Vietnam holds keys to coping with recession

Vietnam should make the most of its advantages to avoid the threats posed by the global economic recession and to tackle urgent challenges, such as the recent decreases in consumer demand and flow of foreign direct investment (FDI).

The World Bank (WB)’s acting country director in Vietnam , Martin Rama made this remark at a press conference which took place in Hanoi on Nov. 28 to provide information regarding the 15 th Consultative Group Meeting for Vietnam .

Rama said inflation is no longer the greatest challenge facing Vietnam , but the country needs to find ways to deal with the difficulties caused by drops in consumer demand, export value and FDI influx as a result of the global economic slowdown. This can be achieved by making the most of its high-quality workforce, stability and attractiveness as an investment destination.

According to the WB acting director, although the global financial crisis has restricted spending power across the globe, Vietnam ’s exports will not suffer too much as the nation had previously posted a high growth rate.

However, he acknowledged that high inflation has had a negative impact on the lives of the Vietnamese people, particularly the poor.

Rama reiterated the WB’s commitment to improving the living conditions of the Vietnamese people by providing the country with financial credits worth between 100-200 million USD each year.

In addition, the WB has annually reserved an average of 1 billion USD in non-interest loans for Vietnam through the International Development Association (IDA).

The 15 th Consultative Group (CG) Meeting for Vietnam is scheduled to convene in Hanoi from Dec. 4-5, focusing on the stabilisation of the economy and maintaining its growth potential.

Topics for discussion at the meeting will include Vietnam’s socio-economic situation for 2008, a mid-term review of the implementation of the Socio-Economic Development Plan 2006-10, progress made towards the achievement of the Millennium Development Goals, poverty rates and solutions and health finance reform.

The meeting will also examine the standardisation of procedures and aid effectiveness, governance and institutional reform, as well as climate change.

Prior to the CG meeting, a Vietnamese Business Forum will take place on Dec. 1 to discuss the business environment, the global financial perspective and its impact on Vietnam, as well as measures that can be adopted to maintain the competitiveness of the nation’s manufacturing and distribution sectors.

During last year’s meeting, donors pledged more than 5.4 billion USD for Vietnam ’s anti-poverty and development programmes.

The Ministry of Planning and Investment predicted that the amount committed by donors at this year’s meeting would reach 5.2 billion USD, despite a decrease in the global flow of official development assistance (ODA) capital.-

New taxes deliver body-blow to nine-seater cars

Hanoi (VNA) – The newly-approved Law on Special Consumption Tax, revised, will deprive cars with between 6 and 9 seats of their current tax rate of 30 percent, increasing production costs by 9,000 USD for each vehicle.

The new law, which comes into force on April 1, 2009, will increase the tax rate levied on these vehicle to at least 45 percent and possibly 60 percent, as it will be calculated on the basis on the cars’ engine capacity instead of the number of seats, as is currently the case.

Currently, cars with between six and nine seats enjoy a low tax rate of 30 percent, compared with the 50 percent rate levied on cars with five seats, giving the former a huge price advantage and explaining their higher sales.

The tax adjustments will influence market trends and cause a shift in the plans of car manufacturers and importers, said experts.

Pham Anh Tuan, Head of the Toyota-Vietnam’s Planning Section, said the company’s Innova brand is facing a sharp drop in sales and forcing them to reconsider their localisation scheme, following years of producing up to 37 percent of parts in Vietnam .

“The scheme is even on the brink of bankruptcy,” he said.

Regarding imports, a car dealer on Hanoi ’s Dao Duy Anh street said he would import 6-9 seat cars only if they are specially ordered by customers.

The special consumption tax adjustments, however, will not have a huge impact on the car industry in general, according to director of the Taxation Policy Department under the Ministry of Finance Vu Van Truong.

He explained that the tax levels would only increase for cars with engines ranging from 2,000 cc to 3,000 cc, but would decrease for cars with engines under 2,000 cc capacity and remain the same for cars with an engine capacity of more than 3,000 cc.

“Domestic businesses manufacture cars with a variety of engine capacities at the same time, thus making their production levels immune to any large impact”, he said.

Besides, car businesses are searching for opportunities to reduce their stock on the assumption that customers might rush to buy their dream products before the tax levels increase.

The car market rallied in October following four months at a standstill, with sales of 5,679 units slightly up from 5,180 during September, reported the Vietnam Auto Makers Association (VAMA).

However, this figure represented an annual decrease of 26 percent.–

Multi-trillion VND contract for Ca Mau power plants

A maintenance contract worth over 10.4 trillion VND for Ca Mau power plants I and II was signed by the Ca Mau PetroVietnam Power Company and the PetroVietnam Power Services Company in Hanoi on Nov. 28.

The contract will cover the maintenance and repair costs for the first 100,000 hours of operation of the two power plants, which form part of the Ca Mau Gas-Power-Fertiliser Complex, a key national project in the southernmost province of Ca Mau .

Ca Mau plants I and II have a combined total investment of 12.6 trillion VND (787.5 million USD) and a total design output of 1,500 MW.

Ca Mau Plant I has commenced operations in April 2007 and has so far supplied 2.8 billion kWh to the national grid.

Ca Mau Plant II is currently performing tests and is expected to begin operations in December this year.-

Nam Viet Corp., Moscow sign food supply accord

The Nam Viet Corporation (Navico) and the Moscow City Food Resources Department signed a memorandum of understanding regarding food and foodstuff supply in Ho Chi Minh City on Nov. 28.

Under the terms of the document, the two sides will cooperate in the supply of fish, seafood, vegetables, fruit and other food products to Moscow .

The partners will also regularly exchange information regarding the level of demand in the Moscow market and the supply capabilities of Navico’s subsidiary companies.

Alexander Ivanovich Baburin, Minister of the Moscow City Government and head of the department, said his department is responsible for ensuring the provision of one-third of the total volume of food and foodstuff for Moscow , a city with a population of 13 million.

Moscow annually imports around 2,000 tonnes of fish from Vietnam and this amount is expected to increase five-fold during the course of next year following the signing of the cooperation deal with Navico, Baburin said.

The Russian department also wants to import rice and coffee from Vietnam , while Navico will import confectionery, processed meats and a number of agricultural products from Moscow .

Navico’s chairman and general director Doan Toi revealed that his company is a pioneer in the export of seafood products to Russia , accounting for 75 percent of Vietnam ’s total annual revenue from this market, which now stands at 200 million USD.-

Belgium-funded reservoir project launched in Ninh Thuan

Ninh Thuan (VNA) – The People’s Committee of central Ninh Thuan province on Nov. 27 held a ceremony to begin the construction of Lanh Ra reservoir.

The project costs an estimated 7.75 million EUR, one third of which is funded by the Belgium government.

The remainder is cover by to-be-forgiven forein debt (1.25 million EUR) and the state budget (3.9 million EUR).

When put into operation, the 13.88 million cu.m reservoir will supply fresh water for residents and more than 1,000 ha of crops within the project area.

The project is expected to complete in the second quarter of 2011.-

Oil spill contained after collision of two tankers

– Rescue force on Nov.27 contained an oil spill hours after two oil tankers collided on Nov 26, spilling 12cu.m of diesel oil in the waters off HCM City ’s Can Gio district.

A tanker transporting 700 tonnes of oil from HCM City to Vung Tau crashed into another tanker carrying 1,800 tonnes of oil from Vung Tau to HCM City .

Dao Anh Kiet, director of the HCM City Department of Natural Resources and Environment, said the 12 cu.m of spilled oil at Bat Oc Rivulet Mouth was cleaned up on Nov. 27. Another ship has transported the remaining oil on board to the original destination.

Police provided few details on the extent of two ships’ damage, saying only that the Gia Dinh ship suffered two scratches of less tan 2 metres, while the other ship was slightly damaged on its prow.

The municipal Department ofNatural Resources and Environment assigned five ships as well as manpower from the department’s division of environmental protection to mop up the oil spill.

Authorities are trying to determine the accident’s effect on the environment and its cause.-

Australian consultant to be hired for fixing tunnel cracks

HCM City (VNA) – Ho Chi Minh City has given the green light for the East-West Highway Project Management Unit to hire an Australian consultant to help fix several cracks in a major tunnel project.

Connell Wagner company will investigate the root cause of the cracks in four tunnel sections pre-constructed for the Thu Thiem Tunnel, part of the larger East-West Highway project linking Ho Chi Minh City’s District 1 and District 2, and put forth solutions to the problem.

The Australian consultant’s assessment is expected to come out within six weeks and its repair will be conducted within three-four weeks.

In early November, the municipal People’s Committee allowed the project management unit to advance 16 billion VND to the consultative contract. The committee said those responsible for the cracks will have to pay all the repair fees.

The HCMC administration is the project’s main investor via the East-West Highway Project Management Unit, while the Obayashi Corporation and Pacific Consultants International (PCI) from Japan are the tunnel’s contractors.-

Gov’t rings alarm over further floods

The Prime Minister on November 27 sent dispatches to all relevant bodies, asking them to remain alert for possible further flooding following reports of 22 left dead or missing in the central region in the wake of typhoon Noul.

A report prepared by the Central Region Office on Dyke Management and Storm and Flood Control also revealed that typhoon Noul, which swept through the southern central region on November 16, caused some 143 billion VND in damages.

The region is bracing itself for another storm as the Central Steering Board for Flood and Storm Control reported worsening weather off Truong Sa Archipelago, which is threatening to develop into a depression.

The Central Hydro-Meteorology Centre also warned of possible increases in regional river water levels, which may continue to rise to the highest alarm category, despite their current abatement.-

Hundreds of Vietnamese stuck in Bangkok

Some 400 Vietnamese nationals, mostly tourists, have been left stranded in Bangkok due to the cancellation of their flights home, according to a statement by the Vietnamese embassy in Thailand on November 27.

The embassy said they have set up hotlines to provide consultancy services for those stuck in the Thai city and have dispatched staff to relevant agencies, including Vietnam Airlines, as well as travel agents in the country, to try to find solutions to the problem.

“Alternative means of returning home may include traveling by car through Laos and Cambodia,” the embassy said, adding that they had also drawn up emergency plans for those who have lost their luggage or are suffering from illness.

The Thai Government has also pledged a maximum of 2,000 baht (roughly 60 USD) per day in compensation payments for each victim, to cover their daily living expenses.

The Dolna Company, a Thai enterprise, has managed to arrange the return home of 60 Vietnamese tourists aboard two coaches on November 27, in association with the Vietnamese Mai Linh Travel Company.

The vehicles are scheduled to drive overland to the Poipet border gate with Cambodia and then continue their trip to Ho Chi Minh City .

Thai protestors, demanding the resignation of Thai Prime Minister Somchai Wongsawat, have besieged Bangkok international airport since November 25, resulting in the cancellation of all flights. Two days later, on November 27, they successfully forced the closure of Don Muang domestic airport.-

Vietnam reiterates vow to fight corruption

The Vietnamese Government has again strongly demonstrated its resolve to combat corruption and ensure transparency by a variety of means through its organisation of the fourth anti-corruption dialogue with donors and international organisations, held in Hanoi on Nov. 28.

The dialogue, on the theme of “the role of the media in preventing and combating corruption”, attracted approximately 200 delegates from relevant Vietnamese agencies and media organisations, as well as representatives of donors and international organisations.

Chairman of the Office of the Central Anti-Corruption Steering Committee Vu Tien Chien told the participants that “the State apparatus of Vietnam regards the fight against corruption as its key duty.”

He placed particular emphasis on the Political Bureau’s recent adoption of a resolution stressing the need to develop a “mechanism to protect those who detect, report, investigate, prosecute and adjudicate corrupt practices”.

Government Inspector General Tran Van Truyen said that Vietnamese agencies are targeting their battle against corruption at specific areas, trying to bolster the confidence of the people in the Government’s determination to fight this menace.

Rolf Bergman, the Ambassador for Sweden, who co-hosted the event, said “Sweden and other international friends have applauded many of the initial efforts by the Vietnamese Government to bring about a public sector where there would be no or little room for corruption.”

“Sometime corruption is referred to as a war that has to be won. But this war is probably more challenging than any other – because the enemy is firmly placed within your own ranks,” the ambassador said.

“That is why Governments and States cannot reduce corruption without strong support from various players in society: civil society organisations, the media, the private sector and individuals all have a crucial role to play,” he noted.

The dialogue was co-organised by the Government Inspectorate, the Office of the Central Anti-Corruption Steering Committee, the Ministry of Information and Communication, and the Swedish Embassy.

Representatives from Transparency International in Thailand were in attendance to share their valuable experiences at the dialogue.-