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Sacombank Securities Company (SBS) at the annual general meeting on Tuesday approved several solutions to maintain its existence on the market as the broker is on the verge of bankruptcy due to heavy losses.
To survive the current difficulties, SBS said that the urgent problem is to restructure capital sources, recover charter capital and secure a minimum capital adequacy ratio (CAR) to escape from special scrutiny soon.
The broker will convert VND500 billion worth of bonds sold to Saigon Thuong Tin Commercial Bank (Sacombank) into shares at the 1:1 ratio to increase its charter capital to nearly VND1.77 trillion. SBS will also dissolve its branch in Cambodia to recover over VND43 billion.
The enterprise also approved changing shares at the 7:1 ratio, which means seven old shares will be swapped for one new share, to reduce its charter capital to VND252 billion. Then, SBS will issue additional shares to existing shareholders at the 1:1.5 ratio to raise the charter capital to VND630.9 billion and reach the minimum CAR requirement of 180%.
However, SBS will have to seek approval of Sacombank, the central bank and the State Securities Commission to carry out these measures. If the plan is realized, Sacombank will hold a 30% stake in this broker.
Speaking at the meeting, SBS chairman Kieu Huu Dung said that if this restructuring scheme fails to obtain approval, SBS will carry out procedures to go bankrupt as its equity has posted a minus VND250 billion.
New computers also contain virus: Microsoft
Virus are often found in computers which are being used but a report of Microsoft Vietnam announced on Wednesday shows that new computers in Vietnam also contain malicious codes.
That is the result of a study about computer safety that Microsoft has carried out in five Southeast Asian nations including Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
Microsoft has taken samples of 282 setup disks and hard disk drives of computers labeled Acer, Asus, Dell, HP, Lenovo and Samsung in the five countries. The company has detected nearly 70% of the tested components contain harmful software with high risks of virus distribution.
The research targeting a total of 41 hard disk drives and nine DVDs in Vietnam shows that 66% of pirated DVDs and 92% of hard disk drives are infected with virus, the highest level in Southeast Asia.
According to the research, Zeus virus is considered as a very dangerous computer worm. The virus enables hackers to steal passwords and help them intrude and recognize individual accounts and other sensitive data of computer users.
“Zeus has caused damages worth about US$1 billion around the world in the past five years,” Vu Minh Tri, general director of Microsoft Vietnam, said.
Studies indicate that computers are attacked by malicious software when their hard disk drives were detached for the installation of operating system and applications. The figure of such computers amounts to up to 50% of the test samples in Vietnam.
Vu Ngoc Hoan, head of the Copyrights Department of the Ministry of Culture, Sports and Tourism, advised consumers to choose reliable computer stores to avoid buying new products having virus. Consumers need to check if the products are integrated with software with legal copyright or not, Hoan said, explaining that many retail stores are trading in computers with software spreading virus among computer users to seek higher benefits.
FPT to open rep. office in Myanmar
FPT Group will open a representative office in Myanmar this year, aiming to promote investment activities in this emerging market.
A source from FPT said the group’s management board had okayed the plan to open the office and appointed Hoang Minh Chau, a member of the FPT’s founding board, as head of the representative office.
The office will serve as a bridge between FPT and Myanmar’s government, ministries, technology associations and customers with the demand of information technology application. In addition, the office will help FPT study, expand the distribution, open stores and build a team of programmers.
FPT will also invest in system integration, e-government, banking, Internet and education.
FPT has opened offices and companies in 12 countries and territories so far including the U.S., Japan, Germany, France, Singapore, Thailand and Malaysia.
The group earned VND25.35 trillion, or some US$1.2 billion, in revenues last year, with pre-tax and after-tax profits amounting to VND2.405 trillion and VND1.985 trillion respectively.
Its core businesses in telecom, digital content, software, computing services and training still achieved good growth, with the software export growing by 34% thanks to the strategy of focusing on foreign markets.
FPT’s number of employees rose by 24% last year to nearly 15,000, mainly resulting from the growth of its software export last year and preparation for this year.
IT firms bemoan poor incentives
IT enterprises said that some industry incentives should be reviewed as they are no longer suitable in today’s society.
Nguyen Viet Hung, managing director of KMS Technology Company, a software outsourcing company for the U.S. market, said that software outsourcing is among sectors receiving investment incentives but there are few policies giving capital support to software firms.
As software firms have no workshops and machines as mortgaged assets, banks usually reject their applications for loans, Hung said.
KMS Technology has signed many contracts with American partners this year and expected to recruit 200 more engineers, so they need a lot capital to expand its business. However, human resource is the only asset of the software industry and that cannot be a mortgaged asset for bank loans, Hung added.
The Government for a long time has given tax incentives to enterprises in the IT sector, including software companies. For example, they enjoy corporate income tax exemptions in the first four years. However, the real demand for enterprises to survive initial years is capital.
Therefore, Hung suggested the Government to map out a capital support policy for IT enterprises to facilitate development of the industry.
Concerning tax policies, Nguyen Huu Le, chairman of TMA Solutions, said that one of the shortcomings is calculation of VAT (value added tax) imposed on software products.
Given regulations in the tax industry, enterprises enjoying tax exemptions are not allowed to deduct VAT in input costs in production expenditure while those subject to the 0% tax rate are approved for VAT deduction.
In fact, to produce software, an enterprise has to buy many products and services that are subject to VAT of 10%. As the tax is not imposed on software firms, they are not entitled to the VAT deduction. Therefore, expenditure for these products and services are taken into account in production costs, seeing profits of software firms declining.
Some enterprises still bemoaned incentives in corporate income taxes. Software enterprises currently get tax exemptions in the first four years since establishment and are subject to a 5% tax rate for the next nine years and 10% in the following two years.
However, these incentives are given to newly-established companies while those having operated for a long time are not entitled to this assistance. This problem will cause adverse impacts in Vietnam’s business environment.
Speaking at a recent seminar in HCMC, Le Truong Tung, principal of FPT University, said that the Government should give incentives in personal income taxes to engineers, programmers and foreign IT experts in Vietnam instead of corporate income taxes.
This solution will help attract high-quality manpower for the IT sector and prevent manpower shortage in the next few years, Tung said.
Vung Ro refinery enjoys import tax incentives
The Government has agreed to let the Vung Ro oil refinery project in Phu Yen Province enjoy preferential import taxes of 7% for petrol, 5% for liquefied petroleum gas (LPG) and 3% for petrochemical products.
Vo Dinh Tien from the provincial Department of Planning and Investment said the province would issue the adjusted investment license to the project this month, and work would start on the project on May 19.
Tien said that regarding the incentive mechanism proposed by the project owner, the Prime Minister has agreed to offer preferential import taxes on petroleum, LPG and petrochemical products like other oil refineries in Vietnam. Besides, the project will enjoy a 0% export tax for its refined products, he added.
If the import taxes of fuel in the coming time are lower than the above preferential rates, it is likely that the State will compensate the investor.
An executive of Vung Ro Oil and Gas Co. affirmed that the project was given the tax incentives. The project has an investment of US$3.7 billion and its capacity has been revised to eight million tons per year from four million tons.
Besides, like other refinery projects, incentives regarding distribution of refined oil products, the tax on foreign contractors, the fee of using sea and seabed, and the tax of using freshwater and seawater resources of the Vung Ro project will be considered.
The project licensed in November, 2007 is constructed in an area of 450 hectares in Phu Yen Province’s Hoa Tam Industrial Zone. Major products of the project are LPG, jet fuel, high-quality petrol, diesel oil, polypropylene, benzene and sulfur.
Hard year in sight for agriculture
A hard year is awaiting the country’s agriculture as rice growers are earning low profits despite big export contracts and seafood producers are coping with diseases, lawsuits and the Ethoxyquin technical barrier.
Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said Vietnam had signed contracts to export 2.3 million tons of rice as of this Tuesday.
“Counting 700,000 tons carried over from 2012, Vietnam has signed contracts to export three million tons, while the volume estimated to be delivered in the year’s first half is 3.5 million tons,” said Phong at a conference on rice and seafood production in the Mekong Delta held in Dong Thap on Wednesday.
The problem of Vietnamese rice is low export prices. Those signing deals for export in January at US$380-390 per ton certainly incur losses, said Duong Nghia Quoc, director of the Department of Agriculture and Rural Development of Dong Thap Province.
However, “if prices picked up, reaching the levels of India, Pakistan and Myanmar, local traders would find it hard to sell their products,” said Phong.
He informed the member companies of VFA had bought over 211,800 tons of rice for temporary storage as of this Tuesday.
To ensure a 30% profit margin for rice farmers in this winter-spring crop, prices must be VND5,500 per kilo or above as for the dried type of the paddy IR 50404, said Quoc of Dong Thap Province.
With a yield of 7.5 tons per hectare and prices of VND4,200-4,800 a kilo for the fresh IR50504, profits are not enough for rice growers in the Mekong Delta to continue farming in the next crop.
Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said he only hoped seafood exports would meet the target of US$6-6.5 billion this year.
The Ethoxyquin technical barrier set up by Japan and South Korea, the anti-subsidy lawsuit filed by the U.S. and shrimp diseases are the three biggest difficulties for the local seafood industry.
“Tra fish supply and demand will be sufficient in the first quarter, but in the second quarter, material shortfall may occur. As for shrimp, material supply is dwindling due to rampant diseases, so some enterprises have imported raw materials,” said Hoe.
In addition, difficult access to bank loans will be a problem for local seafood producers, processors and exporters.
Deputy Minister of Industry and Trade Tran Quoc Khanh said seafood exports in January generated US$486 million, a rise of 139% year-on-year. However, this impressive growth is not a positive sign for export in 2013 because it is attributed to the long holiday break in the same period last year, he explained.
However, the outlook for seafood export is not so pessimistic because China, along with other new markets, has a great demand for shrimp and tra fish of Vietnam, said representatives of seafood trading companies at the conference.
Vietnamese businesses face hurdles in Eastern Europe
Vietnamese businesses face numerous challenges in Eastern Europe in the face of its weak purchasing power and fierce international competition.
They include runaway inflation, high unemployment rates, low GDP growth and devaluation of the euro that has resulted in low income sources.
ASG trade centre in Warszawa
No doubt, this is a risk factor for Vietnamese businesses operating there, said Dr. Le Xuan Nghia, Deputy Head of the National Financial Supervisory Committee.
Nghia’s view was shared by Hoang Manh Hue, Chairman of the Union of Vietnamese Businesses Associations in Europe, who said that Vietnamese traders should sharpen their competitive edge against their rivals, including those from China.
He suggested they should pay more attention to market trends in their countries of residence.
Hue said most Vietnamese traders in Poland, for example, are involved in garment, handicraft, restaurant, and food business. The devaluation of the Zloty (PLN) against US dollar and other currencies circulating in Europe is making it difficult for them to generate profits as they rely heavily on wholesale business.
Hue stressed the need to develop a retail distribution network, which can secure a firm foothold in the long run.
At the 6th Vietnam Business Forum in Europe held recently in Prague, participants agreed that Vietnamese traders have not yet paid adequate attention to developing retail business and dealing with unhealthy competition and dumping activities in provinces and small towns where Chinese traders are holding sway.
Hue suggested as most of them seem to be in the same fix they should cooperate in a suitable model of operation.
He said despite their competitive advantage of two-decade operation in Europe they have not yet kept pace with rapid changes in the political, social and economic fields.
He urged them to learn more from successful partners in Western Europe.
Vietnam-Myanmar trade up 40 percent
Two-way trade between Vietnam and Myanmar hit US$227 million in 2012, a year-on-year increase of 35.9 percent, according to the General Department of Customs.
Vietnam enjoyed a trade surplus of more than US$8 million with Myanmar for the first time over the past decade, the department says.
It always ran an annual trade deficit with this market between 2003 and 2012, with the figure increasing threefold in 2005 and 2006.
In 2012 Myanmar ranked 55th among 230 foreign exporters to Vietnam, shipping US$117.8 million worth of commodities, up 42.9 percent compared to 2011.
Within ASEAN, Vietnamese exports to Myanmar are just a bit higher than those to Brunei and account for just 0.7 percent of its total exports to all ASEAN member countries.
In January 2013 its exports reached US$13.7 million, increasing by 1.8 percent over December 2012. Its major export items were steel products, machinery and equipment, garments and plastics.
Vietnamese imports fell sharply by 45.6 percent to US$3.6 million due to a sharp reduction in wood imports.
Get-together for business and media representatives in Moscow
The Vietnamese Embassy in Russia held a get-together for Russian and Vietnamese business and media representatives in Moscow on February 28.
Also present were officials from Russia’s Foreign Ministry, Economic Development Ministry, Chamber of Commerce and Industry and related agencies.
Ambassador Pham Xuan Son highlighted the growing bilateral ties in various fields despite the negative impact of the global economic crisis. He said the two-way trade turnover hit a record high of more than US$3.6 billion in 2012 after Vietnam and Russia established their comprehensive strategic partnership following State Present Truong Tan Sang’s official visit to Moscow. The figure is expected to reach US$7 billion by 2015.
Last year, Vietnam welcomed nearly 200,000 Russian tourists, Son added.
He informed that National Assembly Chairman Nguyen Sinh Hung and Prime Minister Nguyen Tan Dung will pay official visits to Russia later this year.
The two countries are going ahead with a number of projects as approved at the 15th meeting of the Vietnam-Russia Inter-Governmental Committee on Economic-Trade and Scientific-Technological Cooperation, Son said.
The Vietnamese diplomatic revealed that Vietnam and the Customs Union of Belarus, Kazakhstan, and Russia will start their negotiations on free trade area (FTA) establishment at the end of this month.
Russian participants spoke highly of the traditional friendship and comprehensive strategic cooperation between the two countries and expressed hopes that the FTA agreement between Vietnam, Belarus, Kazakhstan, and Russia will be signed soon to boost bilateral and multilateral cooperation, especially on trade, high technology, fuel, energy, and farm produce.
Vietnam Airlines discounts HCM City-Yangon flights
Vietnam Airlines made a February 28 announcement that they are upgrading their aircraft on the Ho Chi Minh City (Vietnam)-Yangon (Myanmar) route to meet increasing travel demand between the two cities.
From March 31, Vietnam Airlines will employ Airbus A321 on the high traffic corridor, replacing Fokker 70s. The Airbus 321 is a more modern aircraft, providing services for business class customers.
The change also means a 75 percent increase in the number of Vietnam Airlines seats available between these cities.
To mark the occasion, the national carrier will offer discounts on seats by up to 27 percent, starting from US$220 (around VND4,62 million) for a two-way economy class ticket.
The sale will apply to tickets sold from now until March 30, 2013, as well as journeys departing from April 1 to September 30, 2013.
Currently, Vietnam Airlines is the only national carrier to operate HCM City-Yangon direct route, with three flights per week, on Tuesdays, Thursdays and Sundays.
Hanoi’s tourism potential spotlighted in foreign media
The Hanoi Department of Culture, Sports and Tourism has planned to promote the capital city as a tourist destination in the foreign media.
The promotion programme will be featured on several television channels in Russia and the Asia Travel Mart Online Magazine.
Hanoi’s tourism potential will also be introduced in other foreign markets such as Canada, China and the Republic of Korea.
Last year was the first time the city’s annual foreign tourist arrivals exceeded 2 million, and the city expects to welcome 2.25 million foreign visitors this year.
In 2012, Hanoi was rated the best destination in Vietnam for city life by Lonely Planet Traveller, the world’s leading tourist magazine.
Together with Hoi An, the city made the 2012 top 10 attractive destinations in Asia, as chosen by Smart Travel Asia, a Hong Kong online tourist magazine.
It came second in a list of 100 international cities with good hotel services, which was compiled by the well-known tourism website Trivago.
Mekong cities look to attract regional guests
Four cities in the Mekong sub-region, including Phnom Penh, Vientiane, Yangon and HCM City, will jointly promote tourism in Japan and South Korea.
According to the HCM City Department of Culture, Sports and Tourism, this will be one of the main topics to be discussed at a meeting of the four cities taking place in HCM City on March 20-22. Last September, the cities’ mayors signed a statement on tourism development cooperation at the International Travel Expo in HCM City.
City officials will discuss the programme as well as other projects about student exchange and linkages of enterprises, banks and other suppliers to create opportunities for tourism development.
The first joint tourism-promotion programme will take place in Japan in May this year and in South Korea next year.
Shopping draws visitors to northern border town
Shopping is one of the attractions for visitors to Lang Son, the city located near the border with China.
Three markets featured in Lang Son’s tourism guidebooks are Dong Kinh, Ky Lua and Tan Thanh, where visitors can buy anything and bargain freely to get the best prices.
Dong Kinh and Ky Lua markets are located in the centre of Lang Son City, with everything from grilled ducks to electronic products on offer, while Tan Thanh market is about 30km away from Lang Son City.
Vietnam export to Africa and Myanmar soars
Economists predict that the Vietnam export to Africa would increase by 20 percent to US$3.12 billion in 2013.
In January, the total shipment of commodities to Africa was US$62.9 million, mainly telephones and components (US$34.3 million), footwear (US$8.1 million), cashew nuts (US$261.4 million), and coffee (US$1.436 million).
Senegal’s imports from Vietnam earned US$2.93 million including rice (US$1.39 million), garments and textiles (US$161,300) and means of transport and components (US$195.400) while Algeria’s imports reached US$18.9 million, including rice (US$4 million) and coffee (US$9.9 million).
Vietnam and Africa are determined to seek a vigorous growth of trade exchange and Africa remains Vietnam’s potential market for export.
Vietnam’s exports to Africa have annually increased by 20 percent, earning around US$2.6 billion last year. Its major markets include Algeria, Angola, Mozambique, Ghana, Egypt, Nigeria, Cote d’Ivoire and Morocco
These countries import mostly rice, coffee, pepper, seafood, computers, electronics and components, telephones, means of transport and components, machinery and equipment, garments and textiles, and footwear from Vietnam.
Vietnamese rice is much consumed in Africa. Africa is estimated to buy around 24-24.5 million tons of rice per year, including 10 million tons of imported rice from Vietnam.
Last year, Vietnam earned US$900 million from rice exports to Africa, up 22 percent from the previous year, and US$264 million from telephones and components, up 104.7 percent.
Africa is a major producer of cashew nuts, from which Vietnamese businesses expect to import a large volume of raw cashew nuts to reprocess for export to the US and EU.
In a related news, the General Department of Customs informed that the two-way trade between Vietnam and Myanmar hit US$227 million in 2012, a year-on-year increase of 35.9 percent,
Vietnam enjoyed a trade surplus of more than US$8 million with Myanmar for the first time over the past decade, the department reports.
In 2012 Myanmar ranked 55th among 230 foreign exporters to Vietnam, shipping US$117.8 million worth of commodities, up 42.9 percent compared to 2011.
The potential of trade exchange between the two countries are great as in ASEAN, Vietnamese exports to Myanmar account for just 0.7 percent of its total exports to all ASEAN member countries.
In January 2013 its exports reached US$13.7 million, increasing by 1.8 percent over December 2012. Its major export items were steel products, machinery and equipment, garments and plastics.
Dong Nai leads the nation in FDI capital
The southern province of Dong Nai has attracted foreign direct investment (FDI) capital totaling US$214 million in the first two months of the year, leading the nation in incoming FDI over the period.
The Ministry of Planning and Investment (MoPI)’Foreign Investment Agency unveiled the statistics.
Seven newly licensed projects contributed registered capital of US$127 million. They include Terumo BCT Vietnam Co. Ltd’s US$100 million medical equipment production project in Long Duc industrial park and the US$80 million Shink Mark Hospital construction in Bau Xeo industrial park. Provincial industrial parks will also host seven domestic investment projects capitalised at VND947 billion.
The province has improved its investment environment in accordance with the international integration process, another incentive for foreign investors.
Japan’s almost US$160 million in Vietnamese investments accounted for more than 56 percent of total FDI capital in the first two months of the year, the most from any single foreign investor in Vietnam.
Foreign investors have shown particular interest in the processing industry, manufacturing, real estate, and science and technology.
Exports to Pakistan likely to climb slightly this year
The Ministry of Industry and Trade’s Department for African, West Asian, and South Asian Markets is predicting Vietnam’s 2013 exports to Pakistan in 2013 will increase slightly as Pakistan’s economic difficulties continue.
These difficulties include suspensions in production, fuel shortages, and escalating consumer goods prices
The Department noted two-way trade turnover between Vietnam and Pakistan has increased remarkably. In 2012, however, export turnover reached US$174.8 million (up 3.8 percent on 2011) while import turnover hit US$215.8 million (up 38 percent). Cotton and pharmaceutical products performed particularly well.
Last year’s slow export growth stemmed from declines in some Vietnam’s key export items to Pakistan—fabrics, pepper, cashew nuts, iron and steel, garments and textiles, and plastics.
Tea products accounted for US$45.3 million of export turnover (up 39.3 percent), seafood US$13.5 million (up 36.3 percent), and rubber US$10.2 million (up 161.5 percent).
The sharp increase in import turnover came from cotton imports, the 53,854 tonnes, triple the quantity and 2.5 times the value of cotton imports in 2011.
The Pakistani market has great demand for agricultural produce, food, consumer goods, and mechanics, equipment, and materials
Pakistani consumers do not require strict quality standards, their comparatively low-income earning making price a more important factor.
Vietnamese consumer goods can meet these demands, but political and economic instability in Pakistan will hinder Vietnamese businesses from increasing exports to the traditional tea, seafood, rubber, pepper, and cashew nuts.
Vietnamese businesses in Russia head for homeland
Moscow’s Vietnamese Entrepreneurs Association has always helped businesses with any difficulties they encounter, stabilised their production, and assisted the Russian Vietnamese community’s development.
Vietnamese Entrepreneurs Association President Tran Dang Chung made the affirmation at a March 2 meeting reviewing the association’s activities in 2012 and devising orientations for the New Year.
Chung highlighted the association’s achievements in helping Vietnamese businesses map out and implement longer-term strategies, develop trademarks, penetrate the Russian market, protect fellow members’ legitimate rights, attend the Czech Republic’s Vietnamese Business Forum, and conduct a market survey in Krasnodar City.
In addition, the association and the Vietnam Chamber of Commerce and Industry (VCCI) successfully co-organised the Vietnam-Russia Business Forum as part of State President Truong Tan Sang’s high-level Russian visit in June 2012. It has also encouraged organisations to fundraise on behalf of soldiers stationed on the Spratly Islands, Agent Orange victims, and disadvantaged Vietnamese people.
Chung stated strengthening solidarity and developing community will continue to be association priorities in 2013. Other focuses include supporting businesses and overseas Vietnamese, attending the inauguration ceremony of a multi-functional culture and trade centre at the Hanoi-Moscow Hotel, organising partner-seeking visits to Volgograd City and Ukraine, and further fundraising mobilisation.
Vietnamese ambassador to Russia Pham Xuan Son praised the association’s 2012 achievements in supporting the community and participating in people-to-people activities that consolidate the Vietnam-Russia relationship. The ambassador noted Vietnam has begun Free Trade Area negotiations with the Customs Alliance of Russia, Belarus, and Kazakhstan.
The association should consult with businesses and the Vietnamese community to ensure they are kept up to date with developments in Russian laws and procedures, he said.
The ambassador said many Russian cities and localities are eager for Vietnamese businesses to increase investment and expand production.He called on the association and its Vietnamese business members to contribute to important upcoming Russian visits of National Assembly Chairman Nguyen Sinh Hung and Prime Minister Nguyen Tan Dung. These visits present an opportunity to build upon the traditions of friendship, cooperation, and partnership between Vietnam and Russia.
Vietnamese-German economic seminar in Berlin
The Berlin-based Viethaus hosted a Vietnamese-German economic seminar on March 2, attended by 18 Vietnamese and overseas Vietnamese business representatives.
In his speech, Vietnam-Germany Business Association Chairman Dr. Nguyen Ngoc Ky explained his organisation wants the seminar to serve as a bridge for Vietnamese businesses enter the German market.
Roland Ballack, a representative from the German Agency for International Cooperation (GIZ), said Vietnamese businesses had been invited to join the agency’s internationally renowned business administration refresher courses since 2009.
Trade Counsellor to Germany Nguyen Thien Binh said relations between Vietnam and Germany have grown steadily in the wake of the Hanoi Statement on a future strategic partnership and Vietnam-EU relations, signed by both countries’ Prime Ministers.
Successfully negotiating the Vietnam-EU Free Trade Agreement (FTA) will open up greater prospects for developing the relationship between Vietnam and the EU, Binh said.
The seminar’s participants briefed each other on their businesses’ potential, noting that both German and Vietnamese authorities should improve cooperation in specific areas.
Some Vietnamese businesses operating in Germany highlighted obstacles hindering their operations and expressed hopes their concerns would be addressed.
The seminar also enabled representatives to share information, strengthen mutual understanding, and discuss business opportunities.
Vietnam Tra Fish Association established
A congress founding the Vietnam Tra Fish Association was held in the southern province of An Giang on March 2.
The congress elected 47 members to the association’s Executive Committee. Former Minister of Agriculture and Rural Development Nguyen Viet Thang was chosen as Vietnam Tra Fish Association Chairmanfor the 2013–2015 term.
Reports suggest the Mekong Delta’s tra farming areas have declined around 1.03 percent annually over the last five years. It demonstrates the region’s farming area hovers at approximately 6,000 hectares, meaning the focus should be on increasing tra fish quality and value.
The association is aiming for a tra fish output of 1.2–1.5 million tonnes by 2015, with 800,000 tonnes for export and 150,000 tonnes for domestic consumption.Its other goals include earning an export turnover of US$1.8–2.25 billion, generating jobs for 23,000 workers, and improving the reputation of the Vietnamese tra fish trademark on international markets.
Former Provincial Party Committee Secretary Nguyen Huu Khanh said the newly formed association will help defend farmers’ legitimate rights and encourage healthy, mutually beneficial competition.
State budget down 1.9 pct in two months
State budget revenue dropped by 1.9 percent in the first two months of the year to US$5.52 billion, accounting for 14.1 percent of the year’s estimated total.
According to the Ministry of Finance, the decrease was mainly due to weak domestic revenue, which totalled US$3.85 billion, equivalent to 14.7 percent of the target for the full year and 1.5 percent less than what was collected in the same period last year.
Domestic business and production were still struggling, inventories continued to be high and consumption of goods and services was still slow.
The extension of the deadline to pay value added tax (VAT) from last June to the upcoming April also affected domestic revenue.
In the first two months of the year, only 27 out of 63 provinces and cities saw collections for the state reach the estimated total of 16 percent, while 11 localities - including the economic hubs of Hanoi and HCM City – saw fewer contributions than predicted.
Collection from export-import activities reached US$1.34 billion, equal to 11.8 percent of the year’s estimate and a decrease of 3.1 percent year on year, as export-import turnover of many commodities with high import tax rates saw a sharp decline.
Turnover of crude oil, automobiles and motorbikes fell by 40 percent, 69 percent and 70 percent respectively.
However, crude oil continued to be a significant source of State budget revenue, accounting for 16.98 trillion US$816 million, or 17.2 percent of the year’s target, thanks to a US$25 per barrel increase in the world crude oil price to an average price of US$115 per barrel.
The issuance of government bonds raised over US$2.1 billion, equal to 22.4 percent of the annual target - making up for state budget deficits.
The Ministry also noted that in general, State budget spending in the last two months has corresponded roughly to estimates.
Money from the budget has gone towards ensuring social security, helping localities overcome the consequences of natural disasters, price stabilisation and providing 29,000 tonnes of rice to the poor during Tet.
In the first two months, the State budget’s overspending was estimated at US$1.1 billion, or 14.2 percent of the year’s target.
Vietnam-India trade enjoys dramatic upturn
Goods exchanges between Vietnam and India boasted reliable year-on-year increases over the 2006–2012 period, resulting in total bilateral trade almost quadrupling 2006’s $US1.018 billion and hitting US$3.943 billion in 2012.
India sees Vietnam as essential to its “Look East” Policy’s aims of penetrating other ASEAN member markets.
Vietnamese-Indian relations have grown steadily in various fields on a bilateral, regional, and global basis.
The Ministry of Industry and Trade’s (MoIT) African, West Asian, and South Asian Market Department predicts the two countries’ ties will capitalise on the firm foundations already existent and help realise the Vietnam-India strategic partnership established by senior leaders in 2007.
The Vietnam General Department of Customs reported Vietnamese exports to India were valued at US$1.782 billion in 2012, up 14.7 percent over 2011 (US$1.553 billion). Imports from India totaled US$2.161 billion, down 7.9 percent.
Although Vietnam maintained its import surplus during the reviewed period, the balance of trade deficit was US$379 million in 2012—down nearly half from a year earlier and accounting for 21.26 percent of export value. In 2006, the trade deficit was 4.5 times higher than export value.
The result is attributable to the ASEAN-India Trade in Goods Agreements (AITIG), signed in the Thai capital Bangkok by ASEAN and Indian Ministers in 2009 and entering effect from June 1, 2010.
Since the AITIG came into force, Vietnam’s export value has surged, assisted by a focus on products with a high export growth such as rubber (an increase of 641 percent) and telephones and components (an increase of 448.57 percent).
Rubber and products made from rubber are a jewel in Vietnamese exports to India with total export turnover reaching US$ 211.57 million, up 93.74 percent on 2011 (US$109.20 million).
Other items earning high export turnovers include telephones and components (US$469 million); machinery, equipment and spare parts (US$238 million); computers and electronics (US$159 million); and coffee (US$58 million). These five commodity groups account for 64.5 percent of the country’s total Indian export turnover.
Fifteen out of 33 imported Indian commodities also recorded growth in turnovers. Maize, fertilizer and chemicals posted the highest with 128 percent, 34 percent, and 30 percent, respectively.
Vietnamese mainly imports Indian products ranging from corn (US$330 million) and animal feeds and materials (US$285 million) to pharmaceuticals (US$236 million) and cotton (US$11 million).
The African, West Asian, and South Asian Market Department says Vietnam is emerging as an attractive destination for Indian investors. In 2012 alone, India launched an additional 10 projects in Vietnam with a total registered capital of US$19.35 million. India ranked 22nd out of Vietnam’s 55 foreign country and territory investors.
The total investment capitalisation of Indian projects in Vietnam hit US$252.35 million at the end of 2012.
Direct Indian investment in Vietnam primarily focuses on industrial sectors, services, and agricultural product processing. Typical projects include the instant coffee plant in DakLak, the black coal powder plant in Vung Tau, and the animal feed processing plant in Tay Ninh.
Last year saw many Indian business delegations visiting Vietnam in the hopes of finding partners and promising business opportunities. Meanwhile, Vietnamese businesses have intensified their own India-based trade promotion activities.
National economic challenges persist in 2013
International and local economists along with Vietnamese business representatives gathered in HCM City on March 1 for a seminar to discuss 2013’s opportunities and challenges for the national economy.
Experts believe achieving a 5.5 percent GDP growth rate while minimizing inflation will require addressing the problems arising from bad debts, excess stock, and the underperforming real estate.
Delegates said that the State’s economic policies should concentrate on regaining the market’s trust. Relevant agencies should undertake economic and business restructuring to improve the health of the market and facilitate the national economy’s transition to a growth model.
They emphasised the importance of removing the hindrances posed by bad debts and helping businesses have easier access to loans to fund their operations.
Dr Le Tham Duong, Head of the Banking University’s Business Administration Department in HCM City, reiterated that the State should honour its responsibilities and focus on dealing with bad debts and inventories that could hurt the national economy in 2013.
IIB cooperates with Vietnamese banks
The International Investment Bank (IIB) signed cooperation agreements with several Vietnamese banks within the framework of a visit by the bank’s delegation.
Under a comprehensive cooperation agreement between IIB and the Bank for Investment and Development of Vietnam (BIDV), IIB will provide BIDV with a 50 million EUR credit in the medium and long term for project and trade assistance.
The two sides also committed to cooperating in savings and foreign exchange transactions.
The IIB also became a partner of the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) in many fields of business activities. It is a favourable condition for the two sides to strengthen information exchange and propose cooperation opportunities.
They pledged to organise more joint conferences, seminars and meetings to seek partners and discuss consumers’ demand of banking services.
On March 1, representatives of IIB and the Agricultural Bank of Vietnam (Agribank) signed an agreement, under which the two sides will exchange views on cooperative possibilities in the coming time and facilitate joint projects between the two banks.
Established in 1970, the IIB used to be a common bank of former socialist countries with the headquarters in Russia’s Moscow and now includes 10 member states. The aim of the bank is to build an effective mechanism of support for small and medium-sized businesses in the member states, and to participate in large infrastructure projects.
It has provided 7 billion EUR worth of loans for about 200 projects in many countries.
Seafood exports fall in February
Vietnam earned US$806 million from seafood exports in the first two months of this year, marking a year-on-year rise of 3 percent.
But in February, the figure hit nearly US$320 million , down 24 percent from last year. Areas that experienced heavy revenue losses included tra fish, down 32 percent to US$100 million, shrimp (US$96 million ), cuttlefish and octopus (US$26 million), recording decreases of 31 percent and 18 percent respectively.
According to industry insiders, poor access to capital and raw materials will continue to impact on production and exports, especially shrimp and tra fish.
Deputy Minister of Agriculture and Rural Development Vu Van Tam asked localities to expand and monitor the market, and promptly clear challenges facing businesses to increase production and trade.
He also asked firms to organise trade promotion activities at home and abroad, and register their trademarks.
Meanwhile, businesses suggested the sector lower indirect and service costs as input and transport fees are increasing.
The Vietnam Association of Seafood Exporters and Producers (VASEP) reported that the US remains Vietnam’s top importer of seafood, with a total share of 16.96 percent. It was followed by Japan and the Republic of Korea with 16.96 percent and 15.3 percent, respectively.
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