VietNam Business: Asian Development

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Wednesday, February 23, 2011

US$40 million more for SME supporting reforms

HCMC – The Asian Development Bank (ADB) is supplementing a US$40 million loan to an earlier reform program helping to untangle a knot of red tape for doing business simpler and quicker for small and medium-sized enterprises (SMEs).

ADB’s board of directors on Monday approved the loan for the first phase of the Second Small and Medium-Sized Enterprises Development Program, the bank said in a statement.

The supplementation follows an earlier ADB loan for an initial reform program helping to slash the time needed to register a business, and support a sharp rise in new enterprises and private sector jobs. SMEs make up a large majority of all registered enterprises in Vietnam and most new jobs in the last decade were generated by the sector.

“The priority for the Government of Vietnam is to sustain high economic growth to create productive jobs for around 1.7 million new workers each year, and growing SMEs is an essential part of its development strategy,” Edimon Ginting, senior economist in ADB’s Southeast Asia Department, said in the statement.

Despite the strong progress over the past four years, difficulties in businesses’ accessing medium-term capital as well as some ongoing regulatory issues have slowed down the registration of new SMEs and the expansion of existing ones. Meanwhile, economic overheating and the global financial crisis have created further challenges for local enterprises.

The release of funds for the latest program follows the achievement of key reform milestones by the government. These include steps to develop a comprehensive policy to address constraints to trade and competition, as well as measures to simplify and streamline business procedures, the introduction of a pilot e-customs program in 10 provinces, and the introduction of a web-based national business registration system. The Government has introduced a nationwide credit guarantee system to support commercial banks lending to SMEs.

The latest loan from ADB’s concessional Asian Development Fund has a 24-year term including a grace period of 8 years, with an annual interest charge of 1%, rising to 1.5% for the balance of the term.

A second phase of the program will provide support to continue reforms to improve business competitiveness, and access to finance for SMEs.

The Ministry of Planning and Investment is the executing agency for the full program with the target completion date yet to be finalized.

Thursday, December 23, 2010

ADB supports SOE reform in Vietnam

ADB supports SOE reform in Vietnam The government and the Asian Development Bank on Monday signed a US$630 million financing facility to help accelerate reforms of state-owned enterprises (SOEs) in the country.

The multi-tranche facility aims to improve the efficiency of SOEs and enhance corporate governance to spur Vietnam’s economic growth, the Manila-based bank said in a statement.

ADB said it will provide $600 million from its ordinary capital resources to strengthen the balance sheets of selected SOEs through debt restructuring.

Another $30 million from the Asian Development Fund will be used to support improvements in their operations and corporate governance, as well as their and related institutions’ institutional capacity.

The Ministry of Finance will be the executing agency for the program, and the facility is to be utilized by December 2015, the bank said.

Under the financing facility, training and other assistance will also be provided to government institutions involved in the SOE reform process.

The transformation of SOEs in Vietnam started in 1992, but ADB said the process “has been slow and confined mainly to smaller enterprises.”

“ADB assistance will support some SOEs to become more efficient, profitable and transparent with better corporate governance,” the bank said in its statement.

“Enhancing corporate governance of SOEs is a key for Vietnam to enhance the efficiency of its economy and to achieve higher economic growth through reducing inefficient state production and promoting private sector development,” said ADB Country Director, Ayumi Konishi.

ADB provides US$630 million for SOE reform

HCMC - The Asian Development Bank (ADB) and the Vietnamese Government have signed a US$630 million multi-tranche financing facility to support the nation’s efforts to accelerate reforms of state-owned enterprises (SOEs).

The transformation of SOEs started in 1992, aiming at increasing their efficiency and reducing the role of the state in their management. However, the process has been slow and confined mainly to smaller enterprises.

Nguyen Quang A, a local economist, shared the same view at last week’s workshop held by the National Assembly Economic Committee, saying SOE reform had been moving at a snail’s pace since 2006.

As the Government is planning to equitize and transform large general state corporations to unlock their subsidiary companies’ potential, ADB assistance will support some SOEs to become more efficient, profitable and transparent with better corporate governance.

“Enhancing corporate governance at SOEs is key for Vietnam to enhance the efficiency of its economy and achieve higher economic growth through reducing inefficient state production and promoting private sector development,” said ADB country director for Vietnam Ayumi Konishi.

“With this facility, we hope to help restructure several general corporations to become subgroups of companies that can operate independently, secure financial resources from the capital markets on their own without relying on the Government, and meet all the conditions for eventual listing.”

With ADB financial support, training and other assistance will also be provided to government institutions involved in the SOE reform process, such as the Debt and Asset Trading Corporation.

The first tranche of US$130 million will also support the transformation of the Song Da group of companies, which are involved in several different business segments related to infrastructure, and the Southern Waterborne Transport Corporation providing logistics services.

ADB will provide US$600 million from its ordinary capital resources to strengthen the balance sheets of selected corporations through debt restructuring, and US$30 million from its highly concessional Asian Development Fund to support improvements in their operations and corporate governance, as well as their and related institutions’ institutional capacity.

The financing facility, signed by State Bank of Vietnam Governor Nguyen Van Giau ADB country director Ayumi Konishi, will be utilized by December 2015.

ADB provides US$630 million for SOE reform

Nguyen Quang A, a local economist, shared the same view at last week’s workshop held by the National Assembly Economic Committee, saying SOE reform had been moving at a snail’s pace since 2006.

With ADB financial support, training and other assistance will also be provided to government institutions involved in the SOE reform process, such as the Debt and Asset Trading Corporation.

The financing facility, signed by State Bank of Vietnam Governor Nguyen Van Giau ADB country director Ayumi Konishi, will be utilized by December 2015.

Wednesday, December 22, 2010

ADB raises forecast on Vietnam’s economy

Ayumi Konishi, ADB country director for Vietnam, gestures while speaking to the press at the launch of the Asian Development Outlook 2010 Update (ADO Update) in Hanoi on Tuesday - Photo: TTXVN

HCMC – The Asian Development Bank raised its growth forecast for Vietnam’s economy in the Asian Development Outlook 2010 Update (ADO Update) launched on Tuesday.

The report says Vietnam’s economic growth is expected to reach 6.7% this year, slightly higher than ADB’s earlier forecast, and for 2011 from 6.8% to 7.0% while lowering the inflation projection in 2010 to 8.5% and 2011 to 7.5%, respectively.

“Since the last press conference on Asian Development Outlook 2010 in April this year, Vietnam has consolidated its macroeconomic stability, and as a result we are making upward adjustments in our growth forecast for both 2010 and 2011, while lowering the projections for inflation,” Ayumi Konishi, ADB country director for Vietnam, said in a statement.

The report notes the steps taken by the Government to stabilize economy have contributed to an improvement in the external and foreign reserves positions. With an improvement in the capital account, the overall balance of payments likely turned to a small surplus in the second quarter 2010 after recording deficits since the start of last year.

Economic growth quickened in the second quarter. Especially the two laws approved by the National Assembly in June 2010 – a new Law on the State Bank of Vietnam (SBV) and a Credit Institutions Law – together with various legal documents issued by SBV and other agencies, mark important progress in strengthening the framework for monetary policy implementation and safeguarding banking system stability.

Vietnam, however, needs to be cautious in maintaining macroeconomic stability and effectively communicating such a policy stance to the public while accelerating reforms to prepare for the next ten-year period as a new Middle Income Country, according to the report.

“Vietnam should continue its efforts to ensure a better understanding of its policy stance by the public at large, supported by greater and timely availability of information and statistics. This applies not only to the Government but also to the corporate sector,” Konishi said.

“In order to promote better corporate governance of both public and private enterprises, quality and timeliness of information to be made available to the owners or shareholders and potential future investors will be the key.”

ADB raises forecast on Vietnam’s economy

Ayumi Konishi, ADB country director for Vietnam, gestures while speaking to the press at the launch of the Asian Development Outlook 2010 Update (ADO Update) in Hanoi on Tuesday - Photo: TTXVN

HCMC – The Asian Development Bank raised its growth forecast for Vietnam’s economy in the Asian Development Outlook 2010 Update (ADO Update) launched on Tuesday.

Monday, December 20, 2010

ADB ups stable Vietnam’s economic outlook

The Asian Development Bank has raised Vietnam’s GDP growth forecast for this year and next year by 0.2 percent to 6.7 percent and 7 percent due to the country’s efforts to maintain economic stability.

Vietnam has successfully shifted from the strong fiscal and monetary stimulus to tackle the global recession last year to a more balanced policy to stabilize financial and economic conditions, it says in its annual flagship publication, the Asian Development Outlook Update, which was released in Hanoi Tuesday.

The steps taken by the government to stabilize the economy have contributed to an improvement in the economic growth: GDP grew by 6.2 percent in the first half of this year compared to 3.9 percent in the same period last year.

Policy tightening and a good rice harvest have helped pull back inflation from 9.5 percent year on year in March to 8.2 percent in July and August.

The trade deficit has narrowed from $8.1 billion in July-December 2009 to an estimated $3.8 billion in the first half and the current account deficit from $8 billion to $2.7 billion.

The current account deficit, as a ratio to GDP, is forecast to narrow from 7.5 percent in 2010 to 5.4 percent in 2011 due to the shrinking trade deficit and increasing remittances and tourist arrivals.

The balance of payments situation has been improving due to higher foreign direct investment.

The bank is optimistic about the inflation situation since the country’s economy and world oil and commodities prices have been stable. It has cut down its earlier estimation of 10 percent inflation this year to 8.5 percent and from 8 percent to 7.5 percent next year.

However, it foresees a risk to the economy if there is a premature easing of monetary or fiscal policies or a perception of looser policy by financial markets and domestic investors.

“An early easing, or the perception of a relaxation, could derail the macroeconomic stabilization efforts, putting inflation on an upward trajectory and pressure on external accounts.”

So the authorities should maintain a firm and consistent policy stance, and communicate such a position effectively to the market until inflation is clearly on a downward track and foreign reserves increase, the bank warns. The other major challenge is to raise the efficiency of the economy and reduce supply-side constraints through structural reforms.

Ayumi Konishi, ADB’s country managing director for Vietnam, said at the release that the government should be very cautious about maintaining macroeconomic stability and effectively inform the people about the policies while promoting further reform.

The most important factor is providing quality and up-to-date information to businesses and potential investors, he added.

Last year, it ratified a total credit of $16.1 billion for the country’s loans, non-refundable and technical assistance projects.

The Asian Development Outlook and other ADB reports analyze the economic conditions and prospects in Asia and the Pacific and are issued every April and September.

Vietnam will host the ADB’s 44th annual summit in Hanoi next May.

Sunday, December 19, 2010

A brighter economic future

Goods are exported from HCM City's Cat Lai Port. Viet Nam's economic growth was expected to reach 6.7 per cent in 2010 thanks to Government steps to stablise the economy. — VNA/VNS Photo Kim Phuong

HA NOI — Viet Nam should maintain macroeconomic stability in response to its new status as a middle income country, the Asian Development Bank said yesterday as it boosted the nation's 2010 growth forecast.

Viet Nam's economy was expected to grow 6.7 per cent in 2010, up from the bank's 6.5 per cent forecast earlier this year, following the Government's steps to stabilise the economy, the Manila-based bank said in its twice-yearly economic forecast.

The country's expected growth boost was in accordance with the expansion of Asian economies by 8.2 per cent, up from the previously estimated 7.5 per cent, as the region "recovered from the global (financial) crisis with remarkable speed and vigour", according to the report.

The bank also increased Viet Nam's growth forecast for next year from 6.8 per cent to 7 per cent. Inflation was projected to average 8.5 per cent this year, easing to 7.5 per cent next year on the assumptions that domestic macroeconomic stability is maintained and that global oil and commodity prices remain relatively steady next year.

Viet Nam, along with Thailand and Malaysia, would see an upswing in their exports, said the bank, which predicted Southeast Asian economies to grow 7.5 per cent in 2010, up from an earlier 5.1 per cent estimate.

Since the last forecast in April this year, "Viet Nam has consolidated its macroeconomic stability," the ADB Country Director for Viet Nam, Ayumi Koshini, told a press briefing in Ha Noi yesterday. "As a result, we are making upward adjustments in our growth forecast for both 2010 and 2011."

The steps taken by the Government to stabilise the economy had contributed to improvement in the external and foreign reserves positions, the Asian Development Outlook Update noted. With improvement in the capital account, the overall balance of payments would likely turn to a small surplus in the second quarter of 2010 after recording deficits since the start of last year. The bank predicted quick economic growth in the second quarter.

Viet Nam was recently upgraded to a Middle Income Country as the GDP per capita reached US$1,024. In order to prepare for the next ten year period as a new Middle Income Country, Viet Nam needed to be cautious about maintaining macroeconomic stability and effectively communicating relevant policies to the public while accelerating reforms, the bank said in its report.

The country is preparing a new 10-year Strategy and a new five-year Socio-Economic Development Plan as a new ‘middle income country'.

"It will be critical for Viet Nam to keep an eye on the global economic scene," said Koshini who warned that the transformation of China from the ‘factory of the world' to the ‘largest consumer market in the world' would certainly change the regional economic map, together with the establishment of the ASEAN Economic Community by 2015.

The bank advised the Government to continue its efforts to ensure a better public understanding of its policy stance, supported by greater and timely availability of information and statistics which should be applied not only to the Government but also to the corporate sector.

The ADB report noted that the two laws approved by the National Assembly in June 2010 – the laws on the State Bank of Viet Nam and on Credit Institutions – together with various legal documents issued by the State Bank of Viet Nam (SBV) and other agencies, marked important progress in strengthening the framework for monetary policy implementation and safeguarding the stability of the banking system.

The Asian Development Outlook and its Update are ADB's primary economic reports analysing the economic conditions and prospects in Asia and the Pacific. They are issued in April and September, respectively. — VNS

Thursday, December 16, 2010

ADB raises VN’s economic forecast to 6.7 pct

The Asian Development Bank (ADB) increased Vietnam ’s economic growth
forecast for 2010 from 6.5 percent to 6.7 percent while lowering the
inflation projection to 8.5 percent.

In its Asian Development Outlook 2010 Update (ADO Update) released in
Hanoi on Sept. 28, ADB also revised upward Vietnam’s GDP growth to 7
percent in 2011 from its April forecast of 6.8 percent.

“ Vietnam has consolidated its macroeconomic stability, and as a
result we are making upward adjustments in our growth forecast for both
2010 and 2011, while lowering the projections for inflation,” said Ayumi
Konishi, ADB Country Director for Vietnam .

According to ADB Senior Expert Lei Lei Song, Vietnam is performing well in the context of the global crisis.

“The shift from strong fiscal and monetary stimulus implemented during
the global recession to a more balanced policy stance helped to
stabilise financial and economic conditions and, together with the
global economic recovery, paved the way for solid economic growth this
year,” he said.

According to the General Statistics
Office, Vietnam ’s GDP growth rate reached 6.5 percent in the first
nine months of 2010.

Vietnam ’s neighbouring
economies, such as China , continue their robust growth next year,
which will help Vietnam ’s economy grow, Song added.

China ’s robust growth will demand more Vietnamese exports,
contributing to the Southeast Asian country’s growth, he said.

Vietnam ’s exports to China will continue to surge in the future, according to the senior expert.

Director
Konishi said as Vietnam is a low-middle-income country in the next
ten years, the country will have to face different challenges, including
how to raise the efficiency of the economy.

One of
the issues Vietnam should focus on in its economic development
strategy for the next 10 years is to identify its role in the ASEAN
bloc, he said, suggesting the country produce higher value products in
its efforts to speed up national industrialisation and modernisation.

He also recommended that Vietnam pay attention to taking measures
to narrow income gap in its development plan and attach environment
protection to development.

According to Yumiko Tamura, ADB
Principle Country Specialist, who is also Country Deputy Country
Director, developing Asia countries, including Vietnam , are
recovering with speed and vigour.

ADB forecast that these countries will see average growths of 8.2 percent in 2010 and 7.3 percent in 2011./.

Thursday, October 21, 2010

ADB provides US$170 million aid for Vietnam

HCMC - The Asian Development Bank (ADB) on Tuesday signed two loan agreements totaling US$160 million and an US$11 million grant agreement to help Vietnam raise the quality of healthcare services, improve human resource capacity and upgrade irrigation infrastructure, said the ADB office in Vietnam.

A US$60 million Asian Development Fund loan from the ADB and an US$11 million grant from the Government of Australia will finance the Health Human Resources Sector Development Program.

The program will support health system reforms that address key constraints that underpin health service delivery, especially the management of human and financial resources.

In detail, it will establish systems for the licensing and registration of all health personnel as well as health institutions, upgrading of training facilities, training of ethnic minority health workers, and facilitate the adoption of standard treatment and costing packages for health services provided to locals.

The Ministry of Health is the executing agency for the program, which is expected to be completed by end-December 2015.

“Vietnam needs to accelerate, and step up socially inclusive policy reforms to address inequalities and improve delivery of social services such as healthcare, as improvements in health status especially of the poor and ethnic minorities are critical to achieving the country’s development goals of inclusive development,” said the bank’s Country Director for Vietnam, Ayumi Konishi, in a statement.

Another US$100 million loan was for the Strengthening Water Management and Irrigation Systems Rehabilitation Project. The project will rehabilitate the 50-year old Bac Hung Hai irrigation and drainage system, and construct a new campus for the Water Resources University.

The French aid agency AFD is co-financing the project with a loan of 20 million euros, while Vietnam will provide counterpart financing of US$51 million for the project. The Ministry of Agriculture and Rural Development is the executing agency for the project, which is expected to be completed by June 2016.

“The two key characteristics of these projects are the emphasis to develop human capacity to effectively utilize the improved infrastructure and the systems, and the collaboration with our development partners. As Vietnam will host the ADB’s 44th Annual Meeting next year in 2011, we focus more on capacity building and look forward to continue working closely with concerned agencies and various development partners,” said Konishi.

VietNam Business

Wednesday, February 23, 2011

US$40 million more for SME supporting reforms

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Thursday, December 23, 2010

ADB supports SOE reform in Vietnam

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ADB provides US$630 million for SOE reform

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Wednesday, December 22, 2010

ADB raises forecast on Vietnam’s economy

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Monday, December 20, 2010

ADB ups stable Vietnam’s economic outlook

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Sunday, December 19, 2010

A brighter economic future

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Thursday, December 16, 2010

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Thursday, October 21, 2010

ADB provides US$170 million aid for Vietnam

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