Prime Minister Nguyen Tan Dung and authorities from the central province of Quang Tri considered extending their support to the Lao Bao special economic-trade zone (LBZ) during a working session in Hanoi on November 10.

On a total area of 15,804ha, the LBZ lies at the starting point of the East-West economic corridor, which is the shortest and preferred route for trade, tourism and services between Laos, Thailand, Myanmar and other countries in the Greater Mekong Sub-region.

As a State-run organisation, the LBZ has enjoyed a number of governmental preferential policies, but it is facing a number of obstacles.

The PM also asked the province to devise a full plan for La Lay international economic border zone and agreed in principle to offer assistance for infrastructure development.

He asked Quang Tri to capitalise on its strength, including the Road 9 linking with Laos, the National Highway 1 and the North-South railway in a bid to develop its economy.

Quang Tri is one of the two poorest localities in the central region, with a household poverty rate of 12%-13%, doubling the nation’s average.

Trade shortfall with China swells

In the nine months leading up to October the nation’s trade deficit with China was up by US$20.17 billion, according to the General Department of Vietnam Customs.

The department reported the trade shortfall is now forecast to reach US$27 billion by the end of the year, which is down 32.5% when compared to its previous projection of US$40 billion.

For the nine-month period the nation’s imports from China reached US$31.27 billion, comprising 29% of total imports into the country, while exports to China grossed US$11.1 billion, 10% of the nation’s total exports.

Notably, seven groups of imports from China with values exceeding US$1 billion included machinery and equipment (US$5.7 billion), mobile phones and accessories (US$4.5 billion) and cloth (US$3.4 billion).

Two groups of exports to China exceeding US$1 billion were computers, electronic products and spare parts (US$1.5 billion) and crude oil (US$1.05 billion).

Local carriers busy for new int’t air routes

Vietnam Airlines, Jetstar Pacific and VietJetAir are rolling up their sleeves for plans to open new international services connecting Vietnam and other parts of Asia later this year.

Low-cost carrier Jetstar Pacific has just taken delivery of a Sharklet-equipped Airbus A320 airplane to expand its international flight network.

Le Hong Ha, general director of Jetstar Pacific, said the fuel-saving aircraft will be used for international air routes.

The low-cost carrier plans to begin its HCMC-Bangkok air route on December 10 before flying to the Philippines, Hong Kong and Japan next year. Jetstar Pacific launched its HCMC-Singapore service on October 27.

The carrier will receive two more planes by the Lunar New Year holiday to raise its fleet to 10 aircraft to meet rising demand for air travel during the biggest public holiday in Vietnam.

Another no-frills carrier VietJetAir will commence its HCMC-Taipei service on December 12 with five weekly flights on Mondays, Tuesdays, Wednesdays, Fridays and Sundays.

Flights will depart from HCMC at 2:30 p.m. and arrive in Taipei at 6:55 p.m. (local time). The return flight will take off in Taiwan at 8:00 p.m. and land at Tan Son Nhat Airport at 10:25 p.m.

The second largest airline in Vietnam will also open new services from HCMC and Hanoi to Kaohsiung and Taichung in Taiwan.

Vietnam Airlines will operate flights between Phu Quoc and Siem Reap from December 18 with three flights per week. Earlier, the airline launched Phu Quoc-Singapore service with two weekly flights.

The national carrier took delivery of an A321-200 airplane in end-September to bring the total number to 83 aircraft.

According to the Civil Aviation Administration of Vietnam (CAAV), Vietnam’s overall aviation market posted some 29.5 million passengers and 630,000 tons of cargo last year, year-on-year increases of 16.7% and 19.6% respectively with the domestic segment accounting for 14.5 million passengers.

The number of passengers in the first half of this year is 16.3 million, up 13.2% compared to the same period last year. Of which, local air carriers transported a total of 11.8 million passengers in the period, rising 18% over the January-June period last year.

US$700-million waste complex to go up in Long An

Vietnam Waste Solutions (VWS), fully owned by California Waste Solutions, Inc. (CWS), a California, USA corporation, plans to start work on a waste management facility worth up to US$700 million in the Mekong Delta province of Long An later this week.

Vietnamese-American David Duong, chairman and CEO of CWS and founder of VWS, told the Daily that the project would be developed on 1,760 hectares and have a designed capacity of 40,000 tons a day.

The facility will manage garbage and industrial waste discharged in cities and provinces in the Southern Key Economic Region of Vietnam.

Called Green Technology Park, the project will require some US$150 million in its initial phase. After that, the firm will call for more investment to expand the project, which is estimated to cost US$500-700 million in total.

Long An Province has coordinated with HCMC to compensate for the households affected by the project and allocate land for the investor to develop the project.

According to VWS, the project will apply advanced technologies. Earlier, the company said the facility would be able to manage and treat harmful, medical, industrial and electronic waste as well as polluted sludge and wastewater.

VWS’s Da Phuoc Integrated Waste Management Facility covers 128 hectares in HCMC’s Binh Chanh District, and takes in around 3,000 tons of waste per day. Last month, the HCMC government allowed VWS to raise the daily volume of waste to 10,000 tons.

In July, CWS won a US$2.7-billion contract to manage waste collection and disposal for Oakland City in California for 20 years.

VIB posts pre-tax profit of VND234 billion

Vietnam International Bank, or VIB, has reported pre-tax profit of VND234 billion in the January-September period, 72% of the year’s target.

VIB said in a statement that the profit result was what it projected earlier this year.

The bank’s total assets reached around VND76.2 trillion, including outstanding loans of nearly VND36.9 trillion, up 5% against early this year.

In the period, lending to foreign direct investment (FDI) firms increased 57% and individuals 11%.

Currently, VIB has 157 offices and branches. The lender has got approval from the State Bank of Vietnam (SBV) to establish seven transaction offices nationwide.

VIB is now implementing a VND2-trillion credit package with an interest rate of 0.68% per month for the first 30 months of lending. After that, the interest rate will be equal to the interest rate for 13-month deposits plus a margin of 4% a year.

Taking advantage of WTO membership for national development

Vietnam joined the World Trade Organization on November 7, 2006, and was granted official membership on January 11, 2007.

This opened up a great opportunity for Vietnamese products and services to access the WTO’s huge market of 160 member countries, accounting for 97% of global GDP. Over the last 7 years Vietnam has leveraged WTO membership for its economic growth.

The WTO says that although some things need to be adjusted, the last 7 years have shown that Vietnam has strictly and responsibly honored its WTO commitments.

Tran Quoc Khanh, Deputy Minister of Industry and Trade and Head of the Government’s negotiation delegation on international trade, says that since joining the WTO, Vietnam has abided by commitments to open its markets, ensure transparency, fine tune its legal framework, and establish a level play field for both domestic and foreign enterprises. Vietnam’s access to foreign markets has improved, increasing Vietnam’s export revenues.

Vietnam’s export and import turnover in 2007 increased 31.3%, equivalent to US$26.5 billion. Vietnam earned US$132 billion from exports in 2013, an increase of 15.4%, or US$17.6 billion. Khanh said Vietnam’s economic restructuring and trade policy reforms to conform to WTO standards and regulations have been acknowledged by the WTO. “Vietnam has maintained a high growth rate for a long time and obtained remarkable poverty reduction results. Vietnam continues to integrate into the global economy and is striving to build a more dynamic economy.”

Over the reviewed period, Vietnam has recorded an annual economic growth rate of 7.3%, has increased per capita income by 4 times, and brought its inflation rate below 7%. Vietnam exports about 75% of its GNP. Vietnam has become an important economic and political factor in ASEAN and Asia and is now a key partner of many countries.

Vietnam’s economy has changed significantly due to comprehensive legal reform in line with Vietnam’s commitments to the WTO. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, said institutional reform is a foremost task for Vietnam to take advantage of its WTO membership. “Prime Minister Nguyen Tan Dung has set a target of creating an institutional breakthrough which will provide new momentum for national growth and help Vietnam take advantage of the WTO and actual and pending free trade agreements like the TPP and the Vietnam-EU trade agreement.”

WTO membership has had an adverse effect on Vietnam’s agriculture and its most vulnerable social groups. The trade balance has been a problem. Former WTO General Director Pascal Lamy said that in order to minimize risks and create favorable conditions for the post-WTO economy, Vietnamese enterprises should focus on value-added products.

The Vietnamese government has devised export policies to help Vietnamese enterprises improve their competitiveness internationally and minimize adverse effects of WTO membership on sustainable economic growth.

EVN fulfils yearly power generation plan

The Electricity of Vietnam (EVN) said the group had fulfilled its 2014 power generation two months ahead of schedule, with five turbines of three power plants put into operation, adding a total 1,700 MW to the national grid.

In October, the second turbine of the Song Bung 4 hydropower plant was connected to the national grid while the Vinh Tan 2 thermoelectric power plant’s first turbine operated stably with a maximum capacity of 623 MW.

T he group arranged sufficient funding for the Vinh Tan 4 plant project and the progress of other important projects was in line with schedule.

In the first ten months of this year, EVN put 33 projects into operation and kicked off work on 34 500-220kV transmission projects.

Remaining turbines of the Song Bung 4 plant and the Ban Chat hydropower plant are expected to become operational in November. Meanwhile, the expansion of the Duyen Hai 3 power plant will also start this month.

In addition, EVN has planned to operate 11 projects in November, including 500kV Thanh My transformer, a 220kV transformer in Phu My Industrial Park 2, 220kV Uyen Hung transformer and 220kV Song May-Uyen Hung transmission line, Vinh Tan-Thap Cham transmission line, 220kV Thap Cham transformer, and Van Tri-Chem 220kV transmission line.

The group and its subsidiaries have also focused on ensuring power supplies for the SAMSUNG factory in northern Bac Ninh province and Texhong Group in northern Quang Ninh province.

During the ten-month period, EVN’s total investment totalled over 91.7 trillion VND (4.36 billion USD), of which 82 trillion VND was disbursed.

Mekong Delta: exports of high quality rice soar

The Mekong Delta region exported over 2.7 million tonnes of high quality rice, accounting for 52 percent of total rice exports during the first ten months of this year.

High quality rice exports increased by 44 percent compared to the same period last year, generating 2.32 billion USD since the beginning of 2014.

The region has implemented a number of effective marketing plans with a focus on quality and competitive prices. As a result, orders from the European Union, North America, Asia and Africa have increased significantly.

The two recent harvests had a total output of 24.3 million tonnes, with high quality rice and fragrant rice accounting for over 70 percent.

Recently, the region’s rice institute has selected new rice varieties with high yields to supply farmers.

Additionally, a number of enterprises have increased their rice cultivation areas to meet export demands and contribute to improving the image of rice from the Mekong Delta region and Vietnam in general.

Dubbed as the country’s rice granary, the Mekong Delta region produces over 50 percent of the total food output, and provides 90 percent of the country’s exported rice, 70 percent of exported fruits and 60 percent of exported seafood.

Mekong Delta fulfils 85 percent of annual export revenue target

Mekong Delta localities have exported 1 billion USD worth of commodities since the beginning of October, bringing the region’s annual export revenue to 9.2 billion USD so far, representing a year-on-year increase of 6.3 percent and accounting for 85 percent of the annual target.

Rice and seafood exports generated more than 5 billion USD in export revenue according to the Steering Committee for the Southwestern Region.

Long An, Ca Mau, An Giang, Dong Thap, and Tien Giang provinces and Can Tho city took the lead in export earnings out of the region’s 13 localities.

Deputy Head of the committee Nguyen Phong Quang said the region’s localities actively stepped up trade promotion efforts this year by supporting businesses in conducting market surveys and advertising products in Asian, African, EU and North American markets.

They also offered technical assistance in applying international standards in quality management and financial support for trade, as well as enabling the export of environmentally friendly products with high added values, he added.

The localities also expanded the application of technology in harvesting, processing and preserving rice and seafood, diversified the range of high-end processed goods, and managed commodities more strictly in order to meet the requirements of international markets, Quang noted.

Margin lending reaches 806 million USD in 10 months

Margin lending reached more than 17 trillion VND (805.7 million USD) in the first 10 months of 2014, an increase of about 13 percent over the nine-month figure.

Pham Hong Son, Head of the State Securities Commission (SSC)'s Securities Business Management Department, told local online VnEconomy that the figures were based on reports that securities companies sent to the SSC.

This is one of the few times the SSC has published margin lending figures. Previous estimates were informal and often based on financial statements of securities companies which have different margin lending data. The official publication of this data is expected to help reduce the impact of inflated information on the market.

Son said the size of current margin lending was not risky for the market if compared with the total capital of all securities companies, estimated to be about 36 trillion VND (1.7 billion USD).

He added that financial leverage had grown by an average of 10 percent since July.

According to the SSC's regulation, the lending margin of a securities company cannot exceed 200 percent of its equity capital. Current margin loans accounted for only 47.2 percent of their total equity.

However, market insiders say this is the "facade" figure shown on companies' financial statements, and the real number could be bigger. Margin lending can also come from banks, where investors have collateral.

It is estimated that the figure on current margin loans is only eight percent of total lending by securities companies.

The current margin size is not big, but according to some analysts, the fact that margin loans have focused on several large-cap shares could still make it a volatile factor in case securities companies make margin calls when the market tumbles too deeply.

There are nearly 700 stocks trading on the stock market, but the number of codes eligible for margin lending is about 150. These stocks are also the darling of foreign investors, thus erratic performance of these stocks will likely make the market volatile.

Margin trading is expected to increase towards the end of this year with the forecast of a positive market outlook.

State to sharpen agriculture focus

The Government needs to make amends for its rather dismal performance to date in facilitating investment in agriculture despite the sector's key importance in the nation's growth, experts said at a conference on November 9.

The conference brought leading economists and policy think-tanks together to discuss the role of the State in agriculture restructuring, ways to involve enterprises in the restructuring process and how to make investment structure or the sector more effective.

Tran Dinh Thien, Director of the Vietnam Institute of Economics, said that agriculture restructuring needed to follow three main orientations.

The first was development of products utilizing technology, economies of scale and production zones. The second focus must be on establishing a production chain that would render the agriculture sector "safe," he said explaining that currently, the input chain was dominated by foreign enterprises and domestic processing enterprises were still limited in their scope of action.

The third orientation, Thin said, was to ensure that enterprises are in the vanguard of rural development and market development, ahead of other stakeholders including the State, scientists and farmers.

Meanwhile, Nguyen Tien Phong, a programme officer in poverty reduction and social development with the United Nations Development Programme, said that investment in agriculture had been decreasing of late, and it was important that more resources are mobilised for agriculture and farmers.

"Agricultural productivity in Vietnam is still low so we need to invest more in research, science and technology transfer and encourage domestic enterprises to invest in agriculture," Phong said.

He added that it was necessary to enhance farmers' capacity so that they can organise production to boost productivity and product quality.

He stressed the role of the State in making this happen, noting that it was the State that sets standards and regulations, and in a position to instruct farmers on which products had good export potential.

"The State has not well performed its role in managing the imbalance in investments into agriculture," he said, "It has not played its role well in setting standards, quality or food safety."

Phong said the State should also support enterprises to invest in agriculture.

"The role of the State in agriculture restructuring needs to be researched more carefully and in more detail," he said.

Nguyen Thi Lan Huong from the Food and Agriculture Organisation (FAO) said that to define the role of the State in agriculture restructuring, relevant authorities should review all policies and documents related to quality management.

"In the context of international integration, it is necessary to link small agricultural households to the global supply chain and promote all advantages of Vietnamese agriculture," she said.

"From that, we can define the role of the State and the State's management to find out which State services need to be extended, which can be prioritised, and which can be conducted under public-private partnership (PPP)," she said.

Minister for Agriculture and Rural Development Cao Duc Phat stressed that the aim of agriculture restructuring was not merely to develop a strong sector and produce more products. Its bigger target was to raise the income and living standards of farmers.

So the first task is to change the awareness of and attitude towards the market, boost the market to work effectively in all agricultural areas and to ensure better State performance, he said.

The conference was held by the Institute of Policy and Strategy for Agriculture and Rural Development.

A lot of foreign investors from Japan and the South Korea have arrived in the Mekong Delta to visit, do surveys and find investment opportunities in the roomy agricultural field.

Japanese enterprises worked with Dong Thap Province authorities on investment opportunities early October.

Dong Thap’s rice output is ranked third in the country. Local authorities have planned to form 10,000 hectares cultivating rice in large scale fields and prepared to welcome the South Korean enterprises.

A total of 100 projects have been introduced to call for investors in agricultural fields in the Mekong Delta.

From 1993 to 2014, the Official Development Assistance (ODA) fund totaled US$5.7 billion in the Mekong Delta, accounting for 8.2 percent of Vietnam. Of these, only US$500 million has been invested in the agricultural field.

Foreign Direct Investment (FDI) in the delta has mainly concentrated on manufacturing, processing and real estate. It is inconsiderable in agro, aqua and forestry sector.

Shrimp processing for exports at Minh Phu Company, Ca Mau Province (Photo: SGGP)

According to the Ministry of Planning and Investment, the Mekong Delta had 903 valid FDI projects with registered capital of US$11.8 billion as of September. The number of projects accounts for nearly 5.3 percent and registered capital occupies 4.9 percent of the country’s total.

Of them, only 52 projects are in agro, aqua and forestry fields with the total registered capital of US$242.5 million.

FDI attraction has still met with a lot of difficulties in the Mekong Delta. Experts proposed the delta to improve local traffic infrastructure and human resource quality, shift economic growth modals, set up plans on material areas in accordance with processing plants and map out capital and technology assistance policies to businesses.

Will Vietnam become world power in oil refinery given myriad refinery projects?

With eight oil refinery projects operating, under construction or proposed to be built along Vietnam's coast, the question arises of whether the country could become a world power in oil refinery if these facilities live up to expectations.

Even though the country now has only one such operating facility, located in the central province of Quang Ngai, many other projects have been planned and proposed across the country – from the northern to central, south-central, and southern regions.

That facility is Dung Quat Oil Refinery, whose capacity is 6.5 million tons a year.

The said eight plants have a total design capacity of 60 million tons of oil products a year.

PetroVietnam, the country’s oil and gas giant, is working with a joint-venture on the construction of the Nghi Son Refinery in the north-central province of Thanh Hoa, while another facility, with a capacity of 1 million tons per year, is planned to be built reportedly in Hai Phong City, situated in northern Vietnam.

It was reported in 2006 that Hai Phong-based HAPACO Group was eyeing a refinery project in the city’s Dinh Vu Industrial Zone.

On September 9, the US$3.2 billion Vung Ro refinery project broke ground in Phu Yen Province, located in south-central Vietnam, where two other facilities are also under consideration.

Petrolimex, Vietnam’s largest fuel wholesaler, has been working with its partners on a project to set up the Nam Van Phong oil refinery, with a capacity of 10 million tons a year, in Khanh Hoa Province since 2008, while a megaproject worth $22 billion has also been proposed in Binh Dinh Province.

Earlier this month, the Ministry of Industry and Trade called on the Prime Minister to add the Nhon Hoi oil complex in Binh Dinh, to be developed by Thai energy firm PTT Pcl, to the planned development of the country’s oil and gas sector between 2015 and 2025.

The Nhon Hoi project is designed to have a total capacity of up to 20 million tons of products per year during its first phase, according to the industry and trade ministry.

In the southern region, PetroVietnam is carrying out an investment study on the 10 million ton a year Long Son refinery in the coastal province of Ba Ria-Vung Tau, while another plant in the Mekong Delta city of Can Tho received in-principle approval from the Prime Minister in 2008.

The Can Tho refinery is expected to be developed by Vietnam’s VIT Corp and US-based Semtech Limited B.V.I.

While there have been few updates on the refinery projects in Hai Phong, Can Tho or Ba Ria-Vung Tau, the Nhon Hoi facility has grabbed the most media attention as the trade ministry has been actively selling the plan to have the project implemented.

But the project has raised a few eyebrows among industry insiders and experts, including oil and gas behemoth PetroVietnam, which said the $22 billion facility would result in a supply surplus for the country, as the oil projects planned for the 2015-2025 period are already enough to meet domestic demand.

A PetroVietnam official also told Tuoi Tre (Youth) newspaper that Nhon Hoi’s proposed location is too close to the Vung Ro, Nam Van Phong, and Dung Quat projects, which would thus affect the latter’s investment attraction.

The trade ministry admitted in a document submitted to the Prime Minister that the implementation of the Nhon Hoi refinery will cause difficulties for the smaller facilities in the region.

But it rejected claims that the Nhon Hoi project would affect the operations of other facilities.

The ministry said the Binh Dinh facility will not enjoy the incentives and preferential treatments of the other operating and under-construction projects.

Le Tuan Phong, deputy head of the General Department of Energy under the Ministry of Industry and Trade, said Nhon Hoi will not result in abundant supply for the domestic market as its products are targeted for export.

The Ministry of Planning and Investment has backed the proposal to add the Nhon Hoi project to the oil and gas sector’s masterplan, according to documents obtained by Tuoi Tre.

But the ministry suggested that the trade ministry compile additional reports about the project’s socio-economic effectiveness and the target markets for the refinery’s products.

The industry and trade ministry noted that being added to the sector’s plan is not enough for such a huge project with as many risks as Nhon Hoi to be realized.

The project’s implementation relies on many other factors, including capital arrangement, the ministry said.

It also proposed that the Prime Minister remove the Can Tho refinery from the oil and gas sector’s plan, and extend the completion time of the Long Son facility later than 2025.

PwC study on investments in Asia Pacific released

PwC, a leading professional services firm, today released the study, “New Vision for Asia Pacific: Connectivity creating new platforms for growth,” which reflects a rising confidence of CEOs in Asia Pacific about prospects for business in the region.

Accordingly, forty-six percent of executives in the region now say they are “very confident” of growth in the next 12 months, up 10 points from 2012 and four points from last year, despite slowing growth in China, the economic engine for the region.

The survey found that 67 per cent of executives plan to increase investment in the APEC region over the next 12 months.

Their plans are spread over each of the 21 APEC member economies, with China, the US, Indonesia, Hong Kong-China and Singapore the most popular destinations for investment. Vietnam ranked seventh among top 10 economies, with 45 per cent of CEO polled said they plan to increase investment in Vietnam.

"PwC Vietnam has been observing ongoing high levels of foreign direct investment into the country with $22.3 billion licensed in 2013 and $13.7 billion licensed in the first ten months of 2014. Investment has primarily been into the manufacturing sector since Vietnam continues to be viewed as a stable, low cost location with a plentiful supply of labour,” said Stephen Gaskill, advisory partner at PwC Vietnam.

According to Gaskill, foreign direct investment has primarily been from Asian countries such as Korea, Japan and Taiwan.  

“In addition, there has been an uptick in real estate investment after a long period of relative inactivity with a number of funds investing significant amounts into the country,” he added.

In the PwC study, 57 per cent of respondents say they are either building or expanding facilities in APEC economies in the next three to five years, in which 15 per cent chose to spend their capital in Vietnam, helped to rank Vietnam the sixth among top 10 of private sector capital destinations in the Asia Pacific region.

Besides, 38 per cent of respondents expect headcount in their organisations globally to expand by at least 5 per cent a year over the next five years.

Supporting this confidence is a vision of an Asia Pacific region that is more connected, both physically and virtually, and an outlook for more balanced regional growth.

For example, nearly 60 per cent of executives say they are now more willing to share insights and resources with business partners in order to speed product development and gain market access. And more than 40 per cent say their company will likely enter a business combination outside of their core industry.

“Asia Pacific today stands at a turning point as advancing technologies move beyond national boundaries and create new demands and even new industries,” said Dennis M. Nally, chairman of PricewaterhouseCoopers International Ltd.

“CEOs see the need to be bold in breaking down the barriers to growth. They want to finalise the Trans-Pacific Partnership, address intellectual property issues and encourage regulatory harmony in the region,” he noted.

The survey also found that data-driven changes are having an impact in the region as 57 per cent of executives say they are more confident of their ability to respond to changes in the marketplace, and half say they are more skilful at forecasting demand.

“Businesses are investing in a different Asia Pacific with rising numbers of urban middle-income consumers demanding new, technologically advanced products and services from business and governments. In its 25th year, APEC has an ongoing and important role to play in helping to meet these demands and advancing growth throughout the region,” said Nally.

Carried out by PwC International Survey Unit, the APEC CEO Survey 2014 was conducted between June and August 2014 covering 635 CEOs and industry leaders across 39 nations with operations in APEC economies.

AirAsia launches year's biggest promotion

AirAsia has kicked off its biggest promotion of the year, offering three million seats at base fares of zero dong on flights from HCM City and Ha Noi to Bangkok and Kuala Lumpur, Da Nang to Kuala Lumpur and HCM City to Johor Baharu.

It s also offering zero dong tickets on flights from HCM City and Ha Noi to Phuket, Chiang Mai, Krabi, Yangon, Penang, Macau, Sydney, Singapore and other destinations, with transit in Kuala Lumpur or Bangkok. Booking for this promotion ends on November 16 for travel from June 10 next year to January 17, 2016.

Binh Dinh exports seen increasing by nearly 9%

The central province of Binh Dinh expects to earn US$675 million from exports this year, an 8.9 per cent increase on the year.

The province expects export revenue to reach $3.1 billion for the period between 2011 and 2015. The estimate is 111 per cent higher than the goal of the 18th provincial party congress' resolution.

The province exports wood products, garments and textiles, leather and footwear, frozen seafood and construction materials.

Binh Dinh fishermen reach toward Japanese market

Fishermen in Binh Dinh Province have been furnished with new equipment to catch tuna.

The equipment, which was developed in Vietnam, was installed on the Nguyen Que, one of the five fishing boats that were recently chosen to be fitted with Japanese fishing instruments for catching and preserving tuna.

Tran Van Vinh, deputy director of the local Exploitation and Protection of Aquatic Resources, said the fishing equipment was created by a Vietnamese research team. Initial tests seemed to have positive results, but some further work may be needed. If it works, it could reduce the investment needed to import from Japan.

The fishing boat refitting is part of a project aimed at improving the quality of tuna caught in Binh Dinh Province to be able to export to the Japanese market. Previously, Binh Dinh Fishery Joint Stock Company and Hitoshi General Office Co.Ltd signed a contract to trade tuna in Japan after much negotiation and cooperation.

After a 23-day fishing trip, the first pilot boat returned with 48 tuna with a combined weight of over 2.5 tonnes. This boat's catch is expected to fetch higher prices than those of boats with less advanced systems.

Tax and customs authorities told to connect database

The tax and customs authorities will have to coordinate with each other to facilitate enterprises’ access to tax and customs database and shorten the length of time for handling procedures, heard a meeting last week.

Responding to a question about the tax and customs authorities keep asking enterprises to submit the documents they have previously filed, Deputy Minister of Finance Do Hoang Anh Tuan told the meeting on administrative procedures and policies of tax and customs that the two bodies should not ask for what they already have in their database. The tax authority can access the data bank consisting of five million customs declarations to verify information about enterprises, he added.

Nguyen Thai Linh, director of Lien Son Computer Paper Co., asked why businesses have to pay the cargo scanning fee while scanning machines are assets of the State, which were bought with taxpayers’ money.

According to Tuan, the fee was collected by port operators, which is not accepted, so enterprises do not have to pay it. The General Department of Customs will ask port operators to remove the fee.

In the long run, the Ministry of Finance will divide enterprises into groups. Enterprises which are not listed in the risk group are not required to have their cargo tested during the customs clearance process and the customs authority will focus on others.

Besides, the tax and customs authorities will have to ensure handling complaints of enterprises within the required time. A portal through which the tax and customs authorities will deal with difficulties of enterprises will be set up, according to Tuan.

Major IT event set for December

The tenth ASEAN CIO/CSO Summit and Awards will take place in HCMC on December 2, featuring CIOs and CSOs in the future and new security risks.

The information technology (IT) event will be organized by International Data Group (IDG) and the CEO & CIO Club.

This year’s conference will focus on the transition of the role of leadership into that of partnership in the development of business, and on using technology to manage data. Big Data and the importance of security and privacy in technology transfer will be discussed at the conference also.

Speakers will give updates about IT issues on November 10, such as integrating IT into core business functions, establishing values via breakthroughs, and maintaining investment in the IT sector and human resources for creating breakthroughs.

The awards ceremony for Southeast Asia Information Technology and Security leaders, as well as Vietnam’s excellent IT products in 2014, will be presented at this event.

The conference will take place from at Sheraton Hotel in District 1. Details can be found at http://www.cio.org.vn/ciocso2014/vi/tham-du/thong-tin-dang-ki-tham-du

WB warns of excessive spending in provinces

There is a high level of excessive spending in most cities and provinces as their budget collections are always insufficient to make up for their spending, according to a report released by the World Bank (WB).

The report on fiscal decentralization in Vietnam aims to contribute to amendments to the State Budget Law which is being reviewed by the National Assembly (NA) at its ongoing session.

The efficiency of provincial spending on capital construction projects is low, according to the report, and overspending often accounts for up to 50% of original budgets while the safe proportion is 5% at most.

Cost overruns in northern mountainous provinces reach 42% of original costs and 35% in the Central Highlands.

Spending reports by local authorities are of low credibility, says the report, attributing to executive authorities’ lack of discipline as seen through their random changes of approved spending plans.

There are several provisions in the State Budget Law allowing executive agencies to take advantage of flexibility over budget appropriations including the use of higher-than-expected revenues, unbudgeted revenues and carryovers.

Such spending practices mar the transparency of budgets and the outcome of spending.

This is a matter which policymakers should attend to as Vietnam is tightening its budget and its budget collections are slowing down, the report warns.

Cities and provinces now make up a majority of the Government’s total spending and their spending has steadily ballooned since the State Budget Law was passed in 2002.

Ministry: Milk prices decided by different factors

In explaining why local milk prices have remained stubbornly high, the Ministry of Finance’s Price Management Department said material milk cost alone cannot decide prices of local dairy products as it is one of many factors that constitute the manufacturing cost.

Nguyen Anh Tuan, head of the department, said on the ministry’s website that despite the fall in input dairy material costs on global markets, none of the domestic dairy firms had registered to adjust down the prices of their powdered milk products for children under six.

Tuan explained that prices of dairy material from Western Europe, Australia and elsewhere were actually those for futures contracts. Moreover, prices of finished products imported from June to September were declared unchanged, according to customs declarations by big importers of finished milk products.

Therefore, prices of unprocessed and finished milk products of producers and importers have been kept almost unchanged, thereby leaving no impact on the domestic dairy market, Tuan said.

However, he said the Finance Ministry has still requested processors to reduce cost and tightly control input factors.

The ministry also told local authorities to conduct regular checks and keep track of price registrations and declarations of producers of dairy items for children under six.

Provincial finance departments and relevant agencies have been asked to review six months of carrying out the Government’s price stabilization program for dairy products for children under six.

The ministry made clear that it would strictly deal with any infringements related to dairy prices, including announcing them in the media.

SBIC chosen as flagship firm for marine economic strategy

The Ministry of Transport has announced Shipbuilding Industry Corp. (SBIC) will act as a flagship firm to implement the country’s marine economic development strategy in an action plan approved by the Prime Minister.

The objective of the action plan is to turn shipbuilding into a spearhead industry in the marine economic development strategy, said Deputy Minister of Transport Nguyen Van Cong. The focus will be on manufacturing products appropriate for Vietnam’s current stage of development and positioning the country as a shipbuilding destination.

According to the action plan, resources will concentrate on restructuring operational shipyards, develop supporting industries for this industry as well as consumption market and repairing services for domestic and exported vessels, train a qualified and professional workforce, and improve research capacity.

In the fourth quarter of this year, the Ministry of Transport will execute a scheme to form industrial clusters in support of the shipbuilding sector, set up major companies and establish a development fund to support the industry in 2015-2020. The ministry will look for potential investors to help realize the targets.

As of 2020, the output value growth of the sector will be 5-10% a year. About 70-80% of the sector’s capacity will serve domestic needs and the rest for export. The number of exported vessels is estimated at 1.67-2.16 million tons of capacity per year.

Vietnam National Shipbuilding Industry Group (Vinashin) was restructured into SBIC that now accounts for 70% of shipbuilding capacity in Vietnam.

Dairy firms told to spend less on advertising

The finance ministry has asked dairy companies to reduce spending on advertising and marketing to enable them to lower retail prices.

The move comes amid a worldwide reduction in the prices of some imported dairy materials.

In a document to provincial finance departments reviewing the implementation of the price stabilisation of dairy products for children under the age of six, the ministry asked the departments to continue conducting spot checks on and registration of retail prices, as well as the publishing of the names of organisations and individuals selling the products.

All price violations will be strictly punished. Companies and individuals operating in the sector are required to report their wholesale and retail prices under existing regulations, but the prices should be no higher than registered maximum prices.

According to the ministry's Decision 1079/QD-BTC dated May 20 on measures to stabilise the prices of dairy products for children under the age of six and Document 6544/BTC-QLG on guidelines in the implementation of measures to stabilise the prices of dairy products, companies and individuals trading in the sector will have to publish their prices beginning November 30.

Nguyen Anh Tuan, head of the ministry's price management department, said the customs declaration of some companies that imported a huge quantity of dairy products showed that the prices remained the same.

Tuan added that from June to September, the prices of most imported dairy products remained the same except for full cream milk powder which fell by 2.57 per cent, skimmed milk powder which rose by 1.45 per cent, and whey powder which rose by 19.52 per cent.

He noted that none of the companies registered to reduce the prices of their dairy products for children under the age of six in spite of the world price decrease for such products.

In reality, the prices of imported dairy materials have yet to be reduced and therefore had no impact on domestic selling prices, he explained.

However, the ministry has asked localities to conduct regular investigations on price registration and publication to closely manage the businesses' input factors.

SMEs urged to get ready for ASEAN EC

Vietnamese enterprises, especially small- and medium-sized companies, have been repeatedly warned to prepare for both the challenges and opportunities when the ASEAN Economic Community is established next year.

During a recent forum organised yesterday at HCM City University of Technology, local and foreign experts have expressed concern about the preparation of Vietnamese enterprises.

Le Dang Doanh, a renowed economic expert, said the GDP of Viet Nam would increase 13 percent within five years and the annual growth rate of the GDP would be two per cent after AEC begins next year.

With AEC, the market for Vietnamese enterprises will expand dramatically up to 600 million people, offering larger export markets for agricultural products both in and outside ASEAN, especially products with low production costs.

Under the AEC, input costs for production will be much lower for local enterprises.

At the forum, AEC 2015: Opportunities and Challenges for Vietnamese Enterprises, Doanh predicted that the flow of skilled Vietnamese workers to neighbouring countries with higher wages could cause serious issues for local companies.

The expert warned that Viet Nam will be one of four countries in ASEAN to become a good market for the other six ASEAN members.

"Seventy-three per cent of Vietnamese enterprises do not know about AEC and have not prepared, which shows the weakness of local enterprises, especially small- and medium-sized enterprises," Doanh said.

"Six countries are very eager for the AEC to start, while the other four countries (Cambodia, Laos, Myanmar, and Viet Nam) have not been very active in preparing for integration," he added.

Six other ASEAN members are eagerly awaiting the opportunity since they can expand markets and use labour and resources at lower prices in the four countries with less developed economies.

In 1993, the ASEAN Free Trade Area was established. ASEAN-6 including Singapore, Malaysia, Thailand, Philippines, Indonesia and Brunei have nearly completed the process of tariff reductions and non-tariff barriers, leaving a great deal of pressure for enterprises in the less developed countries.

Suchat Sawetkamon, director of research and economic development for Trade and Investment (Thailand – Viet Nam), said that SMEs in Thailand have prepared for AEC 2015, including improving factories, building SME business clusters, SME Corporations and others.

Besides the opportunities for Vietnamese SMEs, the Thai expert warned that Vietnamese enterprises will encounter goods with high competitiveness and high quality as well as cheaper product flows in the AEC market.

As a result, several SMEs will lose their markets or go bankrupt.

While the transfer of skilled labour will also be a concern, the Vietnamese SMEs will need to improve technology, management and products, he said.

The Thai expert suggested that the Vietnamese government further develop infrastructure and logistics as well as offer loans for SMEs, and organise seminars to support SMEs on manufacturing, management, products, labour and others.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR