Vietnam reaffirms inflation control plan

Vietnam will continue to tighten control over consumer prices through the end of the year as the country aims to keep inflation at 8 percent.

At a press conference held on Thursday, Minister Nguyen Xuan Phuc said it will be necessary to keep an eye on milk and medicine prices in particular.

Phuc said the government believes it can keep inflation under its target maximum, but that does not mean there is no need to maintain vigilance.

Prime Minister Nguyen Tan Dung has ordered drastic measures to be taken to keep prices stable and ensure enough supplies of consumer goods, Phuc said.

Consumer prices in Vietnam climbed 8.92 percent in September compared to a year earlier, according to figures released last week by the General Statistics Office in Hanoi.

Meanwhile, the Asian Development Bank on Tuesday forecast that Vietnam’s inflation this year will reach 8.5 percent.

Vinashin’s restructuring

Talking to the press on Thursday, Phuc said state-owned shipbuilder Vinashin has raised US$75 million by selling five ships. The group planned to sell another 35 ships for a total of around $160 million by year's end.

He said the 70,000 jobs at Vinashin have been secured. He also said new blood will be brought into the company, including a new chairman.

Vietnamese police have arrested five former Vinashin officials amid a financial investigation in to the company, which teetered on the verge of bankruptcy this summer. Pham Thanh Binh, the company’s former chairman and chief executive officer, was arrested in August.

Deputy Transport Minister Nguyen Hong Truong announced that the government has lent $3 million from its bond proceeds to Vinashin so that the company could repay the remaining debt owed to France’s Natixis Bank.

The loan did not come from the $1 billion 10-year bond issued in January as reported by local media, he said.

Truong also said many Japanese and Taiwanese investors have expressed interest in buying Vinashin’s factories, but so far no official purchase offers have been made.

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US$900 million committed to Mekong Delta

Prime Minister Nguyen Tan Dung (2nd, L), Minister of Planning and Investment Vo Hong Phuc (2nd, R) and Victoria Kwakwa (R), country director of the World Bank (WB) for Vietnam, at the conference on Mekong Delta investment and development in Can Tho City on Monday - Photo: TTXVN

CAN THO – Foreign investors committed to pouring over US$900 million into the Mekong Delta while they were attending a conference on Mekong Delta investment and development in Can Tho City on Monday.

There were 10 memorandums of understanding and a letter of intent signed for 11 projects in a range of sectors such as infrastructure, energy, tourism, seafood processing, education, housing, industrial park, trade and services.  

Speaking at the conference, Prime Minister Nguyen Tan Dung said the conference provided an opportunity for investors and local authorities to learn about investment policies and find ways to cope with difficulties and improve connectivity in the region.

The conference was aimed at calling for domestic and international investors to get involved in projects in the Mekong Delta which is responsible for around 18% of Vietnam’s gross domestic product (GDP). The region also contributes 50% of the nation’s rice output, 52% of the seafood output, 70% of the fruit production, 90% of the rice export volume and 60% of the seafood export value.

However, foreign investment activity there remains lackluster in the 13-province region around 450 projects worth over US$7.7 billion licensed there so far.

Minister of Planning and Investment Vo Hong Phuc said insufficient infrastructure and manpower were major bottlenecks for investment in the delta. Although the region has Can Tho and My Thuan bridges connected to National Highway 1A, its national, interprovincial and regional road networks still have limited or no connectivity, Phuc said.

The Mekong Delta has a population of 18 million but over 85% of the work force remains untrained. Among the skilled workers, only 0.65% of them have obtained certificates, 1% vocational training diplomas and 2.57% college, university or post-graduate degrees.

Victoria Kwakwa, country director of the World Bank (WB) for Vietnam, said the WB would help the Mekong Delta attract human resources given its development potential. With WB support, the region will be able to attract more investment, she said.

In the 2006-2010 period, the delta has reached a GDP growth rate of between 10% and 12% a year. However, there remain many shortcomings in socioeconomic development in the region given slow economic restructuring, and inadequate scientific and technological applications.

The competitiveness of local businesses and products are poor and investment attraction is lower than in other parts of the country.

Ashok Sud, vice chairman of the Europe Chamber of Commerce in Vietnam, said the Mekong Delta provinces should establish specific plans for investment in key industries. He pinned high hopes on the region’s ability to make it more attractive to investors. 

The conference was co-held by the Ministry of Industry and Trade and the provincial authorities in the region, and attended by over 500 local and international delegates. This was part of the national investment promotion program.

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Vietnam suspends Vinashin board members amid probe

Vietnamese Deputy Prime Minister Nguyen Sinh Hung suspended two board members of Vietnam Shipbuilding Industry Group, a state-owned company that came close to bankruptcy this year, as part of an investigation.

Tran Quang Vu and Tran Van Liem were removed from the board, Nguyen Xuan Phuc, chairman of the Government Office, which oversees implementation of state plans, said in a statement posted on the government’s website late Monday.

The board is also considering the dismissal of Tran Quang Vu, chief executive officer, Tran Tuan Anh, Hanoi-based vice head of personnel at the shipbuilder, said by telephone today. The government statement said the prime minister had asked for Vu to stand down.

In July, Chairman Pham Thanh Binh was suspended from his post at Vinashin, as the company is known, as the government began an investigation into financial difficulties at the state-controlled company, which almost collapsed under VND86 trillion ($4.4 billion) of debts.

Prime Minister Nguyen Tan Dung decided on the probe to review Binh’s “responsibilities and to investigate and clarify faults,” according to a statement on the government’s website on July 14. Deputy Minister of Transport Nguyen Hong Truong was appointed as the replacement chairman.

Vinashin doesn’t have enough funds for some projects after its customers and lenders were hit by the global recession that started in 2008, the Ministry of Transportation said July 1.

The company also over-diversified its businesses and didn’t manage its cash flow and debt properly, according to the transport ministry statement.

Nguyen Quoc Anh will be appointed acting chief executive officer of Vietnam Shipbuilding Industry Group Wednesday, he told Bloomberg News by telephone Tuesday. Anh is currently the state- owned company’s business manager.

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