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Rain leads to hike in vBUSINESS IN BRIEF 18-10eggie prices

The prices of vegetables in southern provinces are peaking as supply dwindles because prolonged rainy weather has destroyed many crops and delayed harvesting in other.

In HCM City, prices are higher than they have been in years, according to anecdotal reports from local residents.

Pham Thi Nu, who lives in the city’s District 7, said that vegetable prices had increased greatly last week.

“Prices continued to jump yesterday. After two price increases, the prices have gone up nearly 100 per cent,” she said.

In other traditional retail markets in HCM City, such as districts Tan Dinh and Nguyen Van Troi, the situation was the same.

The prices of some vegetables doubled. Onions were about VND70,000 per kilo, while morning-glory leaves were VND40,000 per kilo. Spinach was about VND35,000 per kilo.

While prices at retail markets leaped, they rose at a slower rate at supermarkets, about 5-10 per cent, compared with last week.

A representative from BigC said vegetable prices had gone up.

“We’ve changed the price of some vegetables, with different changes on each vegetable. Price changes were due to bad weather conditions,” she told Viet Nam News.

“BigC has cut the prices of other vegetables, such as cucumber and tomatoes, so that customers can have more choices.”

The rainy weather was also the cause for price hikes in many vegetable hubs in HCM City, Da Lat and Tien Giang Province. Vegetable yields in those areas dropped by 70 per cent.

Tran Van Thich, owner of a co-operative in Binh Chanh District of HCM City, said he had been providing 8-10 tonnes of vegetables to the market every day. In recent days, however, the yield has been only two to three tonnes.

The Tho Viet co-operative’s yield in HCM City has also fallen by more than 50 per cent because of rainy weather. The cooperative had been supplying 20 tonnes of vegetables to the market every day, but that has dropped to seven to eight tonnes, according to the co-operative’s owner, Nguyen Thi Anh Ngoc. She said prices had been increased by 20 per cent.

Ngoc added that, while vegetable prices often rose every September and October due to the rainy season, she expected the season to improve in the coming weeks.

Although the situation has improved slightly in recent weeks, vegetable farmers said they needed about two or three weeks to fully recover.

Seafood firms find bank guarantee fees costly

Seafood firms would have to pay as much as VND70 billion of bank guarantee fees a year when importing materials, estimated the Vietnam Association of Seafood Exporters and Producers (VASEP).

Assuming that Vietnam imported US$600 million worth of products every year, then tax payments would stand at US$120 million with an average import tax rate of 20%. If banks charged guarantee fees at 2.5%, importers would have to pay US$3 million, which given an interest rate of 12% would rise to US$3.36 million, or some VND70 billion, said Nguyen Hoai Nam, deputy general secretary of VASEP.

“Seafood enterprises lose VND70 billion each year, which will be included in production costs. Bank revenues are rising thanks to this source,” said Nam at a conference on the draft regulation on import tax grace period with guarantee of credit institutions held by VASEP on Monday.

Most seafood firms have to import materials at certain times in a year, when the sea is rough, making it impossible for fishing.

Enterprises said the requirement for bank guarantee imposes an extra expense on them. The General Department of Customs, one of the compilers of the draft regulation, said enterprises could use letters of credit for the next shipments as collateral.

However, Nguyen Xuan Nam, director of Hai Vuong Co. Ltd., stressed the compilers were standing away from taxpayers. “Not all enterprises open letters of credit. My customers in Europe in the current economic downturn also fear collateral at banks,” he said.

Enterprises should be allowed to gain profits first, and then tax revenues would rise, said Nam.

Nguyen Pham Thanh, general director of foreign-invested Highland Dragon Company, specializing in canned seafood, said he was surprised at this regulation.

He said investment incentives and friendly business environment were what attracted the foreign investor. “But changes and inconsistency in policies now make us very disappointed,” he stressed.

VASEP said it would send a report to the National Assembly and relevant agencies on this issue in the coming sitting on October 22. In addition, the association is asking for a zero import tax rate.

According to VASEP, seafood material imports picked up sharply in the last two years. Import value rose from US$247.7 million in 2007 to US$541 million in 2011.

In 2011, imported seafood materials contributed some US$900 million to the total export value. Seafood material import value is estimated at US$600 million this year.

Korean firm eyes entertainment complex project

Zeta Plan and Investment Co., an alliance of leading financial and technology firms in South Korea, intends to build an international-standard entertainment complex at Phong Nha-Ke Bang National Park inclusive of a casino in Quang Binh Province.

The government of Quang Binh recommended the South Korean investor Tram Village in Son Trach Commune and Chay Lap Village in Phuc Trach Commune, Bo Trach District for development of the project.

As proposed by the investor, the entertainment complex will include a casino, hotels and city on mountain, an outdoor recreation area, Son Doong Cave and the cave system near Phong Nha-Ke Bang National Park. The total investment capital is over US$4 billion, according to a document published on the website of Quang Binh Province.

Quang Binh’s government last month signed a memorandum of understanding on socio-economic development strategy and cooperation between the province and the South Korean investor, including construction of the entertainment complex. In late September, the province conducted a survey of locations and then released the document on investment in this project early this month.

Apart from the aforesaid locations, the provincial government also suggested other sites, such as U Bo Area in Phu Binh Commune and Da Nhay Area.

Casino is a conditional service. The Ministry of Finance last month issued a decree on management of casinos, specifying the requirements for casino operators.

One of the key requirements is those wanting to open new casinos must invest in a tourism, service and recreation complex worth at least US$4 billion so that they can apply for certificates to run casinos.

Phong Nha-Ke Bang National Park covers some 85,700 hectares encompassing Bo Trach, Minh Hoa and Quang Ninh districts of Quang Binh Province.

The national park is divided into three zones: the nature reserve zone of over 64,800 hectares, the ecological restoration zone covering some 17,400 hectares and the 3,400-hectare administrative zone.

Sugar surplus threatens mills in Mekong Delta

The increasing popularity of illegally imported sugar threatens to put sugar mills in the Mekong Delta region out of business, says Nguyen Thanh Long, Chairman of Vietnam Sugar and Sugarcane Association.

Illegally imported sugar is sold for cheaper prices than the locally produced sweetener. Every year, 400,000 tonnes of sugar are imported illegally to Viet Nam. But the country is also expected to produce over 1.5 million tonnes of sugar in the 2012-2013 sugarcane crop. As a matter of fact, the country would face a sugar surplus, Long added.

Sugarcane grower Nguyen Thi Phuong from Phung Hiep District, Hau Giang province, which has the largest sugarcane planting in the Mekong Delta region, said that even though this year’s sugarcane price was as low as VND 8,000 per kilo, she was not able to sell any sweetener from her eight-hectare plantation.

According to Nguyen Van Dong, Director of Hau Giang’s Agriculture and Rural Development Department , sugar mills in the area have been refining an average of 90 hectares of sugarcane per day. So by the end of next month, about 4,700 hectares of sugarcanes will be cut for such production. Farmers will still have 1000 hectares of sugarcane left.

“The flood season has arrived, so the remaining sugarcane will deteriorate. This significantly affects sugarcane growers’ income. Many will have no capital to invest in their next crop,” Dong said.

Chairman of Hau Giang People’s Committee Tran Cong Chanh said authorities and farmers in his area have faced many difficulties in selling sugarcane to sugar mills over the last three years. As a result, his province has been considering shifting from sugarcane planting to rice cultivation. The province has currently grown 14,000 hectares of sugarcane.

General Director of Soc Trang Sugar Joint Stock Company Co Chi Dung said his mill has pressed 14,000 tones of sugarcane stems since early October, but still has 1000 tonnes of sugar in its inventory. Both Ben Tre and Hiep Hoa sugar mills said they face heavy losses. And Nguyen Thanh Son, Director of Ben Tre Sugar Mill, said his mill has lost VND 1,000 for every kilogram of sugar it produced.

The long distance from sugarcane planting areas to mills has made production costs high. The chairman of the sugarcane association suggested that in the future sugar planting areas should be moved closer to mills to reduce transportation and production costs.

At present, in south-eastern Viet Nam, eight kilograms of sugarcane can produce one kilo of sugar, while producing one kilo of sugar in the Mekong Delta requires 15 kilograms. Areas producing low quality sugarcane should grow other crops while areas with high quality sugarcane that are located near sugar mills should expand their plantings, Long suggested.

To stabilize the sugar and sugarcane industry, the market price of sugar should be at least VND 17,000 per kilo. Both growers and producers need to receive help from the banks and those monitoring the markets must deal with the illegal imports of sugar, said Nguyen Van Chinh, director general of Long My Phat sugar and sugarcane corporation.

Banks debts spur interest rate race    

Despite low credit growth, many banks have attempted to attract deposits.

The situation has drawn public concern over the safety of the banking system.

Tran Van Tan, Head of Credit Office under the State Bank of Vietnam (SBV)’s Credit Department, said total lending of the banking system in the first six months of this year was lower than the figure in late 2011.

Thanks to proactive moves taken by the SBV and financial institutions, credit growth has improved since the beginning of the third quarter of this year. By the end of September, credit growth nearly reached 2.5% while total deposits at banks increased by 13% compared to early 2012, he said.

According to Tan, low credit growth is attributed to the low capacity of firms to borrow and bank caution in lending for fear of potential bad debts.

Speaking of the deposit and lending paradox, Dr. Can Van Luc, a banking expert, said banks were stepping up attracting deposits in order to ensure liquidity.

For years, credit growth has always been higher than deposits, reaching over 30% compared to from 25%-27%.  Even last year, credit growth was quite low, at around 11%, deposit rate was only between 10.3% and 10.5%.

“In order to ease liquidity issues, some commercial banks have to attract more deposits. As of August 31, the SBV’s statistics showed that lending on deposit rate was 91%. However, the rate still implies potential liquidity risks, which forces banks to continue to lure deposits to improve the situation,” Luc emphasised.

While trying to restructure their deposits, banks are making efforts to attract medium and long-term by applying attractive interest rates. They also want to increase their cash reserves and prepare for huge disbursements in the last months of the year.

“In addition, some small and incompetent banks that have yet to be wholly restructured still face difficulties in liquidity. So, they have to attract more deposits at high interest rates,” Luc said.

Recent instability in the global gold market has also caused a domestic interest rate race, said an anonymous high-ranking financial expert of an auditing company. Bad debts in the banking system still remain a big problem, he noted.

The SBV’s statistics showed that by the end of March 2012, bad debts totalled around VND202 trillion (USD9.67 billion), accounting for 8.6% of the total lending. However, many foreign and domestic experts said that the real figure could be much higher and would be on the rise due to the economic difficulties some firms were facing.

Increasing bad debts threaten liquidity in the banking system. When a large amount of money is lent out, a modest volume of deposits is attracted meaning commercial banks are compelled to increase their risk provision funds.

“In fact, banks operate based on deposits. The more demand for deposits there are, the higher the interest rates,” he added.

Dr. Nguyen Duc Thanh, Director of the Vietnam Centre for Economics and Policy Research (VEPR) said interest rates would remain high until a solution to the bad debts was worked out.

Tighter budgets likely to lead to deferment in pay raises   

The Government is considering a plan to delay the planned increase in the minimum wage for State officials that was set for 2013 due to limited state budget.

The plan was included in a report on the Sate budget estimate for 2013, recently delivered by the Ministry of Finance.

According to Minister of Finance, Vuong Dinh Hue, the increase in minimum salary planned to take effect on May 1, 2013.

But he said that, due to the impacts of the economic downturn, the State budget is lower than expected, making it necessary for the Government to make cutbacks.

The ministry explained that minimum salary has been raised eight times in the past nine years, consistently between VND100,000 and VND200,000 (USD4.79-USD9.58). Representatives from the ministry have said that another pay raise would be imprudent under during current economic situation.

Still, there have been other suggestions that the Government increase minimum salary for state officials from the current VND1.05 million (USD50.31) to VND1.15 million (USD55.1) per month in order to ensure a living wage.

These also came with the recommendation to increase assignment allowances to 30% starting May 1, 2013, from current 25%. The funding for the increases, they suggested, could come from domestic income and oil export taxes.

While delaying pay raises for Government office employees, the planned increases to the minimum wage at private enterprises would go ahead. For these employees it would mean an increase in the minimum wage from VND1.4 million (USD67.08) to VND1.7 million (USD81.45) per month. The maximum increase would be VND2.4 million (USD115) per month, from current VND2 million (USD95.83).

An anonymous official from the Ministry of Labour, Invalids and Social Affairs said the Government’s final decision on the issue would be announced within the month.

Truong Thi Mai, Chairwoman of the NA’s Committee for Social Affairs, commented that around 22 million people would be affected by the pay raise deferment.

She proposed that the Government make a quick decision on the issue of salaries for workers at enterprises next year, saying that any decision should be made as soon as possible.

Despite forecasts, this year the budget of the State and many local governments have fallen short of expectations, and a heavy dependency on natural resources as a source of revenue has impeded the Government’s best efforts at achieving sustainable budgets.

Philippine businesses discuss investment opportunities in Vietnam

Businesses from the Philippines met at a seminar in Ho Chi Minh City yesterday, October 16, to discuss investment opportunities in Vietnam.

The seminar titled ‘Vietnam-Destination for Investors’ aims to help businesses from both countries to strengthen cooperation and promote effective implementation of bilateral economic agreements.

Le Manh Ha, Vice Chairman of the People’s Committee of Ho Chi Minh City, said bilateral trade has developed well in many fields and there have been regular direct dialogues that have benefitted both sides.

He pledged to create the best conditions for foreign businesses to operate in HCMC.

The Philippines ambassador to Vietnam, Jerril Santos, said that his country currently ranks 27th among Vietnam’s foreign investors with many large firms having invested nearly US$300 million.

He said that in HCMC alone, Filipino businesses are involved in 26 projects with a total investment of $46 million. The two countries should tap their full potential for trade and investment cooperation, especially in agriculture, he added.

Other delegates at the seminar also highlighted prospects for Vietnamese and Filipino businesses to cooperate and utilize their advantages in human resources and food processing.

While attending an investment workshop on October 16, Manny V.Pangilinan, chairman of Maynilad business group of Philippines, paid a courtesy visit to meet Le Hoang Quan, chairman of the City People’s Committee.

During the talks, Chairman Quan expressed appreciation of Maynilad group’s projects in the field of water supply and wastewater treatment in Manila and many other areas in the Philippines, and said the conditions were favorable for cooperation between HCMC and the Maynilad business group.

US tops list of importers

The US ranked first in the top five markets for Vietnamese exports last month, with a trade surplus of more than US$1.2 billion recorded for Viet Nam, according to the General Department of Customs’ statistics.

Statistics from the Ministry of Industry and Trade showed that export turnover to the US in the first nine months of this year hit $14.32 billion, an increase of 14.83 per cent over the same period last year.

In September alone, turnover reached $1.58 billion, mainly thanks to garment and textile products, (making up more than 41 per cent), footwear (12 per cent), wood products (9 per cent) and fisheries (6 per cent).

The US was followed by Hong Kong, the UK, Australia and the United Arab Emirates in terms of trade surplus in Viet Nam’s favour.

For the remainder of the year, export turnover to the US must amount to $2 billion per month on average to fulfil the target of $20 billion for the whole year.

The ministry said the figure might be achievable if the US economy sees continued signs of improvement and rising consumption during the final months of the year.

However, Pham Xuan Hong, president of the HCM City Textile and Garments Association, said that enterprises encountered a lot of difficulties in seeking contracts in the US market as many were cancelled due to price fluctuations for materials.

According to the customs department, the biggest share of imports to Viet Nam came from China, with Viet Nam holding a trade deficit with its northern neighbour of more than $1.5 billion last month, an increase of 6 per cent over August.

The country’s total import-export turnover during the first nine months of this year was $166.96 billion.

Kuwait to create Asian development fund

The Amir of Kuwait announced plans for a US$2 billion fund to finance projects in non-Arab Asian countries yesterday, as leaders from 32 Asian nations gathered in Kuwait City for the first Asian Co-operation Dialogue summit.

Established to discuss measures for promoting economic and trade cooperation in the region, Sheikh Al-Ahmad Al-Sabah kicked off proceeding by unveiling plans for the fund, which Kuwait will contribute $300 million towards.

As well as non-Arab Asian development, the Asian Development Bank proposed fund will also finance projects that contribute to achieving the Millennium Development Goals.

Addressing the opening ceremony at the Bayan Palace, the Amir of Kuwait emphasised the need to create an investment-friendly environment in the continent.

He called for promp enactment of the necessary legislation to promote such an environment to stimulate intra-regional trade between Asian countries.

He put particularly focus on improving transport and communication as a means of increasing the exchange of goods and services.

The Amir also urged participating countries to strive towards improving living standards for people in the continent.

“Accelerating population growth in our continent, which accounts for 60 per cent of the world total, places a burden on our development plans,” said the Amir.

“This requires us to work without delay to provide work opportunities and job security to achieve economic integration between our countries.”

As the country coordinator of the forum, Thai Prime Minister Yingluck Shinawatra also mentioned the importance of maintaining economic links between member countries, particularly in times of economic downturn.

We need to create new routes in Asia to enhance trade and investment in the region, she said.

Meanwhile, the Arab League’s Secretary General Nabi Al-Arabi confirmed Arab nations form part of the Asian continent, adding that there are “strategic ” interests to foster.

Yesterday, participants also discussed other aspects of cooperation including raising the quality of healthcare, education, human resource mobilisation and environment.

Before closing today, the summit is scheduled to approve a 22-article statement which tackles various aspects of cooperation among ACD member states. This is expected to place solid foundations for joint ventures, enhancing trade exchange among Asian countries as well as commercial and trade cooperation between Arab nations and the rest of Asia.

The summit also attracted roughly 3,000 delegates, including economists and researchers from across the continent.

Launched in Thailand 10 years ago,the ACD steadily evolved from 18 founding countries to 32, representing every sub-region of the continent. The dialogue covers 20 areas of cooperation from economic to social, cultural, educational and technological advancement.

Viet Nam has been a member since 2002 and is this year represented by Deputy Foreign Minister Le Luong Minh.

Rice prices increase again in Mekong Delta

After rice prices plunged drastically in early October due to long lasting rains, prices have once again increased over the last few days in the Mekong Delta.

In early October rice prices had plunged to VND3,500-4,400 a kilogram, but on Monday, traders in Dong Thap, An Giang and Vinh Long Provinces paid VND5,800 a kilogram for normal rice variety and VND6,500 a kilogram for the fragrant variety.

Husked rice also went for VND7,700 a kilogram for 15 percent broken rice and 7,900 a kilogram for five percent broken rice.

Traders and export businesses said that the quality of autumn-winter rice crop this year was lower than in previous years, affected by long lasting rains which had either inundated or flattened several hectares of rice fields in the Mekong Delta.

The Vietnam Food Association said that in September export businesses delivered 749,480 tons of rice worth US$330 million.

The country exported more than 5.8 million tons of rice worth $2.6 billion in the first nine months of this year.

Promoting Vietnam’s tourism in Australia

A programme on Vietnam’s tourism was held in the Australian cities of Melbourne and Sydney on October 10-12 as part of the national tourism promotion initiative.

The event was co-organised by the Vietnam National Administration of Tourism (VNAT), the Vietnamese embassy in Australia, and Vietnam’s Consulate General in Sydney.

VNAT Deputy General Director Nguyen Quoc Hung said that the programme offered an opportunity for tourism businesses and airlines to meet and establish partnerships. It also provided information on the sector in Vietnam and replied to partners’ queries, helping to strengthen the multi-faceted cooperation between Vietnam and Australia.

Participants were given a broad introduction to Vietnam – its land, people, and cultural characteristics – before taking part in specific discussions about tourism in the country.

Last year, Vietnam welcomed nearly 290,000 Australian visitors. Australia ranked seventh among Vietnam’s top 10 leading tourism markets.

Under the Vietnamese tourism development strategy, in effect from now until 2020 with a vision to 2030, Australia will become one of Vietnam’s major tourism markets.

Vietnam-Brazil trade exchange keeps rising

Vietnam-Brazil trade exchange in the first nine months of this year reached more than US$1.3 billion, up 23.2 percent against the same period last year, according to statistics from the Brazilian Ministry of Development, Industry and Foreign Trade (MDIC).

Brazil’s export earnings from Vietnam were estimated at US$708.83 million worth of goods (up 23.3 percent) and its imports from the country at US$597.3 million, (up 23 percent).

Brazilian goods included soya bean, cotton, raw tobacco, corn, wood, and steel, while Vietnamese items were mainly footwear, frozen fish, and rubber.

Danang attracts US$152 million in FDI

The central city of Danang has attracted over USD152 million in foreign direct investment (FDI) in the first nine months of the year.

The central city of Danang has attracted over USD152 million in foreign direct investment (FDI) in the first nine months of the year.

Of the total, more than US$107 million came from 24 newly licensed projects, while the rest was additional capital of 12 existing projects.

Processing and manufacturing industries attracted the largest amount of investment capital, US$86.1 million, accounting for 56.5 percent of the total. Real estate came in second with US$062.5 million.

Of the new projects, the most noteworthy are a US$40 million plant of the Japanese Tokyo Keiki Precision Technology Co., Ltd, a US$32 million project to build the Danang information technology zone invested by Roccky Lai & Associates of Panama, and a US$14 million beverage can plant invested by Singaporean Crown Packaging Investment Co., Ltd.

So far, 10 countries and territories have invested in Danang city.

With 12 projects worth more than US$61.7 million, Japan has ranked first among 10 countries and territories investing in Danang since early this year. It was followed by the Republic of Korea with 6 projects worth over US$17.7 million and Singapore, US$14.2 million.

Hanoi Gift Show 2012 to open soon

Around 489 importers from 41 nations have registered for Hanoi Gift Show 2012 scheduled for October 26-30.

The Hanoi Department of Industry and Commerce said that the event, the largest of its kind in Hanoi, has attracted around 550 pavilions put up by more than 230 handicraft businesses from across the country.

The event will provide a good chance for local fine arts and handicraft companies and craft villages to find business partners.

On display are handicraft products, interior decoration, garment and textile items, gifts and souvenirs from different ethnic groups, as well as indoor and outdoor wood products.

Vietnam exports 300,000 tonnes of rice to Indonesia

The Southern Vietnam Food Corporation (Vinafood 2) has signed a contract with Indonesia’s Logistics Board (Bulog) to export 300,000 tonnes of 15 pct broken rice to the country, according to Saigon Giai phong (Liberated Saigon) daily.

Truong Thanh Phong, Vinafood 2 General Director said the delivery will be made from late October to the end of this year.

The Vietnam Food Association (VFA) reported that Vietnam exported more than 6 million tonnes of rice in the first nine months of this year, earning US$2.6 billion.

Last year, the country shipped abroad 7.1 million tonnes, worth US$3.65 billion.

ADB supports Vietnam in SOE restructuring

Vietnam appreciates the Asian Development Bank (ADB) for its continued support for the restructuring of State-owned enterprises (SOEs), said Deputy PM Vu Van Ninh.

While receiving ADB Vietnam Country Director Tomoyuki Kimura in Hanoi on October 17, Ninh spoke highly of the bank’s contributions in terms of policy consultations and technical and financial assistance for the economic restructuring in general and the restructuring of SOEs in particular.

Vietnam has already designed development strategies for the next five and ten years which chiefly focus on achieving sustainable growth, social welfare, new growth models and better investment climate, said Ninh.
The ongoing projects financed by ADB will definitely make positive contributions to the restructuring process and the shifting of growth model in Vietnam, he added.

In the coming time, a host of mechanisms and policies will be amended to fit in with international practices and new circumstances and Vietnam hopes to continue to receive more assistance in terms of capital, experience and policy consultations from ADB in the course, Deputy PM Ninh said.

For his part, Director Tomoyuki Kimura underlined his institution’s commitments to supporting the economic restructuring, especially the restructuring of SOEs, in Vietnam. ADB has passed the country partnership strategy for the 2012-2015 period which centers on the restructuring of SOEs.

He also lauded the Vietnamese Government for its strong pledge on SOE restructuring, suggesting the Southeast Asian nation strengthen transparency and information dissemination to guarantee confidence of investors.

Vietnam promotes economic-trade in European countries

A delegation from the Foreign Ministry led by Deputy Minister Nguyen Phuong Nga paid working visits to Hungary, Slovakia and Norway from October 8-16 to promote economic-trade ties with these countries.

In Hungary, the delegation met with leaders of the Ministry of Foreign Affairs and representatives of the Vietnamese business community, and attended a forum on ASEAN.

The Hungarian side said that in its Look-East open door policy, Hungary attaches importance to developing ties with Southeast Asia countries, including Vietnam.

Hungary affirmed that it will continue providing ODA for Vietnam and strengthening cooperation with the country in training human resources for nuclear power plants, health care, water resource management and information technology.

The country pledged to back Vietnam in the ratification of the Vietnam-EU Comprehensive Partnership and Cooperation (PCA) and negotiations for a Free Trade Agreement (FTA) with the EU, as well as to closely cooperate with Vietnam at international forums.

In Slovakia, the Vietnamese delegation attended a seminar on strengthening Vietnam-Slovakia investment and trade ties and held working sessions with Foreign Ministry leaders.

The Slovak side spoke highly of cooperation potential with Vietnam and showed their interest in investment opportunities in the country in the fields of small- and medium-sized hydropower, plastics and construction materials.

Slovakia is ready to cooperate with Vietnam in training human resources and ensuring the safety for nuclear power plants as well as supporting the country in the negotiations for the FTA and the ratification of the PCA with the EU.

In Norway, the Vietnamese diplomats attended a seminar on investment in Vietnam and worked with leaders of the Ministries of Foreign Affairs and Industry and Trade.

Norwegian officials pledged to assist Vietnam to promote green growth and seek cooperation with Vietnamese businesses in oil and gas, energy, navigation, shipbuilding and industry.

250 Argentinian businesses to conduct survey in Vietnam

Around 250 Argentinian businesses have registered to join a survey of the Vietnamese market later this month.

The visit is part of trade promotion activities launched by the Argentinian Government in 2012.

The participating enterprises operate in industries like food and beverages, automobiles, machinery and construction equipment, agriculture, garments and textiles, and pharmaceuticals.

The Argentinian businesses are scheduled to arrive in HCM City on October 28 and will meet Vietnamese partners on October 29-30.

Promotional activities preceding the third session of the Vietnam-Argentina inter-Governmental Committee are slated for October 31 in Hanoi.

In November, the Argentina Federal Investment Council will send another trade promotion delegation to Vietnam featuring representatives of eight businesses from Buenos Aires, Catamarca, Mendoza, and Santa Fe.

According to statistics from Argentinian Customs, last year’s two-way trade between it and Vietnam has reached a record figure of more than US$971 million, up 17 percent over 2010.

Last year, Vietnam’s key products exported to Argentina were footwear and accessories, rubber, garments and accessories, mechanical equipment, and electronic products. Its primary Argentinian imports were soya beans, plant and animal fat, cereals, leather, and fuels.

Spanish enterprises explore Vietnamese market

A group of Spanish agricultural machinery businesses will visit Thailand and Vietnam over October 22-26.

The visit has been arranged under a trade promotion framework in Southeast Asia, organised by the Spanish Manufacturers–Exporters Association of Agricultural Machinery, Components, Irrigation Systems, Livestock and Post Harvesting Equipment (Agragex).

In addition to Vietnam and Thailand, Agragex has also conducted trade promotion visits to Indonesia and Philippines this year.

In 2010 it organized fact-finding tours of Vietnam and the Philippines for 9 businesses.

Despite the global economic downturn, agricultural machinery exports earned Spain more than 1.6 billion euro in 2011.

Vietnam eager to promote financial cooperation with Bulgaria

Vietnam is keen to expand cooperation and strengthen the ties of friendship with traditional allies in Central and Eastern Europe, including Bulgaria.

Minister of Finance Vuong Dinh Hue made the statement at a meeting with Bulgarian Deputy Prime Minister and Minister of Finance Simeon Dyankov in Hanoi on October 17.

Minister Hue said the Ministry of Finance praises Bulgaria’s support for Vietnam in its past struggle for national liberation and defence and for helping train many Vietnamese officials, experts, and workers.

Vietnam initiated its renewal process in 1986 and aims to become an industrialised country by 2020. Bulgaria began economic reform in 1990 and shifted into a market economy.

Vietnam wants to learn from Bulgaria’s experience of the transition. Economic cooperation between the two countries remains modest. Two-way trade turnover stands at just US$100 million and Bulgaria is only involved in eight Vietnamese projects worth a total of US$30 million.

Vietnam encourages Bulgarian businesses to invest in infrastructure, Hue said.

Minister Dyankov noted Bulgaria has seen success in some sectors of the economy, including the energy industry, mining, and mechanics. The country ranks first among Eastern European nations in terms of zinc and iron products and 19th in the world in coal and copper production. It ranks 11th in the world in sunflower seeds, 15th in cigarette production, and 18th in chili.

It attracts 4 million tourists per year.

Dyankov voiced his hope that the Vietnamese Ministry of Finance can act as a bridge between the two countries, promoting the advantages of the relationship to mutual development.

Australia eyes exporting cattle to Vietnam

Vietnam could become a major export market for Australian cattle, according to Willem Westra van Holthe, Northern Territory Minister for Primary Industry, Fisheries, Mines and Energy.

At a recent meeting with Vietnamese Embassy representatives in Australia, he and Northern Territory Business Minister Peter Chandler spoke highly of the two countries’ cooperative potential and confirmed intentions to boost bilateral trade ties between the territory and its Vietnamese partners.

Minister van Holthe predicted that in the next 2-3 years, Vietnam will import nearly 100,000 cattle from Australia and become its second largest importer after Indonesia.

He expressed hope that Vietnam will further improve its slaughterhouses’ capacity.

On October 4, 1,500 cows worth around US$1.5 million were shipped from Darwin, destined for Vietnam.

Another transaction involving a similar amount of cattle is expected to be negotiated by the end of the year.

Australia first exported 945 cows to Vietnam in September 2011.

Vietnam aims for 5.5 percent GDP growth in 2013

A report on socio-economic development in 2012 and orientations for 2013 will be presented by the Ministry of Planning and Investment (MPI) at the 13th National Assembly’s fourth session next week.

The MPI estimates Vietnam’s GDP growth in 2013 at 5.5 percent, with total export turnover rising 10 percent over 2012 to US$124.3 billion. Budget overspending will stay at around 4.8 percent of total GDP, while the consumer price index (CPI) growth will be kept at 7-8 percent.

Dr. Tran Dinh Thien, Director of the Vietnam Institute of Economics, says that the country should set a realistic target of GDP growth in 2013 at 4-4.5 percent.

Judging by the effectiveness of public investment in some construction projects, Dr. Thien says it seems difficult to maintain the same level of investment as in 2012.

In his opinion, the national economy is facing an imbalance between supply and demand and, no doubt, public investment will more often than not go against the Government’s goal of stabilizing macroeconomy.

Regarding economic growth in recent months, Dr. Thien says the rising credit debt ratio has led to economic slowdown when the flow of capital is hard to come by.

He argues that most economies in the world will experience a low economic growth in 2013, and find it increasingly difficult to gain momentum.

According to the International Monetary Fund (IMF)’s forecast, the world economy will likely face crunch time in 2015, even more risks until 2017 and, of course, Vietnam will be affected by global market fluctuations. So, it is impossible to iron out snags in the national economy as early as expected.

Dr. Thien suggests Vietnam should concentrate on stabilizing its macroeconomy and curbing inflation by mobilizing all available sources to settle bad debts and reduce inventory levels.

Regarding the MPI’s plan to keep budget overspending at 4.8 percent of total GDP, economist Vo Tri Thanh says that won’t be easy at all as the total budget collection in the past nine months of 2012 accounted for less than three-quarters of the set target for the whole year.

Dr. Thanh says restructuring the banking system and settling bad debts will remain too challenging a task to be fulfilled in the next three or four years.

Dr. Nguyen Dinh Chung, Deputy Head of the Central Institute for Economic Management (CIEM), is also worried about the risk of budget overspending. He says the government would rather make good planning for capital allocation than mobilize capital sources for inefficient projects.

Dr. Thanh agrees that all rescue efforts will be to no avail unless business operations are restructured properly.

Seafood firms angle for tax break

Seafood companies that import raw materials for processing exports have asked the Government to extend their 275-day grace period for paying import duties.

The grace period is allowed under the Import and Export Tax Law for companies that import raw materials and accessories for production of goods for export.

The Ministry of Finance, however, has recently compiled a draft on the revised Tax Management Law that requires companies to pay tax before customs clearance, or provide a guarantee from a credit institution before they can secure the 275-day grace period.

Speaking at a seafood-industry conference held in HCM City yesterday, Nguyen Hoai Nam, deputy general secretary of the Viet Nam Association of Seafood Exporters and Producers (VASEP), said many industries that rely on imported materials, especially seafood, electronics, footwear, and textiles and garments, were surprised about the draft’s content.

Most seafood companies have to import materials since local sources only meet 60-70 per cent of their production capacity.

Conference participants said that companies would encounter more financial difficulties and would have to scale down production if the changes to the grace period were approved.

They also pointed out that banks charged 2-3 per cent a year for guarantee fees, plus interest rates, pushing up production costs and product prices, affecting the competitiveness of Vietnamese goods.

Nam said Viet Nam imports about US$600 million worth of seafood materials each year. With an average tax of 20 per cent, seafood companies would have to pay a total of $120 million a year in taxes.

If the Finance Ministry’s proposal is approved, importers would have to pay an additional cost of $3.36 million in bank-guarantee and interest rate fees, Nam said, adding that this was unreasonable.

VASEP sent a letter to the General Department of Customs under the ministry, asking that the proposal be shelved.

But the Customs Department rejected the request, saying that many exporters were taking advantage of the grace period to evade taxes.

The department said enterprises could use letters of credit for their future shipments as collateral.

“In the current economic downturn, seafood buyers do not want to use letters of credit,” said Nguyen Xuan Nam, general director of Hai Vuong Co, Ltd.

Nam also complained about the complicated procedures for tax refunds, saying that it took much time and affected company’s cash flow.

Nguyen Thi The Yen, director of Hai Long Nha Trang Company, said she was worried that her company would go out of business if the draft regulation is approved.

Under such tough economic times, the State should create more favourable conditions for enterprises to cut down expenses and boost exports, many conference participants said.

During the meeting, conference attendees asked the Government to eliminate import tax on seafood raw materials, which they said Thailand and other countries had done.

VASEP and companies in garments and textiles, electronics and footwear plan to send requests to the National Assembly and other agencies about this issue.

In the last five years, seafood material imports rose sharply, from $247.7 million in 2007 to $541 million last year, contributing $400-900 million a year to total export revenue.

Danang Cancer Hospital to open soon

Danang City’s Sponsorship Association for Underprivileged Women and Children last week received financial assistance from organizations and individuals for the Danang Cancer Hospital that has been built thanks to the contributions of donors nationwide.

The sponsors are seven companies in the areas of banking, trade, textile and taxi transport and others in Danang, HCMC and Hanoi. They not only donated a combined VND3.5 billion in cash but also provided other useful items such as ambulances, medical beds, televisions and refrigerators.

Specially, the chairman and general director of Vietnam-South Korea Medicine Joint Venture was also present at the ceremony last Thursday to hand over cash and to witness the hospital under progress for completion.

The hospital will help diagnose diseases for residents in the central region for timely treatment, said Nguyen Thi Van Lan, vice chairwomen of the sponsorship association.

The non-profit hospital offers fee reduction and exemption for needy cancer patients along with many other facilities set aside for the poor. With such a humanitarian purpose, the hospital has attracted strong attention from local public and international friends.


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