BUSINESS IN BRIEF 8/6 Rice exports to China up in volume, value Vietnamese rice exports to China increased 2.39% in volume and 4.94% in value during the first four months of the year, according to statistics from the Ministry of Agriculture and Rural Development. Vietnam grossed US$392.46 million in revenues from shipping 913,957 tonnes to China, which accounted for 41.75% of the country’s total rice export volume in the four-month period. The price of rice also rose 4.4%, hovering around US$456.19 per tonne on average. Vietnam’s rice exports to Malaysia dipped 62.24% in volume and 61.8% in value, Ivory Coast down 52.3% and 46.55%, and Singapore down 31.71% and 30.7%. The Vietnam Food Association (VFA) forecasts Vietnam's rice export markets will be shrinking this year due to tough competition from Thai rice. Vietnam, Russia accelerate interbank payments Russia is making significant progress in bringing its commercial banking settlements up to international standards, a Vietnam-Russia Working Group for Inter-Bank Cooperation in Moscow announced on June 4. A group representative announced that Interbank payments between Vietnam and Russia hit more than US$4 billion in 2013 and more than US$1 billion in the first quarter of this year. Studies show that accelerating the settlements of payments has a positive impact on gross domestic product of a country, the representative said. At the meeting, Deputy Governor of State Bank of Vietnam Le Minh Hung and Deputy Governor of the Central Bank of Russia Skobelkin Dmitry exchanged views on the operation of the two countries’ banking system and the implementation of reached agreements. The Russian side was committed to encouraging its commercial banks to use available tools for boosting bilateral payment, especially national currency and retail payment methods. The two central banks will increase information exchange on related policies, particularly the development of the Russian payment system and experience in using local currency in payment with China. They pledged to cooperate in developing infrastructure for credit payment links, building Vietnam-Russia information gateway, using national currency in payment and encouraging commercial banks to accelerate payments through accounts, credit and money transfer. The two sides signed the minutes of the meeting and agreed to hold the following session in Vietnam in 2015. Vietnam endorses investment protection agreement with Palestine The Government has approved an agreement on reciprocal investment promotion and protection between Vietnam and Palestine. Under a resolution dated June 5, the government asked the Ministry of Foreign Affairs to complete external procedures and inform relevant agencies of the effective date of the agreement. The agreement was signed in Hanoi in November 2013 by Deputy Minister of Planning and Investment Dang Huy Dong and Palestinian ambassador to Vietnam Saadi Salama. The document helps create sound legal foundations for the two business communities to expand investment, stimulate business innovations, generate jobs, and bring quality products for their consumers. The two business circles will have the chance to share investment experience in the areas of their strength. Vietnam, Iran need to enhance trade ties Vietnam and Iran as well as the business communities from the two nations need to accelerate bilateral cooperation in the future. The participants of a June 5 conference in Hanoi also agreed that the bilateral relations, especially in trade and investment, are yet to match the two nations' potential and expectations, despite encouraging results over the past years. Habibollah Pour Motahar, deputy head of mission and counsellor at the Iranian Embassy, said a huge part of the two-way trade is currently done through third countries, leading to an increase in prices of the goods. He emphasised the importance of reducing intermediate trade costs and launching direct flights and shipping lines to facilitate trade and decrease transport costs. In terms of investment, he suggested that businesses should establish joint-ventures, particularly in energy, petroleum, petrochemical, agriculture, IT and construction. The medical and pharmaceutical sector, seafood, apparel, education and tourism are also promising areas for bilateral cooperation, he said. Le Thai Hoa, deputy head of Africa, West Asia and South Asia Market Department under the Ministry of Industry and Trade, called on the two governments to ink agreements on taxes, tourism and customs soon, as a move to facilitate bilateral cooperation between businesses. Fostering the exchange of trade and investment policies and import-export regulations as well as supporting firms in seeking partners should be included, Hoa said. He added that businesses should take the initiative of joining trade and investment promotion programmes, business conferences, trade fairs and exhibitions in both countries to seek cooperation opportunities while diversifying their export products. Deputy Head of the Vietnam Chamber of Commerce and Industry (VCCI)'s International Relations Department Nguyen Ngoc Thang said VCCI will organise a week-long trip for domestic companies to seek business opportunities in Iran in mid-August. Thang described the upcoming event as a good opportunity for the firms to update themselves on market demand to boost their exports and establish new trade and investment partnerships. Hanoi named in Asia-Pacific top crowded retail markets Hanoi has been listed in the top three cities with the most crowded retail market in the Asia-Pacific region in 2014, after China's Beijing and Shanghai. A new study on Crowded Level of retail markets in the Asia-Pacific region by commercial real estate firm CB Richard Ellis, showed that China's Beijing and Shanghai took first and second places in the rank respectively. Vietnam's capital – Hanoi – was also ranked 13th in the list of 19 most crowded retail markets in the world. The French capital –Paris – tops the list, followed by Tokyo and Hong Kong. The study also revealed that Hanoi, HCM City and Danang City were among 10 cities where retailers planned to open the highest number of shops in 2014. Hanoi accounted for 36% of those, which was equal to Berlin and Shanghai. This is the third consecutive year that Hanoi has been listed in the top 10 cities which attracted new brands. The firm said retailers overall have been focusing on more mature markets that already have a strong retail footprint. Only one of 19 global cities – Hanoi – that CBRE ranked was not a mature retail market. There were 18 mature retail cities on the list in 2013 as compared to 14 in 2012. The firm defined mature retail cities as those with 25% or more of the 334 retailers that CBRE tracks. Japanese firm introduces waste treatment technology to Ha Nam Key officials of the northern province of Ha Nam and executives of the Japan-based Kawasaki Heavy Industries on June 5 gathered at a meeting to promote a waste treatment project. Kenji Takayama, a Kawasaki representative, requested Ha Nam province to assist his company in building a feasibility study for the project, following the successful development of a pilot waste treatment technology project by the Japanese firm for the Vicem But Son Cement JSC. The outcome of the feasibility study will be reported back to the provincial People’s Committee for a final decision. He also promised that the technology causes no harm to the local environment. Two of the project’s waste treatment lines are capable of handling a combined 600 tonnes of waste per day, while Ha Nam currently generates only around 100 tonnes. Thus, Takayama advised Ha Nam to treat more waste received from other surrounding localities once the project is put into operation. If the project proves feasible, the Department of New Energy and the Industrial Technology Development Organisation (NEDO) of Japan will fund 50% of the total cost for the US$15 million project, the guest revealed. The Vice Chairman of the provincial People’s Committee, Nguyen Xuan Dong, who joined fact-finding tours to inspect the same waste treatment technology applied in Japan and China, said Ha Nam backs the feasibility study, and put his faith in the benefits the project would bring about. Hong Kong group set to further investment in Binh Duong Hong Kong’s Esquel Group - one of the world’s leading producers of premium cotton shirts – plans to expand investment and production in the southern province of Binh Duong in the coming time. Esquel CEO and chairwoman Marjorie Yang revealed the information during a meeting with Chairman of the provincial People’s Committee Le Thanh Cung on June 5, during which she also expressed her hope that the local authorities will work harder to ensure the legitimate interests for investors operating in the locality. According to Yang, Esquel opened three plants in Vietnam’s Binh Duong, Dong Nai, and Hoa Binh provinces, contributing to the localities’ socio-economic development, as well as creating a large number of jobs for local people. For his part, Cung pledged to create favourable conditions for Esquel to foster its production and investment, vowing to ensure public order and safety for the businesses. In March this year, Esquel inaugurated its third garment factory in Hoa Binh province, which is expected to produce about 7 million shirts for export a year. Apart from Vietnam, Esquel also has many plants in other Asian nations and Africa. With a total of about 60,000 employees, the group manufactures garment products for the world famous brands such as Ralph Lauren Tommy Hilfiger, Nike, Hugo Boss, Brooks Brothers and Lacoste. The group now earns more than US$200 million each year from exports produced at its factories in Vietnam and generates jobs for 10,000 Vietnamese workers. Real estate investors eye Vietnam market Neil MacGregor, Managing Director of Savills Vietnam - the leading real estate developer in Vietnam, described the country as an important destination in Southeast Asia for real estate investors from Japan, Singapore, and the Republic of Korea. In his speech at the ongoing Vietnam-Singapore Business Forum 2014 (VSBF) in HCM City, Neil MacGregor said Vietnam’s real estate market has bottomed out and is bouncing back thanks to the government’s sound performance. HCM City’s office market is achieving balance between supply and demand despite a modest increase in leasing prices, he said, adding that Savills expects bright prospects for the second half of 2014 and early next year. While the Vietnamese real estate market is recovering, others in Asia are overheating and likely to fall in the years to come. Therefore, Vietnam is luring those investors who want to take advantage of the market recovery, the Savills executive analysed. According to Savills, the investment trend is growing in such commercial areas as offices, hotels, and residential buildings to meet a rising demand for accommodation from businesspeople and tourists, especially in big cities, resorts and beaches. PM pledges optimum conditions for foreign investors The Government of Vietnam always does its utmost to create favourable conditions and ensure safety for investors to do long-term business in the country long-term, affirmed Prime Minister Nguyen Tan Dung. Addressing the mid-term Vietnam Business Forum (VBF) in Hanoi on June 5, Dung recalled the recent disturbances by a number of extremists, in the wake of China’s illegal placement of its Haiyang Shiyou - 981 oil rig in Vietnam’s exclusive economic zone, affecting FDI operations. He said the Vietnamese government has taken the matter very seriously and have implemented tough measures against the unrest, to help affected businesses recover from the consequences and resume normal operation, as well as ensuring safety and security for foreigners in Vietnam. The Government of Vietnam will continue to be proactive in preventing riots and public disorder and intensify practical measures for stable operation of foreign businesses in the country, he assured representatives of FDI businesses attending the gathering. VBF Co-Chair Virginia Foote spoke highly of the Vietnamese government’s timely response to the incident and expressed her belief that Vietnam will work out effective solutions to overcome the consequences in a transparent, professional and reasonable manner. She suggested establishing a post-incident compensation agency with the participation of international agencies and in accordance with global norms, and vowed to support its operation. On behalf of investors, Virginia Foote voiced her support for Vietnam’s economic growth and its increasing role in the global supply chain. Kim Jung In, Chairman of the Korean Business Association in Vietnam, offered his deep sympathy to the Vietnamese government and the foreign firms facing difficulties as a consequence of the recent incident. He called on FDI businesses to join hands, together with the government, to overcome this difficult time. Kim proposed the Vietnamese government officially announce specific strategies to stabilise the investment climate, such as providing prompt compensation, offering low interest rates and exempting tax for sufferers of the recent civil unrest. Other delegates appreciated Vietnam’s implementation of its WTO commitments, saying that the country is conducting negotiations on free trade agreements (FTAs) with global powers and proactively taking part in Trans-Pacific Partnership (TPP) agreement negotiations. Joining these deals will lay solid foundations for Vietnam to integrate deeply into the global economy, they said. They also emphasised that to seize these opportunities, Vietnam should sustain its macroeconomic stability, boost economic restructuring, shift the growth model, and build a healthy businesses environment for foreign investors. Business, bank restructuring efforts receive a boost The Japan International Cooperation Agency (JICA) held a seminar in Hanoi on June 5, launching two projects to accelerate the restructuring of State-owned enterprises (SOEs) and credit organisations. The Ministry of Finance (MoF) undertakes a project to improve the financial management capacity building of SOEs, while the State Bank of Vietnam carried out a project to support the restructuring of the banking system. The projects will be rolled out over the next three years till 2017. Addressing the seminar, MoF Deputy Minister Tran Van Hieu affirmed that the Vietnamese Government is implementing its economic restructuring programme targeting three key pillars: public investments, SOEs, primarily economic groups and State corporations, and credit organisations. The three key areas will be carried out in a synchronous manner along with an appropriate fiscal and monetary policy, in order to increase the operational efficiency and competitiveness of SOEs and banks, he said. During the seminar, Japanese experts shared experiences in dealing with non-performing loans and restructuring businesses in Japan. They also proposed some solutions for implementing these two projects effectively.   Hanoi hosts seminar on the transforming retail market Hanoi hosted a seminar on June 4 discussing the unique aspects of increased competition with international rivals in the retail market brought about by Vietnam’s open market commitments. Retailers selling directly to consumers face different challenges than other industries and need an increased level of support from governmental authorities in making the transition to open market competition, speakers at the seminar said. Since opening its markets, Vietnam retailers have cooperated with foreign retailers, benefiting from their experiences and have experienced an overall growth rate of nearly 6%. However, in the future after Vietnam signs some important trade agreements, such as trans-Pacific Partnership Agreement (TPP) and Free Trade Agreement with EU, Vietnamese retailers will face increased competition in the marketplace. They need to adequately prepare themselves to meet the upcoming challenges and the onslaught of competition that is most certain to emerge, speakers at the conference said. Hanoi Supermarkets Association President Vu Vinh Phu, said production businesses’ low capital, poor professional skills and weak infrastructure have hampered effective competitiveness. Farmers often find it difficult to sell products to supermarkets because they aren’t adequately equipped with the proper underlying documents such as receipts, invoices that are a baseline requirement of competition in the emerging markets. The assistance of the government is absolutely essential for producers and retailers to jointly invest and restructure production, Phu said. The Ministry of Industry and Trade’s Market Department Deputy Head Tran Nguyen Nam, said the ministry will continue to organise more exchanges, seminars and talks to create a closer link between producers with distributors to develop the domestic retail market stably capable of competing with foreign rivals. Vietnam has the capacity to compete with foreign brand names when Vietnam fully opens the market in 2015, but much preparedness remains to be done. Domestic retailers need to undertake a host of measures including raising market shares and capital, diversifying trading methods and models, merging shops and restructuring retail networks to ensure competitiveness. New trade agreements: challenges and opportunities for Vietnam The mid-term Vietnam Business Forum (MVBF) themed “Agenda to Action – Preparing for New Trade Agreements” opens in Hanoi on June 5. The annual forum is a policy dialogue between the Vietnamese Government and domestic and foreign business communities to examine ways of building a favourable business environment, attract investment and spur sustainable economic development in Vietnam. Government and ministry leaders, representatives from diplomatic agencies and international organisations, donors and domestic and foreign businesspeople will hold discussions on the impact, opportunities and challenges after Vietnam signs a number of important trade agreements- Trans-Pacific Partnership (TPP) Agreement and Free Trade Agreement with the EU. Other important issues tabled for discussion cover banking, capital market, investment, trade, customs, tax, labour, employment, infrastructure, agriculture and tourism. Ministry leaders will answer all businesses’ questions about the matters of their concern. On sidelines of MVBF, Prime Minister Nguyen Tan Dung met the Council of the Taiwanese Chambers of Commerce to Vietnam delegation led by its Chairwoman Liu Mei Teh. Dung emphasised that Taiwanese businesses are operating successfully in Vietnam, greatly benefitting both sides. The Vietnamese Government will continue to improve the business environment to facilitate foreign investors’ operations including Taiwanese ones in the country. PM Dung said that China’s illegal deployment of its oil rig Haiyang Shiyou 981 in Vietnam’s exclusive Economic Zone (EZZ) and continental shelf is an illegal act, which has led to spontaneous demonstrations in some provinces. Some extremists took the occasion to violate law and break and loot property and estates of some foreign direct investment (FDI) businesses, including Taiwan. After their occurrence, Vietnam timely directed forces to deal with the aftermath and set up working groups to support each business in order to quickly get them back in operation. Liu Mei Teh spoke highly of PM Dung’s efforts to direct relevant ministries and localities to comprehensively implement measures to stabilise the situation, ensure security and safety for Taiwanese businesses’ operations. She also urged the Government to further support affected businesses, including tax policy. She affirmed that Taiwan will expand investment and continue to carry out projects in Vietnam. She expressed her hope that with the Government’s assistance, FDI businesses, including Taiwanese ones, will grow steadily in the future. Exports to Australia show mixed results for Q1 Official data for the first four months of 2014 were mixed, showing overall Vietnamese exports to Australia grew modestly by 11.5% over last year’s same period, tallying in at US$1.068 billion. Significant gains in exports were made in garment and textile exports, which expanded by 45.3% followed.by seafood (up 42.5%), cashew nuts (up 34.2%) and footwear (up 24.7%). Steel and steel products showed a promising increase in the pace of growth rising 300% and 130%, respectively, though their overall value remained inconsequential. Agricultural exports were lacklustre.  Coffee exports dipped 30% from the same period last year, registering US$8.5 million. Pepper exports also declined by 5.8%, coming in at US$3.2 million. Rice exports remained flat at roughly 2.000 tonnes during the period.Leading market analysts are pessimistic on the rice market reporting little prospect for future increases in exports due to stiff completion from Thailand. Meanwhile, Vietnam imports during the period from Australia increased US$658.3 million year-on-year consisting principally of wheat, metals, iron and steel scrap and coal.   Nielsen: Vietnamese consumers favor sharing economy Vietnamese consumers favor a sharing economy model as a majority of respondents say they like using shared products or services, according to a survey recently conducted by Nielsen. In a share economy, also known as collaborative consumption and peer-to-peer rental arrangements, consumers rent or share items they own, such as furniture, sports equipment, cars and homes, or services they have, for a profit. Revenue gained by consumers turning personal assets into income via a share economy in Southeast Asia is expected to surpass US$3.5 billion this year, with growth exceeding 25%. The survey indicates 76% of respondents in Vietnam say they like using shared products or services. The ratio in the Philippines is 85%, Thailand 84%, Malaysia 74%, and Singapore 67% compared to 66% of consumers globally. Electronic devices are among the most common items consumers in Southeast Asia are willing to share or rent, according to the survey. More than two in five consumers in Vietnam (42%) would rent their electronic devices for a fee, along with 37% of Indonesians, 33% of Filipinos, 31% of Thais, 26% of Singaporeans and 24% of Malaysians. Other items consumers in the region are willing to rent include lessons and services, cars and motorbikes. Nielsen said that Southeast Asia was among the most-receptive to the share economy proposition, with four of the top five markets prepared to share or rent their personal assets for financial gain hailing from the Southeast Asia. Just 12% of consumers in Thailand are unwilling to share or rent their personal assets, 13% in the Philippines, 14% in Indonesia, 18% in Vietnam and 28% in Malaysia, it said. Singaporean consumers are the least open to the notion among Southeast Asian consumers (32% unwilling to participate), which was on par with the globally average. Vishal Bali, Nielsen’s Managing Director of Consumer Insights in Southeast Asia, North Asia and Pacific, said in a statement released on June 3 that while income levels across the region were increasing overall, many consumers were constantly seeking out opportunities to supplement their income through alternative means, and sharing or renting items they possess for a price achieves just that. “Underpinning the emergence of share communities is the rapid increase in internet penetration across the region. Connectivity is a key factor for these communities and as such, we expect growth levels to continue in the coming years,” Bali said. Firms urged to diversify material sources Experts have emphasized the urgent need for local firms to diversify material suppliers and reduce dependence on a single market in the context of tensions between Vietnam and China in the East Sea after the latter illegally planted a giant oil rig in Vietnamese waters early last month. At a seminar on solutions to alternative material sources in ASEAN countries in HCMC last week, VietnamPlus quoted experts and business leaders as suggesting various ways for local enterprises to diversify their material sources from foreign markets. Pham Ngoc Hung, vice chairman of the HCMC Business Association, said to cut the dependence on imports from a market, enterprises should manage to develop their own material sources right on the home market by investing in machines and technology to produce high-quality materials for their production. It is important to form a production system with different stages and developing supporting industries is one of the solutions to the problem, Hung added. Hang Vay Chi, chairman of Viet Huong 1 and Viet Huong 2 industrial parks, said the Government is playing an important role in localizing material sources. He viewed Vietnam’s forthcoming accession to the Trans-Pacific Partnership (TPP) agreement as a great encouragement for Vietnamese enterprises to develop domestic material sources. The TPP would require a localization rate of at least 55% for products and enterprises will be allowed to import a maximum of 45% of materials from non-member countries of the multilateral trade agreement. The Government should have a policy to help local firms realize this when the TPP pact is signed. Chi called on the Government to continue credit support for the enterprises which invest heavily in modern equipment and production technology. On top of that, the country should have a specific strategy to develop supporting industries. As developing domestic material sources is a long-term strategy, enterprises are striving to find material sources from Japan, South Korea, Malaysia, Indonesia and Cambodia. Engineering firms have shown keen interest in machine imports from Japan and Taiwan. Chi said prices of machines made in Japan were four times higher than those from China but Japan products would support enterprises’ sustainable development strategies as they could be used three times longer than the Chinese ones. More enterprises have increased imports from other ASEAN countries to enjoy zero tariffs for many products compared to 5% when importing from China. A number of local companies have developed material sources in Laos and Cambodia for importing into Vietnam. Ho Trang, general director of raincoat firm Lucky, noted that enterprises would face difficulties when they shifted to their markets for material imports but the risks in material imports from China would force them to make a change. However, enterprises were urged to map out a road map for changing their material sources. The General Department of Customs put imports from China at US$12.45 billion in the January-April period, accounting for 28% of Vietnam’s total imports. Of the US$12.45 billion, machines, equipment and components took up US$2.3 billion while imports of apparel and footwear materials were around US$2 billion. Leaders advised to create strong corporate culture FranklinCovey Worldwide’s vice president of Global Leadership Susan Dathe-Douglass advised business leaders to develop a good and strong corporate culture and continuously improve themselves in order to boost the competitiveness of their firms. Dathe-Douglass told an international seminar in HCMC on June 3 that corporate culture was the most important core value which creates the strength of a company or organization. Reality has shown that many big corporations have achieved success owing to their culture rather than strategy. Culture is stronger than strategy, Dathe-Douglass stressed at the “Management by Habits” seminar, which was organized by FranklinCovey Worldwide and PACE Institute of Management, a school for business leaders and managers in Vietnam. She defined corporate culture as collective behaviors of the whole staff of a company, nature of relationships, a system of principles and values. The culture of success is intentionally created by the leader and a thinking system which is shared and becomes the most common language in a company. Leaders play a key role in serving as a catalyst for building a strong culture of any organization.  Leaders have to set good examples for employees to follow and partners to understand the value of their companies, Dathe-Douglass said. At the event, PACE founder Gian Tu Trung introduced Management by Habits (MBH), a method which has been applied successfully by many firms in the world, to participants. Trung said this was a method of personnel management. FranklinCovey Worldwide has become a global partner of PACE since June 2014 and PACE will exclusively develop FranklinCovey’s training programs for leaders in Vietnam. FranklinCovey has reached out to 163 countries and is training leaders for major corporations. It also holds courses for government agencies and educational institutions around the world. Vietnamese hotels receive TripAdvisor award of excellence TripAdvisor – the world's largest travel site – has presented its prestigious Certificate of Excellence Award 2014 to three hotels in Vietnam. Among TripAdvisor’s 25 best hotels worldwide were Holiday Diamond (rank 18th) in central Hue city, Serene Hotel (rank 12th) and Essence Hotel (rank 21st), both in Hanoi. Millions of travellers throughout the world voted for these three Vietnamese hotels and it is an excellent opportunity for Vietnam’s tourism sector to promote its image abroad. To achieve the award, hotels and tourism service providers need to maintain an overall rating of four or higher, out of a possible five, as reviewed by travellers on TripAdvisor, as well as the volume of reviews received within the last 12 months. Vietnam re-negotiates rice export supply for Philippines Vietnam has sent representatives to the Philippines to re-negotiate the criteria for a government-to-government contract to supply 800,000 tons of rice to that country after some firms in the Mekong Delta bemoaned strict delivery conditions and loss concerns. A member of the Vietnam Food Association (VFA) told the Daily that VFA and the Ministry of Industry and Trade had told Vinafood 1 and Vinafood 2 to discuss with the National Food Authority (NFA) of the Philippines about some delivery conditions. However, both sides have to yet to reach final agreement. Lam Anh Tuan, director of Thinh Phat Co. Ltd., said it was very difficult to revise conditions for the contract. If NFA agreed to change some criteria for rice delivery, it would demand lower export prices. Earlier, a number of rice export companies in the Mekong Delta sought approval to withdraw from rice supply for the Philippines due to low export prices in the contract and strict quality requirements. For instance, exporters will be fined US$3-30 a ton if they fail to meet the broken ratio requirements. At present, prices of paddy and unprocessed rice in the Mekong Delta are in decline due to rising supply of the 2014 summer-autumn crop in the region. According to local rice traders, prices of the IR 50404 fresh paddy are VND4,100-4,200 per kilo, down by VND100-150 a kilo against last week. Meanwhile, exporters buy IR50404 unprocessed rice at VND6,600 a kilo, down VND50-100 a kilo. Concerning the Government’s rice export contract, some enterprises said negotiators had made some mistakes. In addition, as NFA only imports the rice which has been harvested for a maximum of four months before delivery, Thailand could not meet this requirement. As Thailand stopped rice purchases in February, the country mainly has rice stored during 2012 and 2013. Given the conditions, Vietnam obviously was the only candidate for the rice contract, Tuan said. Vietnam’s prices averaged at below US$440 per ton while NFA earlier announced to spend around US$470 on a ton of rice for this contract. In the year to May 22, VFA member companies exported nearly US$900 million worth of more than two million tons of rice. Perception of State role and market surveyed The Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the World Bank (WB) will conduct a survey on perception of the State’s role and the market in the coming time. The survey will be carried out with 4,000 people who are representatives of government agencies, the National Assembly, the Party, civil servants, enterprises of all economic sectors, media organizations and diplomatic corps in Hanoi, HCMC and Nghe An Province. Dau Anh Tuan from VCCI’s Legal Department said the survey would focus on citizens’ perception of the country’s path to a market economy, prices and access to information, State-owned enterprises and the current economic situation. The survey will also include assessments of the State’s intervention in the market, such as the Ministry of Finance’s milk price caps and the Ministry of Construction’s proposal for a temporary halt to licensing new real estate projects. The survey will also look into freedom of business, the role of the State and market in such basic services as education and healthcare services. Tran Thi Lan Huong from the WB said the survey was aimed to collect data for the Vietnam Development Report 2014 announced by the WB on behalf of international donors. “We want to measure perception of people on the economic renovation progress and transitional steps into the market economy,” she said at a seminar organized by the WB and VCCI last week. Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM), said the country needed drastic economic restructuring to achieve future sustainable development but this was underestimated by many State officials. Economist Le Dang Doanh is concerned that the State’s role has been expanded to all sectors of the economy and the society. For instance, over 72% of the State budget is for routine expenses to maintain operations of the Government agencies and there is no much money left for investments in development. Expert Pham Chi Lan shared Doanh’s view, saying the State economic sector had taken almost all financial and land resources of the country and the rest for the private sector was meager. VCCI’s similar survey in 2011 showed that 68% of respondents said the State should intervene in the market but up to 87% of respondents agreed that the market economy was more preeminent than any other models. Vietnam is developing a market-oriented economy and less than 10 countries in the world have recognized Vietnam as a market economy. Dai-ichi Life Vietnam inaugurates fund management company Dai-ichi Life Vietnam will on June 3 inaugurate its wholly-owned fund management subsidiary company as part of its strategy to expand long-term business in Vietnam. Dai-ichi Life Vietnam Fund Management Company was granted a license of establishment by Vu Bang, Chairman of the State Securities Commission, on the occasion of his official visit to Japan in early March. The enterprise will come into official operation from July 1, 2014, delivering financial investment solutions to meet increasing needs of local customers. Takashi Fujii, Chairman of the Member’s Council of Dai-ichi Life Vietnam Insurance Company and Dai-ichi Life Vietnam Fund Management Company, said that establishment of the enterprise has affirmed their aspiration for growth and long-term orientation in the Vietnamese market. The new development also shows Dai-ichi Life’s confidence in the continued development of the Vietnamese economy. Morinobu Nagahama, managing executive officer, of Dai-ichi Life Japan, said in a statement that besides the management of Dai-ichi Life Vietnam’s investment portfolio, the enterprise will establish and manage the members’ fund with the contribution between Dai-ichi Life Vietnam and Dai-ichi Life Japan. “Together with the growth in both life and fund management sectors, we wish to contribute more of our part to the continued economic and social development of Vietnam in the future,” Nagahama said. Established in Vietnam in 2007, Dai-ichi Life Vietnam has provided financial products and services of Japanese quality to nearly 950,000 Vietnamese customers through the network of 575 staff and 20,000 financial consultants. Up to date, the total assets under the company’s management have exceeded VND4 trillion. Preferential loans for fishermen ready The State Bank of Vietnam is joining forces with commercial banks to prepare a budget of VND10 trillion (some US$473 million) to make low-interest loans for fishermen to repair ships and build new vessels as ordered by the Government. Such financial support for fishermen to build new offshore fishing vessels will also help protect national sovereignty in the East Sea, central bank governor Nguyen Van Binh told reporters on the sidelines of the National Assembly session on June 2. Binh said the annual interest rate for the loans would be around 5%, with two percentage points of it covered by the Government. Therefore, fishermen will pay an annual interest rate of only 3%. The Government will cover 70% of the insurance cost of the new fishing vessels for fishermen. In addition, it is hoped that fishermen will get an additional funding from local authorities based on their budget. The loan terms will range between 10 to 15 years. Binh said the central bank was also pondering ways to help fishermen gain access to interest-free loans. The Ministry of Agriculture and Rural Development has been assigned to draft a decree governing preferential lending to fishermen as a legal basis for banks to make loans. This draft decree is expected to come out soon.   Binh said funding had been made available and would be disbursed as soon as a legal basis for such lending was ready. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR