BUSINESS IN BRIEF 22/5 Vinacomin claims end to Nhon Co bauxite project would cause major losses Vinacomin said that it had considered a halt to the Nhan Co bauxite project, but was scared about the major losses in its investment. At a press conference of the group on May 16, Vinacomin spokesman Nguyen Tien Chinh said, “We’ve spent a huge amount of money on the project. The EPC contract has been signed. How can we deal with the contract as a result of a halt in the project?” “Vinacomin has ever thought of stopping the project as well as its impact, but we didn’t dare because we may face big losses,” he added, emphasising that the group will continue the project. The Nhan Co bauxite project in Dak Nong has a design capacity of 650,000 tonnes per year. By April this year, total disbursement of Nhan Co aluminum project had reached VND6.836 trillion (USD325.2 million), including VND4.6 trillion (USD219.04 million) from the EPC contract. Up to 72 out of 73 items in the contract have been implemented. The Nhan Co aluminum project is expected to come into operation in mid-2014. A number of experts and scientists proposed the halt of Nhan Co aluminum project and urged Vinacomin to quickly assess the Tan Rai aluminum project’s efficiency to decide whether continue the Nhan Co aluminum project or not. According to experts, the transport distance of 260km from Nhan Co aluminum plant to the port is a major difficulty if Vinacomin does not have a solution to mitigate the transport costs. Vinacmoin said it had not bought transport vechicles for both projects but hired other firms. It had calculated the costs carefully in an efficiency assessment. “We wanted to listen to the proposals for consideration. Being an investor, we will be responsible for Nhan Co aluminum project’s efficiency. We can say for sure that in terms of design and careful consideration, the project is feasible,” Mr. Chinh noted. He also disclosed that the government had approved Vinacomin’s approval to slash aluminum export taxes to 0% from the level of 15-40% set by the National Assembly. Solutions to stabilise petrol prices go nowhere Officials and economists discussed possible adjustment to the petrol price stabilisation fund at the meeting held by the Vietnam Petroleum Association on May 17. Three plans were proposed to calculate retail prices include changing the retail prices in accordance with world prices, setting a retail price based on average world prices during a 30 days period or on an annual basis. Economist Ngo Tri Long said price adjustments should be made within a 10 day period to match global prices. Long further said the national reserved petroleum is all stored at petrol companies and this situation makes it hard to separate national reserve with the private company stocks. The second and third plans would let the state set the price cap for retail prices. The second proposals would see the ministries of Finance and Industry and Trade announce the price cap for the whole month and in the third plan they will announce the price cap for the whole year. Enterprises could make their own adjustment to earn more profits. However, Long said those plans would be ineffective as world petrol prices often changed unpredictably. To realise these plans, they would need a very capable team to react to sudden changes in world prices. The state would also have to calculate how to offset the differences between the world and domestic retail prices at such times. Dr. Nguyen Minh Phong agreed and said aside from taxing VND300 per litre at the pump from customers, enterprises must also contribute to the fund. To calculate the retail prices, Phong proposed to include two types of fee in the prices. The first would be the enterprises' cost and profit and second is the required fees from the state. "Through this, enterprises can manage their own losses and the state won't have to offset any losses for them. Actually, I still think we should scrap this stabilisation fund or change it into energy security fund." he said. Vietnam Petroleum Association also favoured the first plan. Lending up 2.1 percent over 4 months The outstanding loans given by commercial banks have increased 2.11 percent since December, according to the State Bank of Vietnam (SBV). Foreign currency loans declined by 7.2 percent, but dong-denominated loans climbed 4.15 percent. Lending to agriculture and rural areas rose 3.1 percent during the four-month period, as Government policies to support agriculture and rural areas helped farmers and rural traders increase borrowing to expand production and business. Real estate loans also went up 1.1 percent in the first four months and both yearly deposit and lending interest rates were reduced by roughly 2-3 percentage points against early this year. To further help businesses, the central bank required four State-owned commercial banks to bring all their yearly lending rates below 13 percent. SBV also asked credit institutions to boost lending to prioritises industries, including agriculture, exports, supporting industries and small- and medium-sized enterprises. The lending interest rate cap for the industries is 10 percent. Total deposits by the end of April also expanded 5.2 percent from last December. Meanwhile, SBV plans to carry out inspections at 18 Vietnamese lenders and seven foreign banks this year. In the first quarter of the year, the central bank conducted 301 inspections, of which 145 were scheduled, 39 were unscheduled and 117 were examinations. During a planned examination of Bao Viet Bank in May, the central bank branch in Hanoi will examine the bank's credit activities, finances and prudential ratios. Million dollar coastal apartments face difficulties in finding customers People have spent billions of VND to buy luxury coastal apartments as investments. However, they are struggling to find customers. Mrs. Bui Phuong Tam, director of a garment and textile company in HCM City, said after careful consideration, she had decided not to buy an apartment of this kind despite putting down a deposit. She added that spending nearly VND20 billion (USD1 million) to buy an apartment seemed a waste, while it wasn’t easy to sell it to earn profit amid economic difficulties. According to a real estate consultancy, the total number of apartments of this kind had topped 2,400. CBRE Vietnam said the local market would receive an additional 10,000 in the next ten years. However, investors are finding it really difficult to attract customers despite offering various promotions. A 100-square metre luxury apartment located in a coastal area often costs between USD200,000 and USD300,000, with most of the projects remaining uncompleted. Customers have begun to recognise the sales tricks employed to raise the prices of luxury apartments, and remain sceptical about the value of so-called million dollar housing. Investors often said that their luxury apartment projects had been sold, but they rarely revealed any information about their customers. Many projects have been sold just on paper, however, in fact, the transactions have not yet been made. Nguyen Hoang Nam, Director of Infor property transaction office said luxury apartments in tourism areas are often for investors, and were not essential product. He added that in Vietnam, the southern central region had the most suitable climate for tourism development and was home to nice beaches such as Nha Trang, Mui Ne and Vung Tau, offering good conditions for the development of these kinds of apartments. Vinalines attempts to sell debt-laden ships by late June Vinalines has set a goal to sell the six remaining ships of its subsidiary Vinashinlines by June 30, said a corporation official. Nguyen Dinh Thanh, Deputy Director of Vietnam National Shipping Lines (Vinalines), said the ship New Phoenix, one of Vinashin Ocean Shipping Co Ltd. (Vinashinlines) was sold at USD3.7 milion on March 28, after being held in China for a long time. After the ship was handed over to the new owner, 15 sailors have been paid returned to Vietnam. He added that the remaining six ships held in Pakistan, China, UAE and India remain safe, and that there is sufficient water and food as well as fuel for the ships, which now accommodate 96 sailors. The biggest difficulty facing Vinashinlines is to pay off debts to material suppliers and repair stations. It is now seeking ways to have the debts restructured after selling ships as well as to unfreeze the ships as collateral at credit institutions. “The ships have been put up for sale and we aim to sell them by June 30 to pay the salaries of our sailors and return the country,” the official noted. If the ship sales fail, Vinalines will still try to ensure living condition for the sailors, sending new sailors to replace the old ones who would return to the country, he said. Although the Ministry of Transport and Vinalines affirm that they have ensured daily expenses for the sailors and to maintain ship operations, the sailors have still complained about the living conditions. He attributed this to the late shipment of supplies, not Vinalines breaking their promise. Vinalines has got a VND200 billion (USD9.52 million) loan from the government to support the sailors of the ships detained in foreign countries and liberate the detained ships. According to the Vinalines, if the maritime transport market improves, the ship sales will be quick. Sugar inventory remains high Sugar plants across the country have produced nearly 1.5 million tons of sugar, up 150,000 tons compared to the previous crop, leaving sugar inventory at about 580,000 tons. According to Nguyen Thanh Long, chairman of Vietnam Sugar and Sugarcane Association, at this time, sugar refineries in the Mekong Delta provinces have officially ended 2012-2013 sugarcane season, while sugar refineries in the Central and the North of Vietnam plan to end the crop season by the end of this month. Balancing local demand of around 100,000 tons of sugar per month, sugar supply will be ensured even when sugar refineries temporarily halt operations until September or October before entering new crop season. ‘Technology transfer’ sparking debate Whether foreign invested enterprises have transferred high technology to Vietnam or not remains controversial. At a recent seminar on announcing two in-depth studies on enterprises’ technology and competitiveness organised by the Central Institute for Economic Management (CIEM) and Denmark’s Copenhagen University, Theodore Talbot from this university said Vietnam-based foreign-invested enterprises (FIEs) had been transferring high technology to Vietnam. He said this conclusion was made based on recent direct surveys over FIEs and other relevant studies. However, Nguyen Tu Anh, vice head of CIEM’s Macro-economic Policy Section, said based on studies over FIEs’ data and operations over the past more than two decades, there had been no convincing evidence showing that FIEs had transferred high technology to Vietnamese enterprises. This meant either FIEs did not do that or local enterprises did not want to receive technology from FIEs and they were even incompetent in receiving such technology, Anh said. One of the Vietnamese government’s prime targets to lure foreign direct investment (FDI) is to attract high technology from FIEs. However, whether FIEs have transferred such technology and in what level such technology has been transferred remains a question. As a result, this has made it difficult for the Vietnamese government to devise a suitable policy to coax more FDI in the coming years. According to Talbot, such advantages as low-cost labour and materials for enterprises in Vietnam are becoming gradually limited. Enterprises would then have no choice rather than invest much more in improving technology in order to enhance their competitiveness. He said that technology transfer had helped increase business profits, but it could not be implemented by enterprises themselves and it would need more help from the government. However, experts said Vietnam lacked a good environment for technology transfer between FIEs and local enterprises. Anh ascribed this lack to macro-economic instability. Such instability had prompted enterprises and investors to boost speculation activities, which would help them both lessen risks and rake in profits swiftly, rather than implement long-term investment activities, he said. Meanwhile, technology transfer would need a stable macro-economic climate, in which enterprises would feel secure in investing into bettering technology and staff quality to enhance their competitiveness. “Therefore, the Vietnamese government would need to persistently pursue macro-economic stability, if it wants the technology transfer process between FIEs and local enterprises to be implemented quickly and effectively,” Anh stressed. Korean electronics power investment More South Korean electronic firms are coming to Vietnam to set up shop, following Samsung and LG Electronics. Kim Jung In, chairman of Korea Chamber of Commerce and Industry (Korcham) in Vietnam, said he had recently seen a shift in South Korean direct investments in Vietnam from low to high-added value production in the current hi-tech trend. “Just in the first quarter of this year, South Korean investors disbursed $157 million in Vietnam, of which $138 million was pumped in hi-tech industries,” said In. “The presence of electronic giants like Samsung and LG is luring hi-tech firms from South Korea to invest more in Vietnam,” he added. Since 2007, the world’s largest electronic firm Samsung has committed to invest $3.5 billion in Vietnam through the construction of two manufacturing complexes in northern Bac Ninh and Thai Nguyen provinces. Meanwhile, LG is in negotiation with the Vietnamese government to build a $1.5 billion manufacturing complex in northern Haiphong port city, and the thumbs-up is likely to come soon. South Korea is now the largest investing country in Vietnam in terms of the registered projects. South Korean investors registered to invest in 3,287 projects in Vietnam by April 20, 2013, according to the Ministry of Planning and Investment’s Foreign Investment Agency. For many years, most South Korea-invested projects in Vietnam were in low value and labour-intensive industries such as garment and textile and footwear. “In Vietnam, business conditions are becoming disadvantaged for low value and labour-intensive industries. This forces South Korean firms to modify their investment plans here,” said In. In addition, he added, Vietnam’s existing incentive policies were luring attention of South Korean investors in hi-tech industries. “Many of them are suppliers of Samsung and LG, so they will follow the increased investment plans of Samsung or LG in Vietnam,” In said. Crucialtec Vina, a supplier of Samsung, started investing in its first plant in northern Bac Ninh province in 2011 to provide optic-based mobile input devices, as well as other light source devices and solutions, to Samsung in Vietnam. The firm has gained the recognition as a company applying high technologies in production, enabling it to enjoy special tax incentives from the Vietnamese government. “We are pleased with the incentives for hi-tech investments in Vietnam. At present, we are planning for the second factory in Vietnam,” said Hwang Bok Hyun, a senior officer of Crucialtec Vina. In said many South Korean companies like Crucialtec Vina contacted Korcham to learn about investment opportunities in Vietnam, and wanted to enjoy incentives offered by the Vietnamese government to hi-tech firms. Pharma field is growing Foreign pharmaceutical companies are exploring healthy Vietnamese sectoral options. Shakeel Akhter, export manager of Pakistan’s Sante Limited, told VIR at Vietnam Medi-Pharm 2013 exhibition in Hanoi two weeks ago that many Pakistani pharmaceutical companies “may build production factories in Vietnam, and the products will both be marketed in the country and exported.” “Many of our foreign rivals in India and South Korea have yet to build factories here and we will have to grab this opportunity. We will likely build a factory in Vietnam over the next several years.” Sante is now finding distributors in Vietnam for its three lines of products used for treating hair, eye and throat diseases. Pakistan’s Life Pharmaceutical Company’s marketing director Zeeshan Haider told VIR this company “may build a factory in Vietnam over the next five years.” “But in order to do that we will work with the Vietnamese governmental authorities and some companies like Ha Tay Pharmaceutical to export products to Pakistan,” Haider said. Vietnam is now home to 600 foreign pharmaceutical companies, however, they are almost all engaged in product distribution. Only several companies have built their own factories like France’s Sanofi with three factories and Japan’s Rhoto Pharmaceutical with two factories in the country. For instance, Sanofi in March 2013 announced the construction of its third $75 million factory in Ho Chi Minh City. This factory is expected to begin production in 2015 and market products in 2016. However, some foreign companies’ representatives told VIR they would not build factories in Vietnam. The UK’s Robinson Pharma’s Ho Chi Minh City-based representative office chief representative Dinh Dung said: “Vietnam has no materials Robinson needs to make its products. This is one of the reasons behind the company having no intention of directly investing here.” Meanwhile, China’s Zhejiang Shibiling Pharmacy sales manager Manning Kang said despite Vietnam’s big potential, many companies like Zhejiang Shibiling would not directly produce in the country. “Foreign companies will face scarcity of raw materials and weak protection of intellectual property rights in Vietnam. As a result, Vietnam is mainly a distribution market, not a production base for many foreign pharmaceutical companies,” Kang added. For example, GlaxoSmithKline is cooperating with local pharmaceutical firms instead of manufacturing on its own. In January 2013, Singapore-based Inviragen licenced its Japanese encephalitis (JE) technology to Vietnam’s Company for Vaccine and Biological Production No1. Under the agreement, Vabiotech can exclusively develop and commercialise JE vaccines in Vietnam, Cambodia and Myanmar. Taiwanese-backed TTY Biopharm is finding local pharmaceutical factories to transfer technologies and produce anti-cancer drugs, while Hong Kong’s Aloha Medicinals Asia is looking for local partners to distribute mushroom-extracted products in Vietnam. Decentralisation needs refined The Ministry of Planning and Investment is pushing for a revised decentralisation policy to muscle-up foreign direct investment inflows. The ministry will ask the Vietnamese government to allow it and other related ministries to appraise foreign direct investment (FDI) projects granted with special incentives, acquiring large chunks of land or those affect the nation’s economy, before proposing the prime minister for in-principle approval, according to the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency (FIA). “The Vietnamese government will approve these projects and then municipal and provincial people’s committees will be in charge of granting those with investment certificates,” said FIA director Do Nhat Hoang. “The fine-tuned policy will promote creativeness and responsibility of local governments and ensure the united management of the central government. This would create favourable conditions for foreign investors, but also supervises operations of the investors,” he said. According to the MPI, many local governments have granted investment certificates for too many ineffective projects since 2007. Often foreign investors failed to start construction with many investment certificates revoked. Before 2007, the MPI was the government authority with the right to licence FDI projects in Vietnam, together with Hanoi and Ho Chi Minh municipal people’s committees, and municipal and provincial industrial parks and export processing zones management authorities. The Investment Law 2005 taking effect on July 1, 2006 put an end to the MPI’s status as an FDI licencing agency and gave full power to local governments, plus industrial parks and export processing zones management authorities. The decentralisation policy is said to shorten time for licencing FDI projects and improve investment climate in the country. Hoang said while cities and provinces were trying their best to attract potential foreign investors, the decentralisation policy needed to be fine tuned. “Many local governments even are puzzled when appraising FDI projects of large scale, or projects having complicated technology and negative environmental impacts,” he said. Vietnamese SME owners determined to pursue business The latest survey from Regus, the world’s largest provider of work places, shows that up to 89 percent of Vietnamese entrepreneurs from small and medium-sized enterprises (SMEs) would continue to pursue a business career if they had a chance to redo things. The survey questioned 26,000 managers and entrepreneurs in 90 countries. The global average of the same index is 85 percent. Accordingly, regardless of the current challenges that Vietnamese SMEs face, it seems that the entrepreneurs are still determined to develop their own businesses. Up to 92 percent of Vietnamese people in business think that the current economic situation is the largest barrier to establishing companies, followed by challenging administrative procedures (agreed by 83 percent) and the overwhelming power of some big players in the market (agreed by 77 percent). More than half of Vietnamese respondents also mentioned the restrictions in approaching capital sources and lack of government support as severe obstacles for enterprise development. Serge Dupaux, Director of Regus Vietnam, evaluated that Vietnamese SMEs are playing a more important role in the current economic situation as large enterprises are experiencing some withdrawals in the market. Meanwhile, Nguyen Xuan Anh, Chief Executive Official of Deli International Solutions, said that SMEs with simple organisational structures and high adaptability will play a key role in stimulating the economy.- Vietnam boasts great titanium mining potential Vietnam is predicted to have a developed titanium mining industry thanks to its rich resource of titanium ores. According to the Ministry of Natural Resources and Environment, titanium-contained sand is mainly found along the coast from central Thanh Hoa province to the northern area of southern Ba Ria -Vung Tau province. Up to 83 percent of the sand is found in central Ninh Thuan and Binh Thuan provinces and the northern area of Ba Ria - Vung Tau. Experts said the resource of titanium sand ore in Vietnam is very large, ensuring long-term, sustainable supply for the processing industry. Under the approved plan on exploring, mining, processing and using titanium ore for the 2007-2015 period with orientations towards 2025, the regions of titanium mining include Thai Nguyen, Thanh Hoa - Ha Tinh, Quang Tri - Thua Thien Hue, Binh Dinh - Phu Yen, and Binh Thuan - Ba Ria - Vung Tau. For the 2016-2020 period, the titanium ore mining and processing industries will be established, providing such products as titanium slag, gigment, titanium sponge, and titanium metal. Binh Thuan will be developed into a large-scale titanium ore mining and processing centre that helps meet domestic and export demand. Nghe An’s first five-star hotel inaugurated The Muong Thanh Hotel Chain on May 19 inaugurated the first five-star hotel in Vinh city of central Nghe An province as a gift to the native land of President Ho Chi Minh on the occasion of his 123rd birthday. Named Muong Thanh Song Lam, the 135m high hotel comprises 33 storeys and one basement with 425 international standard rooms. It is also a complex of restaurants and bars, convention halls, a fancy spa and yoga fitness centre, an open swimming pool and sports clubs. Thanks to this, Muong Thanh Song Lam is now the highest and most modern hotel in the province, a new symbol of Vinh city in its integration and development period. The same day, Muong Thanh Hotel Chain held a ceremony to receive a certificate recognising its “ Vietnam ’s biggest private hotel chain” record presented by the Vietnam Guinness Book of Records.- Power transmission grid investment approved Deputy Prime Minister Hoang Trung Hai has approved a financial mechanism for an investment programme on electricity transmission grid (the second phase) with loans from the Asian Development Bank (ADB) and the French Development Agency (AFD). The Electricity of Vietnam is in charge of closely supervising the spending of the loans in an efficient manner. Earlier, the ADB pledged 730 million USD in four tranches for the electricity transmission grid investment programme in 2011-2020 to improve the delivery of power needed to fuel the country’s fast growing economy. Vietnam has worked to increase households’ electricity access, reducing the percentage of those without power from 22 percent in 1999 to just 3 percent in 2010. With power consumption doubling the annual economic growth rate since 2004, and electricity demand expectedly rising 14 percent per annum over the next four years, ensuring a reliable power supply is a big challenge to the country. The investment programme expects to help boost per capita electricity consumption from 985 kWh in 2010 to approximately 3,800 kWh in 2025.- Package looks to provide silver bullet A long-awaited VND30 trillion ($1.44 billion) credit package was last week rolled out to act as a silver bullet to unlock the stagnant property market. The State Bank and Ministry of Construction-backed package will be implemented from June 1, with low-income people, state officials and soldiers able to borrow at preferential rates for purchasing social housing and apartments of smaller than 70 square metres and priced under VND15 million ($720) per square metre. In addition, social housing developers can borrow from this package. The package reserves 30 per cent of its resources for developers who have been building social and cheap commercial houses and 70 per cent for buyers. Nguyen Tran Nam, Deputy Minister of Construction said the package would both create new supply of low-priced homes and increase purchasing power of this sector, which would then have positive impacts on other segments. Nam said with the release of this VND30 trillion package, the economy and the real estate market would have positive sign after a long time of downturn. “The support for buyers who are lower income earners will make an expanded impact on many other fields such as creating jobless and reducing bad debt,” Nam said. “The economic circumstances have been improved in the last four months of the year and we have been witnessing many positive signs. Especially completed real estate products and those properties priced at less than VND15 million ($750) per square metres are receiving much attention from the buyers and have high liquidation,” Nam said. The package follows the government’s Resolution 02 to support real estate market which was approved early this year. It took time for the circular to come out due to, according to the State Bank’s Credit Department head Nguyen Viet Manh, the fact that the State Bank had to carefully considered the many different aspects relating to this resolution, mainly in social security, cash inflows and inflation. The State Bank said the interest rate would be kept at 6 per cent throughout the first year. In the following years the interest rates will be adjusted, equalling half of the market interest rates but should not be higher than 6 per cent. Market remains challenging Vietnam’s struggling real estate market is still facing many challenges ahead. Cushman & Wakefield Vietnam general manager Chris Brown said 2013 was expected to remain a buyer’s market with falling prices. Demand for accommodation in Vietnam remained high, with its large, growing population and rising number of mid-income earners offering strong potential, Brown said However, the market today lacked products that could meet the population’s demands. Developers were looking for new ways to dispose of property, Brown said, such as subdividing units into smaller ones, giving more incentives and financial support, or putting apartments into rental. With Resolution 02/NQ-CP of the government and the current surplus supply, the condominium market was expected to continue seeing further price cutting. “Buyers, particularly low and middle income ones will have more opportunities,” Brown said. More commercial housing projects are expected to transform into social housing ones, with large apartments dividing into smaller ones. Brown added that Hanoi People’s Committee had put in place a residential development moratorium preventing the approval of more commercial residential development until December 2014 aimed at cooling the market. Increasing supply remains concerns for policy-makers, developers and buyers. In the first quarter of 2013, the residential market in Hanoi witnessed several mid-end and low-end projects launching new apartments into the market, with sale prices from VND14 million ($666) per square metre. Accordingly, grade C primary supply went up considerably to around 5,000 units. Grade B continued occupying the highest market share, with 50 per cent of the total primary supply for all grades. Grade A primary supply stayed the same as the last quarter of 2012. In the first quarter of 2013, according to Cushman & Wakefield, poor performance still continued. After the Lunar New Year holidays, developers of many projects started offering incentives for buyers such as gifts or reducing prices directly. However, there was little positive impact on sales volumes. Average asking prices for grade A condominiums are roughly VND48 million ($2,286) per square metre, grade B around VND30 million ($1,429 per square metre) and circa VND16 million ($762) per square metre for grade C apartments. It is common for developers to include furniture packages in deals now and this would show an increase of VND5 million ($238) to 10 million ($476) per square metre each. Meanwhile, in office segment in comparison with the peak rents in 2008, the current average rents for grade A have decreased by 46 and 41 per cent for Ho Chi Minh City and Hanoi, respectively. Cushman & Wakefield expected a minimum of one million square metres of office forecasted to come online in the next three to four years. Some tenants, meanwhile, are taking advantage of market by upgrading. Hanoi job festival attracts thousands Thousands of students and young people attended the fifth Hanoi job festival on May 19 to learn about employment opportunities at nearly 100 businesses. The event featured a wide range of services, including employment consultancy, recruitment and vocational job opportunities, aiming to encourage Youth Unions and the public to pay more attention to introducing young labourers to a wider variety of jobs and create the best conditions for workers access labour market. also introduced young people to traditional craft villages and streets in and around Hanoi. Vice Rector of the Foreign Language University, Nguyen Lan Trung, emphasised that cooperation between schools and the labour market has become a common trend in countries around the world. He urged businesses to work with training centres in order to discover highly qualified human resources that coincide with their requirements. Tran Anh Tuan, Vice Secretary of the Hanoi Youth Union, said the goal of the event is to help employers meet the right workers, including students and young people. He said he hopes the festival will also help young people find jobs that match their abilities. Goods control in non-tariff zones to be tightened The General Department of Viet Nam Customs has required the Departments of Customs in provinces and cities having economic zones and border gate economic zones and the Anti-smuggling and Investigation Department to enhance management in economic zones and border gate economic zones. The Customs Departments of provinces and cities having economic zones and border gate economic zones need to focus on monitoring activities of enterprises located in these areas. When assessing these enterprises’ liquidity, it is necessary for the Departments to inspect and review specifically the data reported by the enterprises and the data managed by the Departments to promptly detect law violations. In addition, regular and irregular inspections will be conducted at any enterprises when there are suspicious signs. The Anti-smuggling and Investigation Department is required to increase investigations to prevent, fight the illegal transportation of goods from non-tariff zones to the domestic market; proactively coordinate with the non-tariff Zone Management Boards to control imported and exported commodities. Accordingly, the goods brought into and out of non-tariff zones shall be undergone customs clearance and supervised by the customs authority. Each type of goods shall be complied with the current specific customs proceedings. Poor households make up 9.64% of population Over 2.1 million poor households and over 1.4 million families are living near the poverty line in 2012 and representing 9.64% and 6.57% of the population, respectively, according to the Ministry of Labor, War Invalids and Social Affairs (MOLISA). In its latest survey on poor and nearly-poor households across 63 provinces and cities in 2012, the MOLISA found that the poverty rate in 2012 was reduced by 2.12%, outstripping the National Assembly’s preset target of 2%. The rate sharply fell in poor districts with 7.02% while the NA target was just 4%. The northwestern mountainous region had the highest poverty rate in the country with 28.55%. Meanwhile, the east-southern region had the lowest poverty rate with 1.27%. According to the MOLISA, these figures resulted from the synchronous and full implementation of policies for the poor together with socio-economic development programs, the national program on sustainable poverty reduction and poverty reduction projects by international organizations. In 2013, the National Assembly set targets of poverty reduction by 2% for the whole country and 4% for poor districts. Work begins on two tunnels in Thua Thien-Hue Deputy Prime Minister Nguyen Xuan Phuc pressed a button on May 18 to start construction on two tunnels through the Phuoc Tuong and Phu Gia passes on National Highway 1A through Phu Loc district in Thua Thien - Hue province. The VND1.7 trillion (US$81.6 million) project is being built under a Build - Operate – Transfer (BOT) contract. The Phuoc Tuong and Phu Gia tunnels will both be 11.5 metres wide and 345m and 497m long, respectively, and will each include two lanes for motor vehicles travelling at a maximum speed of 80kph. The project is scheduled to be completed after 18 months and the payback period is estimated at 18 years, seven months. The roads will have two toll stations that will begin collecting fees by January 2015. This is the last tunnel project for National Highway 1A aiming to shorten distances and contribute to socio-economic development in the central region, as well as ease the traffic flow on the national route. On the same day, Deputy PM Phuc also attended the ground-breaking ceremony for a project to expand National Highway 1A by 32km from Km791A+500 to Km848+875 KM through Phong Dien district in Thua Thien – Hue province. The BOT project has a total investment of more than VND2.2 trillion (US$105.6 million) and will be implemented within 24 months with a payback period of over 22 years. VN encourages foreign home buyers Regulations on foreigners' rights to buy houses in Viet Nam could be loosened further in a bid to stimulate the domestic property market. Houses in the Trung Hoa-Nhan Chinh area, west of Ha Noi. Laws regulating foreigners' rights to buy houses in Viet Nam could be loosened further in a bid to stimulate the domestic property market. The Ministry of Construction has announced a review of the current regulations, due to take place in the coming months with possibility of the law coming into force by 2015. The policy allowing foreigners to buy houses was first introduced in 2009 through the National Assembly's Resolution 19. However, the strict regulations, which limit ownership and property transfer rights, have discouraged foreigners from entering the property market. The ministry's statistics showed that after four years, only 121 foreigners owned houses in Viet Nam while Viet kieu (overseas Vietnamese) owners numbered just 400. The modest figures compare unfavourably with the number of foreigners living and working the country, thought to be around 80,000 and with housing requirements estimated to total 1 million square metres. According to Deputy Minister of Construction Nguyen Tran Nam, the loosening of regulations for foreigners to buy houses would help to prevent the concentration of crowds of people with the same nationality in one place, which was important for social security. Many countries such as Malaysia and Singapore had policies encouraging foreigners to buy houses in their countries. At the same time, they also had regulations to ensure the purchases were kept under control, he said. Nam added that the percentage of apartments in a building to be sold to foreigners of the same nationality would be capped. The ministry will also consider whether foreigners should be allowed to buy low-priced houses, or be restricted to certain properties. Regarding the policy for Viet kieu to own houses in Viet Nam, Nam said regulations were already favourable. Currently, Viet kieu with Vietnamese citizenship and those who do not have citizenship but have investments or businesses in the country are allowed to buy houses in Viet Nam. Only those without Vietnamese citizenship or investments in the country are limited to buying just one unit. According to Le Hoang Chau, president of the HCM City Real Estate Association, the increase in foreign home-buyers would help clear bulging property inventories, especially in the high-priced brackets. On May 4, the Ha Noi People's Committee issued Decision 13 which allowed foreigners to be granted home ownership certificates, known as a "red book." A foreigner is currently permitted to own one property only. According to Nguyen Manh Ha, Director of the Housing and Real Estate Department under the construction ministry, the policy to allow foreigners to buy houses in Viet Nam would be adjusted in the amended Housing Law. The amended laws on housing and real estate business would be proposed to the National Assembly for ratification in 2014 and expected to come into force in 2015. Ha said the Housing Law, which took effect in 2005, and the 2006 Law on Real Estate Business revealed limitations within the current situation, partly caused by the supply-demand imbalance and unstable development of the property market The construction ministry said the amendments would be in line with the nation's housing development strategy approved by the Prime Minister in 2011, while ensuring consistency with other relevant laws and transparency in the real estate market. Experts eye housing, real estate law moves Experts proposed several ideas on how to amend the Housing Law and Real Estate Business Law at a session held last week by the Ministry of Construction in HCM City. Representatives from the construction and property sectors offered several suggestions on all aspects of the two laws. Most of the participants agreed that overlapping provisions in the laws, as well as in the Law on Land and Investment Law, should be avoided. Speaking at the meeting, Le Hoang Chau, chairman of the HCM City Real Estate Association, said the period to sell a house should be limited. "The Government should permit that developers sell a house within a 15-20 year period," he said. "This could help lower housing prices in Viet Nam," he said, adding that "prices would be 50-75 per cent less than they are now." Chau also mentioned that such a time-period limit had been applied in many other countries. Another issue that provoked heated discussion was the time period for mobilising capital for projects. Under the current law, investors are allowed to contribute money only after the foundation of a building project is completed. But it takes a long time to complete the foundation because "the design could change due to many problems," according to a representative from Him Lam Group. "Companies that obey the law often need huge capital. Real estate developers often run out of money when the foundation construction is finished," he added. Another matter addressed at the meeting dealt with ownership of real estate by foreigners who live in Viet Nam. Many of the attendees said that such regulations must be more open and flexible. "Regulations permitting foreigners to own an apartment must be looser. This would help stimulate the market," said Nguyen Van Danh, deputy head of HCM City's Department of Construction. The approval of the Housing Law and Real Estate Business Law in 2005 and 2006, respectively, played an important role in the real estate market. For the first time in Viet Nam, laws were created to oversee a number of related matters, including land and house rentals and social-housing management, according to Nguyen Tran Nam, Deputy Minister of Construction. Since that time, the two laws' shortcomings have been revealed, he said, adding that it was now time to amend the laws and consider ideas from opinion-makers and the industries involved. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR