GDP and create jobs for 2,000 local workers, said the provincial People’s Committee Chairman Nguyen Van Vinh.

Socio-economic development plan under discussion by NA
 
The National Assembly on the third day of its eighth session on October 22 met in groups to give opinions on the Government’s report on the implementation of Vietnam’s 2010 socio-economic development plan and the new plan for 2011.

Most of the deputies agreed with the Government’s assessment of the plan’s implementation, which emphasised that Vietnam had weathered the recent crisis to maintain a strong economic growth rate, ensure social welfare, political stability, and social order.

These results were attributed to the Party’s sound leadership, the Government’s effective management, and the people’s efforts, said the report.

NA deputy Vu Van Hien (Hai Duong) stressed the important role of State management in carrying out the socio-economic development plan. He said Vietnam gained a lot of experience in overcoming the crisis and called it Vietnam’s most significant achievement of 2010.

Some NA deputies, however, pointed to certain shortcomings in fulfilling the plan.

Nguyen Van Hop (Hai Duong) said management of land and water resources remained ineffective.

Regarding the 2011 development targets, Hop recommended setting a target growth rate of 7 percent (lower than the Government’s target of 7 – 7.5 percent) because 2011 is the first year of the 2011-2015 plan.

Dinh The Huynh (Tuyen Quang) said more discussion is needed before setting a growth rate target and working out measures and policies to ensure sustainable development.

He said the recent economic crisis shows that an economic restructure is needed, but that it is not mentioned in the Government’s report.

Deputy Hien said that while learning from the experience of foreign countries is important, that experience is not always applicable in Vietnam due to differences in the political systems. He said the current “Western” investment model used in Vietnam is not appropriate for the country’s situation.

Tran The Vuong (Hai Duong) highlighted recent achievements in poverty reduction and social welfare. However, he said, the increasing crime rate is now a big problem for the entire society.

It has negative effects not only social order but also on Vietnam’s economic development, he said, adding that it is essential to prevent violations of the law.

According to deputy Huynh, any devaluation of the domestic currency lowers people’s living standards.

Nguyen Thi Kim Thuy (Hanoi) said that although Vietnam has made achievements in poverty reduction, it is not sustainable.

Many deputies proposed measures to ensure macro-economic stability, maintain economic growth, and restructure the economy.

Solutions assist small and medium-sized enterprises
 
In the first 9 months of the year, over 62,300 new enterprises entered the marketplace, bringing the total to 254,200, of which small and medium-sized enterprises (SMEs) accounted for 97 percent.

The numbers were reported at a seminar on solutions for SMEs in HCM City on October 22, co-organised by the Vietnam Association of Corporation Directors (VACD) and the Department of Enterprise Development under Ministry of Planning and Investment.

Seminar participants discussed assistance to SMEs, tax policy, solutions for promoting competitive capacity and sustainable development in the post-crisis period, and experience in business management.

On this occasion, VACD launched a new website at http://www.nhaquanly.vn to provide timely business information.

Vietnam’s agricultural products praised
 
30 managers of 22 Vietnamese enterprises gathered for a meeting in Paris on October 21 during the four-day Global Food Marketplace 2010 (Sial-2010).

The entrepreneurs called Sial-2010 an opportunity for Vietnamese businesses to trade experience, research markets, seek new partnership and cooperate in agriculture, forestry, fisheries and export processing. 

Nguyen Van Thang, the Director of the Vietnam Trade Promotion Centre (Agritrade) under the Ministry of Agriculture and Rural Development, said this was the third time Vietnam has attended the event.

On display are key agricultural products and seafood. Pepper and peanut seem to be the favorites this year.

Coffee prices hit a record high
 
The price of coffee has risen a record to VND31,500 per kilogram in the past two years.

The price of coffee increased from VND29,000 on October 19 to VND30,000 on October 20 and to VND31,500 per kilogram on October 21.

According to the Vietnam Cacao and Coffee Association (Vicofa), the domestic price of coffee has risen because of a shortage on the world market and international businesses are rushing to purchase coffee. In addition, heavy rains have hit key coffee plantations areas in Vietnam, worrying investors.

Website hosts consumer loan talks
 
A lack of information has led to hesitation among customers wishing to take loans out for consumer goods, leaving commercial banks missing out on new customers. To clarify issues surrounding the issue, senior officials from the banking sector held an online question-and-answer session with vneconomy website readers yesterday.

Office secretary Khanh Huyen said she found it hard accessing loans at several banks, and the State had failed to issue any policies to promote the use of consumer loans.

Deputy director of the Ha Noi Housing Development Commercial Joint stock Bank (Habubank)'s private banking department Vu Thu Hang replied that banks usually devised different interest rates and conditions for various customers based on the reason for the loans.

It was not easy for individual clients to access loans because the information on income and personal finances provided to banks by individuals remained unclear, and consumers remained loath to provide such personal information, Hang explained.

"These issues make it difficult for banks to determine debt repayment capacities of individual customers," she added.

Nguyen Le Diem Hang, director of the Military Bank (MB)'s individual client development department, said that there was no great difference in interest rates among banks, the strongest competition between them was primarily service quality, customer care and diversification of services.

Ha Thi Lien, an office worker, wondered why interest rates for consumer loans were usually much higher than loans for enterprises, and what conditions needed to be met before individuals could access lower interest loans.

Managing director of the Standard Chartered Bank (SCB)'s Ha Noi branch Chatchawan Permsukjarusap responded that in reality, individuals could apply for consumer loans by simply providing the required documents.

SCB had diversified its services by offering individuals lower interest loans. For instance, customers with deposits at the bank could access consumer loans at preferential rates, he said.

Do Thanh Tung, director of Habubank's credit policy department, mentioned some of the most important conditions to foster the development of consumer loans in Viet Nam were economic stability, a stable inflation rate and transparency regarding individual incomes.

At present, the Government is encouraging companies to pay salaries via banks and promote non-cash payments, which is one of the basic conditions for the development of consumer loans in the future.

Chatchawan attributed the high interest rates to the inflation rate and poor capital management by the banking sector. To cool rates, the State Bank of Viet Nam should adjust exchange rates and currency policies appropriately to rein in inflation.

He also suggested customers select rates and the duration of the loans appropriately, paying the debts as soon as possible in order to avoid overdue debts.

He recommended banks and financial institutes raise their liquidity, as higher liquidity would mean the banks could boost lending.

Bank liquidity is one of the most significant elements to enhance credit growth in Viet Nam, with the country averaging a 25-per-cent growth in credit per annum.

Dollar hike blamed on ‘manipulation'

The US dollar is said to be overheated on the black market because of price manipulation by domestic gold dealers trying to keep prices of the precious metal high.

Tran Hoang Ngan, deputy principal of HCM City Economics University and member of National Monetary Policy Consulting Council, said gold and dollar prices in Viet Nam were often volatile when global gold prices rose and fell dramatically.

"Because domestic gold dealers still have gold bars in stock that were imported at high prices, they try to collect dollars and push up the dollar price to cut their losses," said Ngan.

He said that when the global gold price fell by US$40 from $1,380 per ounce on Thursday last week, the domestic gold price should have also fallen instead of hovering around VND33 million ($1,510) per tael (one tael equals 1.2 ounces).

However, many gold dealers defend themselves against the allegation. Chairman of jewellery trading company Doji Group Do Minh Phusaid most gold dealers were worried that the global downtrend in gold would not last long.

"If they lower selling prices immediately, they may have to import additional gold at higher prices or face losses," said Phu.

"In addition, to avoid losses, these dealers also use the market value of the greenback to determine gold prices."

Phu denied the possibility of dollar price manipulation by gold dealers, saying that dollar price hikes resulted from growing demand for imports in the closing months and dollar accumulation by civil groups and enterprises.

Viet Nam Gold Business Corp (VGB)'s general director Tran Thanh Hai said he shared Phu's view, adding that gold smuggling pushed up the dollar price, as domestic gold prices were now at between VND400,000-500,000 ($20-25) a tael cheaper than global prices (based on the black market dollar price).

Ngan suggested that the State Bank of Viet Nam instruct general gold corporations to boost sales while working more closely with security agents to supervise the black market.

"If major gold corporations sell out of gold taels, gold market will immediately be cooled down and tension on the FX market eased," the general director of a state-owned bank who ask to be unnamed said.

The central bank this week stated that it was considering dollar injections for commercial banks to meet importers' growing hunger for the greenback in the closing months of the year, when consumer demand for imported goods traditionally rises.

Highland province projects seek investors

The Central Highland province of Lam Dong has unveiled a list of 26 projects that require investment by 2020.

Six of them – the International University Village, Prenn Lake Tourism Zone, Dau Giay-Lien Khuong Expressway, Da LaÏt-Thap Cham Railway, Lien Khuong New Urban area, and Dan Kia Tourism Zone – are considered to be key and require a total of US$8.3 billion-$8.8 billion.

The list also comprises nine industrial projects that need $3.1 billion and five transport works requiring more than $65 million.

Investment is also required to develop a new urban area and for projects in the agricultural, tourism, services and trading sectors.

The province would create investor-friendly conditions within the Government's incentive framework, Huynh Duc Hoa, chairman of the provincial People's Committee, said.

Meanwhile, authorities are reviewing several tourism and real-estate projects to assess their rate of progress and resolve difficulties faced by investors.

They would withdraw licences if investors were found not to fulfill their commitments, Hoa warned.

In the last six years, 170 projects have had their licences cancelled, including 40 in the forestry sector.

PV