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BUSINESS IN BRIEF 22/6
Promoting
effective use of ODA loans
The
recent decision of
According
to calculations from the Da Nang Port JSC, the project will cost nearly VND13
trillion (US$ 59.8 million) if developers seek capital from domestic and
foreign commercial loans, much less than that of VND2.16 trillion (US$100
million) if the decision is made to use Japanese ODA loans.
With the
entire plan having already been mapped out, it is no coincidence that
ODA
involves borrowing capital from countries and paying that back together with
priority terms for contractors from ODA providers. Therefore, much of the
value of the ODA projects will fall into the hands of contractors from
lending countries. Local subcontractors are usually hired to perform small
jobs with cheaper costs.
ODA
recipients are bound to use technologies, machinery and equipment from the
creditors, plus other conditions such as duty-free import of goods, receiving
a portion of loans in the same kind of payment as the type of loan, as well
as bearing the risk of exchange rate fluctuations. Therefore, most developing
countries must strive to cease borrowing ODA in a certain timeframe if they
want to succeed. The
In the
use of ODA, borrowing countries also adhere to strict conditions, including
that loans should be firmly managed, efficiently used and infrastructure
quality should be ensured with a long-term vision. At the same time,
borrowers must only use ODA to invest in essential infrastructure and poverty
alleviation; they ought to not use ODA to pursue other unnecessary projects.
Any aid
received always has two sides. These specific loans, with preferential
interest rates always imply pluralism objectives, both economic and
non-economic from the lenders, are beneficial in both the short and long
terms. In addition, the recipients have to arrange reciprocal capital during
project implementation, which is sourced from taxation. Therefore, it can be
said that the use of ODA can cost more than domestic capital.
In the
context of domestic economic difficulties, ODA is very necessary to
healthcare, clean water, environmental protection, infrastructure
development, agricultural and rural development, hunger eradication and
poverty reduction and national industrialisation and modernisation
acceleration. Therefore, effective ODA management can promote the efficient
use of ODA.
Over the
last 20 years,
However,
there is also losses and wastefulness in ODA use, even violating laws and
influencing the country's credibility with donors. For that reason, it is
necessary to implement a transparent policy in ODA projects to effectively
use loans. Simultaneously, staff capacity should also be enhanced.
If
localities and related agencies use ODA for unnecessary non-urgent projects,
it is inevitable that low-interest ODA loans will become a burden for the
country.
Brand
development imperative in integration process: experts
Building
and promoting brands is vital for Vietnamese businesses to integrate deeply
and widely into the global economy, experts said.
The
establishment of the ASEAN Economic Community (AEC) at the end of this year
will offer both opportunities and challenges for small- and medium-sized
enterprises, they added.
Pham
Ngoc Hung, Vice Chairman of the Ho Chi Minh City Union of Business
Associations, noted that other ASEAN member nations have thoroughly prepared
laws, policies and strategies to support their businesses to make inroads
into
Meanwhile,
up to 60-70 percent of Vietnamese firms are unaware of integration issues, he
cited, adding that only a few Vietnamese brands are competitive in both
domestic and foreign playgrounds such as Ton Hoa Sen, Vissan and
Most
businesses have yet to increase goods quality due to financial shortages and
difficulties in accessing capital, he noted.
Chairwoman
of the Association of Vietnam Retailers Dinh Thi My Loan said the operation
of foreign retail firms in the local market is inevitable since
The
engagement of the overseas retail businesses, which make up 25-26 percent of
the market, is considered important momentum to develop the retail industry
in
However,
local manufacturing firms could face substantial pressure due to the flood of
imported goods from ASEAN member countries with various designs and
reasonable prices such as consumer products from
Domestic
businesses should reform their operations and management to improve
competitiveness and strengthen their foothold in the market while increasing
cooperation for mutual benefit, experts advised.
They
called on the State to build technical barriers to protect domestic products
and enhance market management to prevent counterfeit goods from entering the
market.
HCM
City looks for ways to raise capital for SMEs
Raising
capital remains one of the biggest difficulties for companies, and so
programmes that help connect businesses with capital sources play a very
important role, a conference heard in
Pham
Ngoc Hung, deputy chairman of the HCM City Union of Business Associations
(HUBA), said
But a
recent study by HUBA came up with the extremely worrying result that 65 per
cent of local firms are vague about the opportunities and challenges thrown
up by FTAs, he said.
Asked
what was the biggest difficulty in the context of deeper integration,
companies said it was capital followed by trade barriers, he said.
Nguyen
Manh Tue, deputy head of the Department of Planning and Investment's economic
sub-department, said there are around 150,000 businesses in
The city
has many programmes to support enterprises – such as organising dialogues
with government agencies to help resolve their difficulties in a timely
manner, he said.
The city
does surveys on businesses' demand for credit and organises programmes to
connect businesses and credit institutions, he said, adding that banks have
signed agreements to provide loans worth more than VND120 trillion (US$5.5
billion) to businesses in the past three years.
It also
provides VND100 million ($4,591) for each project in the agricultural sector
under a resolution issued on June 8, he said.
Speaking
about the HCM City Credit Guarantee Fund for Small and Medium Enterprises,
Tran Buu Long, its deputy director, said to qualify for credit guarantees,
enterprises must have good projects, own at least 55 per cent of the
projects, have collateral worth at least 15 per cent of the loan, and are not
tax defaulters.
However,
several attending business executives said SMEs face difficulties in getting
bank loans.
Tue said
the city needs to establish a fund for supporting SMEs.
Marcel
Laneville, senior trade commissioner at the Canadian consulate general in
"
The
conference was organised by the HCM City Union of Business Associations, HCM
City Union of Friendship Associations, the city Departments of Industry and
Trade and Planning and Investment, and the Viet Phu Payment Services Support
Corporation.
Wood
product export value set to meet annual target
According
to the Ministry of Agriculture and Rural Development, the export value of
wooden products recorded a year-on-year increase of 6.9 per cent to US$2.56
billion in the first five months.
The
three largest markets out of the 120 export markets for Vietnamese wooden
products during the first five months were the
After
the signing of the agreement,
The
ministry said that the local wood production industry enjoyed some advantages
during the first five months of the year because Europe had reduced the
production of wood products and an anti-dumping tax had been imposed on
China's wooden products exported to the United States, according to the Thoi
bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper.
In the
first five months of this year, the percentage of the foreign direct
investment enterprises' wooden products' export value reduced from 80 per
cent to 60 per cent, while the percentage of export value for local wood
producers increased from 20 per cent to 40 per cent.
Local
enterprises saw an increase in the export value of wooden products because in
recent years, local enterprises had adopted the modern production technology
of foreign countries such as Italy and the United States, Huynh Quang Thanh,
chairman of the Binh Duong Wood Association, was quoted as saying by Viet Nam
Television (VTV).
The
national export value of wooden products is expected to continue its growth
till this year end as local enterprises have bagged large export orders for
wooden products, said Tran Quoc Manh, a member of the Handicraft and Wood
Industry Association of HCM City's executive board.
Therefore,
the wood processing industry is believed to meet its total target export
value of $7 billion for this year, Manh added.
However,
many experts noted that in coming time, Vietnamese export wooden products
will face high competition from other countries. The high production cost of
wooden products, including high transport costs, will be a challenge for
local wood producers in improving their competitive ability.
Vietnamese
airlines speed up with ASEAN Open Skies
Vietnamese
airlines have drastically invested in modernizing their fleets in
preparations for the ASEAN Open Skies or Single Aviation Market, which sets
to be fully effective by the end of this year.
The
national flag carrier Vietnam Airlines has invested most in modernizing their
fleet to practice the policy.
It will
become the first airline in Asia Pacific region to use two most advanced
aircraft lines in the world including Boeing 787-9 Dreamliner and Airbus
A350-900 XWB, which will be put into service for flights to
Low-cost
joint stock airline Jetstar Pacific has also made efforts for the regional
integration.
The
company director general Le Hong Ha said that they had changed into using
A320/A321 aircrafts in all flights and brought new blood into its aircrew to
improve service quality.
It has
also worked with experienced shareholders such as Vietnam Airlines and
Australia Qantas Airways to open new international and regional flights
besides 25 under operation flights.
The
country’s first private own and low cost carrier VietJet Air has also
modernized its squadron and launched new flights in local and foreign
markets.
However
their efforts seem to be insufficient to compete with other carriers in the
region.
Many
airlines have met four star and five star standards in the 10 ASEAN nations
such as
At a
March conference, local carriers said that airway infrastructure had been
developed behind the quick growth of flights, causing flight delay and
cancel.
Ten
years ago, the Airports Corporation of
However,
there are still many problems. For instance, traffic congestion continuously
repeated along streets leading to airports last Tet holidays. Some heavy
rains rendered flooding to block entrance gates to the airports.
In
principles, the Skies policies will benefit Vietnamese airports because new
airlines will open flights there. However it will be more harm than good if
local infrastructures fail to meet demand, resulting in revenue and customer
losses.
Another
challenge is from ticket fare which will be a tense competition among local
and regional low-costs carriers.
Mr. Le
Hong Ha worried that low-cost carriers might meet with difficulties to book
departure and arrival times at international airports because of the increase
in airline number.
Vietnamese
carriers need the Government’s assistance to conveniently practice the Skies
Policy and improve their competitiveness, he added.
Defense
ministry wants 3,000 apartments in Ba Son area
The
Ministry of Defense expects the investor of Saigon-Ba Son complex project
will sell around 3,000 apartments in the project in the Ba Son Shipyard to
families affected by cityscape embellishment projects in District 1.
In
Dispatch 1934, the ministry requested the HCMC government to consider and
approve adjustments of the 1/500 scale zoning plan of the Ba Son area, also
known as Saigon-Ba Son complex. The ministry said it would ask the project’s
investor to sell around 3,000 apartments to the affected residents at market
prices.
Under
the adjusted plan, the population of the 22-hectare complex will rise to
11,593 people from 5,400 people.
With
around 3,000 resettlement apartments proposed for the affected households,
the total number of people living in the apartments will amount to 12,000 if
a household has four members on average.
Therefore,
if the city government agrees on the ministry’s proposal, the Saigon-Ba Son
complex may see its population rising five times, from 5,400 to around 24,000
people.
A bigger
population means more floors will be added to buildings at the project.
According to the ministry’s proposal, of 22 hectares in the Ba Son area, 7.5
hectares (33%) should be for high-rise buildings of 150 meters (50 floors),
and 3.5 hectares for garden houses, villas and adjoining houses (25 meters
high).
In the
dispatch, the ministry also proposed some changes to the direction of the
riverside road and the location of the elevated track of Metro Line No. 1
planned to go through the Ba Son area.
The
adjustments in the zoning plan of the Saigon-Ba Son complex, according to the
ministry, aims to ensure effective transfer of the land use right of the Ba
Son area.
However,
Vo Kim Cuong, former deputy head of the HCMC Chief Architect Office, said
changes aimed to meet actual demands were normal but adjustments with a sharp
population spike like the Saigon-Ba Son complex project needed to be weighed,
particularly in terms of infrastructure development.
The
ministry earlier requested the Government to pick HCMC Commercial Service
Joint Stock Company as the investor of the Ba Son area after Ba Son shipyard
is relocated.
New
bridges seen affecting port operations
The HCMC
Maritime Administration has expressed concern that the planned construction
of new bridges over the Saigon River to connect the downtown area and Thu
Thiem New Urban Area in District 2 would affect the operational ports in the
city.
In its
recent document sent to the Vietnam Maritime Administration, the agency said
Thu Thiem bridges 3 and 4 are planned in the river stretches where piers and
berths of Saigon, Ba Son, VICT, Ben Nghe and Tan Thuan Dong ports are
located. Besides, there are six sites along the river for vessels of
15,000-30,000 DWTs to dock.
If the
vertical clearance of Thu Thiem bridge 4 is too low, it will hit the vessel
handling capacity of piers K12, K12A and K12B of Saigon Port and narrow the
safety zones of these piers. K12A could be suspended as it is planned in the
safe corridor of the bridge.
“The
limited vertical clearance of Thu Thiem bridge 4 would affect the handling
capacity of piers of Saigon Port and prevent vessels from making U-turns at
VQ2 area,” the HCMC Maritime Administration said in the document.
Therefore,
the agency wanted development of a new area for vessels to turn around to
replace VQ2 area; otherwise, vessels will have to transport goods lower than
their designed capacity before they sail to and leave the piers.
The
agency called on the city to consider building Thu Thiem bridge 4 with a
higher vertical clearance and a new turnaround for vessels to minimize impact
of the bridge on the operations of piers and berths along the nearby river
section.
Statistics
of the HCMC Maritime Administration showed Ba Son, Saigon, Ben Nghe, Tan
Thuan Dong and VICT ports account for nearly 25% of bulk goods and almost 21%
of total containerized goods handled at all ports in the city.
Nha Rong
and Khanh Hoi wharves will be relocated or have their functions changed
before 2020, according to Decision 3327/QD-BGTVT issued in August last year
by the Ministry of Transport approving the master zoning development plan for
seaports in the southeastern region until 2020 with a vision towards 2030.
The city plans to build Thu Thiem bridge 3 at the location of these wharves.
Thu
Thiem bridge 4 is expected to go up at the location of Tan Thuan Port. This
port and Saigon, Ben Nghe and VICT ports will be upgraded and expanded as
envisioned in the zoning plan.
Thu
Thiem Bridge 1 has been opened to traffic while Thu Thiem Bridge 2 under
construction is scheduled to be put into use in 2018. Local relevant agencies
are drawing up investment plans for Thu Thiem bridges 3 and 4.
EU
FTA to unlock green-growth
The free
trade agreement being negotiated between Vietnam and the EU is expected to
encourage businesses to reform and update technology, an important factor in
promoting green growth in the country, according to the deputy chairman of
the HCM City People's Committee.
Tat
Thanh Cang, speaking at a briefing organised by EuroCham and its Green Growth
Sector on June 18 in HCM City, said that Vietnam should target green growth
to ensure sustainable development.
"In
Vietnam, green growth mainly includes sustainable production and consumption,
reduction of greenhouse gas emissions, greening business activities business
via environmentally-friendly advanced technologies, building sustainable
infrastructure, and reforming economic instruments," Cang said.
To
achieve the green growth target, however, other goals should be met, he said.
Management
agencies, businesses and the public must all be part of the national effort,
he added.
He said
that challenges exist in implementing green growth, particularly in funding,
regulation and education.
A large
source of investment capital, for example, is needed for environmentally
friendly technologies.
Vietnamese
enterprises, most of which are small- and medium-sized companies, do not have
sufficient capital for such investment.
Cang
suggested the Government issue new policies to help SMEs, especially in tax,
credit policies and administrative procedures. This would help them access
loans more easily to update technologies.
He said
that schools, hospitals and residents also need to be better informed about
environmental protection, and suggested that Vietnam learn from other
countries, including the EU.
The
EU-Vietnam free trade agreement began three years ago, and has gone through
13 rounds of negotiation.
Speaking
at the briefing yesterday, Jana Herceg, deputy head of the economics and
trade section at the EU Delegation to Vietnam, said the most recent round of
the FTA was held in Brussels.
"We
are now hopefully approaching the final stage of these negotiations,"
she said.
Herceg
said that Commissioner Cecilia Malmstrom and her Vietnamese counterpart Minister
Vu Huy Hoang, who met recently in Kuala Lumpur for the EU-ASEAN Economic
Minister Meeting, said negotiations were expected to conclude this summer.
"They
are meeting in Brussels next week and we can expect further progress in the
discussions," Herceg said.
Agreement
has been reached on tariffs and provisions on trade and sustainable
development, she said. This includes commitments to core International Labour
Organisation standards and conventions as well as multilateral environmental
agreements.
Negotiations,
however, continue on a Green Tech Annex, which is expected to foster trade
and investment to promote energy generation from renewable and sustainable
non-fossil fuels, according to Herceg.
Under
the Green Tech Annex, tariffs would be reduced or removed for products that
are relevant for this sector. In addition, all the parties involved would
have regulatory convergence in the renewable energy sector (solar, wind,
biomass), Herceg said.
Trade in
the renewable energy sector would be beneficial to all countries in the FTA,
and clear rules would provide better trade opportunities and instill investor
confidence.
Vietnam
would be able to profit from the EU's successful experience in developing a
renewable energy sector, Herceg said.
"It
is our aim to conclude the Annex, which would contain specific rules for the
renewable energy sector on non-discriminatory treatment in general (licensing
and authorisation procedures), on local content in particular, and on the use
of standards. In addition, we want to foster cooperation in this sector to
bring about further regulatory convergence," she said.
Eurocham
said the FTA would have a positive impact on trade for Vietnam. In 2013, the
EU was not only one of Vietnam's biggest trade partners, with a total value
of trade in goods of EUR27.6 billion, it was also among the biggest investors
in Vietnam, with 1,810 foreign development investment projects.
Singaporean consultancy to provide services for
Vietinbank
The
Vietnam Joint Stock Commercial Bank of Industry and Trade (VietinBank)
announced on June 18 that it selected Singapore’s InterbrandPte Ltd to
provide consulting services for building and deploying trade name strategies
for the bank.
Accordingly,
the Singaporean partner will assess the reality of the Vietinbank trade name;
build a trade name strategy to promote the trade name of the bank; design
trade name administration models; and organise relevant training programmes.
The
direction and building of the Vietinbank-trade name management system is
expected to contribute to standardising trade name promotion activities and
trade name administration procedures in line with international standards,
thus improving the bank’s competitiveness and making Vietinbank’s business
activities more effective.
According
to Nguyen Van Thang, Chairman of Vietinbank’s Board of Directors, the
building of a trade name strategy is the bank’s key project in 2015.
Jonathan
Bernstein, a representative from Interbrand, noted his firm will implement
the contract signed with Vietinbank on schedule and ensure high service
quality.
He said
he hopes services provided by his company will help Vietinbank improve its
prestige in the international market.
Interbrand
is the world’s leading brand consultancy group with 25 years of experience
consulting on trade name building. It has successfully implemented a number
of projects in the financial and banking sectors.
Germany
supports Vietnam in green credit development
The
State Bank of Vietnam (SBV) and the Deutsche Gesellschaftfuer Internationale
Zusammenarbeit (GIZ) GmbH co-hosted a seminar titled ‘Access to International
Green Funds – Opportunities for Vietnam’ in Hanoi on June 18.
The
seminar is part of the German-Vietnamese Macroeconomic Reforms/Green Growth
Programme, implemented by GIZ Vietnam on behalf of the German Federal
Ministry of Economic Cooperation and Development (BMZ).
Chaired
by SBV Deputy Governor Nguyen Thi Hong, the seminar is an opportunity for
experts from the SBV, ministries, agencies, credit institutions and other
related international organisations to share experiences and discuss on how
to access to international green funds, especially the Green Climate Fund
with its global scale, and to develop and implement green credit programs
under real conditions of development of Vietnam.
The
seminar has the participation of many important credit institutions, foreign
banks, related ministries and SBV departments, as well as donors and
international organisations, who interested in supporting and funding for
environmental purpose, green growth and sustainable development.
This is
a concrete and practical step to facilitate SBV and credit institutions to
initially pilot and develop credit programs in order to successfully
implement the Government’s Green Growth Strategy, hence contribute to
economic restructuring towards sustainable development.
In the
opening speech, SBV Deputy Governor Nguyen Thi Hong emphasized that the
banking system plays a decisive role as "the main channel for providing
green funds, having the role to promote and orient green investments and
credit risk management towards green growth".
In
particular, "the two most important issues are funding and development
of credit programs with appropriate targets in line with green criteria and
standards". Besides, a number of factors also plays an essential role to
encourage green investments, such as policy coordination (credit policy,
fiscal policy); coordination of sources (domestic, international,
greenbankcredit, capital market, etc.); coordination of financial instruments,
technical advice, trainings and capacity building; using funds from
international sources and from the state as leverage and encourage the
participation of commercial credit and private funds, etc.
Ms
Carola Menzel, Senior Advisor and Project Manager from Frankfurt School –
UNEP Collaborating Centre for Climate & Sustainable Energy Finance,
shares international experiences and lessons learned on green credit
policies, international green credit facilities and Green Climate Fund in the
seminar.
Besides,
Mr Anders Nordheim from UNEP Finance Initiative introduces a range of
initiatives and current programs of UNEP FI and sustainable banking.
In order
to implement the National Strategy for Green Growth and the National Action
Plan on Green Growth for period 2014 - 2020, the SBV Governor issued
Directive No.03/CT-NHNN dated March 24, 2015 to promote green credit and
social & environmental risk management in the credit activities.
On June
2, 2015, the SBV and GIZ together with other international organisations
organized a conference on implementation of Directive 03 for the entire
banking sector.
The
seminar is the next step in a series of SBV's efforts to support the economic
transformation towards green and environmental and social sustainability.
Through
the German-Vietnamese Macroeconomic Reforms/Green GrowthProgramme, GIZ
Vietnam has directly connected the activities in the priority areas to ‘Green
Growth Strategy’ of Vietnam to achieve long term impacts across all sectors and
facilitate Vietnam towards a sustainable future.
Green
growth, green finance, green banking and credit isan extremely new field for
many countries around the world, not only for Vietnam.
Therefore,
this kind of seminar is essential to collect ideas, initiatives and practical
experience from Vietnamese credit institutions and international
organisations in this field.
Since
then, the parties involved may pilot, draw lessons learned and replicate
initiatives on national level.
Vietnam,
Japan boost deposit insurance cooperation
The
Deposit Insurance of Vietnam (DIV) and the Deposit Insurance Corporation of
Japan (DICJ) recently signed a memorandum of understanding with a view to
fostering dialogues and bilateral cooperation, the DIV said on June 17.
The document
is intended to enhance deposit insurance efforts in general and the
management of deposit insurance providers in particular.
Specifically,
the DIV and DICJ will exchange deposit insurance-related experience and
knowledge, along with discussing international and professional issues of
mutual concern.
Training
courses, workshops and joint surveys will be organised, while regular working
visits will also be made by the leaders of the two institutions.
DIV is a
State-run non-profit financial institution that was set up in 2013, while its
Japanese counterpart was established as early as 1971.
Tra
fish exports continue to fall
Tra fish
export turnover this year would be US$1.7 billion, posting a four per cent
year-on-year drop due to difficulties in imported markets and tighter
regul-ations.
The Viet
Nam Association of Seafoods Exporters and Producers (VASEP), quoting
statistics from the General Department of Customs, said that for the four
months to May 15, the total export revenue of tra fish fell 9.3 per cent from
the same period last year to $544.8 million.
The
statistics further revealed that the export turnover to China had surged 46
per cent, and Canada went up 12.5 per cent as against the corresponding
period last year, while exports to the US increased slightly by 8.8 per cent.
However,
the export value of tra fish to the EU saw a sharp decrease of 16 per cent,
to Mexico of 21 per cent and Colombia of 8 per cent.
According
to VASEP, in the US, the export value of tra fish represented a strong reduction
of 23 per cent in January due to anti-dumping operations by the US Department
of Commerce.
The
rising US dollar also had importers hesitating while buying even as they
requested a price reduction. The average export price of tra fish to the US
in the first quarter fell 5 US cent over the same period last year.
The
association said the difficulties to the Viet Nam's biggest importer, who
accounted for 22 per cent of the country's total exports, was a key reason
for the drastic reduction in the tra fish price.
The tra
fish price saw a decrease of VND300 to VND500 a week since the end of
February. By the end of May, it was between VND20,000 and VND25,000 per
kilogramme – the lowest level so far this year.
In the
EU, Viet Nam's second biggest importer, the export value in the first half of
last month dropped 16 per cent against the same period of the previous month.
The tra fish exports to the market were not expected to improve in the next
few months.
VASEP
said the main reason for the decrease in exports in the market was because
the importers cut down on their imports. The strong drop in the value of the
euro against US dollar has proved difficult for importers, it added.
Move
to help insurance brokers
The
legal framework for the operation of insurance brokerage companies will be
improved to enhance their competitiveness, according to the Insurance
Supervisory Authority under the Ministry of Finance.
The
department's director Phung Ngoc Khanh said at a conference on Wednesday that
insurance brokerage was becoming an important factor for the development of
the insurance market as well as the country's socio-economic development.
At the
conference, brokerage firms spoke about the difficulties they face and
proposed various improvement measures to the insurance watchdog.
Firms
said that detailed regulations for operations and insurance brokerage fees
are needed.
They
pointed out that in Viet Nam, there are currently no regulations allowing
firms to charge fees for providing consultancies to customers and this has
limited the operations of insurance brokerage firms.
According
to the statistics of the Ministry of Finance, total insurance premiums
through the brokerage channel increased rapidly by 22 per cent last year.
During
the 2011-14 period, total insurance premiums through brokerage reached
VND21.165 trillion (US$979.8 million), or equivalent to 22.7 per cent of the
total non-life insurance premiums during the period, and contributed nearly
VND300 billion ($13.88 million) to the State budget.
Commissions
from insurance brokerage last year reached VND492 billion ($22.7 million),
rising by around 10 per cent.
A
representative of the department said that studies on the development of
insurance brokerage in foreign countries are being carried out to seek
measures that can be applicable to boost the development of this sector in
Viet Nam.
Currently,
there are major gaps between foreign insurance brokerage firms and domestic
firms in management capacity and market shares. Last year, five foreign
brokers dominated the market, holding a combined share of more than 92 per
cent.
In
addition, insurance premiums collected through brokerage remained modest,
just 12 per cent of the total premium of the insurance market, while the percentage
of Thailand and the US were 30 per cent and 85 per cent, respectively.
The
department revealed that a regulation to allow insurance brokerage firms to
offer consultancy services will be taken up for consideration in line with
international practices.
Meanwhile,
firms have urged the foundation of an association of insurance brokers to
enhance their operation capacity and standards.
BIDV
offers cheap health sector loans
Bank for
Investment and Development of Viet Nam (BIDV) has became the first join stock
commercial bank to offer a preferential credit programme worth VND20 trillion
(US$921.65 million) to the healthcare sector.
The
programme provides financial support to speed up the implementation of
targets set in the Government's Decision 93/NQ-CP on mechanisms and policies
for healthcare development.
Under
the programme, BIDV will offer preferential loans for the maximum term of
around 20 years to hospitals to upgrade facilities and purchase medical
equipment for easing patient overload and improve the quality of healthcare
services.
Interest
rates on the loans in the first two years will be 12-month deposit rates +
the band of 1 per cent, but the maximum interest rate must be 7.5 per cent,
lower than the preferential rate of 7.8 per cent that the Development Bank of
Viet Nam offers policy borrowers.
For the
next years, interest rates will be 12-month deposit rates + the band of 2 per
cent.
Both
central and local hospitals can borrow under the programme.
BIDV
chairman Tran Bac Ha said BIDV is not looking to profit from the credit
programme but only expecting to join hands with the Government to improve the
services and quality of the healthcare sector. The bank's current medium- and
long-term deposit rate is at 7 per cent, while the lending rate for both
terms is 11-12 per cent.
According
to Health Minister Nguyen Thi Kim Tien, Viet Nam's hospitals are overloaded,
especially those in large cities. Statistics reveal that in Viet Nam,
hospitals have only 23 beds per 10,000 people compared with 80 beds in South
Korea and 140 beds in Japan. The World Health Organisation's recommended
figure is 39 beds.
Tien
noted that the investment capital demand for the healthcare sector was very
large at roughly VND45.454 trillion ($2 billion) during the 2012-15 period; however,
the Government funds had met only 44 per cent of this demand. Therefore,
loans from commercial banks are very important to develop the sector's
infrastructure, she stressed.
Ceramic
maker starts food styling course
Binh
Duong-based ceramic manufacturer Minh Long 1 has signed a deal with the HCM
City Saigontourist Travel and Hotel Services School to train tourism students
in food styling.
Minh
Long 1 will provide cooking equipment and utensils and send chefs and
professional food stylists to the school to teach the students how to prepare
food for photographs used in magazines, cook books and others.
Speaking
at the signing ceremony, Tran Van Hung, principal of the school, said:
"I hope that with support from Minh Long 1 and the organisers of the Golden
Spoon Cooking Contest, the school will provide its students with necessary
knowledge and know-how for this creative culinary art."
The
course will start next school year.
Forum
focuses on Mekong tourism
Tourism
officials from countries in the Greater Mekong subregion have gathered in Da
Nang to discuss creating a common destination.
Viet
Nam, Laos, Cambodia, Myanmar, Thailand and China will work closely together
to make the region an attractive venue for visitors around the world.
Last
year, the region received 54 million visits, accounting for 20 per cent of
tourists in Asia and the Pacific region.
They
spent a total of US$61 billion, which was significant in overcoming poverty
and developing economics in the region, particularly through tourism, which
created jobs for millions of residents.
By 2020,
tourism in the region expects 70 million visitors a year to bring in US$90
billion.
To
achieve this goal, tourism sectors in the five countries and the Chinese
provinces of Yunan and Guangdong will work together.
According
to Le Khanh Hai, deputy minister of Culture, Sports and Tourism, Viet Nam
borders Laos, Cambodia and China, making it a convenient arrival place for visitors
to the region.
Speaking
at the Mekong Tourism Forum's symposium held in Da Nang yesterday, Hai
highlighted huge the potential for Viet Nam. During the forum's technical
meetings from June 15-17, about 600 participants from the region's tourist
authorities suggested several ways of making the region a common destination.
This
included a regional marketing programme and a master action plan for the
whole region.
Participants
also agreed to create a central tourism office to represent the entire
region.
Deputy
Minister Hai suggested fostering public-private partnership in tourism.
Chris
Bottrill from Canada-based Capilano University recommended the promotion of
responsible tourism among residents in the region.
He also
promoted community-based tourism to create sustainable humanity values.
Representatives
from social network Facebook and travel publications like TripAdvisor
encouraged promotion campaigns on mobile phones, smart phones, social network
and magazines.
Chinese
airline to launch more services to Vietnam
China
Southern Airlines on June 17 announced it would operate more flights between
Vietnam and China and connecting flights to other markets.
The
airline looks set to launch an air route linking Guangzhou and Nha Trang City
in the central province of Khanh Hoa this Saturday.
The
airline will operate three weekly flights on the route on Tuesdays, Thursdays
and Saturdays. Flights will depart from Guangzhou at 2:40 p.m. (local time)
and from Nha Trang at 4:40 p.m. (local time).
According
to Airports Corporation of Vietnam (ACV), three Vietnamese and four foreign
airlines fly to and from Cam Ranh Airport in Khanh Hoa Province.
In
addition to the Guangzhou-Nha Trang service, China Southern will operate
flights between Shenzhen and HCMC from July 26 with four flights per week on
every Monday, Wednesday, Friday and Sunday.
On
August 5, the airline will open the HCMC-Guangzhou-Nairobi (Kenya) air route
and operate three flights on this route every week.
Besides
the launch of new air routes, since the middle of this month China Southern
has conducted more flights on the HCMC-Guangzhou-Los Angeles,
HCMC-Guangzhou-New York and HCMC-Guangzhou-San Francisco routes to 11, 10 and
four flights per week respectively.
The
airline will also increase the number of daily flights between HCMC and
Guangzhou to four in late October.
A
representative of China Southern said the airline currently holds a 50%
market share of passenger transport between Vietnam and China.
IRRI
helps farmers better manage crops
The
International Rice Research Institute (IRRI) has developed the crop manager
software to help farmers in Vietnam and other regional countries better
manage crops and increase incomes by US$100 per hectare per crop.
The tool
accessible through the web browser was developed by IRRI in coordination with
the regional countries where the majority of people mainly live on
agriculture like Bangladesh, India, Indonesia, the Philippines and Vietnam.
The tool
available in English and Vietnamese will benefit Vietnamese farmers in the
Red River Delta and Mekong Delta regions.
The crop
manager tool is being run on the trial version on computers and smart phones
to support rice and corn farming.
Via the
software, farmers are instructed to use fertilizers and pesticides
effectively to raise the productivity of their crop at low costs. Therefore,
IRRI hopes farmers can earn an additional US$100 from every hectare of crop.
According
to the Department of Crop Production under the Ministry of Agriculture and
Rural Development, only farmers taking part in the large-scale rice fields
developed by enterprises make their farming records to better supervise the
farming process while a majority of farmers grow corn and rice based on their
experience.
With the
software, instead of using notebooks, farmers will get technical guidance
given by the tool after they have provided basic information.
A study
of An Giang Province’s agriculture promotion center indicated that farmers
can earn around VND8.5 million from a hectare of paddy after deducting farming
and harvesting costs.
IRRI has
plans to open a representative office in Vietnam. In the past years, Vietnam
has imported many short-day rice varieties with high yields imported from
IRRI for mass farming.
HDBank
selected for on-lending to major water project
The
Government has picked HCMC Development Bank (HDBank) to use over VND3
trillion (US$137.6 million) of an official development assistance (ODA) loan
from the Japan International Development Agency (JICA) to lend on to Nhon
Trach water supply project.
The bank
has been assigned to represent the Ministry of Finance to fund the second
phase of the project, according to Vietnamplus.
The
second phase needs over VND3.56 trillion, with 85% from JICA’s ODA capital.
This is an important project aimed to meet water demand in Dong Nai Province
and economic development in the province.
HDBank
is the first joint stock commercial bank the Ministry of Finance has picked
for ODA on-lending and sharing 20% of credit risk with the ministry. The
lender has assessed the investment efficiency of the project and conduct
procedures such as disbursement, collection of debt, interest and fee and
capital use supervision.
Tran
Hoai Nam, deputy general director of HDBank, said the bank has been mandated
for ODA on-lending and management via three forms. Either the Finance
Ministry or HDBank takes 100% risk responsibility or both sides will share
risk on an agreed ratio.
For the
project, HDBank is responsible for 20% of risk, helping ease pressure on the
nation’s public debt, Nam said.
Nghi
Son to become general industrial zone
The
Prime Minister has approved a plan to turn Nghi Son Economic Zone in Thanh
Hoa Province into a general industrial zone for enterprises active in various
sectors instead of certain industries.
Nghi Son
in the central province will develop based on its strong advantages including
deep-water seaports. In addition to petrochemical and shipbuilding, the zone
will be home to enterprises in other industries such as production of quality
steel products, engineering, energy, building materials, consumer products
and agro-aqua-forestry processing.
The
general industrial zone will help develop human resources and create a center
for high-quality human resource development in the region, according to the
Prime Minister’s decision on adjustments to Nghi Son Economic Zone.
The zone
will have a total area of 106,000 hectares, including 66,500 hectares of land
and islands in Tinh Gia District and more than 39,000 hectares of water
surface.
Thanh
Hoa Province is urged to improve its business environment and boost
infrastructure development to woo both foreign and domestic investors to the
zone until 2025.
After
2025, the province is expected to build strong linkages between manufacturing,
commercial, financial and tourism industries and providers of related
services to prop up socio-economic development.
HCM
City IPs to construct multi-storey workshop buildings
The
authorities of industrial parks (IP) and export processing zones (EPZ) in
HCMC will develop multi-storey workshop buildings to help small and
medium-sized enterprises (SMEs) save costs and make the most of their land.
Nguyen
Phuong Dong, vice director of the HCMC Department of Industry and Trade, told
representatives of business groups on Tuesday that the city government will
implement a pilot plan to construct multi-storey workshop facilities at Hiep
Phuoc and Dong Nam IPs, Tan Thuan and Linh Trung EPZs, and Saigon Hi-Tech
Park between now and 2018. These facilities will have three to eight stories
and workshops will be 100-3,000 square meters.
Dong
said such multi-storey workshop buildings would help HCMC make full use of
limited land and the operational IPs and EPZs attract manufacturers as part
of the city government’s strategy to woo more investors.
The city
government has plans to relocate manufacturing enterprises to IPs in order to
minimize the negative impact of their production on the environment and local
residents.
Currently,
as occupancy and rentals at the operational IPs are high and these IPs eye
large investors, SMEs find it difficult to lease space suitable to their
production scale and financial capability. Therefore, multi-storey workshop
facilities will be a good opportunity for SMEs to set up shop in IPs.
Dong
said the advantage of multi-storey workshop buildings is to enable IPs and
EPZs attract enterprises of the same sectors and support them to create and
join supply chains. The city government will provide financial support for
workshop construction to reduce rentals for small manufacturers.
According
to Saigon VRG Investment Holdings Corporation, the investor of Dong Nam IP in
Cu Chi District, multi-storey workshop facilities will help ease pressure on
initial capital for manufacturers when they implement new and expansion
projects as they do not have to invest in building workshops and wastewater
treatment systems.
At the
meeting, a representative of the HCMC Electrical Engineering Association said
more than 20 out of over 100 member enterprises need a total of 30 hectares
for production expansion and relocation of their factories to outlying
districts.
However,
some corporate representatives expressed concern that they would have to face
more challenges to recruitment of skilled employees and spend more on
transport costs for their employees if they relocated their factories to IPs
on the outskirts of the city.
Affordable
condos still beyond reach of low-income earners
The
local real estate market has seen clearer signs of recovery but low-income
people still find it hard to find and buy apartments.
Luxury
apartments priced at several billion dong each, villas and high-class homes
abound but condos costing between VND500 million and less than VND1 billion
(US$45,890) per unit are scarce.
Experts
said most finished budget and medium-class condos have been snapped up.
For
instance, Dat Xanh Group has almost sold out apartments at Sunview Town
project in HCMC’s Thu Duc District, which provides over 1,600 low-cost units.
Other projects such as Idico Tan Phu and Hung Ngan Garden distributed by
Hoang Anh Sai Gon Co. have also sold well.
Industry
insiders said the market now lack affordable apartments and just a few
low-cost condo projects have been launched in HCMC in recent times.
Saigon Thuong
Tin Real Estate Co. (Sacomreal) has offered for sale apartments in Carillon 2
project in Tan Phu District slated for completion in June 2016 but the
project has just over 200 units. Thu Duc Housing Co. has also introduced TDH
Phuoc Long project in District 9 with just 168 units.
Many
people, mostly workers, still meet obstacles to buying budget condos as
State-owned housing projects mainly serve civil servants.
The city
has seen a few private budget home projects including HQC Plaza developed by
Hoang Quan Co., some new projects of National Housing Organization Co.
(N.H.O), Thu Thiem Sky of Thu Thiem Investment Joint Stock Co. and Jamona
Apartment of Sacomreal.
The
high-class condo segment has been active since 2014 with many projects such
as Masteri Thao Dien, Vinhomes Central Park and Sala Thu Thiem launched,
offering nearly 20,000 units.
An Gia
Real Estate Co. and Hung Thinh Real Estate Trading Joint Stock Co. have
shifted to the high-class segment, developing condos priced over VND1 billion
each after gaining success in medium-class projects.
Nguyen
Trung Tin, vice chairman of An Gia Co., said property investors want to cash
in on potential high-income customers.
A leader
of a property firm said budget home projects bring low incomes and
enterprises have shunned cheap housing projects given few incentives from the
Government.
In fact,
businesses have had difficulty taking out loans from the VND30-trillion
package to develop budget home projects.
Nguyen
Van Duc, vice chairman of the HCMC Real Estate Association, said condos
priced under VND700 million each should account for 70% of the total number
of housing products given the current standards of living in Vietnam. The
Government should even encourage building of condos under this price level.
There has
been an imbalance between supply and demand on the real estate market. With
young population and low income per capita, the demand for low-cost
apartments is huge, Duc said.
A survey
of property service provider CBRE showed 40% of the 5,150 apartments at 17
projects launched in HCMC in the first quarter of this year were for
low-income people and condos of this segment accounted for nearly 30% of
around 5,000 apartments sold in Hanoi in the period.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 21 tháng 6, 2015
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