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State Bank’s decision pulls down gold price
The domestic gold price dropped by nearly 1 million VND per tael to 37.3 million VND per tael by 1:30 pm on Nov. 9 just after the State Bank of Vietnam announced it allows gold imports with appropriate volumes.
The decision was made in the context that the domestic gold price has been rising at a higher rate than the global price in recent days, peaking at 38.2 million VND (over 1,900 USD) per tael at 11:00 am on Nov. 9. O ne tael equals 1.2 troy ounces.
"The domestic price now is higher than the global price and this is likely to encourage smuggling, make the dollar more expensive and have an adverse effect on the gold price," warned Sacombank Jewellery Co general director Nguyen Ngoc Que Chi.
The gold price has been climbing since early October when it reached 32.95 million USD per tael on October 6.
The US dollar also gained 40 VND per USD on Nov. 9 compared to just the day before. The rate on the unofficial market was 21,000 (buying)-21,400 VND (selling) per USD while the rate at banks stayed at 19,480-19,500 VND per USD.
World Bank calls for more reforms
He was speaking at a workshop titled "Vietnam Business Climate Reforms: Looking forward from Doing Business 2011" in Hanoi.
This progress was reflected by the 10-position-jump from 88 in Doing Business 2010 to 78 in Doing Business 2011 overtaking China to rank 11th in the Asia-Pacific region. Areas that improved the most included starting a business, dealing with construction permits and obtaining credit.
Doing Business, which provides objective measures of business regulations for local firms in 183 economies annually, focuses on regulations relevant to the life cycle of small to medium-size domestic businesses, built on standardised case scenarios.
Devan said Vietnam still lagged behind other economies when it came to effective tax collection, ranking 124 globally.
"Paying tax is a complicated and time-consuming procedure, this area can be pushed to make further improvements," he said.
Devan said despite improvements in other areas, Vietnam continued to rank in the bottom ten for protecting investors. It was one of two countries that received a zero rating in the extent of director liability index and consequently maintained its position of 173 in the world.
"Making directors liable and allowing shareholders to sue them, addressed in Decree 102, is very new to Vietnam and perhaps we won't see an immediate impact," he said.
The bank's vice president said in the area of starting a business, although Vietnam had jumped 14 positions, its ranking was still quite low.
The new Decree 43 on business registration had helped by enabling online registration but unlike in many other countries, it was still necessary to have registration approved by a Government agency who would then issue a registration certificate.
"The efficiency of Decree 43's implementation would be greatly enhanced if the entire registration procedure could be done online," he said.
Deputy director of the Prime Minister's Special Task Force for Administrative Procedural Reform Ngo Hai Phan said Vietnamwould have received a higher ranking if the survey had been carried out later in the year.
"The survey was conducted between May 2009 and May 2010 while Vietnam started implementing a lot of administrative reforms in June which weren't reflected in this year's Doing Business report."
Phan said that for tax purposes, businesses were allowed to print their own invoices and small and medium-size enterprises only had to declare tax every three months, rather than on a monthly basis as before.
He also said the regulation on the "valid period for construction start-up" in the construction licence had been eliminated, thereby eliminating all the procedures related to the extension of construction licenses.
"These reforms had direct benefits for the business community," said Minister Nguyen Xuan Phuc, Chairman of the Office of the Government.
Phuc said it took time to fully implement the nearly 5,000 administrative procedures because the process involved amendments and supplements to a large number of legal documents.
He called on the business community to continue to cooperate in monitoring the implementation of the administrative procedure simplification plans.
Devan emphasised that the important factor would be how Vietnam move forward further.
New programme promises export credit guarantees
Twenty-three commodities will receive export credit guarantees under a national trial programme, starting from the beginning of next year, in an attempt to ensure a maximum of 3 percent of the total export revenues will be insured by the end of 2013.
Under decision 2011/QD-TTg issued by the Government on Nov. 5, the pilot programme, which will be implemented during 2011-13, would prevent and minimise risks for exporters while ensuring financial security and enhancing exports.
Subject to the programme are enterprises exporting commodities including seafood, rice, coffee, fruit and vegetable, textile and garment, and footwear.
Those export commodities will be guaranteed regarding commercial and political risks.
Premiums will be computed based on the risk level, damages, management fees and other fees concerning the risks which are guaranteed.
According to the Department of Insurance Management and Supervision under the Ministry of Finance (MoF), Vietnam now has 28 non-life insurance companies with the total charter capital of 11.638 trillion VND (596.8 million USD). Of this, only three insurance companies – Petro VietnamInsurance (PVI), Bao Minh Joint Stock Corporation and QBE limited Company – were running credit guarantees for exports.
Meanwhile, a recent survey conducted by the Ministry of Industry and Trade (MIT) on over 200 companies out of 35,000 exporting businesses showed that only a few enterprises were involved in applying debt and risk payment management.
Around 68 percent of risk that export companies confront was commercial risk, 17 percent was political risk while the remaining concerned banks.
However, there were no enterprises involved in export credit guarantees.
The MIT's survey also found that 95 percent of exporters wanted to be involved in export credit guarantees. Of them, 78 percent wanted to be guaranteed regarding the commercial field, 12 percent wanted to be insured regarding forex rate fluctuations or prices while 10 percent wanted insurance against politics.
Foreseeing the lucrative market, several non-life insurance companies were preparing to run export credit guarantees programmes, including BIC and Bao Viet.
Deputy director of BIC Tran Trung Tinh said that this year his company would be running the export credit guarantees programme as the market had potential and the export demand for products was increasing.
"So far, the Letter of Credit (L/C) method has accounted for 90 percent of the global export and import revenues, but now exporters, including Vietnamese enterprises, tend to buy insurance services for the risks incurred when they export," he said.
Not only insurance companies, banks have also started exploiting this type of insurance product.
Under the factoring method, the bank will buy an export business's accounts receivable instead of lending against them, providing the exporter uses a L/C.
Wood exports likely to exceed 4bln USD in 2011
The country's exports of wood products could exceed 4 billion USD next year thanks to a rising demand, forecast the VietnamTimber and Forestry Product Association (Vietforest).
Vietforest vice chairman Nguyen Ton Quyen said that the industry's export turnover could reach 4.1-4.2 billion USD in 2011, up roughly 30 percent over this year.
However, Quyen warned domestic wood exporters to pay due attention to the Lacey Act, a US law that bans the import of any wood products made from illegally harvested timber.
Although no Vietnamese shipments have been returned so far, Quyen said that exporters needed to take heed as the law only came into force in April.
Quyen said that under the new regulations, the cost of timber would increase by roughly 30 percent, and it would also take exporters more time to source raw materials. He recommended that exporters take the initiative and develop production and business plans.
Wood product exporters are also concerned about the price hike of imported materials which the industry is highly dependent on.
Vietforest statistics showed the wood industry this year would need roughly 6.4 million cubic metres of timber, of which domestic production could provide only 1.6 million cu.m. Therefore, the country would have to import roughly 4-5 million cubic metres of timber to meet the annual export target of 3 billion USD this year. Meanwhile, the cost of imported wood materials had surged 15-30 percent in the past few months.
According to Vietforest, the industry this year would earn 3.2-3.3 billion USD from exports, roughly 200-300 million USD higher than the annual target.
Quyen attributed the increase to the rebound of all import markets, especially the EU and US. The growth rate of the export of Vietnamese wood products to the US market was estimated at 15 percent this year and the figure for the EU market was roughly 8 percent.
The surge was also thanks to the exporters' success in exploiting new markets including India , Russia and the Middle East .
The country expects to achieve 4.5 billion USD in 2015 and 7 billion USD in 2020. To attain these goals, Vietnam will have to import 4-5 million tonnes of timber annually for the next 10 years.
To deal with the shortage of materials, HCM City Handicraft and Wood Industry Association vice chairman Tran Quoc Manh recommended that exporters of wood products cooperate with each other to cut costs.
Firms still lack basic knowledge of WTO
Up to 66 percent of Vietnamese export businesses admitted that they failed to understand the basic content of WTO rules, in a recent survey by the Vietnam Chamber of Commerce and Industry, while 50 percent of businesses were unaware of the WTO commitments related to their sectors or business areas.
Since 1994, Vietnam has been involved in 42 trade disputes, 35 of which were anti-dumping actions.
In order to avoid the imposition of measures by other trading partners on domestic exporters, Nguyen Thi Thu Trang from the chamber's Trade Remedies Council urged domestic firms to sharpen their competitiveness by increasing the quality of their products rather than by reducing prices, as well as to perfect their accounting and financial systems in accordance with international standards.
She emphasised the importance of closer co-operation between businesses, particularly within the same sector. Trade defence lawsuits could affect the entire sector, so the effort of only a small number of businesses was insufficient.
Exporters also needed to retain professional legal services to advise them on complex WTO-related legal issues, Trang said.
VietnamTextile and Garment Association vice chairman Le Van Dao said that, despite facing no anti-dumping suits to date, the garment sector lacked the necessary knowledge to deal with trade disputes.
Vietnamhad also failed to used trade defence measures for its own benefit, to protect its domestic industries in the way other countries had done, said the deputy head of the Ministry of Industry and Trade's Competition Administration Department, Vu Ba Phu.
However, Trang said, while trade defence measures could be used to cope with abnormal import cases, they could not be used in every instance importers had problems. The measures could only be applied under specific conditions and circumstances set forth under WTO rules, so businesses needed to make a greater effort to understand those regulations.
Vietnamese firms were also entitled to ask State administrative agencies to investigate and apply measures against imported goods that present an instance of unhealthy competition, said head of the chamber's legal department, Tran Huu Huynh.
But many businesses have yet to pay due attention to this option due to their inadequate understanding of the measures and the lack of information or sufficient cooperation needed to lodge a complaint.
"This can cause losses for Vietnamese businesses on their home market," Huynh said.
He suggested businesses and associations be more proactive in applying legal measures under WTO regulations to raise their competitive capacity in the domestic market.
Container barge shuttle to ply regular Cambodia route
A container barging line between Vietnam and Cambodia was inaugurated by the Newport – Cypress Co at Phnom Penh Port on Nov. 6.
The launch was attended by Cambodian Deputy Minister of Transport and Communication Suon Rachna and Vietnamese ambassador in Phnom Penh , Ngo Anh Dung.
Two barges, each with a capacity of 128 twenty-foot-equivalent units, or TEU, will operate twice a week in either direction.
Containers are trans-shipped at the Tan Cang – Cai Mep Terminal in southern coastal Ba Ria-Vung Tau province for onward shipping to the US and Europe.
Newport – Cypress is a joint venture between the Hong Kong-based Sun Cypress Shipping Co Ltd and the local Sai Gon Newport Corp.
It was set up last April and currently exploits the container barging service in Cuu Long (Mekong) Delta along with SNP's subsidiaries like Tan Cang – Cat Lai Terminal, Tan Cang – Cai Mep Terminal, and Phnom Penh Autonomous Port ( Cambodia ).
The new service will help meet the rising demand for cargo transport between Vietnam and Cambodia , the joint venture said.
Newport – Cypress will also begin maritime routes linking SNP's subsidiaries to ports in Da Nang and Hai Phong.
This will benefit customers and improve the commercial relationship as well as friendship between Vietnamand Cambodia , the company said.
50mln USD Vung Tau resort housing project begins
Real estate developer CotecLand Group on Nov. 6unveiled Blue Sapphire Resort, its mixed-use, luxury property in coastal Vung Tau, last Saturday and began sales of units.
The 77,000-square-metre property along Chi Linh beach will comprise 460 apartments and penthouses, a 150-room hotel, dozens of villas, and other amenities, and be managed by hotel operator Swiss-Belhotel.
The developer plans to set up a leasing programme to help buyers of apartments and villas rent out their property.
Two 12-storey blocks with 260 apartments and 36 villas, built at a cost of 1 trillion VND (50 million USD), will be ready for occupation in March 2012.
Trinh Xuan Hoa, general director of CotecLand Group, said the company will also build a tourist wharf off the property with restaurants and bars.
Property services firm Savills Vietnam is the sole marketing and sales agent for Blue Saphire Resort.
Source: VNA
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