Credit growth negative for last two months
The credit growth of the banking system as of Tuesday stood at minus 0.16% against late 2012, versus minus 1% in January and minus 3% in the same period last year, according to the Credit Department of the State Bank of Vietnam (SBV).
The credit growth for 2013 is set at 12%, counting banks’ investment in government bonds. A senior source from SBV said whether this target can be achieved or not greatly depends on the capital absorptive capacity of the economy and the health of enterprises.
The Credit Department said it would continue to strictly manage credit quality of banks to prevent capital from flowing into inappropriate places, producing no effect.
Classification of credit groups will be announced soon. SBV will take into account governance capacity and capital scale of each bank and then list them into groups with specific credit growth limits.
Strong banks that have already merged with weak banks resulting in higher bad debt ratios may be reclassified into other groups with lower credit growth limits. Meanwhile, small healthy banks may join the groups with high credit growth quotas.
The classification is aimed at preventing banks from careless lending practices, exerting an impact on inflation, as enterprises in Vietnam heavily depend on loans for operations.
In 2012, banks were classified into four credit groups. The first was allocated a credit growth quota of 17%, while the limits for the second and the third groups were 15% and 8% respectively. The last group was not allowed to have credit growth.
Six months after the classification, the central bank found the credit growth quotas agreeing with the developments of the monetary market and banking activities, meeting the goal of the monetary policy. At the beginning of last year, the credit growth target was set at 15-17%.
According to a number of large banks, credit growth in 2013 remains a difficult question. It is because banks want to give loans to corporate clients to make profits, but enterprises have yet to recover, with some of them recording poor business results in the final quarter of 2012 compared to the preceding quarter.
Lenders are waiting for support from the Government like real estate demand stimulus and corporate income tax cut.
Trinh Van Tuan, general director of Orient Commercial Bank (OCB), said banks had been struggling for credit growth in 2012. Therefore, he deemed it necessary to consider whether to impose credit growth limits or not in 2013.
Banks are now carefully selecting loan applications due to the fear of bad debt. In 2012, most lenders sharply increased risk provisions, leading to unsatisfactory business results.
By the end of last year, credit had grown 8.91%, with government bonds factored in, unlike previous years. At the meeting of the National Assembly in November, SBV Governor Nguyen Van Binh said government bonds were loans for the Government, so they should also be capital supply for the economy.
HCMC-Moc Bai urban planning completed
The Vietnam Institute of Architecture, Urban and Rural Planning (VIAP) has completed the planning for areas along HCMC-Moc Bai expressway until 2030 and will submit the planning to HCMC and Tay Ninh Province.
The planning covers areas along the 55-kilometer route, including 25 communes and four commune-level towns of HCMC and Tay Ninh’s four districts with a total area of over 600 square kilometers.
Based on studies, analyses and evaluations, VIAP has proposed dividing the planning into three areas to facilitate development and management, with HCMC’s outlying district of Cu Chi as the first one, Tay Ninh Province’s Go Dau and Trang Bang districts as the second and Moc Bai border gate economic zone as the last.
According to Pham Xuan Tu, deputy head of VIAP, with these three areas, there will be eight functional sub-areas which will help boost socioeconomic development. “In addition to the development of space, landscape architecture and technical infrastructure, border gate economic zones, urban areas, industrial parks, tourist sites and rest stops will be constructed along the route,” Tu said.
According to the planning, the population in the planned areas is forecast to reach 419,111 in 2020 and 1,077,400 in 2030.
The Ministry of Construction approved the task of doing the planning for the areas along HCMC-Moc Bai expressway until 2030 in October, 2011. The planning is intended to promote the socioeconomic development of the southern key economic region, Tay Ninh Province and HCMC.
The expressway from HCMC to Moc Bai in Tay Ninh Province will be one of the corridors serving the economic development and urbanization of the area and the trans-Asia highway. It will connect economic centers and urban areas of the southern key economic region with seaports and international airports of the regions as well as of the ASEAN economic area (Bangkok-Phnom Penh-HCMC).
HCM City’s tourism sites report good growth at Tet
Numerous tourism parks in HCMC have posted good business results thanks to the week-long Tet holiday, with many attracting millions of visitors on this occasion.
Though business growth at several large tourism areas is lower than in previous Tet seasons, it is good in the context of the current economic slump.
Suoi Tien Theme Park in District 9 welcomed the most tourists, about 700,000 for six days lasting from the first day to the sixth day of the first lunar month, up 3% against the same period last year. An executive of the park said that this is just an initial figure and that Suoi Tien will continue to welcome more visitors until the 15th day of the first lunar month or this Sunday.
Suoi Tien on Monday organized the procession of the goddesses of five basic elements with the presence of over 1,000 participants from 100 temples nationwide, attracting more than 10,000 visitors.
Similarly, other areas like Dam Sen Park, Saigon Zoo, Binh Quoi 1, Binh Quoi 2 and Van Thanh tourist parks have also attracted a huge number of visitors. Specially, Dam Sen Park in District 11 with a vast array of entertainment and artistic activities has attracted more than 337,000 tourists during the holiday, posting a year-on-year pickup of 1%.
According to Chiem Thanh Long, director of Binh Quoi Tourism Village, initial statistics show that up to over 11,500 visitors used dining services and played games at the village’s parks from the second day to the fourth day of the first lunar month or from last Monday to Wednesday, surging some 11% year-on-year.
Rice prices turn volatile before reserve scheme
Rice traders in the Mekong Delta have bemoaned volatile rice prices over the past few days because enterprises are trying to lower buying prices as the national rice temporary reserve program is drawing near.
Many enterprises have imposed the price of 15% broken rice on all types of rice, including high-quality categories, causing many difficulties to both traders and farmers.
Winter-spring crop is the most important harvest in the region because of high output and good quality. This crop offers long-grain rice and the material rice type IR 50404 that can be mixed with other types to process 5% broken rice for export.
Lam Anh Tuan, director of Thinh Phat Co. Ltd. in Ben Tre Province, said that while some importers of 5% broken rice only accept long-grain type, others give nods to the mix of the long-grain type and the IR 50404 type.
However, Duong Van Men, a rice trader in Dong Thap Province, said that enterprises in the province and Can Tho City buy both the long-grain and IR 50404 types at the same price of 15% broken rice. In fact, prices of these types have a wide difference of VND100-300 per kilo.
While the Government’s program to purchase one million tons of rice for temporary reserve will begin tomorrow, rice prices in the Mekong Delta have declined after a short period of upswing.
In Tien Giang Province, prices of fresh rice IR 50404 are from VND4,100-4,150 per kilo, falling by VND100-150 a kilo compared to three days earlier, while trading remains slow. The product is around VND4,200-4,300 per kilo in An Giang and Dong Thap provinces.
Explaining the low buying prices, Tuan of Thinh Phat Company said that local firms recently have signed export contracts at low prices. Currently, all international importers do not agree to buy 5% broken rice at over US$400 per ton.
At this price, which is equivalent to a FOB (free-on-board) price of over VND8,300 per kilo at Saigon Port, enterprises still lose over VND300 more a kilo in packaging, production and testing. Therefore, enterprises cannot offer high buying prices to traders, Tuan said.
Rice exporters in Dong Thap Province and Can Tho City have bought material rice of the IR 50404 type at VND6,600-6,650 per kilo, equivalent to the long-grain type.
Thinh Phat Company have bought the IR 50404 type at VND6,650-6,700 per kilo and the long-grain type at VND6,800-6,850 per kilo, down VND50-100 a kilo against a few days ago.
According to the Vietnam Food Association, enterprises appointed to join the rice temporary reserve scheme will receive 100% interest rate support for a maximum term of three months starting from tomorrow. Rice purchase prices are decided by the market and enterprises will bear responsibilities for their business.
Exporters need renewal for survival, say experts
To achieve export growth of 10% this year, exporters should explore new markets or launch new products with added value, especially farm produce, to survive tough times.
Speaking to the Daily, experts and representatives of industry associations said enterprises should introduce new products in traditional export markets by grasping the demand, the habit and the taste of consumers in order to better serve them. To do so, enterprises must stick to food safety and hygiene standards set by the importers.
The Vietnam Trade Office in Japan suggested enterprises boost exports of agricultural products, particularly rice, to choosy markets like Japan. Although Vietnam is a top rice exporter in the world, its exports to Japan only stay at US$20 million, or a mere 3% of the rice import of this country.
To further penetrate the Japanese market, rice exporters must observe the Food Sanitation Law of Japan. In addition, they should improve rice quality to explore the high-grade rice segment, develop high-quality material zones and export products made of rice such as starch and rice flour cookies.
On the other hand, exporters should look for new markets. For example, in recent years, the United Arab Emirates (UAE) has become the world’s second biggest tea buyer after Russia, with an import value of nearly US$500 million per year. UAE’s tea imports accounted for 9.4% of the total tea import value of the world in 2011.
Sri Lanka is currently the largest tea supplier of UAE, accounting for 20% of the total tea import turnover of UAE, followed by India with 8%.
Vietnamese enterprises have yet to fully exploit the UAE market. In 2013, the country should increase tea exports to this market, said the Ministry of Industry and Trade.
UAE has modern infrastructure for tea import-export at Dubai Multi-Commodities Center (DMCC), with large-scale warehouses and workshops, modern equipment for mixing and packaging, and trade offices.
At a question and answer session organized by the Government web portal chinhphu.vn last weekend, Minister of Foreign Affairs Pham Binh Minh said the foreign affairs authorities should help Vietnamese exporters explore new markets.
Economy faces risk of further lagging
Suffering growth slowdown, stubborn inflation and economic uncertainties, Vietnam is being left further behind by many other developing countries and can hardly escape the middle-income trap.
Professor Nguyen Quang Thai at the Vietnam Economic Association gave such a warning after analyzing the recent data of financial institutions at home and abroad.
He cited a report of the World Development Indicators (WDI) for 2011, the latest update of the World Bank, as saying that Vietnam’s GDP at purchasing power parity (PPP) was US$2,790 in 2009, very low compared to US$6,890 of China, US$7,640 of Thailand and US$10,594 of the world.
In 2000, Vietnam’s GDP at PPP reached US$2,000, versus China’s US$3,930, Thailand’s US$6,320 and the world’s US$7,410.
Thus, in the last ten years, GDP per capita at PPP of Vietnam rose US$790, while China, Thailand and the world enjoyed a rise of US$2,180, US$530 and US$2,394 respectively.
Thai told the Daily: “Despite high economic growth in recent years, Vietnam is lagging far behind not only China and Thailand, but also the world. This is worth considering.”
He cited yearbook data as remarking that inflation in Vietnam had recently showed signs of ticking up, now the highest in Southeast Asia, which was not only caused by external factors, but also by policy flip-flops and mismanagement.
Growth quality is very worrying because Vietnam’s industrial production is heavily dependent on processing and outsourcing, generating low value and hardly promoting technological innovation, he said.
Meanwhile, economic and corporate restructuring, the only way for the economy to develop in a sustainable way and the country to escape poverty, is being carried out slowly and inefficiently.
Warnings about the risk of Vietnam falling further behind have recently been issued by economists and universities after looking at the data of international financial institutions.
For example, a recent report of the National Economics University said that the average income per capita of Vietnam equaled 80% of the figure of China in 1991. In 2010, the ratio dropped to 43%.
In 1991, Vietnam’s GDP per capita at PPP was less than one half of the Philippines’ and Indonesia’s, one fifth of Thailand’s and one tenth of Malaysia’s. After almost 20 years, the figures have exceeded three fourths, one third and one fifth respectively.
Thus, although the gap of income per capita has gradually narrowed, it is still large at present.
VND800 bil. for Truc Lam Yen Tu
The total investment poured into Truc Lam Yen Tu tourist site in the northern province of Quang Ninh’s Uong Bi City, has amounted to nearly VND800 billion in the past ten years.
Over VND270 billion of the sum has been used to restore relics at the Buddhist center which was built in the Tran Dynasty over 700 years ago while infrastructure construction at the site has taken nearly VND520 billion, according to Hoang Thi Ha, vice chairwoman of the city.
The investment of the tourist site mainly comes from enterprises while the State budget accounts for only 18%.
Truc Lam Yen Tu tourist site is frequented by Vietnamese thanks to its three values: historical cultural value, spiritual meaning and natural landscape. Yen Tu special-use forest has been upgraded into Yen Tu national forest and will receive an estimated investment of over VND217 billion under the province’s decision.
Hanoi-based ATS Investment Joint Stock Company drew up an investment plan worth VND2 trillion in an area of 700 hectares in Yen Tu some years ago to preserve historical, cultural and spiritual values. However, the project has yet to be kicked off.
Meanwhile, Tung Lam Development Joint Stock Company invested in two cable car lines on Yen Tu mountain in the 2001-2009 period with a total investment of some VND400 billion.
Yen Tu Spring Festival started at Trinh Pagoda on Sunday night. In addition to traditional rituals, the festival includes a ceremony of receiving the Prime Minister’s decision on recognition of Truc Lam Yen Tu as special national heritage.
Fuel firms still reporting losses
Fuel trading firms said they were incurring losses of VND1,800 per liter of petrol and VND800 per liter of oil and were still waiting for help from relevant authorities.
Speaking to the Daily, a representative from a fuel trading firm said that from January 18-February 18 the firm lost up to VND1,800 for every liter of petrol sold. If including the VND1,000 paid by the price stabilization fund, the firm still suffers a loss of VND800 per liter, he added.
Meanwhile, the price stabilization fund helped the firm cut a loss from VND800 to VND400 for every liter of oil sold.
Detailed situations have been reported to the Ministry of Industry and Trade and the Ministry of Finance. “However, we did not submit any proposals but informed the situations only,” he said.
Management agencies will not make the final decision until this weekend. Besides, there is little likelihood that the fuel price will be increased as the priority of management agencies is to control inflation and keep the consumer price index at a suitable level after Tet, according to the source.
“I am with the possibility that the price stabilization fund will continue to be used and the fuel tax will be reduced,” he said.
The two ministries decided to maintain the fuel retail price three times from January 15 to February 8 despite local fuel trading firms incurring losses of some hundreds of Vietnam dong per liter. To cover such losses, the ministries allowed firms to increase the use of the fund.
Firms were allowed to use VND300 per liter or kilogram of petrol, kerosene and heavy fuel oil on January 15. However, the fund has not been used for diesel oil.
After that, the respective fund support for petrol, kerosene and heavy fuel oil was increased by VND200 and VND100. Meanwhile, a liter of diesel oil was supported with VND200 on January 28.
Most recently, on February 8, the support rose to VND1,000 for petrol, VND400 for diesel oil, VND700 for kerosene and VND600 for heavy fuel oil.
Due to losses, the discounts for fuel sales agents have also been lowered recently, with the current amount of VND350-400 per liter. Besides, the discounts may fall even more in the coming days.
Investment in BR-VT starts on positive note for 2013
The southern coast province of Ba Ria-Vung Tau has got off to a good start for 2013 as its government on Monday presented the investment certificates to five projects worth over US$28 million and VND2.3 trillion.
At the Investment Day event attended by more than 200 local and foreign investors, the provincial authorities granted Sunny Union Vietnam Co. Ltd. an investment certificate. The Taiwanese-invested company will build a trailer factory worth US$20 million on two hectares in My Xuan A2 Industrial Park and put it into operation this year.
Meanwhile, the branch of Pegasus Investment and Consultancy JSC, a 100% Singapore-owned firm, will spend US$8.2 million developing an education, services and resort complex called Pegasus in Ba Ria City.
The 12-hectare project will consist of an international university specializing in tourism and hotel education, a commercial center and a resort. Work will start on the project in the middle of this year and it will be up and running in 2016, said Nguyen Thi Thanh Xuan, a representative of Pegasus.
In addition to foreign direct investment (FDI) projects, Ba Ria-Vung Tau is continuing showing its appeal for domestic investors, especially those committed to tourism and renewable energy sectors.
At Investment Day, the province also gave an investment certificate to Asia Tourism Construction Investment JSC to build an ocean resort named Blue Sapphire at a total cost of VND1.35 trillion in Vung Tau City.
Meanwhile, Blue Ocean Investment Tourism JSC will develop Blue Ocean Ecotourism Resort in Xuyen Moc District with total investment capital of VND931 billion. The project will be carried out on 40 hectares and completed after three years of construction.
In the field of renewable energy, DVN Renewable Energy JSC will construct a factory to turn waste into energy at a budget of VND40 billion.
Ho Van Nien, vice chairman of Ba Ria-Vung Tau, said those projects met the province’s objectives and requirements for investment attraction.
The five projects that got the investment certificates on Monday with total pledged capital of more than VND2.9 trillion, are active mainly in the fields of industry, real estate and services. The province’s orientation for investment attraction in the future is to develop a strong sea economy, striving to become a modern industrial and seaport province by 2015, said Nien.
With such a development objective, the province has been comprehensively implementing a lot of solutions and focusing on channeling investment into supporting industries and logistics services.
“We have been trying to do our best to do away with difficulties and obstacles to create a favorable environment for production and business. We hope we will receive good results,” said Nien.
At the event, Ba Ria-Vung Tau praised the investors who were actively accelerating the development of their projects and putting them into operation in 2012. They are Asian Coast Development Co. Ltd. with Ho Tram Strip Tourism Complex, Vietsovpetro Tourist JSC with Vietsovpetro Resort, PetroVietnam Gas Joint Stock Corporation with Nam Con Son 2 Pipeline and SP-SSA International Terminal Co. with Saigon-SSA Port.
Despite the protracted economic woes, Ba Ria-Vung Tau last year attracted nearly US$500 million and over VND38 trillion in new investment pledges, while capital disbursements amounted to US$1 billion and VND8 trillion. As of end-2012, there had been 300 FDI projects capitalized at over US$27.5 billion and 410 locally-invested projects worth nearly VND220 trillion in the province.
In addition, the number of enterprises in the province has been steadily rising. At present, the province has nearly 9,000 enterprises with total registered capital of VND60 trillion.
Petrolimex speeds up restructuring
The Vietnam National Petroleum Group (Petrolimex) has set up a corporation which will focus on waterway transport under its restructuring plan.
The setup of PG Tanker under Petrolimex’s restructuring process
The newly-established corporation, Petrolimex Joint Stock Tanker Company (PG Tanker), has total chartered capital of VND1.5 trillion (USD71.7 million).
According to Petrolimex, this was the first specialised corporation set up under its restructuring process.
The group claimed that the move is in accordance with the prime minister’s decision on the privatisation and restructuring of Petrolimex.
PG Tanker’s headquarters are located at No. 1 on Kham Thien Street, in Hanoi’s Dong Da District. The corporation will provide waterway transportation and marine services as well as repairing and building waterway vessels.
Petrolimex will be the sole owner of PG Tanker, with Nguyen Anh Dung acting as CEO. Currently Dung is CEO of Petrolimex Joint Stock Insurance Company (PJICO).
PG Tanker has several subsidiaries including Vietnam Petroleum Transport Joint Stock Company, the Vietnam Tanker Joint Stock Company, Haiphong Petrolimex Transportation and Services JSC, and Petrolimex Petroleum Waterway Transportation JSC and Cua Cam port in Haiphong City.
PG Tanker currently has the largest petroleum transportation shipping fleet in Vietnam.
Republic of Korea to take back thousands of Vietnamese workers
Phan Van Minh, director of the Overseas Workers Center, under the Ministry of Labor, Invalids and Social Affairs, said that 25,113 Vietnamese workers, whose labor contracts had expired earlier, will return to work in the Republic of Korea (RoK) this year.
Vietnamese workers register for a Korean language exam (Photo: SGGP)
Mr. Minh said that the RoK Government has approved a quota, under which these workers will return to the country.
From March this year, the center will coordinate with the Human Resource Development Service of Korea to organize a Korean language exam for them.
RoK will continue to be the main labor export market for Vietnam in 2013, offering workers a monthly income of US$1,000-1,500.
Bumper hauls in central region lure fishermen out to sea
Since the beginning of Lunar New Year, fishermen in the central region are a very happy lot because of bumper hauls, prompting them to go more often out to sea.
The tanned and happy faces of the fishermen show there keenness to go out to sea and bring back huge hauls of fish and shrimps to Thuan An Harbor in Phu Vang District of Thua Thien-Hue Province.
Fisherman Cao Van Loi said that he and six others sailed out to sea on the second day of the lunar year and brought back more than ten tons of fish in just one week, raking in VND60 million (US$2,880) in net profits. Several fishermen believe it to be a good sign for a profitable year.
Nguyen Van Ty, a fisherman from Dong Hoi City in Quang Binh Province, is very excited with heavy hauls of tiny shrimps in the last one month.
Hundreds of boats depart every night and return with five to seven quintals of tiny shrimps each, with one boat of two to three fishermen earning VND7-8 million a night.
Ty said that the bumper crop brought about a very happy Tet for all of them. The shrimp season usually lasts three months, in which fishermen can haul several quintals of fish.
The An Hai Fisheries Trade Union on Ly Son Island in Quang Ngai Province hosted a send off ceremony for fishermen at the beginning of the year.
Last year, members of the union harvested more than 16,000 tons of seafood worth VND150 billion ($7.2 million). The average income of a fisherman reached VND50-70 million. The good fishing season prompted 58 boats to sail out to sea decorated with the national flag and slogans.
Tens of boats have begun fishing trips from Tinh Hoa Port in Son Tinh District.
Le Van Nguyen, a fisherman from Pho Thanh Commune in Duc Pho District, said the bumper crop last year has prompted them to go out to sea one week sooner this year.
According to local authorities in Binh Son, Duc Pho and Son Tinh District, the weather has been favorable since the beginning of the year. As a result, local fishing boats have taken advantage of this to begin fishing trips sooner than in previous years.
In related news, fishermen in Hoa Binh District in the Mekong Delta province of Bac Lieu organized the Nghinh Ong Festival on February 18.
This is the second year of the festival, to pray for a good fishing season, and this year it attracted several visitors from Bac Lieu and other neighbouring provinces.
Sluggish sale of gold on day of God of Wealth
At the end of a long Tet holiday season, price of Saigon Jewelry Co (SJC) gold bullion in the first transaction of Lunar New Year fell by VND600,000 (US$28.8) per tael.
The gold market remained sluggish yesterday, with most buyers buying small quantities, as little a 1/10th of a tael or half a tael–merely as a token of good luck on the tenth day of Lunar New Year.
Yesterday, the day of God of Wealth, bid and ask price of SJC bullion was VND44.85 million a tael and VND45.15 million a tael, down VND600,000 compared to days before Tet.
But by afternoon, it rose slightly to VND44.95 million a tael and VND45.25 million a tael.
Nguyen Minh Khoa from District 3 said he buys half of a tael or one tael every year on the tenth day of Lunar New Year that is believed the day of God of Wealth but on the ninth day, price of bullion fell sharply and fearing a further rise, he decided to buy one tael.
Owners of small amounts of gold bullion are concerned the market may soon accept only amounts upto one tael (37.5 grams), according to a draft decree recently released by the State Bank of Vietnam.
The bill, seen as a guideline for the gold bullion trading market, rules that only one tael of SJC gold bullion of 99.9 percent purity is eligible for transaction. Last year SJC was selected as the state gold brand name under State Bank of Vietnam bid, to control the market.
Saigon Jewelry Co currently produces seven different types of SJC gold bars, depending on weight, such as 1/20, 1/10, 1/5, 1/2, 1, 10 tael and 1 kilogram gold bars.
City revokes license of delayed housing projects
The People’s Committee of Ho Chi Minh City has revoked construction licenses of 30 housing projects that have not yet taken off due to problems such as compensation or site clearance.
This decision was taken by the Department of Natural Resources and Environment and approved by Nguyen Huu Tin, deputy chairman of the People’s Committee of Ho Chi Minh City on February 19.
City authorities have also instructed district people’s committees to publicly announce the list of the revoked projects.
For projects which have no site clearance or compensation problems, but are short of capital, investors will be permitted to transfer or work with other investors to complete all construction work.
Investors can also apply to the City People’s Committee for extension of their projects and temporarily use the cleared site for other purposes, to limit costs.
Luxury cruise ship docks at Chan May port
An international Seven Seas Voyager cruise ship carrying 600 passengers docked at Chan May port in the central province of Thua Thien-Hue on February 20.
During their stay, the tourists are scheduled to visit two ancient relics in Hue and Hoi An cities, and experienced traditional and cultural performances and foods.
Gerhard’s Odysseys, an American passenger said he was very delighted at visiting Vietnam, especially the old imperial city which is very beautiful and friendly. The next destination will be Ha Long Bay in the northern part of Vietnam, he added.
The 46,000-ton ship, which is 203 meters length and has more than 700 luxury rooms, belongs to Prespige Cruise Holdingh.
Chan May port has also received 2,100 passengers from the Celebrity Millennium cruise ship which is famous for its grand design and impeccable service such as the shopping centre, dancing club, restaurant, martini bar, and swimming pools.
Nguyen Huu Tho, Chairman cum Director of Chan May Port Company Limited said that as many as 33 international cruise ships plan to visit Chan May port with a total of 38,000 passengers on board this year-a positive sign for the local tourism sector.
Vietnam aims for US$10-11 billion in tourism revenue by 2015
Vietnam’s tourism sector plans to earn US$10-11 billion from 7-7.5 million international visitors and 36-37 million domestic tourists by 2015 and US$18-19 billion from 10-10.5 million foreign visitors and 47-48 million domestic tourists by 2020.
These goals were set in the 2013-2020 National Programme on Tourism which has been approved by the Prime Minister.
According to plan, the sector will improve the quality of tourism products and services and develop tourism trademarks.
Exporters urged to meet growth target
Exporters must both exploit new and traditional markets and introduce new products in order to meet the export growth target of 10 percent this year, according to the Ministry of Industry and Trade.
The ministry recommended exporters step up shipments of agricultural products, particularly rice, to Japan- one of Vietnam’s traditional markets.
Though Vietnam is among the world’s largest rice exporters, it only sends US$20 million worth of the grain to Japan, accounting for a scant 3 percent of Japan’s total rice import value.
Japan has become a lucrative market for Vietnamese exporters, given its annual demand for nearly 200,000 tonnes of rice and the fact that the price of imported rice in Japan is normally 10 percent higher than the average price in other markets.
But this market requests exporters to work hard to meet the country’s strict regulations on chemical residue.
The Vietnam Trade Office in Japan said that local exporters should also improve the quality of rice to complete against their Thai rivals, which are also seeking to broaden their foothold in the Japanese market.
Chairman of the Vietnam Food Association Truong Thanh Phong suggested local rice producers and exporters study Japan’s market trends and consumer tastes.
As for new markets, the ministry recommended the United Arab Emirates (UAE), where there is high demand for Vietnamese products such as tea.
The UAE is the world’s second largest tea importer, with a total import value of nearly US$500 million yearly.
Currently, Sri Lanka is the country’s largest tea supplier, accounting for roughly 20 percent of the UAE’s tea import volume.
Support from the diplomatic sector will help exporters reach these markets, Foreign Minister Pham Binh Minh said in the “Citizens ask- Ministers answer” programme broadcast recently on Vietnam Television.
After the success of the Vietnam-Latin America Forum last year, Minh said the ministry planned to boost ties with Latin America as well as parts of the Middle East and Africa.
Japanese-funded e-customs project to facilitate trade
The Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS) will speed up an e-customs project to be put into operation by the end of this year.
With financial and technical assistance from the Japanese Government, the project is an important step for Vietnam to automate customs procedures, thus facilitating and better managing the circulation of imports and exports, said General Director of the General Department of Customs (GDC) Nguyen Ngoc Tuc.
In late March 2012, the project started following the signing and exchange of a diplomatic note between Japan and Vietnam relating to a 2.6 billion JPY non-refundable aid for the latter’s project to build and implement e-customs and national one-stop-shop customs mechanism in favor of customs modernisation.
It aims to transfer Japan’s automatic customs system to Vietnam’s GDC and assist the department and other governmental bodies to deploy the national one-stop-shop customs mechanism.
VNACCS/VCIS will also facilitate trade and investment activities in Vietnam to increase the country’s competitiveness in addition to further improving customs management efficiency.
VNACCS/VCIS is expected to be completed late this year and handed over to Vietnam in 2014.
No adjustment to exchange rate
The State Bank of Vietnam has insisted that it is not the time for an adjustment to the exchange rate and consequently the rate margin will still remain at +/-3 percent this year.
The central bank has disagreed with several economic experts who proposed depreciating the national currency (VND) by 4 percent this year, reasoning Vietnam’s inflation is higher than in the US.
Last year the average inter-bank exchange rate was kept stable at VND20,828 against the US dollar, and was increased by only 1 percent within the +/- 3 percent margin limit announced by the central bank.
However, the rate policy has not received support from export businesses and even commercial banks that complained that their profits were not as high as expected as a result.
Le Xuan Nghia, a leading finance expert, quoted forecasts saying that the national economy is likely to recover in the second half of the year which will stimulate demand for investment, production, business and consumption.
According to Nghia, the economy will then need more imports to feed production and a consequent trade deficit is inevitable. This means the exchange rate will be adjusted to support businesses that need foreign currencies to import materials.
He proposed that the government increase the exchange rate by an additional 4 percent this year to assist exports and increase the competitive capacity of Vietnamese commodities in the world.
Such a policy will also help reduce the need to import luxury goods, said the expert.
Nguyen Duc Huong, Vice President of the Management Board of the LienVietPostBank, echoed Nghia’s view, saying it’s time to depreciate the national currency to boost exports.
The executive explained that the US has loosened its monetary policy by endorsing a number of rescue packages intended to fuel domestic consumption and increase demand for imports, including those from Vietnam.
Vietnam has maintained its exchange rate below its real value maybe because it is worried about a reduction in foreign investment, Huong explained, suggesting the country needs to seize the opportunity to export more commodities to the US.
However, a central bank representative said expert recommendations should be taken into account along with the implementation of the 2013 monetary policy.
He said the central bank is managing its 2013 monetary policy to meet the government’s targets of controlling inflation and achieving higher economic growth than in 2012.
It is taking a host of measures to ease difficulties for business production, including settling bad debts and warming up the property market.
It is considering adjusting the exchange rate in association with inflation after the consumer price index (CPI) rose 1.25 percent in January and it is expected to continue to climb in February which sees higher consumer demand due to the long Lunar New Year holiday.
The central bank is under mounting pressure to rein in inflation and it is not an ideal time to consider any rate adjustment, he said.
He explained that as domestic production relies heavily on material imports, any rate changes will drive up inflation. In addition, any changes will put pressure on the State budget which is partly used to pay foreign debt.
Dr Nguyen Tri Hieu, another finance expert, shared the view saying maintaining a stable exchange rate over a long period of time supports import activity but puts exports at a disadvantage.
He pointed to the fact that a stable rate will build up people’s trust in the domestic currency (VND), especially when as many as 50,000 businesses have declared bankruptcy, many other are yet to access bank loans and the unemployment rate is increasing.
Against the odds, Hieu argued 2013’s exchange rate should be kept stable unless there is substantial macroeconomic change. He insisted if inflation exceeds the 10 percent mark, it will certainly have a negative impact on the exchange rate.
“I think the central bank should not depreciate the domestic currency this year, and instead it should adjust the exchange rate within the +/-3 percent limit,” he said “This means the bank does not intervene in the exchange rate market; let the economy adjust itself.”
Exchange rate remains stable, say experts
Local experts insist that there is no foundation for strong fluctuations of the Vietnam dong/U.S. dollar exchange rate in the near term, putting paid to the rumor that the State Bank of Vietnam (SBV) might devalue the dong by around 3%.
According to Bank for Investment and Development of Vietnam (BIDV), the official forex market saw bustling transactions on Tuesday with the exchange rate rising from VND20,848 to VND20,895 a dollar, a record high since the middle of October. The reason for that is that foreign currency demand has increased to serve payments and imports while supply remains unchanged.
Meanwhile, there were signs of speculation on the unofficial market, pushing up dollar prices to VND20,990 and VND21,050 for buying and selling respectively. These were also the highest levels over the past four months.
On the previous day, the greenback was bought and sold at VND20,850 and VND20,860 respectively before dropping back to VND20,849 and VND20,852 at the end of the day.
Dollar demand and supply has remained stable in the inter-bank market. Dollar interest rates have continued to hover at 0.5%-0.7% per annum for terms from overnight to one week, 0.8-1% for two weeks, 1.5-1.6% for one month and 2-3% for three months.
SBV still keeps the inter-bank exchange rate at VND20,828 a dollar and buying price from banks having positive foreign currency status at VND20,850 per dollar.
However, experts said that the forex rate will not see strong fluctuations in the first quarter at least.
An analyst of a commercial bank said that the central bank is capable of controlling and stabilizing the forex market given strong forex reserves. Besides, the total balance of payments has run a surplus and trade deficit is not high enough to cause pressure on the exchange rate.
According to the General Statistics Office, trade surplus in January soared 4.5 times compared to the same period of 2012. The strong surplus in trade balance will continue to support the balance of payments, meaning that Vietnam has no reason to devalue the dong.
Besides, the tendency of converting U.S. dollars into dong will be maintained this year. Recent statements of leaders of the central bank still confirm the priority to stabilize dong value to facilitate macro economic governance.
Given the newly-issued Directive 01, the central bank will probably spend much consideration in case of dong devaluation. The exchange rate will be adjusted moderately to avoid a shock on the market and ensure confidence of citizens.
Property project in Can Tho recalled
The government of Can Tho City has signed a decision to recall the investment certificate of the residential project of Nam Song Hau Urban Development Co. Ltd. in Cai Rang District.
According to Vo Thanh Thong, vice chairman of the city, the project has long been delayed.
The project has a total area of over 60 hectares at an ideal location, which is in South Can Tho new urban area, on the side of the Hau River and opposite to Ninh Kieu Wharf.
Under the license issued in January 2011, this is a high-end residential project. In addition to town houses and villas, the project consists of hotel, financial center and resort.
Having an investment of US$30 million, the investor pledged to construct a bridge connecting Cai Rang and Ninh Kieu districts. However, the project has been almost on hold for two years over site clearance and compensation problems.