EIB: 150 million euro for metro line in Ho Chi Minh City

The European Investment Bank (EIB) will provide Vietnam with a credit of 150 million euros to build the second metro line in Ho Chi Minh City.

The credit was signed in Hanoi on December 6 by the Ministry of Finance and the EIB, along with other donors, the Asian Development Bank (ADB), the German government-owned development bank KfW.

The metro line was planned to stretch 11.3km and 11 stations in the HCM City centre. Once in operation it will carry out around 140,000 passengers per day in the first year.

Speaking at the signing ceremony, Deputy Minister of Finance, Tran Xuan Ha said the project will help improve the local people’s living conditions by shortening work travel time as well as reducing CO2 exhaustion.

The second metro line in Ho Chi Minh City was planned for a has total length of 20km, beginning at Thu Thien and ending in An Suong Bus Station with a total investment capital of more than US$1,347 million. The project is divided into two phases. In the first phase, the line will cover the 11.3km from Ben Thanh Market to Tham Luong. 

Regarding the financial arrangement, the ADB will loan US$540 million, the EIB 150 million euro, while KfW pledges to provide 240 million euro, including a 85.75 million euros under the form of official development assistance from the German Government.

Calling for more investment into agriculture and rural development

The Ministry of Agriculture and Rural Development held a conference in Quang Binh province on December 6 to call for more investment into agriculture and rural development in six north-central provinces from Thanh Hoa to Thua Thien-Hue.

In recent times, businesses felt reluctant to invest in agriculture in the north-central region, because the area is seriously affected by floods, storms and wind from Laos.

However, the Vietnam Rubber Group affirmed it is still safe to grow rubber there as only a few areas of rubber plantation were destroyed by storms in the region over the past 10 years.

At the conference, Minister of Agriculture and Rural Development, Cao Duc Phat said the north-central region has great agricultural potential for aquaculture because the region has 670km of coastal line, as well as 23 river mouths and lagoons. There is also has more than 1.6 million ha of forest land. It also has advantages in road, railway, sea and aviation transport, facilitating transportation of goods and abundant human. The region is frequently hit by natural disasters and floods, but it can be dealt with by applying advanced technologies and growing suitable plants, said Mr Phat.

In the 2011-2020 period, the six provinces will call on businesses to further invest in rubber plantations, raising cows and developing aquaculture and seafood processing. Investors in these fields will be granted incentives, such as exemption from land tax, financial support of 50-100 percent training fees for workers, 50-70 percent of advertising fees and 50 percent of transportation costs.

At the conference, businesses signed three projects for agriculture in the region. The Vietnam Rubber Group also donated VND500 million to central flood victims.

Online registration system for secured transactions makes its debut

A launching ceremony for the online registration system for secured transactions made its debut in Hanoi on December 6.

Present at the event were Deputy Minister of Justice, Nguyen Thuy Hien, and representatives from ministries, departments and the International Finance Corporation (IFC) as well as local departments of justice.

Addressing the ceremony, Vu Duc Long, Director of the Department of Exchange Guarantee and National Registration, under the Ministry of Justice, said in recent years, registration and secured transaction had gradually affirmed its role in assisting the operation of the economy.

Since 2001, the State had applied many methods to strengthen this work and gained some good results, in 2006 the Ministry of Justice and the IFC signed a cooperation agreement, and also the Government’s decrees on registering secured transaction were published, Mr. Long noted.

Meanwhile, Deputy Minister of Justice, Nguyen Thuy Hien, said the registration system for secured transactions played an important role in protecting investors, strengthening the capacity for approaching capital sources in credit, trade and ensuring legal safety for partners in doing transactions.

At the event, delegates agreed that the online registration system for secured transaction showed a positive cooperation result between the Ministry of Justice and the IFC. Its establishment helped to reduce the time of registration, and the process of approaching credits of businesses and people is safer and saves on costs.

VND60,000 billion injected into leather and footwear

The Minister of Industry and Trade Vu Huy Hoang has signed a decision to approve a plan to develop Vietnam’s leather and footwear industry up to 2020 with a vision to 2025.

Under the plan, the investment capital needed for the next 15 years will be roughly VND59,570 billion, with 43 percent coming from domestic agencies and 57 percent from overseas.

According to the plan, Vietnam is targeting an export turnover of U$9.1 billion by 2025 with a local rate increasing to 60-65 percent in the next five years and to 80-85 percent by 2025.

The MOIT also asked the leather and footwear industry to liaise with the garments and textiles sector and supporting industries to develop Vietnam’s fashion industry in the country’s major cities.

Vietnamese-French relations on the right track of development

Two-way trade turnover between Vietnam and France have increased sharply in the first nine months of this year, earning more than EUR1.562 billion, up 19.03 percent against the same period last year.

The figure is expected to reach EUR1.99 billion late this year. According to Mr Pham Xuan Yen, trade counselor from the Vietnamese embassy in France said that in the first three quarters of the year, Vietnam’s export turnover in France has increased remarkably, earning EUR1.052 billion, up 11.53 percent against the same period last year.

The turnover of seafood exports is likely to increase by 34.24 percent compared to last year. This is a huge potential product for French market. Other key Vietnamese exports include footwear, garments and textiles (with a turnover of nearly EUR176,800 million in September, and up 3.2 percent and household utensils with EUR97,300 million, up 6.92 percent.

By 2011, the French economy will have recovered more, so the purchasing power of French consumers for these goods will be better.

However, Vietnamese businesses should improve their competitive edge so their products can win more market share in France compared to commodities from other nations, said Mr Yen.

In the first nine months of this year, Vietnam imported pharmaceutical equipment, machinery, electronics and chemical products from France worth more than EUR509 million, up 38.26 percent.

Import turnover began to increase sharply in late 2009 and the country’ s import turnover is expected to increase by more than 25.45 percent later this year with the major items being optical, medical and chemical products.

Mr Yen said that France has always a lot of attention to atomic power, and wanted to cooperate with Vietnam to undertake nuclear power projects in the country in future.

US imposes anti-dumping taxes on Vietnamese shrimp

The US Department of Commerce (DOC) has announced that it will continue to levy anti-dumping taxes on frozen warm-water shrimps imported from Vietnam.

According to the DOC’s ‘sunset’ review at the end of November, Vietnamese businesses will pay taxes ranging from 4.3 or 5.24 percent to as much as 25.76 percent.

The reason for the DOC’s move is that the removal of anti-dumping taxes on Vietnamese frozen shrimp may lead to a recurrence of dumping.

The World Trade Organization (WTO) stipulates that after every five years of anti-dumping taxes, the authorities of the importing country must conduct a sunset review in order to check if the abolishment of anti-dumping taxes on imports could impact or cause losses to domestic manufacturing industries.

According to the WTO’s regulations, if no impact is found or if the losses are insignificant, then the anti-dumping taxes must be abolished.

With this decision from the DOC, Vietnam will need another five years to be able to have these anti-dumping taxes removed while it continues to sue the US through the WTO.

Can Tho hosts int’l agriculture fair

270 domestic and foreign businesses from Thailand, China, India, the US, Japan, the RoK, Indonesia and Singapore attended the 2010 Vietnam International Agriculture Fair which opened in Can Tho on December 6. 

On display are machinery, agricultural equipment, production lines, processed products, fertiliser, pesticides, animal foods and medicines, aquatic products, rice, seeds, furniture, fruits and rare plants and animals from the central, and southeastern region as well as the Mekong Delta. 

A conference for farmers was held to show their skills in growing grapefruit in various shapes, planting seedless jackfruit in Hau Giang, using combine harvesters and the pesticide sprayer in Can Tho, raising chickens in Tien Giang and using seed classification and cleansing machines in An Giang.

The organising board also chose 17 outstanding households from 13 provinces in the Mekong River Delta and awarded them with VND5 million each.

The Ministry of Industry and Trade awarded certificates of merit to 11 businesses from Long An, Hau Giang, Tien Giang, Hanoi, Ho Chi Minh City and Can Tho. They had made a great contribution to the country’s economic development and received gold medals for the best fertilizers, seeds, animal medicines, aquatic products, plastics and pesticides which could all penetrate international markets.

From December 7-11, there will be trade promotions, contract signing ceremonies, technology transfers and conferences, as part of the fair.

The fair is part of a national trade promotion programme launched by the government to help boost agricultural production in the country’s rural areas and create a suitable business environment to attract more investment capital and expand joint ventures.

Stronger cooperation needed to develop tourism

As part of the Hanoi-Hai Phong-Quang Ninh economic development triangle, Hai Phong, Quang Ninh has a great potential for tourism development with Ha Long Bay in Quang Ninh and Cat Ba World’s Biosphere Reserve in Hai Phong.

However, poor cooperation between the two provinces is one of the factors that has lead to poor development in this sector.

According to Dr. Pham Trung Luong from the Institute for Tourism Development Research under the Vietnam National Administration of Tourism (VNAT), although Hai Phong and Quang Ninh are committed to strengthening cooperation to develop tourism in these regions, there have been no joint programmes to promote both provinces. There have even been contradictions in the business operations of some travel agencies in the two provinces and this has negatively affected the tourism.

Nguyen Anh Tuan, deputy head of the VNAT’s Travel Department, said that Hai Phong and Quang Ninh have not been able to offer diversified tourist services even though they have great potential with the World Heritage Site at Ha Long Bay and the World’s Biosphere Reserve in Cat Ba. Tourists to Quang Ninh often only visit Ha Long Bay, which overloads and pints pressure on the environment while the advertising for tourism in Hai Phong is still poor, so it does not attract many foreign visitors.

There have been many models to develop tourism such as the one between Lao Cai, Yen Bai, and Phu Tho and one between the eight northeastern provinces. In addition, the Vietnamese provinces of Yen Bai and Sapa have had a cooperation programme with China’s Yuanyang County to exploit the beauty of their terraced fields.

Hai Phong-Quang Ninh is one of the seven key regions in Vietnam’s tourism development strategy until 2020, so cooperation between the two provinces is very significant for tourism development in the Northeastern Coastal region.

Tuan said that Hai Phong and Quang Ninh can cooperate in many ways such as exchanging experiences in planning, upgrading the infrastructure for traffic, offering more tourist products, advertising, protecting the environment, and training more staff for the sector.

Binh Thuan dragon fruits prices blossom due to scarceness

The price of first-grade dragon fruits climbed to an all-time high of VND21,000 a kilogram in Binh Thuan Province on December 5, an increase of VND12,000-14,000 per kilogram over that of the middle crop. 

Although the prices were escalating, most dragon fruit growers said they did not have dragon fruits to sell. Meanwhile, fruits traders said they were willing to purchase without classifying.

According to the Binh Thuan Dragon Fruits Association, the prices rose as dragon fruits growers failed to make their plants to bloom unseasonably two months ago because of unfavorable weather.

Binh Thuan grows dragon fruits in an area of more than 12,500 hectares, of which 2,600 hectares are recognized to meet the Vietnamese Good Agricultural Practices standards (VietGAP). It is expected that all the dragon fruits grown in the province will meet safety standards by 2015.

Binh Thuan’s dragon fruits have been exported to the US and European markets but mostly to Asian markets, of which China accounts for 70 percent of the market shares. Korean has also opened for Vietnamese dragon fruits.

Local businesses borrow at any costs for booming time at yearend

Financial experts said many businesses would be willing to borrow money at the current rates as they need large sources of capital at the end of the year, which is expected to be a booming time of the local retail market.  

At some commercial banks, deposit rates reached 15-16 percent per annum last week, while lending rates for businesses and individuals are up to 17-19 percent and more than 19 percent.

Some small and medium enterprises disclosed lenders’ current lend rates remained much lower than unofficial sources’ ones, which can be up to 3-4 percent per month or 48 percent per annum.

High interest rates showed commercial banks’ credit growth last month was a little bit slower than previous months, according to Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch.

He expected the banks’ more steady liquidity combining with local firms’ large demand for capital this month will put the growth rate back on track.

However, the central bank’s HCMC branch noticed in a report that interbank rates still reply mainly on the state-owned lenders. Commercial banks and financial firms are often clients of the state-run lenders. The interbank rates therefore will increase rapidly if  the state-owned banks, in some cases, refuse to give loans to commercial lenders, the report said.

The state-owned lenders mostly have to say no to commercial banks or financial firms, whose plans on using capital are risky and unreasonable.

Economists said many lenders’ growth rates nearly reach their annual target, so they will be unwilling to loan more.

The credit growth rate of the Military Bank was 5 percent higher than October’s rate and rose 50 percent so far this year. The lender had to slow down last month’s growth rate as they were afraid it would surge over this year’s target, an officer at the bank said, without providing how much the targeted rate is.

The state bank’s HCMC branch expected credit growth rates this year would rise 25 percent year-on-year to VND699.81 billion (US$35 million), and the deposit would increase 27 percent year-on-year to VND766.25 billion ($38.3 billion).

However, some banks will likely to miss their target. Asia Commercial Bank, known as ACB, said the number of personal loans was small because of the high interest rates. Other commercial lenders said they still accepted personal loan applies, but would offer the loans next year.

PV