Vietnam Economy Forum

[Viet]

Italy funds water-for-the-poor programme
11/16/2012 3:42:27 PM | The Voice of Vietnam

Ambassador of Italy in Vietnam Mr Lorenzo Angeloni


More underprivileged Vietnamese will be given better access to clean water via a new EUR2.4 million programme funded by Italy.

An agreement on the funding was signed between Deputy Minister of Finance Truong Chi Trung and Italian Ambassador to Vietnam Lorenzo Angeloni in Hanoi on November 15, the Quan doi Nhan dan (People’s Army) daily reported on November 16. The daily says this is the follow-up of a programme which has benefited 150,000 poor people in its first phase.

 

[yusheng]

Two big barriers await 100 percent foreign securities companies

VietNamNet Bridge –

Analysts have pointed out the two biggest barriers that may prevent foreign investors from joining the Vietnamese market or force them to “take a roundabout” when entering Vietnam.

The government’s Decree No. 58 has paved the way for foreign investors to set up 100 percent foreign owned securities companies in Vietnam.

However, the provision about the foreign investors’ share purchases and capital contribution to securities companies has been left “open.”

The Decision No. 55 dated in 2009 on the maximum allowed ownership ratios in the stock market stipulates that foreigners can hold up to 49 percent of the chartered capital of domestic securities companies. Therefore, the legal document needs an amendment to pave the way for the foreign capital flow to domestic securities companies as stipulated in the Decree No. 58.

The State Securities Commission (SSC), which is drafting the legal document, has shown the provisions that, as analysts comment, make many investors to stay outside the Vietnamese market, or force them to take a roundabout to obtain their goals.

The two barriers

The Decree No. 58 stipulates that the foreign institutions holding 100 percent of capital of domestic securities companies must be the institutions operating in the fields of banking, securities, or insurance. They must have the minimum operation durations of two years before they make a capital contribution to the domestic securities companies.

A report by SSC showed that there are 12 securities companies where foreign investors hold 49 percent of stakes (46 percent in Phu Hung Securities Company). Of these, Maybank Kim Eng, Kenaga, VSEC, Morgan Stanley Huong Viet have banks as shareholders. Meanwhile, Mirae Asset, Saigon Berjaya, Woorie CBV, Japan Securities and Kis Vietnam have securities companies as investors.

The above said companies would be easily able to shift into 100 percent foreign owned securities companies.

Meanwhile, CX Techonoly, the shareholder of Phu Hung Securities, is a multi-field group. Golden Bridge, which is a shareholder of Vina Securities--a finance investment group. Another shareholder –VinaCapital Group – is an investment fund. And the two shareholders of GBS and PHS operate in the finance sector, but they are not in banking, securities or insurance fields.

GBS now needs capital urgently, but it’s really very difficult to raise funds in the current conditions of the gloomy stock market. In principle, GBS can expect the capital to be pumped by the holding company.

However, there are two barriers for the holding company – Golden Bridge – to pour more capital into GBS. First, Golden Bridge is an investment group, not a legal entity in the banking, securities or insurance factors. As such, if wanting to hold 100 percent of stakes of GBS, the group would have to do that via an investment fund or securities company.

Secondly, the draft legal document which is expected to replace the current Decision No. 55 stipulates that 100 percent foreign owned securities companies would have to operate under the mode of single member company limited.

An SSC’s official has explained that foreign investors would have to hold either less than 49 percent of stakes, or hold 100 percent, while 65-75 percent ownership ratios would not be accepted.

In case of GBS, if the holding company wants to hold 100 percent of capital, GBS would have to turn into a limited company, which means that it would have to delist its shares from the bourse.

Commenting about the ability of foreign securities companies, experts say not all the current foreign invested companies have been profitable, while understanding domestic investors well remains a great advantage of domestic securities companies.

 

[yusheng]

Shipbuilder giant still in big difficulties despite government’s support

VietNamNet Bridge –

Shipbuilding yards have been left idle and big ships have become rusty, while crews have been calling for help from abroad. These all reflect the current situation of the Vietnam Shipbuilding Industry Group (Vinashin), which was once the giant in the shipbuilding industry.

No job, no salary

When the morning just dawned, thousands of workers flocked to the thermopower plant in Tam Hung commune of Thuy Nguyen district in Hai Phong City, starting a new working day.

Meanwhile, the shipbuilding yards of the subsidiaries belonging to Vinashin, located not far from the plant, were still quiet. Sometimes people could hear the sound from hammers. The production could be seen at some workshops in the large area reserved for ship builders.

A lot of workers, including the ones who have devoted nearly all of their lives to shipbuilding yards, have to leave to look for new jobs, because they have become abandoned by Vinashin.

In fact, the giant can do nothing for its workers, since it still cannot settle old debts, lacks capital, lacks materials and equipment for production. Workers now can receive basic salaries for their current works, while have not gotten the salaries of many previous months.

The Nam Trieu Shipbuilding Company, a subsidiary of Vinashin, now receives fewer orders. Therefore, the number of workers has decreased sharply. Meanwhile, at its golden age, Nam Trieu had more than 7000 workers instead of the current 3800. A lot of them have left the shipbuilding industry.

Deputy General Director of Nam Trieu Company Phung Van Khoi complained that workers leave the company in the most difficult period. Nam Trieu now gathers its strength to build the 56,000 ton ship, while it lacks workers.

“We have to arrange three production shifts a day in recent days,” Khoi said.

“We hope that the year 2013 would be better, when we implement the contract on building 20 ships for Vinalines,” he added.

Laying off workers

The Bach Dang Shipbuilding Company has cut down its workforce from 3000 to 2457. In the first quarter of 2012, the company still had enough jobs for workers when building the 17,500 ton ship, the 14,600 ton cement carrier for the Nghi Son Cement Company and a 17,500 TEU ship.

However, the situation has become more difficult since the second quarter of the year. About 50 percent of its workers have been sitting idle.

The Pha Rung Shipbuilding company, which had 3000 workers, had to lay off 200 workers, while 600 others stay at home for 6-12 months due to the lack of jobs.

Bogged down in debts

Workers of the Nam Trieu Company presently only receive 3-4 million dong a month on average. Meanwhile, those who work in shifts get 1-2 million dong only.

However, even the modest pay has also put a heavy burden on the enterprise. Since March, workers have received 50 percent of the salaries in advance.

At the Bach Dang Company, since the second quarter, workers have got 2 million dong a month on average. The workers of Pha Rung Company were luckier with 3.8 million dong a month in the first six months of the year. However, the salaries have also decreased significantly recently.

Vinashin still has been struggling to survive the current difficulties. It has been trying to look for new markets in Latin America and Caribbean countries. However, if it gets new orders, it would face new difficulties – the labor shortage.

http://english.vietnamnet.vn/fms/bu...ifficulties-despite-government-s-support.html

 

[Viet]

Vietnam's central bank says 8.82 percent of loans are bad, pledges action
Last Updated: Friday, November 16, 2012 09:00:00

Non-performing loans in Vietnam’s banking system reached 8.82 percent of total lending at the end of September and are difficult to deal with, the country’s central bank governor said on Tuesday.

Vietnam latest news - Thanh Nien Daily | Vietnam's central bank says 8.82 percent of loans are bad, pledges action

 

[EastSea]

Shipbuilder giant still in big difficulties despite government’s support

VietNamNet Bridge –

Shipbuilding yards have been left idle and big ships have become rusty, while crews have been calling for help from abroad. These all reflect the current situation of the Vietnam Shipbuilding Industry Group (Vinashin), which was once the giant in the shipbuilding industry.

No job, no salary

When the morning just dawned, thousands of workers flocked to the thermopower plant in Tam Hung commune of Thuy Nguyen district in Hai Phong City, starting a new working day.

Meanwhile, the shipbuilding yards of the subsidiaries belonging to Vinashin, located not far from the plant, were still quiet. Sometimes people could hear the sound from hammers. The production could be seen at some workshops in the large area reserved for ship builders.

A lot of workers, including the ones who have devoted nearly all of their lives to shipbuilding yards, have to leave to look for new jobs, because they have become abandoned by Vinashin.

In fact, the giant can do nothing for its workers, since it still cannot settle old debts, lacks capital, lacks materials and equipment for production. Workers now can receive basic salaries for their current works, while have not gotten the salaries of many previous months.

The Nam Trieu Shipbuilding Company, a subsidiary of Vinashin, now receives fewer orders. Therefore, the number of workers has decreased sharply. Meanwhile, at its golden age, Nam Trieu had more than 7000 workers instead of the current 3800. A lot of them have left the shipbuilding industry.

Deputy General Director of Nam Trieu Company Phung Van Khoi complained that workers leave the company in the most difficult period. Nam Trieu now gathers its strength to build the 56,000 ton ship, while it lacks workers.

“We have to arrange three production shifts a day in recent days,” Khoi said.

“We hope that the year 2013 would be better, when we implement the contract on building 20 ships for Vinalines,” he added.

Laying off workers

The Bach Dang Shipbuilding Company has cut down its workforce from 3000 to 2457. In the first quarter of 2012, the company still had enough jobs for workers when building the 17,500 ton ship, the 14,600 ton cement carrier for the Nghi Son Cement Company and a 17,500 TEU ship.

However, the situation has become more difficult since the second quarter of the year. About 50 percent of its workers have been sitting idle.

The Pha Rung Shipbuilding company, which had 3000 workers, had to lay off 200 workers, while 600 others stay at home for 6-12 months due to the lack of jobs.

Bogged down in debts

Workers of the Nam Trieu Company presently only receive 3-4 million dong a month on average. Meanwhile, those who work in shifts get 1-2 million dong only.

However, even the modest pay has also put a heavy burden on the enterprise. Since March, workers have received 50 percent of the salaries in advance.

At the Bach Dang Company, since the second quarter, workers have got 2 million dong a month on average. The workers of Pha Rung Company were luckier with 3.8 million dong a month in the first six months of the year. However, the salaries have also decreased significantly recently.

Vinashin still has been struggling to survive the current difficulties. It has been trying to look for new markets in Latin America and Caribbean countries. However, if it gets new orders, it would face new difficulties – the labor shortage.

Shipbuilder giant still in big difficulties despite government

June 15, 2007: A section of Jiujiang Bridge collapsed after it was hit by a boat in south China's Guangdong province

Read more: Look At All The Major Chinese Bridges That Have Collapsed In The Recent Years - Business Insider

 

[Battle of Bach Dang River]

2009 and 2010 were considered the golden age for the manufacturers that make the products bearing Vietnamese brands, namely Q-Mobile and Bluefone.

The “Vietnamese brand mobile phones” means the products are bearing Vietnamese brands, but are made in China. The only thing that can be made in Vietnam is just the phone’s plastic cover, which makes up less than one percent of the value of the product.

This made the brands above die quickly.

 

[yusheng]

lol , broken bridges in China is not Viet economic news, you are welcome to send them to Chinese economic thread. and i can find more about Viet roads & bridegs broken even in your government websites. the Viet corruption is more than China.

if you can not stand the above negtive Viet news, just goning on posting positive news as Veit is a developed country. keep a balance view of your country is healthy to you and your country.

 

[Viet]

lol , broken bridges in China is not Viet economic news, you are welcome to send them to Chinese economic thread. and i can find more about Viet roads & bridegs broken even in your government websites. the Viet corruption is more than China.

if you can not stand the above negtive Viet news, just goning on posting positive news as Veit is a developed country. keep a balance view of your country is healthy to you and your country.

I did by posting a news on bad loans in the Vietnamese banking system. See #199.

 

[Battle of Bach Dang River]

lol , broken bridges in China is not Viet economic news, you are welcome to send them to Chinese economic thread. and i can find more about Viet roads & bridegs broken even in your government websites. the Viet corruption is more than China.

if you can not stand the above negtive Viet news, just goning on posting positive news as Veit is a developed country. keep a balance view of your country is healthy to you and your country.

You are wrong. We also post the negative news about the Vietnam economy. We do not try to hide it, of course.
View some articles that I have quoted:

Vietnam down again in global competitiveness rankings [Sadly]
Updated : 5:07 PM, 06/09/2012

(VOV) - Vietnam has fallen ten places to 75th in the Global Competitiveness Report 2012-2013.

This is the third consecutive year the Southeast Asian economy has suffered a decline in the global competitiveness index, from 59th in 2010-2011 to 75th in 2012-2013, according to the World Economic Forum report, released on September 5.

The report said in terms of macroeconomic environment, the country plunged 41 places to 106th this year, due to its high rate of inflation in 2011, the worse sovereign debt rating, and difficult access to credit.

Infrastructure (95th) also remained a major challenge for the country despite some improvements in recent years, with particular concerns about the quality of roads (120th) and ports (113th), the report said.

The report considered the nation’s public health and primary education (64th) efficient labor market (51st), its large market size (32nd), as its most competitive strengths.

The WEF also estimated Vietnam’s per capita GDP at US$1,374 and its GDP based on Purchasing Power Parity (PPP) share of world total at 0.38 percent.

Vietnam down again in global competitiveness rankings - Vietnam down again in global competitiveness rankings - VOVNEWS.VN


Refer to http://www.defence.pk/forums/world-affairs/206044-global-competitiveness-report-2012-2013-a.html

Vietnam's economy loses its roar
By Chris Brummitt on September 11, 2012

BAT TRANG, Vietnam (AP) — Four years ago, Le Van Tho borrowed $200,000 to build a new ceramic factory on rice fields bordering Hanoi. But with the economy slowing, orders have slumped this year and she recently laid off almost half her workers.

It's also a grim picture down the road: bowls, statues and flower vases gather dust in export showrooms as shoppers in a recession-hit Europe and sluggish United States stop spending.

Once seen as an emerging Asian dynamo racing to catch up with its neighbors, Vietnam's economy is mired in malaise, dragged down by debt-hobbled banks, inefficient and corrupt state-owned enterprises and bouts of inflation.

Vietnam's one-party Communist government has promised reforms, but it appears unwilling to give up the reins of an economy that has delivered fortunes to top officials and their business partners.



Vietnam's economy loses its roar - Businessweek

It's a colorful picture, viewed from many other sides...

 

[FairAndUnbiased]

Vietnam is currently at the phase we were at in 1998. Good luck, these will be the toughest times.

 

[Viet]

US urged to recognize VN’s market economy soon
| VGP | Nov 15, 2012 16:23 pm

PM Nguyen Tan Dung on Wednesday urged the US to recognize Vietnam as a market economy during his reception for US Under Secretary of Commerce for International Trade Francisco Sanchez.

 

[EastSea]

lol , broken bridges in China is not Viet economic news, you are welcome to send them to Chinese economic thread. and i can find more about Viet roads & bridegs broken even in your government websites. the Viet corruption is more than China.

if you can not stand the above negtive Viet news, just goning on posting positive news as Veit is a developed country. keep a balance view of your country is healthy to you and your country.

Every thing may happen in Vietnam and china.

BEIJING - A workship worth an investment of 740 million yuan ($117 million) by a leading Chinese oil field service provider has sunk during construction at a dock in east China.

This ship was sunk immedetly after landing ceremoy.

 

[ahfatzia]

Vietnam must look to rural economy



Vietnam must look to rural economy
By Elliot Brennan and Tung Phung Duc

Vietnam's economic growth will slump this year to a level not seen since 1999, if forecasts are accurate. As a result of this and factional in-fighting over this issue, Prime Minister Nguyen Tan Dung on October 22 apologized for the government's "weakness" in managing the economy.

While poverty rates continue to fall in Vietnam, concerns about sustainable growth and employment are becoming more prominent. After a strong process of industrialization, Vietnam's economy is now stiffening as local enterprises find credit harder to attain and many export manufacturing contracts move to cheaper countries such as Bangladesh.

Much of the problem is attributed to the estimated 10-15% of bad loans in the banking system. Many of these loans reside with state-owned enterprises (SOEs) that have had, many claim, preferable treatment in attaining capital. Approximately 30% of these enterprises closed in 2012.

This has been coupled with high interest rates and weak banking regulation as well as growing competition in the Asian markets for, among other things, manufactured goods and textiles. These myriad factors have rattled foreign investment and the stability of the predominantly export-oriented economy.

The growing debt and bankruptcy of many SOEs across the economy, including those in agriculture - such as Vinacafe Buon Ma Thuot, a coffee producer owing an estimate US$100 million in debt - will undoubtedly effect jobs and livelihoods. The rural economy is of particular importance given that over 70% of the population still live in rural areas. Rejuvenating the health of the rural economy is thus important both for the wider stability of the economy and to accommodate unemployed workers in a tougher economic climate. As such, lessons from South Korea's rural renaissance could be applicable.

The problems
The "Doi Moi", or "Renovation", reforms in Vietnam of the late 1980s were fundamental to poverty alleviation and increased agricultural production. The Doi Moi reforms and the subsequent land laws of the 1990s and in the early 2000s established farms as the basic economic unit in Vietnam. Initially possession of these was for a 10-15 year period. This was then extended to 20 years for annual crops and aquaculture, with a two-hectare plot limit, and 50 years for perennial crops, with a 10-30 ha limit.

Further reforms saw land-use certificates (LUCs) awarded and farmers were given the right to gift land to their relatives. This is often complicated, however, for households who receive just one LUC for several plots of land. It remains complicated and costly to transfer land-use rights and the difficulties therein lead to illegal and opportunistic behavior. Estimates put the number of plots of land today at 75-100 million - on average seven or eight plots per household. The integrity of the communist government necessitates equitable distribution, yet the large number of plots makes for inefficient production.

These issues, which beg reform in order to improve and increase production, put pressure on the health of the agricultural sector. Yet reform of the agricultural sector has at times been forgotten in favor of industrial growth.

As the economy has developed, Vietnam has experienced a common shift from agriculture to industry. The agricultural sector, as a proportion of GDP, declined from 40% in 1990 to approximately 21% in 2010, and is expected to decline further over the next decade. Meanwhile, according to a 2012 World Bank Report, the industrial sector has almost doubled its share in total GDP to 41% 2010 from 23% in 1990. Migration has thus, in recent decades, pushed from rural areas to urban areas where most factories and jobs are located.

Job creation has been a key argument for new agro-industry developments. From the 1970s to the 1990s the Vietnamese population grew by an average of 1.2 million people annually with the majority living in rural areas. This increasingly young population created a labor surplus that continues to put pressure on the rural economy.

Rural to urban migration has also been exacerbated by poor management of agricultural lands, as indicated by the above inefficiencies in the awarding of LUCs. Poor land tenure delineation and documentation as well as poorly implemented production technology has stunted growth. The forestry sector has been neglected as land tenure and land classifications in the sector remain fraught with difficulty, particularly in upland and mountainous areas. LUCs have consequently been much slower to be issued in the sector.

Yet as demand for manufactured goods from Vietnamese factories staggers, and as many SOEs face bankruptcy, the sector as a whole requires restructuring. Those people once pulled to the promise of higher wages in factories will likely be pushed back to rural areas or on to the streets of big cities, creating further problems and raising the potential for conflict. Rural reform therefore becomes an imperative in preventing an increase in poverty and the possibility of civil unrest.

Lionizing the farmer: Saemaul Undong
South Korea faced a similar problem in the early 1970s. Between 1964 and 1970, growth in the non-agricultural sector ran as high as 14.5%, while growth in agriculture was a meager 2.8%, according to Bank of Korea figures. Similarly, in the same period, the farm population decreased by over one million farmers. From the 1964 base of 15.5 million, this figure would continue to decline and reached 12.8 million in 1976.

The trend needed to be reversed. The implementation of Saemaul Undong, (SMU) or New Community Movement, offered this change and was implemented in the early 1970s. It was successful in alleviating poverty in rural areas and, subsequently, narrowed the urban-rural divide.

The SMU reversed labor migration flows. The 1960s had seen a strong trend of migration from rural to urban areas. Rapid industrialization needed a labor force and the attraction for a young rural population was significant. There was a strong pull to urban, industrial environments, yet little incentive to move back to poor rural jobs.

Notably, South Korea's strong centralized government meant that communities had to fall into line with the policy and land reform, regardless of the direct benefit to them. Through a government-run campaign, the country was mobilized to champion rural development and lionize the role of the farmer in the state economy. As a result, South Korea avoided the great unrest witnessed by other Asian countries in the throes of development, and instead experienced land redistribution that was relatively conflict free.

Preventing conflict through reform
Vietnam can learn from South Korea's successful shift. Indeed, an acceleration of the country's rural development is necessary, and has been for some years. As Vietnam shifts from central planning to a market economy, this development needs to go hand in hand with strong agricultural reform.

The 2010-2020 National Target Programme-New Rural Development (NTP-NRD) and its relevant by-laws, currently being implemented albeit sluggishly, are intended to aid this development by promoting new rural criteria, community ownership, and a stronger, more supportive role for the state. Currently, however, the program implementation is not moving fast enough. This is largely due to a tiny budget for the NTP-NRD of approximately US$85 million suitable only for pilot programs in communes. Thus, balancing economic development and social pressures within rural areas and within rural populations continues to be difficult.

Revisions to the proposed land laws, which should come into effect next year, have been made and are a step in the right direction. The most significant of these is the proposed extension of land-use rights from 20 to 50 years for farmers. This reform has to be thoroughly carried through. Even then, land-use rights of 50 years are still too short a period for sustainable development. Longer land-use rights would provide incentive for farmers and their families to develop their plots over time and improve land quality and production.

Despite this and as a result of sluggish reform, the chance of further conflict amongst rural populations on rural issues continues to grow. Contested land rights and different views on land-use planning continue to be the most prominent cause of conflict in land disputes in the developing world.

Vietnam, despite often being seen as a strong and stable developing economy, is no different. Defining unclear land tenure is the simplest way to correct problems of land rights and resolve conflict. This also needs to be supported by relevant institutional frameworks, while avenues for arbitration, dispute and settlements are similarly important. A the 2006 World Bank report stated that careful policy design in Vietnam is necessary to minimize risks in "surmounting conflicts".

In Vietnam, which has one of the highest rural population densities in the world, effective and efficient rural management is an imperative for stability and growth. The government must address land tenure issues which would allow for the greater productivity and efficiency of the rural economy. Sufficient funding for such programs as the NTP-NRD needs to be made available. Rural development should be prioritized as a key issue for stability and growth.

Lionizing the role of the farmer and championing rural communities as pivotal to the health of the nation; that is, a changing of attitudes could go a long way in cushioning such change. In a period of economic slowdown in the country, effective rural reform will address many of the needs of the country's large rural population while also providing for a strong and stable platform for the growth of the Vietnamese economy.

Asia Times Online :: Vietnam must look to rural economy

 

[yusheng]

Vietnamese businesses facing big difficulties in economic downturn

VietNamNet Bridge – A lot of businesses have to borrow money on the black market at exorbitant high interest rates to pay their due debts. However, debts generate bigger debts, and businesses have been caught in a vicious circle.
Incurring the debts of up to hundreds of billions of dong, having nothing left after selling all the assets to get money for debt payment, a lot of businesses have quietly run away or dispersed and hidden their assets.

The heaped up debts

The private enterprise specializing in making plywood products for export in Bien Hoa 2 Industrial Zone in Dong Nai province has no director for many years. Nearly 100 workers of the enterprise still have not got their salaries.

V, the younger brother of B, who was once the director of the company, now acts as the temporary manager of the company, said that in 2011, the enterprise decided to set up two more workshops to increase the productivity.

Unable to access bank loans, the enterprise decided to seek capital on the black market. It borrowed 1.6 billion dong at the sky high interest rate of 7 percent per month to expand the workshops and buy more machines.

However, as there were few orders, the production got stagnant; the enterprise did not have money to pay the debts with the exorbitant high interest rate. As a result, the enterprise’ owner had to give two cars to the creditors.

As creditors have been chasing for debt collection, B had to escape some days ago, leaving an increasing huge debt. Meanwhile, the company’s assets have nearly got exhausted, and equipments have been left untouched.

“The only thing we can do now is to keep production at a moderate level to get money to feed workers’ mouths,” V said.

At TT Garment Company in Hoc Mon district of HCM City, the company’s workers put chairs at the entrance to the company and kept watching over the activities of the company’s managers on April 9. The decision was made after some workers discovered the attempts by the managers to disperse and hide the company’s assets.


Bui Thi Tuyet Nhung, Chair of the Hoc Mon district Labor Federation, said that the company owed 400 million dong in workers’ salaries. However, after the federation’s intervention, the owner of the company has paid workers already. However, it’s still unclear about the debts incurred by the company to other creditors.
When reporters came back to the company on the afternoon of April 13, there was nothing left. The machines and equipment at the workshops have been carried away for sale.

XB, a scrap material workshop in Bien Hoa City of Dong Nai province, once faced the anger of creditors some days ago.

In early 2009, T, after realizing the big income from scrap material, borrowed one billion dong from a bank and 500 million dong from other sources to implement his production plan.

The big debt plus the unprofitable business both have led to the insolvency. T’s house, worth 1.5 billion dong has been distrained by the bank. The only asset left – a car – is not valuable enough to pay the heaped debts.

The owner of a garment company in HCM City said that bargaining away equipment, mortgaging assets for high interest rate loans are the things that most of unprofitable businesses have to do now, because they have been pushed against the wall.

As the lending interest rates are exorbitant, borrowers cannot pay debts, and they accept to seek their mortgaged assets falling into the hands of creditors. A lot of businessmen have lost their homes and intimidated.

Source: Tien phong


Owing money right and left, a lot of businesses flee

Production stagnates, but stock prices keep rising

2/3 securities companies to go bankrupted after restructuring

Businesses die in masses, commercial banks still live well

In economic crisis, businessmen rush to go studying, travel

Crisis storm attacks retailers, a lot of private shops shut down
VietNamNet

 

[yusheng]

Interest rates in Vietnam highest amongst top ten emerging economies in Asia: ANZ

16-Nov-2012 Intellasia | ANZ | 1:34 PM


As per the report on global economy and Vietnam economic outlook issued by ANZ Bank, interest rates in Vietnam are at the highest level in top ten emerging economies in Asia.

Particularly, as of September 2012, Vietnam’s refinance rate was 10 percent per year while it was 6 percent per year in India and 1.875-6 percent per year in the remaining eight economies.

ANZ forecasts, by the end of 2012, Vietnam’s refinance rate will decrease to 9 percent per year but it is still higher than 1.875-8 percent per year from the remaining nine economies.

In 2013, the major trend is that interest rate will increase in these emerging economies, in which Vietnam’s refinance rate will increase from 9 percent by the end of 2012 to 11 percent by the end of 2013, ANZ said.

Besides, ANZ’s report also forecasts that Vietnam’s inflation in 2012 will maintain at 8 percent this year, economic growth at 5.9 percent and dong/US dollar forex rate at 21,200 dong.

This organisation forecasts that by the end of 2013, Vietnam’s inflation will increase to 9.4 percent, but economic growth will be lower, at 5.7 percent and the dong/US dollar forex rate will increases to 21.500 dong.

In comparison with other five countries in Asean (including Indonesia, Malaysia, Philippines, Singapore and Thailand), Vietnam’s inflation is at the highest.

Regarding the economic growth, in 2012, Vietnam’s growth is lower than that of Indonesia, Philippines and equal to that of Thailand. However, in 2013, Vietnam’s economic growth will be at the second amongst six nations, only after Indonesia.

However, comparing to these five countries, Vietnam will have the biggest balance deficit of current accounts in 2013 as forecasted by ANZ. Vietnam’s current account balance deficit would be 3.2 percent of GDP next year while that of Indonesia would be 1.5 percent of GDP whereas remaining four countries would enjoy a current account balance surplus.

Aninda Mitra, ANZ’s Head of Economic Division in Southeast Asia said that Vietnam has stabilised macroeconomic situation, but in the near future, the central bank will lower the lever. It is necessary to have a proper strategy to reform the state-owned enterprises (SOEs) and the banking system in order to limit the risk of GDP growth decline in the long term.

In the world, the growth prospects of global economy are still changeable. Despite many expectations about growth of the US and China to be improved, political and policy risks still remain.

The evolutions of Chinese economy will affect the whole Asia, therefore, retrieving the balance of China will play a very important role, said Mitra.