Vietnam’s hi-tech sector still in infancy: expert

Vietnam’s hi-tech industry is still in infancy, so there will be ample room for investment and development.

So Vietnam is in dire need of incentives and legal framework for venture capital funds for the industry, said Arthur Trueger, chairman of venture capital firm Berkeley International Capital Corp, in the 4th annual Technology Business Conference opened Wednesday in Ho Chi Minh City.

The country, therefore, has yet made a strong presence on the global hi-tech industry map despite its potentials.

But improvements are underway.

The country will set up 15 software parks and mobilize funding for training high-tech human resources, said Tran Duc Lai, Information and Communications Minister, told participants at the two-day event hosted by IDG Ventures Vietnam, DFJ VinaCapital, IBM and Strategic Alliance Vietnamese Ventures International.

Vietnam is considered a promising technology market. Last year the sector generated US$6.26 billion, accounting for 7 percent of Vietnam's GDP.

The number of internet users exceeds 22 million, a penetration rate of over 25 percent.

The digital content industry saw a dramatic growth rate of 50 percent with revenues topping $700 million. The software industry also achieved an impressive 40 percent growth rate and revenues of $880 million.

Related Articles

• ‘Western’ diseases spread to developing world: experts
• Competition deemed fair
• Vietnamese firms eager to invest in Cuba
• Businesses can do more with support: economist
• IFC: Vietnam needs to increase PPP to support economy

Garments continue topping list of exports

Posting an export turnover of 8 billion USD in the first nine months of
this year, garments continued taking the lead amongst export staples
since the beginning of 2009.

The export of garments
to the Republic of Korea saw the highest growth rate of 84 percent,
mainly thanks to a reduction in tariff in line with the ASEAN-RoK Free
Trade Agreement, while the export to the US , which accounts for 55
percent of the industry’s revenues, also grew by 20 percent.

In particular, garment exports to the European market have bounced
back in the past three months, at 7 percent, following a long period of
dropping.

Vice Chairman of the Vietnam Garments and
Apparel Association (Vitas) Le Van Dao said a number of domestic garment
companies have received orders for the first half of 2011, plus prices
have risen by 10-15 percent year-on-year.

A
representative of the Ho Chi Minh City-based Viet Hung Garment Joint
Stock Company said the business has recently signed contracts to export
1.2 million items to Japan in early 2011.

Vietnam ’s garment firms will also have the opportunity to boost
exports and investments to Laos and Cambodia as the European Union
(EU) has decided to grant references in terms of material origin to the
two nations.

With these advantages, Dao said the
industry is likely to reach the yearly target of 10.5 billion USD in
export turnover right in November.

To achieve
sustainable development, garment businesses have also paid due attention
to the domestic market by participating in programmes which are
designed to encourage local consumers to use Vietnamese goods and bring
Vietnamese goods to rural areas.

Many supermarkets
under the Vietnam Garment and Textile Group have embarked on plans to
expand foothold in the domestic market in an effort to record a retail
sale growth rate of between 17-20 percent in 2010./.

Related Articles

• Garment exports on target
• High rice price cuts exports
• RoK tops investor list in Vietnam
• Stone plateau listed as geopark
• Preparations for congress reviewed

Hai Phong needs to become modern industrial city

The northern port city of Hai Phong should make full use of its advantages, including its marine economy, agriculture, industry and human resources, to become a modern industrial and port service city by 2015.

Prime Minister Nguyen Tan Dung made the request at the Political Bureau’s working session with Hai Phong City’s Party Committee (HPC) in Hanoi on Wednesday to examine the city’s preparations for its Party congress.

The city should focus on developing seaport systems together with infrastructure, mechanics and supporting industries, port services and tourism, he said.

PM Dung asked the municipal leaders to drastically implement administrative reforms, creating favorable conditions for businesses to invest in these areas, in order to fulfill the city’s targets of reaching a GDP growth rate of 13-13.5 percent, per-capita income of over US$3,000 per year and reducing the poverty rate to 1 percent by 2015.

Hai Phong City should pay attention to environmental protection, especially solid waste treatment, speed up the shifting of labor structure by reducing the proportion of laborers in agriculture and raise the rate of households gaining access to clean water.

Regarding the building of the Party and political system, the Government leader suggested the HPC continue strongly implementing political and ideological work in the Party and among people as well as stepping up the implementation of the “Studying and following President Ho Chi Minh’s moral example” campaign.

The city needs to strengthen its apparatus in the political system and better anti-corruption work and personnel training, especially for female and young cadres, he noted.

On behalf of the Politburo, Prime Minister Nguyen Tan Dung praised the HPC’s efforts to build documents and orientations for personnel work in line with the Politburo’s Decree 37 and the Party Central Committee’s guidance.

He also spoke highly of the municipal Party Committee’s attempts during the 2006-2010 term to overcome difficulties and attain achievements in all aspects, especially a GDP growth rate of 11.15 percent and a reduction in the poverty rate to 3.8 percent.

However, he pointed out the city’s shortcomings that should be addressed in the next tenure, including unsustainable economic development, weak competitiveness and urban management and development.

Related Articles

• HCM City's central real estate becomes upmarket
• NA Chairman addresses G20 meeting
• IFC: Vietnam needs to increase PPP to support economy
• Writer receives ‘Love for Ha Noi' award
• Hanoi T&T win first V-League after scoreless draw

Vietnamese central bank to keep interest rate at 8 pct

Vietnam’s central bank said it will keep its benchmark interest rate unchanged for a ninth consecutive month in September as it strives to boost lending.

The so-called base rate will stay at 8 percent from Sept. 1, the State Bank of Vietnam said in a statement on its website Wednesday. The benchmark was raised from 7 percent on Dec. 1. The refinancing and discount rates will also be held at 8 percent and 6 percent respectively.

The government has been urging banks to cut credit costs to bolster the economy as it targets 25 percent lending growth and 6.5 percent economic expansion this year, even as inflation has held above 8 percent for most of 2010. The central bank allowed lenders to set their own rates for medium- to long-term loans in February, scrapping a cap linked to the benchmark.

“The base rate will stay at 8 percent until the end of the year,” Alan Pham, Ho Chi Minh City-based chief economist at VinaSecurities Joint-Stock Co., said before the announcement. Following the elimination of the cap, the base rate “is irrelevant and nobody cares what it is,” Pham said.

Commercial lending rates ranged from 12 percent to 15 percent in July, the central bank said in August. It previously said it will seek to further cut the costs over the rest of 2010 through measures including increased money supply. Credit growth reached 12.97 percent by July 31 from the end of last year.

Dong devaluation

The State Bank of Vietnam lowered the dong’s reference exchange rate by 2 percent last week, citing the need to narrow the trade deficit. The shortfall was $900 million this month from a revised $978 million in July, a report showed Tuesday. For the eight months through August, the gap was $8.16 billion.

The dong traded at 19,490 per dollar at 4:18 p.m., down from 19,099 before the devaluation was announced. The Ho Chi Minh City Stock Exchange’s VN Index slid 2.4 percent to 423.89, after entering a so-called bear market Tuesday following a drop of 21 percent since May 6.

“With the recent devaluation of 2 percent, inflation would likely pick up,” Pham said. “So banks have to keep up their lending rates or even raise them, to keep their real rates positive.”

Inflation cooled for a fifth month in August, climbing 8.18 percent from a year earlier compared with 8.19 percent in July, according to data released this week.

Vietnam’s gross domestic product expanded 6.4 percent in the second quarter, after advancing 5.8 percent in the first three months of the year. Prime Minister Nguyen Tan Dung said in June the economy may grow as much as 7 percent in 2010.

The Southeast Asian nation is preparing a “rapid and sustainable” development strategy for 2011 to 2020 that will lead to average GDP growth of 7 percent to 8 percent a year for the period, the prime minister said last week.

Related Articles

• Vietnamese central bank to keep interest rate at 8 pct
• Banks scramble for mid-level managers
• Martial artists set for karate tourney
• PM lauds police for keeping public order
• Social security must be guaranteed: PM

Vietnamese central bank to keep interest rate at 8 pct

Vietnam’s central bank said it will keep its benchmark interest rate unchanged for a ninth consecutive month in September as it strives to boost lending.

The so-called base rate will stay at 8 percent from Sept. 1, the State Bank of Vietnam said in a statement on its website Wednesday. The benchmark was raised from 7 percent on Dec. 1. The refinancing and discount rates will also be held at 8 percent and 6 percent respectively.

The government has been urging banks to cut credit costs to bolster the economy as it targets 25 percent lending growth and 6.5 percent economic expansion this year, even as inflation has held above 8 percent for most of 2010. The central bank allowed lenders to set their own rates for medium- to long-term loans in February, scrapping a cap linked to the benchmark.

“The base rate will stay at 8 percent until the end of the year,” Alan Pham, Ho Chi Minh City-based chief economist at VinaSecurities Joint-Stock Co., said before the announcement. Following the elimination of the cap, the base rate “is irrelevant and nobody cares what it is,” Pham said.

Commercial lending rates ranged from 12 percent to 15 percent in July, the central bank said in August. It previously said it will seek to further cut the costs over the rest of 2010 through measures including increased money supply. Credit growth reached 12.97 percent by July 31 from the end of last year.

Dong devaluation

The State Bank of Vietnam lowered the dong’s reference exchange rate by 2 percent last week, citing the need to narrow the trade deficit. The shortfall was $900 million this month from a revised $978 million in July, a report showed Tuesday. For the eight months through August, the gap was $8.16 billion.

The dong traded at 19,490 per dollar at 4:18 p.m., down from 19,099 before the devaluation was announced. The Ho Chi Minh City Stock Exchange’s VN Index slid 2.4 percent to 423.89, after entering a so-called bear market Tuesday following a drop of 21 percent since May 6.

“With the recent devaluation of 2 percent, inflation would likely pick up,” Pham said. “So banks have to keep up their lending rates or even raise them, to keep their real rates positive.”

Inflation cooled for a fifth month in August, climbing 8.18 percent from a year earlier compared with 8.19 percent in July, according to data released this week.

Vietnam’s gross domestic product expanded 6.4 percent in the second quarter, after advancing 5.8 percent in the first three months of the year. Prime Minister Nguyen Tan Dung said in June the economy may grow as much as 7 percent in 2010.

The Southeast Asian nation is preparing a “rapid and sustainable” development strategy for 2011 to 2020 that will lead to average GDP growth of 7 percent to 8 percent a year for the period, the prime minister said last week.

Related Articles

• Vietnamese central bank to keep interest rate at 8 pct
• Banks scramble for mid-level managers
• Martial artists set for karate tourney
• PM lauds police for keeping public order
• Social security must be guaranteed: PM

State Bank holds line on prime rate

The State Bank of Vietnam on Aug. 25 announced it would retain the
prime rate at 8 percent in September for the tenth straight month,
quelling market hopes that it might be lowered and borrowers enjoy a
more affordable stream of income from this source.

The unchanged rate is seen as a sign of stability.

The refinancing and interbank electronic payment interest rates will
also remain at 8 percent and the discount rate, at 6 percent.

The benchmark lending rate has been held steady since last November,
having been lowered by a percentage point back in early 2009 to spur
lending during the economic crisis.

Since the
central bank gave the go-ahead for a negotiable interest rate mechanism
in March, the prime rate has not had the direct impact on the market
lending interest rate that it used to. However, the benchmark interest
rate is seen as a way of signalling the monetary policy direction of the
central bank at any given period.

Lending rates at
commercial banks are now ranging from 12.5-15 percent per year for
Vietnamese dong loans but the SBV is trying to lower the rate to as
little as 12 per cent in order to help enterprises access more credit./.

Related Articles

• Vietnamese central bank to keep interest rate at 8 pct
• State Bank, VNA agree to cooperate in information
• Banks scramble for mid-level managers
• Martial artists set for karate tourney
• Vietnam, China to hold strategic defence talks