BUSINESS IN BRIEF 29/5 Taiwanese firms come to HCM City for autotech fair More than 54 leading Taiwanese brands are taking part in the 11th Sai Gon International Autotech and Accessories Show that opened in HCM City yesterday. Organised by Asia Trade Fair and Business Promotion and Chao Chao International Company Ltd, the exhibition not only offers a prime platform for exhibitors to do business but also the opportunity to understand the Vietnamese market. It has attracted nearly 300 exhibitors who are displaying automotive parts, accessories and electronics; management and IT systems; oil and gas products; tools/dies and other machinery; vehicle products, and motorcycles. VietinBank lends to power development project in major cities The Vietnam Joint Stock Commercial Bank of Industry and Trade (VietinBank) has signed a contract with the Ministry of Finance for an authorised loan from the Asian Development Bank (ADB) to implement the power grid development project in Hanoi and Ho Chi Minh City. The signing ceremony took place in Hanoi on May 25 in the presence of Deputy Finance Minister Truong Chi Trung and Vietinbank General Director Le Duc Tho. The project aims to strengthen the capacity and reliability of the power infrastructure in the capital and Ho Chi Minh City through rehabilitation, expansion and development of the 220kV and 110 kV electricity power grids in the respective cities. It also aims to meet the increasing demand for electricity in the two cities in the period from 2014 to 2016. The Hanoi and Ho Chi Minh City power grid development project has a total investment of 392 million USD, with 272.7 million USD sourced by loans from the ADB and the ASEAN Infrastructure Fund (AIF). UAE businesses eye up Ho Chi Minh City’s market A delegation of enterprises from the United Arab Emirates (UAE), led by the General Director of the Vault Investment Fund, Sultan Ali Ahamad Lootah, embarked on a fact-finding mission to Ho Chi Minh City in order to seek investment opportunities in the city. During a meeting with the delegation on May 25, the Chairman of the People’s Committee of Ho Chi Minh City, Le Hoang Quan, said the city welcomed investments in real estate, hotels and tourism, car-parking systems and smart city infrastructure. He stressed that municipal authorities would enhance their support and work closely with UEA businesses that are keen to invest in fields mentioned above. Sultan Ali Ahamad Lootah said UEA firms were interested in launching projects in HCM City, adding that they would forge links with the city in order to develop a car-parking network, hotel complexes and tourism services in the near future. Opportunities, challenges in Vietnam-RoK free trade pact The Vietnam – Republic of Korea Free Trade Agreement (VKFTA) signed on May 5 reflects a high level of commitment from both sides and is set to both challenge and benefit the Vietnamese economy in the future. In a recent interview granted to the Vietnam News Agency, the head of the Ministry of Industry and Trade’s Trade Promotion Agency, Bui Huy Son, said Vietnam will see an unprecedented opportunity to sell strong products to the Republic of Korea (RoK), such as farm produce, seafood, fruits, garments, footwear, electronics and wooden furniture. These will enjoy a zero percent tariff when import fees used to stand at 200-400 percent. Vietnam can also now afford to import raw materials for domestic production and consumption, and export to a third country, including those used in garments, footwear, plastics and automobiles. A wave of Korean capital will flow into Vietnam, bringing with it technological advances and standard management skills to the country. The RoK - the largest investor in Vietnam so far with 83.1 billion USD committed to nearly 4.300 projects - has become the most developed nation in the Organisation for Economic Cooperation and Development (OECD). At socio-political and diplomatic levels, it is expected that labour-intensive sectors in low-and middle income groups, including garments, footwear and agro-fisheries, will reap the most benefits from the FTA. Asked about what challenges the FTA will pose for Vietnam, Son said the State agencies must fine-tune legal regulations in line with international standards while improving personnel capacity. For the business community, the greatest challenge is rising competition once Vietnamese and Korean firms penetrate each other’s markets, offering consumers a myriad of choices at increasingly lower costs. To facilitate Vietnamese exports to the RoK, Son said there are various trade fairs held annually in the country, such as the Seoul Food Industry Fair, where Vietnamese exhibitors are able to meet consumers and new partners. The agency also holds working trips for hundreds of Korean importers to Vietnam to seek ventures. Its other activities also help improve the competitiveness of Vietnamese businesses via information sharing, support in market analysis, product design and development. The ministry is also supporting businesses by launching large-scale electricity projects, bringing domestic products to rural areas and by providing e-commerce training. Thanh Hoa strives to attract investment in Nghi Son EZ The central province Thanh Hoa is implementing a number of measures to boost domestic investment in the Nghi Son Economic Zone (EZ). The province has spent 500 billion VND (23.3 million USD) more in the zone’s infrastructure. The monitoring and management of the projects operating in the EZ have been improved in order to ensure effective implementation. The province has also initiated the reform of administrative processes, while mobilising a broad range of resources to attract more investments. The zone is now home to 134 projects, including 124 domestic projects, with a total registered investment of 96.9 trillion VND (4.5 billion USD). The majority of projects are operating effectively, contributing to local economic development and creating jobs for thousands of local residents. However, the management board has withdrawn the licences of 22 delayed projects, worth more than 7 trillion VND (335 million USD) in total. The Nghi Son EZ covers an area of more than 18,600ha. It focuses on heavy industry, basic industry and the Nghi Son seaport. In 2014, the zone attracted 41 new domestic projects with a total registered capital of over 3.1 trillion VND (145.7 million USD), and three foreign investment projects worth 40.5 million USD. That same year, the zone generated 18 trillion VND (846 million USD) in revenue and created jobs for around 63,000 workers. The zone also houses the Nghi Son Oil Refinery and Petrochemical Complex (NSRP), the largest of its kind in Southeast Asia and the biggest FDI project in Vietnam with a capital investment of more than 9 billion USD. So far, 28 percent of the NSRP project have been completed, with 33.3 trillion VND (1.5 billion USD) disbursed already. Inward remittances continue to rise in HCM City Overseas Vietnamese have sent home remittances of 1.4 billion USD through HCM City-based banks in the first four months of this year, a year-on-year increase of 19.6 percent. Remittances by overseas Vietnamese during Tet (Lunar new Year festival), which falls between mid-January and mid-February every year, is one of the reasons for the huge remittances in the first quarter, according to Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam's HCM City branch. Remittances sent through banks in the city were growing by 8-10 percent annually and were expected to reach 5.3-5.5 billion USD this year, he said. According to the Central Institute for Economic Management (CIEM), in 2014 remittances to Vietnam topped 11 billion USD. In a report it released last December, CIEM said with about four million Vietnamese living and working in 187 countries and territories, Vietnam is now among the top 10 remittance recipients in the world. Remittances have played an important role in the country's socio-economic development. In 2004-06 remittances were the biggest source of foreign funds for the country. Since 2007 they have been the second biggest sources behind foreign direct investment. The remittances bolster the country's foreign currency reserves and help keep the dong stable. Most of the remittances are spent on daily expenses and business activities or saved, but the usage has been changing. According to a CIEM study, 48 percent of the families getting the money are among the top 20 percent in the country in terms of income. And the high incomes are affecting the spending patterns. Among those with comparable incomes, families receiving remittances give priority to spending on accommodation and investment in business activities while spending less on food, consumer goods, education, and healthcare. The group of 20 percent of the poorest families (receiving remittances) has used these funds for their accommodations while the group of the 20 percent of the richest has spent remittances as investments into the real estate sector for profits. The CIEM's study reveals that in 2014 remittances used as investments for business activities slumped to 15.9 percent (of their remittances) from the 16.2 percent of the previous five years. Up to 30 percent of the remittance receivers deposited their remittances as savings in banks; 27 percent to 30 percent for business and service sectors; 20 percent used remittances on gold trading; and 16 percent – 17 percent as investments in the real estate sector. A CIEM representative said remittances into Vietnam in 2015 and 2016 are expected to increase slightly from the last year's 11 billion USD. However, these funds would begin to slightly decrease since 2017. Transport Ministry strives to lure investment in infrastructure development The Ministry of Transport has undertaken great efforts to foster the private public partnership (PPP) model with the goal of mobilising some 1,000 trillion VND (46.7 billion USD) for transport infrastructure during the 2016-2020 period, according to Nguyen Hoang, Director of the ministry’s Department of Planning and Investment. The ministry has developed effective approaches to facilitate the participation of enterprises in developing the traffic infrastructure system, said Ho Minh Hoang, Director General of the Deo Ca Investment Joint Stock Company. Officials have actively worked with local authorities to address difficulties facing the site clearance of each project, Hoang added. “The ministry has done a good job in laying out the carpet for investors. Without such mechanisms, the sector would not have been successful in attracting such a large amount of investment within such a short period,” said the Deo Ca Company executive. Between 2013 and 2014, the sector successfully called for 137 trillion VND (6.3 billion USD) for 44 projects, easing the burden of the State budget and ensuring work has proceeded as planned, the Department of Planning and Investment Director said. Meanwhile, Vice Chairman of the National Assembly’s Committee for Economic Affairs, Nguyen Duc Kien, hailed the significance of administrative procedure reforms conducted by the ministry in drawing social resources. The ministry has made information about traffic infrastructure development projects public and transparent, raising trust among investors and ultimately encouraging them to invest, Kien commented. So far, a wide range of modern traffic infrastructure systems have been comprehensively completed and brought into operation, facilitating transportation, trade exchanges, economic development and national modernisation. In 2015, the completion of the upgrades to the National Road 1 and the Ho Chi Minh Road across the Central Highlands have created great impetus for socio-economic development. Most recently, the Co Chien bridge, built using the BOT (build-operate-transfer) model, was open to traffic in the Mekong Delta province of Tra Vinh on May 16. It has helped shorten the distance between Tra Vinh and Ho Chi Minh City by 70 kilometres. According to the sector’s development plan through to 2020, some 200 trillion VND (9.2 billion USD) is needed each year for transport projects, of which the public budget is expected to cover between 30-40 percent. Agribank receives service recognition The Vietnam Bank for Agriculture and Rural Development (Agribank) has been awarded the 2014 prize for Excellence in Payment Quality by the US’s Wells Fargo Bank. The award acknowledges the bank’s success in completing and improving its payment service quality in the past year. According to Agribank’s head of Financial Institutions, Pham Duc Tuan, the award proves the bank’s efforts in improving service quality and confirms its growing reputation in the international market. Agribank is the largest commercial bank in Vietnam in terms of total assets, liabilities, branch networks and staff numbers. By the end of April 2015, the bank’s total capital in the market reached over 720 trillion (34.3 billion USD), while total loans reached more than 560 trillion (26.7 billion USD). Wells Fargo is the third largest bank in term of assets in the US and is 17th in the world. For over 20 years, the two banks have partnered in many fields. Agribank’s account at Wells Fargo opened in 1998. FLC Group begins work on Binh Dinh tourism project The domestic FCL Group held a ground-breaking ceremony on May 23 to launch the construction of the Nhon Ly golf, resort, villa development and high-end entertainment complex in southern Binh Dinh province’s Quy Nhon city. Covering an area of 300 hectares, the 162.8 million USD project includes an 18-hole golf course, a five-star, 600-room hotel, an international convention centre, a restaurant chain and swimming pools, all built to international standards according to FCL Group Chairman Trinh Van Quyet. The project will be built at a total cost of 3.5 trillion VND (162.8 million USD) and 70 percent of the capital is loan from the Bank for Investment and Development of Vietnam (BIDV). This is the second tourism project granted an investment certificate in Nhon Hoi Economic Zone, said Ho Quoc Dung, Chairman of the provincial People’s Committee. He added that the project will be a driving force to draw more investment in the province, aiding local socio-economic development. The complex is scheduled to become operational by the end of Q2 in 2018. Hoa Sen chairman to compete at WEOY Award Le Phuoc Vu, chairman of the management board of Hoa Sen Group, will compete with 65 other businesspeople from 52 countries globally at the EY World Entrepreneur of the Year award which is scheduled to be held in Monaco, France in June. EY Vietnam told a press briefing on May 25 that Vu had won the EY Vietnam Entrepreneur of the Year 2014 award for his outstanding leadership, genuine entrepreneur spirit, innovation ability and strategic visions to lead the Hoa Sen Group to significant achievements. Pham Phu Ngoc Trai, a member of the EY Vietnam selection board, said this is a great honour and encouragement for the Vietnamese business community to have a businessperson taking part in a world’s leading reputable award for the first time. Hoa Sen Group earned more than US$700 in revenue last year, and obtained an average growth rate of 90% in the 2001-2014 period. The EY Entrepreneur of the Year award is the prestigious international prize which EY initiated in 1986. Agricultural exports hit US$11.4 billion in five months Agro-forestry and seafood product exports are estimated at US$2.37 billion in May, bringing the sector’s total export revenue in five months to US$11.4 billion, a fall of 7.3% over the corresponding period. The Ministry of Agriculture and Rural Development (MARD) reported that exports of key agricultural products dipped 7.4% to US$5.62 billion, especially rice (down 14.6%) and coffee (down 38%). Meanwhile exports of major forestry products jumped 7% to US$2.69 billion. The decline was attributed to price fall in most key export products like paddy, rice, coffee and rubber. According to the MARD, the sector’s imports in the first 5 months were estimated at US$9.25 billion, an increase of 8.1% against the same period last year. Vietnam’s deficit widens as domestic demand rebounds The Vietnam trade deficit widened less than expected in the five months leading up to June and a rebound in imports hinted to some firming in domestic demand early in the second quarter of the year. The General Statistics Office of Vietnam (GSO) said that for the January-May period, export revenue jumped 7.3% on-year to US$63.2 billion while imports increased 15.8% to US$66.2 billion, resulting in a widening of the trade deficit by US$3 billion. Leading government economists had generally expected the trade deficit to rise by a substantially higher figure. The increase in imports for the period –  which reflected rises in industrial machinery, equipment and supplies in addition to consumer goods – pointed to some strengthening in domestic demand. Businesses win litchi export contracts A number of businesses have won contracts to export fresh litchi to demanding markets after all necessary preparations have completed, according to the Plantation Protection Department (PPD) under the Ministry of Agriculture and Rural Development (MARD). After granting codes for qualified plantations and packers, the US Animal and Plant Health Inspection Service (APHIS) has identified radiation dose on Vietnam’s fresh litchi before exporting to the US. Meanwhile Australia has completed all procedures to allow Vietnam’s fresh litchi to access the market. Mai Xuan Thin, export manager of the Rong Do Ltd Company in Ho Chi Minh City said the company has invested in building a processing and packing factory in Hai Duong province and entered into output contracts with litchi farmers. The company is preparing to ship first batches of fresh litchi to the US and Australia. Other markets for its fresh litchi are the EU, Canada and Asian countries, Thin added. Businesses propose measures to support local auto manufacturers Honda Viet Nam (HVN) has proposed that the Government develop measures to support local automobile manufacturers to assure they can compete with imported autos. Workers build a car at a factory in Viet Nam. Honda Viet Nam has suggested the Government develop measures to help local automobile manufacturers improve their competitiveness. Photo fica.vn HVN General Director Minoru Kato said on May 22 that the Government's supporting policies for the domestic automobile industry had yet to be issued, while the deadline moves closer to enacting tariffs on imports from ASEAN markets, which would be cut to zero per cent in 2018. Meanwhile, in general it would take automobile manufacturers two or three years to prepare for the manufacturing of new models, he said at a meeting held to review business activities in the 2015 fiscal year. Without supporting policies from the Government, local manufacturers could move to import cars from Thailand and Indonesia, or other markets, to sell domestically, instead of maintaining their production bases in Viet Nam, he warned. Therefore, it would depend on Government policies to assure the continuation of domestic auto manufacturing, he said. The HVN and other businesses in the Vietnam Automobile Association were working with the Government to calculate import tariffs and special consumption taxes for automobiles. Meanwhile, General Director of Toyota Viet Nam, Yoshihisa Maruta, told Dat Vietonline newspaper that with tax cuts, it would be cheaper to import cars in complete built unit (CBU) than importing car parts for domestic assembly. Further, the company was discussing with the Government how to determine the best solution, in the context of the import tariff from ASEAN being cut to zero per cent by 2018. Concerns linger that the difference between the cost of domestically-assembled automobiles and imported cars would affect local production, he said. He noted that it should be understood that production costs are much lower than the vehicles' stated prices. Therefore, the Government should support local manufacturers to help reduce the gap between the production cost and selling price by initially adjusting tax policies until the market size becomes larger. He explained that, at present, the special consumption tax for domestically-assembled automobiles was based on their wholesale price, plus other costs, such as administrative expenses, transport costs and profits by manufacturers. Meanwhile, the special consumption tax for imported vehicles was based on their cost, insurance, and freight value, plus current import tariffs. This meant that special consumption taxes for domestically-assembled autos were higher than for imported cars. The Government should adjust the calculation of the special consumption tax and apply the same calculation for both domestically made cars and imported ones, which met the development orientation, as set in the master plan to develop the local automobile industry and approved by the Prime Minister, he said. VNR to divest contribution capital from Saigon Hotel Viet Nam Railways Corporation (VNR) has decided to divest its total State-owned capital from Saigon Hotel at Ly Thuong Kiet Street, the ‘golden land' area in the capital city. The 1,005-sq.m. hotel belongs to Saigon Commercial Hotel Company Ltd., which has been officially operating since July 2013 as a joint venture of VNR and Ha Thanh Company. The company was earlier managed by Saigon Tourist and its cooperation agreement with VNR ended in October 2012. VNR holds 50 per cent of the company's registered capital of VND60 billion (US$2.75 million), through its contribution of asset value on the land area, equipment, and land use right on the 1,005-sq.m. spot. Meanwhile, Ha Thanh Company has contributed VND30 billion ($1.37 billion) in cash, which is equal to 50 per cent of the registered capital. They plan to develop an old three-star hotel into a four-star one on a total investment capital of VND180 billion ($8.25 million). The Dau tu (Investment) newspaper reported that since the company changed its legal entity in 2013, the three-star hotel, which is famous in the capital city, began doing poor business. From July 2013 to the end of 2014, its occupancy rate dropped to between 52 per cent and 58 per cent due to its age-old facilities. The company lost VND3.3 billion ($151,376) in nearly two years: VND600 million ($27,522) in 2013 and VND2.73 billion ($125,229) in 2014. According to Chairman of VNR Tran Ngoc Thanh, the company had to bear land hiring costs, three times higher than that of the time prior to the joint venture. The hotel's facilities had degraded and failed to attract visitors, eventually leading to reduction in revenue. Meanwhile, it retained its group of staff on pay that was similar to that of its good days. Before the cooperation with Ha Thanh Company in July 2013, the hotel was seen as a "goose that laid golden eggs." It's reported that it made a profit of VND311 million ($14,266) in the last two months of 2012 and VND521 million ($23,899) in the first six months of 2013. The VNR said it would open its door for all investors. As the role of a founder, Ha Thanh Company has an advantage as it holds the priority right to buy VNR's State-owned capital at the hotel. Conference suggests solutions to recover Vietnam’s tourism growth The alarming decrease in the number of foreign visitors to Vietnam in recent years, as well as reasons and solutions to address the issue, were the spotlight of a conference held in Hanoi on May 25 by the Vietnam Tourism Association (VTA). Statistics from the VTA have shown that while the annual growth rate of the sector in 2010 was 34.8%, the figures in the 2010-2015 period become lower every passing year: 19.1% in 2011; 13.9% in 2012; 1.6% in 2013 and 4% in 2014. The number of international tourists in the first four months of this year saw a decrease of 12.8% over the same period of last year. Participants at the conference pointed out the decline in the number of holidaymakers was a consequence of the unprofessional tourism promotion in the sector, overlapping among agencies working in the field, dispersal in resources for boosting tourism, and the lack of major campaigns to reform tourism and lure more visitors to the country. Newly-promulgated regulations on tourist visas, shortcomings in State management of tourism, as well as ineffective co-ordination among localities, also caused the problem. The delegates agreed that to recover the growth of the hospitality sector, the government should give visa exemptions to tourists to encourage them to revisit the country. E-visas and visas on arrival should be available soon for foreign tourists at all border gates, and visa procedures should be simplified to create favourable conditions for tourists, they said. They stressed that all resourced should be mobilised to attract more visitors to Vietnam, particularly those from the key markets of Japan, the Republic of Korea and Russia. It is also necessary to reorganise the operation of tourist businesses at tourist sites and ensure security and safety for visitors, they added. Besieged by tollgates The competitiveness of the Vietnamese economy has been gradually eroded by a host of bottlenecks, particularly exorbitant transport costs. Businesses, local and foreign alike, have persistently complained about the situation and if not properly solved, the economy could further lag behind others in the region and the world in the integration process. The transport cost burden is certainly hard to ease overnight as a report by the Ministry of Transport says there are 96 toll stations on national highways across the country, with 45 of them already operational. What’s more, it is the ministry that has signed 83 toll collection deals with investors involved in build-operate-transfer (BOT) road projects. The possibility of making the economy more competitive, especially at a time when it has acceded and will accede to various free trade agreements such as the freshly signed FTA with South Korea, the forthcoming Trans-Pacific Partnership (TPP), and the soon-to-be-signed FTA with the Eurasian Economic Union. Though just half of the BOT toll gates are in operation, businesses have already felt the impact of steep tolls. The prospect will continue to be bleak because the Government, already faced with a rising budget deficit and a possibility of tapping the country’s foreign reserves for development investment, will have no choice but to reach out to the private sector to build more roads and bridges to fuel economic growth. This approach will put a heavier burden on the corporate sector which is already struggling with a maze of formal and informal fees. In the end, enterprises will pass on this financial burden to consumers and if this situation continues, consumption would be severely affected. And a fall in consumption would in turn deliver a blow to the economy. This is really a vicious circle. Though the Ministry of Transport has reassured there is no such thing as an overlap of road tolls, one can easily see more than one toll station on a 100-km trip between HCMC and neighboring Ba Ria-Vung Tau Provinces. The ministry will need a long-term vision for road development if it is to ensure the Vietnamese economy can compete with other economies in a more globalized world. Bosch cooperates with VGU in training Global technology and services supplier Bosch last week signed a memorandum of understanding (MOU) with Vietnamese-German University (VGU) to cooperate in training and research. The cooperation will focus on internships for students in Bachelor and Master’s programs, promotion of company-related degree and thesis work, support for student visits to Bosch operations, research and sponsoring activities for the two sides. The cooperation will give VGU students the opportunity to combine their theoretical knowledge with practical experience at a high-tech company and cooperate with Bosch teams in specific research areas. Each of up to ten new Bachelor students majoring in mechanical engineering will be provided with an annual amount of US$1,000 for a four-year period and scholarship recipients will be able to join Bosch after graduation. Vo Quang Hue, managing director of Bosch Vietnam, described the cooperation with VGU as another milestone in the company’s efforts to support the educational system in Vietnam and developing the local talent pool. “Our continuously growing business in the country as well as across Asia requires highly qualified associates. This project will help both VGU and ourselves to train people for the market’s needs and thus support Bachelor and Master’s graduates in quickly finding adequate positions,” Hue said. In 2013, Bosch joined forces with LILAMA2 Technical & Technology College in Dong Nai Province for the Technical Industrial Apprenticeship program (TGA), which combines theoretical training at LILAMA2 with German vocational training standards and hands-on work experience at Bosch. Currently, 46 apprentices are enrolled in the program and graduates will be awarded a certificate jointly issued by the German Industry and Commerce and LILAMA2. Bosch also sponsors educational equipment for mechatronics training, books and training materials for TGA as well as components of the Lean and Green Management Training Centre for VGU. “With both the cooperation programs Bosch builds a strong bridge between the apprenticeship training and the academic education in the technical fields which will play a crucial role in the further development of Vietnam,” Hue said. Bosch was present in Vietnam in 1994 and set up a wholly-owned subsidiary, Robert Bosch Vietnam Co. Ltd. in HCMC in April 2008. From July 2014, all business entities have been merged into Bosch Vietnam Co. Ltd. with its head office registered in Dong Nai Province. Bosch now has offices in HCMC and Hanoi, a showroom in Danang City, a manufacturing plant that produces CVT pushbelts in Dong Nai Province, and a software engineering research & development center in HCMC with more than 600 engineers. In July 2014, Bosch opened a new automotive R&D center (mobility solutions) in HCMC. Ministry warns of toll station distance violations The Ministry of Finance has warned that a number of tollgates built under the build-operate-transfer (BOT) are not located in line with the distance regulated by the existing regulations, triggering outcry from the public. Circular 159/2013/TT-BTC sets a distance of 70 kilometers between two BOT tollgates but a number of toll stations have violated the distance rule, the ministry said in the document sent to the Government’s Office. The distance violation by tollgates is attributable to the absence of a master zoning plan for the development of BOT tollgates in the country, the ministry was quoted by VietnamPlus as saying in Document 6400/BTC-DT commenting on the policy to attract private investors to road projects. The transport ministry reported that in addition to the State budget more than VND372 trillion has been mobilized for transport infrastructure development. Of the total sum, VND194 trillion has gone to 68 road and bridge projects under the BOT and BT (build-transfer) formats. Figures showed that there are 96 toll stations on national highways across the country, with 45 of them already operational. According to the finance ministry, Deputy Prime Minister Hoang Trung Hai told the transport ministry to map out the master zoning plan for tollgate development but it has not submitted the plan to higher authorities for approval. The finance ministry said it throws support behind the transport ministry’s proposal not to call for private investors for projects likely to place negative impact on security, defense and national interests. The finance ministry also agreed with the transport ministry on ways to make clear all the stages of road projects including investment approval; preparations for feasibility study; selection of contractors; and project implementation, operation and transfer. However, the finance ministry noted that the tollgates managed by the transport ministry and built by domestic investors under the BOT and BT formats have used loans provided by local banks with high interest rates and maturity periods which are not in line with the existing requirements. “Banks often offer short- and medium-term loans and the maturity of most long-term loans is no more than 22 years. Therefore, it is difficult for investors to take out loans to carry out tollgate projects with licensed periods of more than 25 years,” the finance ministry said. As most banks provide credit with terms of less than 20 years, the finance ministry asked the transport ministry to select investors with strong financial capacity and able to mobilize loans for long-term tollgate projects. Many toll stations will be put into operation next year, particularly on National Highway 1, the Ho Chi Minh highway section in the Central Highlands region and expressways, certainly leaving impact on transport costs, consumer prices and socio-economic development. Therefore, the finance ministry suggested the Prime Minister tell the transport ministry to report on the impact of private investment in road projects on socio-economic development and prepare proper communication programs to win public approval. Hong Kong businesses interested in Phu Quoc Island The permanent deputy head of the Steering Committee for the Southwestern Region, Nguyen Phong Quang, was received by the Secretary of the Development Bureau of Hong Kong (China), Paul Chan, and met representatives of the territory’s General Chamber of Commerce on May 26. Quang briefed the hosts on the outstanding achievements gained by Mekong Delta localities, affirming that the region holds an extremely important position in Vietnam’s socio-economic development strategy. The Mekong Delta region needs foreign investments to develop agriculture in order to promote its advantage as Vietnam’s largest rice granary, he stated. The Vietnamese official mentioned the master plan to build Phu Quoc Island in Kien Giang province into a special economic zone. This drew the attention of many Hong Kong businesses. President of the General Chamber of Commerce, Jonathan Choi, and business representatives questioned Quang about investment in Phu Quoc, declaring that this could be a very good opportunity for Hong Kong companies. Quang thanked them for their interest and introduced them to Vietnam’s preferential policies for investors in the Mekong Delta region and Phu Quoc; particularly those related to entry procedures and corporate income tax. Banks told to promote corporate governance Corporate governance and management in commercial banks are two core factors that can determine their success or failure. Vietnamese commercial banks still have a lot of work ahead to catch up with international norms of corporate governance despite their progress in recent years. At a conference on corporate governance in bank restructuring at Hanoi on May 26, Can Van Luc, General Director of the Bank for Development and Investment of Vietnam (BIDV), said corporate governance would help improve business activities, as it would offer easy access to long-term capital as well as increasing business opportunities. Luc added that it would also ensure benefits and fair practices among shareholders while enhancing competitiveness and integration. Corporate governance should manage relationship with shareholders, auditors, follow management boards' structure and operation, monitor the role of supervising board and independent members, appointments and incentives, risk management and internal supervision, as well as ensure information quality and transparency, and establish policies and accounting system. "A survey of 35 commercial banks showed that governance in Vietnam is more organised, as 34 out of 35 banks have one member of management board cum head of supervising board," he said. In addition, information dissemination has become more transparent as all of the surveyed banks have websites; 27 of the banks had independent audit reports on their income and finances in 2013 and 2014. However, corporate governance at Vietnamese banks still lacks a legal framework, while the role of management board members is not clear. He proposed that the country should complete its legal framework of governance and strengthen the role and effectiveness of supervising boards, internal audits, as well as good risk management strategies. He also asked commercial banks to increase transparency in information distribution by finishing financial reports on time and regularly updating information on their websites. Sharing the view, Pham Huyen Anh, Deputy Chief Inspector of the State Bank of Vietnam, said the central bank had developed a governance system to suit international norms and credit risk management at 10 pilot commercial banks. He said the banking sector's key tasks were to improve governance capacity, including corporate governance and risk management up to 2020. In addition, the country would have one or two large banks at regional level. Vietnam to hold Forum on ASEAN’s agriculture business Vietnam will hold a forum on ASEAN’s food and agriculture business environment in post-2015 in Hanoi from June 23-25, 2015. The Ministries of Agriculture and Rural Development; Foreign Affairs; Public Security; the Vietnam Chamber of Commerce and Industry (VCCI) are requested to work with authorised bodies and relevant localities to run the event. The forum expects to bring together 350-400 delegates, including the ministers in charge of agriculture, forestry and fishery in the ASEAN region, as well as representatives from ministries, departments, international organisations, and domestic and foreign enterprises. Delegates are expected to exchange information, propose agricultural production enforcement policies in a view to improving income and diminishing environmental impacts on the bloc. Discussion will also focus on such major farm produce as seafood, coffee, and rice. FDI falls, disbursement climbs in first five months The country experienced a noticeable fall of registered foreign direct investment (FDI) capital, while seeing an increase in the capital disbursement, in the first five months of this year. During the period, overall FDI poured into the country reached 4.29 billion USD, equalling 78 percent of last year’s figure. The foreign funds have so far disbursed 4.95 billion USD, increasing 7.6 percent year on year. The industry of manufactured and processed goods received the largest foreign investment worth 3.15 billion USD with 269 new projects registered. The real estate sector claimed the second place, reeling in 461.5 million USD. The Republic of Korea still topped 47 countries and territories investing in Vietnam with 1.1 billion USD spent in the reviewed period. The UK’s Virgin Islands, Turkey and Japan have come closely behind. Domestically speaking, Ho Chi Minh City has attracted 983.5 million USD from foreigners, leading others in the five-month FDI. It was followed closely by southern Dong Nai province, with 948.7 million USD, and northern Hai Phong city, with 319.3 million USD. Regionally, the south-eastern area took the lead in FDI attraction, enjoying 2.29 billion USD, or 53.3 percent of the total registered investment capital, while the Central Highlands got the least amount of FDI, with 17.43 million USD, or 0.4 percent of the total. Japanese firms examine Ha Nam agriculture prospects The northern province of Ha Nam will offer all possible support to Japanese agriculture investors, Secretary of its Party Committee Mai Tien Dung assured visiting Japanese businesses on May 26. The support will include electricity and water supply, transport, and security since Ha Nam regards agriculture as one of the key economic development tasks, Dung said, adding that the province has been encouraging hi-tech farming investment by Japanese firms. Dung suggested the Japanese side partnering with local people or working on land licensed by local authorities. The locality has zoned off a riverside 1,000ha plot for clean vegetable and fruit cultivation, a location convenient for irrigation and travelling, he said. Small scale farms should be piloted, with quality seedling varieties provided by the Japanese companies, he said, adding the successful model will be multiplied, eying export deals. Suzuki Tooru, Director of Mitsui Bussan Vietnam Ltd, which engages in global farm produce procurement, processing and distribution, said the company plans to grow safe rice using made-in-Japan seedlings and fertilisers. He said the project will improve rice output and farmers’ income for certain. Currently, potatoes, vegetables, soy beans and pumpkins grown in Ha Nam are popular in the Japanese market. Vietnamese businesses seek opportunities in Cuba A delegation of Vietnamese enterprises attended a business forum held in the Cuban capital of Havana on May 26. Participants included representatives from 12 businesses involving in hotel management, technology, mechanics, wooden and rubber products, trade and computers. Addressing the forum, Nguyen Vu Kien, an official from the Vietnam Chamber of Commerce and Industry, stressed that the bilateral economic cooperation is not adequate to the existing political ties and potential between the two countries. He reaffirmed the willingness of the two countries’ States and governments to boost cooperation in the field, urging businesses to seek opportunities in the context that Cuba is advancing in updating its economic model and promoting global integration. Celia Labora Rodriguez, Head of the Department for International relations of the Cuban Chamber of Commerce, presented her country’s business promotion policies and procedures as well as the strategic project to develop the Special Development Zone of Mariel in the west of Havana. She also reassured Vietnamese business people about Cuba’s investment priorities and the accounting policies of state-owned enterprises. Trade of some products, including tires and cigars, was also mentioned. According to official statistics, two-way trade between the two countries reached 208 million USD in 2014, of which Vietnam exports were worth 206 million USD. Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR