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Forestry land to be used for agriculture

The People’s Committee of central Quang Binh Province has decided to revoke more than 890ha of forest land that currently belongs to a forestry company in order to allocate the land to ethnic minorities for agricultural production.

Nguyen Xuan Quang, standing vice chairman of the committee, said the provincial Department of Natural Resources and Environment would work with local authorities to return the land of Long Dai Forest-Industry Co,Ltd in Truong Son Commune to local people.

The local authorities would be in charge of informing land recipients about regulations on land management and protection, he said.

Kazakhs visit central Viet Nam

Focus Travel of Viet Nam will join hands with four travel firms from Kazakhstan to bring Kazakh tourists to Cam Ranh in Khanh Hoa Province on chartered flights.

From December 27 to April next year, Focus Travel will have a Boeing 757 aircraft fly from Almaty City in Kazakhstan to Cam Ranh every 10 days.

Starting next year, the travel firm will receive tourists on regular flights of Kazakhstan carrier Air Astana. From next January, it will have an additional 80 Kazakh tourists per flight. Air Astana will operate two weekly flights between the two cities.

Focus Travel, which specialises in Russian-speaking markets, has been regularly bringing tourists to Nha Trang and Phan Thiet.

VietJetAir, VTA sign deal

VietJetAir and the Viet Nam Tourism Association (VTA) have reached an agreement under which the budget carrier will provide tour operators with favourable airfares and the association will seek customers for air routes operated by the airline.

Vu The Binh, vice chairman of the tourism association, said VietJetAir would join all the association’s programmes to attract customers and offer preferential airfares and booking incentives to the association’s members. Meanwhile, the association will ask its members to canvass passengers for VietJet’s services, especially on new routes – Ha Noi-Da Lat and HCM City-Bangkok – to be opened next month.

Quang Ninh targets Europeans

European travellers will be the focus of Ha Long Tourism Week 2012, held from November 27-30 in the northern province of Quang Ninh.

The event, expected to welcome around 140 representatives of travel agencies and journalists from France, Belgium, the Netherlands, Germany and Britain, is being organised by provincial authorities in co-operation with national carrier Vietnam Airlines.

According to the Quang Ninh Department of Culture, Sports and Tourism, in the first ten months of this year, the province welcomed over 5.9 million travellers, including nearly 2 million foreign visitors, up 7 per cent over the same period last year.-

Export to EU in 2013 predicted to face slowdown

Vietnam’s export to the European Union (EU) is estimated to grow 20% this year, but the growth rate for next year is forecast at only 10%.

The growth rate of 20% for this year is satisfactory given the difficult economic situation in Europe at present, said Dang Hoang Hai, director of the Europe Market Department under the Ministry of Industry and Trade.

However, export to the EU market is forecast to only pick up 10% next year. Even this growth rate demands great efforts of Vietnam, said Hai.

Truong Thi Thuy Lien, director of Lien Phat Footwear Company, said her company’s exports to the EU had dropped 30% in the first ten months of the year. However, she declined to reveal the specific figure.

Shoes export in the rest of the year and January next year will continue to face problems. The company has received export orders for next year from the EU partners, albeit few, said the director.

Footwear is one of the key items of Vietnam for export to the EU, which is also the main market for export of Vietnamese footwear products.

As export to the EU is forecast to remain challenging next year, Lien Phat has taken the initiative to receive orders from Japan.

“In fact, Japanese partners once came to our company, but their requirements were very high. As the EU market is in troubles now, our company is seeking orders from Japan again,” said Lien.

Statistics revealed by Eurostat on November 15 show that the eurozone has fallen into recession for the first time after three years of the debt crisis. The gross domestic product (GDP) of the trade bloc in the third quarter dipped 0.1% over the preceding quarter, after falling 0.2% in the second quarter.

According to the General Department of Customs, Vietnam exported US$16.1 billion worth of products to the EU in the first ten months of 2012, recording a growth of over 20%. However, this growth is mainly attributed to the growths in export turnovers of the major items of foreign-invested enterprises, such as mobile phones, electronic products, computers, machines and equipment.

Specifically, mobile phones and spare parts exported to the EU brought in US$4.43 billion in the first ten months, doubling the figure of last year, making up 44% of the total export turnover of this group of items.

Meanwhile, computers, electronic products and components fetched US$1.11 billion, up 78.1% year-on-year.

In the same period, textile-garment exports to the EU reached US$1.98 billion, down 5.6%, and footwear exports generated US$2.08 billion, up 2.2%, accounting for 35.7% of the total export turnover of this commodity group.

Information security still vulnerable

There have been no large-scale attacks on information security this year but a series of local websites have been targeted by hackers causing a lot of headaches to enterprises, experts said at the Vietnam Information Security Day in HCMC last Friday.

Trinh Ngoc Minh, vice chairman of the Vietnam Information Security Association (Vnisa), said over 2,500 Vietnamese websites were attacked by hackers this year. This is a staggering growth compared to just 300 websites attacked in 2011, with the websites of State management agencies affected.

Besides, the number of computers infected with harmful codes in Vietnam is still high, at a ratio of 18.1 per 1,000 computers, compared to the global rate of seven per 1,000 computers.

“Our internet and telecom equipment is all imported and we have no other choice but to put our trust in producers that they are not installing harmful codes into the equipment,” Minh stressed.

The experts shared the same view that the commitment is no longer reliable as several nations now are concerned about the frankness of commitment of a number of equipment suppliers. This is a big challenge to both governments and enterprises, they said.

Regarding the reason why hackers target a certain entity, 57% of firms said it was because of the reputation of the firm or its asset value that can be retrieved via the internet.

Vnisa advised local companies to continue boosting investment in long-term information technology applications and build up information security process by applying information security standards like ISO 27000 or ISO 27002.

Farmers should be cautious despite fish undersupply

The fact that tra fish supply is forecast to fall short until this year’s end, or even next year’s first quarter, is considered a good signal for farmers to resume fish production, but experts warn against massive fish farming at present.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that although tra fish supply was said to be insufficient, it was really hard to precisely measure the supply.

Statistics of the Department of Agriculture and Rural Development of Dong Thap show that the total tra fish farming area of the province had reached nearly 1,680 hectares as of November 5, in which 902 hectares had been harvested, producing an output of over 330,000 tons. As such, the province still has around 780 hectares of tra fish yet to be harvested, a considerable volume.

Nguyen Huu Nguyen, member of the An Giang Fishery Association (AFA), said: “I think fish farmers should thoroughly consider whether to raise new stocks or not because the export situation is still difficult.”

Talking about the situation in which many tra fish processors and exporters had halted operations due to material shortage, VASEP vice chairman Duong Ngoc Minh said tra fish material supply had not run out, but export-qualified fish were actually insufficient.

Minh, who is also chairman of Hung Vuong Seafood Co., said his firm was still operating at 50% capacity because the fish that his firm raised had not grown to the size qualified for export.

“Some say material supply has mostly run out, while others say it is still sufficient. It is very difficult to grasp the current situation, requiring in-depth surveys and analyses,” said general secretary Hoe of VASEP.

At present, farmers are reducing fish farming due to credit tightening, while enterprises are also mired in troubles, said Minh.

Material supply for export in the early months was mainly provided by enterprises themselves, but now many of them are facing financial distress, so they can hardly raise new fish on their own or buy fish from farmers.

Incompetent construction contractors to be named and shamed

Vietnam should have regulations to assess the ability of contractors, experts said at a recent conference held by the Ministry of Construction.

Chairman and General Director of Global Petroleum Investment Corporation Nguyen Quoc Hiep gave an example of current loopholes in contract bidding for construction work that allowed a subsidiary company that is weak in human resources and capital to use its parent company’s dossier to bid.

Although the parent company would be qualified to construct a project, it’s smaller subsidiary would be incapable of meeting the client’s demands.

Hiep said in this case the management agency must clarify the responsibility of which legal business entity was signing the bid submission document to avoid problems and fraud.

President of the Vietnam Association of Construction Contractors (VACC), Vu Khoa said there were many loopholes in the regulations.

This was why so many grossly incompetent contractors won bids at low prices but can’t complete the construction work or did a low quality work.

Khoa called for a public assessment of contractor capacity, with the results made public.

However, what criteria should be used for the ranking lacked consensus among the conference delegates.

Dinh Dang Khoa, Associate Prof., Ph. D of University of Civil Engineering said they should rank enterprises that had been in operation for at least three years.

Khoa also suggested classifying the contractors by their expertise, such as construction design consultant or surveyors. The assessment could be based on the enterprises’ profits or production value.

Deputy Minister of Construction Bui Pham Khanh said the ministry was already surveying the capacity of the country’s construction enterprises.

“Based on the results, we will propose the criteria for the ranking.” he said.

Firms deliberately ‘bore’ staff to leave

Amid economic difficulties, many enterprises have applied several measures to bore their staff out of employment, rather than make them officially redundant.

According to the Vietnam Chamber of Commerce and Industry (VCCI), over 45,000 companies across the country filed for bankruptcy in the first ten months of this year.

Due to their difficulties, many companies have had to curbed production and cut their workforce. In several cases, even well-trained workers have been put in ridiculous situations that have forced them to voluntarily leave their jobs.

Ms. Yen was head of the communication department at a real estate firm in Hanoi. Due to the market slump, her company reported a decrease in revenues in the last two months, leaving her without her paycheque.

Worse still, since then the company started to apply strict regulations.

“I was surprised and embarrassed when being reminded about going to the toilet for more than five minutes. They repeated their behaviour several times.”

Yen decided to stop her job two months later and more surprisingly her proposal was approved right away.

Ms. Nga when seven months pregnant and working as a secretary for her company’s marketing department was moved to work in the firm’s kitchen. She was compelled to quit her job half month later as she felt bored and tired at work.

Another worker in Thuy’s company was also moved to work in the kitchen after her maternal leave despite previously working on the company’s website. She voluntarily left her job two weeks later.

Managing Director Nguyen Thi Van Anh, of Navigos Search, an employment consultancy agency, said many firms still continue to dismiss their workers, especially in the finance and banking sector.

“Few companies in the sector have new recruitment plans. Employment opportunities are just offered to fill vacancies of those who have left,” she commented.

Some banks that are in the process of restructuring have cut their labour force and have no new recruitment plans.

The recruitment freeze continues to affect other sectors, especially at foreign invested companies. Only some Japanese invested firms have demand for new employees, she noted.

An anonymous official from Careervision Company said the dismissal of office staff had happened as a result of their human resource restructuring to save wage costs and management expenses.

Increasing numbers of management staff at medium level have failed to meet increasingly harder work demands, while it has been easier for leading company officials to be sacked amid the current economic difficulties.

“It’s high time for most staff to accept more tasks for the same pay in order to maintain their job,” Anh added.

Official blames cross ownership for banking risks

Banking mogul Nguyen Duc Kien’s case is a typical example of dangerous cross ownership, one official has said.

SBV’s Deputy Governor Dang Thanh Binh made the comment at a press conference on November 20 prior to the international meeting on financial stability and the role of financial supervision in varying environment.

According to Binh, there were no regulations that ban shareholders from holding shares in either multiple banks or banking institutions from holding shares in each other.

“Cross ownership does not foster healthy competition and transparency, but adds risks to the banking system,” he emphasised.

He said that the SBV is taking two measures to deal with the situation. The first one is to clarify the ownership structure of banks.

To this end, the SBV is inspecting the finances and ownership of 30 out of 39 commercial banks.

There are currently two social policy banks, 14 wholly foreign invested banks and their branches and six banking joint ventures in Vietnam, he noted.

The next step is to issue new regulations to strictly tackle inadequacies in banking ownership. Regulations on banking cross ownership are expected to be issued and take effect from next year.

In relation to the case of Kien and the ACB Bank, Binh said that the situation developed as a result of cross ownership.

The SBV is assessing the share ownership and financial situation at ACB and the results will act as the basis to work out measures to deal with the bank’s major shareholders. The SBV will reach a final decision on the case at the conclusion of the inspection, he added.

Dr Dinh Tuan Minh, author of a report on macroeconomic situation for 2012 recently stated that banking cross ownership and banks backed by state owned economic groups had reached an alarming level.

Minh said that even though not all forms of cross ownership are negative, when major shareholders in commercial banks are also big shareholders in enterprises, there is too much temptation for banks to be milked for cash at better rates in the interest of often unprofitable companies.

Banking cross ownership also encourages easy access to credit for corporate shareholders leading to poor risk management. This could result in increased bad debts in the banking sector, he noted.

HCM City’s CPI up 0.10 percent in November

Ho Chi Minh City’s consumer price index (CPI) in November rose 0.10 percent on October but 3.9 percent from a year earlier.

According to the Municipal Statistics Office, clothing, hats and footwear went up by 0.71 percent in price, home appliances by 0.60 percent, culture, entertainment and tourism by 0.54 percent, fuel and construction materials goods by 0.42 percent, medicines and healthcare services by 0.13 percent, drinks and cigarettes 0.09 percent, education 0.08 percent and transport 0.06 percent.

While post and telecommunications remained unchanged, food and drinks, commodities and other services went down by 0.18 percent and 0.10 percent, respectively.

The city’s FDI in November also decreased by 48 percent compared to the same month of last year.

Hanoi CPI up 0.22 percent in October

Hanoi’s consumer price index (CPI) rose 0.22 percent in November against the previous month, or 6.67 percent from a year earlier, according to the Municipal Statistics Office.

Most items in the commodity basket used to calculate the CPI saw an increase of less than 1 percent.

The price of homes, fuel and construction materials saw the highest increase of 0.99 percent followed by hats and footwear (0.95 percent), commodities and other services (0.41 percent), home appliances (0.40 percent), culture, entertainment and tourism (0.23 percent), medicines and healthcare services (0.17 percent), drinks and cigarettes (0.12 percent), education (0.04 percent) and transport (0.02 percent).

Food experienced a decrease of 0.05 percent, indicating a reduction in the cost of restaurant services.

Meanwhile, the gold price in Hanoi was down by 2.85 percent against October, while the local currency VND inched up by 0.12 percent against the US dollar.

Settlement of bad debts and economic restructuring

To achieve its set target for economic growth in 2013, Vietnam should shift focus onto the key tasks of dealing with bad debts and restructuring the national economy, says senior trade official Truong Dinh Tuyen.

On Vietnam’s economic instability, Truong Dinh Tuyen, former Trade Minister, cites three main factors which are internal and external market shocks, tight fiscal policies and inefficient economic structures.

Against the odds, the national economy will face crunch time next year, he says. So, it is essential to concentrate on stabilising the macroeconomy, controlling inflation, changing growth models, maintaining modest economic growth and ensuring social security.

The government has set major targets for 2013, including GDP growth of around 5.5 percent, export growth of 10-12 percent, a trade deficit accounting for 10-12 percent of export turnover, budget expenditure equivalent to 4.8 percent of GDP, and a CPI increase hovering around 8 percent – lower than this year’s figure.

This is no easy task to achieve on account of market fluctuations in Vietnam and abroad, Tuyen says.

Tuyen emphasizes that economic restructuring is a must to ensure macroeconomic stabilisation,  establishment of key market-economy institutions, creation of a healthy competitive environment, development of human resources, and promotion of science and technology applications. These premises, he argues, will help Vietnam remove itself from the list of low income countries.

In addition, it is important to build  well-integrated infrastructure, reduce public spending and increase the competitiveness of the national economy in order to facilitate the economic restructuring process.

Tuyen insists on restructuring service and production sectors, reorganising businesses and adjusting the market strategy with a sharper focus on promoting value-added industrial production, increasing overseas investment and improving supply chains. It also requires greater efforts to apply scientific and technological advances in agricultural production and rural development, he adds.

The former Trade Minister then dwells on the important role of financial services in ensuring economic efficiency and stability, as well as in helping businesses develop new markets and sharpen their competitive edge within the framework of macroeconomic management mechanisms.

He underlines the need for a comprehensive plan as part of the long-term strategy for global integration to promote border trade, expand the goods distribution network in rural areas, and ensure the protection of consumer rights.

Last but not least in the economic restructuring process is a shift of due attention to the public investment sector, State-owned enterprises (SOEs) and commercial banks, Tuyen says.

SMEs see a decline in investment, financial access

The Central Institute for Economic Management (CIEM) in Hanoi on November 21 released its latest report on Vietnam’s business environment in 2011.

According to CIEM, the report was based on a survey of 2,500 small-and medium-sized enterprises (SMEs) operating in the processing industry. Its focus was to analyse Vietnam’s business environment, in particular labour growth, investment, financial access and business capacity.

The report found in recent years SMEs have seen a decline in investment and financial access. About 444 of the 2,000 firms said that they have not made new investments in the past four years.

Credit is considered the biggest obstacle to the development of enterprises. Thirty-nine percent of respondents said that they are facing credit problems.

Dr. Pham Thi Thu Hang from the Vietnam Chamber of Commerce and Industry (VCCI) said that it is important to improve the quality of products to absorb more of the domestic market from goods that are illegally imported. The domestic market remains small- and medium-sized enterprises’ primary market.

Many experts say Vietnam is facing development challenges in small- and medium-sized enterprises. Many post-crisis policies are made and implemented by the Government to maintain the competitiveness of enterprises, small- and medium-sized firms in particular.

Forum on reducing Vietnam-China trade deficit

Vietnamese and Chinese businesses gathered at a forum in Hanoi on November 21 to seek ways to reduce Vietnam’s trade deficit with China.

Attending the forum, entitled “Vietnam-China Business Forum: Cooperation Potential and Opportunities”, representatives from 53 Vietnamese and Chinese firms, discussed issues on economic cooperation between the two neighbours.

They agreed that over the last year, economic-trade relations between Vietnam and China have developed vigorously. Since 2004, China has maintained its position as Vietnam’s largest trade partner with an annual two-way trade growth of over 20 percent in the last three years.

However, Vietnam’s trade deficit with China has increased, resulting in an imbalance in bilateral trade, they said.

Zhou Jian Jun, Director of the Hong Kong-based Zi Lu Investment Company Ltd, attributed the large trade deficit to a sharp increase in domestic demand and Vietnam’s low manufacturing capacity.

After Vietnam joined the World Trade Organisation in 2007, the country needed a large volume of imported materials from China for the production of exports to Europe and America, as well as to other Southeast Asian countries as a result of the ASEAN Free Trade Area, he said.

According to Tran Dinh Thien, Director of the Vietnam Economic Institute under the Vietnam Academy of Social Sciences, Vietnam’s trade deficit with its partners has grown rapidly since the country’s admission to the WTO due to weaknesses in Vietnam’s trade and production structures – especially support industries.

In recent times, many businesses from China’s Guangxi province have invested in Vietnam for a short time, only to withdraw investment and cause environmental pollution and negative socio-economic impact, he said.

To reduce this, the two countries should draw up strategies calling for long-term and selective investment from large Chinese businesses in Vietnam, he suggested.

Vietnam Customs reported that in the first half of 2012, two-way trade between Vietnam and China exceeded US$19 billion, a year-on-year increase of 21.76 percent. Of which, Vietnam’s trade deficit with China was over US$6.8 billion, up 5.56 percent.

China now has 866 valid projects in Vietnam with a total registered investment of US$4.52 billion, of which US$1.8 billion has been disbursed.

Vietnam-Finland trade enjoys rapid growth

Two-way trade between Vietnam and Finland has grown consistently, to US$200 million in 2011 and to US$260 million in the first nine months of 2012.

The figures were unveiled by Doan Duy Khuong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), at a seminar on the potential for trade with Finland and northern Europe, held in Hanoi on November 21.

Vietnam’s main exports to Finland are coffee, rubber, footwear, textiles and garments, handicraft, wood products, bicycles and spare parts, Khuong said.

Meanwhile, it imports machinery, equipment, telecommunication products, textiles accessories, electrical items, and steel.

Finland now ranks 26th out of 94 foreign investors in Vietnam, with US$340 million funneled into agricultural, forestry and water treatment projects.

Briefing Vietnamese businesses on opportunities in Finland, Finnish Ambassador to Vietnam Janne Sykko said despite its small population of five million, his country sustains high level of competitiveness, with trade contributing a large proportion to its GDP.

Finland’s main exports are steel products, machinery, vehicles, and optical devices.

Sykko said Finland will offer more incentives to encourage businesses to cooperate with their Vietnamese partners.

Also at the seminar, the Ministry of Science and Technology and Finland’s Foreign Ministry introduce a joint Innovation Partnership Program, aimed at sharpening the management and institutional capacity in the science and technology sector.

It will also help facilitate the growth of public-private partnerships, both  within Vietnam and between Vietnam and Finland.

Eurozone crisis likely to impact nation’s exports

Exporting to the EU market is predicted to be harder next year and growth will be reduced to only 10 percent against this year’s 20 percent estimation, said Dang Hoang Hai, director of the Ministry of Industry and Trade’s European Market Department.

Hai even warned that domestic exporters would have to take great pains just to reach the 10 percent growth.

The difficulty is due to the bloc’s continuous debt crisis, Hai said, adding that the European Union statistics office Eurostat showed that the 17-member euro zone has fallen back into recession for the first time since the global financial crisis hit hard in 2009. GDP fell by 0.1 percent in the euro area and increased by 0.1 percent across the 27-member EU during the third quarter of 2012, compared with the previous quarter. In the second quarter of 2012, growth rates were 0.2 percent in both zones.

Domestic exporters have also seen signs of difficulties when it comes to shipping to the EU market next year.

Director of the Lien Phat Footwear Co Truong Thi Thuy Lien said that her company’s exports to the EU in the last months of this year and early next year are expected to be more difficult as the company has received few contracts from importers.

Lien Phat’s exports to the EU market in the first 10 months of the year went down by roughly 30 percent over the same period last year due to the eurozone’s economic slowdown.

According to the General Department of Customs, Vietnam’s exports to the EU during the pass 10 months surged more than 20 percent to US$16.1 billion. However, the growth was mainly from exports of mobile phones, electronic products, machines and equipment, all produced by foreign invested enterprises. Mobile phone shipments to the market doubled from the previous period to reach US$4.43 billion while computer and electronic products also rose more than 78 percent to US$1.11 billion.

Meanwhile, key staple Vietnamese exports to the market barely inched up, if they did not decrease. For example, footwear exports increased by only 2.2 percent to US$2.08 billion while textile and garment shipments declined 5.6 percent to US$1.98 billion.

Tra fish meet quality standards

The tra catfish (pagasius) industry will achieve its target of 10 per cent of output meeting Aquaculture Stewardship Council (ASC) standards by the end of this year, a conference heard in HCM City yesterday.

Six pangasius processing firms including Vinh Hoan Corp, Hung Vuong Corp and Hoang Long Seafood Processing Co Ltd have received ASC certificates for sustainable development, Nguyen Huu Dung, deputy chairman of the Viet Nam Association of Seafood Exporters and Producers (VASEP), said.

“ASC certification recognises and rewards farms that are following responsible practices,” Chris Ninnes, head of the ASC, said.

“This includes conservation of water resources, no misuse of antibiotics, responsible use of feed, and behaving in a socially responsible manner.”

With the certification, Vietnamese pangasius products could enter new markets and protect existing ones since importers and consumers have now paid more attention to quality and social responsibility, he said.

Duong Ngoc Minh, general director of Hung Vuong, said some EU markets, especially Germany, the Netherlands, and Switzerland, attached great importance to the ASC label.

“Supermarkets there want to buy Vietnamese pangasius with the ASC logo, but we are unable to supply.

“ASC-certified pangasius products are priced 20-30 per cent higher than normal products.”

Klaas Jan Mazereeuw, Quality Assurance Manager of Seafood Connection, a leading European seafood importer, said: “Western and Northern European consumers tend to be critical: What am I eating? Where is it coming from?

“The ASC label is important to secure and visualise responsible production, restore the image of farmed fish.”

Consumers are willing to pay more for ASC-certified products, he added.

Ninnes said audits of more farms have been done and more are scheduled in the near future to enable their certification.

The World Wide Fund for Nature, VASEP, and the Viet Nam Fisheries Society signed a long-term co-operation agreement in 2010 to help the pangasius industry get ASC certification.

Under the agreement, Viet Nam would strive to have 100 per cent of farmed pangasius production for export certified, half of it by ASC, Dung said.

“ASC certification is a necessary condition for the industry to improve its competitiveness on the global market as well as to meet foreign importers’ requirements,” he said.

Most pangasius farms are located in the Cuu Long (Mekong) Delta, mainly in An Giang, Dong Thap, and Can Tho. The sector is a major provider of employment in these provinces.

More than 90 per cent of world exports of pangasius is sourced from Viet Nam, which exports 650,000 tonnes of catfish annually.

Bribery pervades business world

Small- and medium-sized enterprises continue to face pressures to pay bribes “to get things done”, according to a survey of 2,500 private enterprises conducted in ten provinces last year.

With findings published in a report entitled “Characteristics of the Vietnamese Business Environment: Evidence from a SME Survey in 2011”, the survey was conducted by the Viet Nam Central Institute of Economic Management and the World Institute for Development Economics Research.

The survey found that 38 per cent of firms reported making so-called “informal payments” in 2011, up from 34 per cent in 2009. The payments were mainly to deal with tax collectors (30 per cent) and to gain access to needed public services (26 per cent).

Professor John Rand of the University of Copenhagen said informality and taxation were closely related to bribery and corruption and were a prominent part of the local business climate.

But bribe payments would not keep small businesses alive in the long run, and the data suggested that firms paying bribes were likelier to exit the market, Rand said.

The report said that small- and medium-sized enterprises (SMEs) were 5 to 10 per cent less likely to exit the market than their micro counterparts. Basing on these findings, Viet Nam needed policies tailored to the characteristics of enterprises of different sizes, Viet Nam Chamber of Commerce and Industry’s general secretary Pham Thi Thu Hang said.

The report also said that policies to facilitate the access of SMEs to credit needed to be made more efficient as nearly 39 per cent of surveyed enterprises encountered difficulties accessing bank loans and had to seek financing from informal sources.

Policies were also needed to boost labour productivity, said the report, noting that 40 per cent of surveyed firms reported lower labour productivity growth in 2011.

Finland offers science, technology

Finland hoped to foster co-operation with Viet Nam in key sectors such as hi-tech industries, clean technology and education, said Janne Sykko, Trade Counsellor at the Finnish Embassy in Ha Noi, during a conference yesterday.

The counsellor emphasised science and technology as one of Finland’s strong areas, saying that the country hoped to gradually transfer its know-how to Viet Nam.

The bilateral economic relations between Viet Nam and Finland have developed significantly in the past few years, said Doan Duy Khuong, vice chairman of the Viet Nam Chamber of Commerce and Industry.

Finland has been offering Viet Nam effective assistance in rural development and waste water treatment and helped improve the country’s management capacities in the trade sector, he said.

Yesterday’s event also featured presentations on untapped potentials in the Finnish market and co-operative programmes and financial support tools the Finnish government offered for Vietnamese enterprises to establish relationships with Finnish partners and improve their competitive skills.

Two-way trade reached US$200 million in 2011 and $260 million in the first nine months of this year. During the January-September period, Viet Nam exported $79 million worth of goods to Finland including coffee, rubber, footwear, textiles and garments, handicrafts, wooden goods, imported machines, garment raw materials and electric and telecommunications equipment.

In terms of investment, Finland ranks 26th out of 96 countries and territories investing in Viet Nam, with seven projects worth a total of $335 million.

Major cities see spurt in credit growth

Banks in the nation’s two largest cities have reported a surge in lending in November compared to the previous month.

Credit issued by Ha Noi-based commercial banks grew by 1.3 per cent to VND628 trillion (about US$30 billion), with medium- and long-term loans rising by 2.1 per cent, according to the Ha Noi Statistics Office. Overall, the rise in credit represented a 7.1-per-cent increase since December 31 of last year.

The office also reported that deposits at the capital city’s banks in November reached nearly VND858 trillion ($41 billion), an increase of half-a-per-cent over October and 4.3 per cent over last December.

Credit grew at a slower pace in HCM City in November, according to the HCM City Statistics Office. The city’s institutions lent nearly VND798 trillion ($38 billion) in November, up 0.7 per cent over the previous month.

Deposits at the city’s banks in November also increased by 0.9 per cent over the previous month to VND965 trillion ($46 billion), of which deposits in Viet Nam dong accounted for 80 per cent of the total.

Commercial banks in HCM City reported having capital on hand totalling VND200 trillion ($9.57 billion) available for lending through the Tet (lunar new year) and would allow businesses to use inventory as collateral to ease access to credit.

The closing months of the year often see rising capital demands, yet credit institutions this year have admitted difficulties in boosting lending.

Some banks were also offering preferential lending programmes to attract clients. AB Bank, for example, said that it was offering a 2-per-cent reduction in interest rates for the first three months of commercial loans. The programme had helped the bank to lend over VND1 trillion ($47.8 million) after about a month-and-a-half in effect.

VIB this week also announced it would offer loans at 9.9-per-cent interest in the first three months.

Nationally, credit growth this year has been projected to grow at roughly 5 per cent.

Confab to discuss bank cross-ownership

The heavy incidence of cross-ownership among the nation’s banks will be a hot topic at an international conference on financial stability in East Asia to take place in Ha Noi on November 27-28.

The meeting will bring together financial experts, bankers and leaders from 14 economies to assess the regional financial market, share experiences and strengthen co-operation between regional economies and financial institutions, said State Bank of Viet Nam deputy governor Dang Thanh Binh at a press conference in Ha Noi on Tuesday.

Binh himself would moderate the content on cross-ownership, he said, revealing that the central bank was currently auditing cross-ownership among over 30 domestic commercial banks.

The State Bank did not now prohibit commercial banks, shareholders or related persons to own shares in other banks, Binh noted. However, the problem has arisen that shareholders have borrowed money from banks to invest into other banks, forming a chain of incestuous ownership that poses high risks for and undercuts the vitality and transparency of the financial sector.

The central bank was now faced with the task of untangling this web of bank ownership by investigating and assessing the financial capacity of each institution. Armed with its findings, it would issue a series of new regulations next year to address the shortcomings in the banking system, helping contribute to the safety and transparency of the domestic banking system, he said.

Bank co-operates on taxes

Techcombank has co-operated with the Customs Department to implement an on-line system to create favourable conditions for enterprises and firms to pay export-import taxes.

The on-line system, F@st E-bank or F@st Customs, will save enterprises time and speed up approval procedures for their import-export goods, said Nguyen Ngoc Hung, deputy head of Customs Department’s Tax Import and Export Department.

VN exports 7m tonnes of rice

Viet Nam exported 242,340 tonnes of rice in the first half of this month, earning US$119.4 million, according to the Viet Nam Food Association (VFA).

Since the first day of this year, the country shipped 6.7 million tonnes of rice in total, gaining $3 billion.

The nation expected to export 7.5 million tonnes for this year, said the association.

The association also said the price of rice in the Cuu Long (Mekong) Delta last week remained stable or saw a light increase by VND50-100 per kilo to VND7,950-8,050 for five-per-cent broken rice and VND7,800-7,900 for 25-per-cent broken rice.

Sales keep GMV out in front

General Motors Viet Nam (GMV) yesterday announced that its sales in the first 10 months of the year totalled 4,601, giving it a market share of 6.3 per cent, allowing it to remain one of the nation’s top three car makers.

GMV is the first car maker in the country to export passenger cars with fewer than 10 seats. Last year it sold 301 Vivan 7-seat MPVs to the Republic of Peru.

GMV benefited this year by changing its name from Vidamco, and adopting Chevrolet as its main retail brand. In the past year, it has significantly revamped its domestic and international operations.

Bank loan for affordable homes

The Orient Commercial Joint Stock Bank (OCB) yesterday signed a credit contract to provide real estate Nam Long Group with VND80 billion (US$3.8 million) to help it develop a residential apartment building in HCM City.

The loan has a term of 30 months and the interest rate will be set at the medium-and long-term average (now at 12 per cent annually) plus 4.5 per cent, according to the bank’s deputy general director Pham Linh.

Nam Long Group’s apartment project, the Ehome 3 Tay Sai Gon in Binh Tan District, is designed for medium-income earners.

Becamex Tokyu starts Garden City

Becamex Tokyu Co Ltd yesterday broke ground for the Sora Gardens 1 apartments, the first project of the joint venture’s Tokyu Binh Duong Garden City.

Sora Garden 1 is a 24-storey building, one of three luxury apartment blocks to be built in the development 30km to the north of HCM City. The total of 1,500 apartments in the buildings will range in size from 70sq.m to 100sq.m. The luxury houses and apartments target middle and high-income customers.

Becamex Tokyu began work on the US$1.2 billion project in March, marking the involvement of a Japanese firm in urban development for the first time in Viet Nam.

Nation’s Customs to go online

After a seven-year pilot programme on the application of electronic customs procedures in Viet Nam, all Customs offices across the country will start using the system from next year.

This is part of Decree No 87/2012/ND-CP signed last month which will take effect next year, detailing provisions of the Law on Customs applicable to electronic customs procedures for commercial exports and imports.

Under the decree, declarants of electronic customs will receive prority ahead of those who submit paper documents.

Notably, individuals and organisations can make customs declarations 24 hours a day and seven days a week.

The e-customs system has proved more convenient than the old paper alternative as enterprises can submit their ‘paperwork’ from wherever there is internet access, helping to save time and travel expenses.

Vice head of Viet Nam’s General Administration of Customs Hoang Viet Cuong said that e-customs offered many benefits and incentives for declarants, including time and cost reduction.

He said that the application of e-customs procedures had attracted the involvement of many enterprises.

For example, 80-90 per cent of goods imported/exported via HCM City, Hai Phong, Ha Noi, Dong Nai and Ba Ria-Vung Tau were processed using e-customs procedures.

At present, 21 out of total 34 customs departments in cities and provinces nationwide use e-customs procedures. Out of 134,000 enterprises with import/export licences, 55,000 have registered to use e-customs and made 3.47 million declarations.

Vice head of the administration’s Customs Reform Board Tran Quoc Dinh said that problems that arose during the application of e-customs procedures were down to poor awareness of the regulations.

He also urged the use of digital signatures, which would create favourable conditions for e-customs.

So far, 980 enterprises have registered to use digital signatures nationwide. The pilot use of digital signatures was first introduced by Hai Phong City’s Customs Department with the participation of 18 enterprises in September 2011.

This month, Viet Nam’s General Administration of Customs set up a technical assistance group to implement e-customs at all customs offices to help staff and train them on Customs clearance software.

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