Professional Documents
Culture Documents
51 bài dịch báo
51 bài dịch báo
When Frédéric Tiberghien Frédo first visited Vietnam 20 years ago as a tourist, he
He was already linked to the country, being born to a French father and
Vietnamese mother, but he lost both of them in an accident in France when he was
young, and was raised by his maternal grandmother, according to a 2011 report in
horse keeper in France and England before deciding to visit his mother's native
country.
In his fifties now, he is no longer a tourist. Vietnam has become home. And, he is
beauty, the culture of its ethnic minority residents and improve the living standards
Over the years he has initiated community projects in many localities in the
northern highlands.
foreign tourists. In Lao Cai Province, he built a bridge that made it easier and safer
for children to attend school. In Yen Bai Province, he founded a nursery school
and a community "culture house." He has also helped improve sanitary facilities
began in 2006 in Yen Bai Province's Ngoi Tu Village, which is home to Dao ethnic
families.
Because of the project, locals are able to augment their incomes from farming by
participating in the tourism industry. They have also developed a better awareness
"It is slow but lastingly effective to promote Vietnam's image through sustainable
"Green tourism is not only about sustaining the environment where it happens, but
When he first arrived in Vietnam and visited Hanoi's famous Old Quarter, he felt
motorbike produced in Belarus. During those trips, he was not only charmed by the
beautiful landscape but also the culture of ethnic minority people he met.
Frédo said he printed ads about his motorcycle tours and posted them at places
bookings, he said.
In 1997, he founded a travel company called Compagine Bourlingue, which was
residents to join him in offering homestay experiences for foreign tourists in their
villages.
Years later, he came upon Ngoi Tu Village on the banks of the Thac Ba Lake in
Vu Linh Commune. He was totally captivated by the scenery and the way local
So, he bought a stilt house there and developed it into an eco-lodge that can
accommodate 60 people.
Once again, he invited local people to join him in the eco-tourism project. He
taught them French and English. He also sent them to Hanoi, where they were
trained in being tour guides as well as other aspects of the hospitality industry.
He also worked to raise their awareness about protecting environment and their
Speaking about his project, Luong Xuan Hoi, secretary of Vu Linh Commune's
Party Unit, said local people's life has changed a lot since they began participating
in tourism.
Previously, it was not easy for them to earn more than VND2 million ($94.65) a
month, as they only did farm work, but now, that has changed.
The way Frédo has done tourism, moreover, has contributed to the preservation of
he is based in Hanoi, he visits and stays in the village often, and has learnt a lot
about the Dao culture, from the meaning of pillars in their traditional houses to the
practice of burning incense and offering chicken to the spirits before building
houses.
He loves in particular the festival that Dao people celebrate at the beginning of the
"It is a beautiful aspect of culture," he said. "People thank the plants, heaven and
He regularly takes his 10-year-old son to Ngoi Tu, where the boy plays with local
children. And, like his father, he has learnt to speak Vietnamese and the Dao
The number of companies shutting up shop rose last year while fewer new ones
were incorporated, reflecting the poor business environment and the government's
The number of newly established firms declined by 9.9 percent to 69,900. Their
total registered capital was estimated at VND467.3 trillion (US$22.3 billion), also
Vietnam now has just 300,000 firms, compared to nearly 700,000 during the past
decade.
Most of firms operating in Vietnam now are mainly microenterprises, which have
In 2011 some 39 percent of medium-sized companies reduced their staff size and
in 2002.
Pham Thi Thu Hang, general secretary of the VCCI, said Vietnam lacks medium-
sized and large enterprises that take part in the global supply chains.
below average.
The government has proposed amendments to the tax law to cut corporate income
But companies said the measures have not really worked since their biggest
difficulty now is to liquidate inventories, not high tax or interest rates. Some 73
percent of firms polled by the VCCI said large inventories were their biggest
concern.
The Ministry of Finance last week announced plans to cut corporate income tax to
22 percent on January 1 next year from the current 25 percent. It plans to bring it
enterprises from July as they are most vulnerable in the depressed economy,
The ministry has also announced a 30-50 percent cut in value added tax for
developers of affordable housing from July. Mai said they play an important role in
helping low-income buyers and bringing greater liquidity to the property market.
Enterprises of Bac Ninh Province, said the tax reduction would not benefit small
and medium-sized firms that are already in deep trouble. It benefits only firms with
"Most of the weak companies, which should have received support from the
government, will not benefit because they have no profits to pay taxes," he
explained.
Small and medium-sized firms now find it hard to sell their products, and the
government should help them study and update them on foreign markets, he said.
Many companies, whose products can be competitive in foreign markets, have not
Meanwhile, the State Bank of Vietnam has cut lowered the maximum deposit rate
to 7.5 percent from 8 percent, the first cut this year following six in 2012, raising
But economist Le Tham Duong said interest rate cuts no longer excite expectations
asked.
Tran Thi Hong, director of electrical home appliances maker Phuong Hong, said
interest rates, despite being cut, remain too high especially for small firms.
Her company's bank loans carry over 12 percent interest, but all are short-term,
since she does not dare make long-term credit decisions now. "We will borrow
The VCCI suggested that the government should support firms by minimizing the
The Hoa Dinh Market, around 30 kilometers from Hanoi, could well be hailed as
another Chinatown.
The market in Bac Ninh Province is one of the biggest agricultural produce
suppliers in the country, and most of its products come from across the border.
It used to trade in local products which were famous nationwide, but many farmers
since the late 1990s have left their fields and switched to trading Chinese produce
which are several times cheaper than local ones and thus earns them bigger profits.
A major problem with this is the lack of official supervision of the whole process.
The market trades between 200 and 400 tons of all kinds of vegetables every day,
markets in Hanoi and other provinces, as also down south in Ho Chi Minh City.
"A hundred percent Chinese. You won't find a Vietnamese thing," said a trader
named The.
The owns a warehouse of around 300 square meters that stores 60-70 tons of garlic
and onions in packages labeled with no other language but Chinese, and it is
He told undercover Thanh Nien reporter to feel safe taking stock from his store, as
"the Chinese have special preservation methods and their produce can be stored for
around 100 kilometers away, after it is imported from Hunan, Sidong, Jiangxi and
An area more than 60,000 square meters (around 15 acres) near the border, three
times larger than Hanoi's major wholesale market Long Bien, is used to gather the
Customs figures compiled over the first five months this year show that Chinese
carrots and potatoes are priced between VND3,500-3,700 (around US16 cents),
Chinese raw produce imports to Vietnam are exempt from tariffs and trade in fresh
Nam, a dealer at the border who owns trucks that deliver the Chinese produce to
Bac Ninh, said suppliers like The would resell them at prices many times higher.
"They can pocket VND140-150 million ($6,640-7,110) a trip (of around 30 tons).
"That is not to mention times when prices of Chinese produce drop even lower,
and traders with large pockets would store a lot of these, waiting for prices to go
Vendors buying from The would accept the prices as they can mix the products
with local ones and tell buyers that they are Vietnamese produce so that they can
charge higher prices. Some vendors do not even bother to mix them, and just sell
Chinese imports as locally produced fruits and vegetables. They said the Chinese
imports are not only cheaper, but also look better because they are big, plump and
A 10-ton truck would carry 30-35 tons. "The more we can carry, the more money
we make."
The trucks usually leave the border at night and arrive early in the morning, and
traders in Bac Ninh are charged VND220,000 ($10) a ton for the delivery.
Trucks coming from around the country to buy the stock also arrive at night.
Nguyen Van Cuong, head of Vo Cuong ward in the province's capital town, also
named Bac Ninh, said many local farmers have become rich pretty fast with trade
in Chinese produce. Some families have been able to buy their own trucks for
Cuong said there are around 20 major household businesses that have become
Numerous uncounted small traders also make more than $5,000 a year, they said.
Cuong said that when local crops are out of season, between 80 to 90 percent of
the supply at the market is brought from China through Tan Thanh border gate.
Bac Ninh market managers said the traders almost always managed to produce
legal import documents and quality certificates for their stock. So far this year,
they have imposed fines of VND8 million for the import of eight tons of garlic of
bribed to let the cargo pass without close inspection, and the traders can "buy
Toxic stuff
potatoes from China after samples tested positive for excessive levels of a toxic
insecticide called chlorpyrifos, although the owner had produced adequate safety
Surveillance over two years showed the trader had been importing potatoes from
China and local vendors were mixing these with local produce to cheat consumers.
In May this year, a wholesale market on the outskirts of Ho Chi Minh City banned
traders from selling Chinese ginger after tests found high levels of adicarb, a
Official figures say that Vietnam imported around 150,000 tons of Chinese
produce in the first four months this year, mostly garlic, onions and apples.
A report on the website of the Ministry of Industry and Trade earlier this month
cited experts as saying Vietnam has a much smaller cultivation area than China
Hence local prices cannot compete with Chinese imports, they said.
Trang 62: In Vietnam, unsustainable ‘modernization’ too much for sanitation
services
Huynh Thanh Long said he and his neighbors close all their doors and windows
whenever they are at home but that doesn’t keep the awful stink from the Ba Bo
“Pollution often forms a thick layer of foam on the surface of the flowing water,”
untreated wastewater being discharged from series of new urban areas built
“Over the last 20 years, the government of Vietnam has made considerable
US$250 million annually in recent years,” said Le Duy Hung, a senior urban
specialist in Hanoi.
urban population between now and 2025,” Hung, who is also a leading researcher
public sewerage system, much of this goes to the drainage system with only 10
Hung said estimated economic losses resulting from poor sanitation stood at $780
“Financing needs are still very high, estimated at $8.3 billion for sewerage services
Industrialization problem
Apart from untreated wastewater from residential areas, pollution also comes from
Recently, many farmers in HCMC’s Cu Chi District complained that they do not
have water for nearly 400 hectares (988 acres) of rice due to pollution in the Thai
Vietnam’s first industrial parks opened in 1991 as part of thedoi moi reform
movement, and there are currently more than 189 industrial parks and 878 export
trade policy advisory committee said that rapid industrialization over the past 20
years had led to a boom in industrial parks and export processing zones.
However, it has also led to serious pollution, leading to conflicts with local
residents.
“Only half have established waste treatment plants,” Thu said at a recent seminar
Thu said that toxic waste is discharged without treatment, causing serious pollution
to the environment.
The committee urged the government to review industrial park and export
processing zone zoning plans and encouraged agencies to cooperate to improve the
Action needed
Researchers estimated that investment levels of at least $250 per person are needed
annually in the East Asia region over the next 15 years to manage wastewater and
In another World Bank report, entitled East Asia Pacific Region Urban Sanitation
Review: Actions Needed, researchers examine what is holding back the sector and
and 2.3 percent of GDP in Vietnam, the Philippines and Indonesia, respectively.
“Worldwide, about 2.5 billion people lack adequate sanitation and 660 million of
them live in East Asia and the Pacific Region,” said Charles Feinstein, World Bank
“Inadequate sanitation takes a tremendous toll on the quality of peoples’ lives, the
environment, and the economy,” he said. “But the good news is investments in
According to the report, poor sanitation has a significant impact on public health in
the region including chronic poor health caused by diarrheal disease and an
of economic benefits.
In East Asia, this rate of return is even higher, with every US dollar spent yielding
Over the last 12 years, the life of Marc De Muynck, a 64-year-old French veteran,
has been ruled by the simple desire to help those less fortunate than him.
When he came to Vietnam in 2001 after retiring from the military, he was a tourist,
The Frenchman was stricken by the plight of the abandoned children. After the
three-month trip, he returned to his home, Arras in Northern France, and interned
"My volunteering experience with some NGOs did not satisfy me. I did not really
find my place. Very often, a volunteer is given a specific task and has very little or
him Minh.
During his first years in Vietnam, Muynck initiated several different projects, from
which was often flooded during torrential rains, to building houses for poor people
of the Dragon) with his friend, Bui Huy Lan, a Vietnamese-French dentist based in
Northern France, to help poor people and orphans in the Mekong Delta and part of
With 11 core members, a dozen volunteers, and the support of local governments,
other NGOs, and numerous fundraisers, the association tries to meet every need of
the needy.
It has built houses, bridges, ensured clean water supply to poor localities, provided
scholarships and bicycles, opened free English and French courses for children,
supported teacher training projects, supplied walking sticks for the elderly,
Les Enfants du Dragon also runs farms that culture spirulina a kind of nutritious
supplies it to orphanages and centers. About one-third of the farms' output is for
What motivates him is, Muynck said, the smiles of children when they are given
gifts like bicycles, and the tears of happiness of a poor family when given a roof
"Man can only feel happy when helping people who are less lucky than himself,
an orphanage for about 100 children in the southern province of Long An.
When the project is finished, he will see if he wants to take a short rest, he said.
"But, for now I still have enough energy to help other people. ["¦] There is always
Sweet lifestyle
While most of the association's core members are French and Swiss nationals
living in their own countries, Muynck, despite having his own family in France, is
among the few members who are based in HCMC so that they can work directly
"I am retired, and I like the sweetness of the Vietnamese lifestyle, and the southern
heat."
He said one of difficulties he faced at the beginning was building a stable network
of volunteers.
Initially lots of people volunteered, but many would also retreat quickly, either
because they found the work hard and time-consuming, or because they did not get
the recognition they expected from the association's leaders, and perhaps even
"But, in the end, we managed to form a small but strong and united team of loyal
members."
Currently, there are a dozen of full time volunteers, both Vietnamese and French
volunteer work like building houses for the poor, and playing with children they
These days Muynck is busy checking the progress of construction sites, visiting
updating the association's website and his personal blog to keep members and
supporters informed.
Dr. Lan, who is in charge of the association's work in France, said Muynck has
done his job "very well," and thanks to him, Les Enfants du Dragon's activities are
always "transparent."
Lan, who has always wanted to contribute to his home country, said he has found a
kindred spirit.
Vietnam
Vietnam is opening its doors wider to attract foreign investment hoping that will
help its economy recover, but economists warn against undue dependence on
overseas investors.
Partnership Agreement (TPP) and plans to allow more foreigners to buy housing in
the country.
Nguyen Dinh Cung, head of the Central Institute for Economic Management
(CIEM), said: “It is now the time to review what negative and positive impacts
According to international norms, FDI should account for only 5 percent of gross
capital formation, he said, but in Vietnam, it now makes up 25 percent, which may
cannot rely on foreign firms, only local ones. Foreign investors could leave
Vietnam for other markets when the country no longer has advantages or offers
development.”
Current policies only benefit foreign firms and cause difficulties to local private
Equal treatment
“No country offers incentives to foreign investors like Vietnam. We should review
our policies, cutting out too generous incentives for foreign investors and
Bui Kien Thanh, another economist, said many provinces, which want to compete
with others in attracting FDI, offer them too many incentives but do not know if
“They are exempt from corporate tax and get thousands of square meters of land
“On the other hand, local firms find it hard to get even 100 sq.m for their
workshops.
“Authorities should reconsider the issue. Why do we cause difficulties for our local
Unable to compete with foreign rivals, many local firms have disappeared from the
market. Some firms with good brand names have been bought up by foreign rivals
markets, and good management be in a position where they cannot compete with
“Private firms should play the leading role in the economy. State-owned
enterprises should work to serve the development of private firms, while foreign
Limited contribution
Lan said the country has been too friendly in inviting in foreign investors, and the
economy has lost much and gained little with this approach.
including labor, but abuse transfer pricing and announce losses to avoid paying
Economist Dinh The Hien said foreign businesses' contribution to the country is
not worth the damage caused to the country's resources and environment.
The FDI sector was the best performer in the country with a trade surplus of $14
billion last year compared to a deficit of $13.1 billion made by the state and
But its importance to the country's overall growth was not high because its exports
is that they have done very little technology transfer to benefit Vietnam.
Foreign investors tend to keep their technologies secret while local authorities do
The lack of technology transfer might not be a good thing but the situation can
technologies.
Many foreign investors focus on exploiting cheap natural resources at low prices,
Fourteen percent of foreign businesses use outdated technologies, more than twice
Thanh said the country needs to tweak its FDI policies, forcing foreign investors to
use new technologies and be content with fewer incentives, and offer more
"We need to boost the development of domestic firms to build a strong economy,"
he said.
Foreign investors brought in $1.12 billion in the first two months of the year, up
6.7 percent from a year ago, according to the General Statistics Office.
Vietnam has forecast total disbursement of $11-12 billion this year compared to
Vietnam has been soliciting foreign investments in airports for the past several
years, but it has not succeeded, and critics blame this on the low profitability of
The government plans to have 26 airports by 2020, building five and upgrading the
21 existing ones, the latter at a cost of some VND221 trillion ($10.5 billion).
Le Manh Hung, general director of the national airports operator, the Airports
expanded.
The government used to provide funds for the construction of airports, usually big-
ticket projects, but it has become necessary to attract investment from other
It is difficult to mobilize enough taxpayers' money for the task, and other sources
Public funds can meet just 60 percent of the need, and the rest should be raised
because it requires huge funds and a long time to break even, but fetches little
profits."
Nevertheless many investors have expressed interest in developing airports in
authorities to do feasibility studies for Van Don Airport, which will come up 45
expected to start this year at an estimated cost of VND5.1 trillion ($242.9 million).
Japanese firms have expressed interest in the $10-billion Long Thanh Airport near
Another barrier to foreign investment is the lack of specific policies, Thanh said.
"We do not have clear regulations about which projects foreign investors can
participate in or how much they can invest," he said. In fact, the government
Many airports are used for both military and civilian purposes, and this too causes
All airports are managed by the government except in certain cases approved by
the government.
Most investors do not want to build airports under build-transfer contracts, but
want to manage them, Thanh pointed out, saying this was also a deterrent to
attracting investments.
airports into two groups, with the first comprising of those playing an important
role in international transport and national security - like the ones in Hanoi,
The rest would be in the second group and foreign investors should be encouraged
Barely used
Vietnam's plan to build new airports and upgrade existing facilities is predicated on
International flights are now mostly routed through Hanoi, HCMC, and Da Nang.
Deputy Minister of Transport Pham Quy Tieu said the aviation sector holds
The country has five carriers that fly to 15 countries, and they are expected to
passengers and suffer losses running into tens of billions of dong (VND1 billion =
$47,600).
Dong Hoi Airport in Quang Binh Province is one such. The airport, which cost
VND210 billion ($10 million) and has an annual capacity of 500,000 passengers,
has only received 140,000 since it opened in 2008, deputy head of the airport,
It only has a few flights a week to Hanoi and HCMC, and suffers losses of
A similar situation exists in Chu Lai Airport in Quang Nam, which was built in
The airport now handles 60,000 passengers and suffers losses of VND5-6 billion a
year.
But despite this, several provinces are planning to build their own airports, hoping
The central province of Thanh Hoa, for example, plans to sink over VND2.6
The Mekong Delta province of An Giang has announced plans for a $163-million
I had been to Cho Lach District a couple of times earlier, but I did not remember
much apart from bad roads and weak bridges. There was nothing to write home
about.
However, on a recent trip to the place with a group of friends, I saw the district in a
new light.
The district is located about 144 kilometers from Ho Chi Minh City in the Mekong
Delta province of Ben Tre. When we requested the Center for Ben Tre Tourism
Promotion to help us spend some time with farmers in the district, they
recommended that we visit the Dai Loc eco-tourism site belonging to Nguyen
It was late in the evening when we arrived at Thanh's place. Ben Tre's reputation as
"the land of coconuts" is well deserved and we were not surprised to see coconut
Thanh, a middle-aged man, took us to a restaurant on the banks of the Cho Lach
canal.
We started our dinner with a sweet-sour, lightly fragrant white smoothie. Called ca
cao dằm Ä‘á (cocoa chipped with ice), the drink was made with cocoa flesh.
Suitable for almost every kind of soil, cocoa is quite popular in Ben Tre, where,
apart from its main use as raw material for chocolate, all its parts are used the flesh
is made into a fresh fruit drink or wine, seeds are powdered, and the fruit's outer
and Forestry in 2001, Thanh has successfully developed eight strains of cocoa and
After the refreshing drink, we were treated to bánh xèo hến(deep-fried pancake, or
Having had the pancake at many different places, I can confidently say it was one
of the best I've enjoyed. The sweetness of mussels, the fattiness of coconut milk
and fresh milk, the fragrance of home-grown mushrooms and mung beans, the
dipping sauce - fish sauce mixed with lime, sugar and coconut juice, and fresh
herbs picked from Thanh's garden, are tastes that will linger on our tongues and in
Other dishes on the menu included freshwater apple snails that were cooked into
seven different dishes, sour hot pot with swamp eels, and braised small cyprinids
fish with a toothless jaw that do not have stomachs. These dishes were
The dinner ended with durians, another fruit that Thanh is famous for. Nicknamed
"the durian witch," he was the man who brought the famous Mon thong durian
variety from Thailand into Vietnam during the 1990s and successfully grew it here.
I would highly recommend a boat ride with Thanh along the canal that runs
through his garden. He will provide the best form of "entertainment," introducing
you to many facts about the many fruits that are grown in his four-season garden
that covers more than two hectares. Guests are free to collect ripe durians that fall
on the ground and eat them. Or, at the coconut area, just tell Thanh, and he will
pick whichever fruit you like and you can enjoy it on the spot.
We decided to spend the night at Thanh's place. Contrary to our initial belief that it
garden to serve guests. There were no mosquitoes, but the pleasant breeze was
The next morning we visited the Cho Lach Market, which can be reached either by
motorboat or bicycle.
The sight of vegetables like sweet potatoes and taro, seafood like prawns, snails,
and fish, as also a variety of dried foods, made me want to buy them all. In the end,
however, I just bought the ingredients needed to make the tapioca noodle soup
(bánh canh) with mussels and coconut milk that Thanh's wife was going to teach us
to cook.
Besides Thanh's eco-tourism site, there are many other places to visit in Cho Lach:
a sandy beach on the banks of the Co Chien River in Son Dinh Commune; the Ba
Ngoi and Tam Loc fruit gardens in Vinh Binh Commune; the Nam Cong
ornamental garden with nation famous plants in Vinh Thanh Commune; the Cai
Mon tourism area with fruit gardens and one of the oldest churches in southern
Vietnam.
On this trip, I felt Cho Lach is a good match for Thailand's Suan Supatra Land,
which is considered a paradise for fruit lovers. If local authorities could improve
the infrastructure and promote its attractions, this place can be a big draw for
tourists.
Trang 67 : No takers for bad debts
Vietnam's new asset management company is finding it hard put to find investors
to whom it can resell the bad debts that it buys from the ailing banking industry.
Very few local investors have the financial capacity needed to buy such debts and
prospective foreign buyers are concerned about vague policies that could weaken
their investment.
The Vietnam Asset Management Company (VAMC) has thus far bought VND6.5
trillion (US$309.5 million) worth of bad debts that have book value of VND7.8
Run by the central bank, the company opened in July as the government aimed to
restructure bad debts that have crimped lending and further slowed the economy,
which is facing its most severe slump in at least a decade. Lenders with bad debts
Economist Nguyen Tri Hieu said: "In theory, foreign investors are interested in
Vietnam's bad debt market, as it has not yet been tapped. However, they will not
participate now due to the lack of regulations on bad debt trading procedures, and
Another barrier to foreign investors is that foreigners are not allowed to own land
in Vietnam. The regulation hinders them from getting mortgaged assets, mainly
debt assessment were also a barrier in reselling bad debts. In principle, banks,
when offering loans, evaluate mortgaged assets, mainly properties, below the
market value. However, it is difficult to price them now since the property market
is currently frozen.
"Foreign investors will not participate in the market unless they know the assets'
real value, the potential to resell the assets, and can understand clearly the bad debt
Nguyen Quoc Hung, VAMC's vice chairman, admitted that Vietnam is yet to have
"We have to learn how other countries have dealt with the issue. If foreign
investors could participate, Vietnam can receive huge funds from them."
Pham Manh Thuong, deputy director of the Ministry of Finance's Debt and Asset
Trading Company, said a number of foreign banks and funds have come to study
"I myself have held talks with some big investors who said they are ready to invest
But it is not an easy market for them, Thuong said. "We cannot expect the
participation of foreign investors in the next 1-2 years, because there are too many
barriers they cannot overcome, and we cannot remove them in one or two days."
Apart from the complex procedures and lack of certainty about cooperation from
Vietnamese banks, their biggest problem is the lack of transparency on bad debts,
he said.
Many banks have announced bad debts much lower than the real figures due to
worries about having make high risk provisions and loss of prestige. Banks
estimated their bad debts at 4.93 percent of loans as of September 2012, but the
Many foreign companies want to buy Vietnam's bad debts but they need a clearer
policy framework, said Karin Finkelston, vice president Asia Pacific for the
International Finance Corporation, a private sector lending arm of the World Bank.
Setting up the VAMC is a good thing to rescue lenders, but the country should also
The Asian Development Bank (ADB) has recently said it is concerned that
VAMC's current capitalization may not be sufficient for it to deal with large
The VAMC has an initial registered capital of VND500 billion, while the NPLs
(non-performing loans) in the banking system could total well over VND200
trillion.
Hung of VAMC admitted that the state, due to its thin budget, cannot pour more
money to help the company by NPLs, but has to wait for investors to do it.
The VAMC buys bad debts using its own funds or issues five-year, zero-coupon
"special" bonds to the banks in exchange. The bonds may be used to obtain
refinancing loans from the central bank to boost lending and stimulate an economy
Thus, banks will still play the decisive role in tacking their NPLs, an economist
said.
The VAMC is expected to buy VND40-70 trillion worth bad debts this year.
However, the biggest issue of finding out customers to resell the bad debts has not
Hung said the company will sell the debts to both foreign and local investors, but
If the debts are not sold by the time the bonds mature, the banks would have to
Hung said the company is mainly focusing on buying and categorizing bad debts at
"After categorizing, VAMC will join hands with banks and firms to deal with the
debts."
Some 60-70 percent of NPLs that VAMC bought from banks are from real estate
sector.
An economist said many NPLs are not eligible to be sold to VAMC, as it only
buys those backed by collateral. Thus, banks can only sell a part of their bad debts
to VAMC, and have not found a way to deal with the rest.
Bad debts had accounted for 4.58 percent of the total VND138.98 trillion in loans
as of July, official news website Banking Times reported last month, based on
experts, seeing many chances to expand its markets with the signing of major pacts
like the free trade agreement (FTA) with the EU to be finalized later this year, and
countries.
economics, as Vietnam lacks strengths to play along and hold its own on free-trade
playgrounds.
trade to import products where it does not. This way, every nation would maximize
So, in entering a “flat world” that the FTAs are purportedly creating, every country
needs to focus on its key industries that can help it withstand the flows of goods
At the launch of the book “Swiss Made: The Untold Story Behind Switzerland's
Success,” by James Breiding in Hanoi last month, Vu Khoan, former deputy prime
He said Swiss people have this simple but very effective concept: they make use of
and develop what they have. So, with fields, pastures, and snow, they focus on
cheese. And its well-protected and maintained snow covered landscapes continue
With such well-developed key industries, Switzerland is always eager for FTA
exporting the products of its animal husbandry industry, to mention just one; the
What does Vietnam have to enter FTAs and gain from them?
For many years, local experts have argued over whether or not agriculture is
The country has been blessed with natural resources like fertile land and suitable
climatic conditions to become a major producer and exporter of farm produce like
rice, coffee, cashew and pepper. However, the experts have pointed out that the
Italian and American coffee. Only when it comes to cheap, crude products do
Vietnam has a long way to go in using its tourism resources well, given the lack of
and the failure to effectively tackle problems like robbery, rip offs, and tourist
harassment.
The Central Institute for Economic Management recently introduced six industries
and sea produce processing, shipbuilding, environment and energy saving, and
The industries were, in fact, chosen in 2007 along with the government’s
However, the industries are still underdeveloped, as official figures show that their
According to the General Statistics Office, last year Vietnam’s import of machines,
devices and spare parts increased by 16 percent year on year. The import of
The country imported US$3 billion worth cattle feed and raw materials, a year-on-
year rise of 23.6 percent, while its rice exports earned less than $3 billion.
(agriculture) has yet to be made best of, while those which are considered as key
pressure soon.
For instance, if TPP is finalized, Australia-imported beef with the same prices as
Vietnamese but with higher quality will obviously dominate the domestic market.
Towards the end of last year, the Hoang Anh Gia Lai Group attracted widespread
objections and criticism from local sugar producers when proposing to the
government that it imports 30,000-40,000 tons of crude sugar from Laos, refines it
Nguyen Hai, general secretary of the Vietnam Sugar and Sugarcane Association,
warned that the project, if approved, would kill local sugar producers and
sugarcane farmers.
The association also submitted a petition asking for help from the government.
However, once Vietnam enters one free-trade playground after another, businesses
will no longer be able to turn to the government and seek its help to survive.
The evidence so far is that FTAs are not the level playing fields their votaries
claim them to be. Signatories bound by their regulations have found that they favor
the stronger players because the stronger players are setting the rules, and the
Vietnam needs to seriously think about how it is going to become strong enough to
Vietnam?
People sometimes refer to a free movement of labor, as This forum opens the floor
As this new economic community emerges, there will Vietnamese alike, to hold
be opportunity for the greater mobility of workers who forth in greater detail on
move across national boundaries to fill skills shortages, any and all issues that
increase their incomes and gain new experiences. concern you. Email your
freedom of movement and rights to work across the to edit your submissions
region for professionals in eight fields - accountancy, for reasons of space and
integration could mean movements of workers both in and out of the country. For
large numbers of skilled workers finding higher-paid work abroad through the
MRAs.
But migration among professional categories is and will only represent a very
The contribution of low- and semi-skilled migrant workers should not be forgotten.
And taken in isolation, the emerging ASEAN economic community does not
Vietnam is well positioned to benefit from AEC integration, and with 15 percent of
the ASEAN population, it also has a significant contribution to make to the new
The government of Vietnam is active in its support of migration for work as part of
its poverty reduction strategy and employment strategy. A suite of policies and
services have been introduced to reduce costs and increase opportunities through
The ILO perspective is that migration should be a choice rather than a necessity.
While migration may provide a route out of poverty, it is important to balance the
For a number of years, the ASEAN member states have been cooperating to
strengthen migration management and protect the rights of migrants. There are a
number of frameworks and forums that provide the possibility of greater policy
coordination and dialogue to advance the protections contained within the ASEAN
Some of the areas for action include the need for migrants to be better informed on
the costs and benefits of migration; how to protect themselves throughout the
migration cycle; mutual skills recognition in low- and semi-skilled jobs; portability
of social security; and training and support for returning migrants, who can use
their savings and knowledge developed abroad to enhance their livelihood options
work for all, and the ILO is committed to continuing to work with the government
management and the protection of migrant workers, both at the national level and
OceanBank has been offering corporates loans at just 7 percent interest, lower than
Others like HDBank, VPBank, TPBank, and Maritime Bank offer loans at zero
The head of a bank in Hanoi said there would be no customers if the bank does not
cut interest rates sharply, and the losses then would be much bigger.
It is now buyers' market, and banks which want to lend have to fulfill borrowers'
demands, he said.
His bank gave a big firm a loan of around VND100 billion (US$4.76 million) for
"If we do not agree, they will stop dealing with us and shift to another bank.
RELATED CONTENT
below the 12 percent target, Nguyen Thi Hong, head of the Department of
Monetary Policy at the State Bank of Vietnam, said. Last year credit growth was
8.7 percent.
To boost lending, banks have cut interest rates by 2-5 percentage points.
The fierce competition to attract borrowers and the resultant lending at below
deposit rates is raising concern about the health of the banking system.
Banks only break even when the interest rate spread is 3-4 percentage points,
But Le Quang Trung, deputy general director of VIB, dismissed this, saying banks'
average cost of funds could be as low as 4-5 percent if they have a lot of money in
current accounts.
In that case they would still earn profits by lending at 6-7 percent.
Economist Bui Kien Thanh said the low rates are often offered only for a short
time, maybe the first one to six months, and subsequently interest rates are
Besides, banks also earn fees from many services like ATMs, money transfer, and
Despite the explanations, the central bank, which wants banks to step up lending,
said lending at below than deposit interest rates is an unhealthy practice and has
"Several credit institutions have accepted to lend at below deposit rates, which"¦
It also called on banks to lower both deposit and lending rates, adding "Liquidity at
Do Minh Toan, general director of Asia Commercial Bank, said banks now have
ample deposits and can also borrow at just 5.5 percent in the interbank market, and
so can lower lending rates to attract customers. The central bank's instruction to
stop lending at low rates would make it difficult to expand credit because of low
But Le Tham Duong of the Banking University of Ho Chi Minh City justified the
order saying the central bank is worried about the unhealthy competition among
banks.
The credit growth target for next year is 12-14 percent, according to the central
bank.
The government was counting on lending growth to be higher than last year's 8.4
percent to spur the economy. This year's GDP growth is likely to be at 5.4 percent
The deputy director of a foreign-owned fruit processor in Can Tho has a tale of
woe about its experience in the country: His firm had eagerly invested in Vietnam
a few years ago in the hope of finding a favorable business environment. But the
Local authorities had spoken about plans to earmark areas for certain crops to
support investors, but they remain on paper, Saigon Times quoted him as saying.
Without this support, his company has struggled to remain in business. It has had
to support local farmers with technologies for fruit production so that their
He spoke about other companies who are no longer interested in remaining in the
country after having to do a lot of the work that should have been done by the
Not surprisingly, foreign investment in agriculture has plummeted in the past few
years.
According to the Ministry of Planning and Investment, FDI in this sector had
accounted for 8 percent of total FDI in 2001, but has since fallen to 1 percent.
Bui Tat Thang, head of the ministry's Development Strategy Department, said:
"The shortage of a long-term FDI attraction strategy, poor rural infrastructure, low
quality of human resources, and high risks are major barriers to foreign investors in
In the current tough economic situation, fewer foreign businesses are interested in
months of this year out of more than $20.8 billion overall, according to a recent
Economist Pham Chi Lan said even domestic firms are not interested in investing
in the sector because profits are often lower than in industry and services.
They also face risks like price fluctuations, animal diseases, and natural disasters,
accounts for 90 percent of the chicken supplied in the country, ended contracts
Its general director, Nguyen Quoc Trung, said the company is scaling down its
business in Vietnam by half since prices have kept falling below cost (of
A member of the Da Lat Flower Association said one reason for the difficulty in
attracting FDI is the limited land for agricultural production and high rents. "The
increasing land rent will become one of the biggest barriers to foreign investors in
Le Dang Doanh, another economist, said Vietnam still finds it hard to zone large
areas for agricultural production, which is a decisive factor in attracting FDI in the
sector since regulations on land compensation, taxes, and investment incentives are
unclear.
He said foreign businesses have not invested in bio-technology and new plant and
animal strains, and have mainly invested in basic commercial projects to quickly
The Ministry of Agriculture and Rural Development said foreign investors are
distribution in Vietnam.
Most foreign-invested projects sent to the ministry for assessment before being
products.
This is not a good trend for the agricultural sector, Doanh warned.
Change policies
Lan said the government, to attract more FDI in agriculture, should quickly change
investment policies, which are not efficient. For instance, farmers' land holdings
are too small to ensure a stable supply of raw materials to foreign processors, she
said.
There are no big-sized agricultural zones to supply produce of good quality and in
stable volumes, an issue that needs to be resolved to attract FDI, she said.
The country should also improve training for workers in the agricultural sector,
million each, much smaller than the average that of $14.7 million in all projects,
$130 million in property ones, and $17.6 million in banking and financial ones.
FDI have been often poured in animal husbandry, animal feed production,
agricultural sector has been poured into afforestation and woodwork production
market
Why does the property market not recover despite all the measures taken to revive
it?
Dang Hung Vo: Because of the large investments involved, the property market
has often a big inertia. It means it takes a long time for the market to recover from
In 2013 we helped resolve many of the difficulties faced by developers like capital
shortage and large inventories. The government has cut some of their taxes and
land rent and extended the time for them to pay land use fee. It has helped
This year the government rolled out a supporting package of VND30 trillion
70 percent of it to subsidize interest rates for low-income buyers and the rest
developers of low-priced housing has been effective though it has not really
housing projects and social ones has increased. Early this year it was difficult to
buy an apartment in social housing projects due to the low supply. But we can do it
easily now, and have greater choice in terms of prices and locations.
However, disbursement of the package has been slow. The requirements for home
buyers to demonstrate their loan repayment ability and housing situation are too
complicated. So far over VND800 billion has been disbursed. It is too small. The
disbursement should have been faster. The issue should be resolved in 2014.
If demand is spurred, the low-income housing segment could soon recover. This is
a factor that could increase the confidence in the market, creating a foundation for
Another issue we need to resolve but have not done much about is the inventory of
Management Company to deal with the housing inventory attached with bad debts.
However, it has not been effective since we do not yet know what is form of bad
debts structure in the housing inventory. In the beginning of the year, it was
officially reported that almost all properties with bad debt were in the form of
completed housing, but at the end of the year, statistical data show that 70 percent
The property inventory has reduced slightly as the government has allowed
developers to make changes to housing projects so that they could be used for
other purposes or divided into smaller ones with lower value. We have done
something to reduce the inventory, but the task at hand is still huge.
The draft revised housing law and revised real estate business law has an important
renovation that expands real property market for foreign consumers. It is a good
vision on resolving the housing inventory in current time and also for long term
same situation that existed with high-priced housing a few years ago. What do you
The concern is reasonable but comes too early since the supply of low-priced and
social housing is still low. Many people have not yet been able to buy a low-priced
house. We need to work out a housing planning and its implementation. We have
yet several serious problems with urban planning based on population, housing,
infrastructure, public services and not calculated the number of high, medium-,
The low-priced housing segment has developed only since 2009, so it is too early
But we need to make housing plans in a careful and feasible manner. This is a
Doan Nguyen Duc, chairman of Hoang Anh Gia Lai, has recently announced the
company will pull out of the property market. Do you think it is because of the
market situation?
I don't think one investor's decision can strongly affect the market. A company
could decide to invest in a market and leave the market for another. I don't believe
that an investor in Vietnam could affect the market. Vietnam has many property
investors, including many big ones - Hoang Anh Gia Lai is just one of them. The
property market was not controlled by Doan Nguyen Duc, so his decision will not
agree that the bottom of housing market is the price calculated on production cost
of house. In this meaning, they have fallen nearly to the bottom. Now you can buy
a 40-50 sq. m house for just VND500-600 million. If it is reduced further, builders
Obviously, we can do more to reduce the price, for instance by using more
The low-priced segment will see better growth next year. It will see a larger
number of transactions. But we need to do more to help the market recover soon.
The government should consider allowing banks to accept the huge volume of gold
owned by people as deposits to develop the property market. The current policy,
which does not allow gold transactions or deposits, has prevented the property
The Housing Law and the Real Estate Business Law are in revising process and to
be adopted by the National Assembly late next year. Under those laws, expats will
find it easier not only to buy houses and also to have the transaction rights in
Vietnam. This is a new decision and will contribute to strengthening belief and
McDonald’s said it attracted 20,000 customers and earned around VND1.5 billion
The US fast food giant said it plans to open more outlets this year, to catch up with
chains including Burger King Worldwide which opened its first restaurant in
Vietnam in 2011.
Industry insiders say it is time for Vietnamese firms to find ways to enter the fast
food market, which according to the Ministry of Industry and Trade earned
Local suppliers have not made their presence felt for nearly two decades that the
Foreign fast food chains still rely on importing materials, blaming Vietnamese
McDonald’s has said it only uses two Vietnamese ingredients – tomato and lettuce
from Da Lat. All beef is imported from Australia, pork and potatoes from the US,
Nguyen Huy Thinh, managing director of McDonald’s Vietnam, told Thoi bao
Kinh te Saigon (Saigon Times) Online that the chain adopts a quality control
“McDonald’s has many different quality control stages from the farm to the dining
table, so it’s very hard for us to find a suitable local provider at this moment,”
percent of the fast food revenues from local market, sources 80 percent of its
materials from Vietnam, but mostly from joint ventures with foreign companies.
KFC, which opened the first fast food restaurant in Vietnam in 1997, uses local
ingredients for 30 percent of its production and Dunkin’ Donuts, which entered
The managing director of a chain who wished to remain unnamed said they had a
hard time during the first five years in Vietnam finding enough supplies.
“We had to constantly change the providers as the quality was not consistent as
guaranteed in contracts.”
He said one lettuce and tomato provider made a proper delivery in the first month,
but the quality dropped significantly the very next month as it could not produce
enough and make up the required quantity by buying from other producers.
“That’s why we have to change suppliers and always have to prepare some imports
Kao Sieu Luc, general director of A Chau Bakery Company (ABC) which is the
sole local producer of buns for KFC, Lotteria and Burger King, said the foreign
Luc said the company has to invest in different production chains for each brand,
He said it’s not very difficult to become a supplier for the foreign chains, but one
needs to understand and stick to their regulations and maintain their quality.
“Like the buns for example, the chains have strict requirements for their crispness
and thickness.”
But representatives from local providers said quality is only part of the story, and
Nguyen Hai Binh, director of Dalat G.A.P Store which provides fruits and
vegetables, said: “Domestic firms have met strict regulations of picky markets like
Japan and EU, so meeting the requirements of fast food chains is not a problem.
“But the chains want to maximize their profits and thus tend to choose providers
Binh also urged local providers to popularize their names better at home, as some
have been exporting their products properly but are not able to enter the domestic
market yet.
Leading animal products provider Vissan used to provide ground beef for several
fast food chains in Vietnam, but its partners have come down to only Jollibee.
Other chains are seeking cheaper providers or investing in their own factories to
Muoi said local providers face tough competition in prices, quality, services and
Muoi said the need for stable and quality supply will force local companies to raise
their prices, and they will become less competitive than foreign providers.
Lotteria has built a processing factory in Binh Duong Province outside Ho Chi
small and cannot guarantee stable quality and quantity of their supplies.
“The strength of large joint ventures that are providing for Lotteria is they have a
otherwise, there will be big impact on our brand name,” Tam said.
But he said finding local partners is always the priority if they want to stay long, as
import ingredients can be cheaper but they raise transport and storage costs.
“We are working with local providers. They will be trained for managing product
Automobile giants like Toyota, Ford and Honda plan to expand production in
ASEAN countries like Indonesia and the Philippines, but not Vietnam due to the
said Vietnam would not be a choice for foreign investors interested in the ASEAN
“Vietnam’s supporting industries are far less developed than other ASEAN
Locally-made automobile components and spare parts accounts for only 25 percent
Indonesia.
The rate is very low, which means investors have to import more components and
spare parts from other countries, raising their production costs, he said.
“Products made in Vietnam are less competitive than those made in other countries
Former Ford Vietnam General Director Laurent Charpentier said it is not easy for
country are mainly small-sized with limited production capacity. Thus, supply has
He said the local automobile industry would develop only when Vietnam does
more to boost its supporting industry, which now has some 210 businesses making
auto parts. The number is just a fifth of that in Indonesia, and a fiftieth of that in
Thailand.
Weak supporting industries are a barrier to foreign investors not only in the
automobile sector, but also in other sectors like motorbikes, electronics and
garments.
Executives at chip producer Intel also said the company had been unable to find
production.
"We have worked with many Vietnamese companies in the supporting industry.
They showed very good samples, but when it came to actual business, their
Samsung Electronics Vietnam has only five Vietnamese partners in its 60-strong
supply chain, and they do simple jobs like packaging and printing. The others are
mainly companies from South Korea or other ASEAN countries, or joint ventures
A company source said production had evolved from cheap cell phones five years
ago into smart phones and tablets, but the local supporting industry companies
Nguyen Van Dao, vice general director of Samsung Vina, said almost none of the
Vietnamese firms could meet the technical requirements set by Samsung. With low
technology, local firms could provide foreign investors simple products only.
“Thus, it is difficult to reach the target that half of 170 providers of Samsung are
(JETRO), said Japanese firms see the weak supporting industry as their biggest
challenge. A recent JETRO study found that for Japanese firms, Vietnam is the
The ratio of Japanese firms’ use of local parts in Vietnam is just 28 percent, or half
This raises concerns about high input costs among firms that have already
complained about tax policies and the lack of skilled workers and information,
Some industry insiders said the government is actually treating foreign electronics
Nguyen Anh Tuan, chairman of the Ho Chi Minh City Semiconductor Industry
Association, said by failing to back the local supporting industry while pampering
foreign investors with low taxes and land fees, the government is just giving the
Tuan said foreign giants like Sony, JVC, and Panasonic only use Vietnamese
Amid reducing import tariffs under free trade agreements, the primitive state of the
supporting industry is a reason for foreign firms to shift their focus away from
and selling products. Their ratio of imported cars now matches locally made ones.
Even a few years ago 75 percent of their cars had been produced locally. Others
Nguyen Mai, former vice minister of the Planning and Investment, said supporting
industries, despite being a major concern for foreign investors, have not been
within five or 10 years, but Vietnam's has been stuck in assembling for more than
30 years.
He said the problem was that the government has not offered specific policies to
Economist Dinh The Hien said state-owned corporations involved in key sectors of
the economy want to participate in all stages of their production chain, instead of
ordering spare parts for their products from private small-and medium-sized
While local enterprises could not participate in supporting industries due to weak
technology and limited capital capacity, and shortage of support from the
government, foreign ones are not interested in it because of the small market scale.
high number of assemblers (18) compared to the industry size (less than 200,000
units). “With multiple models assembled in all factories the average production run
“At this volume it is almost impossible to localize beyond a very basic level. Most
a year, and this will require exports if they are to set up in Vietnam,” he said.
will boost in the coming years, and build specific policies to develop them.
“There is a trend of tax reduction in the world, so Vietnam doesn’t have much time
to develop its supporting industry. The most essential thing now is to define a
concrete action plan - where, when, and what to do - and implement it well.”
Trang 75 : Hiring the right people key to public sector reform
the government sector. Strict regulations that will ensure only qualified people
enter it is the real answer, says Ngo Thanh Can, deputy director of the Department
Public Administration.
The Ministry of Home Affairs has released a draft resolution seeking to downsize
the 2.8-million strong government workforce by 100,000 between 2014 and 2020.
It says that people working in areas they are not qualified for, those lacking
enterprises that have since been privatized will be laid off. Do you think this will
work?
Ngo Thanh Can: The government’s Resolution No. 132, implemented from 2007
to 2011, had cut 67,000 public servants, mainly by offering voluntary retirement.
Now, the government is drafting a new resolution as many people who are not
qualified enough have been recruited into the government in recent years.
Leaders of some sectors and National Assembly delegates have said 30 percent of
public servants fail to do their work efficiently. Others think that the rate may be
even higher.
The current draft resolution envisages 100,000 employees leaving between 2014
and 2020, with 80 percent of them being allowed to retire before reaching
It is not very large, equaling that effected under Resolution 132. So I think the
reduction is feasible.
However, what we are interested in is the resolution’s effectiveness and its impacts
employees from the government, keep good ones, and recruit new ones with of
good quality.
and treatment of talents. Without such policies, the social impact will not be great
There are concerns that relatives of senior officials and leaders will not be laid off
The issue is that too many unqualified workers have been recruited into the
who are relatives, have connections or those who are able to offer bribes have
The downsizing policy will only work well if inefficient workers are weeded out
There is also the possibility that qualified employees who are unpopular with their
bosses are laid off, or even that some bosses lose their jobs when they try to
dismiss relatives of those who have higher positions. To avoid this, we have to
process.
Right. We can do this two ways. Local governments can hire private professional
You have said that the government should have implemented strict recruitment
The root of the problem will not be solved if a policy only provides a temporary
solution. To develop the government sector, we should also replace bad employees
with good ones. For this, the filtering process must happen at the time of
recruitment. The government sector will also not develop if we do not treat
Dismissing unqualified workers can improve the quality of the government sector
and increase citizens’ confidence and belief, which has much higher value than
VND8 trillion. However, if the policy is not implemented well, it would be
Vietnam’s earlier efforts to downsize the government have not proved effective.
What should be done to make sure the upcoming effort does not suffer the same
fate?
recruit employees with good professional capacity and good morals. To this end,
we should raise awareness of these issues for all government workers, review and
sorrow of poverty?
This forum opens the floor
The media has reported about nine families in Long An
to readers, expats and
Province asking to be imprisoned because they are
Vietnamese alike, to hold
broke after last sugarcane season.
forth in greater detail on
They said being in jail is better than starving after their
any and all issues that
lands are auctioned to repay their debts.
concern you. Email your
In 2011 they had mortgaged their lands to rent 300
thoughts
hectares (740 acres) of land in Ben Luc District to
toeditor@thanhniennews.c
grow sugarcane. But floods destroyed their crops
om. We reserve the right
repeatedly, rendering them completely broke.
to edit your submissions
It is rare for farmers to ask to be jailed, but much less
for reasons of space and
rare for Vietnamese farmers to be broke.
clarity.
Many Ho Chi Minh City residents remember well the
rumors about a possible dire shortage of rice in 2008. People rushed to buy and
A few months later things went from apparent bust to boom as farmers, hoping to
HCMC then witnessed long lines of trucks with rice from the delta parked
It was the result of panic sparked by rumors and poor export policies.
When global demand was high, the government allowed limited exports, fearful of
food security. A fall in demand coincided with the harvest season in Vietnam.
After agents offered very low prices, farmers resorted to hiring trucks to take their
In the previous two seasons, after the prices of the IR 50404 rice variety - a short-
term, low-quality variety - shot up, middlemen went to the fields and offered
Development’s warning not to do so because they saw some reaping nice profits
But suddenly the government limited exports saying it was waiting for a further
Vietnam is not the only country to export rice. So, when it curtailed exports, others
Then, one day, there was no more demand for the low-priced rice from Vietnam;
It hurt to see Mekong Delta farmers riding their motorbikes for hundreds of
kilometers to find the new variety and waiting on fields to buy it for cultivating on
their lands.
People competed to buy jasmine rice, buying even unripe grains. Some took off
I cried.
their farms for days after their animals died, others giving away huge amounts of
fruits to feed livestock because they cannot sell them, and vegetable growers
Why do Vietnamese farmers face this kind of sorrow? Because they are the first
link in the production – consumption chain that consists of dozens of other links.
These links promote the trade, but also pocket most of the profits. The farmers
have to depend on them because they have no other choice. That is the tragedy of
Vietnamese farmers.
Farmers have to put up with a multitude of official agencies, most of whom merely
collect taxes and fees and do not help them improve farming technologies or
Without being aware of the market, lacking resources, and cultivating without any
While authorities have taken certain actions like setting up linkages between the
government, scientists and farmers, traders and banks, there is a distance between
the planner’s office and the field, and farmers have had to struggle on their own.
on the weather. There is truth to the saying that farmers can easily become
insolvent after investing all their money in the farm when “Mr. Sky” is not happy.
After dozens of years, a plan to sell farmers insurance remains in trial mode.
So farmers struggle on their own to cope; they survive, but face extreme hardship.
As for the sugarcane farmers in Long An, their children have had to drop out of
school or quit their jobs to return home and see if they can do something with their
lands.
But with the huge debt, it is easy to foresee a scenario of poverty for these
which place a burden on farmers, putting an end to unrealistic theories and leaving
and farmers.
Vietnamese farmers can learn from their peers in Japan, Malaysia, Israel, Thailand,
Although Vietnam may shelve construction of its first nuclear power plant to
assuage fears about safety and efficiency, the country has still failed to hammer out
Vietnam has done little to promote renewable energy despite its abundant wind and
solar power generation potential, experts say. Coal is the main source of power
generation in the energy-hungry country, a fact that could exact a heavy economic
Construction of the first nuclear plant in the coastal south-central province of Ninh
Thuan, which was originally slated to start this year, may be put on the backburner
until 2020 to ensure the highest safety and efficiency standards, Prime Minister
Nguyen Tan Dung told officials from the Vietnam National Oil and Gas Group
Dung also ordered PetroVietnam to ensure that Vietnam has enough gas to build a
Dogged by an energy crunch, other than the first four-reactor power plant in Ninh
total generating capacity, through nuclear power by 2030, a senior official from the
The Asian Development Bank has predicted that domestic electricity demand may
rise by up to 14 percent per year until 2015 and plateau at 11 percent growth until
coal, which are both leveling off. Given that, official plans for the expansion of
power generation will rely increasingly on imported coal and gas, and on foreign
According to the most recent power development blueprint, total collective power
plant capacity in the country must reach 75,000 MW in 2020, of which coal will
account for 48 percent, hydropower 25.5 percent, gas 16.5 percent, renewable
energy 5.6 percent, nuclear power 1.3 percent and imported power 3.1 percent.
Thus, delaying nuclear power development would not make a huge difference for
But given that power shortages are still affecting many businesses and
communities and crude oil output has peaked, “the overall planned capacity by
2020 is a heavy increase when compared to 2011 for all sources and I am not sure
that expansion is fully on track,” Koos Neefjes, the policy advisor on climate
toldVietweek.
say other renewable resources have not been given priority in Vietnam.
Experts say that even though speeding up investment in wind and solar power
generation would limit Vietnam’s dependency on imports of fossil fuels and global
fuel market price fluctuations, there is no sign that the country is taking this path.
“We do not expect this type of energy resource to play a significant role in the
country in the near future, due to low tariff rates and other available attractive
provides analysis and forecasts on global emerging markets, said in its Vietnam
The government has set a tariff cap of VND1,614 (US$0.078) per kilowatt hour for
wind energy, which is significantly lower than comparable tariffs in the region, the
report said.
The state utility Electricity of Vietnam (EVN), which has long controlled the
obliged to purchase the electricity generated from wind farms at the maximum
“EVN has no motivation to purchase the electricity from the farm at a higher price,
as the utility is already selling the generated electricity to consumers at a loss,” the
report said.
“Given these limits towards the profitability of wind farms, we do not foresee
investors are not being attracted,” said Nguy Thi Khanh, director of the
in the northern province of Thai Binh through introducing sound local energy
planning practices.
‘Worst of all’
The Business Monitor International report projected that coal capacity and
generation would grow “the fastest” of all energy supplies and that Vietnam would
From this year, Vietnam is set to become a net importer of coal with Indonesia and
possibly Australia as likely suppliers. Behind China, India and Turkey, Vietnam
has the largest number of coal plants proposed out of any country in the world,
with EVN outlining plans to build a further 17 large coal-fired power stations by
2020.
Such a scenario portends a grim economic and environmental picture for Vietnam.
economy, experts say. International coal prices are far higher than domestically
produced coal and are subject to the power of just a handful of large producing
fuels, in terms of greenhouse gas emissions that cause global climate change and
other pollutants, including the effects of mining, transport and use in large power
Numerous studies have documented the serious health impacts from coal fired
power stations to nearby communities worldwide. Air pollution from coal kills
13,000 people every year in the US, 22,000 in the EU, and 100,000 in India,
Khanh, the Vietnamese expert, said she was not aware of such a study in Vietnam
other than the one her organization is conducting on the impacts of coal-fired
plants.
“The impacts of those plants have not been taken into serious account,” she said.
voted to deny financing for the polluting and inefficient 1,200-MW coal power
Experts hope that these moves at the international level will force Vietnam to
rethink its energy policy for the future. But it is not clear if a real sea change is in
the offing as coal is projected to cover over 56 percent of all electricity production
subsidizing coal and other fossil fuel consumption, so “it is subsidizing pollution
whilst clean energy sources are still comparatively expensive,” Neefjes said.
He said if indirect subsidies on coal and other fossil fuels are removed, alternative
renewable energy would be able to compete with coal and hydroelectricity very
soon. Removal of indirect subsidies would also make energy efficiency measures
Thailand will allow initial public offerings of foreign companies for the first time
as Asia’s 11th-largest equity market seeks to compete with Hong Kong and
Thailand, and rules for the offerings will be announced this quarter, Vorapol
While Thailand’s $341 billion equity market is about a tenth the size of Hong
Kong’s, growing interest in stocks from the Southeast Asian nation’s 67 million
people led them to pour $2.7 billion into the market last year. The benchmark SET
Index trades at a valuation premium over the Hang Seng Index and Singapore’s
Straits Times Index, even amid anti-government protests that spurred Prime
yesterday.
“Thailand wants to compete with Singapore and Hong Kong to become one of
Asia’s funding centers,” Vorapol said. “Thai investors are also in desperate need
The regulator will also allow trading of depository receipts linked to large foreign
companies such as Apple Inc. and Google Inc., Vorapol said. Thai companies,
property funds and infrastructure funds raised about $5.8 billion through IPOs last
year, the most since Bloomberg began compiling the data in 1993.
Myanmar, Laos
The SET index has slipped 0.4 percent this year amid violence in Bangkok that
injured at least 70 people since Jan. 17. Political tension is increasing as Suthep
Thailand will require foreign companies seeking Bangkok listings to have at least
two Thai citizens on their boards, Vorapol said. Financial statements must be
Policy makers will promote Thailand as a funding destination for nearby countries
Vorapol said. Thailand is in talks with Myanmar’s finance ministry on the sale of
Relative Value
Hong Kong’s exchange, long a listing destination for Chinese companies, has
broadened its reach in recent years to include Moscow-based United Co. Rusal and
Milan-based Prada SpA. Singapore has lured companies from China, Malaysia and
the Philippines.
Thailand’s SET gauge is valued at 14 times reported earnings, while the Hong
Kong index trades at 10 times and Singapore’s measure has a multiple of about 13,
While Thailand has made strides in developing its capital markets, the country still
“The regulator has taken a lot of development steps,” Viravate said. “It’s going in a
good direction.”
Trang 79
The country's pharmaceutical and healthcare sectors are set to see strong growth,
albeit from a low base, given the bullish outlook on the economy and rising
affluence.
Spending on drugs is expected to increase from US$2.84 billion last year to $3.31
Vietnam is still heavily reliant on imported raw materials, which could increase
profitable because the country has to import 90 percent of the raw materials.
and distribution.
in production in the country. Even they focus on turning out low-cost generics, not
sophisticated drugs.
There are 178 drug companies in the country, 80 of them making only traditional
medicines. Together they meet only around half the country's demand, according
Company account for most of the market share, with Hau Giang being the largest.
Vietnamese drugs are not very popular, with doctors and patients preferring
pharmaceutical firms.
around 300 products which are much cheaper than imports, but still finds it hard to
attract customers.
He blamed this on the disparity in regulations that limit the capability of domestic
total spending.
win over doctors and hospital procurement officers is only 6-10 percent of that of
But Nguyen Ngoc Hien, deputy director of Bach Mai General Hospital in Hanoi,
said: "Many local drugs are not as good as imports. The most important thing for
Unable to sell their products, most have stopped production to focus on imports.
of over 2,000 drug firms are still in production with 90 percent now preferring to
trade.
The association said only 11.9 percent of central hospitals' spending on drugs is for
local products, while the ratio is 33.9 percent for provincial facilities.
Pham Khanh Phong Lan, deputy director of the Ho Chi Minh City Department of
Health, said while it is easy for foreign pharmaceutical products to infiltrate into
Vietnam even if they could be produced locally, other countries use technical
Ong Van Dung, general director of pharmaceutical firm Stada Vietnam, said the
biggest rivals for Vietnamese companies are India, Pakistan, Bangladesh, and
South Korea.
Vietnam, but some firms are getting around that restriction by investing in local
companies.
drug manufacturer.
Vietnam has spent $1.25 billion on importing drugs so far this year, 7.1 percent
higher than in the same period last year, according to the General Statistics Office.
Trang 80
Vietnamese garment exports, plagued by rising labor costs and heavy reliance on
imported raw materials, face fierce competition from low-priced products from
other countries.
As a result, export growth is expected to be lower this year, with the target being
Pham Xuan Hong, the chairman of the association, said: “Vietnam is facing big
competition from some countries, including Bangladesh, which offer lower selling
He said Bangladesh has among the lowest labor costs in Asia, with workers getting
Bangladesh also produces more raw materials for the garment industry than
Vietnam, which also makes its products more competitive, Hong said.
A report on the Vietnamese government website last year said the garment industry
Local cotton production, for instance, is only 5,000 tons, enough to meet just 1
percent of the demand, while cloth production is estimated at less than 1 billion
The heavy reliance on import of raw materials causes great difficulty for garment
producers. “When they receive too many orders, foreign suppliers do not provide
materials in time. Sometimes they delay delivery by one or two months, affecting
our production,” said the head of a garment company in Hung Yen Province.
But it is not easy to reduce imports since the domestic industry is still
undeveloped.
“Many textile and dyeing businesses are refused licenses everywhere they go since
favored nation status, meaning Cambodian garments enjoy zero tariff when
“Lower export tax and labor costs in Cambodia are also important factors,” Phung
set for signing this year to boost their export prospects. But things may not be so
straightforward.
Le Tien Truong, vice chairman of the Vietnam Garment and Textile Group, said to
benefit from preferential tariffs in the US market, exporters would also need to
meet the TPP’s requirements on the origins of raw materials. Vietnam’s garment
industry imports most of its raw material needs from non-TPP members, mainly
In fact, Vietnam should have beefed up production of materials to benefit from the
TPP, of which the "yarn forward" rule requires clothing to be made from yarn and
fabric manufactured in one of the free trade partner nations to qualify for duty-free
added.
He said the most important task now for garment producers is to improve quality to
Trang 81
Everyone gets more than they bargained for as volunteers from several countries
contribute sweat and money to build houses for needy families in the Mekong
At 63, Nguyen Van Kheo has two major concerns: his health and his house.
He says enteritis, muscle pains and other illnesses have forced him to undergo
several surgeries, and made him dependant on medicines and acupuncture. They
make him feel "weak," says the man, who is virtually on his own with no
Meanwhile, the small house that he got from his mother some 20 years ago in
Tien Giang Province's Cho Gao District has worn him out with its continuous
needs for repairs, he says. Intended as a temporary shelter, the house has seen its
wooden poles and beams begin to rot, and it leaks during the rainy season.
With an income of just about US$30 a month, he can only afford cheap and non-
So, over the years, he has been stuck in an endless cycle of housing improvements
If he had a new house, he would feel much relieved and would be able to focus on
taking better care of his health problems, Kheo tells anyone who cares to listen.
District to build new houses for Kheo and 24 other poor families in Cho Gao
District, under the project Mekong Big Builds 2013 initiated by Habitat for
The volunteers included 190 people from eight countries Australia, Cambodia,
China, Germany, Japan, New Zealand, Singapore and the US. Aged 16-81, they
came from different backgrounds. They were students, lawyers, teachers, singers,
kilometers from Cho Gao District, on Sunday (August 4). And, the very next day,
they started working together with local volunteers and families. On Friday noon,
Kelly Koch, country director of Habitat for Humanity Vietnam, said the rush to
build and repair houses in four and a half days was because volunteers had to cover
all the costs of their stay in Vietnam, and a longer period of time would be very
Not only did they pay for the accommodation, air fares and other costs, the
Koch said funds also came from Habitat affiliated offices around the world,
bilateral funding agencies, various corporate donors, local government, and home
In an interview with Tuoi Tre (Youth) newspaper she said although the building
was done at high speed, each house with an average area of 40 square meters met
Vietnamese technical standards as well as those set by her organization's
Nearly 250 volunteers, including staff members of the organization, were divided
into specialized teams. One managed technical standards, another team the
logistics, and yet another took care of processing concrete. Then, at each house, a
"house leader" was chosen from some ten volunteers, and there was a paper on
Every day, they started working at 8:30 a.m., spent around 10 minutes assigning
jobs, and would not stop until they had completed all the jobs listed for that day.
Koch said all the volunteers believed in and were dedicated to what they were
doing.
They had joined the project at their expense, and worked until they were bathed in
sweat, and did not let inconvenient weather conditions caused by the rainy season
Paul Foster, a Singaporean singer, actor and model, did not rest for an instant. He
transported sand, rocks, water, and cement in a push cart. Whenever he had
Koch said it was the fourth build for Wichman, and that she was planning to join
one in Nepal.
But, even more "amazing" was the relationship among people who joined the
Koch said despite differences in culture, profession, social status, and language,
In one blog entry, a volunteer wrote that strong connections between volunteers
and local families were expressed in simple acts like the sharing of local fruit and
the effort made by residents to practice saying "hi" and "goodbye" to their
benefactors.
week progressed," it read. "The team felt we were leaving a piece of our hearts
Dinh Thuy Loan, whose family benefited from the Habitat project, said after living
in a dark and leaky house for many years, her family feels "blessed."
She said they finally had a place safe enough to shelter their six-year-old son from
tired, he could imagine how a family with parents and children would be able to
Sweat, tears and blood (injuries at the construction site) was shed, but everything
Foster also said that every volunteer knew that locals would thank them when the
houses were completed, but from the bottom of the volunteers' heart, they too felt
That is the lot of volunteers they give but also receive a lot, Koch said.
"We are not trying to convey any specific message. This is the work we do. We
feel we give people more than the walls within which they can live."
Trang 82
American swine could make their way to the Vietnamese dining table via Chinese
Super-secret Trans Pacific Partnership talks ended in Singapore last week without
a deal. While US trade representatives reported making major progress on the 12-
Protesters all over the globe have warned that the pact
Without even a modicum of transparency, the TPP has come to feel like the
proverbial monster under the bed. No one knows what it will look like and perhaps
for that reason we can't help but fight a creeping sense that it's going to kill us.
That may sound a little alarmist. Unless you're, say, a Vietnamese pig farmer.
The National Pork Producers Council (AKA the lobbying arm of America's
Due to a number of strict laws protecting Vietnam's patchwork of small farms and
joint-stock slaughterhouses, less than 2 percent of the two million tons of pork
Naturally, the NPPC wishes to crush those laws and capitalize on our daily cơm
sườn.
If that happens, the organization says it stands to increase pork exports to Vietnam
"The NPPC will continue to work with Vietnam to encourage the adoption of
The NPPC reserved the term "science-based" to belittle food systems (notably
those in the EU, Russia, and China) which ban US pork outright because it
contains ractopamine. The leanness and growth-promoting drug (it does both!) is
In 2007 mobs of Taiwanese pig farmers hurled feces at the Ministry of Agriculture
building in Taipei when word got out that their government might lift its zero-
tolerance policy on the drug. US trade representatives continue to push for an end
However, few are budging on their blockade of US pork; there's more than one
In addition to concerns about the growth drug, Thai farmers took to the streets this
spring to warn that, if permitted, cheap US pork imports would devastate more
than 250,000 Thai households that draw their livelihoods from rasing pigs.
The Thai conglomerate Charoen Pokphand Foods (operating here as the Vietnam
operates large-scale slaughterhouses which buy pigs from farmers who can no
Some of these farmers have publicly accused CP and its ilk of creating "price
The pages of this and other papers have been full of stories in recent years
describing how pig farmers have been driven to bankruptcy by falling meat and
rising imported feed prices. Many are barely surviving on emergency government
loans.
In addition, who knows how much longer those will hold out? In October, the
quaking in their green socks at the prospect of competing with America's drug-
One estimated that American, Canadian, and New Zealand pork is 1.5 times
cheaper than local meat. Compound this with the blind faith Vietnamese
Perhaps the strangest twist in all of this is the role China plays. The People's
Soon after the sale, Smithfield announced plans to make half its pork products
currently suing the American Food and Drug Administration for 100,000 pages
In the end, one could probably upend the entire TPP negotiation process by telling
every Vietnamese person at the table that they were about to ink a deal that would
Global rice prices will extend declines as Thailand is forced to offload grain from
Exports to China and Africa from the second-largest shipper will drop this year on
increased competition from Thailand as well as from India and Pakistan amid a
global glut, said Truong Thanh Phong, chairman of the Ho Chi Minh City-based
group.
prices since 2011, the program is now short of funds and unpaid growers are
demanding stockpile sales. The unrest by the growers adds to opposition targeting
pace of sales from holdings that are large enough to cover 39 percent of annual
“The rice market has seen fierce competition for the past two years due to the
global surplus,” said Phong, who has been chairman of the group for 13 years.
Global prices will decline this year because they’re guided by Thai rates, he said.
The price of new-crop Thai 5-percent broken white rice, a benchmark grade,
tumbled 23 percent last year and was at $460 a metric ton on Feb. 12. The
Vietnamese 5 percent-broken variety is about $395 a ton, higher than $370 for old-
harvest Thai grain, Phong said, without giving price forecasts. Rough rice fell 0.3
percent to $15.81 per 100 pounds in Chicago today, paring losses this year to 0.7
percent.
Rural Incomes
Thailand spent 689 billion baht ($21 billion) in the past two years buying from
farmers to boost rural incomes. That spurred the buildup in the inventories to 14.7
million tons this year from 6.1 million tons in 2010, according to the U.S.
Department of Agriculture. The program is set to lapse at the end of this month as
extend it.
for their paddy pledged during the past wet-season crop, it seems likely that they
will try to increase sales,” said David Dawe, Bangkok-based senior economist at
the Food & Agriculture Organization. “If they are sold too soon and all at once, the
global price will fall, but if they are sold too late then the quality will continue to
deteriorate.”
Thai farmers blocked roads in the provinces and protested in Bangkok this month,
urging a faster pace of sales from the stockpiles so that the government can make
missed payments to growers. It may take about five years for the state stockpiles to
be sold off and a further slump in prices is possible as more of the grain is shipped
out, Thai Rice Exporters Association President Chareon Laothamatas said on Feb.
5.
Planned Sales
Thailand plans to sell about 1 million tons a month from stockpiles during the first
Boonsongpaisan said on Feb. 17. The government will clear all remaining
Vietnam’s exports are forecast at 6.5 million to 7 million tons this year, with
shipments of 1.2 million tons seen this quarter and 3.5 million in the first half,
Phong said. The country shipped 6.68 million tons in 2013, the lowest level in four
Official exports to China may drop 9.1 percent to 2 million tons this year, Phong
said on Feb. 14, referring to trade tracked by customs. Unofficial shipments, not
tracked by customs, may slide to 1 million tons to 1.1 million tons from a range of
Biggest Importer
China, the world’s largest buyer, will import 3.4 million tons in 2014, according to
the USDA. Heilongjiang province halted a plan to buy 1.2 million tons, Deputy
Prime Minister Niwattumrong said on Feb. 4, citing the province’s concerns about
There’s enough evidence to charge Yingluck with negligence for her role
before the commission determines whether she will be indicted. The prime
Phong said. Shipments were 1.9 million tons last year, accounting for about 28
percent of the total. That’ll decline to 23 percent to 25 percent this year, he said.
record 11 million tons in the 12 months through March, according to M.P. Jindal,
president of the All India Rice Exporters Association. Exports from Pakistan may
total 3.4 million tons in 2014 compared with 3.5 million tons last year, a USDA
projection shows.
Harvest Forecast
The global rice harvest expanded 0.8 percent to 469.5 million tons in 2013,
outstripping demand of 467.1 million tons, according to the USDA. The surplus --
together with record supplies of wheat, corn and soybeans -- helped world food
Vietnam’s total output of unmilled rice this year will be similar to last year’s 44
million tons, Phong said. In 2015, the harvest may decline 2 percent to 3 percent as
the government implements a plan to switch more land to other crops, he said.
The switch away from rice is designed to boost farmers’ incomes, with corn one of
the alternatives, Pham Dong Quang, deputy head of the government’s crop-
planting will be mainly in the north of the country as the Mekong Delta in the
who’s been in the industry for almost four decades. “But China will definitely
Three artists of ca tru - a complex form of sung poetry found in the north of
performance in Hanoi
UNESCO's recognition of Vietnam's cultural heritage should not be the end but a
driving force for efforts to conserve it a task that has been neglected even at
Don ca tai tu, or southern folk music, was recently recognized as an intangible
significance?
Ngo Duc Thinh: Besides don ca tai tu, seven other intangible cultural heritages of
others are mostly located in the north. The fact is that heritages can be found across
the country, not just in the north. Thus, the Ministry of Culture, Sports and
UNESCO.
Don ca tai tu is very popular and enjoyed by a large number of people. The
There is an opinion that Vietnam seems too anxious to get UNESCO recognition
run after the recognition, regarding it as a target. The same situation could also be
In fact, UNESCO recognition for our heritage should not be the end, but a driving
The biggest concern for cultural managers, scientists and international agencies is
how we will act to conserve heritages recognized by UNESCO and the state.
The fact that we push for having more heritages being honored partly reflects our
achievement disease, which has spread to all walks of life and has to be treated.
However, the honor conferred on our heritage will be canceled out if we do
What is the conservation status of our heritage sites after being recognized by
UNESCO?
The conservation of many heritage sites has not improved even after being
recognized by the organization. Ca tru (a complex form of sung poetry found in the
example. Despite our efforts, we have not yet been able to take it out of the list of
heritages needing urgent protection. The conservation of the cultural space of the
The community is very happy when heritage sites are honored, but it is not yet
fully aware of the [need for] cultural heritage protection. The most important thing
is that the public lacks knowledge about heritage protection. Heritage conservation
is a science, and we should learn it. Sometimes we make great efforts in heritage
protection, but cannot get good results as hoped for, and even destroy their value
important.
There is an opinion that we should not rank intangible cultural heritages because it
will create a hierarchy of high- and low-ranking heritages. What do you think
about this?
The Ministry of Culture, Sports and Tourism has identified national intangible
cultural heritages since 2012. To date over 40 heritages have been recognized as
national intangible cultural heritages, of which those meeting UNESCO criteria are
The honor should not be the ultimate end, but an encouragement to protect and
foster them.
If the government or the world does not honor certain heritages, we should still
government and experts do to make the public more aware of the country's
heritage?
The future of a country belongs to youths, so the future of the nation's culture also
belongs to them. Youths play a decisive role in heritage conservation. Without the
because the government has not yet involved common people in the task. The
government has done the people's work in heritage protection. Other governments
never do that. They only support people in protecting the heritage. Heritage
RELATED NEWS
Vietnam's foreign ownership cap for non-banking firms set to rise to 60 pct
Investors are unhappy with Vietnam for taking too small a step to open its banking
system by lifting the foreign ownership for “single strategic investors” at local
banks but keeping the total foreign cap, analysts said at a conference Tuesday.
But the total foreign ownership in a bank is still limited to 30 percent compared to
website Saigon Times quoted Nicolas Audier, executive board member of the
said.
Standard Chartered and the World Bank’s International Finance Corp were
surprised by the news that local bank ACB, in which they had stakes, had been
Audier suggested legislators consider further increasing the cap, especially given
the current problems of bad debts, cross ownership, and mismanagement at banks.
He also said that ongoing mergers of weak banks without the help of foreign
strategic partners would not do much to clean up bad debts in the system at all.
achieve a credit growth of 12-14 percent this year but has seen loans drop 1.66
Remco Gaanderse from leading Dutch bank ING said Vietnam should have raised
20 percent, he said, adding that local banks stand no chance of catching up with the
Mac Quang Huy, managing director of local stock firm Maritime Bank Securities
suggested Vietnam not be hesitant to lift the ownership limits in order to lure
international investors into the local banking sector and get them to help rectify the
But Nguyen Manh Hung from the central bank’s Banking Strategy Institute said in
fact there is still a lot of room for foreign investors since only a few banks like
ABBank and state-run VietinBank have used up their ownership limit for strategic
investors.
By increasing the cap by 5 percent to 20 percent, the central bank has sent the
message that the system genuinely needs foreign investors, but it also needs plans
News has been circulated since late last year that the government would also raise
TPP trade pact misses deadline as more talks planned for January
Ministers negotiating the 12-nation Trans-Pacific Partnership trade pact said today
"We identified potential landing zones for the majority of key outstanding issues in
the text," U.S. Trade Representative Michael Froman told reporters after four
days of talks in Singapore, reading a joint statement from ministers and delegation
heads. "We intend to meet again next month," he said, with market access issues
yet to be resolved.
The TPP, which would link an area with about $28 trillion in annual economic
output, has been bogged down by differences over issues from agricultural tariffs
to intellectual property. Leaders from the U.S. to Malaysia and Japan face
opposition to the deal from lawmakers at home, an obstacle that will have to be
No new timeline has been set to reach an agreement on the TPP, a pact goes
beyond usual trade deals that focus on tariffs and traditional goods such as
government-backed businesses.
"We had various bilateral talks and of course everybody understands that there are
missed the talks after being diagnosed with early stage tongue cancer.
"We have been making necessary adjustments and coordination and deepened our
discussion," Nishimura said. The U.S. made progress with Japan in talks on
automobiles and insurance, and still has more work to do on cars and agriculture,
U.S. agenda
The delay in concluding the TPP complicates the Obama administration's so-called
pivot to Asia, already dogged by tensions with China over the East and South
China Seas. President Barack Obama sent Secretary of State John Kerry in his
The countries in the pact are the U.S., Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico,New Zealand, Peru, Singapore and Vietnam. China, which has
been excluded from TPP, is separately moving on trade talks with countries such
WTO deal
The TPP talks follow an accord struck by the World Trade Organization, the first
multilateral agreement negotiated by the WTO's 159 member nations in its 18-year
borders and safeguard food security in developing nations. A successful WTO deal
may add $1 trillion to the world economy, supporters among business groups have
said.
"There is a line on which Japan can absolutely not compromise," Japan's Chief
Cabinet Secretary Yoshihide Suga told reporters earlier today in Tokyo of the TPP.
Still, Japan's team "will continue to put all their energies into the negotiations until
Japan's defense of its farming and automobile industries and reluctance to allow
access for U.S. automobiles have been among issues impeding progress on the
deal. Prime Minister Shinzo Abe seeks to increase agricultural efficiency in the
nation's 1.2 million rice farms and remove hurdles to his pursuit of free-trade pacts
Fast track
In the U.S., Obama faces opposition to the deal from Congress, consumer
advocates, automakers and labor unions over a range of issues. Last month 151
House Democrats sent a letter to Obama stating their opposition to granting him
U.S. Vice President Joseph Biden's trip to Asia last week, intended to pin down the
TPP and renew the U.S. emphasis on Asia, was overshadowed by China's Nov. 23
announcement of an air defense zone over a large swathe of the East China Sea,
South Korea late last month expressed interest in joining the talks, and said it could
start preliminary bilateral discussions with TPP parties. That would not amount to
a formal decision to join the TPP process, the trade and finance ministries said in a
Investor-state
"The Australian government has said that it would be able to consider, on a case-
by-case basis, the possible support for an ISDS -- investor-state dispute settlement
said that we're prepared to consider that in the context of TPP provided there is a
international trade minister Mustapa Mohamed said in an interview Nov. 20 "is not
WikiLeaks, which this week also released two documents it said were prepared by
a TPP negotiating country and showed strong disagreement between the U.S. and
Vietnam's online recruitment market has a lot of potential for growth, he said.
"With a population of over 90 million, the third largest ASEAN country, and an
average age of 28, Vietnam offers an exciting future with enormous potential for
economic growth."
"Job search websites are expected to be an important tool along with the economic
are likely to play a yet more significant role as the penetration rate rises from now
workforce," he said.
"VietnamWorks and Navigos Search have, in the past 11 years, come to be the pre-
Vietnam. And we are thrilled to be partnering with En-Japan and En-World for the
next phase of our development, confident of the ongoing potential of this very
exciting market."
IT, electronics, consulting and retail and wholesale are expected to be promising
Based on VietnamWorks first quarter of 2013 online employment report, the best
industries for job seekers remain in IT. Most notably, job growth in software
percent), textile and footwear (up 38 percent), pharmaceuticals and bio-tech (up 66
percent), and retail and wholesale (up 105 percent) all proved themselves
recession-proof.
Competition
Vietnam now houses some 50 online job websites, but vietnamworks.com and
VinaCapital. Thus, the two M&A deals means that the real competition will be
"For example, we are preparing the launch of our nation-wide jobseeker campaign
CareerBuilder has become VON's strategic partner will help accelerate its
Paul Nguyen, general director of kiemviec.com and HR Vietnam, said his firm
needs to accept global competition but that it is very hard for it to survive and
compete with global economic giants. To some extent, it had no other choice but to
Ngoc said she is well aware that some crew members have been able to earn a lot
“The salary the company pays is good enough for a living but some employees
may have thought about earning more through smuggling,” the Vietnam Airlines
(VNA) stewardess told Vietweek, refusing to reveal her real name in fear of losing
her job.
In an effort to cope with rampant smuggling by flight crews, the national carrier
VNA has made a controversial move – banning them from carrying large suitcases.
According to an instruction from the airline’s general director Pham Ngoc Minh,
flight crews on all short and middle-range flights are only allowed to bring small
suitcases.
Any handbags for coats have to be put inside the suitcase for scanning purposes,
flights has adversly affected the image and reputation of VNA, said the instruction.
Minh instructed flight crew to strictly follow the laws and regulations of
Le Truong Giang, VNA spokesman, said the company issued the new regulation
after many flight attendants were caught smuggling products into Vietnam.
Earlier, a flight crew member was allowed to carry a handbag and a checked bag of
baggage is screened but customs officials only randomly inspect their hand
baggage.
A flight attendant who wanted to remain anonymous told Tuoi Tre (Youth)
newspaper that the ban will be ineffective because a dishonest flight attendant can
Commonplace
Ngoc, the VNA stewardess, said the most commonly smuggled items were small
“Flight attendants can earn good profits reselling smuggled cellphones... they
smuggle cosmetics, alcohols and cell phones. Cellphones are the most common
products.”
She said that while she herself brought back two cellphones twice a year, for
“Each cellphone brings profit of around VND2 million (US$95) and some
expensive phones can bring profit of up to VND4 million. Normally, I buy only for
my brothers and sisters in my family one or two. But if I was detected, I would be
rebuked.”
Nguyen Phi Hung, director of the Anti-smuggling Investigation Department at
Vietnam Customs, said commodities with high values but small sizes like
medicine, clothes, cellphones and other luxury products are often found smuggled
by air.
“Smugglers often hide products in their pockets or hand baggage without declaring
them with customs when entering Vietnam,” he told the media at a recent
conference on anti-smuggling.
“Smugglers are mostly pilots, flight attendants and passengers who often take the
A VNA representative told Thanh Nien that smuggling among flight crews still
In a recent case, a VNA crew member is currently under suspicion of buying goods
February 27, but Le Truong Giang, the VNA spokesman, said the company has yet
to receive any official request for an investigation from Japanese law enforcement
agencies.
According to Sankei Shimbun, local police arrested four Vietnamese people for
They then sent the goods, most of which were popular brands like Uniqlo and
International Airport, where a member of VNA’s flight crew would buy them and
In 2009, Japanese police arrested Dang Xuan Hop, a VNA pilot, on suspicion of
smuggling.
He was kept in custody for a few months in Japan before local police dropped
charges against him. But VNA still suspended him from flying for one year.
In another case, VNA steward Bui Ngoc Tuan was arrested after he was suspected
He had just gotten off the plane at Noi Bai International Airport at 6:25 a.m. when
The officers said Tuan had not declared the batch with customs. They handed over
More than most people, Dang Thanh Trang, who used to work as a trainer at a
fitness center in Ho Chi Minh City for several years, knows well that children like
"But I cannot arrange any time for it because of her school and study schedule,"
she said.
multimillion dollar project that aims to improve the physical strength and stature of
Vietnamese people. Trang says she cannot see her daughter benefiting from such
years to 1.67 meters by 2020 and 1.685 meters by 2030. The target heights for
The project, approved by Prime Minister Nguyen Tan Dung in 2011 and estimated
to cost around US$287 million, covers studies and action programs that will
Vietnam's gross domestic product was around $136 billion last year.
women have grown only four centimeters in the past 35 years, to 164.4 centimeters
Experts had then blamed poor nutrition and lack of physical activity for
age, ensuring nutrition supplies, physical activities and greater awareness of health
Doctors said at the teleconference that children need deep sleep and should go to
However, experts say project planners have not taken into account sufficient
scientific studies and that it is basically misdirected. The huge costs envisaged
should instead be spent on improving living standards of the people, they add.
Nguyen Van Tuan, a Vietnamese senior researcher on bone genetics at the Garvan
"I think it is unnecessary to spend the money on research that has no sound
Tuan said it was wrong to say that the height of Vietnamese people has been
He said a survey by the Fels Research Institute in the US found the average height
of a group of people in Ohio increased by 4.8 centimeters among men and 3.1
Tuan also said it is impossible to increase the average height of Vietnamese people
physical exercises.
He said there is no study showing that genes account for just 23 percent of a
"Hundreds of genetic studies over the past 50 years, including my own, show that
Tuan said Vietnam should prioritize improving living standards instead of focusing
"I suggest the project's investment be used to improve the public healthcare system
Nemat Hajeebhoy, Vietnam country director for Alive & Thrive, a Washington-
based non-profit organization that seeks to improve health and nutrition and reduce
stunting, said it is critical that Ministry of Culture, Sports and Tourism works
closely with Ministry of Health and the National Institute of Nutrition to ensure
interventions."
She said the project should focus on the first 1,000 days of a child's life - from
pregnancy (nine months) to the time the child is two years old.
"This means that the Ministry of Culture, Sports and Tourism must invest
through nutrition interventions. If this critical window is ignored then we will not
Southeast Asia.
Tran Thanh, another HCMC resident, is not dismissive of the project's aims, but is
nutrition intake of Vietnamese children will be difficult Vietnam plans $287 mil
to carry out because of high milk prices. project for taller, better
built population
"Most people think about milk when talking about
nutrition. Doctors say it improves height. But mothers Like us on Facebook and
like us are really concerned about frequent milk price scroll down to share your
is just a dream.
"There should be practical actions rather than just discussing the plan and
Although a stagnant economy has many businesses scaling down and even shutting
Vietnam's leading recruitment company Navigos Group, which runs the two
Japan said it bought 89.8 percent of the Ho Chi Minh Navigos Group to sell 90
City-based company, or around 9.98 million shares pct stake to En-Japan Inc
Reuters earlier quoted En-Japan, which has operations in China, Singapore, Hong
Kong, Australia, and Korea, as saying that it would acquire the remaining 10.2
investment in Vietnam with a deal to buy out DFJ VinaCapital, the main
sitesHRVietnam.com and kiemviec.com. The value of the deal has not been
revealed.
At the same time, Jobstreet.com, the Southeast Asia's largest online employment
in Vietnam.
Potential
Nguyen Thanh Nam, director of the strategy consulting firm Win-Win, said many
foreign investors have been interested in recruitment services here for the past few
years.
Revenues from online job service providers will continue increasing because local
"Now is a good time for foreign firms to buy stakes in local jobs firms. They can
negotiate good prices as the economy has not yet rebounded," Nam said.
Like many other companies, job service providers have also faced difficulties
increased by 6.29 percent last year to over 54,200. Most of them were in the
However, Nam said this is a temporary difficulty as the demand for labor will
increase when the economy rebounds, he said. "There will be many opportunities
Talking about the opportunities, Navigos Group's Chief Executive Officer Carlton
Pringle said: "2013 commenced with the hangover of late-2012, and general
economic malaise, so to return an almost identical quarter year-on-year for the first
quarter of 2013 compared with the first quarter of 2012 in terms of online labor
Vietnam's online recruitment market has a lot of potential for growth, he said.
"With a population of over 90 million, the third largest ASEAN country, and an
average age of 28, Vietnam offers an exciting future with enormous potential for
economic growth."
"Job search websites are expected to be an important tool along with the economic
While the Internet penetration rate in the country is 36.6 percent, job search sites
are likely to play a yet more significant role as the penetration rate rises from now
workforce," he said.
"VietnamWorks and Navigos Search have, in the past 11 years, come to be the pre-
Vietnam. And we are thrilled to be partnering with En-Japan and En-World for the
next phase of our development, confident of the ongoing potential of this very
exciting market."
IT, electronics, consulting and retail and wholesale are expected to be promising
Based on VietnamWorks first quarter of 2013 online employment report, the best
industries for job seekers remain in IT. Most notably, job growth in software
percent), and retail and wholesale (up 105 percent) all proved themselves
recession-proof.
Competition
Vietnam now houses some 50 online job websites, but vietnamworks.com and
VinaCapital. Thus, the two M&A deals means that the real competition will be
"For example, we are preparing the launch of our nation-wide jobseeker campaign
CareerBuilder has become VON's strategic partner will help accelerate its
Paul Nguyen, general director of kiemviec.com and HR Vietnam, said his firm
needs to accept global competition but that it is very hard for it to survive and
compete with global economic giants. To some extent, it had no other choice but to
RELATED NEWS
U.S. consular officer accused of taking bribes from Vietnam visa seekers
May 28
Every day, scores of hopeful Vietnamese line up under the spiked iron fence that
They clutch plastic folders containing all the details of their lives and await the
The huddled masses are unlikely to enjoy the privilege of this interview, which
Many will be rejected in minutes because they do not own property or haven't
traveled enough.
For years, I've heard vague rumors that visas could be bought or simply granted if
On May 13, Michael T. Sestak, the man who ran the Non-Immigrant Visa division
of the US Consulate in Ho Chi Minh City, was arrested in Los Angeles for his
Sestak could not be reached for comment. Emails and phone calls sent to the
federal public defender that represented him at his initial hearing were not
returned. As of press time, Sestak was still being held, without bail, in a California
Compliance issues
Long before Sestak's arrest, there were problems with consulate's visa process.
The report found that the Consulate General had created "inappropriate"
special interest generated by the executive office and a category for immediate
The inspectors urged the Ambassador to keep an eye on any and all visa
recommendations.
"Because compliance has been an issue," they wrote in the report, "it will be
important for the Ambassador to review a monthly report on all referral cases,
including information on any email or other contacts that circumvent the policy."
Tuoi Tre quoted an anonymous source inside the consulate as saying that three
Vietnamese members of the Consulate staff members had been fired following
Sestak's departure.
Agents from the Diplomatic Security Service asked him if he'd noticed anyone
He said he hadn't. He and his American staff were more than happy with their
At that time, Sestak drew over $7,500 a month from his job as a consular officer
investigators.
When they asked if anyone had been helping friends obtain visas, he said no.
"Most of us didn't have any contacts with the Vietnamese community outside local
staff," he said.
Secrets to a US visa
The 42 year-old, former cop, Naval Intelligence Officer and bureaucrat arrived in
HCMC in August of 2010 to run the non-immigrant visa section, which frequently
"Secrets of the Visa Application Process Revealed!!!" read a flyer for one such
event emblazoned with clip art of the flag and the statue of liberty.
The flyer promised to reveal the secrets of the luckiest days to schedule visa
According to a 28-page affidavit filed by DSS Special Agent Simon Dinits, Sestak
For six months or so, according to chats and emails mined by US investigators, a
A Cinderella story
"Last night we went out with this guy who works at the consulate - he's the one
who approves visas... and he's this single guy who wants to find someone to be
with," wrote Hong Vo, his alleged 27 year old co-conspirators on June 1, 2011.
"My brother knows that so he's been trying to get this guy out to introduce him to
In the ensuing months, sources close to Sestak say the Vo's took him out on the
In exchange, investigators say he rubber stamped the visa applications they sent
him.
At first, the scheme benefited the family's relatives by marriage and blood. But
before long, investigators say Hong and her family members were soliciting photos
and personal information from paying clients and sending them directly to Sestak
In exchange, Sestak rigged the interview system to ensure the applications were
approved or (at the very least) given a "soft refusal - ” which gave them a chance
His co-conspirators were soon promoting the scheme to other Viet Kieu. In the
emails excerpted in the affidavit, the co-conspirators said they targeted Vietnamese
Americans because they had money and were "desperate" to get family members
into the United States on tourist visas, frequently so they could either "disappear
(get married)" or "get the green light to go the next time [they applied]."
This whole process could cost between $20-70,000 per tourist visa. Investigators
say they used encoded IP addresses, fake names and wired money through Chinese
bank accounts.
source that alleged between 50 and 70 people from a single village had illegally
According to sources who knew him, Sestak believed he would return to naval
service and took a leave of absence from his post, starting last September.
During the last few months at the consulate, he refused between three and six
percent of the applications that came across his desk while the rest of his staff
Sources close to Sestak say he was told his ongoing relationship with a Vietnamese
waitress in Ho Chi Minh City had somehow compromised his clearance for the
Navy mission.
So Sestak left Vietnam for Thailand with more than $3 million squirreled away in
a Thai bank account. When he arrived, he set to work buying over $2 million
Sources involved in his apprehension say that law enforcement agents from the
State Department and the US Marshall's Office caught up to him in the Thai capital
awaiting a flight to DC, where he has been charged with conspiracy to commit
On May 8, Hong Vo was arrested in Denver, Colorado and released to her parents'
brother's wife, her significant other and her cousin have yet to be named.
Trang 92
A worker spreads coffee bean to dry at a coffee processing factory in the Central
Highlands of Vietnam
The Ministry of Industry and Trade has issued a circular prohibiting foreign firms
from directly buying produce from farmers. There is concern that the regulation, to
take effect June 7, will reduce competition and force farmers to sell to local firms
at lower prices.
Vietweek asked Nguyen Xuan Thai, an executive of the Vietnam Coffee and
Vietweek: There is a fear that the new regulation will seriously affect farmers'
coffee sales since they will have fewer customers. What do you think?
Nguyen Xuan Thai: Only foreign firms not investing in coffee production will be
prohibited from buying coffee directly from farmers, but they can buy from
Vietnamese dealers. So the regulation will not have a strong impact on coffee
sales.
In fact, coffee demand is always higher than supply, so we do not have to worry
that our exports will be hit. The issue is whether Vietnamese firms have enough
money to buy coffee from farmers and wait for higher export prices. However,
only a few wealthy farmers can keep their coffee harvest and wait for higher
prices.
The regulation will enable local firms to have a more stable supply.
But will the regulation force foreign firms to leave the Vietnamese market?
They would never leave the market. Their profits from the market are very large
since the US dollar is appreciating against the dong. Foreign firms can get loans at
around 2.5 percent interest from banks in their home countries, much lower than
the 3.5-4 percent paid by Vietnamese firms. Thus, their profits are always higher
Foreign firms can also directly sell coffee beans purchased in Vietnam to
international processing firms, so their profits are higher. Local firms often
purchase coffee from farmers and then sell it to international intermediaries, who
resell the product to global processing firms. Thus, Vietnamese firms' profits are
But farmers face losses since foreign firms always pay them higher prices than
Selling to foreign firms can bring immediate benefit as foreign firms pay our
farmers higher prices for coffee than local ones. Now, Vietnamese firms cannot
pay higher prices to farmers because their other costs such as bank interest are
But foreign firms, if allowed to buy coffee from farmers at high prices for a while,
will push Vietnamese firms out of the market. Then they will be able to force
farmers to sell their produce at lower prices. Thus, farmers will not enjoy any
years?
RELATED CONTENT
Low competitiveness is also one reason for many local coffee firms' bankruptcy.
Due to the large number of coffee firms closing down, banks have recently become
reluctant to lend, so some firms find it hard to raise funds for production. Besides,
interest rates are too high for them to make profits. Also, Vietnamese firms have to
export their coffee via financial intermediates, so their profits are smaller.
The participation of foreign firms in the market could force Vietnamese companies
to improve their competitiveness. Some firms, which could not compete, have
gone bankrupt. In the current context of serious difficulties for local firms and the
robust participation by foreign firms in buying produce from farmers, more local
firms will go bankrupt if the Ministry of Industry and Trade does not prohibit
co-operatives. They have concrete business plans, so they can often sell their
products at good prices. But in Vietnam, farmers cultivate coffee on small land lots
of less than 1,000 square meters to a few hectares. They farm by themselves and
operatives. Foreign firms cannot directly invest in farming either, only via co-
operatives, which then use the money to reinvest in farming. Foreign investors
investing in the co-operatives have priority in buying raw coffee from the co-
operatives.
In Vietnam, foreign firms investing in farming can directly buy raw coffee from
the farmers.
to produce coffee of higher quality. For this, authorities should help them. For
example, provincial people's committees should make plans and provide directions
for this.
It is not difficult to find customers for our coffee. However, we can make high
'UNFAIR'
The general secretary of the Vietnam Coffee and Cocoa Association, Nguyen Viet
Vinh, says only a few foreign firms buy raw coffee from farmers for processing in
Vietnam. Many others buy and export for earning profits. The Ministry of Industry
and Trade said foreign-invested firms have made up 60-65 percent of Vietnam's
lot of money to provide farmers with materials and equipment only to see them sell
The new regulation is expected to tackle that problem, Vinh says. It would also
encourage greater focus on coffee processing since both foreign and local firms
Analysts say major graft allegations stemming from a Japanese aid project warrant
corruption
The Bai Chay Bridge in the northern province of Quang Ninh, built with Japanese
regarding ODA as an achievement in foreign policy because at the end of the day it
File photo
In a show of assuring the public about its resolve to tackle rampant graft, Vietnam
involvement in allegations that a Japanese firm had paid bribes to secure a deal for
month only to learn that agencies concerned there would not be able to reveal any
further information other than what the Japanese media had already reported: The
had paid bribes of 130 million yen (US$1.3 million) to civil servants in Vietnam,
Indonesia and Uzbekistan between February 2008 and February this year to win
railway system in the country, allegedly received 80 million yen ($782,000) for a
suspending aid to Vietnam still looms large, sowing worries that Tokyo, Hanoi's
While analysts have sought to assuage such fears, they also say the bottom line is
has to jettison its entrenched mindset about ODA to prevent similar cases from
occurring.
so it can tread more carefully before deciding on asking for more international
aid,” said Nguyen Duc Thanh, a Vietnamese economist who advises the prime
But a very small part of it is non-refundable. Most of it are loans with interest rates
which are not as preferential as assumed. Interest rates and loan fees increase if
Two thirds of the international aid has been earmarked for infrastructure projects
where the bidding process and equipment purchase has long been considered
Vietnam has made little headway in the latest corruption rankings by the Berlin-
public sector corruption, sees Vietnam up just seven spots to 116th out of 177
countries and territories with a score of 31/100. In Southeast Asia, it ranks seventh
Given the status quo, analysts say at the end of the day ODA is a financial burden
Japan churned out around $20 billion worth of ODA to Vietnam between 1993 and
2012. Japan said last month its aid to Vietnam this year would not be less than the
major power, Japan follows the United Nations advice in providing aid to
2015 will mark the target date for the UN’s Millennium Development Goals
(MDGs) – a set of targets for education, poverty, health and other areas – and all
donors have tried to claim their economic aid has been effective toward
In the context of Vietnam achieving the first of its MDG on poverty reduction well
ahead of the 2015 deadline, Japan will want to show the world that its aid is
With corruption, such as the most recent bribery case, risking prompting
But “it is unlikely Japan will suspend aid in any serious form or length of time
given that Vietnam is one of its most important aid partners and models of
success,” Edward Feasel, an expert at Soka University of America who has studied
In 2008, Huynh Ngoc Si, former deputy director of the Ho Chi Minh City's
Pacific Consultants International, which was hired as the project consultant. The
in December 2008. But Tokyo resumed the aid four months later.
Many of Japan’s main aid recipients in Asia are also main markets for its exports.
This is important in Japan’s own economic progress, which has been stagnant for
two decades, analysts say. Thus, economic assistance does bring benefits to Japan
“They support port construction for trade, they often link ODA to contracts to
equipment,” he said. “It’s not that this is unusual, but no one does it to the degree
Netherlands last month, Vietnamese Prime Minister Nguyen Tan Dung told his
Japanese counterpart Shinzo Abe that the two countries would closely work each
other to thoroughly investigate the most recent graft allegations that involve the
“If the allegations are true, [the two sides] need to immediately draw lessons from
that,” Nguyen Van Nen, Minister and Chairman of the Government Office, told the
But analysts say the bottom line is that instead of focusing on the actors, Vietnam
needs to get to the bottom of systemic conditions that make bribery endemic such
projects. The next step – but one that only works after corruption is minimized – is
to evaluate very carefully whether a project, ODA or not, is the best deal for the
country.
The analysts raise an important question: Would Vietnam be better off without
“Whatever the inequities in Japan's ODA, it is clear that Vietnam benefits,” said
Carl Thayer, a Vietnam expert with the University of New South Wales.
“But it should be noted that when I use the term ‘Japan’ and ‘Vietnam’ I’m mainly
including not only the people who benefit from the aid, but the groups of elites
A farmer waters his Malabar nightshade field outside Hanoi. Public investment
deteriorate
if the economy enters a recession. The country should closely monitor the use of
loans from now to avoid a public debt crisis like in Europe, Tran Hoang Ngan, a
member of the National Financial and Monetary Policy Advisory Council, tells
Vietweek.
Vietweek: The Ministry of Finance said public debt reached US$68.8 billion in
2011, or nearly 55 percent of GDP that year. But it was 106 percent of GDP if
Tran Hoang Ngan: Organizations had included the debts of state-owned enterprises
in the public debt figures, so it was so high. Their way of calculating Vietnam's
public debt is not quite right. According to our calculation, public debt comprises
Both private and state-owned firms should take responsibility for their debts. The
Should Vietnam, with its budget deficit and an inefficient use of loans, worry
about
a debt crisis?
The debt is still at safe levels, but I do not say it is safe. The safety is unstable.
Your
loan may be small, but it could also become a burden if you are jobless. The debt is
at a safe level. If the economy sees growth, we do not have to worry about the
debt.
We should closely monitor the use of loans from now on to avoid a public debt
crisis
Vietnam's goal is to keep the public debt at 65 percent of GDP by 2015. Now, the
debt is estimated at 55 percent of GDP. So we can borrow more. The important
thing
is not whether the debt is big or small, but whether the use of loans is efficient. We
still need to increase public spending to boost economic growth. That is impossible
effectiveness.
For this, we should improve assessment of public projects. It is the most important
task.
The waste that takes place when works like hospitals, roads, and bridges are not
finished due to shortage of funds is more serious than the impact of increased debt.
stop
However, we see budget deficits every year. Do we use new loans to invest in new
We have debts maturing every year. For example, we had to repay debts of some
VND100 trillion ($4.8 billion) in 2012. We continue to borrow to either repay old
debts or for new projects. The interest rates on public debts are low. So it would be
It will not be a problem if the public debt is large but the economy sees high
growth
rates. The important thing is that the loan is used efficiently, not how much the
debt is.
But since the efficiency of public spending is not high, isn't continued borrowing a
concern?
Before 2011 the use of loans was very wasteful because [the use] was inefficient
and
spread too thin. The government and the Party realized the mistake.
The use of loans has been more closely monitored since the government's
resolution
No. 11 on economic restructure and the prime minister's instruction No. 1792 on
We should be more careful in project assessment. Projects that have long-term and
should
It is also necessary to increase public investment in tourism. The sector has not yet
realized its potential. Higher public investment in the sector could help attract
more
We have drafted plans for servicing the debts. Every year we have to pay around
VND100 trillion. Since we have made plans to use government funds to service the
debts, we need not worry about the repayment in the near future. We should be
concerned only about what we should do to ensure loans are used efficiently. If
they
The National Assembly should closely monitor the government's use of credit.
Trang 95
The government has ordered the central bank to cut interest rates to increase
sluggish credit rates and reduce business closures, but economists say the country
should not seek to increase credit growth at any cost since credit quality is more
At a Cabinet meeting last month, Prime Minister Nguyen Tan Dung instructed the
central bank to extend loan terms and cut rates, saying that while most new loans
enjoy interest rates of around 10 percent or less, old ones are still charged 15-19
percent.
“It is still very difficult for businesses to get bank loans. I suggest the governor
interest rates are not the main reason for the current stagnant credit; but “the health
of firms.”
“Amid weak domestic demand, enterprises dare not borrow to expand business and
production. Interest rates have recently decreased. Many banks have launched
As of March 31 credit growth for the year was a mere 0.01 percent, according to
the central bank. Many banks now face pressure to improve credit flows. They
have been emulating each other to lure customers and they are assigning their
The central bank last month cut the refinancing rate to 6.5 percent from 7 percent
and lowered the VND deposit cap to 6 percent from 7 percent. HSBC said in a
recent report: “This signals the central bank's intention to spur credit growth, we do
“Interest rates are not the issue, as rates are already accommodative and there is
excess VND funding. The elephant in the room is Vietnam's bad debts, which
“Due to the economic slowdown, most firms have kept production and business at
a moderate pace. There are not many enterprises doing good business. When the
firms have the demand to borrow capital, they will be invited to do so by tens of
Van Duc Muoi, general director of food producer Vissan, said many banks have
frequently solicited his firm to borrow capital with preferential interest rates.
“There are banks offering us loans with interest rates of only 6 percent each year.
Not all firms could be offered the rate, which is even lower than long-term deposit
rates.”
Some banks now offer interest rates of 6.5-6.8 percent for 7-11 month deposits,
A representative of local bank Eximbank said his bank, since early this year, has
offered lending rates of some 6 percent each year to increase credit flows, but few
enterprises have the demand to borrowing capital. Some of the enterprises have not
Kiem said banks, despite lowering interest rates, find it hard to lure customers, as
they still have lending requirements tight for most enterprises due to concerns
The central bank has recently said some firms, including infrastructure
construction
ones, could not access loans due to their weak financial capacity, failure to
demonstrate their projects’ feasibility and effectiveness, massive bad debts, and
“Loosening requirements to borrowers to help firms easier access loans will cause
credit risks, increase bad debts that will affect banking system security,” said the
central bank.
Companies’ dreams of loosened credit requirements will not be met, said Kiem.
Finding it hard to increase loans to enterprises, many banks have sought ways to
banks’ loans. Individual customers could receive gifts and preferential interest
General director of Oriental Bank Nguyen Dinh Tung said credit flows are unlikely
to sharply increase in the short coming time. “Capital demand can increase only
What’s in a number?
Nguyen Duc Thanh, head of the Vietnam Center for Economic and Policy
Research, said: “Credit growth does not depend on the banking’s system’s efforts
Economist Vu Dinh Anh said what’s most important is not credit growth, but
credit quality. “We must not let new bad debts occur. If banks lower lending
Economist Vo Tri Thanh said credit growth depends on bad debt reduction,
banking system reform and financial policy. Vietnam targets credit growth of 12-
However, bad debts now still stand high, hindering banks’ credit growth, said
The World Bank has recently said credit activity in Vietnam remains subdued
because banks, with balance sheets saddled by high levels of nonperforming loans,
continue to be a major concern, although poor quality data and limited disclosure
which is responsible for the purchase, recovery, and restructuring of banks’ bad
debt. However, there are concerns over the operational capacity of the VAMC, the
lack of resources to meet banking sector capitalization needs, and the pace of
The issues of bankruptcy, insolvency, and creditor rights will also need to be
Bad debt in Vietnam is expected to account for about 9 percent of total loans, after
Banks in Vietnam managed to cut bad debt to 3.63 percent of loans at the end of
2013, from 4.73 percent last October, said the central bank after a Moody's report
on February 18.
Trang 96
A Japanese expert on Vietnam has warned that the country is getting mired in a
middle-i
ncome” country as the World Bank classifies those with an average income of
$1,036-4,085.
Professor Kenichi Ohno, who has been studying the Vietnamese economy for 20
years, said warnings about the trap have been raised by local analysts since then
but
they failed to raise awareness among local businesses and the government who
The ongoing slump with the growth rate falling below 6 percent in the past three
years indicates that the country has fallen into the trap, he said, noting that it is a
Ohno also pointed to the faster pace of wage growth compared to productivity,
high input costs, and the lack of capacity to make structural adjustments in the
economy
According to the bank, a typical middle-income trap occurs when a country's GDP
per capita cannot exceed $4,000-6,000 for 42 years after entering the middle-
income bracket.
forecast that it would take Vietnam 44 years from now, until 2058 that is, to shift
Tran Tho Dat, deputy head of the Hanoi-based National Economics University,
estimated that the country, still with a per capita income of less than $2,000, would
need to grow at 7.2 percent annually over the next decade to more than double it.
With the economic outlook not improving much, the government targets 6 percent
Dat said Vietnam has run out of room for growth driven by cheap labor and natural
resources.
Last year foreign investment rose by nearly 36 percent to $22.35 billion, still far
Analysts are also concerned over foreign firms' meager contribution to economic
growth, and blame it on the lack of "connections" between them and domestic
private firms.
These links should be strengthened and the quality of FDI improved to achieve
rapid and sustainable growth, enabling the country to avoid the middle-income trap
Economist Bui Kien Thanh said despite the government’s attempts to loosen
monetary policies and lower credit interest rates, businesses are losing faith due to
Worse still, cheap labor would no longer be an advantage after the next few years,
which would make the business environment less competitive, he said, adding that
many foreign investors are already complaining that costs are increasing at a faster
Pham Chi Lan, another economist, said Vietnam is unlikely to escape from the trap
for industrialization, she said, lamenting that there has been little progress toward
But the country could still avoid the trap if it changes policies to make it a level
Medium-sized and small private businesses receive less support from the
government than state-owned, larger private, and foreign firms though they create
Economist Nguyen Minh Phong said that of the 113 countries that have reached
middle-income status since 1960, only 13 have been able to rise to the high-income
The OECD has forecast that Indonesia, also a middle-income country, will enter
the
Malaysia, China, and Thailand are expected to become high-income nations much
Lower prices, easy payment terms set property market on revival path
Construction to stop licensing new commercial and urban housing projects as part
of its efforts to simulate the property market, saying it violates the law of demand
Minister of Construction Trinh Dinh Dung has made the recommendation to the
Provinces seeking exemptions for some special cases should clear them with his
property market.
“In general, the market is in difficulty due to oversupply, but not in all localities.”
In some big cities the property market may be frozen, but it is still robust in other
places, he said, pointing to Phu Quoc Island, which has potential for development
of resorts and villas for lease, and Binh Duong Province, where there is high
“Thus, there is no reason to stop licensing new housing projects in these localities.
“The mechanical implementation of the proposal will undermine the market’s
development.”
ones, and if the government does not license new projects, middle-income people
“We should let the market regulate itself based on supply and demand.”
Nguyen Van Duc, deputy director of property firm Dat Lanh, concurred with Liem,
saying a ban on new projects would violate the principle of market competition.
Firms could suspect that the ministry is seeking to protect certain developers with
“Investors should take responsibility for their wrong investment decision. Banning
If the proposal is approved, property firms would have to change their business
strategies and plans, which could affect their workers and the construction
“The government should not ban new projects just because of low demand. The
Ministry of Construction could warn firms not to invest in certain segments, not
ban them.
“The ministry said the property market is recovering. Why does it not want to
since most people could only afford apartments costing less than VND1 billion,
but those in the market are mainly priced at VND2-3 billion (US$95,200-142,800)
upwards.
“So I do not think the measure will help resolve the situation.”
The ministry has also urged the government to instruct localities to review all
property projects and order their developers to temporarily use lands for other
purposes if they do not comply with local development plans. Those that have
acquired and cleared sites could be allowed to use the project sites for business
activities, it said.
“It is necessary to temporarily halt projects that are not in line with the
As of last December there were 4,015 approved property projects with a total
Signs of recovery
The stagnant property market is showing signs of bouncing back with the number
According to the ministry, housing prices, after years of sharp falls, have increased
In Hanoi there were nearly 1,300 transactions in February, twice the number from
He said inventories in Ho Chi Minh City have fallen by 45 percent this year
To help the market recover more strongly and speed up disbursement of the
VND30 trillion ($1.43 billion) loan package, the ministry has suggested that
The package, unveiled last June, was expected to revive the market, but only
VND1.32 trillion had been disbursed as of March 15, the ministry said.
It has called for scrapping the condition on the size of apartments to qualify for a
loan.
Borrowers are offered loans at 6 percent interest for 10 years to buy apartments
measuring less than 70 square meters and costing no more than VND15 million per
square meter.
Low-income earners, government workers, and military personnel who do not own
a house or own housing measuring less than 8 sq.m per member of the household
The stipulations on size and price per square meter should be scrapped, the
ministry said, and instead the cost of the apartment should be capped at VND1.05
billion.
Liem said the strong demand for low- and mid-priced apartments could drive a
Association, said gold and stock prices, especially of property stocks, have been
A proposed
Bitcoin exchange
could be illegal and faces the threat of official sanctions, but its founder says the
digital currency is unstoppable like the Internet was two decades ago.
Private company Bitcoin Vietnam said last month it would set up Vietnam’s first
But the central bank has issued a statement saying Bitcoin is not recognized as a
currency.
The company's director, Nguyen Tran Bao Phuong, said the central bank has been
though
the latter did not grant approval since Bitcoin is not a currency or a commodity
But she told Thoi bao Kinh te Saigon Online that the exchange would open for
sure.
There are plans to meet with related government authorities to discuss the positive
features of Bitcoin since the happenings are similar to those in 1995 when the
She said she is willing to cooperate with the authorities to prevent Bitcoin-related
crimes.
“Even when the government does not accept Bitcoin, like in China, it is very hard
to
The website has listed Bitcoin buying and selling prices at VND9.6-9.8 million
But it warns that the market for Bitcoin might never get big in Vietnam and that
investors have to realize there is a risk that they can lose everything.
Tran Huu Linh, head of the e-Commerce and Information Technology Department
at the trade ministry, told the newspaper that Phuong’s exchange would violate the
But lawyer Tran Phuong Bac said that the establishment of an online exchange
only
requires registration with the ministry and not a license, though the ministry has to
he said.
Phuong said she registered with the ministry but was informed that the ministry
Financial analyst Phan Dung Khanh said the exchange would not be attractive to
investors given that few businesses in Vietnam or anywhere else accept the
currency.
responsibility
Khanh said the collapse in February of the world’s biggest Bitcoin exchange, Mt.
Gox in Tokyo, must cause investors and others to have second thoughts.
It is thought that 850,000 Bitcoins worth US$473 million were lost or stolen in a
Other asset classes in Vietnam such as stocks and property are doing well and
Children walk on flooded Calmette Street in downtown Ho Chi Minh City. The
city
is considering a plan to build underground water tanks and dig lakes to store
Thien, a resident of the Le Thanh Apartments in Ho Chi Minh City, said the streets
surrounding his home flood whenever there is rain or high tides, and the
inundations
have become more serious over the years since he settled there in 2011.
“I have to hang my shoes on the motorbike and wade through the floods when
going to work. The situation is no better when I come back in the afternoon.”
“Sometimes I fell in the water. But I feel more pity for the children wading in the
water following their parents on the way to school. Some children fell and their
sea
levels, city authorities are considering a controversial plan to dig ponds, small
lakes
flooding in the city due to the impacts of climate change, saying the city can only
mitigate damages.
“The Mekong Delta will suffer the most when up to 30 percent of the area is
affected by rising sea levels in 2050. HCMC is no exception and nearly 700 square
He said city dwellers will have to “live with floods because it will be impossible to
Center also found that parts of the southeastern region and the Mekong Delta are
Researchers found the city has been sinking since 1996, with the speed increasing
gradually since 2004. Many sections of the city are sinking by up to 20 millimeters
Besides geological factors, the surface is sinking also due to urbanization and
Slow to react
In 2009, the central government approved a plan to drain water in HCMC but little
According to HCMC People’s Committee, the plan was not carried out fully
because
it is a major project while the city has been unable to disburse money for it due to
economic difficulties.
Due to the slow process, the plan’s cost has increased from VND11 trillion to
VND57.8 trillion.
By late last year, only 31 of 149 km of dikes along the Saigon River have been
built and only one of nine large sewer valves envisioned has come into operation.
With the rainy season coming next month, HCMC authorities need to rush to
prevent
inundation that will hit an apex when the rainy season meets with high tides.
Last week, the HCMC People’s Committee instructed all districts to facilitate
projects to construct and upgraded dike systems and sewer valves and dredge
drainage canals.
Early last month, city authorities asked the Ministry of Planning and Investment to
HCMC
as one that can use the World Bank official development assistance.
staff
and solving inundation along the Tham Luong and Ben Cat canals and in the city
center.
From 2011-2013, the city spent more than VND8 trillion ($379 million) in battling
inundation.
City ponds
HCMC
Center for Flood Control Program, relevant agencies have agreed with the center’s
The plan will be submitted to the HCMC People’s Committee for approval in May,
he said.
“This is an open plan that does not have a fixed number of ponds and tanks. Maybe
dozens or hundreds of them based on the amount of rain water that the current
sewer
Long said the ponds and tanks can be built in parks or empty spaces near
apartments
“Meanwhile, we can dig small lakes in the outskirts like in Binh Chanh, Thu Duc
The draft plan aims to temporarily store rainwater as dozens of canals in the city
According to the Center for Flood Control Program, 47 canals with a total area of
16.4 hectares (40.5 acres) have disappeared over the past decade.
The water storage capacity of the city’s lakes and ponds grew ten times smaller
from
If the plan is approved, a large underground tank of 4,000 square meters will be
built
Besides small underground tanks in the city center, there will be 30 small lakes in
the city’s outskirt. The plan aims to reduce 30 percent of inundation citywide.
Controversies
Ho Long Phi, director of the HCMC Center for Water Management and Climate
Change, said the plan is a good solution for flooding in the city.
“The plan aims to drain rainwater naturally and correct the previous mistake of
However, he said it will be a difficult plan because it may affect many residents’
land.
“Governmental offices should be a good example by setting aside their land for the
plan,” he said.
“There is not enough land in the city center for ponds while digging lakes in the
outskirts will not be effective in reducing inundation in the city center.”
He said the city should install larger sewers to facilitate rainwater drainage.
“Besides, cement sidewalks should be replaced with materials that can absorb
water and more trees should be planted for faster water draining.”
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Experts urge Vietnam to turn garbage into power for double benefit
Vietnam is using little of its potential in this area since most investors are waiting
Bagasse, the waste from sugarcane after making sugar, is used to generate 100
million kWh a year, while it could make ten times that since sugar mills produce
4.5
million tons of bagasse a year, enough to produce 1.2-1.4 billion kWh, according
to
But out of 41 plants, only six are using bagasse to generate electricity.
Bourbon Tay Ninh in Tay Ninh Province near Ho Chi Minh City is one.
It receives nearly 10,000 tons of sugarcane a day and churned out more than 3,000
tons of bagasse for a nearby power plant when it ran at full capacity during harvest
Pham Van Dung, head of the power department at Bourbon, said bagasse can be
used for producing paper, animal feed, fertilizers, and plywood, but the current
trend
is to use it for generating electricity, especially in developing countries and those
in
The power generation system was built as part of the factory in 1995 and has been
running since 1997 to provide electricity to the factory and sell the excess to
Electricity of Vietnam.
Dung said it sells around 360,000 kWh a day to the power monopoly during peak
Pham Hong Duong, director of the sugar department at Ho Chi Minh City-based
Thanh Thanh Cong Corporation, said a power plant using bagasse costs around $1
million a MW to build, twice the cost of a plant that uses oil or coal.
“Given such cost and pricing, no one dares to invest in it except for sugar mills
who
can afford to build their own plant to make use of the waste.”
Nguyen Van Loc, vice chairman of the bagasse power section at the Vietnam
Sugar
and Sugarcane Association, said only three of the six sugar plants generating
power
plan to expand and only because they are expecting the government to increase the
Loc said the current prices of US3-5 cents are too low to stimulate the factories.
He said the government needs to roll out policies to increase generation from
bagasse
and other biomass -- like increasing the price to 7 cents a kWh and offering
investors
cheap loans.
The cost of generating power from bagasse is estimated at around 6.25 cents a
kWh.
Analysts said power generation from bagasse can fill the gap during the dry season
when supply from hydropower plants dwindles or even replace hydropower given
It can also help reduce sugar prices, like in Thailand, the most efficient country in
Power generated from bagasse and other agricultural waste contributed 16 percent
of the power used in that country last year and its government plans to increase
2020, up from the current 28,000 MW, including 4.5 percent from renewable
sources.
Mechanism Center at the Ministry of Industry and Trade’s Institute of Energy, told
He said his ministry has recommended that the government should help by paying
7.3 cents for power generated from rice husk and a little lower to bagasse plants.
Cuong said using biomass for electricity generation is a pressing matter since water
resources for hydropower plants are running out and thermal power plants may
have
He cited studies showing that around 110 million tons of biomass are discarded
every year, including 40 million tons of straw, eight million tons of rice husk, and
six million tons of waste from processing coffee seeds, peanuts, and sugar cane,
and wood.
But instead, straw and rice husk are burned after every crop, not only causing
waste
ineffective, with one now feeding boilers in an industrial zone and the other one
No investments have been made in plants fueled by waste from coffee, cashew, or
woodwork.
Analysts said that without government support biomass power investors would opt
sowed: a swelling of output that has made it the third-largest rubber producer.
Later this year rubber farmers will tap maturing trees from new plantations, but
with global oversupply and limited storage capacity, Vietnam's burgeoning output
farmers will have little choice but to sell, shrugging off industry pleas to hold back
and making other leading suppliers, Thailand, Indonesia and Malaysia, nervous.
"Of course we are worried," said Edy Irwansyah, executive secretary of the North
the world's second-largest producer after Thailand. "If supply and demand don't
In 2001, a rebound in rubber prices from 30-year lows of sub-50 cents a ton
inspired Vietnam to diversify key agricultural crops and offer loans at low interest
and Cambodia. The Vietnam Rubber Group, the top exporter, reported its rubber
area last year rose 9 percent to 392,000 hectares (968,000 acres), of which 100,000
In just seven years, the aggressive state-sponsored rubber campaign has seen
output rise by 60 percent from 2007's 606,000 tons, according to data from the
Association of Natural Rubber Producing Countries (ANRPC), in which Vietnam
is a member.
This year, output is forecast to hit nearly 1 million tons, said the International
Rubber Study Group, which includes rubber producing and consuming countries
And Vietnam's output could rise a further 50 percent near the end of the decade.
"In the next five years (Vietnam) can move up to 1.5 million tons. Trees are
already there waiting to mature. You can't ask farmers not to tap once they become
Group.
Price war?
Traders well remember 2001 when Vietnam was accused of flooding the coffee
market sending global prices to 30-year lows. Coffee farmers now curb sales when
prices slip below certain levels, but rubber growers may not have the financial
"I wonder if you could see this kind of discipline in the rubber market. I doubt it.
It's still a fairly new industry for them and they still haven't as much money," said
Dealers say there could be price war among the main growers as production rises,
with farmers possibly scrambling to cash in before any further fall in prices due to
oversupply.
"They need cash to feed the family, and they can't afford to hold back because they
City, has no intention of holding back his rubber, citing farm revenues halving in
the last two years to 100 million to 120 million dong ($4,700-$5,700) per hectare.
"We do not have alternatives, no other business, so we will have to stick to rubber.
Yield has fallen, but I will not sell my rubber land," said Bao, who has farmed
Thailand, Indonesia and Malaysia met in February and recommended they should
not sell rubber at the current prices. It has asked Vietnam to sell less this year.
But efforts to revive prices could hit a snag without participation from Vietnam,
includes major rubber producers such as Thailand, Indonesia and Malaysia and
"We have sent a letter to Vietnam Rubber Association, and they replied, supporting
our effort not to sell rubber at low prices," said Irwansyah at the Indonesian rubber
exporters group. "But whether Vietnam is actually doing it, we need to check their
sales volumes."
Tran Ngoc Thuan, chairman of the Vietnam Rubber Association, said the
association had proposed that members and domestic entrepreneurs cut natural
rubber production in 2014 and avoid selling at levels lower than international
prices.
State media reported last month that many farmers were cutting down rubber trees
in the Central Highlands province of Dak Nong due to slow sales and a drop in
prices.
Prices under pressure
2014, the market will see a surplus of 373,000 tons this year, a fourth year of
Worries over economic growth and demand from China, which buys 60 percent of
Vietnam's rubber, have sent tyre grade prices on the Singapore Commodity
The global rubber price benchmark on the Tokyo Commodity Exchange is also
The ANRPC expects Vietnam's exports to fall slightly in 2014 to 1 million tons
from 1.08 million tons in 2013, and while it said domestic consumption will rise,
Vietnam's closing stocks may hit a four-year high at 54,200 tons this year.
Top exporter the Ho Chi Minh City-based Vietnam Rubber Group said in a March
hectares (1.06 million acres) by 2015, with at least 100,000 hectares in Laos and
Cambodia.
Trang 102
By Bao Van, Thanh Nien News (The story can be found in the April 4 issue of our
RELATED NEWS
Footwear sellers and repairers sit waiting for customers on the sidewalk of a street
in Hanoi
Vietnam has been a middle-income country for only three years and cannot be
considered to have fallen into the middle-income trap until it is stuck there for
At a recent meeting Japanese economist Kenichi Ohno, who has been studying
Vietnam’s economy for many years, said the middle-income trap is no longer a
distant risk, but has become a reality in Vietnam. What do you think about this?
Nguyen Minh Phong: According to Ohno, there are five pieces of evidence to
prove
that Vietnam is stuck in the middle-income trap. First, the country has seen an
economic slowdown since 2006. Second, the efficiency in the use of investment is
low. Third, wage rises in the country have outpaced the increase in productivity in
recent years, pushing production costs higher. Fourth, the dong’s depreciation
against the dollar at a rate of 5.5 percent fails to offset the 22.7 percent reduction in
the economy’s competitiveness each year. Finally, there has been little
However, there are two points to demonstrate that Vietnam has not yet fallen into
the trap. First, Vietnam has been a middle-income country for only three years. A
country would be considered as being in the trap only if it is stuck there for several
its average annual per capita income remains at US$4,000-6,000 for 42 years.
Second, Vietnam has slowed down its growth only to enable economic restructure
Development last December, it may take Indonesia a few more decades until 2042
No economy can become a high-income one if its industrial sector does not
account
for at least 18 percent of GDP. The middle-income trap is a big challenge when
information
The government needs to support enterprises with market research and exploration
of niche markets, help small and medium-sized enterprises get bank loans, and
The country needs to expand negotiations and signing of bilateral trade agreements
to boost trade and reform fields in which it does not have a competitive advantage.
It should also reform education and training to foster high-quality human resources
consider their private sector firms as being central to economic development and
ways."
To avoid being stuck in the middle-income trap, Vietnam should not rely on FDI
and ODA. However, the development of the domestic private sector remains weak
and many firms continue to shut down despite all the measures to support them.
In theory, Vietnam says that it treats local and foreign firms equally. But the fact is
that foreign and state-owned firms get more incentives from localities in terms of
tax and land. Thus, these firms have better conditions for development than local
private ones, and crush them. Local private firms are not facilitated and so still see
We should seek and properly use overseas capital sources like FDI, ODA, overseas
remittances, and commercial loans. We should also enable the local private
sector’s
development. Last year Prime Minister Nguyen Tan Dung issued a circular on
boosting private firms’ development, but it does not contain many specific
measures.
To overcome the middle-income trap, local private firms should be the spearhead
of
development. Without due attention to the sector, we will be stuck in the middle-
income trap.
What are the experiences of other countries in coping with the middle-income trap
Many economies, including Japan, Taiwan, Singapore, and South Korea have
successfully overcome the trap. All of them consider their private sector firms as
cooperation. Their industrial sector contributes more than 18 percent of their GDP.
Vietnam, in future, should study their ways for reference, but need not follow
them.
For example, we can focus on developing the services sector instead of industry
since we do not have advantages in the field. It could take Vietnam 15-20 years to
develop a modern industrial sector. That is too long. Besides, the sector’s
trap
Vietnam
There is an opinion that Vietnam should review its industrial and agricultural
structures, and work out a specific plan to develop them, but the government’s
I don’t think so. We have developed an overall economic restructure plan which
envisages the marine economy accounting for half of the GDP and prioritizes high
However, the plan has not been implemented well. We have not yet achieved an
Vietnam loses on ODA because of high project prices, says former official
Luc Town in the Mekong Delta and Long Thanh District, Dong Nai Province. The
construction of this highway section, which is slated for beginning this year, is
Vietnam should hire foreign consultants to assess bids for ODA-funded projects
because there is a lack of local capacity and the country is losing by accepting
ODA
even when firms in donor countries quote very high prices, former deputy
A Japanese company executive has recently alleged he paid bribes to get ODA
that
Pham Sy Liem: Some ODA donors, including Japan, stipulate that contractors of
ODA projects should be firms from their country or Vietnam. Some other donors
former find it hard to win because of they have less construction experience. Many
construction works, like the Thu Thiem Tunnel (under the Saigon River in Ho Chi
Minh City), have been done in Vietnam for the first time, meaning we don’t have
experience in these fields. Local firms also have low financial capacity and
shortage
of specialized machines. Foreign firms often win bids for ODA projects and then
Some firms from an ODA donor country in Vietnam could tacitly consent to
facilitate a firm to get a contract and another firm to get another contract. All the
firms could participate in a tender, with most of them quoting very high prices.
Only one firm, which is supposed to get the contract, quotes a more reasonable
price,
Japanese contractors often quote high prices, saying that they use high-quality
construction materials so that the work would meet the high Japanese quality
standards.
contractors quoted US$1,000 per cubic meter of construction materials for the
Nhat Tan Bridge (in Hanoi). But they pay only $100 per cubic meter when signing
management costs.
accept the aids. We should indicate that the rates it offers are too high, and Japan
might reconsider. However, Vietnam has not done this. It has taken all the ODA
offered without any complaints about the prices for the ODA-funded projects. It is
We have not turned down ODA since we are in need of capital. The conditions for
getting ODA from Japan are easy. Japan offers ODA loans with a long grace
period. During the time, Vietnam is not required to pay principal or interest.
The psychology (of officials) not having to take responsibility for repaying the
debts
in the future and hoping they would be forgiven are also reasons for accepting
ODA.
Debts are forgiven. The former Soviet Union forgave Vietnam its debts. But
donors
only forgive debts when countries are ruined because of repayment of debts. We
there
is no reason for forgiving our debts. Vietnam not only has to repay its loans but
also has to offer ODA to other countries with lesser economic development.
I think we should hire foreign consultants to assess the prices of ODA projects.
"Vietnam has taken all the ODA offered without any complaints about the prices
Japanese firms are often chosen to implement projects with Japanese ODA. But the
prices they quote are often high. Is this a reason for the bribery scandals that have
not
only in ODA projects but also state-funded ones. The case of the Japan
Transportation Consultants, Inc. that allegedly paid bribes to get an ODA project
contract is not the first one. Some years ago Huynh Ngoc Si, former deputy
director of the Ho Chi Minh City transport department and head of the project, was
charged
with taking bribes in 2003 from a Tokyo-based company for a major infrastructure
project – a highway linking the east and west of HCMC – also funded by Japanese
ODA.
ODA is an important source of funds for Vietnam. However, what we gain from
That argument is not correct. There are many good ODA projects with reasonable
prices. My Thuan Bridge with Australian ODA is of good quality and reasonable
price. It was built at a cost of $90 million, including $60 million in ODA from
Australia.
In general, projects funded by international organizations like the World Bank and
We have to rapidly modernize our construction sector. We could learn from China.
From being an underdeveloped country in the field, it now has many of the top 250
officials.
We also do not have human resources companies that can provide qualified
construction workers. China has such firms. We should also have strong
Vietnam should also consider negotiating with ODA donors about requirements for
ODA project contract if a local bank guarantees that it will provide enough funds
to
implement the project. Under current regulations, a Vietnamese can only get an
Many Westerners say they travel to Vietnam to open their minds and broaden their
horizons, but once here, closed minds and narrow horizons seem to prevail...
For centuries, many in the West have considered themselves superior to people in
other parts of the world. This attitude was most blatantly manifested during the
(very
long and varied) colonial period, when the European powers occupied vast swathes
They justified this, in their discourse, by talking about a moral obligation that
white
people had to civilize the savages in the rest of the world, and teach them modern
The French called this the mission civilisatrice (civilizing mission), while the
British
coincide with the building of political and economic structures across the
colonized
world which extracted resources from the colonized and delivered them to the
colonizers.
Colonialism is, thankfully, over, at least in its most explicit and direct forms.
However, the attitude of Westerners thinking that they are superior to others
continues to this day, such as with the whitewashing of global history, which
claims
visit
Over the past few decades, Vietnam has seen a huge influx of foreigners. Some
come
for work – either to run businesses or to sell their labor – while others come to
travel
and to holiday.
The latter rarely seem to come in order to try to understand and investigate the
politics, economics, society, and history of the country, but more often for an 18-
And because of this, such Westerners expect to be served and waited on. Any
put on the back burner, if at all. In this way, Vietnam (and Southeast Asia more
is why such tourists think they can shout at service sector workers without feeling
any guilt. Overhearing such phrases as, “I ordered Hawaiian pizza, you idiot!” or
“NO. I WANT THREE BEERS. THREE! THREE! NOT ONE! CAN YOU
UNDERSTAND THAT!?” or “What the hell do you think you’re doing? Stop
trying
to rip me off!” is, sadly, not uncommon on Pham Ngu Lao Street.
When backpackers aren’t busy abusing workers, who only exist, in the eyes of
these
culture.
becomes seen as static and simple, rather than being complex, multi-layered, and
in
flux, as all “cultures” always are. Such an attitude allows tourists to think that
showing respect equates to refraining from touching people on the head, rather
than,
Of course, not all foreigners in Vietnam are tourists - there are thousands of expats
in the country. A sense of Western superiority is also, sadly, present amongst this
group – many live entirely with other Westerners, and have social circles that
consist
almost totally of foreign faces. Vietnamese friends that expats do have are seen as
Despite this, many such expats feel that they are able to make great, ground-
breaking
insights into Vietnam and its people, such as “Vietnamese people don’t have a
concept of the future – they just live for the moment,” or “they haven’t developed
modern thought yet,” and “they don’t understand the idea of getting regular
customers, they always try to rip me off even though I go there every day.”
These are just a few examples of the dozens I’ve heard. Such “insights” are made
from what expats consider to be a higher, superior level. “I’ve done much more for
this f***ing country than you have,” said one English teacher who couldn’t get a
These attitudes, from both tourists and expats, are just small examples of a
structural
racism that exists across the globe. Such attitudes of Western superiority are, at
best,
to
We must get over this attitude of superiority. Othering the Vietnamese as inferior
will not allow us to fully engage in Vietnam’s society (and indeed, we often see
ourselves as outside, judge mental observers), and will not allow us to approach
different
Nguyen Van Minh's parents are among at least 50 people in a commune in Tien
Giang Province who have died of cancer over the past five years, and concerns
"My father died of stomach cancer and my mother died of blood cancer. Neither
smoked nor drank," said the farmer who lives in Thoi Son Commune, which is
Do Tien Hoa, a medical worker in the commune's Thoi Hoa Hamlet and many
local residents believe that arsenic, a carcinogenic substance, in their tap water is
Unlike previous studies that linked arsenic contamination to groundwater near the
lesions and numerous forms of cancer. These diseases may take years to manifest.
While the symptoms of arsenic poisoning are treatable in the short-term, there is no
Faced with arsenic contamination, many people have dug deeper wells for cleaner
water, but scientists have recently found increased arsenic contamination in the
research from Stanford University's School of Earth Sciences has found that even
The scientists reviewed 42,000 well measurements taken throughout the multi-
aquifer system of Vietnam's Mekong Delta and in an area spanning more than
1,000 square kilometers (386 square miles), arsenic was found in nearly 900 deep
wells.
"Historically, deep wells often tested arsenic-free," said Laura Erban, a doctoral
student in environmental Earth system science at Stanford and the lead author of
the study.
arsenic, to greater depths. But in the Mekong Delta, it appears that there is an
It said when water is heavily pumped from an aquifer, surrounding clay layers
"If this expelled water contains substances such as arsenic, the groundwater can
report said.
The impacts of arsenic contamination from deep groundwater extraction may be
investigator on the study, the implication of these findings for the Mekong Delta
region, and potentially other arsenic-prone aquifer systems like it is that deep,
"Deep wells that test clean upon installation, as do those bordering the focus area,
may not remain arsenic-free over time as pumping promotes compaction and
"These include first understanding the nature and extent of deep groundwater
meet health standards, and possibly screening pumping wells over intervals of deep
aquifers that are distant from confining clays, among other water management
Depleting source
People in Tien Giang's Thoi Son Commune were using tap water supplied by two
stations pumping from two deep wells without any treatment for drinking and
cooking, the Voice of Vietnam news website quoted Hoa, the medical worker, as
saying.
Tran Thanh Thao, deputy director of the Tien Giang Health Department, said
relevant agencies had collected tap water samples in the commune and found a
commune, local authorities said. Scientists from the Pasteur Institute in Ho Chi
Minh City have collected hair and urine samples of 100 local residents for testing
Increasing pollution as well as salination of surface water have over the years
To Van Truong, former director of the Southern Institute for Water Resources
"This increases the risks of arsenic consumption for local residents in the Mekong
Delta," he said.
July.
In May, authorities in Tien Giang's Cai Lay District announced that a source of tap
water for more than 200 households in Phu Cuong Commune has a high
concentration of arsenic.
Many residents, fearful that they have been consuming the carcinogenic substance,
are using bottled water as an alternative, while waiting for the commune
Concerns over arsenic-laden tap water have spread widely in the Mekong Delta.
There are more than 400 well water stations in Dong Thap Province, but not many
people have been using their water recently, fearing that it is not safe.
According to the provincial Preventive Health Center, a test of 295 stations in late
2011 found 191 of them supplying unsafe water, including 110 with high
concentrations of arsenic.
There are dozens of thousands of household wells in the Mekong Delta, from 100-
300 meters deep, the Ministry of Natural Resources and Environment said.
Duong Van Ni, a lecturer at the Can Tho University, said many people in the
Mekong Delta provinces of Ca Mau and Bac Lieu have been using groundwater to
"It's so wasteful. Many people think groundwater is endless and that they can just
drill new wells if the old ones get polluted or go dry," he said.
Samsung Electronics Co. built the world's largest smartphone business by tapping
China's cheap and abundant workforce. Not for much longer: it's shifting output to
Vietnam to secure even lower wages and defend profit margins as growth in sales
By the time a new $2 billion plant reaches full production in 2015, China's
communist neighbor will be making more than 40 percent of the phones that
generate the majority of Samsung's operating profit. The Suwon, South Korea-
Samsung surged past Apple Inc. to the top of the mobile-phone industry by
offering cutting-edge devices for more than $900 to basic models costing less than
$150. With demand sagging in the most-profitable top end and Chinese rivals
Oyj and Intel Corp. to be drawn to Vietnamese wages that are about a third those
in China.
"The trend of companies shifting to Vietnam from China will likely accelerate for
at least two to three years, largely because of China's higher labor costs," said
Lee Jung Soon, who leads a business-incubation team of the Korea Trade-
It seems to be working.
The government has approved $13.8 billion of new foreign projects this year
through Nov. 20, a 73 percent increase on a year earlier, according to the General
China's $8.4 trillion economy, 59 times the size of Vietnam's, received $97 billion
of foreign direct investment -- although this was actually utilized -- in the first 10
Intel, the world's largest chipmaker, opened a $1 billion assembly and testing plant
in Ho Chi Minh City in 2010. Nokia said its facility near Hanoi producing Asha
smartphones and feature handsets became fully operational in the third quarter. LG
Electronics Inc. (066570), Samsung's smaller South Korean rival, is building a new
400,000 square meter complex to make TVs and appliances as part of a $1.5
Young workers
Samsung's new plant is expected to make 120 million handsets a year by 2015,
said two people familiar with the company's plans, who asked not to be identified
because the matter is private. That would double the current output from the
country and compares with the 400 million global total Samsung shipped last year.
With about one-third of the global smartphone market, Samsung may eventually
produce as many as 80 percent of its handsets in Vietnam, said Lee Seung Woo, an
analyst at IBK Securities Co. in Seoul who has been tracking the company for
Record growth
After setting up in China in 1992, Samsung now has 13 manufacturing sites and
seven research laboratories there, according to its June sustainability report. The
global workforce, the largest source of labor outside South Korea, it said.
Record economic growth that made China the second-biggest economy has fueled
wage inflation, pricing many workers out of low-end jobs. The base monthly salary
for a factory worker in Beijing was $466, compared with $145 in Hanoi, according
While this growth has created an emerging class of potential Chinese buyers of
Samsung products, consumers wants more for less. Features once reserved for top-
end devices, such as high-definition screens and faster processors, are being added
to cheaper handsets.
China last year surged past the U.S. as the biggest smartphone market, and sales
there will reach 350 million units this year -- more than double U.S. demand,
quarters of devices sold for less than $250, compared with a fifth in America, IDC
said.
Sales double
Globally, smartphone sales will more than double to 1.7 billion units by 2017 at
the same time average prices will drop to $265 from $337, IDC said in a Nov. 26
report.
"The rule of the game is now changing to how much market share you can win
over rivals," said Hong Sung Ho, an analyst at LIG Investment & Securities Co.
in Seoul. "Many companies are now scratching their heads to figure out how to cut
manufacturing costs."
Samsung's complex in the Yen Binh Industrial Zone of Thai Nguyen province,
north of Hanoi, will pay no tax for the first four years, and half the full rate the
making camera modules and circuit boards, along with other Samsung plants, will
get half their infrastructure rent subsidized. Under a so-called strategic partnership,
Samsung said it will also help Vietnam build social infrastructure, and nurture key
conglomerate.
Close to home
Shares of Samsung have fallen 7.4 percent this year, compared with a 1.5 percent
drop in the benchmark Kospi index, and the stock is headed for its first annual
While tax breaks and cheap workers are lures that other countries such as India and
bases in China and South Korea is an extra incentive, according to Than Trong
Phuc, managing director of technology-focused investment fund DFJ VinaCapital
"Other countries can match or even beat the incentives that Vietnam is offering,
but Vietnam is very close to Samsung's supply chain," said Phuc. "You see
In Vietnam it is very difficult for firms to find candidates for CEO jobs because of
Many have to hire expats even if they prefer Vietnamese, who would have a better
managing director of recruitment firm Navigos Search Nguyen Thi Van Anh tells
Vietweek.
Nguyen Thi Van Anh: The economic slowdown has affected demand for mid-level
and senior staff, which include those in the position of deputy director upwards,
and experienced engineers. Amid the high production costs, high inventories of
goods, and lower demand, firms cannot expand their business. They have to find
The pressure to cut costs is higher in some fields with high personnel costs like
services. A wave of personnel cuts has occurred since 2011. But the middle- and
senior-level markets have not seen a mass reduction because there are only a few
positions for mid-level and senior employees in each company, and it is very
Some other firms even take advantage of the current dull recruitment market to
scour for talents for top positions though it is costly. It is easier for them to recruit
employees now as they can have more options and time to assess candidates. It
will be too late if firms leave executive search and recruitment until the economy
In the field of information and technology, many Vietnamese and foreign firms
wish to set up software development centers in the country, but they cannot find
enough engineers to meet their demand because of the supply shortage. The
employers.
Many of our engineers do not know foreign languages, and are not updated on the
Candidates for CEO jobs lack managerial experience and strategic vision. So many
firms still have to recruit expats for the position though they prefer Vietnamese,
who have better understanding of the country's culture, business environment, and
legal system.
FDI flows have increased this year. Have they impacted the executive recruitment
market?
Registered capital is not important, only disbursed capital. Investors have demand
for executive talent only when they execute their projects in Vietnam. We see an
In what sectors do firms face the most difficulty in executive search and
recruitment?
It is difficult find CEOs in all sectors. Vietnamese can meet the requirements for
middle-level positions. Most deputy directors and directors in firms are local
people.
It used to be difficult 5-7 years ago for employers to find local people for even the
Vietnam and vice versa. This way they are also training Vietnamese employees,
employees?
Many candidates from Japan, Hong Kong, Singapore have applied for jobs we
advertise on our website. Some expats are willing to work in Vietnam because of
But senior candidates will not want to work in Vietnam because they want to
develop their capacity in developed and competitive markets like the US and
Japan. The Vietnamese market is very small, so the size of firms is also small.
workers need more time to meet the requirements of firms. Firms' needs in terms
The shortage of senior employees will be even more serious when the economy
recovers and labor demand bounces back. The number of university graduates is
Hasn't it been too long? After all Vietnam opened its doors more than 20 years
ago?
Yes, it has been too slow. The changes in our educational system have not caught
FPT has even had to start a university to serve need for employees. Vietnam will
workers is low compared to that of those from China, Thailand, and Malaysia.
The highest salaries are often seen in the financial and banking sector. CEO of
banks could get hundreds of thousands of dollars a year, or even $1 million. CEOs
Expats often get higher salaries than local employees in the same positions, maybe
REVIVED DEMAND
In the first half of 2013 moderate growth was reported across a broad array of
sectors including industry and services, showing positive signs for business
revival. The demand for executive staff has remained steady through the economic
into Vietnam in the first six months of 2013 could also help boost demand for
executive talent, as new investors look for senior managerial talent to head their
enterprises.
The industries with the biggest increase in demand included manufacturing with 66
The labor market is expected to see a rebound this year, especially with a huge
increase in investment from Japan and South Korea. IT, marketing, and customer
service continue to lead the demand for labor, Jonah Levey, founder and CEO of
Jonah Levey: 2013 witnessed an amazing recovery in the labor market. Q1 saw no
change in labor demand, but from Q2 on, demand kept rising at a steady pace of
more than 10 percent each quarter compared to the same period of 2012. Overall,
labor demand in 2013 increased 9 percent compared to the previous year. This
upward trend is expected to continue into 2014, especially with a large amount of
Major cities like Hanoi and Ho Chi Minh City will be the hubs of job supply due to
Bac Ninh and Binh Duong will also post a lot of jobs thanks to the flourishing
industrial parks.
Which sectors will have the biggest demand and offer the best salaries this year?
IT, marketing, and customer service continue to lead the labor market’s demand
As for salary level, popular sectors tend to be those that offer the most competitive
the most popular employers. According to VietnamWorks’ survey, seven out of the
The economic slowdown has changed society’s perception of jobs, with some
sectors becoming less attractive to workers and others more attractive. What do
There is always a fair reason for any change, especially in the labor market. As I
compensation package that will allow them to not only survive but also live
Industries that promise good financial compensation like banking and finance, as
usual, attract a lot of job seekers. Technology companies have also become great
potential employers in Vietnam, similar to what has happened in the world in the
last few years. By contrast, the production sector has become less attractive to
The change has profound ramifications for the labor market. On the part of job
banking and finance can be a promising decision, but there is a great deal of
hand, the less attractive sectors can be unexpectedly rewarding and much easier to
enter.
On the employers’ side, companies in popular sectors will have a hard time
choosing the right talents in a crowded pool of applicants, some of whom are only
sectors will struggle with the task of finding qualified talents with such a limited
supply of labor.
Experts have warned about the oversupply of workers in some sectors like
One possible measure is to push for a more serious career guidance program. A lot
appealing to employers.
these activities will help them become familiar with professional work
environments as well as prepare them for the reality of working in certain sectors.
As a result, students will have a better sense of who they really are as a
professional and which industry is best suited to their interests and abilities.
talk about a more pressing problem: how to improve Vietnamese the labor force’s
very likely to worsen in the coming years as demand for skilled talents continues to
grow faster than supply. Universities and vocational schools are not generating
enough graduates to meet the demand. More importantly, many graduates from
Vietnamese universities and trade schools do not possess the skills and ability
required of foreign enterprises or top local businesses. That is why companies like
Intel, FPT Software, and others are spending billions of dong on training.
employers in 2013. Employers come to us because they want more and better
candidates to apply for their jobs. In addition, companies with the means will
continue to invest heavily in training to bridge the gap between the talent they
Are firms willing to pay higher salaries for workers with better qualifications when
The problem is that a lot of times it is not about the costs; it is about the overall
Many companies already have effective human resource policies to retain and
reward their most valuable talents. For example, Japanese company Evolable Asia
employee who passes the probation period will receive a one-time bonus of half a
month’s salary. Companies are willing to invest in their most valuable employees.
The most pressing question right now is not whether firms want to pay high
salaries, but whether there are good enough employees who deserve competitive
compensation packages.
Trang 109 : Vietnam remains firm on controversial airport project
Central government wants to go ahead with a multi-billion dollar plan to build the
Long Thanh Airport in Dong Nai Province, as the project is set to be voted by
lawmakers in June
want to expand the current Tan Son Nhat airport instead of building a new one in
Plans for the new airport also envisage building a new golf course at Tan Son Nhat
on land that critics say could be used for airport expansion instead.
In response to constituents in Tan Binh District – where Tan Son Nhat is located –
who say they have no need for a golf course, the ministry has argued that the
construction of the Long Thanh airport will satisfy demands that Tan Son Nhat
In a petition last month, the constituents said Vietnam should not build Long
Thanh airport, which is expected to cost at least US$7 billion in the first stage
Vietnam should not use official development assistance to build the airport while
the Tan Son Nhat airport has not even been fully exploited yet, they said.
They also demanded a revocation of plans to turn the airport’s buffer zone into a
In its response, the transport ministry said Tan Son Nhat airport served 20 million
and unfeasible because it is located in the residential area only seven kilometers
from the city center, Tuoi Tre (Youth) quoted a ministry document as saying.
The transport ministry said Ho Chi Minh City, Dong Nai, Binh Duong and Ba Ria
- Vung Tau provinces are major airline transport markets that link to bustling air
and Long Thanh is a better place than other airports in the area, it said.
Regarding the golf course project at Tan Son Nhat, the ministry said it was
New airport
transport minister Dinh La Thang reaffirmed that the project is necessary for the
country’s development.
He instructed relevant agencies to clarify the necessity of the project and the
choice to build it in Long Thanh instead of Bien Hoa, Can Tho or Da Lat and why
expected to serve up to 100 million passengers and five million tons of goods a
The first stage is scheduled for completion in 2020 to serve 25 million passengers
A total of 5,381 households of more than 17,000 residents will be affected by the
project, including 3,321 households that will have all their land revoked.
trillion.
“Without a new airport, Tan Son Nhat will be overloaded in two or three years,”
Dinh Quoc Thai, chairman of the Dong Nai People’s Committee, said the
government should facilitate the Long Thanh airport project so the province will
However, Nguyen Xuan Thanh, director of the Public Policy Program at the
that his team had assessed the project and found it to be financially-ineffective.
transfer] project. It will need to use ODA [official development assistant]. The
problem then is that the whole country has to pay the debt.”