CPI rises less than expected

The country's consumer price index (CPI) in October rose only 0.49 per cent against last month, despite a number of factors that were expected to push the index higher.

This month's CPI was also much lower than the past few months. In September and August, CPI rose 1.06 per cent and 0.83 per cent, respectively.

CPI has increased by 5.14 per cent from December 2012 and by 5.92 per cent from October last year, according to the General Statistics Office (GSO).

Director of the GSO's Pricing Department Nguyen Duc Thang said that CPI this month was lower than previous Octobers, when it traditionally starts a five-month upward curve.

Thang said that CPI was also under pressure from the seasonal capital injection.

October is often a time when capital construction funded by the State budget starts, Thang explained, adding that local producers, traders and importers also started to push production at this time in the lead up to Lunar New Year.

This month's CPI was also expected to be hit by unfavourable weather that restricted food supplies.

However, low demand in the local market helped restrict the CPI rise this month to only 0.49 per cent.

Due to the low demand, the prices of food and foodstuff in October increased by 0.86 per cent, despite the restricted supply.

Mirroring the same trend, the cost of housing and construction materials only rose 0.5 per cent, even though it was the start of the construction season.

According to the GSO, the cost of nine out of 11 goods used to calculate the CPI increased this month, with food and foodstuff rising the most.

The price of transport dropped by 0.17 per cent, while prices of postal services and telecommunications inched down 0.03 per cent.

In October, the CPI in urban areas posted slower growth compared with rural area, at 0.42 per cent compared to 0.54 per cent.

Not included in the CPI, gold prices lost 2.87 per cent month-on-month and US dollar prices edged down 0.18 per cent.

Supermarket offers big discounts

The Co.opmart and Co.opXtraplus Thu Duc supermarkets have been offering discounts of 50 per cent on more than 1,200 cosmetics and fresh food products from October 23 to November 10.

More than 300 household appliances are also being discounted from 30-49 per cent. Free gifts will be distributed to buyers.

Besides the mentioned "Giai dieu mua thu" (Autumn Melody) programme, they also offer other kinds of discounts, including "buy 2, get 1 free" or "buy 1, get 1 free" during October 25-27.

Malaysia to build thermal power plant in Vietnam

Malaysia’s Che Group Sdn Bhd is cooperating with Vietnam’s Hau Giang Power Plant Joint Stock Company to build 20 thermal power plants worth US$600 million in the country.

Che Group Managing Director K.K. Chang said each plant can produce 10MW by using rice husks as main material.

The first will be constructed in Hau Giang province later this year and the remaining ones in six other provinces within five years.

He said this is the first kind of thermal power plant ever built in Vietnam to produce high-quality harmless ashes.

All machinery and equipment will be supplied by CHE Group which cooperates with the UK’s Torftech Ltd and Germany’s ERK Eckrohrkessel GMBH in designing modern system using rice husks as main material.

CHE Group and Torftech have established a joint venture named Torche Energy Sdn Bhn as the building contractor to do the work.

Vietnam to accelerate FTA negotiations with EFTA

Vietnam and the European Free Trade Association (EFTA) should speed up their negotiations of a free trade agreement (FTA) to make the most of trade liberalisation and increase trade ties.

Vietnamese Minister of Industry and Trade Vu Huy Hoang made the proposal at a working session with Johann N. Schneider-Ammann, Head of the Federal Department of Economic Affairs, Education and Research of Switzerland in Hanoi on October 24.

He proposed Switzerland, an EFTA member, support Vietnam-EFTA negotiations, taking into account the development levels of concerned parties to adopt an effective, practical approach to negotiations.

Johann N. Schneider-Ammann, who is visiting Hanoi from October 24-26, assured Hoang the Swiss government supports Vietnam in FTA negotiations with the EFTA.

This agreement will create a complete legal framework for improving the business environment and increasing trade ties between the two countries, he said.

Vietnam and the EFTA (comprising Iceland, Liechtenstein, Norway, and Switzerland) are conducting negotiations of a free trade agreement. The sixth round of negotiations is due to take place in Geneva in November.   

As of September 2013 Switzerland had 93 valid projects in Vietnam with a total registered capitalisation of US$2 billion, ranking it 18th among foreign investors in the country.

During his current Vietnam visit, Johann N. Schneider-Ammann is being accompanied by representatives of 17 leading Swiss businesses specialising in pharmaceuticals, banking, insurance, machinery, energy, watch manufacturing, air and rail services, and consultancy in construction and industries.

India affirms close trade ties with Vietnam

Vietnam is an important pillar in India’s Look East policy, John H. Ruolngul, first secretary of the Indian Embassy in Vietnam, has said.

Addressing a workshop in Ha Giang province on October 24, Ruolngul noted the Indian government prioritises strengthening cooperation with Vietnam bilaterally and multilaterally.

Both India and Vietnam are rapidly developing economies in Asia, and commercial cooperation is a key pillar in bilateral trade partnership, he said.

Trade ties between Vietnam and countries in Africa-West Asia-South Asia- and India have grown and flourished over the years.

Many of Vietnamese products from northern provinces are exported to this lucrative market. They include tea, timber, chemicals, plastic materials, seafood, mineral ors, garments, ceramics, cookies and cereal products, bamboo and rattan, and other farm products.

Trade exchanges between Vietnam and India have increased constantly in recent times, with Vietnamese exports rising from US$179 million in 2007 to US$1.778 billion in 2012, and US$1.835 billion in the first nine months of 2013.

As of September 2013, India had 73 valid projects totalling more than US$253.2 million in Vietnam, ranking it 28th among foreign investors in the country.

Workshop participants discussed the prospect of trade cooperation between Vietnam and India, especially after the India-ASEAN free trade agreement (FTA) took effect in 2010.

Business representatives of 28 northern provinces provided Indian businesses with much-sought after information to increase connectivity between the two business circles.  

The Indian government has established a support fund for development projects within the framework of India-ASEAN cooperation. It has committed US$25,000 to a school project to improve the living and working conditions of teachers and ethnic students in Ha Giang’s mountain areas. The project is due to get off the ground in 2014.

Digital signatures will be used for e-customs

Import and export firms will begin phasing in the use of digital signatures for the e-customs system this year, according to the Vietnam General Department of Customs (VGDC).

The move forms part of the implementation of a decree that regulates commercial importers and exporters using e-signatures for e-customs procedures.

Director of the VGDC's Customs Information Technology and Statistics Department Nguyen Manh Tung said that digital signatures will help improve security and safety for enterprises in e-customs procedures.

Tung said at a press conference on October 24 that using digital signatures in e-customs will benefit both commercial importers, exporters and the customs sector.

He added that the sector has asked the Finance Ministry to allow enterprises without digital signatures after the November deadline, to perform customs procedures.

The customs sector is also working with relevant agencies to provide information and training on digital signature procedures nation-wide.

A VGDC representative said that the department has accepted digital signatures provided by e-signature service providers licenced by the Ministry of Information and Communications, including FPT, BKAV, VNPT-CA, Nacencom, CK-CA, Safe-CA, Viettel-CA and SmartSign.

Customs statistics showed that more than 40,000 import and export enterprises this year were using e-customs procedures in 34 customs departments nation-wide. Around 3,000 enterprises have registered digital signatures for e-customs.

By mid of November, the customs sector will test run a new system, called the Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS) that requires digital signature for procedures.

The system is scheduled to be put into operation nation-wide in April next year.

Vietnam seeks to boost trade, exports

Nearly 100 economic experts, State trade managers, producers and exporters met at a seminar in the central province of Khanh Hoa on October 24 to discuss how to further Vietnam’s trade and exports.

They shared the view that to realise the goal, Vietnam should establish a national committee on trade facilitation while ramping up transport infrastructure and services, simplifying legal procedures and restructuring chains of farming production.

Hoang Van Dung, Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), suggested taking a new approach to improving competitiveness as the country is facing a decline in export orders due to global economic turbulence.

It is made more challenging that low-tech products and raw materials are Vietnam’s hard currency earners as it is now an out-of-date trend, he said.

Sandeep Mahajan, World Bank (WB) head economic expert, recommended improvements in Vietnam’s three key pillars of transport infrastructure – a trade logistics system, legal procedures in cross-border trade and the restructuring of its supply chain in order to compete with other rival nations.

The event was co-hosted by the National Committee for International Economic Cooperation, the VCCI and the WB.

The Ministry of Foreign Affairs will host a forum in Hanoi on November 4-5 to increase economic cooperation between Vietnam, the Middle East, and North Africa.

This is the first large-scale event strengthening cooperation with the two overseas regions held in Vietnam.

It will provide policymakers and business leaders a valuable opportunity to explore partnerships and investment potential, promoting economic cooperation for shared benefits.

The forum also helps Vietnam present its economic policy and advertise the advantages it can offer business partners.

The Middle East and North African regions extend from Morocco to Iran and include the majority of both Middle Eastern and Maghreb countries. They make up 60% of the world's oil reserves, and 45% of the world's natural gas reserves.

Their emerging economies possess impressive foreign currency reserves and diverse consumer demands that match well with Vietnam's exports.

RoK builds electronics factory in Ha Nam

The Republic of Korea’s Anam Electronics broke ground in Ha Nam province on October 24 for a plant to manufacture electronic equipment for export.

Built at Dong Van II industrial zone at a total cost of US$20 million, Anam Electronics Vietnam will be put into operation in April 2014 to churn out electronic appliances and audio-visual equipment.

It is designed to manufacture 1.5 million products every year for export, mainly to Europe and the US.

This is Anam Electronics’ first plant outside the Republic of Korea.

The company wants to turn Ha Nam into a regional and international centre for manufacturing audio-visual equipment, said Kim Joo Chai, an Anam Electronics representative.

Anam Electronics is the first company to produce TV sets in the RoK.

Vietnam gets higher rice prices owing to Philippine contracts

Vietnam has recently signed contracts to sell as much as 120,000 tonnes of rice to the Philippines, helping push up its prices by 10 percent, according to Business World Online.

Jump in Vietnamese rice prices in recent weeks is also due to demand from China, Vietnam’s biggest rice importer, traders said.

Statistics from the Vietnamese Government show that China has bought 1.62 million tonnes of the grain from Vietnam in the first eight months of this year, up 3.2 percent compared to the same period in 2012.

This week, the Free on Board (FOB) price of 5-percent broken rice at Saigon port soared to 400-405 USD per tonne, 10 percent higher than earlier this month.

However, higher export prices could mean loss of new deals to rivals such as Thailand and Pakistan, the website warns.

Delegations from 12 member countries of the Trans-Pacific Partnership free trade (TPP) negotiations started a meeting on intellectual property (IP) in Tokyo on October 24.

Negotiations on IP issues are expected to be tough, as there is a wide range of technical and contentious issues. They are considered a bottleneck in the TPP process, while the negotiating nations aim to conclude an overall TPP deal by the end of this year.

Among issues in the area, the United States wants to extend patent terms for new drugs so that drug makers can recover their huge development costs, while Malaysia protests this idea, saying it could prevent the popularisation of cheaper generic medicine.

Meanwhile, Japan is calling for stiff sanctions on violations of intellectual property for animation series and cartoon characters.

The TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

The deal, when realised, will see the establishment of a free trade area with a 800-million population which accounts for one third of global trade and nearly 40 percent of the world economic output.-

Employers prefer people with good thinking

When it comes to recruiting new staff, businesses will give preference to people with good thinking rather than those with previous work experience, according to business leaders at a talk on human resource strategy held last week as part of Vietnam CEO Forum 2013.

Do Thanh Nam, chairman and director of Win-Win Strategy Consulting Co., said that when he was a university lecturer in HCMC, he gave a 10/10 mark to a test on strategy done by a student who had failed three times earlier. He added the student’s thinking captivated him and that in reviewing his three early tests, he found they were all good.

Nam said he introduced this student, after graduation, to a company and his employment brought positive changes only after six months.

According to Nam, evaluating an employee is not an easy task and the job of business leaders is to identify good people. Therefore, the first thing needed to care about is businesses should recruit those with good thinking rather than good previous experience.

Meanwhile, the general director of leading meat processor Vissan Co., Van Duc Muoi, said that when he took up the top position of the company, he faced a poorly-organized entity with many departments virtually inactive.

Vissan had to undergo restructuring and the main task was to remove unnecessary departments and retrain employees.

However, Vissan still needed new employees, especially ambitious and enthusiastic ones, and then let them work with the old ones so that they could help develop their capabilities.

Tran Tuan Anh, general director of Zecchino Co., described staff as an orchard that could not produce good fruits without good care.

Nhan Huc Quan, general director of New Toyo Co., said the foreign-invested firm started using more local staff 10 years ago to reduce costs. The company has let certain good staff rise through the ranks as they can interact with the rest more easily than those recruited from outside.

Similarly, employees at Lien A Mattress Production and Trading Co. are promoted based on their achievements. Training of internal personnel is cheaper than recruiting outsiders, according to general director Lam Ngoc Minh.

Top 1,000 corporate tax payers announced

Vietnam Report JSC has made public a list of top 1,000 corporate tax contributors this year (V1000), which paid a total amount of about 77 trillion VND (3.6 billion USD) to the state coffer.

The top ten include the PetroVietnam Exploration and Production Corporation PVEP), Vietnam Military Telecommunications Group (Viettel), Vietnam Mobile Information Company (VMS), PetroVietnam Gas Corporation (PV Gas), Vietnam National Oil and Gas Group (PetroVietnam), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Dairy Products JSC (Vinamilk), Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank) and Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV).

There are 42 State-owned enterprises in the top 100 in the list, contributed over 64.5 percent of the total tax amount paid by the 100 leading companies.

Meanwhile, the top 100 companies accounted for 64.3 percent of the total tax payment of the top 1,000, two percent lower than last year’s figure.

This is the fourth consecutive year the V1000 ranking has been compiled. It aims to honour and encourage enterprises that make the biggest tax contribution to the State budget.-

Vinacomin aims to export over three million tonnes of coal

The Vietnam Coal and Mineral Industries Group (Vinacomin) targets to sell 11 million tonnes of coal in the last three months of this year, including 3-3.5 million tonnes for export, based on forecasts of increasing domestic demand for the fossil fuel.

Vinacomin Deputy Director General Nguyen Van Bien announced the goal at a press conference in Hanoi on October 21, recapping the corporation’s trading and production in the first nine months of the year and its business plan in the fourth quarter.

He noted that demand for coal serving domestic thermoelectricity power plants is expected to surge in the dry season, while coal-export tax has been reduced to 10 percent from 13 percent in the first half of the year, thus facilitating exports.

The group’s coal sale in the third quarter only fulfilled 15.6 percent of the entire year’s target, down 40 percent from the previous months due to a reduction in domestic coal consumption and dropping export price.

In the January-September period, Vinacomin earned 39 trillion VND (1.83 billion USD) in turnover and made a 1.5 trillion VND (70.5 million USD) profit.

This year, the group strives to sell more than 39 million tonnes of coal, equivalent to last year’s aggregate figure, including 11.5 million tonnes for export, a year-on-year decrease of three million tonnes.

Project helps EU businesses seek opportunities in Vietnam

A 4-million-EUR project was signed in Ho Chi Minh City last week to help business players from the European Union (EU) to seek investment opportunities in Vietnam.

The project is seen as a joint effort by the EU Delegation to Vietnam and the French Chamber of Commerce and Industry in Vietnam to lure more investment from European businesses, especially small-and-medium-sized (SMEs), in the Southeast Asian country.

It is expected to benefit both European and Vietnamese businesses as well as boost their economic-trade relations in the time to come, said Ambassador Franz Jessen, head of the EU Delegation to Vietnam .

Under the project, a SME supporting centre is scheduled to be set up in HCM City in November this year, which will help promote bilateral trade and investment, he added.

According to Chairman of the chamber Pierre-Jean Malgouyres, one of the priorities of the project is to create all favourable conditions for both sides’ businesses to promote their cooperation with specific support programmes and practical services.

As Vietnam and Europe have enjoyed an increasingly sustainable growth in their bilateral cooperation through a number of trade agreements, the two sides need to diversify their activities to cement their trade links, experts said.

European businesses hope to study the investment climate in such potential market as Vietnam, they noted.

Electronic billing service makes Vietnam debut

The Vietnam Datacommunication Company (VDC), a subsidiary of the Vietnam Posts and Telecommunications Group (VNPT), officially launched Vietnam’s first e-Billing service last week.

The new feature saves enterprises money previously spent on printing, delivering and storing paper-based bills. It also saves time, as customers no longer have to wait for their bills to arrive by post. Electronic billing is green too, drastically reducing the amount of paper used and wasted.

The e-Billing service is an integral part of current efforts to modernise businesses’ accounting processes. Enterprises and organisations that issue bills in large quantities could benefit greatly, including those in the fields of telecommunication, electricity, oil and petrol, water, banking, credit and television.

VDC offers businesses the choice between two types of e-Billing services – ‘Package’ or ‘Solution model’. Customers who choose the first will be able to issue and manage electronic bills directly on the VDC network, while those who select the latter will invest in building proprietary infrastructure and acquiring the necessary hardware with consultation and instruction from VDC.

VDC has also rolled out digital signature authentication (VNPT-CA) and online tax declaration (VNPT-TAX) services to support and enable the rapid and widespread application of the e-Billing initiative.

Shrimp exports enjoy high turnover

For the first time ever, exports of white-leg shrimp have surpassed those of giant tiger prawns, said Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Producers (VASEP).

In 2010, white-leg shrimp accounted for 26 per cent of shrimp exports. Today, they account for 47 per cent.

The country's total export turnover of shrimp in the first nine months of the year exceed US$2 billion; white-leg shrimp posted export turnover of $952 million and giant tiger prawns accounted for the remainder, according to Hoe.

Other seafood products such as tra fish, tuna and molluscs saw a decline in export turnover.

The export volume of giant tiger prawns rose only 2.14 per cent in the third quarter, while white-leg shrimp exports were up nearly 80 per cent over the same period last year.

Early mortality syndrome (EMS) has caused large losses among shrimp farmers in Thailand, while white-leg shrimp farming has been increasing rapidly in Viet Nam.

The farming acreage of white-leg shrimp in 2013 was 12 times higher than in 2012, according to the Fisheries Department.

While the production area of giant tiger prawns was 5,581,441ha, in comparison with only 47,283ha for white-leg shrimp, total production of white-leg shrimp reached 106,497 tonnes –10 times that of the larger shellfish.

The total acreage of white-leg shrimp surged rapidly because farmers could harvest them for export after two and a half months, avoiding the risk of EMS.

Moreover, the productivity of white-leg shrimp was much higher than that of giant tiger prawns, said Nhu Van Can, an official from the Fisheries Department.

The volume of white-leg shrimp exported to Japan increased from 31.6 per cent to 42.7 per cent, while shrimp shipped to the US rose from 37 per cent to 66.3 per cent. Exports to the EU grew to 53 per cent from 45.7 per cent.

Hoe predicted that shrimp prices would continue to go up and export turnover would rise in the remaining months of the year, with average export turnover of $250 million per month and total shrimp exports reaching $2.5 billion to $2.6 billion.

Viet Nam, Iran eye extended trade ties

Iran is increasingly focusing on Asia and especially Viet Nam and other members of ASEAN with the aim of increasing trade ties, speakers said yesterday at a conference.

Organised by the Iranian Embassy and the Viet Nam Chamber of Commerce and Industry in HCM City, the conference was participated by representatives from nearly 20 Iranian companies who come to seek business opportunities.

Speaking at the event, Iranian Ambassador Hossein Alvandi Behineh said: "One of the main obstacles hindering businesses is the lack of adequate, updated information about trade and economic opportunities between the two countries."

Both sides should find ways to remove these obstacles and expand trade relations to a higher level of US$1 billion a year, he added.

With a pivotal geographical location in the Middle East and as a member of the Economic Cooperation Organisation, Iran can provide "an easy access for Vietnamese products to the Middle East, Central Asian and CIS countries", he said.

"On the other side, Viet Nam is a potential market for Iranian companies to establish their business here, thanks to its strategic geographical location and membership of ASEAN in Southeast Asia with over 750 million people."

Vo Tan Thanh, director general of VCCI branch in HCM City, said the two countries had signed agreements that form the foundation for further trade.

Bilateral trade has increased in the past 10 years, from US$6.5 million in 2001 to $185 million in 2011 and $316 million last year.

"But it is still modest compared to the potential of the two countries," he said.

Hossein said that Iran and Viet Nam could be "two wings of the economic-political belt in Asia which can be a gateway for expansion of trade and distribution of goods for each other".

Potential fields of cooperation between the two countries can be in energy, petrochemical, agriculture, fisheries, construction, foodstuff, garment, shoes, pharmaceuticals, tourism and others, he said.

To enhance economic ties between the two countries, Thanh said "problems involving payment methods must be solved".

Habibollah Pour Motahar, deputy head of mission counsellor at the Embassy of the Islamic Republic of Iran, said to eliminate payment barriers in other currencies, businesses should attempt to trade via the national currency.

This is similar to the way Iran trades with China, Russia, India and other countries, as Iran must deal with trade embargoes against its country. He also encourages companies to use barter as a means of trade.

Motahar also urged the two countries to launch direct flights and direct shipping lines to facilitate trade and reduce transport costs.

Viet Nam exports mainly agricultural products such as rice, tea, coffee, pepper, rubber, wood, clothing, shoes, motorcycle part and mobile phones to Iran.

It imports bitumen, petrochemical and other chemical products such as urea, textiles and raw leather from Iran.

Construction violations uncovered

Violations of construction investment and budget use have been found in 24 fresh water and public toilet projects across central Quang Ngai Province.

The news was announced by the provincial people's committee chairman Cao Khoa.

Inspectors discovered that during 2010-13, the provincial Department of Education and Training, which invested in the project, had declared the cost VND359 million (US$17,000) higher than the actual investment.

The department has been requested to submit the extra money to the local budget and discipline individuals who let the wrongdoing take place.

Derivatives decree to manage market

The State Securities Commission has completed a decree on derivatives transactions which will be submitted to the Government for approval this year.

According to director of the Market Development Department under the commission Nguyen Son, the domestic stock market was set up thirteen years ago, but a derivatives market had yet to be firmly established.

Currently, only stocks, bonds and fund certificates are commonly traded.

Derivatives transactions became essential in Viet Nam when unpredictable changes in the prices of commodities, interest rates, exchange rates and stocks posed risks to investors.

Several commercial banks provide currency derivatives, but not enough to meet market demand and prevent risks from exchange rate and interest rate fluctuations.

Regarding the commodities market and futures trading, common products including rice, coffee, rubber and steel have been added to foreign trading floors such as the Commodities Exchange (Comex) and the London Metal Exchange (LME).

However, the application of derivatives in Viet Nam remains limited and lacks State management.

The decree would set a legal framework for the derivatives market under State management, according to Son.

For long-term development, derivatives transactions would be opened to stocks, gold, interest rates, exchange rates and commodities.

He said the operation of the derivatives market was complicated and required careful preparations.

The commission also asked the Ministry of Finance to set up regulations for those allowed to participate in the derivatives market, operational licences, taxes and fees to ensure the market operated efficiently and stably.

The establishment of the derivatives market was in line with the restructuring of the stock market and the Stock Market Development Strategy to 2020, said Son.

VN economic outlook bright

Improved global and domestic conditions offered promising prospects for the Vietnamese economy in 2014-15, although significant challenges lay ahead, agreed speakers at a conference in Ha Noi yesterday.

While Asian economies were now structurally less dependent on foreign capital, Asia's industrial production and exports might jump in the fourth quarter on the US housing recovery, said Glenn Maguire, ANZ's chief economist in the Asia Pacific region.

New economic policies in Japan – Abenomics – were working and would help reactivate supply chains throughout South Asia in the coming months, he added. This meant ASEAN and Viet Nam could outperform expectations at a time when China faced slowdown and India and Indonesia were becoming weak points for regional economic development.

Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, said the domestic economy had seen the first steps of recovery since September.

He pointed out that manufacturing was showing high growth, with the industrial production (IIP) index hitting 9.2 per cent in the fourth quarter. Exports were also recovering strongly, increasing 9.5 per cent in September after months of reduction.

Total registered foreign direct investment (FDI) expanded 36 per cent to reach US$15 billion in the first nine months.

Glenn said FDI was a bright spot despite weak domestic demand and manufacturing had so far attracted nearly 82 per cent of total FDI.

A Government report delivered by Prime Minister Nguyen Tan Dung on Monday said national gross domestic product (GDP) was forecast to grow by 5.4 per cent by the end of the year, close to the 5.5 per cent annual target.

Glenn said ANZ anticipated growth to come in below potential in 2013, at about 5.1 per cent. "To get back to potential growth (around 7 per cent), banks and State-owned enterprises need to be restructured and the global economy needs to return to ‘normal,'" he said.

While foreign portfolio capital kept flowing out, the banking sector remained the weakest link for the domestic economy.

Official data revealed that the cumulative foreign indirect capital outflow reached $185 million in the past 17 weeks; total lending rose about 6.5 per cent during the first nine months, more than half the annual credit growth target of 12 per cent.

"The economy is depending largely on Government measures to restructure State-run firms, the financial system and public investments," said Nghia.

He said solving bad loans had to continue to be a key measure, as the lending situation would determine investment decisions by the private sector, which was facing great caution from lenders: "Pushing loans reasonably into the economy remains a medium-term difficulty."

The Viet Nam Asset Management Company (VAMC) could buy VND35-45 trillion ($1.67-2.14 billion) worth of non-performing loans by the end of the year and the Government's VND100 trillion ($4.76 billion) bad debt solving package could be used up by next June, he said, meaning additional policies would be soon needed.

Nghia said Viet Nam still lacked necessary legal framework for dealing with cross-ownership among banks and businesses, greatly hindering transparency and preventing bad debt resolution: "This can't be prolonged and the Government must definitely deal with it."

Next year, State budget deficits would be allowed to increase from 4.8 per cent to 5.3 per cent, he said, which would let the Government step up public investments to facilitate economic growth.

Proposal for different images on Vn. currency faces controversy

The proposal of voters in the southern province of Long An to print images of other national leaders, who made contributions to the country’s independence, on Vietnamese currency, faces controversy.

Before the sixth session of the 13th National Assembly, the SBV sought voters’ opinions for monetary policies, in which, voters in Long An Province recommended that besides printing the image of Late President Ho Chi Minh, on high-value notes, the SBV should print the images of other leaders who made great contributions to national independence on the remaining notes.

On the sidelines of the NA meeting on October 21, speaking with a DTiNews reporter about this proposal, NA Deputy and Historian, Duong Trung Quoc, said, “It's not a bad idea in principal but the selection of those to be represented on the currency must be discussed." To date, only the image of the late President, Ho Chi Minh is on the national currency. Therefore, the change must have the peoples' approval.”

Meanwhile, Economist Dr. Nguyen Minh Phong said it's a good idea, however, it needs the consideration of management agencies because the criteria which define a person who has made great contributions to the country can change in different times.

“If the choice is based on fixed criteria, comparisons that might cause concern will obviously take place. Additionally, it is quite costly to change the design of Vietnamese currency so I think we should publish a summary record to commemorate these people or use their names for roads, bridges etc. Only the images of one or two people should appear on the currency,” Phong said.

Economist Bui Kien Thanh said that in the context of the current economic downturn, with the bankruptcy of thousands of businesses, the government should spend the state budget to support them, instead of thinking about the costly exercise of printing new money.

Earlier, replying to the voters in Long An Province, the SBV said, our currency is a national symbol which conveys national values and other messages to users. Thus, only images of important people or important events from history should be selected and in Vietnam, this is decided by the Politburo.

According to the SBV, the front side of the currency should show the image of the late President Ho Chi Minh who is a national hero and a world cultural icon. His image has justifiably been used since 1945, while on the other side, images of Vietnamese people during the national protection and construction period, as well as the country’s natural landscapes and cultural relics, are favoured.

Hanoi fails to deal with abandoned land

Hanoi authorities set a target to settle the issue of many land plots left idle or used for wrong purposes over the past years, but to date they have still failed to control the problem.

In mid-2012, the Hanoi People’s Committee found violations at 32 local land plots in the four districts of Thanh Xuan, Cau Giay, Tay Ho and Tu Liem, covering a total area of 488,545 square metres, used by 23 investors.

Among those, more than 15 plots remain unused with a total area of 309,368 square metres, while 10 others are used illegally as parking lots, restaurants, garages and mini football grounds.

The list of violators includes Vietnam Construction and Import-Export Joint Stock Corporation (Vinaconex), Housing and Urban Development Corporation (HUD); Hanoi Construction and Investment Joint Stock Company No2. (Hacinco) and Song Da Corporation and a number of others.

After a range of delayed projects, the municipal authorities have asked districts to deal with land violations. However, over the past year, many of the plots given for projects remain as they were, covered by wild grass.

Many of the plots in Hanoi are used for restaurants and parking lots.

Along Pham Hung Street in Cau Giay District and Tu Liem District there are dozens of plots listed among those to be revoked.

Many land plots covering thousands of square metres in Tay Ho District were auctioned, but were left idle for many years.

Ba Dinh District has at least nine projects left idle for many years, including a 4,000-square metre one in Ngoc Ha Ward developed by Handico since 2003.

Nguyen Trong Dong, Director of Hanoi Department of Natural Resources and Environment, said, “We have proposed that the city withdraw land from the two delayed real estate projects in Ba Dinh District for school and cultural housing projects.

The project was assigned to the investor in 1999, but, to date, it has been no groundbreaking, he added. Some investors had financial difficulties due to the economic downturn, but many intended to keep land.

The vice chairman of the Hanoi People’s Committee, Vu Hong Khanh said, “Any violator will be strictly punished.” However, in reality, settlement of the issue remains very slow. The number of revoked projects is modest compared to the found violations.

Pham Sy Liem, Vice Chairman of the Vietnam Construction Association, said many enterprises tried to seek authorities’ approval for their projects, but due to their limited capacity, they left projects idle.

“It is due to both the irresponsibility of investors and the lax management of authorities,” Liem noted.

HCM City wants to tighten import of used machines

Following the Prime Minister’s instructions on enhancing control of imported technology and machinery, the HCMC government is consulting relevant agencies over how to choke off the import of outdated technologies from foreign countries.

Speaking at a meeting held on Sunday with agencies and business associations, HCMC vice chairman Le Manh Ha urged closer scrutiny on machinery from China, following an announcement in 2011 by the neighboring country to close down 2,255 facilities with outdated technology that pollute the environment.

These facilities are in the sectors of metallurgy, leather tanning, dyeing, steel, cement, coal, glass, paper, alcohol, monosodium glutamate and chemical fiber.

“There is high likelihood that Chinese enterprises have tried to sell old equipment and machines to Vietnam,” said an officer at the HCMC Department of Science and Technology.

Ha said that he would propose the Ministry of Science and Technology to delegate power to localities to control the import of such machines for easier and more effective management.

European SMEs supported to enter Vietnam

The European Union (EU) will begin a project to establish a center next month to assist European companies, especially small and medium-sized enterprises (SME), to invest and do business in Vietnam under an agreement signed in HCMC on Monday.

The agreement was clinched by Franz Jessen, ambassador and head of the European Union Delegation to Vietnam, and Pierre-Jean Malgouyres, chairman of CCIFV - the French Chamber of Commerce and Industry in Vietnam.

“The signing today is to make sure that further European investment will be coming to Vietnam. Particularly, we are trying to increase the investment from European SMEs,” Jessen told reporters after signing the agreement.

CCIFV is the implementation partner of the project worth 3.8 million euros for the center. Jessen said this business center would be located in HCMC but would also organize activities in Hanoi to support European SMEs in this market. European chambers of commerce will also get involved to bring into play this initiative.

Malgouyres said the center would operate as an open consortium consisted of European partners in order to maximize assistance for the European SMEs to enter Vietnam. He detailed this center would operate for least five years but expected that it would be in place for many more years with support from the EU.

European SMEs when facing difficulties related to market access and coping with legal issues when entering and operating in Vietnam would be helped to address these challenges and find reliable partners, Malgouyres answered a relevant question raised by the Daily after the signing.

Jessen said the business center would officially operate during a visit of a vice president of the European Commission leading a delegation of European companies to HCMC in the next three weeks to promote cooperation between SMEs of Europe and Vietnam. With collaboration of the Vietnam Chamber of Commerce and Industry, these European SMEs will meet with local counterparts to explore opportunities for forming joint ventures.

According to the European Chamber of Commerce in Vietnam (EuroCham), the European business delegation will sound out the prospects in a number of areas, including tourism, agriculture and pharmaceutical.

The EU ambassador Jessen said many European companies had asked about the Free Trade Agreement (FTA) between the EU and Vietnam as this would affect their future decisions. He added the two sides would convene at the fifth round of negotiation for their FTA in Hanoi next week and things had progressed very well.

Exporters advised to prepare for Vietnam-EU FTA

Exporting firms are advised to know well about commitments of the Free Trade Agreement (FTA) between EU and Vietnam which is still under negotiation to make use of opportunities and boost export to 28 member countries of EU.

Pierre Defraigne, Executive Director of the Madariaga - College of Europe Foundation, said that enterprises should increase access to information, regulations and opportunities concerning the Vietnam-EU FTA. This will help small and medium enterprises to meet requirements when accessing the EU market, he said at a dialogue on trade policy of the EU within the framework of the Multilateral Trade Assistance (Mutrap) held on Monday in HCMC.

The EU has adopted a policy towards the east aimed at seeking new markets and boosting production of low-price products which will be supplied for the EU market, he said. This is a chance for enterprises to expand their connection, take advantage of the technological and technical development of EU member countries and increase the production capacities.

According to the Ministry of Industry and Trade, EU is currently the second biggest trade partner and the biggest exporting market of Vietnam.

Two-way trade between EU and Vietnam reached US$29.1 billion last year, with Vietnam’s export to EU accounting for US$20.3 billion and import of US$8.8 billion. Major exporting products to EU are footwear, coffee, apparel, furniture and seafood.

The fifth round of negotiations for the FTA will be held in Hanoi next week.

Dong Phuong opens new convention center

Dong Phuong Group’s The Adora Grand View is expected to lead competition in the wedding and convention center segment to heat up in HCMC.

The Adora Grand View, located on Ngo Gia Tu Street in District 5 and inaugurated on Wednesday, covers some 22,000 square meters and has seven large halls with a total seating capacity of about 5,000 persons, the company said.

This is the second The Adora convention center to be built by Dong Phuong after the first inaugurated on Nguyen Kiem Street in Go Vap District last year which can accommodate around 500 dining tables.

Investments in the convention center segment have been rising in recent times thanks to surging demand and fast capital investment recovery.

Ben Thanh Land is among the local enterprises that have ventured into this market segment as it has the Riverside Palace on Ben Van Don Street in District 4 with nine halls able to accommodate some 4,500 people at a time. The company also plans to construct two more, with Nhu Ngoc Palace in Thu Duc District’s Hiep Binh Phuoc Ward and Nam A Convention & Wedding in Phu Nhuan District.

There are around 120 wedding and convention centers of different sizes in the city.

The newly-opened facility raises the total number owned by Dong Phuong to six. Meanwhile, the group said it would inaugurate another project of the same brand, The Adora Premium, on Nguyen Van Linh Parkway in District 7 at the year-end.

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