BUSINESS IN BRIEF 26/3 UNDP chief urges reforms to target inclusive economic growth Lifting the quality and quantity of production in agriculture and aquaculture should be an integral part of Viet Nam's wider growth strategy, a UN official has recommended. Speaking at an international conference titled Economic Reforms for Inclusive and Sustainable Growth: International Experience and Lessons for Viet Nam held yesterday, United Nations Development Programme Administrator Helen Clark emphasised that the steps were necessary in creating an inclusive economy, especially given the majority of Viet Nam's poor lived and worked in rural areas. Despite rapid growth rates in many countries, the benefits of such growth have often not been enjoyed by entire populations. With an average GDP growth rate of 7.3 per cent from 1990 to 2010, Viet Nam was one of the fastest growing economies in the world, with per capita income increasing by almost five times by the end of two decades. However, income and non-income inequalities between specific areas and population groups have been rising in Viet Nam. Clark said that as Viet Nam was looking to shape economic reforms, strategies which promoted inclusive and sustainable growth would be important to allowing all Vietnamese citizens to benefit from growth. She said that Viet Nam's strong egalitarian and poverty alleviating growth over the last two decades was due to land reforms, an improvement in the agricultural terms of trade and an increase in public investment in the rural economy, which happened in the late 1980s and early 1990s. "Now, attention needs to be given to adding value to agricultural and aquaculture production so that it can command higher prices," she said, adding that farmers and the economy would benefit from a more systematic provision of agriculture extension services, better quality assurance and certification, and better branding for Vietnamese products. "Viet Nam has many strengths including its relatively young and competitive labour force, abundant natural resources and its geographic location at the heart of a dynamic region. With smart policy choices, the country's future is bright," Clark said. The UNDP Administrator also highlighted critical areas that could be considered in the reform process to achieve inclusive and sustainable growth. The list included a progressive upgrading of the economy towards higher value sectors to establish new comparative advantages and create decent jobs; expanding opportunities through access to quality and relevant education; investment in disaster risk reduction and climate change adaptation. More transparency and accountable public resource allocation were also named as critical measures to maximise the impact of the country's resources, in addition to better management. "Combating corruption and engaging citizens in the development process are among documented best international practices in promoting inclusive and sustainable development," she said. Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh said that after nearly 30 years implementing doi moi (renewal) policy, Viet Nam had recorded many social and economic achievements. Minh said Viet Nam had become a middle-income country, reduced its poverty rate from 58 per cent in the 1990s to 7.8 per cent last year. He also said that the UNDP's 2013 Human Development Report had shown Viet Nam's human development index had risen 41 per cent in the last two decades. However, the report had also noted that Viet Nam's economic growth was not sustainable because of low productivity and competitiveness, a high proportion of untrained labour, and a range of health-related and environmental challenges. "These challenges require more and more resources and need to be addressed," said Minh. "Viet Nam has been integrating into the international markets and mobilising resources to push domestic economic reform to catch up with global economic trends," he said. At present, Viet Nam is negotiating six free trade agreements with key partners including Trans Pacific Partnership and Regional Comprehensive Economic Partnership. The two-day conference was jointly organised by the UNDP, Ministry of Foreign Affairs and Viet Nam Academy of Social Sciences. It attracted more than 150 participants including policy makers, researchers, enterprises and representatives from multilateral development agencies. Air conditioners, refrigerators fly off HCM City shelves The onset of the hot season in HCM City has sent the sales of refrigerators and air conditioners skyrocketing, electronics retailers said. A spokesperson for dienmay.com, a major retailer, was quoted as saying by Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) newspaper that sales has picked up since the beginning of this month. He expected the sales of electric fans, refrigerators, and air conditioner to increase by 500 per cent. Le Pham Anh Thy, marketing director of another major retailer, Nguyen Kim, said his company too has seen sharp growth, adding sales would surely increase further in the coming days. Retailers said many advanced new products including energy-saving and green ones have appeared on the market. Established brand names such as Toshiba, Daikin, LG, and Samsung remain the bestsellers. Retailers predict the market to get hotter in April and May when temperatures climb to peak levels, and prices to increase by at least 5 per cent. But many promotion programmes, introduced in the middle of March, will remain on offer. Nguyen Kim offers free installation of air conditioners and foots up to VND500,000 the cost of materials like pipes for the installation and besides doubling the guarantee period. It also offers discounts of up to 30 per cent on some refrigerators, fans, and air conditioners. Thien Hoa Electronic Centre offers customers vouchers for 50 per cent discount and interest-free hire-purchase of appliances and gifts. CPI dips in March on low post-Tet demand The country's consumer price index (CPI) in March dropped 0.44 per cent against the previous month, the lowest level for the past decade. However, March CPI still rose 0.8 per cent over December 2013. According to the Director of the General Statistics Office (GSO)'s CPI Department Nguyen Duc Thang, March's CPI slide was due to the sharp decline in consumption demand after the country's most important holiday of the Lunar New Year in February. Thang added that the local consumers also cut their spending due to economic difficulties and stagnant production. The cost of some of the 11 items used to calculate the CPI fell in March or inched up only slightly, GSO reported. The prices of food and foodstuff posted the highest fall of 0.06 per cent this month. Housing and construction materials (including rent, electricity, water, fuel and construction materials) came second with a decline of 0.74 per cent. The prices of traffic services postal services and telecommunication fell by 0.03 per cent, the data showed. In the same month, the prices of beverages and tobacco reported the highest price hike of 0.24 per cent, followed by the prices of household appliances and goods with a hike of 0.16 per cent. The cost of other items, including culture, entertainment and tourism; medicine and health care; garment, footwear and hats, and education inched up between 0.03 and 0.10 per cent only. In the urban areas, the March CPI decreased by 0.41 per cent and in rural areas by 0.45 per cent. This month's CPI fall does not surprise observers as some experts had forecast it after Ha Noi, HCM City and some other cities reported a fall in CPI in March. Not included in the CPI components, the gold prices in March rebounded by 3.31 per cent, while the US dollar prices edged up by 0.02 per cent.  Economy grows by 4.96% in Q1 For the fourth consecutive quarter in a row, economic growth in Vietnam has continued its upward trend and now stands at 4.96% for the first quarter of the year, according to official statistics. This is the highest growth quarter on quarter Vietnam has achieved in the past three years, reported the General Statistics Office of Vietnam (GSO). The leading sectors experiencing increases included services (up 5.95%), industry and construction (up 4.69%) and agro-forestry and fisheries (up 2.37%). Rapid growth of HCM City, Binh Duong and Dong Nai, just to name some, contributed significantly to overall national economic growth. The GSO reported that the strong performance of the foreign business sector is the critically decisive factor in fueling economic growth. Vietnam enjoyed a trade surplus of more than US$1 billion in the last three months, which was mostly generated by the FDI sector. Meanwhile, domestic businesses, especially those operating in the manufacturing and processing industries, continue facing a number of difficulties in production. In the current context of weak market trends, the fact that the economic growth rate this quarter is higher than the previous quarter is a positive signal, helping to create confidence in investment and consumption. Commercial banks recently lowered their loan rates in an effort to stimulate investment and consumption. The decision came after finance, banking and insurance just obtained moderate growth of 5.91% in quarter 1, a rather low figure compared to a year earlier. Along with the loosening of Government policies and the considerable GDP growth in Q1, the move is expected to signal a rebound in real estate trading and will result in great future payoffs. Vietnam looks to inclusive, sustainable growth Vietnamese and foreign experts shared experience in economic reform to achieve inclusive and sustainable growth at an international conference in Hanoi on March 24. Vietnam has obtained substantial socio-economic development since it carried out the Doi Moi (Renewal) process in 1986, said Deputy Prime Minister Pham Binh Minh. He noted Vietnam has made the transition from an underdeveloped economy to a middle income nation with an average economic growth rate of 7% per year (between 1986 and 2011). It slowed down in 2011-12 due to the global economic recession, but showed signs of steady recovery in 2013, with GDP rising to 5.4% and estimated to expand to 6% in 2014. The country’s poverty reduction rate dropped from 58% in the early 90s to just 7.8% in 2013. According to the United Nations Development Program (UNDP)’s human development report (HDR) in 2013, Vietnam was one of 40 developing countries to have exceeded expectations in human development, with its index increasing 41% over the past two decades. The International Telecommunication Union (ITU) reported that nearly 31 million people in Vietnam use the Internet, accounting for around 34% of the country’s population, and ranking third in Southeast Asia and eighth in Asia. Despite the negative impact of the global economic slowdown, Vietnam has managed to accelerate social welfare programmes, testifying to the country’s determination to promote economic growth whilst ensuring social equality and progress. In the 2011-2020 socio-economic development strategy, the Vietnamese Party and Government show their strong commitment to strengthening the Renewal process, focusing on three major breakthroughs – completing the market economy institution, developing highly qualified human resources and modernising infrastructure – with the aim of transforming Vietnam into a modern industrialised country by 2020. To obtain sustainable growth, Vietnam has no choice but to accelerate economic reform and renovate the growth model, with priority given to quality, efficiency and competitiveness. The target will be realized only when socio-economic development must go along with environmental protection, cultural development, and social equality and progress. Humanity is the key factor behind development. The State must ensure human rights and create optimum conditions for people to stimulate their creativity and comprehensive development. UNDP Administrator Helen Clark emphasised that Vietnam has many advantages, including a young labour force, abundant natural resources and its prime geographical location at the centre of a dynamic development region. Vietnam should choose an inclusive and sustainable growth model in the reform process, she suggested, pledging the UNDP’s strong support for Vietnam’s reform efforts. Clark said Vietnam should implement measures to improve labour productivity and quality in agricultural and seafood production. The country should focus on sectors with higher added values to create set up new competitive advantages in the region and the wider world. Last but not least, she recommended Vietnam reform its social welfare systems, invest in risk and disaster mitigation, climate change adaptation, and allocate public resources in a clear and fair manner. After the opening ceremony, the conference continued to discuss the importance of inclusive growth, relations between unequal economic growth and economic institutions, and priorities in balancing short-term macro-economic stability and short and medium term institutional reform. Huge potential for Vietnam-South Africa cooperation South Africa is a potential trade and investment market for Vietnamese businesses, said Doan Duy Khuong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI). Addressing a Vietnam-South Africa trade and investment promotion conference in Hanoi on March 24, Khuong noted the establishment of diplomatic ties between the two countries in 1993 has laid a firm legal foundation for stronger cooperation. Both countries have signed a number of agreements, including a bilateral trade agreement, an agreement on granting the Most Favoured Nation (MFN) status in bilateral trade, and an agreement on setting up the Inter-Governmental Partnership Forum for Economic Cooperation. Vietnam mainly exports footwear, garments, coffee, rice, gemstones, precious metals, wood and timber products to South Africa. It imports steel and iron, metals, chemicals, plastic materials, cotton, fibre and fertilisers. Two-way trade turnover has increased significantly over the years, from US$722.6 million in 2012 to US$920 million in 2013. However, both Khuong and South African Ambassador to Vietnam Kgomotso Ruth Magau shared the view that the results remain modest compared with the two countries’ potential. They expressed their hope that Vietnamese and South African businesses will play a key role in promoting bilateral economic and trade ties. South Africa is currently Vietnam’s largest trade partner in Africa, Magau said, adding South Africa considers Vietnam an important and long-term ally. Garment sector needs to tap market potential: President The garment sector needs to capitalise on free trade agreements when Vietnam is expanding its overseas markets, State President Truong Tan Sang told outstanding garment makers in Hanoi on March 24. Sang said Vietnam is negotiating the Trans-Pacific Partnership (TPP) agreement with 11 TPP members, and other trade pacts with the Republic of Korea and the Customs Union of Russia-Belarus and Kazakhstan. Once these trade pacts are enforced, they will put some economic sectors at a disadvantage, but offer other sectors plenty of opportunity to prosper. The garment sector should thoroughly study policies and seek competitive advantages to fully tap potential available, he told delegates. Sang suggested the sector improve the quality of its human resources, especially designers, and develop the support industry to increase the localisation rate in its products and to ensure material supplies. It was reported at the meeting that despite the global low purchasing power in 2013 the garment sector raked in more than US$20 billion from exports, a year-on-year rise of 18.5%, and generated more than 7.7 million jobs.    It heavily invested in technology renovation and design, developed brands, and expanded overseas outlets. The sector aims to raise its export earnings to US$25 billion in the near future. NHO expands investment in Danang property market On March 20, National Housing Organisation (NHO) JSC clinched a cooperative deal with Korea’s Kreves to implement an affordable housing project - First Home Danang - at the total investment value of VND1 trillion ($48 million). Accordingly, the firm will join hands with Kreves to develop 4.3 hectare First Home Danang which will kick off construction this June. When operational, the project would roll out 2,200 quality apartments with a full suite of support facilities such as park, swimming pool, supermarket, cinema and trade centre. “We are happy with this $48 million cooperative deal because we see its important role when in use. The project not only ensures a comfort life for the residents when living in our apartments but also contributes to enhancing the urban appearance of Danang,” said NHO’s Management Board chairman Kim Kyoo Chul. Kim also said before stepping into Vietnam’s property market NHP has committed with Vietnam’s Ministry of Construction to building about 100,000 apartment units in the country in the next decade. The deal with Kreves this March is a step towards realising the commitment. Earlier, NHO was the developer of another affordable housing project - Nest Home Danang - with scale of 420 apartments on one hectare area which came on line matching its progress target. The apartment fetches only VND5.3 million ($250) per square metre. Construction of Nest Home Danang ended up after 15 months and the apartments were handed over on March 21. The project's total cost was VND148 billion ($7.04 million). This was the first social housing project not using state budget capital in Danang city. NHO JSC, a joint venture between local TAG JSC and NIBC Investment Limited from South Korea, is one of pilot businesses in affordable housing promotion in Vietnam. The company left marks in diverse Vietnamese locations including Hanoi, Ho Chi Minh City, Danang, An Giang, Quang Ngai, Quy Nhon and Binh Duong through building quality affordable housings under First Home brand. Thai Nguyen People's Committee and Microsoft sign MoU on IT development The Thai Nguyen People’s Committee of Thai Nguyen and Microsoft today officially signed the Memorandum of Understanding (MoU) towards the provincial prominent goals of IT development and boosting the socio-economic development in the province. Under this MoU, both parties will focus on implementing key areas including IT infrastructure, cyber security, cloud apps development, IT human resources training, and deployment of e-government, e-authority in all socio-economic sectors of Thai Nguyen. The signing ceremony is held at Thai Nguyen first time on the occasion of the first “PC for Life Day” is organised here. The event of “PC for Life Day” is the continuous activities of the successful programme “PC for Life” launched by the Ministry of Information and Communications in 2008. "This event has a very significant meaning, marking the beginning of the close and long term relationship between Thai Nguyen and Microsoft, together towards the primary goals of IT development and boosting the sustainable development of socio-economics of Thai Nguyen,” said Duong Ngoc Long, Chairman of the Thai Nguyen People's Committee. Under this memorandum, and also towards the goal of building IT infrastructure in the cloud computing platform, both sides agreed to focus resources to develop cloud computing applications to save the state budget, improve IT efficiency and accelerate bureaucracy innovation to help local people gain more benefit from public services. “We are proud to bring out cloud application fueling the development of information technology as well as the goal of building smart city in Thai Nguyen. Microsoft currently offers over 200 cloud services, including Bing, MSN, Outlook.com, Office 365, SkyDrive, Xbox Live and Windows Azure platform. More than 1 billion customers and 20 million businesses in 88 nations and regions across the globe are using Microsoft's cloud services. And we believe that Microsoft's "cloud" will bring practical effectiveness to Thai Nguyen to help organization overcome challenges which they are facing as well as reduce the burden of lacking human and financial resources," said Vu Minh Tri, general director of Microsoft Vietnam. Thai Nguyen is recognised the country's third largest centre of culture and education. To continue to sustain that achievement, according to the MoU, Microsoft is committed to provide free Microsoft 365 for the education sector in Thai Nguyen, and increasing the digital access through the programme Shape the Future. Exporters bemoan new customs red tape tussle Many exporters, especially those devoted to garments and textiles, are unimpressed by a Ministry of Finance regulation which could cause an increase in their operational costs. The Ministry of Finance (MoF) recently issued Notice 1767/BTC-TCHQ on combating electronics customs violations, which will take effect on April 1, 2014. According to the notice, customs declaration forms can only be submitted to local customs agencies after companies have unloaded their goods at fixed places and announced the time that the goods will loaded into containers for dispatch. The notice states such locations include border gates, seaports, airports, inland container depots, container freight stations and warehouses. The document also stipulates specific places for examining goods at border gates. All these places have to meet certain specific conditions. The MoF said the notice was aimed at stringently managing cross border trade by preventing firms from committing trade fraud via electronics customs procedures. However, the document was met by many exporters’s uproar, particularly garments and textile producers which claimed that despite its laudable aim, the notice would also hit enterprises with good business records. Garment 10 Joint Stock Company’s CEO Than Duc Viet told VIR that because almost all of the company’s input materials were imported and demand for the company’s products was rising internationally, cross-border trade needed to be even quicker, not entangled in red tape. Because of the busy shipping timetables, enterprises had to declare their goods for custom clearance in advance to loading, otherwise both they and the customs agency would have no time to process the declaration forms and the ships would continue without the export goods. He suggested that the existing customs procedures be maintained. Specifically, enterprises could make declarations before the goods were loaded for export. Duc Giang Garment Joint Stock Company’s general director Pham Tien Lam said the company exported goods via several border gates and seaports. He said the current regulations were far simpler. “Enterprises are able to save time, and reduce overloading and risks about missing ships. If the new regulation is applied, enterprises will suffer from bigger burdens. They could miss the ships if they fail to complete customs procedures in time.” Nguyen Sy Hoang, head of Export-Import Department of Tex-Giang Joint Stock Company in the southern province of Tien Giang, said the firm was based 80 kilometres from Ho Chi Minh City seaport’s inland container depot so if they had to unload its exported goods at the depot before it could make a customs declaration form, it would take the company much time and extra fees. “This will undoubtedly affect us,” Hoang said. Vietnam Garment and Textile Association vice general secretary Dang Phuong Dung also said the MoF and the Vietnam Customs should reconsider Notice 1767 as quickly as possible. Highway cost soars above original estimate The Cau Gie-Ninh Binh highway cost over VND8.9 trillion (US$423.8 million) to build, more than double the budget approved in 2005. The 54km road, with six lanes and designated speed of 100-120km/hr, opened in 2012 and is the first to connect Ha Noi with other provinces in the south. In 2005, the Build-Operate-Transfer project was approved with a budget of VND3.73 trillion ($177.6 million). However, project investor Viet Nam Expressway Corporation (VEC) adjusted the budget and design twice, according to recently released data from the State Audit of Viet Nam (SAV). Moreover, VEC did not conduct a hydrographic survey, instead using hydrographic statistics and calculations from similar projects, and the highway failed to meet technical requirements such as cement quality and road surface height. The SAV said VEC, along with the project management board and its Cuban consultant Quality Couriers International, was responsible for these problems. Director general of VEC Mai Tuan Anh told Tin Tuc (News) newspaper on Wednesday that the increased investment for the project was a result of changing the investment form. The project was first approved with funding from the State budget, but then the corporation issued bonds to mobilise capital. The increased price of materials and labour, plus the bank interest rate, added additional financial burdens, he said. "The increased project investment was mostly due to slow land clearance, complicated geographic conditions and more work required by localities such as flyovers and underground drains," Tuan Anh said. He added that it was unfair to call the increased investment a loss because consultants made the approved estimate, while competitive bidding was open to select constructors and the value of bidding packages was identified through bidding. The corporation would also invite independent consultants to re-examine the quality of the road and would take responsibility if mistakes were found, he said. Viettel provides 1.3 million new prefix numbers Military-run telecom Viettel will provide its users with 1.3 million new mobile phone numbers starting with 096. Accordingly, the company has become the only provider owning multi-number networks in the local telecom market. Meanwhile, Sai Gon Postel (STP) has been allowed to shift from CDMA to 3G technology. STP was required by the Ministry of Information and Communication to ensure the rights and interests of subscribers and implement measures to make sure their telecom network works well. Treasury mobilises VND2.99 trillion from G-bond issue The Ha Noi Stock Exchange auctioned a total VND2.99 trillion (US$142 million) worth of two-year government bonds (G-bond) on Thursday, at the yields of 5.59 per cent per year. It was 0.38 per cent decrease per year as compared to the previous auction held on March 13. The auction featured a volume of VND9 trillion (US$428 million) worth of two- year, three-year, and five-year bonds. Since the beginning of this year, the State Treasury of Viet Nam has sold VND62.3 trillion (US$2.9 billion) of Government bonds. CMC sets revenue target of VND30 billion The CMC Investment Joint Stock Company (CMC) has announced its VND30 billion (US$1.5 million) revenue target and business plan during its annual shareholder meeting on Tuesday. Last year's revenue stood at VND17.58 billion and its profit after tax reached US$635 million. During the shareholder meeting, a consensus was reached on assigning the board of directors with the task of selecting the co-operation project in the fields of construction and capital sharing with other businesses. Construction firm to sell all 4 million shares The Hoa Binh Construction Company (HBC) has announced that it will sell off all its current shares. Under its notice, the company has registered to sell more than 3.9 million of its shares through the HCM Securities Company. The registration period to buy the shares will be active between March and April 27, 2014. SBV postpones debt standards The State Bank of Viet Nam has issued a circular allowing commercial banks an additional year before applying new, strict debt classification standards. According to the circular (Circular No. 09/2014/TT-NHNN), dated March 18, 2014, banks can continue to restructure existing loans and keep them in the same debt group until April 01, 2015 instead of reclassifying them using more rigorous standards by June 1, 2014 as planned previously. In Viet Nam, debts are classified into five groups based on their risk status: Standard Debt, Debt Needing Special Attention, Subprime Debt, Doubtful Debt, and Potentially Irrecoverable Debt. The postponement comes as a big relief for commercial banks and businesses. If the new debt classification standards were to be applied next month, all debt balances and value of off-balance sheet commitments (OBS) of a customer with a credit institution would be placed in the same debt group. If these were already placed in different groups based on varying risk levels, they would now have to be put into the group which has the highest risk level in the customer's credit portfolio. The central bank decided to allow deferment after the banks expressed their concern that bad debt would surge and stifle credit, causing major businesses to collapse and triggering a financial crisis. However, Circular 09, which took effect on Thursday (March 20, 2014), still requires banks to manage their debts more stringently. It says banks must issue internal regulations on controlling and supervising the restructuring of loans in order to keep them in their current group. It also says that restructuring of a loan and keeping it in the same debt group (instead of downgrading it) can only be done once. If a customer fails to adhere to the repayment schedule of the restructured loan, it would have to be downgraded and placed in a higher risk category. The new circular also stipulates that credit institutions and foreign bank branches set aside risk provisions when they purchase special bonds issued by the Viet Nam Asset Management Company (VAMC), which was set up by the central bank to buy bad debts. In calculating the risk provision, credit institutions and foreign bank branches must periodically assess the value of relevant collateral to ensure that it corresponds to their current market value, the circular says. Pan Pacific share sale fetches maintenance firm $30 million Pan Pacific JSC (PAN) completed its individual stocks offering of more than 20 million shares (PAN-HOSE) on March 18. After selling the shares at a price of VND32,000, or US$1.5, each, which was an increase of 33.33 per cent over the price of shares offered in the first quarter last year, PAN got VND650 billion, or US$30.9 million. Among the major shareholders this time are GIC Private Limited, the National Investment Fund of Singapore, which bought 1.9 million shares and owns 4.7 per cent of the stake; the Singapore-based TAEL Partners, a principal investment firm specializing in growth-oriented investments, which has bought 8.07 million shares and owns 20 per cent stake; the Finland-based Elite Mutual Fund which bought 2.087 million shares, raising its stake to 9.98 per cent, NDH Viet Nam Limited Company which purchased 1.23 million shares, equivalent to its ownership of 13.10 per cent; CSC Viet Nam Company which purchased 680,000 shares, owns 4.32 per cent and SSI Asset Management (SSIAM) which bought 4.06 million shares, raising its ownership to 11.65 per cent. PAN, therefore, is the affiliate of Sai Gon Securities Inc. due to SSI group owning over 20 per cent of PAN. Pan Pacific CEO Michael Louis Rosen said after the sale that the corporation had increased its charter capital to VND403.6 billion, or $19.2 million. The CEO added that the corporation would continue to follow its strategy of mergers and acquisitions at the companies that are working effectively in fisheries, agriculture and foodstuff. Building expo to showcase eco-friendly technologies More than 450 local and foreign firms will showcase their latest products in construction, building materials, real estate and interior and exterior decoration sectors at Vietbuild 2014 in Ha Noi. The five-day exhibition, to be inaugurated on Wednesday at the Viet Nam Exhibition and Fair Centre, will introduce eco-friendly materials and energy-saving devices related to the housing industry. AFC International Exhibition Company General Director Nguyen Dinh Hung told the media yesterday that the exhibition would feature 1,350 booths of 214 domestic businesses, 175 joint venture companies and 61 foreign groups and enterprises. The foreign participants are coming from China, South Korea, Japan, Malaysia, Thailand, Italy, Indonesia, Hong Kong, Switzerland, Singapore, France, the US and India. Hung said the exhibition was also expected to offer business cooperation opportunities for the participants as well as the expanding market. He added that Vietbuild has attracted big companies with an aim to bring a new direction to the domestic building material and interior market. The exhibition will include the presentation of the Vietbuild Golden Cup to encourage quality improvements and the creation of new construction and real estate products. Three special conferences would also be held to discuss the development of new eco-friendly technologies. Vietbuild is an annual exhibition jointly organised by the Ministry of Construction and the AFC International Exhibition Fair Corporation. The event was organised for the first time in HCM City in 1998, and was subsequently expanded to Ha Noi and Da Nang in 2005. Vietnamese consumers snub local plastic products for imported fare Locally-made household plastic products were losing market share to imported products due to their poor designs and R&D activities, reports the Ministry of Trade and Industry For example, jn just a short period, a high-class brand of Korean plastic appliances has flooded supermarkets. The brand is competing directly with Vietnamese products, reports Doanh Nhan magazine. Kim Anh, the manager of a restaurant in District 1, HCM City, said Vietnamese products sold at Co.opmart, Big C and Maximark outnumbered imported products, but they still were losing their market share to products from Thailand or Korea. A representative from Maximark said local products were 20 to 30 per cent cheaper than imports of similar quality but with well-known brand names, imported products still attracted local consumers. Tran Phuoc An, sales director with Duy Tan Plastics Company, said domestic manufacturers were likely to focus on the low-end of the market. They produced large volumes so that they could offer better prices.. An said that high-end plastic products from overseas relied mainly on marketing and advertising to push their products. He added that many consumers bought imported high-end products because they were convinced they were made from safe materials, which they usually were. Ho Duc Lam, chairman of Rang Dong Plastic JSC and a member of the Viet Nam Plastics Association, said domestic firms were reluctant to invest more in this segment because of low profit. He said the association estimated that tens of thousands of billions of dong had been spent on design, plastic moulds and on purchasing new machinery and equipment to make quality products to compete with the foreign imports. However, only a few businesses had enough funds for improvement. Trinh Chi Cuong, General Director of Dai Dong Tien Plastics Company, said that since 2008 his company had set up an R&D section to produce ecofriendly products every year. Duy Tan Plastics Company produces at least 10 new products every year. However, most of these new products are improvements on the old design and the firm rarely has a new line of innovative products to compete with the imports. According to Nguyen Hoang Ngan, General Director of Binh Minh Plastics JSC, the technological innovations made by the local plastic firms had been more than other industries. However, these firms spent mostly on renovated technology and equipment, while the R&D activities remained neglected. Expo highlights ‘smart security' The trend that users access data from their handheld devices with different operating systems has urged managers to build a system to manage and monitor their activities. The statement was made by Pham Van Quang, the country sales manager of Dell Software, at the Security World 2014 Conference and Exhibition on Wednesday. Quang noted that the number of mobile devices had been increasing rapidly, and trends of using cloud, big data, and mobility had brought huge potential of risk. According to Dell's survey, 85 per cent of businesses stated that their organisations would use cloud tools in a moderate to extensive manner during the next three years. By 2020, the volume of data stored will reach 35 zettabytes. Mobility source will shift from 62 per cent and 38 per cent for corporate and personal owned devices to 37 per cent and 63 per cent, respectively. As many as 79 per cent of the surveyed companies experienced some form of significant security incident within the past year that had a financial and reputational impact. To assist governmental agencies, enterprises, and organisations to flexibly access resources across devices, the US corporation introduced its Next Generation Security solution. Quang elaborated that the solution will secure remote access requirements, including granular access control, flexible connectivity, and manageability. It will detect what is running on the end point device, protect applications with granular access control based on user identity and device integrity, and connect users securely and easily to applications on any device. Attending the forum, Goh Su Gim, the security advisor of F-Secure Corporation, remarked that targeted attacks were carried out through attachments with filenames pdf.exe, jpg.exe, doc.exe, and spoofed email addresses. Showing images of real Angry Birds and its fake game, Gim emphasised on the higher risk for users when they download games from application stores. "I see a lot of Android malware and I think that currently, hackers are mainly targeting Android users," he claimed. Gim added that applications today use more permissions than ever, citing the example of The FlashLight App on Google Play, which asks the location of its users. Participating in the event, Cisco shared finer details about how transitioning to the cloud has driven organizations to challenge today's security assumptions and learn how they can utilise Cisco security solutions. "Smart security in the cloud means building confidence in risk management in which security needs should be adaptive and responsive, securing boundaries while demarcating physical and virtual resources, detecting problems, and enforcing policies," explained Phan Thanh Son, the partner director and chief technology officer for Cisco in Viet Nam. "Cyber criminals are professional and well-resourced, and they will invest time and money for compromising your network. Once they are there, they will try to remain hidden and infiltrate further into your systems. Unlike the hackers of the early internet days, they do not want to be seen," he noted. The two-day event, which is considered the biggest and trusted national forum in Viet Nam for information security, attracts senior technology professionals and consulting experts on information security and risk management from global enterprises such as Cisco, Huawei, Trend Micro, and Dell. SBV lowers interest rates on agri-loans The State Bank of Viet Nam (SBV) has reduced maximum interest rates for five priority sectors, including agriculture, export, supporting industry, small and medium-sized enterprises and high-tech firms. The new rates, set at eight per cent yearly for short-term loans, is one per cent lower than the previous rate and took effect on March 18. Industry officials have expressed their enthusiasm for the assistance the new rate will provide. "Enterprises began purchasing rice for storage on March 20. Therefore, the cut in lending rates helped increase rice prices, which had sharply dropped in past days," said Lam Anh Tuan, Director of Thinh Phat Food Co., Ltd. in Cuu Long (Mekong) Delta's Ben Tre Province, as quoted by Nong thon ngay nay newspaper. Pham Thi Huan, Director of Ba Huan Co., Ltd in HCM City, said she was pleased about the reduction in lending rates. "The cut in lending rates will encourage enterprises operating in the agriculture sectors, such as my company, to invest in modern machinery and apply new technologies along the production line," Huan said. The lending rates for supporting industries and exports in Viet Nam are still high, compared with rates in other countries, resulting in it being difficult for some domestic enterprises to compete, according to Director of CAFATEX Fishery JSC Nguyen Van Kich. "Therefore, we are still considering further cuts," Kich said. Lowering interest rates is SBV's attempt to encourage enterprises to take out more loans, and seeks to aid the economy, according to Nguyen Tri Hieu, a banking expert. However, several enterprises and farmers raised concerns over the procedures required to receive loans. The Government should closely supervise and monitor credit institutions to assure the process to receive loans remains uncomplicated, according to a director of a company trading in rice in Can Tho City. "The SBV has required that farmers and fishermen seeking loans must submit too many legal documents and procedures, causing farmers and fishermen to find it difficult to receive loans," Deputy Chairman of People's Committee of Hoa Hiep Nam Commune in central Phu Yen Province, Ngo Tan, said. Viet Nam targets US$11b from aquatic exports Viet Nam hopes to earn US$11 billion from aquatic exports by 2020, including US$5.5 billion from the shipment of farmed products. The target was revealed by the Directorate of Fisheries under the Ministry of Agriculture and Rural Development at a press briefing in Ha Noi on Wednesday. According to the General Statistics Office, in 2013, the aquatic sector earned revenue of $6.7 billion from exports, a year-on-year increase of 10.1 per cent. The output of aquatic products has risen from nearly 1 million tonnes in 1990 to almost 6 million tonnes at present, including 2.7 million tonnes of caught products and 3 million tonnes of farmed products. Poultry prices up, but shortages loom The price of poultry in southern Viet Nam continues to rise following a decline in outbreaks of H5N1 avian influenza nationwide. In the Cuu Long (Mekong) Delta province of Long An, the price of eggs sold at farms increased by VND1,100-1,300 each against last week. The prices of chicken meat from Tam Hoang and free-range chickens sold at farms have increased to VND30,000-31,000 (US$1.5) a kilogramme, up VND4,000-5,000 against early this month. However, the prices were said to be lower than production costs. Traders are now buying more poultry products. In HCM City, the sale of poultry eggs increased in the last few days. According to the Ba Huan Company Ltd, one of the city's largest egg dealers, supplies have risen by 20 per cent in less than a month. Collective kitchens at industrial parks and schools have also resumed buying eggs. To meet the demand for safe products, HCM City has asked the neighbouring provinces of Dong Nai, Binh Duong, Binh Phuoc, Long An, Ba Ria-Vung Tau and Tay Ninh to supply safe poultry products. Only certified slaughterhouses are being allowed to supply poultry products to the city, according to Phan Xuan Thao, head of the city's sub-department of Animal Health. Nguyen Phuoc Trung, director of the city's Department of Agriculture and Rural Development, said the department was working with agencies to foster consumer confidence. This included using labels showing where chickens were bred and slaughtered. Despite the revival of the industry, the city's Department of Industry and Trade said there would be a shortage of eggs and chicken meat from June.This was because the quantity of poultry had fallen significantly because of the impact of disease. To help ensure supplies of poultry products, soft loans to buy and store poultry are being provided for firms participating in the city's price stabilisation programme. Each day, the city buys more than 42,700 chickens, 12,100 ducks and 1,200 quail from neighbouring provinces. HCM City deposits grow, credit heads south HCM City's total capital mobilization reached VND1.16 trillion (US$55.18 million) this month, constituting a 1.9 per cent month-on-month or 15.1 per cent year-on-year (yoy) increase, noted the municipal Statistic Office. This information was cited by newswire Tri Thuc Tre. However, the credit growth of the city has been negative at 0.7 per cent. The deposit records came as a surprise to observers since the city's banks had cut deposit interest rates by the end of February, which was supposed to discourage deposits. Commercial banks accounted for 56.8 per cent of the total city's deposits, up 18.4 per cent yoy, of which, the deposits in Vietnamese dong accounted for 84.3 per cent, while the remaining 15.7 per cent deposits were in foreign currencies. The State Bank of Viet Nam noted that the increase proved that savings and deposits were favourable investment channels, regardless of the considerably low interest rates. According to several banks, although the property and stock markets were warming up, they were not likely suited for amateur investors. In the meanwhile, the total outstanding loans in the city fell 0.7 per cent against the end of last year at VND946.3 billion (US$44.8 million). Loans in the dong accounted for 83.6 per cent, while those in foreign currencies were 16.4 per cent. Short-term loans dominated the basket schedule with 54 per cent. As of March 13, Viet Nam's credit growth was negative, 1.05 per cent against the end of 2013, and the total money supply increased 2.96 per cent compared to the end of last year. Deposits grew by 1.92 per cent, of which dong deposits were up 2.23 per cent, but dollar deposits were down 0.09 per cent. The central bank, which insists on targeting a credit growth of 12 to 14 per cent for the year 2014, stated that the negative credit growth was periodically understandable. It is believed that the credit growth will hike in the coming months, especially by the end of the year. Last Monday, SBV, in a bid to spur economic growth and salvage dying businesses, cut policy interest rates cautiously by 0.5 percentage point. Accordingly, the current refinancing rate is 6.5 per cent, the discount rate is 4.5 per cent, and the overnight rate is 7.5 per cent. The interest rate cap for commercial dong deposits of less than six-month term was slashed to 6 per cent from 7 per cent. No cap has been set for longer-term deposits. The cap for the USD deposit interest rate was also cut by approximately 0.25 percentage point across the board. The cap for the privileged lending interest rate has been set at 8 per cent for short-term loans in Vietnamese dong, down by 1 per cent. Dong Nai attracts over 439 million USD in 2014 FDI The southern province of Dong Nai has received 439.8 million USD in foreign direct investment (FDI) so far this year, Bo Ngoc Thu, Director of the provincial Department of Planning and Investment has revealed. Of the total, 119.6 million USD was poured into 15 new projects, while 320.2 million USD was injected to 18 ongoing developments, she said. As of March 15, Dong Nai has hosted 1,407 FDI projects with a total investment of 24.814 billion USD, including 1,089 valid projects totalling 20.444 billion USD, the official added. Thu said in order to achieve the target of attracting 900 million USD of FDI this year, the province has offered a number of support policies to investors, including preferential corporate income tax for new and expanded projects. The projects will enjoy a preferential rate of 22 percent after two first years of tax exemption and a 50 percent cut in four following years, she specified. Enterprises operating in industrial parks will also get a general tax rate cut of 3 percent, she said, adding that the province has also set up an investment office to support enterprises. In a recent meeting between the local government and foreign-invested enterprises, FDI firms praised the investment environment in Dong Nai, highlighting the upgraded infrastructure system and the positive support of the government. They also proposed that local authorities design more training programmes to better the quality of human resources and further simplify procedures for issuing working permits to foreigners.- Two-digit export growth expected this year: report A HSBC report released yesterday anticipates that Viet Nam's merchandise exports will grow at around 12 per cent annually between 2014-2016, although last year's figure was 15.4 per cent in nominal US dollar terms. The HSBC Global Connections Report completed last December covered 23 markets with a sample of 5,550 exporters, importers and traders from small and mid-market enterprises on trade volume, buyer and supplier risks, and the need for trade finance, among others. It gauges sentiment and expectations on trade activity and business growth over the next six months. Of the Vietnamese businesses surveyed, 70 per cent see Asia as the most promising region for trade "over the next six months" (2014's H1). Europe was cited by 14 per cent of respondents, reflecting the return to growth in the Eurozone; and 10 per cent selected North America. Almost 90 per cent of businesses surveyed trade elsewhere within Asia. Around 45 per cent trade with Europe and nearly 20 per cent with the Americas. Viet Nam's trading reach is becoming more international, with 10 per cent of businesses reporting trade with the Middle East and/or Latin America compared with less than 5 per cent when the survey was first conducted in 2009. The currency of choice for trade is predominantly the US dollar, identified by almost 80 per cent of respondents. But currency volatility is a concern for almost 40 per cent of traders, and half of respondents reported that trade was negatively affected by weak product demand. The report says the economic growth rate is set to pick up in the medium term, helped by a strong improvement in foreign direct investment. Lower inflation and credit constraints will support domestic activity. Rising incomes across emerging markets will help to drive strong trade flows from Viet Nam to these markets. China will replace the US as Viet Nam's largest export destination by 2030, while Malaysia will move from fifth place in 2012 to third place by 2030. The ASEAN Free Trade Area (ACFTA) will pay dividends, helping exports to Indonesia and Malaysia to grow around 15 per cent a year until 2030. Clothing and apparel will still be Viet Nam's biggest export sector in 2030, reflecting sustained wage competitiveness, but exports of ICT equipment are forecast to increase by 10 per cent a year until 2030, by which time it will have become the second largest export sector. China and Korea will still be Viet Nam's largest import partners in 2030. Imports from India are forecast to rise rapidly, growing almost 20 per cent a year, making India its third largest import partner by 2030. Industrial machinery is expected to account for more than 25 per cent of the growth in goods imports, as Viet Nam develops its infrastructure needs. In 2013 almost 20 per cent of Viet Nam's exports were high-tech goods, up from around 5 per cent ten years before. Viet Nam imports slightly more high-tech goods than it exports; some are final consumer products, but other high-tech imports are intermediate inputs into the ICT production process. Around a third of Viet Nam's population now lives in cities. The rapid pace of urbanisation should provide an increasingly skilled workforce to help the country develop its foothold in global ICT. However, this will depend on increasing spending on R&D. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR