Ministry urges State firms to restructure
Restructuring state-owned enterprises (SOEs) is vital to the economic health of the country, according to the Ministry of Planning and Investment.
The ministry said State-owned businesses accounted for only 37-38 per cent of GDP even though they represented 70 per cent of social services investment, 50 per cent of State investment, 60 per cent of loans from commercial banks, and 70 per cent of Official Development Assistance loans.
The ministry’s Central Economic Management Research Institute said that SOEs were not as profitable as businesses in other sectors.
They also had weak managers who failed to implement policies, it said.
Monitoring systems at businesses had also been weak, and, as a result, capital sources are not used effectively, he said.
Experts said the SOEs must become more competitive and the State’s managing and regulating roles must be improved.
The restructuring of SOEs has been done at a sluggish pace, and those that have restructured have not been operating effectively.
Nguyen Dinh Cung, deputy director of the institute, was quoted by Sai Gon Giai Phong (Liberated Sai Gon) as saying that the key task in restructuring these businesses was to publicise their data and make their operations transparent.
This would force business leaders to follow the market, he said, adding that more businesses should be equitised, or partly privatised.
In some cases, the State would keep the governing share, experts said.
The Ministry of Finance has submitted for the Government’s approval a decree on the equitisation of businesses that are wholly state-owned.
Loans to rescue coffee, cashew processors
The Ministry of Agriculture and Rural Development has asked banks to make low interest loans available for the purchase and processing of coffee and cashews, worth a total of VND45 trillion (US$2.15 billion).
The ministry’s Circular 3017/BNN-CB urged banks to provide the six-month loans to the coffee and cashew sector to overcome cashflow difficulties and high input costs.
Coffee and cashew processors needed capital late in the year to buy raw materials to process for export to take advantage of approaching holidays, the ministry said.
But the Viet Nam Coffee and Cocoa Association and the Viet Nam Cashew Association had complained of difficulties in getting loans due to high interest rates of 20-22 per cent, the ministry said.
The coffee association said the banks had imposed conditions, including financial ability, export volume and the number of years exporting, that made many coffee enterprises ineligible for loans.
The cashew association complained that high interest rates and input cost, and pressure to repay principal at the end of the year had forced firms to sell cashews at low prices.
Therefore, based on export ability and demand on capital for the year end production, the ministry asked banks to provide VND16 trillion ($766 million) in “soft-interest” loans at 17-19 per cent with flexible conditions.
It asked that the cashew sector get VND29 trillion ($1.38 billion) in loans with preferential interest rates, including VND13 trillion ($622 million) to buy raw cashew locally, VND13 trillion to import raw cashews and VND3 trillion ($144 million) in long-term loans to upgrade equipment and machinery.
The coffee association said that at the end of this month and early next month, it would sign co-operation agreements with the Agriculture and Rural Development Bank (Agribank) and Technological and Commercial Bank (Techcombank) to provide loans for enterprises purchasing coffee in the 2011-12 crop.
At a meeting last month with export enterprises in Central Highland Dak Lac Province, Agribank undertook to provide loans of VND5 trillion ($239 million) during the 2011-12 harvest starting next month, a bank representative said.
Meanwhile, other banks said at a meeting between banks and coffee and cashew trading enterprises in Ha Noi last week they would provide enough capital for coffee trading enterprises. The banks included the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Bank for Investment and Development of Viet Nam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank).
The coffee association said if the sector had the capital, it would likely export 1.2 million tonnes of coffee this year, to earn an expected $2.4 billion.
The export value of coffee had increased sharply in recent years but most of the exports were raw coffee, so the industry has planned to increase the export volume of processed products by 20 per cent.
Cashew association chairman Nguyen Thai Hoc said despite the many obstacles in production and business, the industry was predicted to earn $1.3-1.4 billion from exports this year.
So far of this year, Viet Nam has exported 129,000 tonnes of cashew, earning $1.1 billion, a year-on-year reduction of 7.8 per cent in quantity but a year-on-year increase of 38.6 per cent in value due to the sharp increase in export price from $8,809 to $9,500 per tonne in July.
Bank officers learn communication
More than 60 officers from the State Bank of Viet Nam (SBV) and other banks participated in a three-day training workshop on enhancing communication skills in Ha Noi yesterday.
The workshop, held by the SBV and Standard Chartered Bank, provided the officers with basic skills on understanding economic and financial news, public relations and responses to the economic crisis.
On the same day, the Standard Chartered Bank launched its Platinum debit card.
Vietnamese cranes land in Singapore
Each 245 tonne crane is 27 metres high, 11 metres wide and 25 metres long. They are designed for moving containers of up to 40 tonnes.
A third shipment is scheduled for early next year.
Delta boosts agricultural exports
Businesses in the Cuu Long (Mekong) Delta are stepping up the export of farm products to the United Arab Emirates. The total so far this year is US$118 million.
According to the Viet Nam Chamber of Commerce and Industry’s branch in Can Tho City, the UAE mainly buys shrimp, frozen fillet fish, coconuts and rice. In 2009 and 2010, Viet Nam earned $292 million from farm produce exported to the Middle Eastern country.
The UAE also imports consumer and pharmaceutical products, footwear, wooden furniture, handicrafts, machinery and equipment.
In return, Viet Nam imports plastic material, crude oil, chemicals and spare auto parts.
Construction starts on Bank Tower
Western Bank began construction of the Western Bank Tower at 1A Lang Ha Street, Ha Noi on Saturday.
The tower will have 34 floors with a total area of 47.080sq.m. Kumho Engineering and Construction of South Korea are the general contractors.
The Western Bank Tower is expected to be completed in three years.
Southern province to host trade fair
The fair will feature 500 stalls from 170 domestic and foreign enterprises. It will also have 100 stalls displaying high-quality products selected by the Department of Industry and Trade and Investment and Trade Promotion Centre.
Viettel, Agribank join hands
The military-run Viettel Telecom and Viet Nam Bank for Agriculture and Rural Development (Agribank) have signed a co-operative agreement on investment and development.
Agribank will prioritise using telecom infrastructure and services provided by Viettel in its operations. Viettel pledges to use services provided by the bank including payments, foreign exchange, bank deposits, credit cards and home-banking.
Techcombank set to go online
The Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) has announced that its online transaction system would be available in 63 cities and provinces nation-wide from Friday.
The online transaction service ([email protected] e-Bank) will allow customers to transfer money via the internet.
Disclosure rule violators to see names publishedJapan to fund Viet Nam satellite project
The Japanese government has decided to offer loans to Viet Nam for its domestic satellite programme.
Accordingly, the country is set to receive around JPY50 billion (US$660 million) in official development assistance (ODA), as reported by the Japan Broadcasting Corporation (NHK, which added that Japanese firms would be able to participate in the project as part of the agreement.
The two governments are likely to finalise the deal at the end of this month.
The NHK said that Japan had as yet never provided yen loans to satellite projects due to concerns over technology being diverted for military use. However, the Government decided to support Viet Nam in its efforts in disaster-prevention, including flood forecasting, and mapping.
Vietnam plans to launch two earth-observation satellites after 2017.
Japan to continue agricultural aid
Japan would continue to help Viet Nam develop a multi-functional agricultural model as part of the Enhancing Functions of Agricultural Co-operative in Viet Nam-Phase 2, a project inked yesterday in Ha Noi.
The project was signed by representatives of the Japan International Co-operation Agency (JICA) and the Department of Co-operatives and Rural Development under the Ministry of Agriculture and Rural Development.
“The co-operatives take responsibility for all service areas, such as the provision of farming tools and credit; they help farmers process and consume products and cover insurance for their activities. This type of advice and oversight is crucial to the development of Vietnamese agriculture at present,” said Chief Representative of JICA Viet Nam Tsuno Motonori.
By communicating the achievements of the first phase (2006-10) to other regions and co-operatives, the second phase will build the support system for enhancing the effectiveness of co-operatives and training centres at the national and local levels.
The first phase of the project was begun in March 2006: it aimed to assist the Government of Viet Nam in developing new models in accordance with the Co-operative Law of 1996. The government would continue to promote the updating of traditional style co-operatives, which focus mainly on agriculture production, as well as establishing new co-operatives whose activities would include marketing, production, and credit distribution.
Despite demands from co-operative members, little progress has been made due to the lack of experience of the officers.
Philippine investment encouraged in Vietnam
Vietnam will create all favourable conditions for foreign investors, including those from the Philippines, to do business in Vietnam, affirms State President Truong Tan Sang.
He expressed his belief that the two countries’ businesses will seek cooperation in their potential areas to fully tap advantages and raise two-way trade value to US$3 billion by 2016.
Philippine businesses showed their keen interest in investing in Vietnam and pledged to do long-term business in the country.
At the forum, three cooperative agreements were signed by Vietnamese and Philippine businesses in the presence of President Truong Tan Sang. They included a memorandum of understanding on trade and investment promotion between the Vietnam Chamber of Commerce and Industry (VCCI) and the Philippine Chamber of Commerce and Industry (PCCI), a US$23 million cooperative agreement on rice and cashew nut imports and exports between the Long An Food Processing Export Joint Stock Company and the Mayon Development Company and a US$25 million cooperative agreement on a food and drinks franchise between Viet Thai International Joint Stock Company and IP Ventures Inc.
Agro-forestry and seafood exports reach US$21 billion
Vietnam fetched US$2.2 billion from exporting agro-forestry and seafood products in October, bringing total export turnover of these products in the past ten months to US$20.8 billion, according to the Ministry of Agriculture and Rural Development (MARD).
The total value represents an increase of 34.5 percent over the same period last year.
Of this, 6.5 million tonnes of rice were exported, earning US$3.3 billion, rising by 11.6 percent in volume and 20.3 percent in value.
Cassava and cassava-made products grew sharply in export value, reaching 2.3 million tonnes in ten months and earning US$815 million.
At the same time, coffee exports increased to over one million tonnes, with a market value of US$2.3 billion.
Meanwhile, exports from forestry and wood products brought US$3.4 billion to the country.
82 pct of new businesses fall by wayside
More than 82 percent of the 57,000 businesses established this year had stopped operations or dissolved as of September, Deputy Minister of Planning and Investment Nguyen Van Trung said at a meeting yesterday.
The figure rose had risen by 22 percent year-on-year to the highest rate in the last 20 years, he said, destabilizing the economy.
“With only 10,000 enterprises remaining in operation, the economy has become unstable since businesses are the main factor for its stabilization.”
The Hanoi Department of Planning and Investment, said most of the new businesses had been licensed in the capital and Ho Chi Minh City.
The number of businesses operating in HCMC as of December 31 last year rose by 23.2 percent to 96, 206, with most new firms being in the private and foreign-owned sectors, figures from the city Statistics Office show.
The trading and hotel and restaurant sectors posted the highest growth rates with 7,940 new businesses, or 43.8 percent of all new ones.
Exchange rate tops VND21,000 a dollar
Following the 14th increase so far this month of the interbank dollar exchange rate, the ceiling price of the dollar at banks today surpassed the VND21,000 mark.
The State Bank of Vietnam today increased the interbank rate by VND15 to VND20,803 a dollar, sending banks’ ceiling price to VND21,011 a dollar.
The interbank exchange rate has risen by VND175, or 0.85 percent since September 7 when the central bank said the depreciation would not be more than 1 percent this year.
The dollar price on the black market has recently slumped after the government increased the maximum fine on illegal trading of foreign currencies to VND500 million from VND70 million.
The greenback yesterday fell by VND250 to VND21,500.
Meanwhile, gold in Vietnam this morning rose by VND700,000 compared with yesterday closing to over VND45.5 million a tael (37.5 grams), the highest level since September 27.
It was sold at VND45.55 million a tael in Hanoi and VND45.6 million a tael in Ho Chi Minh City.
According to Kitco, spot gold was quoted at US$1,745.4 an ounce at 10 am today.
With the official exchange rate, the gap between domestic and global prices was VND1.3 million a tael.
With the black market rate, the gap was VND300,000 a tael.
Steel pipe producers face anti-dumping suits
Ten Vietnamese steel pipe manufacturers may face anti-dumping and anti-subsidy lawsuits on their products exported to the US from 4 American manufacturers, said the Vietnam Chamber of Commerce and Industry (VCCI).
According to the Saigon Times newspaper, VCCI said Ailled Tube and Conduit, JMC Steel Group, Wheatland Tube and United States Steel Corporation had asked the American Department for Commerce to conduct anti-dumping inspections on steel pipes imported from Vietnam, India, Oman and the United Arab Emirates.
The American Department for Commerce will have the final decision on whether to conduct the inspections or not by November 15 and the Vietnamese manufacturers will have to complete their investigation questionnaire by November 12.
The charge came after a testimony made last May at the US Senate Committee on Finance meeting by Robert L. Mahoney, president of Northwest Pipe Company, who brought up the fraudulent practice in which Chinese pipes were threaded and coupled in Vietnam and then mislabeled as Vietnamese products before being exported to the US.
“This continues despite current customs rulings stating that simply threading coupling pipe does not change the country of origin of the product,” Mahoney said in a statement.
He thus urged the US Customs and Border Protection to enforce the nation’s trade laws to curb this duty evasion.
The US has to spend around US$3 billion a year for importing steel, with China, the world’s leading steel pipe manufacturer, holding 95 percent of the market share.
Steel pipes imported from China to the US was imposed an anti-dumping tariff of between 17.7 percent and 39.2 percent for five years starting October 2009.
According to the Vietnamese Ministry of Industry and Trade, Vietnam’s steel export turnover in the year to September topped $1.26 billion.
Vietnamese steel pipe exports to the US in the first eight months of this year rose by 62.60 percent year on year to $34.03 million, the US manufacturers said in their lawsuit files.
Prices still listed in dollar despite steep fines
Goods and services are still paid and their prices still quoted in dollars in Ho Chi Minh City, though the penalties for such violations were last week increased seven times.
In Vietnam, all transactions, payments, advertisements and price listings are banned from being conducted or quoted in foreign currencies, except those carried out by banks, airports and customs agencies.
Last week the State Bank of Vietnam issued a new decree, increasing the penalties for quoting prices of goods and services in foreign currencies seven times to VND500 million (US$24,300).
It also slapped a hefty fine of VND50-100 million on those making payments in foreign currencies, something it had previously left unpunished.
However, prices listed in dollars can still easily be spotted in stores around the city.
At the unofficial exchange rate of around VND21,700 to the dollar, V. would have to pay VND9.7 million for the camera.
She said the store was also willing to accept payment in dollars, which was against the regulation.
The store owner said since he had to buy the greenback from the black market to import the products, he had to sell in dollars to “recoup the capital.”
V. said other stores also quoted prices in dollars while those listed in dong were “only for reference since the exchange rate changes on a daily basis.”
Despite the new regulation, many travel agencies, beauty salons and resorts still have not changed their usual practice of asking customers to pay in foreign currencies.
Many customers of the Trung Nam Investment Consultant Co Ltd have recently complained that the company charged them in dollars for its visa consultation services.
The company, however, accepts payments both in U.S. dollars and Vietnamese dong.
K, a tour organizer in Tan Binh District, quoted its price for a six-day tour package to Thailand at $350 a person and $500 for a four-day trip to Singapore. Other tours to Laos, Cambodia, Malaysia and Hong Kong are also listed in dollars on its website.
The HCMC branch of the State Bank of Vietnam said its joint operation with the municipal market control agency had detected many violations in quoting prices in dollars.
So far six businesses have received warnings from the central bank for making payments in foreign currency, it said.
The market control agency has issued fines to 60 violators to the total amount of VND1.5 billion while the police also cracked down on 50 cases with the total penalties of VND2.8 billion.
The central bank said it would soon expand its operations on a larger scale to curb violations in the financial sector.
Vietnam’s demand for cloud computing on the rise: Intel
Vietnam is a promising market, particularly in information technology and communications and its demand for cloud computing is increasing rapidly, said Intel Vietnam General Director Mai Sean Cang.
At a seminar on Intel’s vision on cloud computing and effective data centre in Hanoi on October 27, Mai Sean Cang said this was a good opportunity for Vietnam’s service providers to access the latest IT technology with high investment efficiency to offer attractive services to their customers.
Intel introduced solutions and new applications to improve the efficiency of data centres, including upgrading processors that maximize both energy cost savings and performance.
In Vietnam, Intel has cooperated with Da Nang city to build a data centre in the Open Data Centre Alliance in January 2011. The centre is expected to lay a foundation for building IT infrastructure for the city’s e-government in the coming time.
Industrial output creeps up in October
The national Index of Industrial Production (IIP) rose by 5.2 percent in October, helping to boost the 10-month Index by 7 percent over the same period last year, the General Statistics Office (GSO) has reported.
Vu Quang Ha, a statistician at the GSO, blamed the slow growth on domestic financial and monetary fluctuations, high inflation and high interest rates.
The modest IPP increase was also reflected by growing stockpiles of products. As of October, the stockpile index has increased by 21 percent compared with last year’s corresponding period.
During that period, the mining industry experienced a 0.7-percent drop in industrial output while the manufacturing, gas and water sectors experienced growth rates of roughly only 10 percent.
Among the main industries to record a year-on-year decrease in the first nine months, natural gas fell 9.4 percent, electrical wire and cabling declined 20.9 percent and shipbuilding was down 22 percent.
HCM City reviews development issues in 10 months
The Ho Chi Minh City People’s Committee held a meeting on October 27 to discuss socio-economic development over the past 10 months and develop strategies for the remaining months of this year.
It was reported that the target economic hub has maintained its growth with major targets fulfilled in the review period.
Total retail sales and services revenue continued to increase considerably, reaching more than VND373 trillion. Its consumer price index (CPI) in October rose by 0.18 percent compared to September. Industrial production value also rose while progress was made in implementing key projects.
In addition, the city effectively carried out programs for the poor and generated jobs for its residents.
The achievements were attributed to the local administration’s efforts in implementing a Government resolution aimed at controlling high inflation, stabilizing the macro-economy and ensuring social welfare.
At the meeting, Mayor Le Hoang Quan directed municipal departments and businesses to proceed with implementation of the Government resolution. He said efforts will be focused on closely monitoring market fluctuation to stabilize goods prices, and preparing an abundant supply of goods for the upcoming traditional Lunar New Year festival (Tet).
High prices boost farm exports
Exports of agricultural products during the first 10 months of this year reached a total of US$11.6 billion, a year-on-year increase of nearly 45 per cent, with export value bolstered by high prices.
During this period, the country exported 6.5 million tonnes of rice, valued at $3.3 billion, reported the General Statistics Office (GSO).
These figures increased by 11.6 per cent in volume and 20.3 per cent in value against the same period last month.
Indonesia was still the biggest rice importer, with export turnover and value to the market rising year-on-year by 3.4 times and 2.8 times, respectively, the office said.
Many agricultural products reached export records thanks to high prices this year.
Rubber was one of the best performers, with rubber exports earning the country $2.6 billion during the first 10 months, about $300 million higher than the total for all of 2010. In comparison with same period last year, rubber exports soared by 57.3 per cent.
More than 1 million tonnes of coffee have been sent abroad during the 10 months, earning $2.3 billion.
Other exports to hit record earnings included cashews, with a total volume of 146 tonnes, worth $1.2 billion during the 10 months. Thanks to high prices, cashew export value increased by 36.5 per cent despite a decline of 8.1 per cent in volume.
The GSO reported that seafood export value was worth $4.95 billion, up by 23.2 per cent against the same period last year.
Forestry products brought the country $3.4 billion, an increase of 16.2 per cent over last year.
Public investment under scrutiny
More innovation in the Government’s thinking on public investment has been called for to restructure and increase efficiency of public projects.
Economic experts yesterday agreed that a restructuring of public investment was urgently needed, at a workshop co-organised by the Ministry of Investment and Planning and the United Nations Development Programme in Ha Noi.
Public investment during the last 10 years was labelled inefficient, and had created an imbalanced economy as well as raising risks of macro-economic instability, vice president of the Viet Nam Economics Association Nguyen Quang Thai said.
Nguyen Duc Thanh from the National University of Ha Noi’s Centre for Economic and Policy Research said the inefficiency of public investment also resulted in a recent increase of public debt, which was nearly 57 per cent of GDP last year and is estimated to see a 2 per cent increase this year due to rising inflation.
Deputy general secretary of the Viet Nam Economics Association Vu Tuan Anh said each year the Government had spent a third of the State budget on public investment since 2000, which is seen as the highest among countries in the East and Southeast Asia.
The GDP growth rate has remained lower than the investment growth rate, proving that investment has been inefficient, he said.
“Public investment failed to encourage and promote the development of key economic sectors,” Anh emphasised, reasoning that no economic breakthrough had been made and the investment structure seemed to remain unchanged during the last 10 years.
The country’s Incremental Capital–Output Ratio (ICOR) index during 2000-2007, which was the ratio of additional output to new investment, also revealed that public investment rated the least efficient compared with private and foreign-backed sectors.
He pointed out that State-owned enterprises (SOEs), though occupying up to about 40 per cent of the total investment of all enterprises, created only 25 per cent of the total pre-tax turnover and 19 per cent of employment, while losses has also been revealed in some SOEs such as Vinashin.
Haphazard investment and an over-estimation of real demand were seen as the root causes for the low efficiency of public investment, according to deputy director of the ministry’s Department of Finance and Monetary Affairs Phan Thanh Ha.
Agreeing with these findings, Anh added that hundreds of construction projects, including seaports, airports and industrial zones remained unfinished, which restricted further economic growth. Many projects that had been approved had not complied with the country’s socio-economic master plan which had further created inefficiency, he said.
Thai emphasised that public investment should be restructured towards improving the quality of life and social welfare for residents, and that “prior consideration should be put on macro-economic stability.”
Currently, 75 per cent of public investment was spent in developing the economy, especially infrastructure development, while the rest was for social affairs and State management.
In the next 10 years, the share of public investment for social affairs should be increased to at least 30 per cent.
Reducing public investment would work alongside increases in private investment, focusing on key economic sectors and leaving non-state-owned enterprises to join other sectors would improve the situation, Thai said.
The encouragement of investment schemes such as public-private partnerships (PPP) and build-operate-transfers (BOT) would also help reduce the amount of public investment.
The reduction of corporate income tax should also be put into consideration to raise the competitiveness of private and foreign-invested enterprises, encouraging them to invest more, he added.
- Business Breakfast LIVE: High Street to lose another 175,000 jobs this year, study reveals
- Rail user satisfaction at 10-year low
- Brighthouse to close 30 shops and cut jobs
- John Meagher’s 50 best albums of the year – and top 10 Irish
- Ex-IRA bomber who got 30 life sentences has words of advice for young dissidents
- For 30 years of EitC, 30 of its greatest successes
- Bad weather hits Christmas retailing
- City's macho culture has 'got to change'
- 'Macho testosterone culture has to change'
- The most cancelled rail line in the UK?
- Boxing Day sales 'attracting fewer shoppers'
- Brexit ferry firm 'will get no money upfront'
BUSINESS IN BRIEF 30/10 have 4547 words, post on at October 30, 2011. This is cached page on VietNam Breaking News. If you want remove this page, please contact us.