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What do you think folks, especially Dinar investors?

Vietnam’s 2013 economy in the eyes of foreign entrepreneurs

13/01/2013

VietNamNet Bridge – Last year, prolonged unstable macroeconomic policies made the panorama of the Vietnamese economy quite bleak for foreign businesses.

Along with the Vietnamese government’s efforts to tighten fiscal and monetary policy to reduce inflation, to restructure the banking system... whether foreign investors have a brighter view of the economic situation in Vietnam in 2013?

The opinions of Mr. Herb Cochran, Executive Director of the American Chamber of Commerce (AmCham) in Ho Chi Minh City, Mr. Yasuzumi Hirotaka, Executive Director of the Japan External Trade Organization (JETRO) in HCM City and Mr. Paul John Jewell, Executive Director of the European Chamber of Commerce in Vietnam (EuroCham) will partly answer this question.

Prospects for Vietnam's economy in 2013

Last year, the Vietnamese Government made great strides in economic reform but did not made tangible results. According to foreign investors, whether the Vietnamese economy will recover in 2013?

Yasuzumi Hirotaka: The Japanese business community has noticed signs of economic recovery in Vietnam in late 2012 and early 2013. This is an optimistic result thanks to the Government’s inflation stabilization policies. It is hoped that Vietnam will maintain macro-economic stability in the future.

Mr. Yasuzumi Hirotaka

Herb Cochran: Although it is no longer a top destination in the region, Vietnam still has a lot of opportunity for investors. Therefore, the AmCham’s businesses will continue to strengthen their capital resources in this market.

However, we do not think that the Vietnamese economy can recover next year, especially the domestic economy. Uncertainty in the economy appeared in 2007-2008 and it has been worsening. To regain stability, it is probably to wait until 2014 or 2015.

Paul John Jewell: The fiscal and monetary tightening policy of the Government has achieved significant effects in terms of macroeconomic indicators but maintaining this growth momentum in the coming year is not easy. European enterprises are concerned that the macro-economic situation of Vietnam will continue to decline in the first six months of 2013. There are too many negative signs that cannot be settled overnight such as a drop in the labor force, the decline of real estate prices and the increasing risk of bankruptcy of enterprises…

Which economic sectors that are considered to have the potential to develop?

Paul John Jewell: Most economic sectors in Vietnam have potential and are invested by members of EuroCham in recent years. We also hope to increase investment in both quality and quantity in more economic sectors, but the economic situation has not improved significantly that we are still afraid of the expansion of business.

Herb Cochran: The industries that Amcham sees with development potential are the consumer goods industry, modern manufacturing for exports (such as Intel, GE, Honeywell, Jabil, Samsung, Foxconn, Nidec Canon. etc.) and the service sector. More and more U.S. companies are investing capital into the modern industry of Vietnam to create value-added products for export.

Yasuzumi Hirotaka: The Japanese investors are very focused on the supporting industry and the service industry. The form of investment is no longer favored in processing for export as before but expanding investment based on the domestic needs and the need of the ASEAN market.

Which industries are said to be the most unattractive?

Herb Cochran: The industries that are not as attractive as they were in the past include: apparel, footwear, furniture... because of rising labor costs and market competition with India, Indonesia, Bangladesh, Mexico, Cambodia and Myanmar.

Mr. Paul John Jewell

What are the most basic problems hindering economic development in Vietnam?

Herb Cochran: In the situation of macroeconomic instability in Vietnam, two most serious problems are rampant bad debt and SOEs operating inefficiently.

In addition, the government’s strict management of business activities such as price fixing, import restrictions… causing difficulties for business, particularly foreign firms.

Yasuzumi Hirotaka: According to JETRO, there are quite a lot of problems in the Vietnamese economy causing difficulty for economic development. The most visible thing is the infrastructure issues have not been paid adequate attention. Besides, the continuous change and inconsistency in the policy is also a major obstacle to business operations, especially the car industry.

Gaps in policies and laws of Vietnam are a major obstacle to economic development?

Paul John Jewell: I also agree that the problem lies in the laws of the State, especially the documents regulating the activities of foreign firms. For example the law on lawyers that war adopted on November 20, 2012, which limits the activities of foreign law firms in Vietnam. This law is like a reaction to reduce foreign investment.

Yasuzumi Hirotaka: The difficulty of the economy also comes from the banking issues such as: non-transparent banking information, banking reform, bad debt...

With so many obstacles, would Vietnam be still an attractive destination for foreign companies?

Paul John Jewell: One thing to claim is that European enterprises increasingly feel that Vietnam will be the center of ASEAN and it can be built into an economic center to well serve the whole region. But this is hardly true when the issues that we pointed out in the Whitebook 2013 on "Trade, investment issues and recommendations" are unresolved. Among these issues, the big problem is bank restructuring, prices, the role of state-owned enterprises and intellectual property rights.

What measures should be taken to change the color of the picture of the Vietnamese economy in the coming year?

Yasuzumi Hirotaka: There is no way other than trying to change to both develop internal strength and attract foreign investment. Vietnam is considered a favorable destination in the area, but whether these advantages will remain for how long? Vietnam should increase investment advantages in attracting foreign business.

How to increase the advantages in investment?

Yasuzumi Hirotaka: By resolving the following issues: The first is to remove regulations limiting the freedom in foreign business activities, especially the automotive industry.

Secondly, the government is more active in the implementation of policies and strategies appropriate to each industry. Ministries and sectors should design development strategies for various industries.

Thirdly, developing infrastructure effectively and in certain plans. In addition, the most urgent problem to be solved is corruption. We hope that Vietnam will attempt to resolve these issues as quickly as possible because the time 2015 is not far off.

How about the American and European business communities?

Mr. Herb Cochran

Herb Cochran: According to AmCham, the government should listen to the opinions of foreign investors doing business in Vietnam. In fact, a lot of our comments and the opinions of other foreign business associations are not interested by the Government. Some of our recommendations include:

- Improving education and training for graduates of universities and colleges to turn them into qualified labor force, who can work immediately.

- Improving the quality of customs services, especially e-customs. Thousands of containers from the port of Cai Mep (Ba Ria - Vung Tau) are transported across the Pacific Ocean to the west coast of the United States in only 15 to 16 days but the customs procedures take up to 21 days.

- Developing the quality domestic supply units.

- Instead of using the consultation proposals from enterprises, the government should have the conversation and exchange directly with domestic and foreign enterprises.

- Exerting the best effort to eliminate corruption - Vietnam's most serious problem.

Paul John Jewell: As I said, the problems that the EuroCham members want the government’s attention to address are the price, the role of state-owned enterprises and intellectual property rights.

- Price: the Government does not have consistent attitude in the issue of the free market price and in many industries. While foreign firms want to set prices according to the cost of production and competition, the government’s price control makes investors worry.

- The role of state-owned enterprises: The contribution of state enterprises is estimated at about 40% of the national budget. They often receive preferential loans, access to land, restricted profit target... but the work inefficiently, affecting the development of the economy.

- Intellectual property rights: Vietnam wants to move from the labor-intensive economy to the technology-based and value-added economy. But foreign investors would not want to bring their technology to Vietnam once the protection of intellectual property rights has not been done.

EuroCham is always willing to contribute ideas to Vietnam to overcome crisis and improve the quality of long-term investment from abroad. In contrast, the Vietnamese government should have a clear signal showing the aspiration for the future economic development through the Free Trade Agreement (FTA) and the early settlement of the above problems.

THE LINK : http://dongtalk.com/2013/01/13/vietnams-2013-economy-in-the-eyes-of-foreign-entrepreneurs/

Half of Vietnamese businesses have “passed away”

Last update 12/01/2013

VietNamNet Bridge – The number of Vietnamese businesses have been decreasing sharply in recent years, according to official reports by state management agencies.

The General Statistics Office (GSO) on January 4, 2013, released a report showing that Vietnam had had 313,000 operational businesses by January 1, 2012.

Meanwhile, a report by the Ministry of Planning and Investment submitted to the second session of the National Assembly, said that by the end of 2011 there had been 624,000 enterprises registering their business.

As such, the number of operational businesses had halved from 624,000 to 313,000 by the end of 2011, or one year ago, if referring to the reports of the two state management agencies which are believed to have most reliable statistics about enterprises.

However, GSO’s General Director Do Thuc warned that the figures about businesses may differ at different times.

However, Thuc could not explain why there was such a big difference in the number of enterprises which still keep operation and the number of registered enterprises during the same period.

Meanwhile, the noteworthy thing is that the two figures were released by the same agency. GSO is an arm of the Ministry of Planning and Investment.

As such, the disappearance of a half of Vietnamese businesses has not found reliable answers.

Luu Quang Manh, Head of the Business Registration Management Agency under the Ministry of Planning and Investment, said Vietnam should have had 363.000 operational businesses by January 1, 2012, instead of 313,000 as announced by GSO.

Manh explained that up to 50,000 businesses “seemed to be operational by that time,” though they did not answer state management agencies, or refused to meet the surveyors from GSO.

Also according to Manh, by the end of 2012, it is estimated that Vietnam had had 475,000 businesses nationwide, if noting that it had had 363,000 businesses by the end of 2011.

In 2012, up to 110,000 businesses joined the market, including 70,000 newly registered businesses, 22,500 prepared to start their production and the other 21,000 businesses which is the error of the three ministries of planning and investment, GSO and the General Department of Taxation.

If referring to the above said survey by GSO, the number of existing enterprises is higher than 313,000, about 342,000, or 2.7 times higher than that of 2007 (125,000). The businesses attract 10.9 million workers, an increase of 65 percent (4.3 million workers) from the 6.6 million in 2007.

According to the HCM City Statistics Office, in 2012, the city had 23,708 newly set up businesses, down by 2.5 percent in comparison with 2011. Meanwhile, 21,746 businesses halted or stopped operation in the first 11 months of 2012, amounting to 96.2 percent of the new businesses granted tax codes. Of these, 41 percent of businesses have locked the tax codes or were waiting for tax codes, and 29.8 percent did not have business offices.

In Hanoi, 15,000 new businesses were set up in 2012 with the registered capital of VND83 trillion, which are equal to 90 percent and 70 percent, respectively, of the figures in 2011.The Hanoi Statistics Office did not figure out the number of shut down businesses. However, the city’s taxation body said that by the end of November 12,249 businesses had stopped operation.

US$1=VND21,000

TBKTSG

THE LINK : http://dongtalk.com/2013/01/13/half-of-vietnamese-businesses-have-passed-away/

Big tycoon disappears, leaving half-finished projects and deserted land

Last update 09/01/2013

VietNamNet Bridge – Hoang Kieu, President of the US-based RAAS Group, a tycoon, who once appeared in all local newspapers when heating up the mild land area of Tien Giang with a lot of promised huge projects, has disappeared quietly.

Some years ago, Hoang Kieu, a Viet Kieu in the US, who always affirms his love to the homeland of Vietnam, was warmly welcomed in Vietnam.

In early 2009, local residents in Tien Giang province got excited with the news that Hoang Kieu, the tycoon, would bring the “2010 Miss World pageant” to the Thoi Son isle in Tien Giang province, though the pageant was initially planned to take place in the sea city of Nha Trang in the central region.

Local residents then took pride of their land where there is the “gem island” of Thoi Son which has wonderful landscapes and favorable conditions to serve the pageant. If such an important event had taken place in the province, this would have helped promote the tourism industry in the locality.

At that time, Hoang Kieu and his family members held 100 percent of stakes of Tigi Tour, which came forward and planned to organize the beauty contest.

A banderole with the words “Welcome 2010 Miss World” was then hung over on the Thoi Son isle. After that, Hoang Kieu spent money to buy land at sky high prices and hurried to implement the construction items to serve the beauty contest.

However, Kieu seemed to be too excited with the pageant, while he forgot that the government did not give the nod to the Tien Giang provincial authorities’ proposal to organize the contest in Tien Giang instead of Nha Trang as previously planned.

At that time, commenting about the proposal, analysts said that Thoi Son isle did not have necessary conditions to organize such a big event.

After that, the Ministry of Culture, Sports and Tourism sent a dispatch to the Tien Giang provincial authorities, officially rejecting the proposal, affirming that the beauty contest would still take place in Nha Trang as initially planned.

Then local residents got exceedingly astonished when realizing that the competent agencies in Tien Giang did not grant the licenses to the construction of many items in the Thoi Son tourist site, but the items were still implemented by the investor to serve the pageant.

Kieu also started the component projects on a power generation plant and water filtration lake on a land plot he bought from a local woman at a sky high price and had not paid all the money, even though the construction items were not licensed.

Finally, the land purchasing deal was broken, when Kieu gave up the VND13 billion in deposit money. The land plot was priced at several billions of dong only before Kieu tried to negotiate for the deal.

As a result, Hoang Kieu was asked to pay the fine of VND35 million for illegally building the works. He then stopped the execution of most of the construction items, stopped the operation of the tourism service establishments, thus badly affecting the tourism industry of Tien Giang.

The local authorities then asked Kieu to put the tourism projects into operation, or they would take back the land.

Kieu has not turned up in Tien Giang over the last two years, while all the activities of Tigi Tour have been assigned to his relatives.

Local residents have realized that Kieu took over Tigi Tour and invested in Thoi Son isle not because he wanted to help develop Tien Giang’s tourism as promised, but just served the “Miss World game” he planned a long time ago.

Meanwhile, the construction works serving tourism have been left idle, while Thoi Son isle has been quiet because of no tourist.

Hoang Ha

THE LINK : http://dongtalk.com/2013/01/09/big-tycoon-disappears-leaving-half-finished-projects-and-deserted-land/

A lot of banks change hands before the Year of the Snake

21/01/2013

VietNamNet Bridge – The banking sector has become boisterous with a lot of big shareholders selling their shares in big quantities to quit the business field. Meanwhile, a lot of hidden “big guys” have jumped on the bandwagon.The merger of Western Bank and PVFC will create a big bank.

Big guys tired of the investments in banks?

ACB Securities Company (ACBS) has just sold 125 million shares, including 57.8 million Eximbank shares, 33.6 million Dai A Bank, 11 million Techcombank, 5.6 million Vietcombank shares.

A lot of share transfer deals have taken place recently, under which tens of trillions of dong worth of bank shares were traded, which have led to the big changes in the ownership structure of commercial banks.

In fact, the massive share sales were foreseeable, especially when enterprises and commercial banks are undergoing the restructure process.

Enterprises have no other choice than withdrawing capital from some investment projects to get money back to maintain the operation in their core business fields. Especially, securities companies, which are in critical situation, have to “beautify the books” to meet the new requirement set by the State Securities Commission (SSC), or they would be put under the probe by the watchdog agency.

Bank shares seem to get less attractive to investors recently, after a series of banks were found as “having problems” and forced to bear the strict control by the central bank.

The wife of Dang Thanh Tam, one of the biggest businessmen in Vietnam, has registered the sale of 1.87 million Nam Viet bank shares to withdraw all of her capital from the institution.

Prior to that, the Hanoi Stock Exchange released a notice that Thanh registered the sale of 14.82 million shares, or 4.98 percent of Navibank’s shares.

If the sale succeeds, Thanh would not have any more shares at the bank which has a close relation to her husband – Dang Thanh Tam.

Savico has transferred all the 12.14 million stakes, or 4.05 percent of the chartered capital in OCB to the partner through an affair worth VND133.53 billion (VND11,000 dong per share).

A lot of other institutions and individuals have also withdrawn capital from banks, namely the Vietnam Helicopter Corporation, which registered the dale of 53 million MBB share options, and MTV, which registered the sale of 8.3 million MBB share options.

Tram Trong Ngam, the eldest son of Tram Be, registered the sale of 48 million Sacombank shares (4.93 percent). Meanwhile, Phuong Nam Securities, Saigon Exim have withdrawn capital from Sacombank.

Some satiated, some still itching for bank shares

The movement of the big guys withdrawing capital from banks has been attributed to the current economic difficulties and the predicted bad economic performance in 2013.

SVC said it decided to withdraw from OCB to restructure its investment portfolios. The business performance of SVC in 2012 was not as good as in the years before. The total debts by the third quarter of the enterprise had been three times higher than the stockholder equity.

If withdrawing capital from OCB, SVC would take back a big sum of cash to implement its important projects. This is also the reason which prompted ACBS, KBC and SGT to withdraw capital from banks recently.

Experts believe that it’s now the right time for powerful finance investors to buy bank shares to set their foot in the backbone business field of the national economy. The banking sector is facing some difficulties now, but in the long term, the sector always show great potentials..

Thien Thanh Group, which plans to own 9.67 percent of stakes of Trustbank, and together with the other 20 individual shareholders, own 74.37 percent of stakes, is an example,

In case of OCB, the hidden face who bought 12 million shares might also think carefully when spending VND130 billion dong on the affair.

US$1=VND21,000

THE LINK : http://english.vietnamnet.vn/fms/business/57448/a-lot-of-banks-change-hands-before-the-year-of-the-snake.html

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Im definitly not an economist, but bought a million through my bank last year for approx 60.00. Lost that the first couple of hours at the Hard Rock last month. I certainly would not want to wish I had invested IF something good happened to their currency over a lousy 60.00. Go IQD and Dong :twothumbs:

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