Air Mekong starts maiden commercial flights

Passengers disembark from the Air Mekong’s plane as it lands on Phu Quoc Island last Friday - Photo: Dinh Dung

HCMC – Vietnam’s Air Mekong officially launched its maiden domestic commercial flights last Friday, taking its first step into the local airline market after two years of preparation.

The country’s third private carrier marked its presence in the market with eight domestic routes, including Hanoi – Phu Quoc, HCMC – Phu Quoc, and Hanoi – HCMC. There are also routes from Hanoi to Danang, Nha Trang, Dalat, and routes from HCMC to Danang, Nha Trang, Dalat, Con Dao, Buon Ma Thuot, Haiphong and Vinh.

The airline, which uses a red-headed crane symbol as its logo, uses four three-year-old Bombardier CRJ-900s, chartered from the U.S.-based Sky West Leasing Inc. to provide 26 daily domestic flights.

These planes are configured with 10 deluxe-class and 80 economy-class seats. Doan Quoc Viet, board chairman of Air Mekong, said at a ceremony to receive the Aircraft Operator Certificate (AOC) held in Phu Quoc Island last week that the carrier’s strategy was to expand its network to different destinations in the country.

An AOC is required for any air carrier to operation commercial flights. Viet explained the reason to have chosen Bombardier CRJ-900s for starting up business, saying that the jet-engine airplanes could land on almost all runways in the country thanks to their small size.

He said Air Mekong’s strategy was not to compete for market share by cutting fares, but rather by improving the quality of service. It operates as a traditional airline, concentrating on the segment of economy-class passengers.

The start-up carrier is upbeat about the maiden flights’ seat occupancy as the number of tickets booked for the first flights has gone beyond its expectation of 1,000 tickets launched in a promotion program, according to the chairman.

The airline offers a VND400,000 fare for a single trip from HCMC to Con Dao, Phu Quoc, Pleiku and Buon Ma Thuot, VND800,000 for a trip from Hanoi to HCMC, Dalat, Pleiku, and Buon Ma Thuot, and VND1.2 million for a journey from the capital city of Hanoi to Phu Quoc Island.

Viet said Air Mekong planned to increase its daily frequencies to 34 flights on 10 air routes next month, a time when demand for air travel begins to pick up within Vietnam. He also revealed the carrier’s expansion plan, saying that Air Mekong targeted to increase its fleet to 10 airplanes next year, and would offer international flights to some neighboring countries in the next two years.

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VN starts FTA talks with Customs Union members

The Free Trade Agreement (FTA) between Vietnam and the Customs Union
of Russia, Belarus and Kazakhstan will bring economic, trade,
service and investment benefits to all parties.

The
head of the European Market Department under the Ministry of Industry
and Trade, Dang Hoang Hai, made this claim to reporters on the sidelines
of the first session of the FTA research group in Hanoi on Oct. 11.

The meeting was an important start to allow the
parties to implement the next steps for the signing of the agreement, he
said.

He added that the FTA between Vietnam and the
Customs Union of Russia, Belarus and Kazakhstan would open up
prospects for a large free trade area and tighten the traditional and
strategic relations between them.

In his opinion,
Russia was interested in FTA with Vietnam as the Southeast Asian
country may develop a strategic position that helps Russia restore its
presence in Asia, particularly in the Southeast Asia region.

The
FTA enables Vietnam to boost its agricultural, seafood and garment
products to Russia , and Russia to export fertiliser, oil and gas,
atomic energy, heavy industry and cars to Vietnam .

“We
hope the FTA will help improve Vietnam-Russia trade ties,” Hai said,
adding that two-way trade between the two countries is expected to reach
3 billion USD in 2011 and 10 billion USD in the near future.

In order to boost strategic relations between the two countries, as
well as between Vietnam and the Customs Union of Russia, Belarus and
Kazakhstan , leaders of Vietnam and Russia agreed to sign an
FTA.

Following the roadmap, negotiations will cover three main issues of tariffs, service, plus investment and intellectual property./.

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Rice exports up in both quantity and value

The Vietnam Food Association (VFA) expects a boost in earnings from rice exports as world demand and prices surge.

VFA President Truong Thanh Phong said rice exporters have so far this
year earned 2.56 billion USD from exporting over 5.5 million tonnes of
rice, representing an increase of over 14 percent in value and almost 12
percent in quantity over the previous year.

Vietnam
is among a few major rice exporters to enjoy such a rosy situation,
with Thailand , India and Pakistan suffering a decrease in rice
exports.

Abnormal climatic conditions caused bad
harvests in many countries. Indonesia , for example, had to drop its
plan to export rice and was forced to import food instead due to bad
harvests. In September alone, the Islamic country imported 300,000
tonnes of rice from Vietnam and 200,000 tonnes from Thailand .

Rice reserves in Africa are depleting, pushing the continent towards
importing rice. Poor harvests in many republics of the former Soviet
Union have inflated world wheat prices and shifted some demand from
wheat to rice, causing more pressure on world rice prices, said
economists.

FOB prices for Vietnamese rice averaged
422.67 USD per tonne in the first nine months of the year, up by 16.43
USD year on year

Rice exporters have signed contracts
of 6.8 million tonnes against 6.5-6.6 million tonnes previously planned
for the whole year.

Enterprises are expected to sign
contracts for the export of an additional 3 million tonnes of rice and
ship another 2 million tonnes in the fourth quarter of the year.

As a result, Vietnam is likely to export between 7.2 and 7.5
million tonnes of rice this year, breaking its record of 6 million
tonnes in 2009./.

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Laos opens first stock exchange

The first securities exchange in Laos, a joint-venture between Laos
and the Republic of Korea (RoK), opened for business on October 10
in the capital, Vientiane.

On addressing the
opening ceremony, Laos Deputy Prime Minister and Chairman of the
Securities Commission Somsavat Lengsavad highlighted the importance of a
securities market when raising capital for the country’s socio-economic
development.

The Laotian government is about to
launch its seventh five year socio-economic development plan for the
period 2011-2015. The main objectives of the plan are to eradicate
poverty, reach the UN’s Millennium Development Goals (MDGs) and create
the best possible conditions to take Laos of the list of the world’s
under developed countries by 2020 and lay the foundations for the
country’s industrialisation and modernisation, said Somsavad.

He added that it was essential for Laos to raise significant
funding and professionally qualified human resources to boost its
integration into the world international arena./.

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UK keen to be key in public-private partnership

An UK diplomat has expressed interest in his country working as
Vietnam ’s key partner in the Public Private Partnership (PPP) sector as
there is now a great emphasis on PPP from both Government and the
public sector in Vietnam.

Kate Harrison, Deputy
Head of Mission , British Embassy, said at a workshop in Hanoi on
October 11 that the UK could share its experience with Vietnam at a
time when the latter is looking at new ways of finding finance for
crucial infrastructure projects.

“PPP has been a
cornerstone of the modernisation of public service delivery in the UK
with more than 900 projects, involving private finance of around 100
billion USD approved in the UK in the last 12 years”, the British
diplomat said as an illustration of UK experience in this field.

Vice Minister of Planning and Investment Dang Huy Dong shared his
view, emphasising that the PPP would certainly bring great benefits for
infrastructure development in Vietnam .

He said the
legal framework of the PPP model had been submitted to the Prime
Minister for approval and a number of pilot projects in infrastructure
development were underway.

British businesses’
executives shared experiences in making the legal framework of the PPP
model, plus how to establish infrastructure PPP projects in an emerging
market, how to avoid disputes and how to enhance transport development
through PPP.

Prince Andrew, The Duke of York and the
UK Special Representative for International Trade and Investment,
appreciated bilateral relations between the UK and Vietnam .

“Two key areas of this relationship cover trade and development: both
are essential elements for a country’s wellbeing; and as part of that
relationship we see the concept of PPP as being a key ingredient to
deliver the necessary infrastructure which will bring increased trade
and investment”, said the Duke of York./.

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Yearly seafood exports to earn 4.8 bln USD

Vietnam is expected to earn more than 4.8 billion USD from the export
of 1.3 million tonnes of aquatic products this year, according to the
Ministry of Agriculture and Rural Development.

Of which, tra fish brought in over 1.3 billion USD from 630,000 tonnes.

The
Ministry attributed the positive signals in Vietnamese seafood exports
to the economic recovery of several countries, especially developed
economies, which has slightly upped the sales of seafood globally.
According to the United Nations Food and Agriculture Organistion (FAO),
the volume of seafood on the world market in 2010 is estimated at around
52.8 million tonnes, in comparison with 52.5 million tonnes in 2009.

However, Vietnam ’s seafood export processing businesses face a lack of seafood products for processing.

To
increase supplies, Vietnam has targeted an output of between 6.5-7
million tonnes of aquatic products, 65–70 percent of them aquaculture,
as set in the country’s aquatic development strategy till 2020.

In
the first nine months of this year, the country earned 3.5 billion USD
from aquatic exports. Japan remains Vietnam ’s largest consumption
market. It is closely followed by the United States , the Republic of
Korea , Germany , Spain and China .

In addition to its
major and traditional markets, Vietnamese seafood is now also widely
available in many Latin American countries./.

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Asia braces for currency wars but options limited

Photo: AFP

SINGAPORE - Emerging Asia is braced for collateral damage in case of an all-out currency war between the world's most powerful economies, but regional governments have limited options, economists said.

The subject dominated annual International Monetary Fund talks in Washington at the weekend, but there was no consensus as the US and China wage an acrimonious dispute over Beijing's currency policies.

"I strongly hope that this will not escalate into an all-out war," said Cyn Young Park, a senior economist at the Asian Development Bank (ADB), voicing fears any conflict could derail the world's fragile recovery from recession.

"We are now at the stage where many countries have to maintain the recovery momentum and it is really counterproductive that we slip into protectionism, whether it is trade or financial," she told AFP.

Battered by the financial turmoil that began in 2008, the US, Japan and Europe are moving to weaken or cap their currencies in a bid to make their exports more competitive in the global market.

The war drums grew louder as the US, facing midterm elections next month, mounted a high-profile campaign to pressure China to allow the yuan currency to rise more rapidly against the dollar to correct trade imbalances.

As China dug in, Japan intervened in the market for the first time in six years to stem a sharp rise in the yen.

Emerging Asian economies are caught in the cross-fire. With Beijing keeping a tight rein on its exchange rate, their currencies have risen faster against the dollar than has the Chinese yuan, making their exports less competitive.

The US and Britain have also injected more money into their banking systems to stimulate growth.

But with growth in the US, Japan and Europe anemic, a large chunk of the money is heading to emerging markets, including in Asia, where it stands to gain better yields, said David Carbon, an economist with Singapore's DBS Bank.

According to the Washington-based Institute of International Finance, net private capital flows to emerging economies are projected to reach US$825 billion this year, or over $2 billion a day, up from $581 billion in 2009.

The massive inflow has been a key factor pushing Asian currencies higher. It has also led to steep gains in stocks and property prices, stoking fears of "bubbles" which could later burst if the money exits as fast as it has come in.

Pressure is now on Asian policymakers to limit the rise in their currencies and yet at the same time manage the effects of growing inflation, as well as the rising asset prices.

DBS Bank said that since January, Asian currencies have gained by 6.0 percent on average against the dollar, with the Malaysian ringgit and the Thai baht up the most at 9.0 percent.

Comparatively, the yuan appreciated by only 2.0 percent.

While market intervention remains an option, many central banks are preferring to keep their powder dry because of inflationary risks.

The Malaysian ringgit has been trading at a 13-year high against the dollar, but the central bank has said the strength in the currency reflects Malaysia's robust 9.5 percent economic growth rate in the first half of the year.

Bank Negara, the Malaysian central bank, said it would only intervene if there were any sudden or excessive movements.

A decision to intervene is not simple for the Reserve Bank of India, despite the rupee reaching over a two-year high against the dollar, as a strong currency is helping the central bank battle rising inflation, officials said.

South Korea is one country that is said by traders to have intervened repeatedly in the currency markets to put the brakes on the won's rapid ascent.

Thailand's central bank declined to say whether it intervened in the market after the baht hit a 13-year high against the dollar last week but dealers suspected it might have bought dollars.

In the Philippines, officials have expressed concern over the rise of the peso, but also admitted that the government had limited resources to help exporters deal with the problem.

"Policymakers in smaller Asian countries have to accept that they are powerless in the face of policy decisions made by the G3 (US, Europe and Japan) and China," said Manu Bhaskaran, head of economic research at consultancy Centennial Group Inc.

Their options include imposing capital controls and introducing measures restricting foreign investors' access to some assets, he said, citing Singapore's recent measures to cool down its property market.

But that risks setting off a round of beggar-thy-neighbor policies that jeopardizes the global recovery, analysts say. Battle will be rejoined at upcoming G20 meetings in South Korea.

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