BUSINESS IN BRIEF 6/12 State budget overspending put at VND167 trillion in Jan-Nov Vietnam’s budget overspending amounted to VND167.25 trillion (US$7.42 billion) in the January-November period, 65.8% of the target approved for this year by the National Assembly. The budget collection in the eleven-month period was VND911.2 trillion, nearly 90% of the year’s target, while budget spending in the period hit more than VND1,000 trillion, or 84.7% of the target, up 6.2% year-on-year, the Ministry of Finance announced in a statement. Of the expenditure, VND145 trillion was used to pay debts and refund financial aid, accounting for 93.5% of the annual goal and up 1.8% year-on-year. The country had signed 34 agreements to take out foreign loans of US$5.14 billion in the period. Of this amount, more than US$3 billion had been disbursed as of mid-November. By the end of the month, US$1.46 billion of debt had been paid while US$12.5 billion worth of bonds had been sold, meeting 98% of the target and surging 43.8%year-on-year respectively, said the ministry. PetroVietnam oil production achieves target 29 days earlier       The Vietnam National Oil and Gas Group (PetroVietnam) on Tuesday reported its completed production of oil 29 days ahead of schedule, with the 14.02 million tonnes target achieved on December 2. The state-owned energy giant also announced that its financial result was above the target by 5-18 per cent in eleven months of this year. This achievement was based on the oil price of US$45 per barrel projected by the government in the beginning of the year. In its 11-month report, the whole group, including affiliates and subsidiaries, earned VND406.2 trillion (nearly $18 billion), a rise of 5.4 per cent over the target for the period and 93 per cent of the goal set for the whole year. Tax payment to the state budget was VND79.6 trillion, up seven per cent over the 11-month target and almost achieving the government’s full-year goal. Global oil price averaged $48 per barrel in November and $43.9 in the eleven months. Brent crude is moving around $50-53 per barrel. For production activity, besides crude oil, PetroVietnam reported its gas and petroleum production achieved the government’s annual targets one month earlier. Ending November, the state-owned energy giant produced 9.63 billion cu.m. of natural gas, up 0.2 per cent of the target set for the whole year. Petrol output reached 6.26 million tonnes, a rise of 10 per cent over the annual projection. Production of other products, including electricity and fertilizer, was above the target of 11 months by less than two per cent --19.23 billion kWh of electricity and 1.47 million tonnes of fertilizer. Vietinbank asks shareholders about 2015 dividend cash payout     The Viet Nam Commercial Bank of Industry and Trade (VietinBank) has asked its shareholders for their views on the 2015 dividend payout by cash. Under a bank resolution of the management board of managers No. 641/NQ-HĐQT-NHCT44, issued on December 1, the deadline for the registration date is December 15 this year. Currently, the state holds 64.46 per cent of Vietinbank’s charter capital. Previously, the Ministry of Finance (MoF) released an official document in June requesting the State Bank of Viet Nam (SBV) to direct the representative of state capital in Vietinbank and the Bank for Investment and Development of Viet Nam (BIDV) to vote for the 2015 dividend payout to be in cash. BIDV is set to payout 2015’s dividend in cash at a rate of 8.5 per cent per share, as confirmed at an extraordinary shareholders meeting in October, which means the state will receive VND2.7 trillion (US$120 million) in dividends as the SBV currently holds 95.28 per cent of BIDV’s charter capital. Meanwhile, VietinBank has made no indication to MoF on paying a dividend. Under a plan submitted to VietinBank’s annual general meeting in April, there was to be no dividend payout for 2015. Its chairman was quoted as saying that “this is a necessary decision and has strategic meaning for the bank in improving its financial capability and ensuring its capital adequacy ratio (CAR) and continued development.” Besides wanting to use all the profits from 2015 for the bank’s development, VietinBank also proposed the government consider lifting the foreign ownership limit, in which the state would hold less than 50 per cent of charter capital. VietinBank said this would ensure the ownership and control of the state in the bank while also creating conditions to attract more resources. In the first nine months this year, VietinBank recorded strong growth, with after-tax profit reaching VND5.19 trillion, up 16.4 per cent year-on-year. The bank’s total assets stood at VND900 trillion as at September 30, up 15.5 per cent compared with the start of the year. Customer loans and deposits, coincidentally, both reached VND625 billion, up 16 per cent and 27 per cent, respectively, year-on-year. Its bad debt ratio was down slightly to 0.85 per cent in the quarter against 0.92 per cent at the start of the year. Sharpest increase in new orders for 18 months The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, soared to the highest in 18 months, according to a recent Nikkei report. Higher workloads led firms to quicken their rate of job creation and growth of input buying, the report said. The PMI rose to 54 in November compared to 51.7 in October, thereby signaling a solid monthly improvement in the health of the sector, and one that was the strongest for a year and a half. Business conditions have now improved on a monthly basis throughout the past year. New business increased at a sharp and accelerated pace during November, with the rate of growth quickening for the third month running to the sharpest since May 2015. New export orders also rose at a faster pace, with improving client demand reportedly supporting growth of orders from both domestic and external sources. The report said new order growth supported a rebound in production following a dip in October. Output rose solidly and at the fastest pace in 16 months. With new orders rising, Vietnamese manufacturers took on extra staff, and the rate of job creation quickened from that seen in the previous month. Firms also raised purchasing activity at a faster pace, with the latest expansion the strongest since March 2011. With demand for inputs rising, and some reports of supply shortages, the rate of input cost inflation quickened markedly in November. The latest rise was the sharpest in 30 months. Output prices also increased at a faster pace, the steepest in five and a half years. Suppliers’ delivery times improved amid reports of competition among suppliers. Breakthroughs mulled to lure investment into agriculture Minister of Agriculture and Rural Development Nguyen Xuan Cuong said there would be breakthrough policies on land and credit to draw investors into agriculture in an attempt to improve the proportion of agribusinesses in the economy. At the “Dialogue with enterprises with investment in agriculture and rural development” last Saturday, Minister Cuong said many policies had been adopted to stimulate investment in agriculture, including incentives in terms of tax, credit, land and human resource training. Thanks to such efforts, private investment in agriculture has sharply risen, making a significant contribution to the growth of the sector. The number of firms with investment in agriculture had risen from nearly 2,400 in 2007 to more than 4,000 by the end of this September. Yet, corporate investment in agriculture and rural development remains limited and unstable, Cuong remarked. Agribusinesses still make up less than 1% of the total number of companies in the country. Moreover, most of them have a small amount of capital, with over 50% having less than VND5 billion each. Many investors are mainly dependent on the exploitation of natural resources (land and water), with little interest in radical investment with technology application or investment in modern equipment and intensive processing. The link between enterprises, scientists and farmers in the value chain remains tenuous, resulting in high costs and low competitiveness, he said. To take advantage of the FTAs Vietnam has signed, enterprises need to boost the application of advanced technology, product diversification, branding and the added value of agricultural products, said Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI). Removing land, credit bottlenecks Nguyen Do Anh Tuan, director of the Institute of Policy and Strategy for Agriculture and Rural Development, cited the latest data of the Organization for Economic Cooperation and Development (OECD) as saying that Vietnam’s agricultural support accounted for only 7% (of the sector’s value), versus 55-60% in such countries as Japan and South Korea. Thus, the sector – despite the greatest trade surplus and bringing in high value – is getting the least assistance, said Dinh Cao Khue, chairman of Dong Giao Foodstuff Export JSC. It is believed that agriculture must aim for large-scale production, with land accumulation and concentration as the most important factor. To do so, it is a must to fundamentally change the current land policy, associating it with those policies on technology, taxation and credit. The Prime Minister has urged amendments to Decree 210 on attracting investment into agriculture, Cuong said. In particular, those enterprises with investment in high and clean technology will be preferred. The ministries of planning-investment and agriculture are working with other relevant ministries over a new decree. Besides, agriculture authorities are joining hands with relevant agencies to enact innovative policies in a bid to lure enterprises and other economic sectors into agriculture. PM wants public investment disbursements sped up Ministries and local authorities will be held accountable if they fail to achieve their public investment disbursement targets for 2016, according to a dispatch signed by Prime Minister Nguyen Xuan Phuc. Dispatch 2144/CD-TTg says State budget disbursements have met only 70.2% of the year’s target, with 12 ministries, central-level agencies and one province having accomplished less than 50% of their disbursement plans. The proceeds from Government bond sales have been 46.6% disbursed, with two ministries and 15 provinces having fulfilled less than half of their tasks. On July 8, 2016 the Government issued Resolution 60/NQ-CP accelerating distribution of capital for public investment projects. Those ministries, central-level agencies and local authorities who had accomplished less than half of their disbursement plans by the end of November must clarify those responsible for the delays and inform the Ministry of Planning and Investment. Those having reached 80% of the targets or above as of end-November can now inform the ministries of planning-investment and finance of any needs for additional capital. Ministries, central-level agencies and local governments should promptly finalize their plans for medium-term public investment in 2016-2020 and those for investment in 2017. If the plans for 2017 and for the medium term 2016-2020 are not submitted as of December 5 and December 10 respectively, the Ministry of Planning and investment might request the Government to take back the unallocated and improperly arranged sums to settle debts owed by basic construction projects, and even the advance capital to fund other projects. Customs clearance on Euro Auto's BMWs investigated The General Department of Customs has decided to stop the customs clearance for BMW auto shipments imported into Vietnam after the Euro Auto Corporation was accused of committing violations. The General Department of Customs asked local customs departments and export-import ports nationwide to stop customs clearance for shipments except in cases of diplomatic immunity. The Euro Auto Corporation will be investigated for customs and tax violations. The Ministry of Finance also asked to temporarily stop customs clearance because the official importer of BMW in Vietnam, Euro Auto Corporation, had committed violations in the import of completely built-up cars. Euro Auto Corporation is accused of purchasing BMW cars without permission or customs clearance and did not provide certificates of origin and documents. They are also accused of using fake purchase contracts to import BMWs and cheat customers. The ministry also suggested that the People's Supreme Court should prosecute this case which showed evidence of consumer fraud and deliberate violation the laws. On November 30, the corporation denied the accusations, saying that it had been strictly followed the laws. Euro Auto said it had answered the ministry's questions and was still providing documents to government agencies. Euro Auto requested to have its rights protected by legal bodies and the public. Central Group Vietnam pledges to support SMEs Central Group Vietnam, the owner of the Big C supermarket chain, inked a cooperation agreement on product consumption and support for small and medium enterprises (SMEs) in Vietnam at a Vietnamese Regional Specialties Fair in Hanoi last week. Central Group Vietnam cut the deal with the Hanoi Promotion Center on Trade, Investment and Tourism (HPA) and the Vietnam Handicraft Exporters Association (Vietcraft). Philippe Broianigo, chief executive officer of Central Group Vietnam and Big C Vietnam, said products of SMEs would be displayed at Big C stores nationwide, and other distribution channels of Central Group Vietnam. He pledged to assist SMEs in marketing and branding and thus develop these enterprises’ products in the long run. The group would cooperate with banks to offer financial support programs for them as well. Central Group Vietnam, currently operating 34 Big C supermarkets, has plans to double the figure by 2021. At a conference with suppliers in HCMC on November 24, Central Group Vietnam and Big C Vietnam introduced strategies to support and accompany Vietnamese firms, especially SMEs and startups. In particular, they would sign cooperation agreements lasting three years or longer with SMEs, and display their products in the distribution system of Central Group’s subsidiaries. In addition, they would help train and support SMEs in specialized knowledge, technology and other relevant skills. VN firms invest in textile, dyeing       Many textile and garment enterprises are investing in textile and dyeing complexes to ensure material for sustainable development, Vietnam Television (VTV)reported recently. To avail themselves of business opportunities from the Trans-Pacific Partnership (TPP) agreement, many textile and garment firms have over the past two years started building textile and dyeing complexes. For instance, 10 enterprises have invested hundreds of millions of US dollars in those complexes in southern Binh Duong Province. However, US President-elect Donald Trump said his country would leave the TPP but investment to those industrial complexes would still continue for long-term development strategies. Esquel Garment Manufacturing Viet Nam Co Ltd has operated in Viet Nam for 10 years and mainly imported material from China. In 2015, the company invested in a textile and dyeing factory in Binh Duong partly for availing business opportunities from the TPP. The factory has completed construction of the building in the first stage and it will begin operations in a year. With information emerging that the US could leave the TPP, the company would consider carefully its investment plans for the factory in the second and third stages. However, Nguyen Van Luong, deputy general director of Esquel Garment Manufacturing Viet Nam, said the decision on investment was under the company’s long-term development strategy in Viet Nam but not only for TPP. Textile and garment enterprises said that TPP has prompted them to increase investment in textile and dyeing for production of garment products. In the long-term, development of textile and dyeing would help Viet Nam complete its production process for garment products and avoid dependence on material imports as being done at present, VTV reported. Meanwhile, Nguyen Xuan Duong, chairman of Hung Yen Garment Company said TPP would present more opportunities to local textile garment firms to export to the US, but if there was no TPP, exports to the US would have no effect. During his election campaign, President-elect Donald Trump had said that if he won the elections the US would impose import tariff of 45 per cent on Chinese products. So, Duong said, garment producers who have investments in China could consider moving their business to other countries, including Viet Nam, to avoid high import tariff for products imported from China, the Dien dan Doanh nghiep newspaper reported. Duong said that Viet Nam’s textile and garment exports next year would face many difficulties as expectations. Hung Yen Garment Company has signed contracts to produce garment for exports until March and April 2017. He expected the company to receive more export orders after Tet (the Lunar New Year) festival to produce stable exports until October 2017. According to the General Statistics Office, Viet Nam gained a year-on-year increase of 4.5 per cent in export value to US$21.5 billion for the first 11 months of this year. This year, the nation expected to gain a total export value of textile and garment at around $29 billion. Vinatea returns to domestic market     The Viet Nam Tea Corporation (Vinatea) has launched 10 new tea brands to mark its return to the domestic market after focusing on exports. They include three kinds of tea: premium with 100 year white tea, Japanese Sencha, excellent Oolong and ancient Shan Tuyet; popular products with Thai Nguyen green tea, jasmine tea and England tea; and vegetation teas including ginger, daisy with honey bee, sleep well combining different vegetation. All its products are green and organic, the company said. They are grown on a 4,700-hectare plantation in the northern area of Moc Chau, Thai Nguyen and Phu Tho and processed at three factories. Vinatea was equitised in September 2015 with GTN Foods buying a 95 per cent stake. It plans to develop the tea industry together with culture and tourism. Vietnam Airlines launches flash sale on flights to Tokyo Vietnam Airlines has slashed the price of fares from Hanoi and Ho Chi Minh City to Tokyo for the winter season in their flash seat sale. The flight sale starts from today (December 5) and runs through January 31, 2017. Travellers can pick up flights for as little as US$540 (VND12.45 million) for a round trip economy class ticket from Hanoi. Round trip business class tickets from Hanoi start as low as US$999 (VND22.95 million). From Ho Chi Minh City to Tokyo, a round trip economy class ticket starts at US$399 (VND9.15 million) and business class tickets begin at US$980 (VND22.55 million). Offers exclude taxes and fees and are available at Vietnam Airlines agents, booking offices and websites. Jetstar Pacific opens Hanoi – Pleiku air route Low-cost airline Jetstar Pacific on December 5 launched a new air route connecting the capital city of Hanoi to with Pleiku city in the Central Highlands province of Gia Lai. The new route will have three return flights each week on Wednesdays, Fridays and Sundays, using Airbus A320 planes. The first flight will take off on January 6, 2017. The same day, the airline also opened the sale of tickets for the route at its website www.jetstar.com and ticket outlets nationwide. Jetstar Pacific is now operating 37 new domestic and international routes, eight of which connect the Central Highlands region with big cities across the country. Some 3.56 trillion VND of State capital divested from SOEs About 3.56 trillion VND (156.7 million USD) of State capital has been divested from State-owned enterprises (SOEs) so far this year, the Sai Gon Giai phong (Liberated Saigon) daily reported. As a result, nearly 6.57 trillion VND (289.2 million USD) was collected through the divestment in the first 11 months of 2016. Meanwhile, 56 SOEs have had their equitisation plans approved since the beginning of 2016. They have a total value of more than 34 trillion VND (1.49 billion USD), including 24.39 trillion VND (1.07 billion USD) worth of the State capital. A plan for SOE restructuring in the 2016-2020 period is expected to be approved by the Prime Minister in the near future. Accordingly, ministries, sectors and SOEs must increase transparency and publicise information about their SOE equitisation while enhancing examination and supervision of the equitisation process. With regard to the equitised companies, the Ministry of Finance requested the representatives of the State capital at those firms to speed up their listing on the stock market. It stated that business executives who did not carry out or carry out equitisation ineffectively will be strictly handled. Ba Ria - Vung Tau officials visit SCG Petrochemical During the official visit on 23th-27th November 2016, the delegation of Vung Tau city, Ba RiaVung Tau province have studied various practices from industrial and tourism sectors in Thailand, in which SCG Petrochemical operation – the major of investor of Long Son Petrochemical Project in Vung Tau city - has been examined as a successful case for the industry development. The trip of Vung Tau leaders aimed to observe Thailand’s best practices in industrial and tourism development, which could be applied for the province in the upcoming plan.  Accordingly, the group has met with Tourism Authority of Thailand in Pattaya to discuss about the experience to leverage coastal tourism advantages.  Besides, for industrial development, a visit has been paid to Map Ta Phut Industrial Estate in Rayong to learn the practice of the eastern seaboard of Thailand – an emerging region that plays a key role in the country’s economy. Amongst other factories in Map Ta Phut industrial estate, the delegate has visited SCG Petrochemical Complex to understand about petrochemicals manufacturing, especially in environmental aspects such as water management and air pollution control.  Also, they were introduced to SCG’s model of social enterprise in the local community where community people are encouraged and supported to sell their own products and generate higher income. “Being the sustainable business leader in Thailand and in ASEAN region, SCG is delighted to share our best practices in Petrochemical industry to the management of Vung Tau city, Ba RiaVung Tau province – the location of our strategic petrochemical in Vietnam. The Long Son petrochemical project which planned to start up in early 2021 once established will provide a full range of downstream and upstream petrochemical products that will contribute significantly to the national economy, as the example of Map Ta Phut in Thailand.”, said Mr. DhepVongvanich, Executive Country Director – Vietnam, SCG.  “We look forward to collaborating with Vung Tau city, Ba RiaVung Tau province to develop both economic prospect and the welfare for local community in the future when our petrochemical project is coming into operation”, he added. Besides the visit to Thailand’s tourism and industrial sites, the delegate also showed respect to the late King BhumibolAdulyadej by signing the condolence book at SCG Headquarter in Bangkok. Vietnam Business Forum 2016 focuses on private sector The Vietnam Business Forum 2016 opened on December 5 in Hanoi focusing on strengthening the role of the private economic sector through fostering the partnership between domestic and foreign enterprises. In opening the annual event, Minister of Planning and Investment Nguyen Chi Dung said the business community in Vietnam saw developments in both terms of quantity and quality in 2016, but still the domestic enterprises are not strong enough to make effective integration, without any representative able to join the global value and supply chains. The minister also recalled the lesson of environmental protection in association with investment projects, stressing that it is the lesson for not only the State but also enterprises themselves. He reiterated that environment protection is a priority of the Government in its strategy for green and sustainable development, and called on the business community to pay due attention to this issue. Participants at the forum took note of breakthrough changes in the business environment in Vietnam and the Vietnamese government’s efforts and resolve in facilitating the operation of enterprises and investors.   Kyle F. Kelhofer, country manager for Vietnam, Cambodia and Laos of the International Financial Corporation, appreciated the unceasing endeavours of the Government in maintaining macro-economic stability and keeping public debt within permissible level, adding that the role of the private economic sector has received more attention. Addressing the forum on behalf of the domestic business community, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc asked the Government to tighten discipline in the execution of duty while enhancing the supervision and feedback of the public and enterprises. He urged the Government to draft a bill to revise laws related to investment and business environment, adding that the revision of laws should be done regularly as the situation keeps changing rapidly. The business community also proposed that the Government promptly submit to the National Assembly revisions to the Labour Code regarding regulations on overtime work, wage and social insurance to ensure the economy’s competitiveness. On behalf of the US business and investor community, Governor of the American Chamber of Commerce in Vietnam Virginia B. Foote asked the Vietnamese Government to pay attention to five issues that need improvements, which were facilitating the private sector; developing human resources; addressing net security problems; enforcing the Trade Facilitation Agreement; and facilitating travel to develop tourism.  Prime Minister Nguyen Xuan Phuc welcomed the opinions of the business community, saying that the Government is always ready for open and straightforward dialogue in order to seek the most appropriate and effective solutions for Vietnam to achieve fast, sustainable and harmonious development.     He noted that the reality of the 30-year Doi Moi (renewal) process has proved convincingly that the private economic sector is an important driving force of the Vietnamese economy. The PM cited statistics that showed the country now has nearly 600,000 firms. 2016 is the first year when Vietnam saw more than 100,000 new firms established, which means an average 12 firms set up per one hour. According to the PM, the 3.5 million business households in the country hold great potential for realising the goal of 1 million firms by 2020.     At the same time, PM Nguyen Xuan Phuc laid stress on the important role played by 21,000 foreign-invested enterprises in the country. The FDI enterprises have invested a combined 300 billion USD in Vietnam. Total FDI capital flow into Vietnam has topped 17 billion USD in 2016. In its 2016-2020 socio-economic development strategy, Vietnam is determined to create every possible favourable conditions for the development of enterprises, especially private ones, thus creating a driving force to elevate competitiveness and self-reliance for the national economy, he said. The PM emphasized that in saying Vietnamese enterprises, it also means FDI enterprises with legal person status in Vietnam and domestic enterprises. “This is the Government’s major direction in forming a connected and effective Vietnamese business community,” he said.  PM Phuc reiterated the government’s commitment to continued efforts to complete the market economic institutions along with policies and laws, push forward with administrative reform, enhance the national competitiveness and create favourable conditions for the private sector to develop strongly. The Government will work to raise the essential WB-rated national investment environment indexes and WEF-rated competitiveness index to the average level of the ASEAN-4 countries, he said. The PM called on the Vietnamese business community to actively participate in the process of economic restructuring through diversifying investments with a priority for the PPP form, stimulating startup business and innovation spirit, and increasing win-win partnership between the domestic private FDI sectors. He urged FDI businesses to trust Vietnam’s reforms and accelerate the transfer of advanced technology, human resource training and the sharing of corporate governance experience while upholding their responsibility to society and joining hands with Vietnam in protecting natural resource and the environment.   PM Nguyen Xuan Phuc instructed ministries and agencies study proposals and recommendations put forth at the forum with a view to supplementing and adjusting related policies and legal documents to align with the market economy and international practice.   “The Government will make all-out efforts so that the Vietnamese business community can closely connect and grow in the Vietnamese economy and successfully rise up to the world stage,” the PM told the forum. Hanoi economic growth hits a six-year peak Despite failing to hit the yearly target of 8.5-9 percent, Hanoi’s economic growth in 2016 has hit its highest level in six years, reaching 8.03 percent, Deputy Chairman of the municipal People’s Committee Nguyen Doan Toan said on December 5. The service sector grew by 8.1 percent while industry-construction and agriculture witnessed increases of 8.8 percent and 2.21 percent, respectively. The statistics were presented at the third session of the 15th Hanoi People’s Council from December 5-8. According to Toan, over the past year, an unprecedented number of new enterprises had been established. Foreign-invested capital on projects reached 2.8billion USD, increasing 2.6 times compared to last year. Total social investment was estimated at 277.95 trillion VND (12.3 million USD), a rise of 10 percent over the previous year. The city has finished or nearly finished key transport projects such as Ring Road No.2 running through Nhat Tan-Cau Giay, Ring Road No.1 through O Dong Mac-Nguyen Khoai, the Long Bien district centre project and accelerated railway projects. In the report reviewing socio-economic tasks in 2016, Deputy Chairman Toan said that the process had various weaknesses, including difficulties of business and production, leading to closure of firms. Industry growth speed has been slowing down. Pressing issues include pollution at industrial parks and traditional craft villages, fires, explosions and traffic accidents. The session approved a resolution on 2017 socio-economic development plan. Gross Regional Domestic Product (GRDP) is hoped to reach 8.5 to 9 percent. GRDP per capita is targeted at 86 million VND to 88 million VND (3,820-3,900 USD). Export-import turnover is aimed at 4 to 5 percent. Health insurance coverage is hoped to reach 82.8 percent. The plan also expects all households in urban areas to have water for daily use. To fulfill these targets, the meeting agreed on tasks, including improving the business and investment climate as well as provincial competitiveness index. To tackle pollution, by 2020, 117 industrial production bases in 12 districts will be moved out of the inner city, Phan Hong Son, Director of the municipal Justice Department said. Politburo member Hoang Trung Hai, Secretary of the municipal Party Committee, said that “The year of administrative discipline” has been selected as the main topic of the city’s work next year. It aims to beef up administrative order and strengthen the role of public servants in office, residency and public areas and spread the spirit to citizens to tighten social discipline. During the four-day gathering, the council will discuss and approve 15 important resolutions related to socio-economics, defence and security, the city’s State budget spending in 2017, key projects and middle term public investment next year. WB helps promote Vietnamese agricultural brand names International and domestic experts gathered at a workshop organised by the World Bank in Hanoi on December 5 to identify Vietnamese agricultural brand names on the international market. Sergiy Zorya, a WB expert, said Vietnam has witnessed a slowdown in agricultural growth, and attributed it to impacts of climate change and raw agricultural product export. Vietnam targets to develop agricultural brand names to create more jobs and raise income, he said, suggesting that Vietnam reduce production cost and enhance product values. He emphasised the formation of a supply chain of farmers, enterprises, the State and banks for the development of Vietnam’s agriculture. The expert highlighted regional countries’ experience in identifying their products on the international market, saying that Thailand chooses five to six commercial rice varieties for continuous production while Vietnam uses a wide range of rice varieties, which is difficult for developing a brand name. He also stressed the need for applying environmentally-friendly technology in growing rice, and called for a closer cooperation with the Vietnamese embassies to promote their agricultural products overseas. Participants discussed measures to enhance the sector’s competitiveness, such as investing in the supply-demand chain, developing seeds market, expanding agricultural land, particularly large-scale cultivation and ensuring food safety. According to the WB, Vietnam’s annual agricultural growth dropped to 2.6 percent in 2008 – 2013, from 4.5 percent in 1994 – 2000, and 3.3 percent in 2001 - 2007. Vietnam should make changes in agricultural land use by shifting rice growing areas which are affected by salt to aquaculture or other crops to promote export and improve product quality and value. More support should be provided for developing ecotourism in coastal areas while focusing on preserving the ecosystem. HCM City, Belgian province bolster agricultural partnership Ho Chi Minh City of Vietnam and East Flanders province of Belgium have signed a Memorandum of Understanding (MoU) on agricultural cooperation for the 2016-2020 period. Speaking at the signing ceremony in HCM City on December 5, Vice Chairman of the municipal People’s Committee Le Thanh Liem said the MoU demonstrates the two localities’ wish to enhance their economic and trade collaboration. The document will lay a foundation for bilateral cooperative ties in agriculture and other fields in the future, he added. For his part, Vice Governor of the East Flanders province Geevt Versnick said the Belgian province has conducted numerous cooperation activities between Vietnam and Belgium. The province is also carrying out effectively scientific and agricultural projects in Vietnam, he noted. The Vice Governor highly valued HCM City’s efforts in developing hi-tech agriculture, which is expected to create enormous opportunities for cooperation with the Belgian province in the coming time. Under the MoU, the two sides will cooperate in personnel training and technique transfer, especially in creating high-quality beef and crop varieties, post-harvest processing and packaging farm produce. The Belgian province will also help HCM City to promote agricultural products in EU markets, including Belgium. Petrol prices up over 300 VND per litre Retail prices of RON 92 petrol and E5 bio-fuel increased by 304 VND and 301 VND per litre, respectively, from 7:00 pm on December 5, according to the Ministries of Industry & Trade and Finance. Prices of diesel 0.05S and paraffin saw respective hike of 163 VND and 244 VND per litre. This was the 12th increase in fuel prices so far this year with a total increase of over 5,000 VND per litre. The prices have been dropped nine times since the beginning of the year, with the decreases of about 4,463 VND per litre. The current ceiling prices of RON 92 and E5 bio-fuel are no more than 16,675 VND and 16,552 VND per litre, while the maximum prices of diesel 0.05S and paraffin are kept at 12,672 VND and 11,209 VND per litre. The average global prices of RON 92 during the last 15 days to December 5 was 58,529 USD per barrel, whilst that of diesel 0.05S was 58,529 USD per barrel. Structural reforms key to growth: official     Deepening structural reforms is crucial to Viet Nam’s growth, World Bank Country Director Ousmane Dione said as the organisation released a biannual review of the country’s economic performance in Ha Noi yesterday. The Taking Stock report says despite a fragile global environment, Viet Nam’s economy remains resilient thanks to robust domestic demand and export-oriented manufacturing. Its medium-term outlook remains favourable, with gross domestic product (GDP) expected to expand by 6 per cent this year. The report revealed that Viet Nam’s growth slowed to 5.9 per cent during the first nine months of the year, mainly because of severe drought that has reduced agricultural output, cut oil production and slowed external demand. The fundamental drivers of growth of domestic demand and export oriented manufacturing remain in place. Viet Nam’s growth was accompanied by low inflation and a widening current account surplus. Despite price hikes for health and education services, core inflation remains low and headline inflation is expected to stay below official targets of 5 per cent. “Viet Nam’s macro-economic stability creates a favourable environment for policy makers to accelerate structural reforms, which is crucial as the country moves toward a more productivity-led growth model,” said Dione. The report says Viet Nam’s fiscal deficit remains sizable and is approaching the statutory limit of 65 per cent of GDP, but the government has reinforced its commitment to achieving fiscal consolidation in the medium term. The economy’s recent performance owes in part to rapid credit growth and an accommodative fiscal stance, which may support growth in the short term but amplify existing medium-term risks. In addition, easing monetary conditions and reducing credit growth can exacerbate existing macro-economic and financial vulnerabilities. Several risks could affect medium-term prospects, including delayed implementation of structural and fiscal reforms, a further slowdown in the global economy, fragile global financial market conditions, and the prospect of rising interest rates in the US. The report also discussed how the agricultural sector can bring about more economic value and better livelihoods for farmers and consumers, using less natural and human resources but without degrading the environment. Some banks cut deposit interest rates     Several commercial banks have unexpectedly slightly cut the dong-denominated deposit interest rates in the past week, according to report by the State Bank of Viet Nam (SBV). BIDV has inched down the rates for demand and 36-month terms from 0.3 per cent to 0.2 per cent, and 7 per cent to 6.8 per cent per year, respectively, since November 29. Agribank has also lowered the rate for demand term from 0.5 per cent to 0.3 per cent per year. In addition to the two State-owned banks, some commercial joint stock banks have also cut deposit rates. After cutting 0.1 per cent for 6, 13 and 18-month deposits on November 9, Viet Capital Bank on November 29 applied new rates for some terms, down 0.05 per cent and 0.1 per cent for 1-5 month terms and 13-18 month terms, respectively. Currently, the bank’s rates are 5.3 per cent for 1-2 month terms, 5.4 per cent for 3-5 month terms, 7.5 per cent for 13-month term and 7.9 per cent for 18- month terms. Sacombank has also lowered the rates for short-term deposits, cutting rates for 2-3 month terms to 4.9 per cent from 5.2 per cent per year. According to SBV, currently, the popular deposit interest rates are 0.8-1 per cent per year for demand and under 1 month terms, and 4.5-5.4 per cent for 1-6 month terms. The popular rates applied for medium- and long-term deposits of 6-12 months and above 12 months are 5.4-6.5 per cent and 6.4-7.2 per cent, respectively. The rate cut is aimed at balancing the banks’ liquidity and is a positive move to cut input costs. However, according to a leader of a joint stock commercial bank, who declined to be named, it would be hard to forecast interest rate movements in the next two months. He explained that demands for loans often rise sharply ahead of Tet (the lunar New Year), which falls in late January 2017. Experts meanwhile were concerned about the strengthening of the US dollar against the dong, saying that if the dollar continues to rise, dong savings holders could transfer to the American currency, causing pressure on dong liquidity. If that happens, commercial banks would have to adjust up interest rates to attract depositors. The abundance of dong liquidity in the banking system is lower than a few months ago in the wake of rising credit growth. According to the SBV, lending as of November 22 had expanded by around 14 per cent compared with December 2015, with dong loans rising 15.3 per cent. South Korea-based Nonghyup Bank opens branch in HN     South Korea-based Nonghyup Bank has officially opened a branch in Ha Noi after receiving an official license from the State Bank of Viet Nam. With extensive experience and capabilities accumulated over 50 years, Nonghyup Bank will participate in the Viet Nam financial market with the full functions of a commercial bank and continue supporting the economic development of Viet Nam and activities of both countries’ businesses. Founded in 1961 in Korea, Nonghyup is a co-operative bank with 100 percent of capital contributed by farmers and locals. Nonghyup is not only a commercial bank and but also a bank supporting agriculture policy, providing credit services for households and businesses and contributing to the Korean economy through credit financing in the field of rural agriculture. Nonghyup is currently the largest bank in Korea. Nonghyup Bank has had a representative office in Viet Nam since 2012. At present, Nonghyup Bank is implementing several corporate social responsibility (CSR) activities to support Vietnamese brides in multicultural families while focusing on the mountainous areas of Viet Nam. Nonghyup Bank has signed a corporation agreement with Tin Tức Newspaper (under Vietnam News Agency) to provide this publication to overseas Vietnamese living in South Korea. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR