Expert points out major challenges for local economy

The foreign exchange rate volatility and low growth of credit for producers will be the two major challenges for the local economy in the coming time, the director of the Fulbright Economics Teaching Program has warned.

Nguyen Xuan Thanh pointed out these challenges at a seminar in Can Tho City Tuesday on measures to channel capital into enterprises and promote entrepreneurship among young people in the southern region.

Compared to the U.S. dollar, Japan’s yen has fallen by some 40%, the euro by roughly 20%, Indonesia’s rupiah by 35%, the Singaporean dollar by 12% and Thailand’s baht by 6% since late 2012. And the devaluation of Vietnam’s dong by a modest 1% against the greenback means the local currency is firmer against other currencies, Thanh said.

The State Bank of Vietnam’s target for all of 2015 is to weaken the domestic currency by a mere 2% against the U.S. dollar but it has already been realized while other currencies are seen dropping further against the dollar.

“So the devaluation pressure on Vietnam dong will continue toward the year-end,” Thanh said.

Commenting on credit growth, Thanh said in the past credits grew 20-30% and inflation ranged from 15% to 18%. The respective figures in 2014 were 15% and some 2%, suggesting that the actual credit growth was high last year.

But problems remained as the percentage of bank loans for production and trading dropped to 66% from up to 90% in the past.

“That means VND66 out of VND100 goes to production compared to the previous VND99,” Thanh said.

Thanh noted a number of large commercial banks have focused more on buying government bonds than lending to production and trading businesses.

“Loans for manufacturers and recovering the local economy will be major challenges in the medium term,” Thanh said.

Animal feed firms bemoan troublesome procedures

Representatives of many animal feed enterprises at a dialogue on quarantine procedures in Hanoi Tuesday voiced their outcry over the complicated procedures that cost them dearly.

Tran Thu Thuy, deputy general director of Vietnam Nutrition Co., said procedures for animal feed imports are handled by three units, namely the Plant Protection Department, the Department for Animal Health and the Department of Livestock Production.

The Plant Protection Department has cut quarantine procedures by half to help enterprises get the results for related checks in just one day but animal feed quality tests of the Department of Livestock Production require more than a week.

According to Thuy, it takes three to four days to send a shipment from Thailand to Vietnam but four to five days for the Department of Livestock Production to take samples for tests before approval documents are issued. On average, it takes around ten days to complete procedures for a shipment at the Department of Livestock Production.

The time-consuming procedures lead to high storage costs at ports, US$35-40 per container per day, and affect production schedules of enterprises. Each company may spend dozens of billions of dong a year on the unexpected cost.

For many times, the Department of Livestock Production has failed to send the testing results to enterprises on time for unconvincing reasons like leaders’ absence from office.

Thuy noted the existing regulations on administrative procedures require competent agencies to compensate transport cost and other fees caused by their procedure processing delays.

Vo Thi Thanh Ha from Hanoi Agricultural Products Manufacturing Export Import Co. said if documents could be processed online, enterprises would be subject to fewer procedures and lower costs.

According to Thuy, enterprises importing powdered corn from the U.S. have to pay high fumigation costs while the world does not require them to do so. Besides, the number of shipments from the U.S. containing foreign objects is very small.

Hoang Trung, deputy director of the Plant Protection Department, promised the department would work with the U.S. to remove the fumigation requirement as well as with the Department of Livestock Production to reduce troublesome procedures for enterprises.

Survey shows consumer confidence unchanged in May

The ANZ-Roy Morgan Vietnam Consumer Confidence in May is unchanged at 140.2 but is well above its long-term average of 135.2, ANZ Bank said on May 27 on the findings of a recent survey.

Of the respondents of the survey, 56% (down one percentage point) of Vietnamese expect their families to be ‘better off’ financially this time next year compared to only 5% (down one percentage point) who expect to be ‘worse off’ financially.

In addition, 53% (down two percentage points) of Vietnamese expect Vietnam to have ‘good times’ financially during the next 12 months and 12% (up one percentage point) expect ‘bad times’ financially.

In the longer term, 61% (down two percentage points) of Vietnamese expect the nation to have ‘good times’ economically over the next five years compared to just 5% (unchanged) who expect ‘bad times’ economically.

Finally, 47% (unchanged) of Vietnamese say now is a ‘good time to buy’ major household items compared to 12% (down three percentage points) who said now is a ‘bad time to buy’ major household items.

Glenn Maguire, ANZ chief economist for South Asia, ASEAN & Pacific, said Vietnamese consumer confidence is holding steady as the economic recovery gains a surer footing.

“Our broad macro assessment is that the Vietnamese economy has now bottomed and we foresee an ongoing recovery for 2015 and 2016. The transmission mechanism of a firming economic recovery to consumer confidence should be relatively straightforward,” he said in the report.

Industrial production and manufacturing purchasing managers’ indexes (PMIs) are soaring in Vietnam and firmer output will soon translate into higher income and employment.

“As this dynamic unfolds, we would expect to see both confidence and aggregate income formation improving over coming quarters. The ongoing firming recovery should create an environment where households become more confident to spend, further strengthening the recovery in domestic demand,” the expert said.

The obvious caveat is that for an emerging economy, this transmission mechanism may play out with uncertain lags or be only partially transmitted given high savings rates.

Still, the Vietnamese economy appears to be entering a sweeter spot and both consumer confidence and spending will play a key role in ensuring that is where the economy is likely to stay in the medium term.

Credit card market likely to boom in Vietnam

Vietnamese commercial banks are striving to expand and improve Vietnam’s credit card market, which has huge potentials, the Thanh Nien Online reported.

The article cited statistics published by the State Bank of Vietnam (SBV) which showed that by the end of Q3/2014, an astounding 76 million cards were issued by 50 banks and credit institutes, but credit cards accounted for just 4 percent (approximately 3 million cards).

Credit cards, a convenient form of payment, are popular internationally and used by most frequent travellers. However, the Vietnamese public is not used to credit cards, providing a large gap in the market that could be seized upon.

Besides, credit cards are not accepted widely in the country except for major shopping centres and hotels, which is another reason why few people want to use it.

Even companies are not willing to use credit cards. Quang Minh, head of a representative foreign office in Hanoi, said most of his staff were hesitant to use credit cards to pay for expenses during business trips due to the interest payments incurred by the card.

To win over business clients, some of the biggest banks have issued special credit cards for this group of customers, such as Vietcombank’s American Express (Amex) credit card which provides financial support for organisations and businesses during a 57-day interest free period.

In addition, the credit card issuers offer their customers detailed account statements, indicating their total spending in a specific period. Thanks to this transparency in transaction management, enterprises can improve relations with their important partners.

According to some experts, credit cards will become more attractive for enterprises as they now often come with a global travel insurance package. Vietcombank American Express provides an insurance package worth 4 billion VND (186,000 USD) together with other services, such as global emergency assistance and professional advice.

Business credit cards mark the emergence of a new kind of quality in Vietnam’s credit card market. This market will hold a great potential for commercial banks in many years to come.

Preconditions in place for strong shopping sector to develop

Vietnam boasts a huge potential for the development of convenience shopping outlets, market research company Nielsen Vietnam said in its report released during a roundtable in Hanoi on May 29.

Nielsen Vietnam elaborated that 57 percent of the country’s population is under the age of 35, monthly per capita income is on the rise and up to 73 percent of consumers are willing to pay for high-quality services and products.

The average number of customers per convenience store in Vietnam is 69,000, dwarfing the figures in nearby Thailand (5,556), Malaysia (7,040), and Singapore (7,300), the firm found.

Nguyen Huong Quynh from Nielsen Vietnam said the aforementioned figures show that there is still a huge potential for convenience stores and mini supermarket chains to develop in the Southeast Asian nation.

She added that although the prices at these facilities can be 10-20 percent higher than in traditional markets or hypermarkets, the chains offer consumers convenience and a wide range of high quality goods.

While the operation of trade centres and hypermarkets has proved to be less efficient than expected, the emergence of mini supermarkets and convenience stores is a new consumption trend, Chairwoman of the Association of Vietnam Retailers Dinh Thi My Loan said.

These facilities are also so successful because of their flexible opening times and careful attention to minimising price differences within the market. She recognised Vietnamese companies’ efforts to open convenience stores and mini supermarkets, such as the Coop Food and Satrafood stores run by the Saigon Union of Trading Cooperatives (Saigon Coop), to win consumers’ trust.

Participants in the roundtable pointed out the major challenges faced by domestic firms, such as the lack of funding and retail space, and insufficient management experience.

They suggested local businesses support families that run small groceries stores and existing mini super markets by expanding retail space and training personnel, as well as cooperating with each other to enlarge their networks.

Hopes rise as real-estate market improves

Vietnam's social and economic factors are supporting the growth of its real estate market, which has bottomed out, an executive at property consulting firm Savills Vietnam has said.

Managing director Neal Macgregor told a press briefing on the HCM City property market over the past 20 years that 17 – 20 percent of remittances flowing into the country went into direct property investment.

"Vietnam is in the top 10 foreign remittance recipients globally, with last year's figure at around 12.5 billion USD. This is up from less than 2 billion USD in 2000.

"The quantitative easing throughout the region will benefit the respective domestic economies and also encourage foreign investment into other regional targets," he said.

Recently outward flow of capital had accelerated, noticeably from Singapore, the Republic of Korea, and Japan.

The amended Law on Housing effective from July 1, 2015, which will enable overseas Vietnamese and foreigners to own houses in the country, is expected to attract a new wave of investment.

Singaporeans have shown interest, especially in projects developed by companies from their country.

Vietnam's coastline could quickly draw foreign investors, with residential products of international standards and oriented towards foreign purchasers already being available.

According to Savills Vietnam, the lowering lending rate is helping revive the market.

"Vietnam's current [lending] interest rate is around 9 percent, however this low cost of debt has only recently emerged.

"In 1995 it was around 20 percent."

The shrinking of household size from an average of 4.7 people in 1995 to 3.6 last year has also increased demand for housing.

"As younger people gain greater independence, there has been a gradual erosion of the three-generation household, the effect has been to fuel residential apartment development."

The country's urbanisation rate, from less than 20 percent in 1995 to 34 percent last year and its rapidly growing middle class — expected to reach 33 million by 2020 from 12 million in 2012 — are other positive factors for the property market.

Farm produce sector requires overhaul

The Ministry of Industry and Trade believes that drastic measures need to be implemented to increase the competitiveness of farm produce and to fight against the desperately poor performance of Vietnamese agricultural products in many foreign markets.

According to the ministry, agricultural export revenue remains low despite the country’s standing as the world’s leading farm produce exporter, with key sales including rice, cashew, coffee and aquaculture.

Worryingly, product pricing remains a problem. Vietnam’s tea exports rank 5 th in terms of global quantity but only 10 th in price received. Similarly, Vietnamese tra fish has 90 percent of the market share but always fetches up to 30 percent less than similar products of competitors.

This is caused by rudimentary processing techniques and non-trademarked products, experts believe. In addition, very few contracts are signed directly with foreign partners due to limitations in processing and exporting capacity.

Experts attending the recent Vietnam International Conference on Food Industry said that despite GAP and GMP standard application in the farm produce process, huge losses still emerge in the harvesting to processing stages.

To join the global value chain, Vietnamese farm produce needs to see great improvements in everything from the seeds used to the pesticides utilised and the reaping process adopted, said Chairwoman of HCM City Food and Foodstuff Association, Ly Kim Chi.

The Ministry of Agriculture and Rural Development has issued a decision on raising added value of farm produce and reducing post harvest losses by half.

In addition, Vo Thanh Do, a senior official from the Ministry, suggested that enterprises invest in advanced technology to make use of farm produce residues and byproducts, bringing additional value for agricultural products.

For example, bran rice residue can be used to produce bran oil and cattle feed while straw can be utilised for mushroom cultivation.

Meanwhile, Bui Huy Son, Director of the Trade Promotion Agency under the Ministry of Industry and Trade, highlighted that it is crucial for enterprises to know their target market tastes while create attractive designs for their products.

Free trade deals with foreign countries as well as the establishment of ASEAN Economic Community by the end of this year are expected to open up opportunities for Vietnamese agricultural exports. Enterprises need to focus on high-quality products and choose suitable distributing channels and export products in line with the diversified demands of the market.

Imports of automobiles rise sharply year to date

About 45,000 completely-built-up (CBU) automobiles, worth US$1.2 billion, were imported into Viet Nam in the first five months of the year, the industry and trade ministry said.

The volume and value of the imports were almost 80 per cent of the total for 2014 as a whole, at 72,000 units and $1.57 billion, representing an increase of 62.8 per cent and 60.1 per cent, respectively, compared to the same period last year.

In May alone, 10,000 automobiles, worth $337 million, were imported, posting an increase of $43 million in terms of value. This is the highest import turnover achieved since the beginning of 2014.

The import of automobiles in recent months has shown a slight increase in volume and a significant rise in value month-on-month. This is due to the increasing imports of trucks and specialised vehicles, primarily from China.

The rapid and continuous surge of imported automobiles has put pressure on the domestic production and assembly sector.

One of the reasons why customers prefer imported trucks from China is that they are cheaper than those from other countries and even the locally assembled trucks.

The ASEAN-China Trade in Goods Agreement in the 2015-18 period, which took effect at the beginning of the year, has applied preferential taxes on imported CBUs.

Specifically, the import tax on CBU trucks of more than 45 tonnes is zero, while on trucks of 25 to 45 tonnes, it is 10 to 15 per cent.

A calculation of the Viet Nam Association of Mechanical Industry (VAMI) said a locally assembled truck (including assembling costs and import tax on spare parts) in Viet Nam costs 24 per cent higher than an imported one.

In addition, the country has no Made-in-Viet-Nam automobile.

Chairman of Vinaxuki Bui Ngoc Huyen told Thoi Bao Kinh Doanh that lack of capital and the effects of tax policies were also factors.

Former Director of the Institute for Trade Research Nguyen Van Nam said the purchase of automobiles has been increasing in recent years, despite the economic downturn.

However, Vietnamese people prefer imported automobiles over local products.

Many experts urged the quick completion of the development master plan for the country's automobile industry.

General Director of Ford Viet Nam Jesus Metelo Arias said with the current growth rate, the country's automobile market was expected to reach sales of 200,000 units this year. Among these, imported CBUs will account for half of the total.

Insurance triples average GDP growth

The insurance market's turnover at the end of last year accounted for 2.44 per cent of the nation's gross domestic product (GDP), meeting the national strategy's target.

Minister of Finance Dinh Tien Dung said in a report that the turnover of the insurance market posted an average growth of 14.5 per cent per year during the 2011-14 period, nearly tripling the average GDP growth rate.

The results were "significant," the minister said, given the slow economic recovery, declining interest rates, low credit growth, and unimproved incomes of the people.

Agency for Insurance Supervisory and Management under the ministry projected the growth rate of insurance premiums this year in double digits, specifically around 10 to 12 per cent for non-life insurance and 15 to 17 per cent for life insurance.

Dung noted that this year, the ministry would introduce regulations for microinsurance, which provides protection for low-income people, together with completing regulations for other kinds of insurance, including agricultural and pension insurance. In addition, the ministry aims to enhance system security, the competitiveness of insurance firms while encouraging the diversification of insurance products and distribution channels at the same time, tightening management, and promoting international cooperation in insurance.

The report also revealed that as of the end of March, there were about 60 insurance companies in the country, offering non-life insurance, life insurance, insurance brokerage, and re-insurance.

The Finance Ministry's statistics show that in the first quarter of this year, the total turnover from insurance premiums reached more than VND14.38 trillion (US$665.75 million), representing a rise of 18.7 per cent over the same period last year.

Under the national strategy for developing the Viet Nam insurance market during 2011-20, the insurance industry's total revenue is expected to account for 3 per cent of the GDP this year, instead of 2 per cent, and between 3 per cent to 4 per cent by 2020.

Commercialisation of airport services must be transparent

Transparency is critical for the commercialisation of airport and seaport services, as well as the energy sector, for the benefit of the State, investors and residents, according to experts.

They were speaking at a workshop organised by Central Institute for Economic Management (CIEM) yesterday.

The workshop, held within the framework of restructuring for more competitiveness in Viet Nam's projects, was aimed at highlighting lessons from Australia's experiences.

Viet Nam has been considering the possibility of putting the commercialisation of transport infrastructure services under scrutiny, especially the selling of airport operation rights.

At the workshop, Warren Mundy, Commissioner of Australian Productivity Commission, shared his country's experiences in the commercialisation of airport services in Australia, which, he said, gave good results and improved issues.

He stressed that transparency in all stages in was put under the evaluation of the national audit office.

He pointed out that a total of US$5.3 billion was raised from the commercialisation of airports in Australia and investments also increased during the 2010-14 period, while service quality was maintained. Airports in Australia now have investors in pension and investment funds, apart from the presence of global companies.

However, the country also had problems to tackle and improve, such as the supervision of implementation and airlines' contract compliance.

According to Nguyen Dinh Cung, CIEM's director, the operation mechanism of the commercialisation of airport services must ensure transparency, safety, and efficiency.

The commercialisation of airport services must prevent monopoly, Cung said, adding that services costs must be decided on the basis of their supply and demand.

Experts at the workshop also expressed concerns that most airports in Viet Nam are used for both civil and military purposes and stressed that national security should be a priority issue while commercialising airport services.

Last week, the Government Office issued Document 185/TB-VPCP on the Prime Minister's opinions about raising social resources for investments in aviation infrastructures. It said employing private resources for investments in the transport sector, including airports, was in line with the Party's policies and guidelines mentioned in Resolution 13-NQ/TW.

The management and operation of airports are closely related to national security and aviation safety; hence, the construction, operation, and development of airports must be put under the unified management of the State.

The Prime Minister assigned the Ministry of Transport to complete a project to raise private resources for investments in aviation infrastructure and a pilot scheme for the selling of the operation rights of the international airport on Phu Quoc Island in Kien Giang Province.

The Ministry of Transport has also sought approvals to allow private players to operate Phu Quoc International Airport.

In early February, private carrier Vietjet Air submitted a proposal to the transport minister to utilise Noi Bai International Airport's Terminal 1 for 20 years. Later, Vietnam Airlines also sought to buy T1 outright.

Overseas Vietnamese to talk economic, integration issues

A forum of overseas Vietnamese intellectuals and experts will take place in Hanoi on June 7, focusing on improving Vietnam’s competitiveness in the global economy.

Co-hosted by the Party Central Committee’s Economic Commission and the State Committee for Overseas Vietnamese Affairs, the event will host over 100 economists, policy experts, scientists and lecturers at home and from the US, UK, France and Australia who will voice their feedback on Vietnam’s economic development and integration for 2016-2020 and the subsequent years.

Predominant topics will cover Vietnam’s economic restructuring; growth model; governance capability improvement; financial-banking reform; development policies for industry, agriculture and businesses; and reforms in tertiary education and workforce training.

FTA opportunities, challenges are equal: official

Opportunities and challenges arising from free trade agreements (FTAs) between Vietnam and partner countries will present themselves equally, an official remarked a press conference in Hanoi on June 3.

The signing of FTAs affords opportunities to exporters, importers and consumers as Vietnam expands its export markets, said Deputy Head of the Finance Ministry’s International Cooperation Department Ha Duy Tung.

The country has reached 10 bilateral and multilateral FTAs, including the recently-signed Vietnam–Republic of Korea (RoK) and Vietnam–Eurasia Economic Union deals.

In his view, lowered import duties on raw materials will stimulate production and churn out products at competitive prices, offering customers more choices of imported and home-grown items.

Vietnam is currently running a trade surplus with Japan , Australia and New Zealand with no plans for further import tariff cuts.

However, Tung also admitted considerable troubles faced by home companies with weak competitiveness, as the private sector is mostly working on a small scale with limited access to funding and technology.

The support industry is still underperforming, and key export products still rely on imported raw materials, such as electronics, garments, leather, footwear and automobile assembling.

He stated that Vietnam is rechecking a set of technical barriers to protect domestic firms alongside a series of business incentives to be proposed by the Finance Ministry along the process of tariff cuts.

Concerns over decreased revenue to the State budget following the import tariff decline could be offset by corporate income taxes resulting from augmented manufacturing and trading activities, said Tung.

As part of Vietnam’s commitments under its FTAs, around 5-7 tariff lines will remain unchanged, which are tobacco, alcoholic drinks and beer, petroleum, automobiles and some spare parts, certain iron and steel products, sugar, eggs and tobacco leaves, and defence goods such as weapons and explosives.

In addition, the deadline for Vietnam to complete tariff cuts differs from agreement to agreement, with the earliest date set in the ASEAN Trade in Goods Agreement (ATIGA) in 2018, followed by the ASEAN–China FTA by 2020 and the ASEAN–RoK FTA by 2021.

According to Tung, the finance ministry has adjusted several taxation policies, including lowering corporate income tax to 22 percent from 25 percent under the corporate income tax law and abolishing the cap on advertisement spending in line with National Assembly-approved revisions to the Law on Taxation, making it easier for firms to adapt to global integration.

Administrative procedures, especially in tax and customs, will continue to be streamlined, he said.-

Vietnam learns from experience in seaport, airport privatisation

Vietnamese and foreign experts shared experiences in calling for private sectors’ engagement in providing seaport, airport and energy services during a conference held by the Central Institute for Economic Management (CIEM) in Hanoi on June 3.

Dr. Warren Mundy, Chairman of Australia’s Productivity Commission, said improving infrastructure systems is needed to increase productivity and competitiveness.

He suggested a number of policies to renovate infrastructure, including the classification of public infrastructure systems like transportation, energy and telecommunications, which are significantly dependent on State expenditure.

Calling for investment from the private sector to the area will help save State resources for other initiatives while creating space for private enterprises to engage in the operation and exploitation of these infrastructures, he said.

He took the privatisation of Australia ’s Brisbane and Melbourne Perth Airports as an example. The airports, which were handed over to a private firm in 1997 under a 49-year leasing contract, saw a surge in the number of passengers and investment through the years, he noted.

Meanwhile, CIEM Director Nguyen Dinh Cung pointed out a number of problems facing Vietnam in privatising airports, including facility conditions, policy gaps and security and defence concerns.

According to Vice Director of the Civil Aviation Agency of Vietnam Vo Huy Cuong, the country’s airport system has been developed on the foundation of military purposes. Only one of the 21 nationwide has been invested in by private businesses, he noted.-

Vietnamese firms face big changes following Eurasia Economic Union trade deal

The recent conclusion of the free trade agreement (FTA) between Vietnam and the Eurasia Economic Union (EAEU), comprising of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, is expected to offer both opportunities and challenges to Vietnamese business players.

In an interview granted to the Vietnam News Agency, Minister of Industry and Trade Vu Huy Hoang highlighted the significance of the trade pact, the first of its kind struck between the union and an outside partner, which covers almost all commerce and investment fields from trade in goods and services, investment services, finance and banking to science-technology services, e-commerce, intellectual property, environmental protection and Government purchase.

The most important result of the deal is the opening of the goods market and investment services, the minister said, adding that the advantages of each side are supplementary. Vietnam has strength in farm produce, seafood, garment-textiles, footwear and food processing, while the EAEU, particularly Russia , boasts huge potential in mineral resources and mechanical products.

Trade between Vietnam and Russia is expected to top 10 billion USD by 2020 thanks to the liberalisation of up to 90 percent of the tax line and 90 percent of the import-export turnover, he said.

However, the minister also pointed out some challenges, such as the stable quality of products, especially Vietnamese farm produce like tea and coffee; the strict requirements of EAEU markets; the geographical distance that requires a suitable transportation roadmap and connection with other markets; and the complicated payment methods required.

The limited understanding of Vietnamese businesses about the EAEU market, especially small-scale economic members like Armenia and Kyrgyzstan , is worrisome, he said, adding that local firms should study the market’s consumer tastes when seeking investment opportunities there.

The Ministry of Industry and Trade will promote its role in linking domestic firms with international partners, while cooperating with the press – including the Vietnam News Agency, the Voice of Vietnam, the Nhan dan (People) Newspaper, and the Department of Popularisation and Education, to disseminate Vietnam’s commitments to international economic integration as well as opportunities and challenges of the Vietnam-EAEU free trade pact.

The ministry is willing to support enterprises with information relevant to business contracts with the EAEU. It will also organise trade and investment promotion events and fact-finding tours to foreign countries, while working with the State-run agencies and EAEU offices to properly deal with any disagreements between businesses in the spirit of ensuring the interests of the involved parties, he said.

Difficulties facing migrant female workers: survey

Female labourers working in the foreign—invested (FDI) sector received an average monthly wage of 5 million VND (233 USD), below that received by the opposite sex and their peers working for domestic companies.

The finding was unveiled at a workshop held in southern Dong Nai province on June 3 which reviewed the outcomes of a survey on income and living standards of migrant female workers.

The poll was conducted in northern Bac Ninh province, southern Dong Nai province and Ho Chi Minh City since late 2014. In each locality, the research team questioned 13 exporters to the EU operating in apparel, fisheries, footwear and food processing.

According to the survey, access to safety equipment for women working for FDI companies was 10 percent lower than those for local female workers.

The migrant group also faced difficulties in finding housing, educating children and accessing health services due to problems with personal finances, official procedures and distance from their work place to those facilities. Particularly, 69.1 percent of the group had trouble looking for schools and kindergartens, compared to only 3.7 percent among their peers working outside the FDI sector and 1.1 percent with the locals.

Hoang Thi Thu Hai, a representative from the management board of Bac Ninh’s industrial parks, revealed that there are currently 130,000 women among 189,000 labourers working across her province.

The Government should invest in developing social infrastructure such as kindergartens, schools and social housing near industrial zones to improve the living conditions of the migrant female workers, she proposed.

Meanwhile, Tran Anh Tuan, Deputy Director of the HCM City Centre for Human Resources and Labour Market Information revealed there are 890,000 female workers in the city, and in the next ten years the city will demand an additional 270,000 labourers, half of which will be women.

The expansion of programmes facilitating migrant access to bank loans will be very helpful, he continued.

At the workshop, Dr Bui Sy Tuan from the Institute of Labour Science and Social Affairs suggested establishing additional support centres, improving the quality of local vocational training courses and completing relevant regulations that ensure the rights of the vulnerable community.

Can Tho strives to make PCI top ten list

The Mekong Delta city of Can Tho is making concerted efforts to increase its competitiveness capacity to appear in the list of ten most competitive localities in the country, according to Vice Chairman of the municipal People’s Committee Le Van Tam.

At a conference on provincial competitiveness index (PCI) analysis and orientation for 2015 on June 3, the Vice Chairman said the city will try to improve its 2014 result, which saw Can Tho ranked 15th among 63 provinces and cities with 59.94 points.

To achieve the target, the city needs to effectively implement economic restructuring and renew its growth model while improving the investment climate, said Head of the legal department of the Vietnam Chamber of Commerce and Industry (VCCI) Dau Anh Tuan.

He recommended that the city switch to high-tech industry and agriculture by offering training for unskilled labourers and guiding farmers to apply science-technology into cultivation and animal breeding.

In a bid to lure foreign investors, the city should provide adequate infrastructure, simplify administrative procedures and enhance the performance of public servants. At the same time, more support should be offered to enterprises to address difficulties and reduce operation costs. The move aims to ensure an equal competitive environment.

Local business to expand cement markets

The La Hien Cement Joint Stock Company aims to enhance product quality and diversity to expand its export market, an executive of the company said.

According to Nguyen Van Dung, Director of the La Hien JSC, the company will seek new markets while securing its traditional markets including Thai Nguyen, Bac Kan and Lang Son provinces.

The subsidiary of the Vietnam National Coal Mineral Industries Group ( Vinacomin) aims to ship its clinker to Bangladesh, the Philippines and a number of nations in Africa, Dung said.

Additionally, the company has invested more than 16 billion VND (750,000 USD) in projects to ensure material supply and labour safety so far this year.

The La Hien JSC has two cement production lines with an annual capacity of nearly one million tonnes.

It has produced more than 310,000 tonnes of cement and more than 80,000 tonnes of clinker, earning more than 280 billion VND (13 million USD) and creating jobs for more than 700 workers.

It aims to sell 650,000 tonnes of cement and generate revenue exceeding 570 billion VND (26.6 million USD) this year.

Support industry attracts small-scale FDI projects

A series of small-scale foreign direct investment (FDI) projects have been funnelled into Vietnam, contributing to increasing the number of FDI projects operating in the support industry, reported Dau tu (Vietnam Investment Review) online.

The JNTC company from the Republic of Korea (RoK), one of the firms specialising in supplying components for Samsung, is considering investing in a project to manufacture optical glass worth 50 million USD in the northern province of Vinh Phuc.

Meanwhile, the RoK’s Vina Anydo Electronics Company has decided to build its factory in the province which will manufacture and process mobile spare parts and electronic devices for Samsung.

Built with a total investment of 700,000 USD across nearly 2 hectares in the Binh Xuyen industrial park in Vinh Phuc province, the project is expected to generate annual revenue of 16.46 million USD and create job for over 250 workers with average monthly salaries of 200-300 USD.

In May this year, the People’s Committee of the northern Bac Giang province granted investment licenses to a number of small-scale FDI projects in the support industry, including prominent projects such as Wonjin Vina worth 10 million USD and Mooroc Printec Vina worth 2 million USD.

The Management Board of the Hai Phong Economic Zone has also decided to allow Eujin Winsys Co., Ltd of the RoK to build a plant to produce and assemble electronics with a total investment of 100 million USD.

All projects are scheduled to become operational after 6 to 12 months of construction, meeting the increasing demand for spare parts of big electronic firms such as Samsung, LG and Microsoft.

Since Samsung, Microsoft and LG invested in Vietnam, great numbers of foreign investors have poured capital into the country, contributing to the formation of a strong domestic electronics support industry.

Director of the Foreign Investment Agency Do Nhat Hoang told the Dau Tu that the support industry not only plays a crucial role in boosting national economic growth and accelerating the country’s global integration, but also helps increase the attractiveness of the investment climate and creates added value for the country’s economy.

Bac Lieu to develop large-scale fields

Localities in the Mekong Delta province of Bac Lieu are aiming to develop large-scale rice fields to improve productivity and efficiency.

The province has applied laser technology in levelling 100 of nearly 5,600 hectares zoned off for large-scale fields.

Pham An Lac from Lang Giai village said the technology helps reduce production costs, increase productivity and facilitate harvests.

A number of cooperatives have also been formed in Hong Dan and Phuoc Long districts to connect enterprises with farmers.

The localities have invested in hundreds of embankments to regulate irrigation systems for local rice production.

As many as 14 water supply stations are to be completed within the year in Phuoc Long district, one of the localities expected to serve as a role model for modern rural areas.

Harvesting machinery will also be bought for the summer-autumn crop.

In 2014, Bac Lieu recorded a 12 percent economic growth and per capita GDP rose to 39.33 million VND (1,800 USD).

Four communes in Bac Lieu completed all 19 criteria for the new-style rural area building programme and six others fulfilled at least 15 of the criteria.

Ca Mau boosts local tourism investment

The southernmost province of Ca Mau has introduced open mechanisms and policies in a bid to boost the local tourism sector.

Three years since its approval, the Ca Mau Cape tourism complex site has attracted numerous investors to research and seek investment opportunities in the province and its vicinity.

Authorised provincial bodies have licensed a nearly 200 billion VND (9.5 million USD) investment for zone 4, the area for a mangrove ecological tourism in the site.

Director of Ca Mau’s Department of Culture, Sports and Tourism Duong Huynh Khai said among eco-tourism destinations of the province, such as Hon Da Bac, Hon Khoai, and the national park of U Minh Ha, the cape area has substantial tourism potential and historical significance.

Covering 160 hectares, the site consists of a monument park, a mangrove ecological forest, a mangrove ecological conservation and a community centre.

Ca Mau Cape is located in the district of Ngoc Hien, 100 kilometres from the southernmost city centre of Ca Mau.

In recent years, investment to the province’s sector has been limited, preventing it from reaching its full potential. Prioritising investment will help the province become an attractive tourism destination for both domestic and foreign travellers.

Vietnam's coffee exports drop off

Vietnam's coffee exports in April were equivalent to half of Brazil's total exports, confirming the wide gap between the world's two largest coffee exporters.

The International Coffee Organisation's (ICO) report, released at the end of May, said Vietnam shipped only 1.45 million bags of coffee in April, posting a 42.8 percent year-on-year decrease, the largest drop among the top coffee exporting countries.

Despite being the world's second largest coffee exporter, the country's export was much less than Brazil's total of three million bags.

Colombia and Honduras, which are in third and fourth position respectively, saw their exports increase by 16 to 20 percent in the period.

The Vietnam Coffee and Cocoa Association said the decrease in coffee output was due to prolonged bad weather.

The association said the Central Highlands faced a severe water shortage.

In the last 10 years, the region has suffered from the most severe drought on record, pulling down coffee output and exports to the lowest level in the past five years.

The website also forecast there would be 134 days of hot weather in the region by 2050, and 230 days by 2100, thus affecting coffee cultivation.

Vietnamese coffee exports have also faced a fall in value due to decreasing prices.

Statistics from the General Department of Customs said coffee export turnover in April was 225 million USD, bringing the total to 968 USD million in the first four months of the year. This represented a 39 percent fall over the same period last year.

Stricter penalties for bank share violations

The State Bank of Vietnam (SBV) will take bold actions against any breach of its rules on bank share ownership restriction.

According to the latest circular issued by the SBV, the move will make the banking sector more safe and transparent.

In Circular 06/2015/TT-NHNN released this week, the central bank states that credit institutions will have to cooperate with individuals or organisations that exceed its bank share ownership limits so that the existing cases of violations can be resolved by December 31, 2015.

The circular also regulates that from mid-July this year, credit institutions should not lend to individuals or organisations that breach the SBV's rule.

The central bank will also ban those who breach its rules, or their representatives, from becoming board members or taking key posts in banks unless their stakes are reduced.

The Government's website quoted a report from the central bank, saying that although the Law on Credit Institutions with regulations on bank share ownership limits has been in effect since 2011, some credit institutions haven't actively adjusted the ownership ratio to meet the regulations.

The central bank's report showed that five of the country's 33 commercial joint stock banks have breached the SBV's rule that limits a person's holdings to 5 percent in a bank and 15 percent in an institution.

The report also said eight commercial banks have yet to comply with a 20-percent ownership restriction applicable to a group of one shareholder and associates, which it said risks fuelling irregularities.

As a result, some individuals or organisations are still in breach of the SBV's rule on bank share ownership restriction, owning bank shares larger than permitted amounts, and hence, are capable of dominating the performance of credit institutions. The violation was partly liable for a rise in bad debts in banks.

As non-performing loans (NPLs) accounted for 3.57 percent of the total loans by the end of February, the central bank urged credit institutions to step up bad debt resolution from January, in a bid to reduce the rate to less than 3 percent by the end of this year.

Lenders will also have to resolve by June 30 at least 60 percent of the total bad loans they are supposed to handle in 2015. They will also have to transfer at least 75 percent of the total debts that they will register for sale to the national debt dealer, Vietnam Asset Management Company (VAMC), this year, within the same deadline. The deadline for selling all their NPLs to VAMC is September 30.

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