La Poste Group, LienVietPostBank sign technical consultant contract

LienVietPostBank and Vietnam Post signed a memorandum of understanding (MoU) and a technical consultant contract with France’s La Poste Group in Hanoi on October 17.

Accordingly, La Poste Group will provide consultancy to LienVietPostBank and Vietnam Post on the three major issues including the merger of effective administration models, the designing of retail products for post banks, the launching process of new products to the market, and the building of a role model post transaction office in five years.

LienVietPostBank and La Poste Group will set up a project team consisting of experienced experts. In addition, La Poste Group will also transfer technologies to LienVietPostBank and Vietnam Post under human resource training program.

This is the first consultant contract signed on the 40th anniversary of diplomatic ties between the two countries. La Poste Group believed that the contract will help Vietnam build a role model post bank named LienVietPostBank up to international standards in the near future.

By the end of June, LienVietPost Bank had a charter capital of VND6.460 billion and a mobilized capital of over VND55trillion with total assets worth nearly VND80,000 billion and nearly one million customers. The LienVietPostBank will have its branch offices set up nationwide by the end of 2018.

IT application improves business competitiveness

The effective application of e-commerce and information technology (IT) has helped improve business competitiveness considerably.

Vietnam currently has 120 million mobile phone subscribers and more than 34 million Internet users. Subscriptions to 3G services are predicted to rise 20 percent by 2015.

The latent potential for e-commerce is undeniable.

The Ministry of Industry and Trade’s (MoIT) E-Commerce and Information and Technology Department Head Tran Huu Linh says e-commerce and IT application are essential to maintaining business competitiveness in the current era of globalization.

Via the internet, businesses can directly access customers, reduce costs, and increase revenues and profits when excess inventories, widespread bankruptcy and business dissolution are leading to a decline in the purchasing power and export performance.

Dr Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management, says business survival depends on exploiting IT advantages such as high speed connectivity and capacity for integration.

A recent E-Commerce and IT Department survey of businesses’ marketing method assessments showed 18 percent focus on search engines, 12 percent prioritised social networks; 6 percent used print newspapers, 11 percent used online newspapers, 5 percent advertise on television, and 6 percent resorted to other means.

Pham Tan Cong, Head of the centrally-run business bloc’s Party Committee Office says 32 of the bloc’s businesses have created 1.3 million jobs, significantly contributing to national budget revenue.

Another survey of 19 businesses of the bloc found all respondents used the internet and local area networks but only 12 opened a specific IT office and 8 integrated the IT section into the corporate budget.

All these business have their own websites, only seven accept online orders, four use online payment systems, six collect customer information via the internet, and eight offer customers online consultancy.

Eleven percent of surveyed businesses use a customer relationship management (CRM) model and 29 percent apply an enterprise resource planning (ERP) system.

Only three of businesses maintain a Chief Information Officer position.

FPT Group representative Mai Cong Nguyen argues competitiveness includes access to capital and materials, up to date technology, and management capacity.

Management capacity is the key to international competition, he stresses.

A Vietnam National Petroleum Group (Petrolimex) representative agrees that State-run businesses must have new thinking and focus more on investment in technology.

Pham Tien Cong insists that businesses should fully realize the importance of applying   IT solutions in the building of a modern system of administrative and operational management.

Russian companies keen to sell meat to Vietnam

Russian farming businesses plan to penetrate the Vietnamese market as of early 2014.

Among them are Miratorg-Russian integrated meat and feed producer, Prioskolye-leading manufacturer in the Russian poultry meat market, Belgrankorm company, The Petelinskaya Poultry Factory and Ural Broiler- one of the leading producers of high quality food products in Russia.

The news has come from the ITAR-TASS News Agency in the wake of negotiations between Rosselkhoznadzor, the Russian Federal Service for Veterinary and Phytosanitary Supervision and the National Agro Forestry Fisheries Quality Assurance Department (NAFIKAD) and Ministry of Agriculture and Rural Development.

A representative of Rosselkhoznadzor was quoted as saying that the provision of meat and poultry to Vietnam can start two or three months after Vietnam considers the granting of business certificates under the Vietnam-Russia Agreement.

Vietnam encourages investment in deprived areas

Vietnam is appealing for investment in the hi-tech fields of manufacturing and processing in deprived areas, said Deputy Prime Minister Hoang Trung Hai.

Deputy PM Hai was speaking at the annual VinaCaptial Investor Conference in Ho Chi Minh City, which drew the participation of nearly 90 foreign investors seeking investment opportunities in Vietnam on October 17.

The Deputy PM said the Government has asked its ministries and sectors to create a favourable environment for investors in order to restore their confidence.

The government is focused on stabilising the macroeconomy, promoting business, and improving the State’s management skills to curb inflation.

The conference will close on October 18.

Int’l Agricultural Fair planned in Thai Binh

Nearly 300 local and foreign businesses have registered to participate in Thai Binh Province’s International Northern Delta Agricultural Fair scheduled for November 5–11.

Provincial Department of Industry and Trade Deputy Director Tran The Dinh described the annual fair as a prestigious occasion for businesses and investors to promote trade, advertise their respective advantages, and learn more about scientific and technological advances that could fuel the northern delta region’s economic, trade, and agricultural development.

The fair’s 400 pavilions will display strains of plants and livestock, machinery and equipment, bio-technology, fertilizers, cattle feed, agricultural products, seafood, beverages, processed food, electronics, telecommunications, information technology, fashion, interior decoration, handicrafts, and decorative plants.  

It also encompasses an exhibition introducing the region’s economic, cultural, and social achievements.

Dinh said the annual fair attracts more than 100,000 people. Participating businesses often record sales worth an estimated VND20 billion.

Vietnam-India trade turnover surges

The two countries’ two-way trade turnover totalled US$3.94 billion after the first nine months of the year, a 39.2 percent increase from last year’s same period.

In his October 17 report, Vietnamese Trade Counsellor to India Nguyen Son Ha said Vietnam’s exports to India rose 49.6 percent to US$1.84 billion while its Indian imports also climbed 31.2 percent to US$2.1 billion.

The trade deficit fell 29 percent to US$265.5 million. Bilateral trade turnover already matches last year’s final total.

The Vietnamese trade office in India predicts 2013’s total will surpass US$5 billion and reach the US$7 billion target by 2015.

Military Bank named Best Domestic Bank

Asiamoney Magazine has awarded the Military Commercial Joint Stock Bank (MB) its “Best Domestic Bank in Vietnam” title for the year 2013.

According to Asiamoney, MB’s 26 percent credit growth far exceeded the sector’s 2012 average of 9 percent. It managed to limit its bad debt ratio to less than 2 percent and recorded a pre-tax profit of US$145.2 million.

Asiamoney credited MB’s astute management and shareholders’ support with helping it overcome the difficulties of the current economic downturn.

The annual award, decided by financial experts and fund managers, is judged according to growth rates, business initiatives, profits, and network expansion.

Asiamoney is a prestigious Asia-Pacific economic and financial magazine and part of the Euromoney Institutional Investor PLC Group.

Begun in 1990, the Best Bank award has become an important reference for customers and researchers to assess financial institutions in the Asian region.

Vietnam joins international trade fair in Macau

Vietnamese products including rice, coffee, cashew nuts, and ceramics are on display at the 18th International Trade and Investment Fair (MIF) opened in Macau on October 17.

The annual four-day event, the largest of its kind hosted by Macau, aims to encourage inter-regional and international economic and trade ties.

Businesses consider it a useful forum for exchanging information, exploring potential partnerships, and discovering investment opportunities.

This year’s fair features more than 1,900 pavilions and 4,600 exhibitors from 50 countries and territories. Pavilion and participant numbers are up 4.6 percent and 17 percent respectively compared to 2012.

Vietnam’s pavilion attracted major attention from visitors interested in farm produce and handicrafts.

Vietnam’s Consul General in Hong Kong and Macau (China) Nguyen Thi Nha said Vietnam is using the MIF to introduce its economic potential, its culture, and its landscapes.

Since its launch in 1996, the trade fair has grown into a key pillar supporting Macau’s economic development.

The Bao Viet Insurance Company and its strategic partner Sumitomo Life of Japan on October 16 inked a plan on the implementation of a technical support and capability transfer agreement for the first phase.

The agreement was signed on December 20 last year after fact-finding tours by both sides to study their business operation and development demand.

Under the plan, the Japanese insurer will support its Vietnamese partner in life insurance, non-life insurance and risk management within one year.

Bao Viet General director Tran Trong Phuc said the agreement is expected to help the group become a leading finance-insurance one in Vietnam.

Can Tho targets 860,000 tonnes in rice export

The Mekong Delta city of Can Tho has set a target of exporting 860,000 tonnes of rice this year, up 40,000 tonnes from last year.

In the first nine months and two weeks of this year, the city shipped 755,000 tonnes of rice, raking in 359.7 million USD, representing a year-on-year increase of 14 percent in volume and 22 percent in value.

Apart from main markets in Asia, Africa, Europe, Oceania and the United States, there are many new customers registered to buy rice from Can Tho.

Taking advantage of the opportunity, the local authorities have directed enterprises that engage in exporting rice to foster promotion and marketing campaigns to seek more new markets.

It has also encouraged local rice processors to improve their production in order to enhance the quality of rice.

Can Tho is looking to cooperate with other localities in the region to ensure enough rice for export.

The city has also decided to double its VietGAP standard large-scale rice fields to 14,000 ha in the 2013-2014 winter-spring crop, in order to increase rice output and quality.-

Int’l agro-fair to attract 300 businesses

About 300 domestic and foreign businesses will join the International Agriculture Northern Delta Fair 2013 in Thai Binh province from November 5 – 11.

Half of the fair’s 400 booths are of the province’s businesses, the remainder come from those in northern localities and such countries as Indonesia, the Republic of Korea, and China.

Deputy Director of the provincial Department of Industry and Trade Tran The Dinh said that the event, held every November in Thai Binh, draws over 100,000 visitors each year.

It will help businesses intensify trade promotion, advertise localities’ strengths, and apply advanced technology to production, thus creating a driving force for economic and rural development in the region, he added.-

Ca Mau works to earn 1 billion USD from exports

The southernmost province of Ca Mau is applying breakthrough measures to earn 1 billion USD from exports.

With focus on aquatic products and rice, the two major income earners of the locality, Ca Mau is working to deal with material shortage by both buying local aquatic materials and importing those from other countries.

Besides targeting traditional markets like the US , Japan , China and the EU, it is also stepping up trade promotion and penetrating into new and emerging markets.

Ca Mau has also asked sectors and businesses to restructure themselves to improve operation efficiency while reducing costs and increasing the quality of products. The province also assists local enterprises in coping with difficulties in bank loans, inventories and labour shortage.

The locality is aiming for 980 million USD in seafood exports and about 20 million USD from rice sales.

Ly Van Thuan, General Secretary of the Ca Mau Seafood Exporters’Association, said there were positive signals in the third quarter of this year with many enterprises making a profit and successfully solving their inventory problems.

Many new contracts have been signed, creating better prospects for exports in the last months of the year, he added.

As of October 15, Ca Mau’s exports had already topped 750 billion USD.

Exports increase in three quarters

Vietnam’s export turnover so far this year has amounted to 96.27 billion USD, an increase of 15.5 percent over the same period last year.

The Ministry of Industry and Trade, announcing the figures during a meeting in Ho Chi Minh City on October 17 to review export activities in the third quarter, described this as a silver lining of the economy.

By now, there have been 19 products with export turnover topping 1 billion USD each, 11 of which have topped 2 billion USD. Largest earners include telephone and accessories with 15.52 billion USD (79.9 percent increase), garment 13.1 billion (17.3 percent), footwear 6 billion (15.1 percent), machinery 4.37 billion (5.1 percent), wood and wood products 3.87 billion (14.9 percent).-

Hanoi seminar spotlights European integration

A seminar themed “The European Union in the 21st century: The EU integration process and the interaction between EU’s supranational institutions and the national EU member states” was held in Hanoi on October 17.

The presentations at the event, jointly organised by Vietnam’s Ministry of Foreign Affairs, the Embassy of Belgium and the Delegation of the European Union (EU) to Vietnam , aimed at providing a better insight into the scope and function of the EU in the world, including its relations with the Asian region and Vietnam in particular.

Specifically, the seminar reviewed the interaction between EU’s supranational institutions and the EU member states as well as the decision-making of the EU institutions and the negotiation process with the EU member states.

The role of EU member states’ within the bloc and the European integration process, with a particular focus on Belgium, drawing on 50 years of experience as a member state of the Union, were also the prominent topics for discussion at the event.

In his speech, Dirk Achten, Vice-Minister, President of the Board of the Ministry of Foreign Affairs, Foreign Trade and Development Cooperation of Belgium highlighted the relations between Belgium and Vietnam, saying that this relationships has evolved from development cooperation to a rich patchwork of partnerships in various sectors, both at the level of central Governments, regional authorities as well as through academic cooperation or business partnerships.

“ Vietnam is now more prosperous, and has an ambitious international agenda, including full integration in multilateral and international organisations. As a privileged partner of Vietnam , Belgium is committed to contribute to this international integration”, he stressed.

Meanwhile, Dr. Franz Jessen, Ambassador-Head of Delegation of the European Union to Vietnam emphasised the importance of Vietnam 's current role of coordinator for relations with the EU inside ASEAN.

“Advancing our bilateral cooperation, recently by the EU-Vietnam Partnership and Cooperation Agreement (PCA) signed in June 2012, is one of the EU priorities in the region. Additionally, we believe that Europe's experience in regional integration can also be of relevance for Vietnam inside ASEAN," he said.

Hanoi hosts Asia-Oceania tax conference

The Ministry of Finance, General Department of Taxation, Vietnam Tax Consultants Association in coordination with the Asia-Oceania Tax Consultants Association held the 21 st annual conference of the Asia- Oceania Tax Consultants Association (AOTCA 21) in Hanoi from October 17-18.

The event, first time in Vietnam , drew as many as 200 senior tax experts from 20 countries to discuss major topics regarding preferential tax policies for investment encouragement.

Participants also shared experiences in taxation policy formulation and management. They also discussed on tax consultant service and tax agents in an effort to have tax law implemented effectively and equally.

Speaking at the event, Deputy Finance Minister Nguyen Thi Minh said Vietnam should continue its highest efforts to perfect economic reform and legal framework on tax to lure more foreign investment.

Vietnamese government has also continued the tax policy reform introduced in the 2011-2020 taxation master plan. The taxation reform includes simplifying tax procedures, tightening measures on anti- price transferring, tax fraud, and enhancing the role of tax agents and tax consultants, added Minh.

The master plan aims to create favourable conditions, transparency and fair playing field for investors in Vietnam , said Deputy Finance Minh.

Vietnam has so far signed Double Tax Avoidance Agreements with 65 countries and territories of which 55 agreements have been taken effectively.

Vietnam is taking positive steps in its economic-finance reforms and regional and international integration. Despite challenges and fluctuations of global economy, Vietnam still maintains its steady GDP growth rate of 5.6 percent over the last three years.

Vietnam has been seen as a potential destination for investors due to stable politics, advantages of convenient geography conditions and abundant young labour force. To date, Vietnam counts 15,100 FDI projects with total registered capital of 220 billion USD.-

Thanh Hoa rolls out welcome mat for Nghi Son EZ

Thanh Hoa province, which boasts the Nghi Son Oil Refinery and Petrochemical Complex Project, will organise a trade promotion conference on October 23-24 to introduce its socio-economic development strategy to 2020 with a vision towards 2030 as well as its incentives for foreign investors. Report by the Vietnam Economic News.

The Nghi Son Economic Zone (EZ) in Thanh Hoa province is expected to make more breakthroughs in investment attraction in the coming time thanks to its potential and the upcoming record breaking 9 billion USD Nghi Son Oil Refinery and Petrochemical Complex Project.

To attract a large amount of capital into the EZ, on October 23-24 Thanh Hoa provincial People's Committee and the Ministry of Planning and Investment will co-organise a forum on promoting investment in Nghi Son EZ and the surrounding areas.

The Nghi Son EZ is located in the south of Thanh Hoa province, about 200km south of Hanoi. This is also a link between Vietnam’s northern, central and southern regions with southern Laos and northeastern Thailand.

The EZ is planned into many important sections on a total area of 18.611ha, including Nghi Son Port, oil refinery and petrochemical complex zone, Nghi Son Thermal Power Center, Industrial Zones and urban areas. Of those, the Nghi Son Port has potentials to become a deep water ports capable of receiving ships with a capacity of up to 100,000DWT.

Not only having very favorable and strategic position for investment attraction, Head of Nghi Son EZ Management Board Tran Hoa said the EZ is also one of Vietnam’s five key EZs prioritized by the government to build important infrastructure systems such as breakwaters along with traffic, water and telecommunication systems.

By now, the Nghi Son EZ has attracted 74 investment projects, including 66 domestic projects with total registered capital of 93 trillion VND and 8 foreign projects, totaling 12.1 billion USD.

Some projects will have a large effects on the provincial, regional and national socioeconomic development such as the Nghi Son Oil Refinery and Petrochemical Complex with a capacity of 10 million tonnes of crude oil per year and total investment capital of more than 9 billion USD; the Nghi Son 1 Thermal Power Plant project with a capacity of 600MW invested by the Electricity of Vietnam Group and total investment capital of 22 trillion VND; the Nghi Son 2 Thermal Power Plant project with a capacity of 1,200MW and total investment capital of 2.3 billion USD invested by the joint-venture Marubeni Group of Japan and Kepco Group of the Republic of Korea.

Vice Chairman of the Thanh Hoa provincial People's Committee Nguyen Dinh Xung said, investment attraction in the Nghi Son EZ has obtained recognizable results. However, the investments are only at an early stage and remained modest maybe because the investors have not been fully aware of preferential treatments, especially in terms of land and tax policies when undertaking investments in this EZ.

In terms of land policies, the investors’ land and water face hire costs will be exempted for 11-15 years since the operations of projects, depending on the fields and branches of the projects.

As for tax policies, when undertaking investments in the Nghi Son EZ, the investors will enjoy an Corporate Income Tax (CIT) rate of 10 percent applied for 15 years since the operations of projects. The CIT is exempted for the first four years and reduced to 50 percent of payable tax amount for nine subsequent years

Regarding high-tech, large scale and important projects to the development of various fields and branches or to the provincial, regional socioeconomic development, preferential tax rates could extend to a maximum of 30 years. Goods import taxes to make fixed assets and specialized transport means used in the projects are exempted. Import taxes are applied for five years since the operations of projects for production materials, accessories that Vietnam has not been capable to make or for Vietnamese products failing to meet the quality requirements.

Hoa said: “The success of investors at the Nghi Son EZ is also that of Thanh Hoa Province. Therefore, the Nghi Son EZ Management Board pledges to create the most favorable conditions for their operation in the zone.”

Operators ring 3G rate changes to better networks

Telecom providers increased 3G fees in order to reinvest in their mobile networks, VinaPhone deputy director Ho Duc Thang has said.

Customers deserved the best service for their money, Thang said at an online discussion organised by Infonet online newspaper on October 17, so VinaPhone was building better 3G services with the Ministry of Information and Communications (MIC).

However, he warned that customers should not expect service quality to improve immediately. "We have to build the network according to a detailed plan so we are not able to finish it immediately," he said. "While the network is in adjustment, the service quality may not be good."

After MIC approved the three giant telecom providers' proposal to increase the 3G fee, they all raised the monthly full-package fee to 70,000 VND (3.3 USD) for 600GB. Many wondered if they had colluded, although representatives of the providers denied this.

Tran Anh Son, deputy director general of the Competition Administration Department under the Ministry of Industry and Trade, said that the department had asked the telecom enterprises to provide relevant information.

"We will collect information and find out more details. After that, we can give our opinion on whether their simultaneous fee increase violates the law on competition," he said.

Nguyen Viet Dung, head of Viettel Group's business department, admitted that the company had received complaints from customers but said that 3G signal quality was a "top priority" for Viettel.

"After being allowed to provide 3G services, the corporation invested in more infrastructure than any other, with 26,000 emission stations. We will continue to add more stations," he said.

Nguyen Duc Trung, deputy general director of the Authority of Telecommunications under MIC, said that the fee increase was unavoidable.

Most telecom equipment in Vietnam was imported and expensive, yet the service fee was only 39.6 per cent of fees in other ASEAN countries, he said.

"The telecom providers need to adjust the fee. If there is not any change in the market, the companies will continue increasing the fee in the future, as they registered with MIC to ensure the fee is not lower than the cost," Trung added.-

Banking sector audit shows mixed results

The State Audit of Viet Nam (SAV) has said the State Bank of Viet Nam's monetary policies ensured stable exchange rates and a liquid banking sector, in a report sent to the National Assembly this week.

In the report, SAV concludes that the management of interest rates in 2012 was considered more flexible with many downward adjustments helping to curb inflation at 6.81 per cent against the Government's target of 7-8 per cent.

However, other findings were varied with credit growth falling short of 2012 targets, holding at 8.85 per cent below a target range of 15-17 per cent. Meanwhile, total means of payment surged 22.4 per cent, far above the 14-15 per cent target.

SAV noted its auditing results on 59 credit institutions showed the non-performing loan ratio was also behind expectations, hitting 7.8 per cent by the end of last year compared with the 4.08 per cent ratio reported by 120 credit institutions.

In relation to the Viet Nam Development Bank (VDB), SAV indicated an imbalance between the source and use of funds that led to a significant stagnation of capital for the financial institution.

The bank's lending activities also faced a number of obstacles, including project inefficiency, large losses and insolvency. The bank also faced high bad-debt ratios for preferential credit programmes and encountered errors in accounting for management fees and compensation for interest rate gaps.

SAV plans to focus on assessing the financial health, management and performance of non-core investments from next year, with a particular focus on restructuring State-owned entities, commercial banks and credit institutions in line with growth models.

The move will underpin recommendations provided to the Government and National Assembly on restructuring State-owned enterprises and commercial banks, and bolstering supervision of the two sectors next year.

SAV will also audit this year's State budget and properties in 2014, in addition to assessing monetary policy implemented by the central bank.

Under SAV's plans, the Mekong Housing Bank (MHB)'s 2013 financial statements will be audited to reveal the bank's bad loans and investments in non-core businesses by the end of 2013 and June 30, 2014.

APA to clarify tax admin issues

The introduction of an Advance Pricing Agreement (APA) is expected to create more transparency in the tax administration process involving both tax authorities and taxpayers in an agreement and enabling both parties to control and monitor transfer pricing (TP) issues.

This argument was made by several experts at the 21st annual conference of the Asia-Oceania Tax Consultants' Association (AOTCA) held in Ha Noi yesterday. Vu Huong, a tax partner of Ernst&Young Viet Nam said that APA agreements last for no longer than five years and determine the basis of tax calculations and pricing methods prior to the submission of corporate income tax and customs declaration.

"APA will not only help enhance the enterprises' tax and transfer pricing compliance level but also increase their confidence that a transfer pricing audit is mitigated or avoided for the duration of the APA," Huong said.

She added that Viet Nam has a large number of small-and medium-sized enterprises who also would like to mitigate TP risks through APA, suggesting that the process would be useful and practical for tax authorities to efficiently allocate resources.

She recommended introducing rules specifically applicable to complex high-risk transactions and to less complex or low-risk transactions.

Sharing his ideas, Mie Seyama from Zeirishi, a certified public tax accountant member, said Japan pioneered this system and introduced it in 1987.

Taxpayers proposed a way to calculate the APA in advance. If the tax offices approved the method, TP rules would not be imposed. He said bilateral APAs have been the most effective to prevent TP disputes.

Talking about experiences in building APA programmes in Hong Kong, Marcellus Wong, senior advisor at PWC Hong Kong said APA agreements resolved transfer pricing issues and reducing uncertainty arising from related party transactions. APA applications were made by taxpayers on a voluntary basis in Hong Kong with five steps including pre-filling, formal application, analysis and evaluation, negotiation and agreement, drafting, execution and monitoring.

As many as 300 delegates and 200 senior tax experts gathered at the event which was organised in Viet Nam five years after it joined AOTCA.

The conference focused on six major topics regarding preferential tax policies for investment encouragement: APA, legal regulations on tax evasion and impacts on tax consultants, tax payers' rights and obligations, taxable income and profit shifting – the cause and effects of developing countries and principles of Organization for Economic Cooperation and Development (OECD).

The Viet Nam Tax Consultants' Association joined the AOTCA in 2008 as an observer and became a full member in 2009.

Viet Nam will in the long term offer higher returns to foreign investors, given the positive prospects of its economy, the recovery of the global economy and the Government determination to restore investor confidence.

The statement was made by Deputy Prime Minister Hoang Trung Hai yesterday at a conference in HCM City.

Hai said the Government has designed a series of solutions to address challenges with top priority given to the stability of the macro-economy, a reasonable growth rate, inflation control, production acceleration and improvement of State management efficiency.

"We have achieved positive results in the first nine months of this year," he told participants at the VinaCapital Investor Conference.

The country posted GDP growth of 5.54 per cent for the third quarter, up from the second quarter's 5 per cent and the first quarter's 4.76 per cent.

This year's rate is expected to stand at 5.4 per cent, and is hoped to rise to 5.8 per cent next year.

"Interest rates have continued to fall while credit growth saw signs of improvement," he said.

Businesses, though, are still faced difficulties, but are recovering, he noted.

Export value was US$95 billion and the figure is expected to reach $129 billion by the year-end, up 12.6 per cent from 2012.

The registered capital of foreign direct investment was $15 billion, up by more than 36 per cent over the same period last year.

He said the country would continue its economic restructuring with a focus on completing the market economy mechanism; creating a fair competition environment; and improving administrative reform.

Rapid human resource development, especially highly skilled staff, and infrastructure development, are also priorities.

Economic restructuring, with an emphasis on public investment, the banking system and State-owned enterprises, will be linked to sustainable growth.

As for handling bad debts, the Viet Nam Asset Management Company has been yielding positive results.

The deputy prime minister also promised a new legal framework to allow participation by foreign investors.

Beginning in 2014, the corporate income tax will be lowered to 22 per cent from the current 25 per cent, and in some special cases the rate will fall further to 20 per cent.

Further efforts will be made to tackle investors' difficulties, he said.

Andy Ho, managing director and investment head of VinaCapital, said the investment opportunity has potential and the investment window will open if signs of stability return, such as stronger GDP growth, declining interest rates and improved credit growth.

If this occurred, it would help business expansion and the resolution of non-performing loans.

He also cited a P/E (price to earning) ratio of around 12-13, while elsewhere in Southeast Asia it stands between 16 and 20.

"Top companies in defensive sectors like consumer goods, healthcare and agriculture continue to produce good earnings growth," he said.

He added even with the banking sector in difficulty, investment opportunities are created due to low prices, citing VinaCapital's investment in commercial banks like Eximbank and Military Bank.

VinaCapital manages $1.5 billion in three funds listed with the London Stock Exchange (Alternative Investment Market), VinaCapital Vietnam Opportunity Fund, VinaLand, Vietnam Infrastructure, and another unlisted one, the DFJ VinaCapital L.P.

During the one-day conference, investors were introduced to several topics including the country's real estate and securities markets, infrastructure development in HCM City and opportunities in Myanmar.

Vegetable prices jump after Storm Nari

Vegetable prices soared after storm Nari hit central provinces and cities, although other essential food prices remained stable, according to market watch teams.

In Da Nang markets, vegetable prices doubled or even tripled. In Han and Hoa Khanh markets, for example, prices surged VND3,000-5,000 to VND10,000-12,000 (US$0.5-0.6) for a bundle of water spinach, VND10,000 for a bundle of ceylon spinach, VND15,000 ($0.7) for a kilo of eggplant, VND25,000 ($1.2) per kilo of welsh onion and VND15,000 per kilo of cabbage on Wednesday.

Vegetable supplies declined after the storm because regions growing vegetables were flooded and transporting vegetables to the inner city was difficult, said Nguyen Thi Hoa, a trader in Hoa Khanh Market.

Vo Thanh Tung, head of the Hoa An Market management board, recommended traders in the Hoa An Market not to sell vegetables for a significantly higher cost despite the shortage. Meanwhile, he said, the price of other foods was stable at VND250,000 ($11.9) per kilo of beef, VND90,000 ($4.3) per kilo of pork and VND25,000-40,000 ($1.2-1.9) per kilo of fish.

The Da Nang Industry and Trade Department said prices of building materials such as steel and cement were unchanged.

The department said vegetable prices would continue to increase in coming days, but market watch teams would carry out inspections of trading activities in markets.

The price of rice and dried food such as instant noodles would remain stable because eight companies had huge stockpiles of these products, including Da Nang Food Joint Stock Co, Vissan Da Nang Co, An Hai Dong Cooperative and Da Nang Me Coc Ltd Co.

HCM City set for major economic restructuring

HCM City will focus on restructuring its economy, Le Thanh Hai, Politburo member and Secretary of the HCM City Party Committee, told a committee meeting on Wednesday.

Members agreed to retain the economic targets set for this year.

HCM City's economy grew by 8.7 per cent year-on-year in the first nine months to reach VND532 trillion (US$25.2 million).

According to a report tabled by the city People's Committee at the meeting, the services sector expanded by 10.4 per cent, agriculture by 5.8 per cent, and industry and construction by 6.4 per cent.

Hai said the city's gross capital formation in the first nine months was estimated at VND123 trillion (US$5.82 billion), 3.3 per cent up from the same period last year.

Hai noted that in the past this had always been close to 40 per cent of GDP, but has fallen to under 30 per cent now.

He ordered relevant officials to identify the causes for this, but said in past years the ration was higher thanks to abundant resources and liberal investment policies.

The banking sector's difficulties had been addressed but its weaknesses remain, he admitted, adding that relevant agencies have to focus on efforts to strengthen the banking system.

He promised the city would improve social welfare measures.

According to the People's Committee report, the city is likely to achieve economic growth of around 9.2 per cent this year against a target of 9.5 per cent plus.

Over 280 businesses cease operation in Thai Binh

Up to 286 businesses have stopped operation in northern province of Thai Binh since the beginning of this year, up 54 per cent year-on-year.

The provincial Business Association chairman Tran Huu Khoa announced the figures, saying the local firms' poor management and financial capacities and negative influence of the global economic downturn were behind the situation.

Enterprises will continue to face many challenges in the time ahead, Khoa said, petitioning the State's further assistance in policies, administrative procedures as well as finance in order to help them overcome difficulties.

Billions of VND owed to the social insurance fund

The unemployment insurance programme is owed billions of VND due to lax regulations and lack of awareness.

The problem was discussed at a review conference five years after the implementation of the unemployment insurance programme held by the Ministry of Labours, Invalids and Social Affairs (Molisa).

Currently, around 8.3 million people are enrolled in the programme. In 2010 the fund was at VND609 billion (USD29 million) but reached VND7.9 trillion in 2012. However, the unpaid money has also sharply increased. In 2009, the debt owed to the social insurance fund was VND43.1 billion, increasing to VND600 billion as of August 2013.

The deputy head of the Social Insurance Policy Implementation Department, Nguyen Hung Cuong, said there are a number of reasons that caused such a huge debt. The first was the adverse effects from the economic downturn, and the second was non-adherence to the law. However, 50% of the debt is from the government.

According to regulation, any participant must pay 1% of their monthly wages to the fund and the government will match those funds. In reality, this 1% of support has been disbursed very slowly.

At the same time, many companies are avoiding their duties to employees. Even though employees' wages are cut down a little for unemployment insurance, companies do not follow proper procedures and try their best to keep employees working longer hours.

Punishments for violators are weak and the social insurance agencies also do not have clear regulations for inspection responsibilities.

Representatives from the Vietnam Chamber of Commerce and Industry suggested that social insurance agencies should extend the debt payment deadlines depending on the scale of the enterprise. They went on to recommend that the rules must be more stringently enforced.

According to the Molisa's Bureau of Employment, they will install new management software that will be able to connect all of their offices with social insurance agencies. This improvement is expected to shorten administration procedures and to more quickly deal with employees' requests.

Agro export revenue sees sharp drop in Vietnam

At a meeting on October 17 to review agro-export revenues and plans for next three months of the year, the Ministry of Industry and Trade said that export turnover in first nine months of the year has declined.

According to the Ministry, agricultural produce is the backbone of the country, which unfortunately has seen a sharp drop in exports.

For instance, cashew exports have dropped by 15.8 percent, coffee by 23.1 percent in quantity and 22.4 percent in value, rice by 14.7 percent in quantity and 17.2 percent in value, and manioc and manioc-made products by 22.7 percent in quantity and 21.2 percent in value.

The domestic market is facing fierce competition. Genuine businesspersons have to fight against fraudsters, despite intervention of tax agencies to shrink purchase and selling price among firms. To resolve this problem, related agencies must make concerted efforts to curb this menace.

According to Nguyen Duc Thuan, Chairman of Vietnam Leather and Footwear Association, the sector may earn export revenue of US$10 billion this year.

Nguyen Van Tuan, Deputy General Secretary of Vietnam Textile and Apparel Association, said the sector hopes to touch export revenue of US$18.5 billion by year end.

US$490 mln ADB loan for two infrastructure projects in VN

The State Bank of Vietnam and the Asian Development Bank (ADB) on October 16 signed a loan contract of US$490 million for two infrastructure projects in the Mekong Delta and the Central Highland Provinces.

The Central Mekong Delta Connectivity Project will be funded $410 million from ordinary capital resources of ADB and $134 million in non-refundable aid via the Australian Agency for International Development.

The above project aims to improve transport in the Mekong Delta region and link roads from Ho Chi Minh City to some southern coastal provinces by building the Cao Lanh Bridge across the Tien River and Vam Cong Bridge across the Hau River.

Millions of residents in An Giang, Can Tho, and Dong Thap Provinces will benefit from this project which will also create more jobs and increase trade in the Mekong Delta.

Within the next five years, the project is expected to improve transport infrastructure, reduce poverty, intensify national security and defense, and foster socioeconomic development in the Mekong Delta and southwest region.

The Rural Infrastructure Development Project for the Central Highland Provinces will receive $80 million in preferential credit from ADB and will be implemented during the period from 2014 to 2018. This is aimed at reducing poverty by developing technical and social infrastructure and improving socio-economic conditions for residents in the region.

Nam Con Son Pipeline supplies 50 billion cu.m of gas after 10 years

Nam Con Son Gas Pipeline Company on Wednesday marked a milestone of reaching total output of 50 billion cubic meters of gas after ten years of operating as a key fuel supplier for nearly 40% of Vietnam’s power generation.

Le Dinh Chau, operation manager of Nam Con Son Gas Pipeline Company, told local media that at the moment, the company has total gas capacity of 22 million cubic meters a day to satisfy the fuel needs for producing one third of the nation’s electric power output.

The company supplies gas – which is pumped from the offshore fields of Lan Tay, Rong Doi, Chim Sao and Hai Thach-Moc Tinh – for many thermo-power stations in the nation’s southern region such as Ba Ria, Phu My 1, Phu My 2, Phu My 3,  Phu My 4 and Nhon Trach.

With total investment capital of US$1.3 billion, the Nam Con Son gas pipeline project is now operated by three partners: PetroVietnam Gas Corporation with a 51% interest, ConocoPhillips with 16.33% and TNK Vietnam with 32.67%.

According to Nam Con Son Pipeline, the company expects to obtain total revenue of US$226 million this year, a 5% pickup from last year. In 2003-2012, the company paid some VND1.3 trillion in taxes.

Speaking to the Daily during a media trip to the company’s gas treatment terminal in An Ngai Village, Long Dien District in Ba Ria-Vung Tau Province on Wednesday, Chau said the current gas demand of power plants had declined considerably in the past two months.

As observed by the Daily at the terminal on Wednesday, nine power plants in the southern region on Wednesday consumed nearly 12 million cubic meters of gas from Nam Con Son Pipeline while its designed output is 22 million cubic meters a day.                     

Chau explained that in the rainy season, State utility Vietnam Electricity Group (EVN) often intensifies purchases of power from hydropower plants to enjoy lower prices.

He added the gas treatment terminal often operates at full capacity in the dry season from March to May when the output of hydropower plants declines.

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