IT investors seek more space

Investors in high-tech fields are planning to build factories in HCM City's neighbouring provinces as available land in the city for industrial plants shrinks.

Osamu Kawakami, general director of Nidec Tosok Precision, said his company wanted to do business in the city but was finding it difficult to find enough land to build factories.

On a recent tour of industrial and export processing zones inside the city, his staff could not find available land for new factories.

So the company will build a plant in nearby Ben Tre Province, even though transport and production fees will be much higher than those in HCM City, according to Kawakami.

In HCM City, there is no more land for new industrial parks, while existing ones are fully occupied. High-tech parks in District 9 and Thu Duc District are all full.

As the amount of land has decreased, Ben Tre and Tien Giang provinces have become ideal destinations for investors.

Nguyen Thi Minh Thu, head of the Saigon Hi-Tech Park's investment promotion and international relations division, said the park was given 913 ha of land by the city's People's Committee, with the first phase of development ending in 2010.

Local and foreign investors set up factories during the first phase, covering 90 percent of the land area of 300 ha.

The park's second period of development began this year and is to end in 2015. The remaining 613 ha will be occupied by new investors by the end of 2013. As of this September, it has attracted 29 projects, including four construction projects.

Another 13 projects have received land but have yet to begin operations. Most of the projects are owned by domestic investors, who do not have enough capital to continue. Three of the 13 projects may have their licenses revoked, according to city officials.

Many investors prefer to set up shop in the city because of its natural advantages and international-standard infrastructure.

Nguyen Tan Phuoc, deputy head of the city's Export Processing Zone and Industrial Zone Authority's managing board, said the Tan Than Export Processing Zone was building factories on 38ha in order to meet demand of investors in hi-tech fields.

Blue chips weigh on indices
 
Blue chips fell on the nation's stock markets yesterday afternoon, pushing the VN-Index on the HCM City Stock Exchange down 0.38 per cent to conclude the session at 389.86 points.

Most brokerage companies forecast a downward outlook this week with large-cap shares being the major drag on the southern bourse.

Shares holders began to unload blue chip shares after a strong rally during the previous weeks which would likely drag down the VN-Index and VN30 early this week, according to analysts from Viet Dragon Securities Co.

Without news that will boost the psychology of investors, the market was unlikely to rebound soon, they said, adding that low valuations were not appealing enough to overshadow potential risks.

The total value of trades yesterday was down 33 per cent from a day earlier, reaching just VND297.2 billion (US$14.2 million), of which VND137.8 billion ($6.6 million) came from transactions of top 30 shares.

Only three of the top 30 shares on the southern bourses climbed while 19 codes declined, driving the VN30 Index down 0.43 per cent to 459.04.

HCM City Infrastructure Investment (CII) was the biggest gainer, hitting the ceiling price of VND24,700 (US$1.18) a share, following news on Monday that the company will advance an 8-per-cent dividend in the form of cash for the first phase dividend this year.

Ending September, CII earned a total profit of VND218.37 billion ($10.4 million), an increase of more than 48 per cent over the same period last year.

However, shares in Tan Tao Investment Industry (ITA) were still the most active code with more than 2.5 million shares changing hands, closing off 2.33 per cent at VND4,200 a share.

Sluggish trading also depressed shares on the Ha Noi Stock Exchange, with the HNX-Index down 0.95 per cent to 53.13 points on a modest turnover of just VND259.35 billion ($8.1 million).

Shares of Nam Viet Bank (NVB) and Sai Gon-Ha Noi Bank (SHB) saw huge trading, with over 8 million NVB shares and 5.5 million SHB shares changing hands. While NVB closed flat at VND7,000 a share, SHB edged 5.26 per cent down at VND5,400 each.

NVB on Monday posted a nine-month profit of VND130.7 billion ($6.2 million), down 33.5 per cent year-on-year. The lender's deposits increased by 11.73 per cent to VND16.56 trillion ($788.6 million) but its bad debt rose from 2.92 per cent in the second quarter to 3.97 per cent by the end of September.

Foreign investors finished yesterday as net buyers on both stock exchanges, picking up a combined net buy of more than VND5 billion ($238,000) worth of shares.

 SBV claims bad debts are falling

Bad debt has decreased by VND36 trillion (US$1.715 billion) thanks to the efforts of debt restructuring, debt payment delay and quittance, according to the State Bank of Viet Nam (SBV).

The settled debts made up for nearly 18 per cent of the VND202 trillion ($9.62 billion) total bad debt reported in September by the SBV's inspectors. This amount accounted for 8.6 per cent of outstanding loans.

SBV also seeks to establish a debt purchase-and-sale company to resolve bad debts. This plan has been in formation since last year and SBV expects to propose it to the Government next month. Accordingly, the company would be able to handle some kinds of bad debt estimated to total about VND60-100 trillion ($2.857-4.762 billion).

Forming a council under the Government to deal with bad debt was also mentioned as a possible measure to curb the problem.

According to SBV's chief inspector Nguyen Huu Nghia, the current bad debts could be traced back to the rapid credit growth - nearly 30 per cent on average per year - during the period from 2005-10.

Nghia said that this year could not result in more bad debts because all of the debts this year were of a short-term nature, adding that the total bad debt accounted for around 8-10 per cent of outstanding loans.

He said that 85 per cent of bad debts had security assets equal to 135 per cent of the total. The credit institutions also had credit risk provisions of about VND70 trillion ($3.334 billion).

However, most security assets of bad debts were real estate, and the real estate market was now deep in difficulty. SBV said that it was important to tackle the difficulties affecting the real estate market and speed up inventory clearance to eliminate bad debts and boost the economy.

Meanwhile, SBV also enhanced the restructuring of the commercial bank system.

The bank discovered that the real bad debts of nine commercial banks awaiting restructuring were much higher than the reported figures.

To date, five out of nine banks had their restructuring plans approved and the implementations were in progress. SBV said that after 2012, commercial banks that failed to raise a proper restructuring plan would be subject to coercive measures.

Coconut prices improve

Farmers are finally getting a decent price for their coconuts after joining a large-scale orchard model set up in August in a commune in Ben Tre Province's Giong Trom District.

The first of its kind in the province, the model was set up by the coconut processor, Ben Tre Import-Export Joint Stock Company (Betrimex).

Under the model, coconuts are bought directly from farmers, eliminating middlemen traders. The Hiep Thanh Fertiliser Company offers advanced farming techniques as well to participants. All of the commune's 1,755 coconut farming households, covering a total area of 1,195ha, are taking part in the model.

The Giong Trom People's Committee offered funding support for the project after farmers complained about the drastic drop in prices (VND1,000 per fruit) beginning in October of last year.

Nguyen Minh Hoang, chairman of the Chau Binh Farmers Association, said that teams of 50 farmers each process the dry coconuts by peeling the fruit and scraping the meat out of the shell.

Previously, farmers only sold the coconuts, but with the extra work, they now make more money.

For the last few harvests, farmer Nguyen Van Tuong of Chau Binh Commune sold his dry coconuts for VND42,000 per dozen compared to the previous price of VND12,000.

Tuong told Tuoi Tre (Youth) newspaper that previously local traders had offered lower prices to several farmers because they had to travel too far to buy the produce.

Nguyen Thu Cuc, who works as part of a farmer-team, now earns an average of VND200,000 every day from peeling the outer layer of 1,000 dry coconuts.

"Thanks to this job, my family has additional income," she said.

Betrimex needs about 420,000 dry coconuts a day for production, according to Tran Van Duc, general director of Betrimex.

Ho Vinh Sang, chairman of the Ben Tre Coconut Association, said that with the success of the large-scale coconut orchard in Chau Binh, his association and local authorities had set up two similar models in Mo Cay Nam District's Minh Duc Commune and Mo Cay Bac District's Thanh Tan Commune.

Sang said he hoped that Ben Tre's other large coconut cultivation areas like Chau Binh would establish similar models next year.

The model in Chau Binh has resulted in a more stable supply of coconuts as well as more reasonable prices for farmers.

 Shrimp exports fall as stocks decline

Shrimp farmers, processors and exporters are struggling to survive as high production costs, a lack of raw material and disease outbreaks take their toll.

According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), Viet Nam's shrimp exports to traditional markets like EU and the US have reduced strongly in the first nine months of the year.

Exports to the US market, for instance, reached US$333 million, down by more than 17 per cent over the same period last year.

Nguyen Hoai Nam, VASEP deputy general secretary, said while shrimp prices in other exporting countries have decreased in the past few months, they have risen in Viet Nam, making Vietnamese shrimp less competitive.

Tran Van Linh, general director of the Thuan Phuoc Seafood and Trading Corporation in Da Nang City, said diseases and high input costs have pushed up production costs, hence Vietnamese shrimps were priced higher.

In addition, with the domestic supply shortage, shrimp processing companies were having to import shrimp from other countries, including India and Thailand, to process for export, which also increased production costs, he said.

However, "in the current situation, if we don't reduce prices, Vietnamese shrimp will be unable to compete with these countries," he said, adding that it was not an easy task.

Meanwhile, there has been a slight increase in shrimp prices in the Cuu Long (Mekong) River Delta in recent days, but not many farmers have shrimp to sell since most of them began scaling back production many months ago.

Vo Quang Huy of Soc Trang Province's Tran De District said many shrimp farmers in the district have stopped or scaled back because they'd incurred huge losses to disease outbreaks, and did not have the capital to re-invest.

Huy used to be a large shrimp farmer in the district, with 150 ponds covering 7,000sq.m. However, this year he farmed shrimp in just 10 ponds and left the remaining idle.

Linh said his company used to buy about 50-70 tonnes of shrimp for processing a day, but this has fallen to as low as 5-7 tonnes now.

If farmers are not supported in their efforts to re-invest in shrimp farming, the country's shrimp exports will reduce significantly in the coming months, he said. He also predicted that shrimp export value this year would not reach the $2.4 billion it did last year.

 PTI launches member firms in major cities

The Post and Telecom JS Insurance Corporation officially launched two new member companies in Ha Noi and Hai Duong.

The launch of the companies will bring the number of its member companies to 28, with a total of more than 1,000 employees nationwide.

Soon PTI will continue the expansion of its network and establish new businesses in the southern region. By the end of this year, PTI will establish its Tien Giang Post Insurance in the southern Tien Giang Province.

French business delegation eyes commercial trade

A delegation of 11 French businesses is in Viet Nam to seek opportunities in the fields of technology and urban transport.

The four-day visit, which started yesterday, is being organised by the French Trade Office, Ubifrance.

The delegation, including Alstom Tranport and Gras Savoye, will visit companies and policymakers in Ha Noi and HCM City.

Export taxes on timber, minerals tipped to rise

A proposal to impose or increase export taxes on different categories of wood and minerals has been announced by the Ministry of Finance.

An export tax of 10 per cent was proposed for exports of rough timber – with or without bark – planks and sapwood, and 5 per cent in the case of some categories of sawn timber, and wood to make plywood of 6mm or less in thickness. These categories are not taxed at present.

The ministry proposes a 30 per cent tax on the export of nickel, aluminium, tin, zinc, uranium, wolfram and silver ores – up from 20 per cent at present – to be in line with the current export tax on gold ore.

Gemstones and semiprecious stones, which are not taxed at present, would be taxed at 10 per cent.

Shares reverse gains on bleak outlook

Shares reversed gains made during the morning session to close down, with blue chips leading the downward trend on the HCM City Stock Exchange.

The benchmark VN-Index closed yesterday at just 391.36 points after reaching almost 393 points in the morning, off 0.09 per cent from the previous session.

The value of trades jumped 55 per cent, however, totalling VND454.3 billion (US$21.6 million) on a volume of nearly 29.8 million shares. Property developers Kinh Bac City Development (KBC) and Tan Tao Investment Industry (ITA) hit their ceiling prices after news that KBC chairman and ITA's major shareholder Dang Thanh Tam, also a lawmaker, appeared at the National Assembly meeting yesterday morning after a foreign trip. Previously, Tam asked to be excused from the NA meetings due to health problems, which led to KBC and ITA shares plummeting last week.

ITA was also the most active code on total trades of 2.58 million shares, settling at VND4,300 a share, while KBC closed yesterday at VND5,900 each.

Other blue chips declined, however. Half of the top 30 shares on the exchange sank, pushing the VN30 down 0.24 per cent to 461.03 points.

On the Ha Noi Stock Exchange, the HNX-Index was also down 0.28 per cent to finish yesterday at 53.64 points by the end of the session on decreased value of VND186.6 billion ($8.9 million), down 18.5 per cent from Friday's trading value.

Real estate firm Sacomreal (SCR) was the most active code on the northern bourse with 1.58 million shares changing hands, closing flat at VND5,500 a share. In addition, about 10.8 million SCR shares, worth VND58.2 billion ($2.8 million), were traded through negotiations. Recently, SCR chairman Dang Hong Anh registered to sell 21 million shares.

Up to October 19th, credit growth was at only 2.77 per cent whereas deposit growth reached over 14 per cent. Bad debt problems and unfavourable business conditions are the main factors worrying banks in lending to enterprises, said Pham Tien Dung, an analyst from Bao Viet Securities Co.

"The plan on establishing a corporation to buy up bad debt could solve the debt problem and is expected to facilitate capital flow in the economy. However, this expectation may need a long time to be realised," Dung wrote in a report, noting that businesses would continue to face difficulties such as high interest rates in the short term.

Foreign investors began to unload shares on the HCM City exchange yesterday, responsible for a net sell of VND3.26 billion ($156,000) worth of shares, but they remained net buyers in Ha Noi with a modest net buy of more than VND267 million ($13,000).

 Da Nang to issue bonds for development

Da Nang city plans to issue bonds to raise funds for socio-economic development this year.

City authorities said a VND5 trillion (US$240.4 million) bond issue was aimed to attract 4 million foreign and domestic tourists by 2015.

As part of a master plan put into operation last year, the city will build shopping centres, supermarkets, wholesale markets and entertainment places, plus a night market spanning Han market, Da Nang supermarket, Da Nang trade centre and Vinh Trung Plaza.

The plan aims to make the city a wholesale and retail centre in the region with 12.2 per cent of GDP by 2015 period.

 Ca Mau to spend $5m on dredging seaports

The province has revealed it intended to allocate VND100 billion ($5m) to clear 12 seaports and estuaries as part of its development plan during 2012-15.

The province would spend VND25 billion for dredging massive amounts of soil, deepening the seaport and fulfilling the demands of high-capacity ships and vessels from 90hp and up.

The province plans to draw funds from its own budget as well as attracting foreign and domestic investors

Mekong Delta fisheries ‘require $2.8 billion for sustainable growth'
 
The Cuu Long (Mekong) River Delta will need around VND60 trillion (US$2.88 billion) to sustainably develop the local fisheries sector, officials said at a conference held in Can Tho City late last week.

The State Budget contribution for this outlay will be used in developing fisheries infrastructure, they said.

They will try to tap FDI (foreign direct investment) as well as ODA (official development assistance) funding for other fisheries development projects, they added.

Vu Van Tam, deputy minister of Agriculture and Rural Development, said to ensure sustainable development of the local fisheries sector, delta localities must prepare scientific and specific plans for all processes including production, processing and export of seafood, particularly tra fish and shrimp.

If they do this, they would be able to manage the entire value chain better, ensuring profit distribution and risk sharing in the fairest way possible, Tam said.

He said that the delta fisheries sector has great potential to attract investment from domestic and foreign investors, apart from State Budget disbursements.

Tam said provinces and cities in the Cuu Long (Mekong) Delta region should create close linkages among themselves by setting up a fisheries development centre with Can Tho City as the hub.

Can Tho City has the right conditions to be developed into a fisheries hub for the delta since it has well-developed transport infrastructure linking regional localities by road, water and air. It also has several scientific and technological research institutes and training centres, Tam said.

If Can Tho hosts the delta's fisheries development centre, it would have a common fisheries market for the delta, a marine produce processing complex and a freshwater produce trading floor. It would also include research institutes and a human-resource development centre.

To realise this plan, the Government needs to issue incentive policies to encourage investments outside the State Budget.

"The agriculture ministry will submit a master plan for fisheries development until 2020 to the Government for approval. If the Government approves it, the plan will provide a legal framework for establishment of the centre," Tam said.

Dang Huy Dong, deputy minister of Planning and Investment, agreed with Tam, saying the Cuu Long Delta Fisheries Development Centre should be set up in a way that it can function as an effective link for the fisheries industry in the delta region.

Furthermore, he said, an agency specialising in regulating tra fish production and processing should be set up.

"The ministry plans to call on domestic and overseas enterprises to further invest into the delta's fisheries sector with the main focus on infrastructure facilities," Dong said.

Ho Tram Strip accelerates investment

Canada-backed Asian Coast Development Limited last week started construction of the second tower of the MGM Grand Ho Tram Beach at its $4.2 billion Ho Tram Strip project.

The company (ACDL) commenced work on the pile foundations of the new property that will ultimately include 559 rooms and further leisure facilities, connected to the initial 541-room tower which will open its doors in early 2013.

Ho Tram Strip, licensed in 2008, is the most expensive tourism undertaking in Vietnam’s history. The project includes five five-star hotels, of which two will include entertainment facilities, and a Greg Norman-designed championship golf course.

“We are delighted to announce the formal start of construction on a new second tower for the MGM Grand Ho Tram Beach. I am thrilled that our vision for the Ho Tram Strip and for the future of tourism in Vietnam, is coming to fruition so rapidly,” said ACDL chief executive officer Lloyd Nathan.

Construction had initially been planned to begin next year. However, with the rapid construction of the first tower and leisure amenities, further development was accelerated with a view to commencing construction on Tower 2 prior to opening the first phase of the MGM Grand Ho Tram Beach.

The first tower of the MGM Grand Ho Tram Beach and all of its related leisure amenities were close to completion and will be open early next year, said Nathan. In addition, full construction on its Greg Norman Golf Course has been underway for several months and is also on track to open next year.

The MGM Grand Ho Tram Beach is the first hotel in this project which is managed by MGM Resorts International, one of the world’s leading global hospitality companies.

“The first phase of the MGM Grand Ho Tram Beach is just a few months from opening,” said John Shigley, president and chief operating officer of MGM Grand Ho Tram Beach. “With our 2,000-strong team of dynamic tourism professionals preparing for our grand opening, we are thrilled that ACDL is commencing construction of our neighbouring sister tower.”

Shigley said after the completion of the second tower, which will be constructed within about 18 months, MGM Grand Ho Tram Beach ultimately comprises 1,100 rooms. This will become Vietnam’s largest integrated resort.

“We are looking forward to welcoming our customers through our doors and to bringing the unique energy, excitement, and entertainment of MGM Grand to Vietnam,” he added.

SAM teams up with Greater Houston Partnership

Saigon Asset Management (SAM) has signed a memorandum of understanding with the US-based Greater Houston Partnership to help American and Vietnamese companies enter each other’s markets.

SAM chief executive Louis Nguyen said: “We are delighted to enter in this partnership with GHP as we see clear demand from Vietnamese companies seeking to do business in the US, particularly Houston, due to its strategic location, great growth record and potentials.

“Along with our current office in Ho Chi Minh City, we have taken the opportunity to open a new office in Houston to facilitate efforts between the two cities.”

Genaro J. Pena , GHP’s vice president of international investment and trade, said: “This is a strategic deal for both of us. It will generate more business between Houston and Vietnam. SAM represents a growing Vietnamese market, and their new office in Houston demonstrates the city’s positive environment for foreign direct investment.”

SAM currently manages investment funds Vietnam Equity Holding (VEH) and Vietnam Property Holding (VPH), listed traded on the Frankfurt Stock Exchange and Xetra, a worldwide electronic securities trading system based in Frankfurt.

It has developed a client base and business network among portfolio companies and through various deals, enabling it to connect US-based companies with future Vietnamese partners and vice-versa. SAM runs an office in Houston, Texas.

SAM is raising capital for two regionally focused funds – Indochina Energy Holding and Funan Impact Investment Holding. The former is for investments in energy and natural resources, while the latter focuses on impact investments and agriculture.

The Greater Houston Partnership (GHP) was founded in 1989 and represents interests of Houston companies, facilitating relocations and expansions in the area and well as international outreach initiatives.

Catalyst for growth in difficulty

Vietnam is known as one of potential destinations for investors all over the world. Foreign direct investment to Vietnam is ranked 12th in the world in recent years.

However, it seems that the country does not escape from the impact of the global recession. The development of Vietnam after the crisis is gradually slowed down and shows signs of depression.

According to World Bank, GDP growth of Vietnam is 5.7 per cent in 2012 before increasing to 6.3 per cent and 6.5 per cent in the next two years. Vietnam is ranked at number 22 in the charts with strong growth in the export products such as textile, oil, electricity, rice and machinery. However, there remain challenges for transformation of the industry structure to more high-valued industry, because the majority of the output is still based on agricultural products, seafood and natural resources.

This difficult micro-environment has cast a shadow over operations and financial results of local and foreign enterprises in Vietnam.

Looking back the investing trends in the past few years, many domestic firms followed the crowd's trends. Businesses borrowed funds from banks and invested in different (non-core) areas such as finance and real estate, without careful analysis of the internal and external situations and consultation from professionals.

As a result, many companies could not turnover investing capital and got stuck in the recession. In addition, high interest rate raised burden of debt and made it more challenging for businesses.

Consequently, in the first six months of 2012 there was more than 26,324 corporate dissolution or cessation of business operation.

Tribeco, a local company with over 20 years of history, was no longer owned by its founder. The M&A contract recently turned Tribeco into 100 per cent foreign-owned company. On the other hand, some foreign enterprises withdrew from the market for many reasons such as the current economic situation, frequent policy changes, corruption, unfavorable infrastructure, pirated product and shortage of qualified human resource. In the end, large enterprises such as Shell Gas, Beeline, Bourbon decided to exit from the market.

Despite the fact that Vietnam has serious challenges, it is certain that Vietnam is still appealing for foreign enterprises, with attractiveness of large population, competitive labour cost, and geographical advantage. The increase of foreign companies will make the market in Vietnam more competitive. In such a prospective-in-mid-term but severe-in-short-term environment, more prompt and appropriate decisions by managements are required. In some cases, restructuring of business or organisation is also necessary.

Like catalysts in chemical experiments which are used to start or accelerate chemical changes, professionals contribute clients to accelerate their growth or restructure their business and organizations. Management consultants, for instance, have expertise and knowledge based on abundant experiences of clients’ transformation all over the world. Sharp insights for customers, competitors and companies would take the clients to leading positions in the cutthroat markets.

Now is the time for generation of our own management culture; a mixture of Vietnamese own tradition and foreign advanced technology. The catalysts are not only for companies but for socio-economy.

HCMC posts positive economic signs

Ho Chi Minh City made higher growth rates in goods retails, industrial production value, and export turnovers in the first 10 months of this year, according to the municipal People’s Committee.

Its total goods retails and service revenues stood at over VND 438 trillion, up 17.4% on-year; export turnovers rose 4.5% to US$24.3 billion, state budget collection increased 3.1% to VND 175.6 trillion. In October, the city’s CPI grew only 0.4% against September, while Viet Nam’s CPI increased 0.85%.

To boost socioeconomic development in the remaining months of this year, Ho Chi Minh City is focusing on removing difficulties in production and business, promoting trade and investment activities, expanding export markets, and facilitating enterprises’ access to financial sources.

The city is also well taking care of ordinary people’s life, especially disadvantaged ones. It is ensuring supplies of goods with stable prices to serve the coming Lunar New Year Festival.

Vietnam ranks 53rd in global prosperity index

Vietnam has climbed nine notched to 53rd – two notches above China - in the latest global prosperity index released by British think tank - Legatum Institute.    

According to a survey conducted in 144 countries which account for 96 percent of the world population or 99 percent of total GDP, Vietnam is placed 39th for its healthy economy, 73rd for business opportunity, 55th for national security, 61st for public administration, and 80th for education and healthcare services.

The country has earned higher points than the global average level in the areas of life satisfaction, life expectancy, people who are treated with respect and female representation in parliament.

However, it is lagging behind the global average level in terms of GDP per capital as well as internet access in family.

Topping the list are Norway, Denmark and Sweden.

The United States is placed 12th, dropping from the top 10 which includes Hong Kong and Singapore, while Asian “Tiger Cub” countries such as Vietnam, Thailand, Malaysia, and Indonesia, also rise in the index rankings.

The Legatum Prosperity Index is a unique and robust assessment of national prosperity based on wealth and wellbeing globally which benchmarks 144 countries around the world in eight categories: Economy; Education; Entrepreneurship & Opportunity; Governance; Health; Personal Freedom; Safety & Security; and Social Capital.

Price stabilization in focus

 Although the consumer price index (CPI) slowed down in October, the Department of Price Management (DoPM) under the Ministry of Finance (MoF) is still worried about a possible price hike in a number of essential goods and services in the remaining months of the year.    

DoPM Deputy Director General Nguyen Anh Tuan says high inflation is likely to return as many countries have loosened their monetary policies or used stimulus packages to boost growth.

There are also additional factors such as natural disasters, spreading epidemics, and the general trend to raise prices at the end of the year, he notes.

Tuan insists that ministries, agencies and local administrations should fully implement Government’s Resolutions 1 and 13 by strictly inspecting, monitoring and regulating of prices, taxes and fees applied to essential products, he says.

Tuan proposes intensifying measures to prevent trade frauds, unreasonable pricing, and secret smuggling of cigarettes, oil, gas, and transfer minerals across the border.

All violations should be strictly dealt with within the law.

The Finance Ministry suggests there’d be no more adjustment in the prices of goods and services such as medical check-up and treatment, tuition, water supply, and public transport.

It says other relevant ministries and agencies are also engaged in developing a roadmap for price stabilization based on careful consideration of its effects on production and people’s living conditions.

So, the ministries says, any adjustments should be reported to the authorities in advance.

According to Tuan, the MoF and the Ministry of Industry and Trade will continue to manage petrol and oil prices in line with the Government’s decree No. 84/ND-CP, for the benefit of the State, businesses and consumers.

With the approval of flexible tax policies as well as price stabilization funds, the two ministries will focus on inspecting the importation and distribution of petrol and oil to avoid speculation, which would make the market unstable.

The MoF also proposes tightening controls over the production and price gauging of essential goods by business through their registration and listing.

It is coordinating with other ministries and agencies to stock up with goods for Lunar New Year holidays, in order to ensure a good balance between supply and demand.

Hanoi to host donors meeting in December

The Prime Minister has approved the Ministry of Planning and Investment’s proposal to organise the Consultative Group Meeting (CG) for Vietnam in Hanoi on December 10.  

The PM is scheduled to attend and deliver a keynote speech at the annual meeting.

The PM has asked relevant ministries and agencies to work closely together with the Ministry of Planning and Investment to make thorough preparations for the event to ensure it will be a success.

During the mid-year CG meeting in Quang Tri province in June, donors and authorities of 14 north-central and central midland provinces discussed ways to support socio-economic development, poverty reduction, and climate change adaptation in the region.

The CG Meeting creates a forum for government officials and donors to exchange views on economic policies, poverty reduction strategies, and the effective use of official development assistance (ODA).

The formal meeting normally takes place in December every year while the informal (mid-year) meeting is held in May or June. Vietnam has played host to the event since 1999.

State firms pay 58 percent of all corporate taxes

State-owned enterprises (SOEs) continue to be the leading tax contributors in the list of the 1,000 leading corporate taxpayers in Vietnam, accounting for 58 percent of total tax payments this year.   

According to the so-called V1000 profile, released on October 29 by the Vietnam Report Co in cooperation with the General Department of Taxation and online newspaper VietnamNet, the top 10 corporate taxpayers included eight SOEs, a joint venture and one domestic private company.

Military-run telecom Viettel, the State-run VNPT Group (which operates mobile phone providers MobiFone and Vinaphone), and the State-run Viet Nam Mobile Telecom Services Co (VMS) were all among the top 10.

Many commercial banks which continue to be majority-owned by the State, including Vietinbank, BIDV, Agribank and Asia Commercial Bank, were also high on the list.

Other sectors with companies making significant tax contributions included construction, real estate, building materials, mining, petroleum and food processing.

Rankings were based on the total corporate income tax paid in the three consecutive fiscal years between 2009 and 2011.

Despite the SOEs’ dominance, the private sector accounted for 22 percent of tax collections during the period, an increase of 4 percent over last year's survey.

Of 410 newly rated businesses, 51 percent were from the private sector, compared to just 31 percent last year.

Enterprises in the two leading cities of Ho Chi Minh City and Hanoi continued to be the nation's primary economic drivers, accounting for 60 percent of corporate taxpayers on the list.

Nation seeks sustainable urban development

Vietnam has gained significant achievements in developing its urban areas in line with increasing economic growth and improving people’s living conditions, says Minister of Construction Trinh Dinh Dung.    

Minister Dung made the remark at a seminar discussing the future of Vietnam’s cities, which was held in Hanoi on October 30 by the Vietnam Urban Forum, the Ministry of Construction, and the Cities Alliance.

He said Vietnam has a high rate of urbanization in Southeast Asia, with the rapid development of urban areas to meet the demand for high quality living and working environments.

According to Dung, as of September 2012, Vietnam had 760 urban areas, with the national urbanization rate estimated at 31 percent and predicted to reach 45 percent in 10 years’ time.

Urban areas, which contribute about 70-75 percent to the nation’s gross domestic product (GDP), will provide fresh impetus for economic development and shift the economic and labour structures within each locality, as well as across the whole country, he added.

Dung also pointed to shortcomings in the urbanization of Vietnam, including ineffectively dealing with the impact of climate change and environmental pollution.

The Minister affirmed the country’s policy to develop urban areas alongside building new rural areas by introducing mechanisms to encourage overall development and create links between all regions.

Vietnam aims to develop an urban network with modern and environmentally friendly infrastructure linking major, medium and small cities together, he said.

The representative of the UN HABITAT Asia-Pacific regional office, Paula Pennanen, said all stakeholders, including local authorities, policy-makers, managers and the public, should be involved in improving the quality of urban areas.

All cities in Vietnam play important roles in linking urban areas in the region, she said, adding that UN HABITAT has helped Vietnamese cities through international forums and seminars.

Victoria Kwakwa, World Bank Country Director for Vietnam, said the country should try to learn lessons from international experiences in sustainable urban development.

Car imports drop 50 percent in ten months

Vietnam imported 22,000 CBU (Completely Built Unit) automobiles worth US$498 million in the past ten months, down 45 percent in quantity and 55 percent in value against the same period last year.    

According to the General Statistics Office (GSO), the country imported 2,000 CBU units worth US$50 million in October alone.

The GSO also reported 30,000 CBU motorbikes valued at US$57 million were imported, 49 percent fewer units and 31 percent less value than in the same period of 2011.

However, the import of components and other means of transport rose sharply, recording a total value of US$1.2 billion, an increase of 19 percent over last year.

US$140 mln for oil&gas project

PetroVietnam Exploration and Production Corporation (PVEP) has reached a US$140 million deal with five commercial banks to implement its offshore oil and gas exploitation project in Lot 15-2/01 within Vietnam’s continental shelf.    

The seven-year loan will be provided by OceanBank, VIB, MB, SeABank and LienVietPostBank.

Lot 15-2/01, located in the Cuu Long Basin, covers nearly 280,000 hectares 20km off the southern coast of Ba Ria-Vung Tau province.

Other oilfields are being exploited in the Basin, including Su Tu Den (black lion) in Lot 15.1, Rang Dong in Lot 15.2 and the Rubi project in Lots 01 and 02.

The PVEP project is expected to pump the first oil flow from the Hai Su Trang (white lion) well in the second quarter of next year.

PVEP, a major arm of the Vietnam Oil and Gas Group, is operating oil and gas exploration projects for both the domestic and foreign markets. At present, it is currently involved in 44 projects in Vietnam and 15 projects abroad, mainly in the Middle East, Central Africa, Latin America, and Southeast and Central Asia.

Bad debts are falling, says central bank

Bad debt has decreased by VND36 trillion (US$1.7 billion) thanks to the efforts of debt restructuring, debt payment delay and quittance, according to the State Bank of Vietnam (SBV).   

The settled debts made up for nearly 18 percent of the VND202 trillion (US$9.62 billion) total bad debts reported in September by SBV inspectors. This amount accounted for 8.6 percent of outstanding loans.

SBV also seeks to establish an asset management company to resolve bad debts. This plan has been underway since last year and SBV expects to submit it to the Government next month. Accordingly, the company would be able to handle some kinds of bad debt estimated at VND60-100 trillion (US$2.8-4.7 billion) in total.

Forming a council under the Government to deal with bad debt was also mentioned as a possible measure to solve the problem.

According to SBV's chief inspector Nguyen Huu Nghia, the current bad debts could be traced back to the rapid credit growth - nearly 30 percent on average per year - during the period from 2005-10.

Nghia said that this year could not result in more bad debts because all of the debts this year are of a short-term nature, adding that the total bad debts account for around 8-10 percent of outstanding loans.

He said that 85 percent of bad debts have security assets equal to 135 percent of the total. The credit institutions also have credit risk provisions of about VND70 trillion (US$3.3 billion).

However, most security assets of bad debts are real estate, and the real estate market is now in a fix. SBV said that it is important to tackle the difficulties affecting the real estate market and speed up inventory clearance to eliminate bad debts and boost the economy.

Meanwhile, SBV also enhanced the restructuring of the commercial bank system. The central bank discovered that the real bad debts of nine commercial banks awaiting restructuring are much higher than the reported figures.

To date, five out of nine banks have had their restructuring plans approved and the process is progressing. SBV said that after 2012, commercial banks that fail to raise a proper restructuring plan would be subject to coercive measures.

Retail sales go up in October

Retail sales of goods and services exceeded VND200.9 trillion (US$9.6 billion) nationwide in October, an increase of 1.3 percent over the previous month, the General Statistics Office (GSO) announced on October 29.
    
The results represented a fall in growth from September's month-on-month increase of 2.3 percent, noted GSO economic specialist Vu Manh Ha. He, however, attributed September's jump to an abrupt rise in the costs of healthcare services and the rising demand for textbooks and school supplies as the new school year began.

Ten-month retail sales reached VND1,917 trillion (US$91.3 billion) – an increase of around 6.8 percent over the same period last year. The average annual growth in retail sales has remained below 6 percent since April, a long way from figures in early 2011, when sales were expanding at rates of 7.7-17 percent, Ha said.

"It's likely that the average sales growth of around 6 percent will continue through the remainder of this year, if there is no jump in the consumer price index," he forecast.

5.35 million foreigners visit Vietnam

Vietnam welcomed 5.35 million foreign arrivals in the past ten months, a year-on-year increase of 11.2 percent, according to the General Statistics Office (GSO).    

The number of visitors coming to Vietnam for tourism and leisure activities was nearly 3.2 million, up 8.7 percent compared to the same period last year.

These figures indicate that Vietnam has fulfilled 82.3 percent of its set goal to welcome 6.5 million international holiday-makers by the end of 2012.

The greatest numbers of foreign tourists visiting Vietnam this year come from the Republic of Korea, Japan, Taiwan (China), Malaysia, France and Thailand.

Tripartite conference boosts regional tourism links

More than 60 tour operators from Vietnam, Thailand and Cambodia discussed ways to promote their tourism potential at a conference in Hanoi on October 29.

They shared information on organizing tours and developing new kinds of services to attract visitors.

Chhaysivlin, Director of CLS Cambodia, said the event helps tourist companies find partners from different parts of the world to seek out opportunities for investment and cooperation.

Deputy Head of the Ninh Binh Provincial Department of Culture, Sports and Tourism, Nguyen Ngoc Luyen, said his province has over 1,000 historical, cultural and scenery sites.

It is improving its infrastructures and the quality of services and offering preferential investment policies to boost the local tourism industry and make it a spearhead economic sector in the future.

The conference, jointly held by the Hanoi and Ninh Binh Departments of Culture, Sports and Tourism, aims to promote the 2013 National Tourism Year focusing on the Red River Delta Civilization.