Vietnam: Watch-list for foreign investors
By Vincent Tsui, 10 Feb. 2012 Student 1: Nguyễn Thị Hải Yến Looking ahead, foreign investors thinking of entering Vietnam‘s sovereign-debt market should seek clarity in a number of areas where the country‘s credit profile is vulnerable. They include the restructuring of stateowned enterprises (SOEs), which is likely to be a key focus this year. Without a formal framework to supervise and coordinate them, Vietnam‘s SOEs took advantage of easy credit and became overleveraged, investing rampantly in noncore lines of business, including real estate and financial services. These have incurred massive losses over the past few years and such overinvestments have exacerbated Vietnam‘s trade deficit. According to the minister of finance, the worst-performing 12 state-owned groups and corporations alone incurred losses of more than VND26.1 trillion (US$1.2 billion) or 1.3% of GDP in 2010, and liabilities of all state groups and corporations total VND1,088 trillion, or 54.9% of GDP. This not only creates the ― oo big to fail‖ problem, but the heavy cost of SOE t restructuring - including paying for the irrecoverable account receivables, capital injections, realization of accumulated losses and the social cost of supporting redundant labor—would also risk increasing the government‘s already ballooning debt. In late January, minister of finance Hue said that the SOE restructuring plan would be drawn up in 2012, and he outlined the framework, which includes speeding up the privatization process, restructuring capital, developing a management and supervision framework and implementing an executive order to request SOEs to withdraw capital from noncore businesses by 2015. The market will be better able to assess the implications for the liabilities side of the government‘s balance sheet once the plan‘s details have been finalized. Another risk area is Vietnam‘s banks, which extended credit imprudently even to loss-making SOEs on the basis of the implied government guarantee. The Ministry of Planning and Investment has revealed that the public economic sector accounts for as much as 60% of total bank credits. Given such high exposure, this not only crowds out private investment but also limits the extent to which the SBV can tighten monetary policy without triggering concerns about the solvency of the state sector, which dominates the economy. This in turn undermines the market‘s conviction in the political will to implement the austerity measures that are necessary to mitigate macroeconomic instability. Student 2: Trần Thị Bích Vân Moreover, the current regime of banking reform focuses on building the scale of financial institutions, but reveals little about where funds will come from to inject capital into the banking system. The level of nonperforming loans (NPLs) has been high, but there has been little transparency about them an auditing has been inadequate. The SBV‘s Ho Chi Minh City branch revealed recently that the bad debts of the capital‘s financial institutions hit a record high in 2011, mainly as the result of exposure to the
―When we started. and the above-ground tombs are the only places to sit that aren‘t covered by trash. the children didn't even know flip-flops were supposed to match. The kids are sometimes stolen. Dieu‘s little sister." said Caroline Nguyen Ticarro-Parker. The dump lies on an abandoned cemetery. the children end up as sex slaves. ―The trafficker looks like your mom. Oftentimes. But this is their life‘s work. too. (the trafficker) doesn't look like a bad guy. "If they screamed.‖ Ticarro-Parker said. and we know girls were being taken in there by traffickers and being raped. Until now. Children are bought and sold here. however. Lastly. They are three generations of Cambodians who fled the brutal Khmer Rouge regime in the 1970s."
. sustained efforts on fiscal austerity and control of credit expansion— together with improved transparency about the level of foreign exchange reserves. who founded the Catalyst Foundation to help Dieu and other children in Vietnam's poorest communities. watches from the family‘s two-room shack. One of her brothers sits on a nearby tombstone with his dog. when they make their long walk into town to sell lottery tickets. They live on a dump in Rach Gia. sorting plastic from the discarded food and waste. CNN Student 3: Nguyễn Thu Trang Twelve-year-old Dieu wears a bright-green top sprinkled with yellow flowers as she squats in a pile of garbage with her mother. A full bag will bring their family just pennies. But there is a danger here far worse than filth or poverty. What they eat and what they wear is often from what they find in the trash. some for as little as $100. Vietnam. as argued in previous Asian Perspectives. The two talk and laugh while their hands work quickly. part of the Mekong Delta. For the longest time. And the girls were as young as 4. then they were taken.property sector. Meanwhile. and smaller-scale banks face liquidity concerns given the difficulty of attracting deposits under the deposit rate cap imposed by the central bank. Human traffickers prey on these poor people‘s desperation.
Hope for Vietnam's children of the dump
By Natalie Allen. there has been little clarity about the cost of recapitalizing the whole financial system and the source of funding—both of which should be key concerns for international investors. and the granting of independence to the SBV—are all important for the recovery of market conviction in macroeconomic stability and the VND. If they didn't scream. recent monetary tightening also prompted NPLs to climb further. one of nine siblings. we knew of a house that was at the entrance of the dump. then they were let go. It‘s the only home they have ever known. Some 200 families live on this and one other dump in Rach Gia. and for reducing Vietnam‘s sovereign spreads in the medium term. The parents sell because they are tricked into believing that the buyer has good intentions. They so badly want to help their sons and daughters escape poverty. that their children will have a promising job and a promising future.
Student 4: Vũ Thị Thanh Thủy After leaving Dieu‘s dump. One could barely call it that. The school also teaches parents the cold hard truth: what will really happen to their children if they sell them. the children had never been to school. Volunteers are here to build a playground for the school. chased her and her brother as they walked home on the last day of school in 2010. The mother lays her baby in a net strung up as a hammock. before the school opened. which was built on a rice paddy on the edge of the town. Ticarro-Parker said. ―The children are understanding that they could be the generation that doesn't work in the dump. In 2011. ―None of the parents (at the dumps) knew how to read and write.. wearing a colorful striped hat.‖ TicarroParker said. In 2006. He is cradling a little boy. The children are dirty. That‘s exactly what 13-year-old Hanh did when men. Hanh was interviewed for the school‘s first brochure. After rocking the baby to sleep. Lesson three: Teach the children to run if strangers approach. ―They‘re most at risk. but their maroon-and-white school uniforms are crisp. they all don headlamps to work in the dark. presumably traffickers. Hanh fell into a canal and drowned.‖ she said.‖ Lesson two: Teach the children to read so that if they are taken. Next to her picture is a quote of what hope meant to her: ―Hope is my school.m.‖ Ticarro-Parker said. started raising money and eventually opened a school for the children of the dump. "When we started it was 99% illiteracy. Ticarro-Parker‘s family fled Vietnam when she was a child. The father swats flies away from the child‘s face. At 1 a. when the last truck of the day arrives. Student 5: Nguyễn Thị Minh Thúy Inside one of the school‘s two classrooms. Lesson one: Arm the children with cell phones so they can call for help. it is nothing more than tarps strung together for shelter. months old. they can read city signs and call the school to let them know where they are. Across their backs reads. she knew much more had to be done. It will be the first real playground these
. TicarroParker fights back tears recalling the tragedy: ―She died doing what we asked. Ticarro-Parker says. They work day and night alongside their children. Bowls of discarded food are covered in flies. ― I t sounds weird. only four were sold.‖ Before she died. That happened in 2008. He clutches a blue pen with fingers covered in dirt. but the traffickers were caught because the girls had a cell phone and knew how to read a road sign to give their location.‖ School is the only hope for these children. bringing clothes to the poor. more than 37 girls from the dumps were sold to traffickers by their parents. I arrive at another one just as a sanitation truck leaves behind a fresh pile. He mistakenly thinks I am here to buy his baby. Another parent offers me his baby when I arrive. but we gave the prettiest girls the cell phones first. But when she stumbled onto the families of the Rach Gia dumps. she heads back out to work in the dump. I follow a mother who carries her baby to the family‘s shack. a boy writes in his notebook. Clothes dry on barbed wire. She did what she was taught and ran. Four girls were taken. ― b e a catalyst for change. She went back home to Minnesota. But while getting away.‖ They are now down to 40% illiteracy. She returned as an adult to give back to her homeland. People scurry with picks and bags and start sorting.‖ And they all wear shoes that match. Outside is the sound of a power saw. It strengthens the entire community. black under all his fingernails.
We are not going to change this whole culture of girls feeling unworthy of themselves. over the monkey bars.children have seen. The nation still has the fastest inflation among 17 Asia. onto the swings. While cooling price pressures may provide scope for the central bank to cut interest rates. She is working to pay off a debt to the school. Easing inflation provides scope for the central bank to cut interest rates. on the seesaw. One Vietnamese woman helps the volunteers with sanding and toting wood. it is hard to believe these children live on a garbage dump. the Foreign Investment Agency of the Ministry of Planning and Investment said separately. down the slide. The government rolled out the so-called Resolution 11 strategy to tame prices. "Over the last year and a half. Now the woman works to pay off her debt. 2012 Student 6: Nguyễn Thị Hồng Thuận Vietnam is making headway against Asia‘s fastest inflation as prices rise the least in 11 months. oil costs pose a threat that may delay monetary easing. 24 Feb. Student 7: Vũ Diễm Thanh Vietnam‘s central bank signaled last month that it may cut rates to ―more suitable‖ levels
.and the school helped get her back both times. ―They want to be singers and teachers and doctors and architects. But we're going to change this group of girls. … We're not going to eliminate trafficking. Pledged foreign direct investment in Vietnam fell 54.23 billion in the first two months of 2012 from a year earlier.44 percent in February from a year earlier. They don‘t have any idea how it works. They have to be taught how to pump their legs and pull the ropes to make the swings move.‖ Ticarro-Parker said. The central bank last cut the repurchase rate in July and the refinancing rate in 2009. an easing that may boost confidence in its economic policy making as the nation struggles to spur foreign investment. Dieu. one girl at a time
Vietnam Reining in Asia’s Fastest Inflation
Bloomberg News. after it signaled last month that it may lower borrowing costs to ―more suitable‖ levels. We're going to change 200 girls.37 percent this month from January. Suddenly they have a career in mind. and are soon flying high. the General Statistics Office said in Hanoi today. screams with joy as a row of girls fall like dominoes onto the sand in hysterical laughter.Pacific economies tracked by Bloomberg.5 percent to $1. When the playground opens. They swarm. It's going to happen. restrain credit growth and stabilize the currency a year ago. Seeing their smiles and hearing their joy. according to Standard Chartered Plc. and consumer prices rose 1. however. even as policy makers from Indonesia to the Philippines have reduced borrowing costs to shield growth. the children are waiting. constraining its ability to loosen policy even as Europe‘s debt crisis hurt Asian economies. Up the climbing wall. She sold her teenage daughter to traffickers – twice . the boys and girls have been happy. Consumer prices climbed 16. They learn quickly.
teach them the skills of their discipline. a drop of 9 percent from the same period in 2011. Young people need to love the truth to be good students.89 percent in 2011. another fundamental goal is largely being neglected— developing the intellectual virtues they need to be good students. Most colleges encourage a kind of honesty: Don't plagiarize and don't cheat. Price gains this year have been driven by the Lunar New Year holiday in January and an electricity price increase in December.78 percent the previous year. Prime Minister Nguyen Tan Dung ordered the central bank to ― sove‖ within the first quarter a shortage of funds among lenders and l to closely monitor the market in order to reduce lending interest rates to appropriate levels. 19 Feb. why they are so important. according to the foreign investment agency. and ordered fuel retailers to keep prices of petroleum products ― ts able‖ in a bid to check inflation. down from 6. Some academics may cringe at being charged with the task of developing virtue. the International Monetary Fund and the World Bank have said the country must guard against loosening monetary policy too soon. We would do much better to take the time to think through what the central intellectual virtues are. encourages them to confront their mistakes. Disbursed foreign direct investment was $1 billion in the first two months of the year. cut taxes on diesel and kerosene.. Students need to be honest because it enables them to face the limits of what they themselves know.
Colleges Should Teach Intellectual Virtues
By Barry Schwartz and Kenneth Sharpe. they will only get things right because we punish them for getting them wrong. The Finance Ministry this week eliminated import tariffs on gasoline. teach them how to write and calculate. Gross domestic product in Vietnam. a manufacturing site for companies such as Intel Corp. Still. and helps them acknowledge uncongenial truths about the world. said before the inflation report. grew 5. When a significant minority of Americans reject evolution and global warming out of hand. 2012 Look at what colleges state as their aims. and how they should be integrated into our curricula: The love of truth.. believing that it's a job for others—especially when there is so little agreement about what "virtue" even means in a pluralistic society like ours.‖ Hai Pham. and good citizens. They are mistaken. But it is uncommon to hear them tell
.after the first quarter and this month. a Singapore-based analyst at Australia & New Zealand Banking Group Ltd. As important as such goals are. Honesty. Europe‘s debt crisis has hurt Asian exporters from Singapore to Taiwan. the desire to find the truth rather than "truthiness" cannot be taken for granted. we often encourage such development—if a bit unreflectively. ―There is now pressure to ease monetary policy as growth remains moderate and inflation continues to fall. In fact. and you'll find a predictable list: Teach students how to think critically and analytically. Without it.
at figuring out how to incorporate them in what they model in their everyday behavior. Wisdom. between trust and skepticism. They need the humility to face up to their own limitations and mistakes. They need to be good listeners because students can't learn from others. Fairness.
. including people in authority. English. So how do we develop the intellectual virtues in our students? Few colleges think systematically about it. between empathy and detachment. between speaking up and listening up.students. No one will choose a cardiologist who is brimming with love of truth. since little that is worth knowing comes easily. Aristotle rightly argued that character and wisdom are developed through practice and by watching those who have already mastered the relevant virtues. And they need to be able to take the perspective of others. and science. between carelessness and obsessiveness. it's been possible for students to achieve high levels of proficiency in mathematics. between flightiness and stubbornness. But it takes intellectual virtues to fill that vessel. Developing academic skills demands developing character. and empathize. Intellectual virtues are no substitute for disciplinary skills. especially in an age in which almost all serious published work is collaborative." Courage. or from us. honesty. and perseverance but empty of anatomy and physiology. like their professors. and consciously. We have to fill the empty vessel. Students also need to be fair-minded in evaluating the arguments of others. Some teachers have structured educational experiences to do exactly that. Teachers should work hard. Wisdom is what enables us to find the balance between timidity and recklessness. without it. With virtues like perseverance and honesty and some of the other intellectual virtues we've described as essential parts of the curriculum. "Face up to your ignorance and error" or. And wisdom is also what enables us to make difficult decisions among intellectual virtues that may conflict. "Accept this unpleasant truth and see how you can mitigate its effects instead of denying it. Being fair and open-minded often rubs up against fidelity to the truth. Students need courage to stand up for what they believe is true. They need perseverance. Most important. sometimes in the face of mass disagreement from others. students need what Aristotle called practical wisdom. And these intellectual virtues aren't simply values that are preached.