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BUSINESS IN BRIEF 19/5
Fourteen
brands to join Vietnam Motor Show
Vietnam Motor Show
2013 will take place at Saigon Exhibition & Convention Center (SECC) in
HCMC’s District 7 from October 23 to 27, 2013, with the participation of 14
auto brands, said the Vietnam Automobile Manufacturer’s Association (VAMA).
VAMA members
including Ford, GM, Hino, Honda, Mercedes-Benz, Suzuki,
A wide range of
products and services in the supporting industry, banking, and insurance will
reach consumers at the exhibition.
This year, the
exhibition continues to attract the participation of the most prestigious
automobile brands available in
Vietnam Motor Show
2013 is the much-expected automobile event of the year, introducing to
customers the products and latest technologies in the automobile industry.
Market for
children’s goods, services exceeds US$5 bil./year
The market for
goods as well as education and entertainment services for children in
According to Thomas
J. Ngo, general director of
He said the market
for children was divided into three main groups, with the first two for
education and healthcare and the last for all products produced for children.
Among these, the
last group reaches US$3.1 billion per year, with milk and nutritious food
products accounting for up to US$1.2 billion, other products such as clothes,
diapers and hats around US$1.1 billion and entertainment services US$700
million.
Parents spend an
average of around VND800,000 per month on products and services for a child.
Meanwhile, the average spending recorded in HCMC almost doubles the country’s
average with VND1.4 million per month.
Vinacomin
stands firm on bauxite projects
Vietnam Coal and
Mineral Industries Group (Vinacomin) on Thursday stressed its determination
to continue Nhan Co and Tan Rai bauxite mining projects in the
Speaking at a press
briefing in
Chinh said that the
group’s latest review confirms that the Tan Rai and Nhan Co project will see
capital returns in the next 12 and 13 years respectively, adding that
Vincomin will bear all responsibility before the Party and the State if the
two projects fail to bring socio-economic benefits.
However, Chinh admitted
that the projects will suffer losses in the first three to five years due to
depreciation, loan interest payments, economic slowdown and low sale prices
at the start. The projects will then turn profitable given higher alumina
prices in the coming time.
Over the past
years, the two bauxite projects have drawn much criticism due to concerns on
their adverse environmental and economic impacts. The total investment for
the Tan Rai project in Lam Dong Province has jumped from VND11.3 trillion to
over VND14.9 trillion while that for Nhan Co in Dak Nong Province has
increased from VND11.6 trillion to VND16 trillion.
Chinh said
Vinacomin has signed principle alumina consumption contracts with
More staff
recruited by realty brokerage firms
Regardless of the
current woes faced by the real estate market, many realty brokerage firms are
racing to recruit more staff to expand operations and deploy new business
plans to approach customers and market products more effectively.
Since early this
year, several property brokerage companies have focused on recruiting
employees to execute new business plans.
For instance, Kim
Oanh Real Estate Joint Stock Company has employed 150 more staff, taking its
personnel to 550 persons. Similarly, Hung Thinh Real Estate Trading Floor
Joint Stock Company (
These businesses
fared well with multiple low-cost condo and land lot projects last year and
they are actively opening more branches and trading floors in major cities
like
Following the same
move, Phuc Khang Real Estate Joint Stock Company (
Despite lower labor
demand, a number of other realty brokerage enterprises are also present in
the employment race, with
In fact, a survey
at companies posting recruitment demand shows that salaries, bonuses and
commissions of the property industry remain almost unchanged from a couple of
years ago. However, these entities offer higher commissions while setting
stricter employment requirements, targeting those with wealthy experiences in
the industries of property, automobile, banking or insurance.
MVCorp
cancels music download fee deal
MV Joint Stock
Corporation (MVCorp) has cancelled the contract it signed with the Recording
Industry Association of Vietnam (RIAV) to collect online music download fees
in a bid to protect music copyright.
Truong Thi Thu
Dung, vice chairwoman of RIAV, on Monday confirmed that the contract has been
cancelled after MVCorp presented various reasons for its decision.
“After liquidating
the contract with MVCorp, RIAV is seeking qualified partners to join its
online music download fee collection bid,” Dung said.
Earlier, RIAV
picked MVCorp as its only partner to manage song copyright on music websites
in the past three years. MVCorp had cut deals with popular websites such as Zing.vn,
Nhaccuatui.com, Nhacvui.com, Socbay and Nghenhac to collect download fees at
VND1,000 each song.
Phung Tien Cong,
deputy general director of MVCorp, has also confirmed its withdrawal from
this project but refused to give reasons.
Speaking at a seminar,
MVCorp once complained that fee collection was very difficult because user
awareness is still low and online payment in the country remained
underdeveloped.
Despite MVCorp’s
withdrawal, other digital music service providers such as Zing and Nhaccuatui
said that this will not influence their scheme. Fee collection will keep
moving on and they will work with RIAV instead of MVCorp like before.
RIAV said that the
local recording industry has incurred heavy losses due to free music
downloads. Disc production of the association has slumped over 80% in the
past five years, preventing producers from investing in new music projects.
Qualcomm
advises Vietnam to soon advance to 4G
The demand for
connection between mobile devices is surging in line with smartphone and
tablet boom, posing a big challenge for
In 2020, the volume
of data transmitted around the world would be 1,000 times larger than the
current figure, Qualcomm forecast. Therefore, wider network coverage will be
needed to ensure 3G service quality when users are traveling around the
world.
This exerts an
enormous pressure on mobile network operators, including those in
“To improve 3G
service quality and meet the strong demand for data transmission in the
future, network operators should think about 4G,” said
It is not too soon
to mention 4G now. The problem is how mobile network operators fully utilize
3G and successfully deploy 4G, according to Qualcomm.
In addition,
investment is an important issue. To lure subscribers, 4G service quality
must be really good.
Recently, Nielsen
in collaboration with Buu Dien newspaper has conducted a survey on 3G users
in
Some 60% of the
surveyed say they use 3G services every day, up 18 percentage points compared
to the 2011 survey. Up to 90% use 3G as a tool for Internet connection
anytime and anywhere.
Despite a rapid
increase in the number of 3G subscribers, customers’ satisfaction with 3G
services declines to 64 points on a 100-point scale in 2012 from 71 points in
2011. This is ascribed to the decreasing data transmission speed and
unsatisfying service packages.
Fecon
Mining debuts on HOSE
Fecon Mining Joint
Stock Company on Wednesday floated 26.8 million shares on the Hochiminh Stock
Exchange (HOSE) at the reference price of VND24,000 each.
Ha The Long,
chairman of Fecon Mining, said that listing on HOSE will help the enterprise
mobilize capital to expand its business to mining, supplying of pre-stressed
concrete piles, sand and stone for big projects such as Thai Binh thermal
power plant,
This year, the
enterprise targets to obtain VND850 billion in revenues, 3.2 times higher
than 2012, and VND94 billion in after-tax profits.
Long said Fecon
Mining has plans to become the leading pre-stressed concrete pile supplier in
the country.
Established in
2007, the enterprise has a charter capital of VND268 billion. Earlier, it has
supplied pre-stressed concrete piles for Nghi Son 1 thermal power plant,
Honda 3 factory, Dung Quat oil refining plant and
BTMU
completes payment for VietinBank shares
The Bank of Tokyo
Mitsubishi UFJ (BTMU) last Friday completed payment of US$734 million, or
nearly VND15.5 trillion, to acquire a 19.73% stake in Vietnam Bank for
Industry and Trade (VietinBank).
BTMU bought more
than 644 million shares from VietinBank at VND24,000 per share. Thus, it
officially becomes a strategic partner of VietinBank and gains two seats in
the board of directors of the Vietnamese State-run bank.
The transaction
between VietinBank and its Japanese partner is considered the largest stake
transfer deal in the history of
As per the plan
revealed at the 2013 shareholders’ meeting, VietinBank will issue more shares
to BTMU and other shareholders to spur its charter capital and equity capital
to around VND37.2 trillion and VND52 trillion respectively within this year.
The bank aims for VND80 trillion in equity capital by 2015.
With technical
support from BTMU, VietinBank will be able to improve its financial capacity
and enhance safety and operational efficiency. When the agreement on
comprehensive cooperation in commercial banking, investment banking and
retail banking is realized, VietinBank can boost its capacity for governance,
risk management, product development, technology innovation and human
resource development.
In mid-April, a
senior leadership delegation led by VietinBank chairman went to
Many Japanese
companies currently investing in
The partnership
with VietinBank is part of BTMU’s strategy for expanding its operations in
Following the deal
with BTMU, VietinBank’s ownership structure significantly changes. The
central bank remains the dominant shareholder with a stake of 64.46%,
followed by two foreign partners, BTMU and IFC, holding respective stakes of
19.73% and 8.03%. Other shareholders hold a combined 7.78% stake.
Views
differ over financial supervision role
The national
financial system is in trouble but an upgrade of the National Financial
Supervisory Commission (NFSC) intended to cope with this is deadlocked.
State officials,
deputies of the National Assembly (NA) and economists were split over NFSC
while they were meeting at a seminar themed “
The financial
market has undergone big changes over the last five years. Now, many risks
beyond control have emerged, according to NFSC.
For example, rising
bad debt and property inventory have delivered a blow to the banking system,
while banks have been venturing in a variety of sectors without due
supervision.
MFSC vice chairman
Ha Huy Tuan said: “Cash is coming in and out of the financial market, and it
is hard to track the flow to see if it is safe for consumers.”
Five different
agencies are currently in charge of financial supervision. They are NFSC, the
Bank Supervision and Inspection Agency under the State Bank of
Daniel Zuberbuhler,
senior financial consultant of KPMG, suggested merging NFSC with the four
other agencies. Many countries did something similar during the global
economic crisis in 2008, he said.
Nguyen Dai Lai, a
financial-banking expert, said that since NFSC was seen as an advisory and
consultancy agency, it does not have the right to issue a rule.
Sharing this view,
To Ngoc Hung, director of the
However, State
officials did not agree with these experts.
Nguyen Huu Nghia,
head of the Bank Supervision and Inspection Agency, said: “Prudence is
needed. No one can tell for sure that the consolidated supervision framework
is a step
The banking system
is not only to blame for bad debt, he said, adding enterprises and the
economy as a while have been mismanaged.
Bui Duc Thu, member
of the NA Finance and Budget Committee, deemed it impossible to merge all
financial supervisory agencies into one to boost its power. The current legal
system does not allow this, he noted.
Echoing this view,
President Le Xuan Ba of the Central Institute for Economic Management said
such a merger could never take place in
Economist Le Dang
Doanh said the financial-banking system was facing a stressful situation, yet
the supervisory agencies had not made any specific move.
“A fast car must
have good brakes, but Vietnam is running too fast while there isn’t any
brake, and even if there was, the driver did not want to put the brakes on
it,” he said.
NFSC Chairman Vu
Viet Ngoan did not give a conclusion on the arguments. Still, he admitted the
financial market had been running wild and the economy had felt the impact of
that in the past five years.
Earlier, at a
conference to review the five-year performance of NFSC held in January,
Deputy Prime Minister Vu Van Ninh said the financial-banking system had
witnessed unexpected volatility. He asked NFSC to enhance supervision of the
local financial-banking system.
He remarked the
model of the State Bank of
VN Air
launches daily HCMC-Thanh Hoa services
Vietnam Airlines
Corporation (VNA) has launched daily air services between HCMC and the
north-central
Given rising travel
demand between Thanh Hoa and HCMC, Vietnam Airlines has decided to run daily
flights between the localities. The flights depart from HCMC at 11a.m. and
from Thanh Hoa at 1:50p.m, taking one hour and fifty minutes each.
The air carrier
offers many promotions for the route, including allowing first customers to
buy air tickets at good prices from VND800,000 to VND1.35 million each until
March 31, 2014 or launching the “buy one get two” program.
The HCMC-Thanh Hoa
link before had only five flights a week using 184-seat Airbus A321 airplanes
on Monday, Wednesday, Friday, Saturday and Sunday. However, as the number of
passengers traveling between the localities is surging, the airline has
increased the flight frequency earlier than the initial schedule slated for
July 1.
The government of
VNA has used Airbus
A321 airplanes for the flights between HCMC and Thanh Hoa since Tho Xuan
Airport was put into service on February, 2013. The average seat occupancy on
the route has been over 85% over the last three months.
More
borrowers accessing VND30-trillion package
The VND30-trillion
home loan package will be available for more borrowers, as per a draft
circular on conditions for borrowing loans to purchase low-cost condos in
response to the Government’s Resolution 02.
Not only those in
need of renting low-cost apartments or commercial homes converted into
low-cost condos, but those wanting to buy such homes will also be able to
access the preferential credit package, said Nguyen Viet Manh, director of
the Credit Department under the central bank.
In addition, the
estimated interest rate of 6% per annum will be the highest level during the
ten-year lending term. If the market lending rates drop sharply, the
preferential rate could be lowered, said Manh.
Such a lending rate
is reasonable, he remarked, because it is 50% less than the current market
rates, hovering around 11-14%. The lending term is also extended, giving
borrowers more time for repayment.
He said the draft
circular was quickly revised after Resolution 48 had been released.
The resolution
requires the central bank to join hands with the Ministry of Construction to
draw up guidelines and implement the preferential credit policy for those in
need of low-cost condos. Moreover, they are asked to ease lending conditions
and give credit access to a wider range of borrowers.
In accordance with
Resolution 02, low-interest loans will also be provided to those wanting to
buy commercial homes of less than 70 square meters each, which are priced
below VND15 million per square meter.
Low-cost homes are
available for civil servants, workers at industrial parks and low-income
households in urban areas, who are not subject to personal income tax or are
living in housing with less than five square meters per person.
While commercial
home owners can freely sell their homes, low-cost home owners cannot. Owners
of low-cost condos are not allowed to transfer their homes within ten years
from the date of purchase contract signing, and they can only sell homes to
the State or other people who are also eligible for low-cost homes.
The HCMC government
expects to receive more backing from the Japan International Cooperation
Agency (JICA) for infrastructure projects after it supported the city’s
At a meeting at
City Hall with Tsuno Motonori, chief representative of JICA in Vietnam, who
said goodbye as he has finished his four-year office term in Vietnam, HCMC
chairman Le Hoang Quan proposed JICA consider assisting the city in improving
Doi, Te, Tan Hoa-Lo Gom and Tham Luong-Ben Cat canals.
Chairman Quan on
Tuesday granted the city’s badge to Motonori to recognize his great
contribution during his tenure in
Contractors
pledges to complete expressways by year-end
Several contractors
have just signed letters of commitment with the Ministry of Transport to
complete three expressway projects late this year after these projects have
fallen behind schedule for years.
According to the
management unit of HCMC-Long Thanh-Dau Giay Expressway, after three years of
construction, the project’s package 1A has been finished while the
implementation of other packages is still underway.
Under the
commitment signed by the project’s contractors, the HCMC-Long Thanh section
will open to traffic late this year while the entire expressway 55 kilometers
long and running through HCMC and Dong Nai Province will be finished late
next year.
At the signing
ceremony, Mai Tuan Anh, general director of Vietnam Expressway Corporation
(VEC), said that the remaining workload was huge. To ensure the
implementation progress, the contractors has to make greater efforts to cover
the workload falling behind schedule, he added.
The HCMC-Long
Thanh-Dau Giay Expressway has total investment of VND20.6 trillion sourced
from official development assistance (ODA) loans.
This expressway
section is an important part of the north-south expressway. Besides, it
connects localities in the southern key economic zone, shortens the route
from HCMC to Dong Nai and Ba Ria-Vung Tau provinces and facilitates the goods
transport to Cai Mep-Thi Vai port complex.
Early this month,
contractors of Noi Bai-Lao Cai Expressway have also committed to finish the
project late this month with the transport ministry. Currently, some 60% of
the project’s eight main packages have been completed.
After several times
of directly supervising the project, Transport Minister Dinh La Thang said
the ministry would not give any extension for the project’s completion
deadline.
According to VEC,
although the Noi Bai-Lao Cai Expressway project is still facing many
problems, the road will open to traffic by December 31 as many difficulties
have been removed.
The Noi Bai-Lao Cai
Expressway going through Vinh Phuc, Phu Tho, Yen Bai, Lao Cai provinces and
In addition, the
Hanoi-Thai Nguyen Expressway’s contractors have pledged to finish 30 among
its 61.3 kilometers next month. The project worth VND10 trillion is funded by
In related news,
the Danang-Quang Ngai Expressway project will officially be kicked off this
Sunday, according to the ministry.
Having a length of
139 kilometers, the expressway starting from Danang’s Hoa Vang District and
ending in
The project costs
nearly VND28 trillion sourced from the World Bank, the Japan International
Cooperation Agency (JICA) and the State budget.
Vietnamese
companies will join hands with a Russian partner to develop a railway running
from Binh Phuoc to Ba Ria-Vung Tau to facilitate transport of minerals and
agro-forestry products.
An agreement on
this partnership was signed this Tuesday between Vietnam Railways
Corporation, An Vien Group and Russian Railways Joint Stock Company at the
office of Russian Prime Minister under the witness of the prime ministers of
the two countries.
Involved parties
will conduct study and make report on the 170-km railway from Binh Phuoc to
Ba Ria-Vung Tau, and consider building an 80-km section linking Binh Phuoc
with Dak Nong. This project will make it easier for transport of minerals and
agro-forestry products from Binh Phuoc to the seaports in Ba Ria-Vung Tau and
transport of fuels, materials and consumer goods to the Central Highlands.
Earlier, Vietnam
Railways Corporation and An Vien Group received nod from the Prime Minister
to conceive a railway project running from Binh Phuoc to Ba Ria-Vung Tau. The
two firms decided to invite Russian Railways Joint Stock Company to join the
project.
Cat Lai
Overpass not yet accepted due to defects
Cat Lai Overpass
has not officially been accepted yet because some defects are still being
remedied, although the State Appraisal and Acceptance Council has permitted
it to open to traffic.
Since many traffic
accidents involving container trucks have occurred on Cat Lai Overpass in
HCMC’s District 2, the Urban Traffic Management Unit 2 under the HCMC
Department of Transport stated the details of the overpass had not met the
design.
For example, the
HCMC Management Board of Urban Traffic Project Construction has found that
the roughness of the overpass surface has not satisfied the requirement.
The Urban Traffic
Management Unit 2 suggested replacing the 3-cm asphalt layer with a polymer
concrete layer of the same thickness. In addition, plastic stakes currently
used to divide traffic lanes should be replaced by solar-powered reflective
nails.
The total cost of
adopting this suggestion is VND1.7 billion, which will be sourced from the
municipal fund for urgent traffic works.
In addition, the
Urban Traffic Management Unit 2 suggested spending VND70 million testing an
adjusted plan for vehicular speed. This test plan will be deployed within
this month.
There are also
several other suggestions, such as installation of a vehicle speed tracking
camera system on the overpass.
Transport export
Pham Sanh ascribed the recent traffic accidents on Cat Lai Overpass to design
errors. The curved overpass is too steep, he told the Daily.
Cat Lai Overpass is
designed with two auto lanes for vehicles to transport from
Eight traffic
accidents involving container trucks have occurred since Cat Lai Overpass was
put into use. Perhaps, these vehicles have traveled at a higher speed than
allowed (30 kilometers per hour), said the management unit.
Cashew
products head to
Processed cashew
nut products will be sold directly to supermarkets in the
Dang Hoang Giang,
general secretary of the Vietnam Cashew Association (Vinacas), said
As Vietnamese firms
have mainly exported unprocessed cashews to the
Prime Minister
Nguyen Tan Dung and his Russian counterpart Dmitry Medvedev on Monday
discussed workable measures to raise the two-way trade to US$7 billion by
2015.
On his official
visit to
In addition, they
discussed ways to boost cooperation in nuclear energy and further operations
of Russian oil and gas firms on
The two-way trade
between
The two countries
set a target for a two-way trade turnover of US$7 billion by 2015.
Currently,
Speaking on Russian
online newspaper Inforos, Pham Xuan Son, Vietnam’s Ambassador to Russia, said
Vietnam is in talks with the Customs Union grouping Russia, Belarus and
Kazakhstan over a free trade agreement (FTA), covering eight important areas,
from trade, investment to workforce shifting and intellectual property.
“The negotiators
are striving to conclude the agreement in late 2014,” said Son.
Prime Minister
Nguyen Tan Dung arrived in
On Monday, he paid
a visit to Kaliningrad Oblast, where the first 636 Kilo submarine of
The submarine is
the first of the six Kilo-class submarines to be manufactured under a
contract signed during the official visit of Prime Minister Dung to
FDI sector
continues robust export growth
Regardless of
economic difficulties, foreign investment enterprises (FIEs) have constantly
posted strong export growth, with year-on-year growth of 31.1% in 2012 and
21.1% in the first quarter this year, according to the Import-Export
Department under the Ministry of Industry and Trade.
At a meeting with
FIEs in
Some 2,840 FIEs
reported export value of US$1 million or above in 2012, a pickup of 30%
year-on-year. Notably, Samsung Electronics Co. Ltd alone achieved
year-on-year export growth of 77.8% to US$10.9 billion last year.
FDI companies have
played a major role in the nation’s exports, especially in the export
processing industry with the highest rate of 75% and the fastest growth in
the structure of export items.
Many products
exported by FIEs have posted the highest growth of that total, including
computers, electronic products and components and mobile phones with 95% and
machinery, equipment and spare parts with 91%. Items where FDI companies have
pocketed big export revenue are mobile phones and components with around
US$12.3 billion, apparel items with US$9 billion and computers and components
with US$7.5 billion.
It is obvious that
FIEs have imported considerably for exports with such huge value. In 2012,
the FDI sector imported nearly US$60 billion, jumping 22.7% year-on-year,
resulting in a trade surplus of US$4.1 billion by the sector in all of 2012,
making a trade surplus of US$781 million for the country.
FIEs contributed as
much as 20% to total investment capital at home and paid up to US$3.7 billion
to the State budget via taxes and other financial obligations last year.
The FDI sector has
still contributed the most to the nation’s trade surplus when marking a trade
surplus of up to US$1.8 billion in the first quarter, taking the national
trade surplus to US$278 million in the period, the industry ministry reports.
BR-VT
builds industrial zone to attract
Dong A-Chau Duc
Joint Stock Company obtained a license on Wednesday to develop infrastructure
for Da Bac Industrial Zone in Ba Ria-Vung Tau (BR-VT) Province and also began
construction of the project that targets Japanese investors.
According to the investment
plan, the zone’s cleared land and workshops will be ready for Japanese
investor in this year’s fourth quarter. Da Bac IZ covers 75 hectares in Chau
Duc District.
This is the first
industrial zone in BR-VT that targets Japanese investments.
Da Bac IZ is part
of the province’s plan of developing specialized industrial parks and
industrial zones for supporting industries, focusing on attracting Japanese
investors.
According to this
plan, another IP project for supporting industries is Phu My 3 Industrial
Park invested by Thanh Binh Phu My Joint Stock Company and covering a total
area of 999 hectares.
Located in Tan
Thanh District, Phu My 3 Industrial Park will consist of four functional
areas for supporting industries, heavy industries, port and housing. The park
will have 120 hectares of cleared land ready for investors in the fourth
quarter.
BR-VT has signed a
memorandum of understanding on cooperation with
The sectors which
are in need of investments are metalworking, mechanical processing, plastic
component production, electrical and electronic components and software for
other industries.
Last year, the
province held several conferences and made promotion trips to introduce its
investment potential to Japanese investors. There have been 14 groups of
enterprises from
The implementation
of the plan of building specialized industrial parks started last year after
the plan received approval from the provincial government, and Japanese
investors are regarded as strategic partners, according to the provincial
Department of Planning and Investment.
With the
development plan for supporting industries, BR-VT is under preparation for
making itself the country’s center for supporting industries. Supporting
industries are expected to help BR-VT integrate more effectively and develop
faster in the coming years.
According to
statistics of the department, BR-VT has granted investment licenses to 323
industrial projects having total registered capital of over US$17.7 billion,
99 of which are in supporting industries and worth a combined US$1.7 billion.
Japanese
investors keen on service sector
A group of Japanese
enterprises operating in the service sector on Tuesday met Vietnamese firms
to sound out investment and business opportunities.
At the gathering
held by the Vietnam Chamber of Commerce and Industry (VCCI) and the Japan
External Trade Organization (JETRO), Japanese service enterprises expressed
an interest in cooperating with Vietnamese companies.
According to
Japanese firms, which are involved in the fields of hotel, education,
wholesale, retail, beauty care, fitness and catering,
Shinichi Muramoto,
board chairman of Muramoto Suisan, a firm specializing in catering service
and seafood processing, told the Daily that he chose
“We will firstly
focus on those with high incomes and then shift to medium and low-income
earners for two to five years after that,” Muramoto said.
Education is an
attractive field to Japanese enterprises as well.
A representative
from the education service company I-Cube said that I-Cube would hire
Vietnamese laborers to accelerate the adaptation process of the company in
the Vietnamese market.
Two urgent
tasks to rescue economy
Two urgent tasks
were given in the report on socioeconomic performance in January-April
delivered at the 18th meeting of the Standing Committee of the National
Assembly (NA) on Tuesday in a bid to prop up the economy.
First, disbursement
of investment funds from the State budget must be accelerated to stimulate
aggregate demand for the economy.
The national asset
management company should be established soon. Prices of the items subject to
the State management should be adjusted reasonably.
Funds for capital
construction, especially those from the State budget, government bonds and
ODA, must be disbursed at a faster speed.
Secondly, all-out
efforts must be made to promote production and boost demand without causing
macro-economic instability and inflation.
Corporate income
tax should be lowered to 20-22% and value-added tax should be reduced in a
definite time, according to the Government web portal.
In the first four
months, economic growth was 4.89%, which was higher than this time last year;
inflation was well restrained and the market was quite stable. However, the
economy struggled with bad debts and the frozen real estate market.
If the above
problems are not resolved, it will be difficult to obtain a GDP growth of
5.5% as targeted by the NA, said Minister of Planning and Investment Bui
Quang Vinh.
Vice State
President Nguyen Thi Doan remarked that credit flow was stagnant and
enterprises could not access loans for business development. This bottleneck
should be removed as soon as possible, she said.
Meanwhile, NA Vice
Chairwoman Nguyen Thi Kim Ngan said businesses did not really want to borrow
loans in the context of high inventory and poor consumption. The consumer price
index has been falling, indicating very weak purchasing power, she noted.
Ernst & Young,
a global assurance, tax and advisory services firm, has forecast
“With the growing
internal marketing boosting FDI, tourism and agricultural exports helping to
finance industrial upgrades, and new power plants ending the perennial energy
shortages, GDP growth of at least 6.5% remains sustainable in the medium
term,” Ernst & Young said in its latest Rapid-Growth Markets (RGM)
Forecast.
Ernst & Young
Vietnam released the report on Wednesday in collaboration with Oxford
Economics to meet the need for practical and accessible economic forecasts
and insights into the development of 25 rapid-growth countries around the
globe.
According to the
report,
The Ernst &
Young RGM Forecast contains projections for
The country’s
inflation is put at 7.7% this year, before going down to 6.4% next year, 4.8%
in 2015 and 4.5% in 2016.
“Last year’s
inflation slowdown will enable monetary and fiscal relaxation in 2013. This
should lift (GDP) growth from about 5% last year toward the 6.5%-7% target
range by 2014,” the report said.
Ernst & Young
warned of the risk for a high inflation comeback if the Government opted to
promote exports by depreciating the local currency. Therefore, the dong is
forecast to be devalued to just over 21,402 against a U.S. dollar this year
from 20,858.9 last year.
But, the report
noted that “the requirement to service foreign debt and the import needs of
industry will keep monetary policy focus on currency stability.” This matches
the International Monetary Fund’s projection for exchange rate stability for
Outstanding debts
and their impact are also the concerns raised in the Ernst & Young RGM
Forecast.
“… an overhang of
bad debt will hold back the pickup in private sector credit, tilting the
recovery toward public sector investment and sharply reducing export growth.
The consequent return to current account deficit in 2014 will leave growth
more dependent on the recovery of inward investment,” the report said.
Ernst & Young
assumed that inward investment would revive fast to finance the re-opening
current account deficit in 2015. “But to attract investors, the Government
must upgrade infrastructure and skills to promote higher-tech industry, as
textile and basic assembly FDI shifts toward lower-cost neighbors,” the
report said.
In a review of the
RGM Forecast, Ernst & Young pointed out more impact of the yen
depreciation on the Asian RGMs having close trade links with
Ernst & Young
also quoted Oxford Economics as projecting that
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 18 tháng 5, 2013
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