Spain helps improve Vietnam’s tourism capacity

The Spanish government will provide 400,000 euros in non-refundable aid for a project to help Vietnam raise the capacity of its tourism sector from now until 2020, with a vision for 2030.

Spanish Ambassador to Vietnam Fernando Curcio Ruigomez and Vietnamese Deputy Minister of Culture, Sports, and Tourism, Ho Anh Tuan, signed an agreement to this effect in Hanoi on November 29.

The project aims to develop sustainable tourism in line with Vietnam’s strategy for that sector, with the initial focus on improving the management capacity in the local tourism industry.

The project also seeks to diversify tourism products while preserving and building on the unique traditional cultures and values of Vietnam.

Addressing the signing ceremony, Ambassador Ruigomez said he hoped that under the project, Spanish experts will introduce Vietnam to new international standards, thereby helping to improve its competitiveness and develop a socially responsible tourism industry.

He said the project is expected to generate jobs for local people while minimizing negative impacts from the development of tourism.

Luxgen widens its footprint in Vietnam

Luxgen, the luxury automotive brand of Taiwan-based Yulon Motors has opened a showroom in Ho Chi Minh City.

Covering on 1,000 square metres in District 10, the third showroom adds to its existing sites in Binh Duong and Hanoi.

“Ho Chi Minh City as Vietnam’s economic heart is a vitally important market for expanding the Luxgen brand,” said Henry Hsieh, Luxgen’s general manager.

Hsieh also revealed that the company would continue to strengthen its presence in Vietnam by opening more three showrooms in Haiphong, Hanoi and Danang as planned in 2012.

In addition to that, Luxgen has first time introduced a new car model Luxgen7 CEO to Vietnam market, aimed at buyers of luxury imported vehicles.

Ninh Thuan calls for investment
 
The central coastal province of Ninh Thuan has called for investments in 46 key projects, pursuant to its socio-economic development master plan until 2020 and a vision towards 2030.

Despite geographic advantages and substantial potential for mineral exploitation, tourism and agricultural development, Ninh Thuan has found it difficult to attract domestic and foreign direct investment. To date, the province possesses only 23 foreign-invested projects, worth US$571 million.

These figures had lagged behind the national and provincial averages, said Do Nhat Hoang, director of the Foreign Investment Agency under the Ministry of Planning and Investment.

Ninh Thuan planned to offer tax incentives and lower land rental fees for investors in an attempt to draw more capital, said the provincial People's Committee chairman Nguyen Duc Thanh.

Thanh said the province had received approval from the Prime Minister to hire two foreign consulting firms, Monitor Group from the US and Arup Group from the UK, to map out the zoning plan and determine economic strategy.

Accordingly, Ninh Thuan would focus on four key economic programmes that would convert the province into a centre for clean energy, tourism, food and beverage production, and education.

The locality's GDP is expected to grow 16-18 per cent in the next five years and 19-20 per cent from 2016-2020. Experts predict that average personal income will increase to $1,400 by 2015 and $2,800 by 2020.

Private investors less optimistic

The sentiment has been sapped for private equity investors about Vietnam’s economy as only 17% of respondents in a Grant Thornton Vietnam survey hold a positive view, compared to 53% in this year’s second quarter.

The confidence decline is seen as a reflection of the macro-economic problems, said Grant Thornton Vietnam in a report released on Monday.

The financial audit and advisory firm in the report said investors tended to be more cautious than six months ago since the economy is facing more challenges with the drop in gross domestic product (GDP) growth and the rise in the consumer price index (CPI).

Some 84% of respondents described the economic uncertainties as the biggest obstacle to their investment activity in Vietnam.

Regarding the outlook on Vietnam’s economy in the next 12 months, some 51% of the investors expressed a pessimistic view, or a surge of 30 percentage points against the last survey.

The attractiveness of Vietnam as an investment destination has fallen to be the lowest among the last five surveys to 38%. Besides, some 41% of respondents said Vietnam has become less attractive or even unattractive to investors.

Only 29% of the investors replied they would increase their allocation of investment funds to Vietnam, equal to half of the percentage in the previous survey. The numbers of investors unchanging and decreasing their allocation are 43% and 27% respectively.

Bill Hutchison, advisory services partner of Grant Thornton Vietnam, said that as the private sector contributed nearly half the GDP in Vietnam in 2010 and has continually increased its contribution, it was unsurprising that investors consider this sector as the most significant source of deals.

However, he added, the sombre business outlook as confidence wanes is making investors bide their time at the moment.

The most surprising is that property has surpassed education and retail to become the most appealing sector to investors with a jump from 12% to 44%. However, the survey also indicated that almost the same number of respondents rate the real estate sector as the least attractive.

Like the last surveys, red tape, corruption, infrastructure and the legal system remain as the biggest obstacles with more and more complaints from investors in Vietnam.

Besides Vietnam, investors are considering the new markets, with Indonesia chosen by 40% of the participants in the survey, followed by Cambodia and Laos at 20% and 15% respectively.
 
Manufacturers enjoy lower rent

The Government issued Decision No 2093/QD-TTg on November 23 to reduce businesses' land use rental costs for 2011 and 2012. Enterprises conducting manufacturing businesses will enjoy a 50-per-cent reduction in rentals for leased land which is paid annually according to calculations under Decree No 121/2010/ND-CP. The land rent charge is reduced only when such entities (i) have the proper and lawful use of the leased land, and (ii) have been subject to statutory increases in land rent charges at least twice in 2010. However, the reduced land rent charge cannot be lower than the land rent charge in 2010. If the reduced charge remains twice the 2010 charge or more, the payable charge will be reduced to twice the 2010 charge. The new decision takes effect immediately.

New regulations on digital signature certification

The Government issued Decree No 106/2011/ND-CP on November 23 amending Decree No 26/2007/ND-CP of February 2007, issued to implement provisions of the Law on Electronic Transactions on digital signatures and digital signature certification services. Under Decree No 106, the public digital signature is the digital signature created by subscribers using digital certificates issued by an organisation providing digital signature certification services. A specialised digital signature is a digital signature created by the subscriber under the digital certificate.

Under Decree No 106, the organisations providing digital signature certification services are only required to assure that technical, managerial, operating, security and customer service staff are qualified and have never been condemned. They are no longer required to have specialised legal knowledge. Decree No 106 takes effect on February 1, 2012.

Exemptions granted from environmental taxes

The Ministry of Finance issued Circular No 152/2011/TT-BTC on November 11, providing regulations under the Law on the Environmental Protection Tax and Government Decree No 67/2011/ND-CP of August 8, 2011. Under Circular No 152, goods which are not defined in Article 3 of the Law on the Environmental Protection Tax, Article 2 of Decree No 67 and Article 1 of Circular 152 are not subject to environmental protection taxes, provided that (i) such goods are transported from the exporting country to importing country through a border gate of Viet Nam and transited through the border gate (including goods brought into bonded warehouses) without undergoing import procedures into Viet Nam or export procedures out of Viet Nam; or (ii) such goods are transited through a border gate of Viet Nam on the basis of the agreements signed between the Government of Viet Nam and foreign governments or between agencies or representatives authorised by the government of Viet Nam and foreign governments under provisions of law; or (iii) such goods temporarily imported for re-export are within the time limit as prescribed by law; or (iv) such goods are exported abroad by manufacturers or processors or their licensees, except for organisations, households and individuals purchasing goods subject to environmental tax in order to export them.

Organisations and individuals producing and trading in petroleum products will not have to declare or pay environmental protection taxes for gasoline which was declared prior to January 1, 2012.

The circular takes effect on January 1 and replaces Circular No 06/2001/TT-BTC of January 17, 2001; Circular No 63/2001/TT-BTC of August 09, 2001; Circular No 70/2002/TT-BTC of August 19, 2002; and provisions on tax management of fuel in Circular No 28/2011/TT-BTC of February 28, 2011.

City kicks off exporter poll

The HCMC Department of Industry and Trade is calling for local exporters to join in a program called prestigious export enterprises of 2011 and designed to enhance competitiveness and expand export markets.

The selection criteria require the participants to export their products directly and not make any loss in 2009 and 2010. In addition, qualified exporters must not violate Vietnamese law, the international trade law and other regulations, or involve in any lawsuits initiated by their partners regarding the products and brand names.

Moreover, enterprises must properly perform their export contracts, in order not to affect the export development and the reputation of Vietnamese business. The participants are also asked to fulfill tax duties.

Furthermore, to be eligible for the selection, enterprises must have obtained high export sales in 2010, with the threshold varying according to the sector.

In particular, the highest turnover is set for footwear exporters at US$20 million, followed by textiles at US$15 million. Exporters of coffee, seafood and electronic products must achieve US$10 million each.

Furniture exporters should have earned US$8 million in the preceding year, while those exporting rice and cashew had to reach US$6 million in turnover. Other commodities with the required turnover ranging from US$1-5 million include rubber, pepper, electric wires and cables, building materials, machinery, plastic products, vegetables and meat.

HCMC-based enterprises interested in the program can register with the department prior to December 15.
 
Gold owners may exchange other brands for SJC

Gold traders have been informed that their gold bars could be purchased at the same price as Saigon Jewelry Company (SJC) gold when the SJC brand is taken over by the State Bank of Vietnam (SBV) under a looming decree.

Nguyen Thanh Truc, director of Agribank Jewelry Co., said gold of other brands would need around VND30,000 per tael as the processing fee to convert into SJC gold brand. Therefore, people need not to hurriedly offload their holdings of non-SJC gold as it can result in chaos on the market and losses for themselves, he added.

The central bank’s governor Nguyen Van Binh said in a question and answer session last week that Saigon Jewelry Co. would be put under management of SBV and SJC brand would become a national brand. The SJC brand may later be changed to the SBV brand.

The governor said he had worked with the HCMC government as the administrating agency of SJC about this issue, with the goal of realizing the State monopoly over the gold trading and production.

Hanoi-based Bao Tin Minh Chau Jewelry Co. has been much affected although the draft decree has yet to become effective, said general director Nguyen Minh Chau. Gold keepers have sold a large amount of Rong Thang Long gold, affecting the firm’s business operation.

“We are planning to ask for permission from SBV to produce SJC gold, helping the firm buy Rong Thang Long gold at a higher price to avoid damages for customers,” said Chau.

Rong Thang Long gold has been bought by Hanoians for many years, and if they sell such gold at the same time, it may affect cash amounts of his firm. Therefore, the company has to lower the buying price, he added.

Regarding the price parity of non-SJC and SJC gold, Nguyen Ngoc Que Chi, general director of Sacombank Jewelry Co. (SBJ), said gold of different brands should be sold at the same price as they had the same quality.

Besides, Truc from AJC said the use SJC gold as a national gold brand was reasonable as it helped the State control the market and avoid speculation.

He also suggested that other large firms having good financial capacity and experiences be allowed to produce SJC gold in case SJC is not able to supply the increasing gold demand, and SBV should have a close monitoring of producing SJC gold.

Following news of the forthcoming decree on gold management, sales at SJC have surged while trading at other gold enterprises has become stagnant.

Nguyen Cong Tuong, SJC’s deputy sales manager, said his company’s gold trading last week was the highest over the past two months with 20,000 taels sold last Thursday alone. The total volume of gold sold by SJC in the week was over 42,000 taels, equivalent to 1.57 tons.

Meanwhile, trading at other firms is not active, with only 2,000 taels on the busiest day.

It is because gold keepers prefer SJC gold rather than gold of other brands, said Chi of SBJ.

The domestic gold price on Monday rose in accordance with the global trend. The buying and selling price of SJC was VND44.87 million and VND45.02 million per tael, up VND420,000 from last week.

The price of Rong Thang Long gold was VND44.25-44.50 million per tael, VND520,000 lower than SJC.
 
Ninh Thuan says nuclear power projects a catalyst for investment

Ninh Thuan Province said on Monday the development of two nuclear power projects would serve as a catalyst to attract more investment into the central province, despite earlier warnings that investors would walk away over safety concerns.

Provincial chairman Nguyen Duc Thanh asserted that the development of these two projects of national importance would spur infrastructure development in Ninh Thuan, thus attracting more investors, local and foreign alike.

He brushed off the worries that emerged following the nuclear crisis in Japan, saying no negative impact had been seen on the province’s deployment of such projects. He was speaking at a press briefing in HCMC on Monday to introduce a conference that will be organized in Ninh Thuan Province early next month.

The conference to announce the master plan on socio-economic development of Ninh Thuan until 2020 and investment promotion in 2011 is slated for December 10.

After revealing the nuclear power projects at a conference held in Ninh Thuan in October 2009, the province recorded a more satisfactory investment attraction, Thanh said. In particular, there have been 70 fresh projects added with total registered capital of VND20 trillion (some US$970 million), compared to some 200 projects licensed before the power projects were announced.

Thanh said the infrastructure in the province would benefit from the nuclear power projects.

For example, the road system stretching a combined 116 kilometers to serve the power projects will help connect other projects related to tourism, marine industry, coastal residence management and climate change tackling.

In addition, improved infrastructure will facilitate the development of the locality, create jobs and promote supporting services for the housing projects for specialists. This would trigger the development of the property market, he said.

Pham Dong, director of Ninh Thuan Province’s Department of Planning and Investment, said the nuclear power projects made the province become more appealing to local and foreign investors.

At the event on December 10, Ninh Thuan will release the master plan for socio-economic development of the province to 2020 with a view to 2030 conducted by two foreign consultancy firms namely Monitor Group of the U.S. and Arup of England.

Under the master plan, the province will focus on the development of six economic pillars, including clean energy, tourism, agri-aqua-forestry, manufacturing and processing, education and training, and property.
 
Extension for corporate income tax payments

Labour-intensive businesses will enjoy a one-year extension on 2011 corporate income tax payments, under Ministry of Finance Circular 170/2011/TT-BTC.

The circular, which takes effect on January 9, provides that enterprises and co-operatives in manufacturing, processing, agriculture, textiles and garment, footwear products, electronic components, and civil engineering with an average of over 300 regular employees during 2011 would be eligible.

The enterprises operating in the real estate, banking, insurance and securities sectors, as well as importers of luxury goods, would not benefit.

Under the terms of the extension, temporary tax payments for the first quarter in 2011 would be payable in April 2012; those for the second quarter would be payable in July 2012; and those for the third quarter would be payable in October 2012. Taxes for the last quarter of 2011 would not be due until March 2013.

In April, small- and medium-sized enterprises with 200-300 employees were granted a one-year extension on corporate income tax payments under a decision issued by Prime Minister Nguyen Tan Dung with the aim to help small businesses overcome inflation and the disadvantages created by foreign exchange fluctuations.

Garment exporters aim high

The garment industry has set itself an export target of US$15 billion next year despite a slew of possible hurdles in its path.

This year's target is $13 billion, which is most likely to achieve after already exporting $10 billion worth goods.

The Viet Nam Textile and Apparel Association (Vitas) listed challenges like high inflation and unstable interest and exchange rates next year.

The sector would also be affected by the ongoing public debt crisis in the EU, one of the country's key markets, it said, as it would be by the economic problems at home.

Inflation in Viet Nam is likely to be around 10 per cent next year, higher than in countries that compete with Viet Nam for the global textile market.

This means costs like electricity, water, fuel and salaries would continue to rise, impacting the sector's competitiveness.

A large number of textile firms lack funds for production and expansion because of the continuing high loan interest rates despite the Government's efforts to reduce them. Only a small number of firms have been able to get credit on easy terms.

The industry has mapped out measures to be taken to achieve next year's target, including gradually reducing its dependence on sub-contracting for other producers.

The growth in exports to key markets like the EU, the US, and Japan was expected to fall by 10-15 per cent next year, Vitas said.

Thus, combating this fall is another measure the sector eyes.

Besides, exploration of new markets like Russia, Canada, and South Korea will be accelerated.

The sector also plans to increase the use of domestically sourced feedstock to reduce costs and adopt proper policies to attract workers.

None of these problems are new, however. The industry has been facing inflation and a relentless rise in feedstock prices, but still managed to achieve growth, topping $11.2 billion in exports last year.

In the latter half of this year too the sector has been facing challenges in getting orders, but Le Tien Truong, deputy general director of the Viet Nam Textile and Garment Group, said it remained on track to fulfil its export target.

Exports to the EU, the US, and Japan had been growing as scheduled, he said.

As of the end of October, exports to the EU were up 41 per cent. They were up 14 per cent to the US and a whopping 52 per cent to Japan.

Website to promote domestic products

The Ministry of Industry and Trade launched its BuyVietnam.com.vn website yesterday in a bid to create more trade opportunities for Vietnamese companies.

The website, managed by the ministry's Trade Promotion Agency, is part of a co-operative programme between the agency and the ASEAN Promotion Centre on Trade, Investment and Tourism to promote goods and services for export.

At a seminar to introduce the website, experts explained how the site will work in co-ordination with similar ASEAN trade websites such as BuyASEAN.jp.

The agency also introduced a draft regulation on management and organisation to maximise the efficiency of the website and meet the information needs of the business community.

Ta Hoang Linh, deputy director of the Trade Promotion Agency, said that despite global economic turmoil, Viet Nam's export turnover was still on the rise. It was expected to reach US$90 billion this year. To maintain growth in export turnover, apart from promoting trade in traditional markets, the agency was pushing the use of information technology and e-commerce to further promote trade, said Linh.

"In developing countries, e-commerce is considered an effective tool to promote trade by providing information to the businesses community," he said.

The new website would also help to raise the capacity and production capabilities of enterprises as well as link Viet Nam's trade promotion agency with other ASEAN countries, said Linh.

Huge opportunities for agricultural exports to the US  

There are huge opportunities for Vietnam to export agricultural products to the US, said a representative of the USAID Star Plus (Support for Trade Acceleration) at a seminar for exporting agricultural products to the US in Ho Chi Minh City on November 29.  

Vietnam is one of the top 15  countries exporting largest agricultural products to the US, and at fifth position for exporting aqua products.

According to the commercial policy and tropical fruit expert, Matthew Lantz, the new Food Safety Modernization Act (FSMA) 2011 aims to strengthen the quality of agricultural products and community health.

Hence, Vietnamese enterprises must seize the opportunity and comply by international standards set by FSMA to increase exports.

Tight monetary policies control inflation

The tightened monetary policies in place at present will reduce commodity volumes and increase inflation in the near future, a Nguoi Lao Dong (The Labourer) report yesterday cited experts as saying.

In recent months, the Vietnamese economy has improved with inflation in November at a low level of 0.35 per cent, interest rates having gone down and the surplus in balance payment has been around US$4 billion. Moreover, the nation has had foreign currency reserves of $14 billion, the report said.

However, it added, Viet Nam was suffering negative impacts of the current global economic situation. "The demand for foreign currency is going to increase because local enterprises will need to make international payments at the end of the year," it stressed.

Meanwhile, several tens of billions of dong (several billion dollar) have been withdrawn from banking system as interest rate has been regulated at 14 per cent per year. The monetary market has also been affected by the billions of dollars spent on importing gold.

The ban on gold borrowings by commercial banks has hindered capital mobilisation, the report said.

It cited international experts as saying that in the coming time, the tight monetary policies in Viet Nam could cause up-side-down impacts on the economy.

The Government has estimated credit growth this year at 14 per cent, and inflation has been brought under control.

Therefore, in 2012, the Government should loosen monetary policies, pay more attention to protecting the banking system and support enterprises, the Nguoi Lao Dong (Labourer) report said.

To do this, the Government should increase compulsory reserves in big banks and use the money to help small banks. It should also lift the 14 per cent limit on deposit rate and pledge to provide enough working capital in the form of short-term loans for enterprises.

"The Government should release a special recovery plan for the real estate market. If not, every effort to protect the banking system and restructure State-owned enterprises will fail," said Dr. Le Xuan Nghia, deputy chairman of the National Financial Supervisory Commission.

Coast region urged to ensure green farming
 
There is a huge potential for agricultural development in Viet Nam's coastal provinces and islands, but the challenge is to achieve it in a sustainable manner, delegates said at a forum held in Con Dao Island on Monday.

The forum was titled "Developing agriculture along coastal provinces and islands in a sustainable manner."

With a coastline that is more than 3,200km long, Viet Nam's coastal zone provides a diverse range of natural resources and favorable conditions for many economic sectors to develop, including fisheries, aquaculture, agriculture, tourism and transportation, said Phan Huy Thong, director of the National Agricultural Extension Center.

Coastal provinces have supplied many specialty products that have become famous in domestic and foreign markets like Phu Quoc and Phan Thiet fish sauce, Ly Son garlic, Phu Quoc pepper and Phu Quoc pearl, Thong said.

They have also been successful in breeding various kinds of shrimp, crabs and fish, enhancing development of the seafood processing industry, he added.

Other delegates also noted that fisheries and aquaculture were key to promoting agricultural development in coastal provinces.

Fishing has provided high-quality seafood for both domestic and export markets, created jobs for the rural population and improved living standards of fishermen in coastal areas, they said.

Tran Quoc Vy of the southern coastal Ba Ria-Vung Tau Province's Agricultural and Fisheries Extension Centre said that with more than 2,500 fishing vessels, the province could catch more than 200,000 tonnes of seafood every year.

Many modern processing factories for export have also established in the province, he said.

Coastal provinces have also been very successful in aquaculture, delegates noted.

Farmers in southern Bac Lieu Province, for instance, enjoyed great profits this year from breeding sugpo prawn, white-leg shrimp, eel and other seafood, said Nguyen Xuan Khoa, director of the provincial Agricultural and Fisheries Extension Center.

However, fishing, aquaculture and tourism activities in coastal areas remained dependent on nature, and limited application of advanced technology has seen fishery sources reduce and land quality deteriorate, delegates said.

The development of aquaculture without a proper plan in many areas has resulted in low efficiency and adversely affected the environment, threatening sustainable development of the sectors, they added.

"The coastal areas are facing many challenges, including fresh water shortage, storm surges, environmental pollution, sea level rise related to climate change, and human activities such as mangrove destruction for shrimp farming," Thong said.

"These areas will likely face issues of submersion, flooding, erosion, and increasing salinisation of ground water sources in the coming time, which will greatly affect agricultural land," he added.

Thong said these dangers required coastal provinces and cities to come out with measures that ensure sustainable economic development of their localities.

To protect near-shore natural resources, representatives of provinces said they would take measures to reduce shallow water fishing, support the fishermen in changing their vocation and focus more on developing aquaculture.

They said they would strengthen focus on training human resources and enhancing agricultural and fisheries extension activities to help improve product quality and efficiency.

Delegates also called on coastal provinces and cities to map out a comprehensive investment policy for the agricultural sector to ensure it can overcome challenges and develop in a sustainable manner.

Oganised by the National Agricultural Extension Center, more than 200 delegates, including scientists, provincial officials, agricultural specialists, and farmers from 13 coastal provinces and cities in the south attended the forum.