Saigon Co.op launches green month

Supermarket chain Saigon Co.op has launched its fourth Green Product Consumption Month, offering many promotions at all its outlets.

The program aims to encourage more environmentally-friendly consumer habits.

The chain is offering discounts of up to 50 per cent on more than 2,000 products such as garments, beauty care products and household appliances from June 3 to 23.

Banks offer $1.4b housing loans deal

Viet Nam Bank for Agriculture and Rural Development (Agribank) has officially launched a lending program encompassing a VND30 trillion (US$1.4 billion) loans package for home buyers and realty developers.

Agribank is the third after the Bank for Investment and Development of Viet Nam (BIDV) and Viet Nam Bank for Industry and Trade (Vietinbank) to do so.

The bank now offers an annual preferential lending rate of 6 per cent for this year, which will then be revised by the SBV in the following year, at a rate that is required to stay below 6 per cent per annum.

It also pledged to process lending applications for individuals and businesses within 5 and 10 working days, respectively.

Meanwhile, through BIDV individual and business clients can have their applications processed within 4 and 20 working days.

HSBC lowers 2013 Vietnam forecast

HSBC’s monthly report predicts Vietnam’s GDP growth rate will only reach 5.1 percent in 2013, 0.4 percent lower than its previous forecast.

The banking giant explains Vietnam’s economy continues to be hammered by weak domestic demand. The HSBC manufacturing PMI fell back to contraction territory in May, dragged down by sluggish domestic activity. Retail sales, CPI, and trade data indicate similar trends.

May’s economic indicators paint a mixed picture of the economy. While trade, retail sales, HSBC’s manufacturing PMI, and CPI all point to anemic 5% growth in 2013, the registered FDI print shows the country remains competitive and continues to attract healthy capital inflows.

Five-month FDI registered capital has risen to US$5.1 billion, up 23.5% year on year. Most of the capital was channeled into the manufacturing sector, providing much-needed employment and investment amid the austere fiscal and monetary context and weak domestic demand.

HSBC analysts say tightening fiscal spending, coupled with low credit growth, has dragged down domestic activity significantly. While foreign investment will pick up some of the slack from weaker domestic investment, it is still not enough to maintain the previous 7 percent levels of growth.

Headline inflation dropped to 6.35 percent from April’s 6.6 percent, a falling trend fuelled by weaker food prices and decelerating core prices. Food inflation slid to 1.5% from 1.7% in April. Food prices have tumbled over the past three months.

Core inflation slowed to 11.0% year on year from 12.1% in April. HSBC expects the figure will continue to fall in the coming months thanks to a favourable base effect and sluggish demand.

Against all odds, the bank says Vietnam’s reform process is building new momentum. The recent authorization of the Vietnam Asset Management Company’s settlement of non-performing bank loans is a crucial step towards restructuring the banking sector.

HSBC experts acknowledge that while the AMC’s limited capital base has raised doubts about the efficacy of the program, its establishment is an important signal to the market that the government is serious about the reform process.

Impetus for Vietnam-EU strategic partnership

The European Union launched an EU-Vietnam Strategic Dialogue Facility in Hanoi on June 4, committing more than 2.9 million euros to the program.

The 2013-2016 funding will support policy research, technical assistance programs and the organization of conferences, training courses and communication campaigns.

The EU- Vietnam Strategic Dialogue Facility aims to support Vietnam in realizing its five-year socio-economic development plans. To meet the goal, the EU and Vietnam will work together in different key areas mentioned in their Partnership and Cooperation Agreement (PCA) signed in June 2012.

The Vietnamese Ministry of Foreign Affairs (MOFA) hopes the program will offer central and local agency representatives an opportunity to update their understandings of Vietnam-EU relations, especially in the fields of trade, investment and Official Development Assistance (ODA), said MOFA Deputy Minister Bui Thanh Son at a workshop launching the facility.

He asked them to propose areas of cooperation with reference to the 2012 PCA to foster relations between Vietnam and the EU, as well as with EU member states.

Son noted that the PCA created a new legal framework for developing Vietnam-EU relations towards an equal partnership and mutually beneficial, comprehensive cooperation.

While waiting for ratification, both sides agreed to early implement the agreement on a number of prioritised areas in the 2011-2012 period, and are preparing for the 2013-2014 period.

Son voiced Vietnam’s strong commitment to implementing the agreement, seeking further assistance from the EU and its member states.

Franz Jessen, EU Ambassador and Head of the EU Delegation to Vietnam, confirmed that Vietnam is one of the EU’s important partners, and development cooperation is crucial to bilateral relations.

Vietnam and the EU have already identified some prioritised areas of the PCA to be implemented over the years, he said, adding that the EU will consider ratifying the agreement to seize opportunities it presents.

The workshop examined reports from former Deputy Prime Minister Vu Khoan and EU, MOFA, and Ministry of Planning and Investment representatives on subjects like Vietnam-EU relations, bilateral trade and investment, potential difficulties and challenges, and the role of Vietnam-EU cooperation in Vietnam’s socio-economic development plan.

Trade turnover between Vietnam and the EU has grown impressively. Despite the international economic crisis, two-way trade reached US$29.9 billion last year, up nearly 20 percent compared to 2011.

EU member states are some of Vietnam’s leading foreign investors. As of March 2013, 22 out of 27 EU member states had 1,299 valid projects capitalised at over US$17 billion in Vietnam.

Seminar discusses Chief Information Officers ’role

Experts from Vietnam and the Republic of Korea (RoK) shared experience in developing e-government services and Chief Information Officers (CIOs) at a seminar in Hanoi on June 4.

Deputy Minister of Information and Communications Nguyen Minh Hong said recent years have seen Vietnam expand its application of information technology (IT) in State agencies and develop the potential for e-government.

This trend has helped improve bureaucratic transparency and efficiency benefiting state agencies, organisations, businesses, and citizens, and part of the success should be attributed to CIOs, said Hong.

The rapid development of IT has also required CIOs to reconcile their ideal vision with the reality of long-term IT development in government ministries and agencies.

According to RoK experts, CIOs are responsible for tailoring IT strategies to the requirements of their assigned departments,, building and expanding agency databases and information systems, and formulating IT guidelines and regulations that meet certain technical standards.

During the 2013–­2015 period, Vietnam is aiming to expand its e-government and online services, working towards a fully connected government by 2020.

Vietnam and the RoK have deepened cooperation in information and communication technology (ICT), especially in developing policies on IT, e-government and telecommunications.

Vietnam considers ICT a driving force behind the country’s sustainable development.

Consumer confidence index surges

Vietnam’s consumer confidence index hit 96 points in the first quarter of 2013, an 8 point rise from the previous quarter and 2 points higher than the same period last year.

According to a market research company Nielsen report, a large number of Vietnamese consumers are optimistic about 2013’s first quarter job market.

The 39 percent positive outlook reading was higher than the 34% in the last quarter of 2012 but lower than both the 50% in 2012’s first quarter and the regional average of 61%.

Around one third (33%) of online customers said this December will be conducive to furniture purchase, up 4% on Q4, 2012 and 7% on Q1, 2012.

Other consumer demands also rose slightly compared to Q4, 2012, including house decorations (up 3%), technology products (1%), and clothes (3%). The number of people who plan to invest in securities jumped a significant 5%.

Saving remains the dominant Vietnamese consumer trend. As many as 71% of those surveyed reported planning monthly savings after essential expenses.

Vietnamese consumers were mostly concerned about economic performance, job security, health, the cost of living, and rising food prices.

Forval opens door to more IP investment

Japan’s Forval Corporation will help unlock the door for dynamic Japanese enterprises to enter two Vietnamese industrial parks.

The Tokyo-headquartered firm has just decided enter into ventures with the parks after a painstaking study of 200 industrial parks in Vietnam.

Forval Corporation chairman Hideo Okubo said the firm would support Dai An Industrial Park Joint Stock Company and Tin Nghia Company – the owner of Nhon Trach 3 Industrial Park to develop sites reserved for Japan’s small- and medium-sized enterprises (SMEs) and introduce one-stop services to support investors.

“To attract investments from Japan’s SMEs, industrial parks must have staff who speak Japanese, must offer available workshops and have one-stop shops to handle investment procedures,” he said.

“We are also thinking about investing in these industrial parks. We are now discussing with the Japan International Cooperation Agency (JICA) for funding our investment in Dai An and Nhon Trach 3,” added Okubo.

Dai An Industrial Park is located in northern Hai Duong province, while Nhon Trach 3 Industrial Park is located in Dong Nai province. Both are good locations for developing supporting industries. “We learnt that the Vietnamese government wants to call for investment from foreign SMEs, especially from Japan, to develop supporting industries, and there is also a growing trend of overseas investments at Japan’s SMEs at this time. So we want to expand this business in Vietnam,” Okubo said.

Since Forval Corporation introduced Dai An and Nhon Trach 3 to SMEs in Japan, 30 Japanese SMEs have expressed interest in building factories in these parks. More than 10 of which registered to invest in.

“In the past, Japanese SMEs rarely expanded investment overseas, but due to the growing labour shortage in Japan, more SMEs want to build factories outside Japan. Vietnam is among their good destinations to make investments,” said Okubo.

In fact, Vietnamese government has been trying to call for investment from Japan’s SMEs for long time, but the result is not so positive even though Japan’s multinational companies like Canon, Honda, Toyota, Panasonic and Mitsubishi have already been present in this country.

Aquatic exports to Africa extend by 15% during Q1

Viet Nam's aquatic export turnover to Africa reached US$30.3 million over the first quarter of this year, up 15 per cent against the same period last year.

Last year, the turnover to 25 African countries hit $150 million, a 38 per cent surge from 2011, with key exports including tra fish, shrimp and tuna.

According to the Ministry of Industry and Trade, Vietnamese exporters have a good opportunity to promote seafood exports to African countries as the nations have to import numerous aquatic products to meet their domestic demand and their aquaculture industry is under-developed.-

Ninh Thuan aims to increase competitiveness

The central province of Ninh Thuan would foster administrative reforms to raise its competitiveness index and become a trusted destination for investors.

The promise was stated by the provincial People's Committee chairman, Nguyen Duc Thanh, at a conference late last week.

Ninh Thuan jumped 28 places to the 18th position out of 63 cities and provinces. The annual index is based on a survey conducted by the Viet Nam Chamber of Commerce and Industry.

The province was praised by enterprises for its efforts to cut costs for business start-ups, reduce informal costs and cut time spent on bureaucratic procedures and inspection, the survey said.

Its labour training policies and creative provincial leadership in solving problems for enterprises were also appreciated.-

Northern province to host promotion conference

The Viet Nam Chamber of Commerce and Industry (VCCI) plans to organise the Yen Bai Trade and Investment Promotion Conference early next month.

VCCI said it would also organise business delegations to the province to study the investment and business environment and projects recommended at the conference.

Yen Bai was a poor mountainous province which encountered a lot of difficulties in socio-economic development, VCCI said.

The provincial authorities had vowed to better facilitate investors and offered incentives for investors who wanted to invest in the province.

VN firm launches community development investment

Hoang Anh Gia Lai Group last Friday kicked off its US$10 million investment program of community development in a bid to improve life for people in Cambodia's Ratanakiri province, where it is investing in agricultural projects.

In the first stages of the program, the group provided free healthcare services to roughly 1,500 local people in the province's Sre Aung Chhrong Commune; also offering gifts of rice, salt and sugar to 400 poor local households.

Under the program, which will last until 2016, the group will also build up community cultural houses, schools, medical stations and roads in the province, besides giving sponsorship to local students to study teaching and healthcare in Viet Nam's Gia Lai and Kontum provinces.

Tiger Air unveils promotion to mark anniversary

Singapore-based Tiger Airways and the Singapore Tourism Board are offering huge discounts on Viet Nam-Singapore tickets to mark the eighth anniversary of the low cost carrier's operation on the route.

A one-way ticket to Singapore from HCM City and Ha Noi will be sold at VND88,000 and VND688,000 respectively from June 3 through June 9 for travel between October 9 and November 30.

Cement market continues solid recovery

Cement sales increased in May, adding to a rising trend which is expected to continue on the back of a credit package worth VND30 trillion (US$1.42 billion) for domestic real estate.

The Ministry of Construction reported cement consumption in the first five months on the domestic market had a year-on-year increase of 9 per cent to 19.15 million tonnes.

Le Van Toi, head of the Building Material Department at the Ministry of Construction, said that in the first half of May, some cement factories had difficulty sourcing clinker due to increased sales the domestic cement market.

The nation had a total cement consumption at home and abroad of 23.8 million tonnes in the first five months. In May alone, the total consumption saw a year-on-year increase of 19 per cent.

Nguyen Thi Tao, deputy general director of Viet Nam Cement Industry Corp (Vicem) Hoang Thach, said cement consumption had recovered since the end of March. For the first quarter, the company had consumed 1.06 million tonnes of cement, 4 per cent higher than the same period last year.

Hoang Xuan Vinh, general director of Cam Pha Cement Company, said that in the first quarter demand exceeded his company's production capacity to reach 618,000 tonnes of cement.

Luong Quang Khai, Vicem's chairman, said Vicem's cement sales had recovery in recent weeks because the bank interest rate had been lower and the domestic real estate market had shown recovery signs.

In the first quarter, consumption jumped by 19.2 per cent against its production plans of 4.91 million tonnes of cement, Khai said.

Cement producers awaited the credit package worth VND30 trillion, which had been approved by the Government, along with a soft interest rate to lift the real estate market as well as other related markets such as cement, steel and wood products.

According to the Viet Nam Real Estate Association, many property projects had been suspended due to lack of credit. If those projects received credit from the package to finish their building, it would promote cement consumption and production.

The package for housing and property traders was necessary to stimulate the property market and other related markets that had suffered bad impacts from a stagnating property market, said Nguyen Tri Hieu, a member of Management Board at the Ocean Bank.

Vietnam–EU strategic dialogue facility launched

The Ministry of Foreign Affairs and the European Union (EU) delegation to Vietnam on June 4 organised a seminar to launch the Vietnam–EU Strategic Dialogue Facility as part of the Vietnam–EU Partnership and Cooperation Agreement (PCA).

In his opening speech, Deputy Foreign Minister Bui Thanh Son said one of the facility’s objectives is to help Vietnam realise other cooperation activities within the PCA.

The Deputy Minister expressed his hope that through the seminar, representatives from ministerial and local agencies will have opportunities to access up-to-date information and evaluations of both Vietnam and the EU on the two sides’ relations, especially in trade, investment, ODA and PCA implementation with the EU’s support. Then they can actively propose suitable cooperation areas, boosting ties with the EU and its members, he added.

According to the Deputy Minister, the PCA signed in June 2012 meets the demand on a new legal framework, and is a manifestation of the rapidly increasing and dynamic relations between Vietnam and the EU, marking a milestone in the development of ties towards equality and comprehensive cooperation.

The implementation of the 2011-2012 PCA has successfully concluded, and the two sides are now discussing the 2013-2014 stage, he added.

Vietnam, as a PCA signatory, pledges to follow its regulations. Besides its own efforts, the assistance and support of the EU as well as its members are greatly needed, the Deputy Minister said.

Head of the EU delegation to Vietnam , Ambassador Franz Jessen, said development cooperation has always been an important part of the cooperation between the EU and Vietnam.

The Vietnamese Government and the EU have identified several prioritised fields for the early implementation of the PCA, Jessen said, pledging to continue the PCA approval and implementation process, and make full use of the cooperation opportunities it may create.

According to him, the new PCA demonstrates the EU’s commitment to forge a modern, broad-based and mutually-beneficially partnership with Vietnam, a partner willing to take on increasing responsibilities in the world arena, and an active and central force in ASEAN, he added.

Also at the seminar, EU representatives announced the launch of the Vietnam–EU Strategic Dialogue and related activities to run in 2013.

Accordingly, the EU delegation to Vietnam will provide 2.9 million EUR from February 2013 – 2016. Main activities focus on policy related research, technological support, organising seminars and training courses.

The facility aims to enhance strategic dialogues between Vietnam and the EU, supporting the PCA through sharing experience, good practices and examples in the prioritised fields.

It also aims to support Vietnam realise its socio-economic development plan in the strategic fields.

Despite the economic crisis, two-way trade between Vietnam and the EU in 2012 still exceeded 29 billion USD, up nearly 20 percent from 2011.

EU nations are among the leading investors in Vietnam. By the end of March 2013, 22 of the 27 EU members invested in 1,299 valid projects in Vietnam, with registered capital totalling over 17 billion USD.

Cement consumption showed signs of recovery last month with the sales volume up 19% year-on-year, according to the Ministry of Construction.

Overall, 23.8 million tons of cement was sold in the first five months, meeting 41% of the year’s plan, in which 19.15 million tons was consumed in the local market, up 9% over the same period in 2012.

The construction ministry predicts domestic cement output will reach 79.45 million tons in 2013, 81.56 million tons in 2014 and 83.86 million tons in 2015, according to a report on the Government web portal.

Le Van Toi, head of the building materials department under the ministry, said that in the first half of May, some plants found it harder to buy clinker because of the increase in local cement consumption.

At most large cement companies, production and sales have improved. Positive signals from domestic consumption have urged some firms to adjust their export plans.

Nguyen Thi Tao, deputy general director of VICEM Hoang Thach Co., said consumption had rebounded since the second half of March and the first week of April. By the end of the first quarter, Hoang Thach had sold approximately 1.06 million tons of cement, up 4% year-on-year, exceeding its target.

Although the property market has not recovered, Hoang Thach is affected less than other companies because its products are mainly sold to individual customers. Currently, the company does not have inventory.

Hoang Xuan Vinh, general director of Cam Pha Cement Co., informed his company in the first quarter sold about 618,000 tons and produced a volume higher than the designed capacity.

On average, Cam Pha exports 35% of its output every year. However, last quarter, the company exported nearly 50% of its output.

The demand for cement for large projects has also increased, with bulk cement accounting for about 35%.

Luong Quang Khai, chairman of Vietnam Cement Industry Corporation (VICEM), said interest rate cuts and the warming construction market helped improve VICEM’s sales in recent weeks.

In the first quarter, VICEM sold over 4.9 million tons, 19.2% higher than its target, but still lower than the same period last year. However, the company still considers this as a good sign.

SBV calls for transparency in home loan program

The State Bank of Vietnam (SBV) requests all five lenders participating in the VND30-trillion home loan program to disclose information about the lending process.

The program is large-scale in terms of total loan amount, loan term and interest rate, and is unprecedented. Therefore, it is important that transparency is guaranteed so that people understand the policy of central authorities, and loans are given to the right ones, says a notice of SBV issued last Friday. The preferential home loan program was launched on the following day.

SBV asks lenders to have separate book keeping for the loans given under the program to make it easy for inspection and audit later. The five banks selected to provide loans are BIDV, Vietcombank, Vietinbank, Agribank and Mekong Housing Bank.

SBV and the Ministry of Construction have set conditions for borrowing loans under this program. In addition, the two agencies have provided details on the responsibilities of borrowers, lenders and other persons concerned, and will impose severe sanctions against wrongdoings.

On that basis, lenders will issue specific guidelines to their branches and transaction offices and disclose information in various forms, so that people can make their financial plans for buying homes and following the procedures for loan application.

The preferential home loan program is put under inspection and supervision of the entire political system, including the State bodies, the internal inspection department of each bank, district- and ward-level governments, and especially the people.

VND20 tril. G-bonds mobilized in May

The State Treasury of Vietnam mobilized over VND20 trillion via government bond sales last month, which is lower than April’s figure of VND23 trillion but remains a strong investment channel for banks awash with funds.

May’s figure suggests that credit institutions still have a strong demand for government bonds, according to the agency.

The agency since the start of the year has mobilized over VND104 trillion worth of government bonds, meeting 61.3% of the year’s revised target of VND170 trillion.

The Ministry of Finance earlier intended to raise VND150 trillion from government bond issuance this year to make up for the State budget deficit and use it for investment and development. The figure then was revised up to VND170 trillion given liquidity surplus in banks and high demand for government bonds.

At an auction on May 29, the State Treasury sold out two, three, and five-year bonds while it managed to sell only VND250 billion out of VND1 trillion worth of 10-year notes. Corresponding coupons for four types of bonds were 6.55%, 6.75%, 7.78% and 9% respectively.

As of May 30, over VND76.5 trillion worth of investment capital was disbursed via the State Treasury, meeting 34% of this year’s capital plan, including over VND54 trillion for capital construction projects.

Cooperative bank of Vietnam set up

The Governor of the State Bank of Vietnam (SBV) on June 4 granted a licence to establish the Cooperative Bank of Vietnam at the request of the Central People’s Credit Fund (CPCF), serving as another funding channel for individuals and collectives.

Under the licence, the bank will be transformed from the CPCF and headquartered in Nguyen Thi Dinh street, Trung Hoa commune, Cau Giay district, Hanoi.

It will have a chartered capital of 3 trillion VND (about 142 million USD) sourced from the State, CPCF members and other legal entities.

The bank, which operates nationwide in a 99-year period, will be allowed to set up a network of domestic and foreign branches once getting the SBV’s writing approval.

Nation sees export surge in five months

Vietnam’s exports reached 49.9 billion USD in the first five months of this year, a rise of 15.1 percent over the same period last year, the General Statistics Office has reported.

In May alone, the figure was 10.8 billion USD, up 7.6 percent month-on-month and 11.8 percent compared to that of a year ago.

In the five-month period, State-owned businesses saw a 2.1 percent export growth, while FDI firms enjoyed a 23.3 percent surge in exports, including crude oil.

Meanwhile, Vietnam imported 12 billion USD worth of goods in May, up 9.4 percent compared to April’s figure and 16 percent year-on-year. It brought the country’s five-month total imports to 51.9 billion USD, representing a sharp year-on-year increase of 16.8 percent.

Trade deficit was estimated at 1.2 billion USD in May and 1.9 billion USD in the Jan-May period, equivalent to 11.1 percent and 3.9 percent of the country’s total exports respectively.

Vietnam: Rice year-to-date exports top last year

Rice exports hit 2.787 million tonnes in the first five months of 2013, up 10% from a year earlier, according to the Vietnam Food Association (VFA) and generated a hefty US$1.2 billion in revenue.

In May alone, the shipments of the country’s most important export experienced a sharp increase and stood at 650,000 tonnes of the grain, equating to US$273 million of revenue.

Vietnam has set a target to export 7.5 million tonnes of rice in 2013, which is slightly higher than the 7.72 million tonnes exported last year.

According to the Ministry of Agriculture and Rural Development, the Mekong Delta region harvested nearly 10.9 million tonnes of rice from the winter-autumn crop and it is expected to reap 9.3 million tonnes in the upcoming summer-autumn crop.

The requirement is part of the Earth Island Institute (EII) policy to protect dolphins and the maritime environment.

Tuna importers from the EU, the US and Australia have asked Vietnamese tuna exporters to get the “Dolphin Safe Tuna” label from the EII for their products exported to these markets.

The EII has asked all Vietnamese export businesses to get the State certificates for every package of their products which confirms the register number of fishing ships, output, operating field, time, date and place of docking and name of supervision officials from Vietnamese State agencies.

The Vietnamese Association of Seafood Exporters and Processors (VASEP) said this is an important issue, and State agencies must provide adequate information and data on the right to tuna fishing for the EII and its relevant agencies.

203 seafood processors licensed to export to Argentina

The National Food Safety and Quality Service of Argentina (Senasa) has approved the list of 203 Vietnamese seafood processors eligible to export products to Argentina.

The Vietnam National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) has asked the eligible exporters to register with NAFIQAD soon to have their batches inspected and certified before shipped to Argentina.

The exporters should contact with Argentinean importers to keep abreast of and meet their requirements before delivering the products, NAFIQAD said.

The Vietnamese food safety watchdog also asked local processors to learn from Senasa’s notice of food safety and hygiene to avoid consignment return.

Senasa released a warning on food safety for Vietnamese seafood processors following a fact-finding trip in August 2012.

The Vietnam Customs reports that Vietnamese exports to Argentina totaled US$31 million in the first two months of 2013. Major export items were computers, electronic appliances, seafood, and footwear.

Since 2010, Argentina has emerged as Vietnam’s fourth largest trading partner in South America.

Argentina will be one of the most potential markets for Vietnamese enterprises to boost their exports, especially frozen seafood, in the coming years, experts say.

Can Tho rice exports on the rise

Can Tho city exported 77.300 tonnes of rice in May, bringing its total rice export volume in the first five months of the year to nearly 364,000 tonnes worth US$180 million, up 34 percent against the same period last year.

Rice exports currently account for 38 percent of the city’s total export turnover.

The increase is attributed to the city’s timely support for businesses by purchasing nearly 100,000 tonnes of rice from the spring-winter crop for reserves.

Rice exporters have also promoted marketing to seek new outlets in Asia, Africa, and the Middle East and signed numerous contracts with foreign customers.

In addition, they have invested dozens of billions of VND in upgrading production lines to meet the export demand.

Some businesses have also authorized other provincial level units to expand the export of fragrant rice to Europe, North America and other Asian nations.

NA considers separation of SBV from government

NA deputy proposed making the State Bank of Vietnam (SBV) and the General Statistics Office (GSO) become independent bodies during the discussion to revise the 1992 constitution, held on June 4.

NA deputy Nguyen Van Tien from Tien Giang Province said the revised constitution of 2001 introduced three separate branches of government: the executive, the legislative and the judicial. However, these branches sill do not have proper oversight.

According to Tien, letting the SBV and GSO become independent agencies would be a mean to keep these three powers in check.

NA deputies also gave an implied vote of confidence in the work of the State Audit of Vietnam by showing no objection to their work as an agency independent from the government.

"I think we need to separate agencies that often deal with the questions of NA deputies and deal with issues pertaining to doubts from the government. For example, during many sessions, the minister of Planning and Investment has been directed questions as to how the GDP is calculated, and henceforth it has been up to him to explain for the GSO. It's time that the GSO is separated from the government," Tien said.

Meanwhile, NA deputy, Bui Duc Thu, from Lai Chau Province requested an expansion of the powers of the State Audit.

He said, "Our financial system consists of three parts. These are public finance, corporate finance and those having to do with state-owned firms, and personal finance. Currently, the State Audit Office only have control over public finance, which creates a large loophole. There is a need to more closely monitor public assets used for investment."

HCMC tackles crisis of unsold housing inventory

The People’s Committee of Ho Chi Minh City convened a meeting on June 4 with related departments associated with housing and construction to discuss the ongoing crisis of unsold housing inventory in the City.

According to statistics given by the Department of Construction, around 308 condominium blocks in HCMC have had to put on hold all construction for lack of buyers and frozen property market.

But on the other side, 736 projects in the City have been implemented, such a 118 in District 2 and 92 in Binh Tan District.

Since the beginning of the year, 1,877 apartments were sold, accounting for 13 percent of total apartment inventory but 12,613 apartments are still unsold, which are worth VND22,414 billion ($1million).

After the Government issued a Decree to ease difficulties for realty businesses, the Department of Construction has received proposals to convert commercial housing projects into social housing projects.

Since then, a 360 apartment project in District 2 will be converted into a hospital and three other commercial housing projects in Districts 2, Tan Phu, and Binh Chanh will convert to social housing projects.

The Department of Construction said it will complete construction of 3,000 new social housing apartments in 2013 to meet demand for government employees, military personnel and low-income groups.

In related news, on June 4, VietinBank in Nha Be District and Hiep Phuoc Industrial Park signed a contract in which the bank will give credit aid to Hiep Phuoc Industrial Park for the second phase with a  loan of VND555.5 billion($26,624,933) for a period of 62 months.

On June 4, the State Bank of Vietnam held a meeting with five banks, namely Vietnam Bank for Agriculture and Rural Development, Bank for Investment and Development of Vietnam, Vietnam Joint Stock Commercial Bank for Industry and Trade, Bank for Foreign Trade of Vietnam, and the Mekong Housing Bank about the government credit aid package of VND30 trillion ($1.44 billion) for low income groups, who can borrow at only 6 percent a year to purchase apartments under social housing projects.

As per the agreement between State Bank and five banks, the latter have assigned money for the program and will target borrowers for the loans. Disbursement has been on since June 1 and will continue until the central bank disburses all VND30 trillion ($1.44 billion) in next 36 months.

Gov’t to assist with marketing of summer-autumn rice crop

The Government is applying a number of measures to help market the summer-autumn rice crop, which is just getting ready to be harvested in the Mekong Delta, said Truong Thanh Phong, chairman of Vietnam Food Association (VFA) at a meeting on June 4.

According to VFA, the Government will purchase one million tons of summer-autumn rice for stockpiling from June 15 to July 31.

Rice export companies are currently experiencing a loss of US$25-30 a ton and none want to purchase more rice. As a result, VFA will have to appoint enterprises to buy rice.

The Government is encouraging businesses to quickly purchase rice to enjoy preferential interest rates.

VFA will accept lower than export price rates and help stimulate domestic price.

This measure might bring more losses to businesses but it is hoped it will prevent the domestic rice price from further falling.

VFA said that at this time relevant sides should not pay much attention to profit margins but try to circulate the rice market.

Experts say that present inventory of rice is very high in the world. For instance, Thailand has 17 million tons and India has 35 million tons in stock.

The two markets that are expected to import the most are China and Africa.

According to the United States Department of Agriculture, China will be the largest rice importing country this year with three million tons.

African countries are expected to import more rice this year than last year. This market buys about 6.4-6.5 million tons annually.

Poor administration leads to budget overspending

NA deputies discussed the wasteful management that is rampant among local state agencies and departments.

Minister of Finance Dinh Tien Dung reported to the NA on the topic on June 5. According to the report, weak management is rife, leading to chronic overspending. Several agencies have also used their budgets for the wrong purposes.

In 2010, 3,386 projects were behind schedule and 221 projects violated regulations on investment. In addition, the management of land and headquarters is ignored and large amounts of land remain idle.

During the first eight months of 2012, most of the firms were revealed to have committed violations such as sham tendering, overspending on contractors.

State-owned firms also seem unaware about how to cut costs. The Vietnam National Petroleum Group incurred huge losses in 2011, Petrovietnam Construction Corporation showed little business efficiency and Saigon Industry Corporation used its land ineffectively.

"Firms often expand business despite their limited management and financial capacity. This has resulted in many losses over the years." the report said.

Waste in the healthcare and education sectors were also discussed with problems such as medical facilities equipped with modern technology being wasted as they do not have capable personnel to use the machines. The report suggested drafting specific regulations to the two sectors.

Overspending needs to be addressed and the report proposed to assign specific responsibility to the agencies. For example, the Ministry of Planning and Investment will take full responsibility for planning evaluation, investment guidelines and the Ministry of Construction is responsible for issuing building permits and price lists.

The NA Finance and Budget Committee said that most overspending was the results of decisions to invest in ineffective projects or to make investment without considering the financial and social factors. That's why penalties and the responsibilities of the leaders of state agencies needed to be outlined.

Banks hiding bad debts to face inspection

Banks which try to hide their bad debts and do not want to sell the debts will face inspections by the State Bank of Vietnam (SBV).

The measure is included a plan issued by the prime minister to mitigate bad debts in the banking sector.

According to the plan, the State Bank of Vietnam, the Ministry of Finance, the Ministry of Construction, the Ministry of Justice and the Ministry of Planning and Investment will co-ordinate efforts to resolve the problem.

The SBV will join with the ministries and city and provincial people’s committees to carry out measures to deal with the bad debts.

The SBV will inspect and conduct compulsory audits or suspend some activities for banks which try to hide their bad debts and do not conform to the SBV’s solutions on the settlement of bad debts. These banks will also face restrictions on paying dividends and assets and share transfers.

The SVB will also request an increase the charter capital of banks found to have hidden their bad debts and will also decide a credit growth limit to ensure the safety of the entire banking system.

Under the project, the Ministry of Finance and the SBV will co-operate with agencies to work out a mechanism and plan on dealing with bad debts of the Vietnam Development banks and state-owned enterprises for submission to the prime minister this year.

In early March, the government approved a decree to establish Vietnam Asset Management Company (VAMC) which will go into operation in 2013.

VAMC is expected to solve between VND40,000 (USD1.9 billion) and VND70,000 trillion (USD3.33 billion) in bad debts this year, said the State Bank of Vietnam Governor Nguyen Van Binh.

HCM City industrial sector expands

Industry and trade in HCM City have had five consecutive months of growth, even in the face of national economic challenges.

The city’s policies on coping with inflation have contributed to steady growth.

In May, the industrial production index rose by 5.5 percent against the previous month, and 4.4 percent compared to the same period last year.

Of 26 industries, 22 of them improved capacity, especially in food processing, beverages, leather and shoes. Only ore mining, tobacco and automobiles were stagnant.

The storage index for the industrial sector also improved by 0.26 percent.

“The major reason for this growth is that the Government and related industries have offered many solutions to overcome difficulties,” said Nguyen Van Lai, Director of the city’ Industry and Trade Department.

Industrial production has also increased. By early May, total loans in the city had reached 873 trillion VND (41 billion USD), an increase of 1.4 percent against the previous month long period and 15.1 percent compared to the same period last year.

“However, the international and national economies face low demand and a high quantity of stockpiled goods. Lower foreign direct investment, equal to only 43 percent in the same period last year, has affected industrial production,” Lai added.

To cope with the situation, the textile and garment industry has expanded local market by changing its business model but keeping the high quality of exported goods. For the first five months of the year, the industry grew by 5.4 percent.

The food processing and beverage industries have also earned good results.

Retail sales and turnover from services in the city totalled 288 trillion VND (133 billion USD), a year-on-year increase of 10.4 percent. The figure showed that buying demand had increased.

To support enterprises, the Industry and Trade Department has organised meeting with enterprises. Nine meeting have been held with 100 enterprises thus far.

The department is also continuing to develop delivery channels to the city outskirts and processing zones.

Work starts on HAGL complex in Myanmar

Hoang Anh Gia Lai (HAGL) Group began construction of a 440 million USD trade centre, hotel and service office complex in the Myanmar city of Yangon on June 5.

The 8-ha Hoang Anh Gia Lai Myanmar Centre is the company’s largest investment project at present. It was financed by the Bank for Investment and Development of Vietnam (BIDV), Eximbank and Sacombank.

Company chairman Doan Nguyen Duc said the project will be completed within six to seven years. He predicted that when operational, it will help meet the city’s demand for property, which has become “very hot” since Myanmar opened its doors to foreign investment in 2011.

Office spaces in Yangon are being rented at 75-150 USD per sq.m per month, while a night in a hotel costs around 300 USD, according to domestic press.

Myanmar Minister of Hotel and Tourism U Htay Aung said that the nation plans to hold many major events in the next few years, including ASEAN summits and tourism forums, so investment in hotels and other travel-related business has significant potential.

Last year, about one million international tourists visited Myanmar, an increase of 20 percent over the previous year. The number is expected to reach 1.5 million this year, the minister said.

According to U Htay Aung, HAGL’s investment represents 26 percent of the total foreign direct investment capital poured into Myanmar ’s hotels and trade centres.

The company’s total overseas investment amounts to about 1.5 billion USD.

Hiep Phuoc industrial park to triple its size

The Ho Chi Minh City-based Hiep Phuoc industrial park will be expanded to 908.4 hectares with VND555.5 billion (US$26.664 million) funded by Vietinbank.

The industrial park currently covers an area of 311.4 hectares in Nha Be district, which houses 95 projects with a total investment of more than US$900 million, said Doan Hong Tam, General Director of the IP at the loan closing yesterday.

In the second phase, the industrial park will be expanded by 597 hectares, nearly doubling its current size.

When expansion is completed, the Hiep Phuoc industrial park will focus on attracting seaport services, high-tech and environmentally friendly projects.

Tam said his company plans to increase the size of the Hiep Phuoc industrial park by an additional 1,000 hectares in the third phase.

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