ADB loans $630m to State enterprises

HA NOI — The Asian Development Bank yesterday approved a loan of US$630 million to help accelerate reforms of State-owned enterprises, improving their efficiency and enhancing corporate governance for economic growth.

Up to $600 million from its ordinary capital resources would be provided to strengthen the balances sheets of selected corporations through debt restructuring.

Another $30 million from its Asian Development Fund would support improvements in their operation and corporate governance, as well as their related institution capacity.

In addition, Government institutions involved in the State enterprises reform process, including the Debt and Asset Trading Corporation, would be given training and other assistance.

The first package of $130 million would support transformation of the Song Da Group's companies, operating in infrastructure, and the Southern Waterborne Transport Corporation, which is involved in logistics.

Other contents of the second and third projects would be defined in the first process of the first one.

Speaking at the signing ceremony, State Bank governor Nguyen Van Giau said the country had paid much attention to State enterprise reform to improve their competitive capacity and market-orientation for sustainable development.

He said nearly 5,000 such enterprise had been restructured and over 3,300 equitised.

It is estimated that about 1,500 small and medium enterprises would be converted with 948 being equitised.

Thousands of equitised State enterprises had accounted for only a small amount of total investment from the Government.

ADB country director for Viet Nam Ayumi Konishi said enhancing corporate governance of State-owned enterprises was key to improving the efficiency of the economy and to achieving higher economic growth through reducing inefficient state production and promoting private sector development.

"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 market on their own without relying on the Government, and meet all the conditions for eventual listing," he said.

The transformation of State-owned enterprises had begun in 1992, aiming at increasing their capacity and reducing the role of the state in their management.— VNS

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Asia to grow 8.2 pct in 2010, slower next year

Growth across Asia and the Pacific will be the fastest this year since 2007 as the region recovers strongly from the global crisis, but will moderate in 2011

Photo: Reuters

MANILA - Growth across Asia and the Pacific will be the fastest this year since 2007 as the region recovers strongly from the global crisis, but will moderate in 2011, the Asian Development Bank said on Tuesday.

Developing Asia, a diverse group of 45 economies including China, India, Tajikistan, Samoa, and Indonesia, would grow 8.2 percent in 2010 and 7.3 percent in 2011, the ADB said in its update of its 2010 Asian Development Outlook.

The 2010 growth forecast has been revised up from 7.5 percent in April and a forecast of 6.4 percent a year ago; the 2011 forecast is unchanged from April.

"The return of investors' risk appetite for emerging market assets and the strong economic recovery have combined to bring a surge in capital flows to developing Asia," the ADB said.

Those flows -- both portfolio and direct investment -- reflected strong fundamentals and confidence in long-term reforms and growth potential, but also carried risks such as potentially destabilising markets and complicating policy setting.

"The prospect of reversal of inflows remains a possibility in the medium term as monetary tightening in the U.S. and the eurozone narrow the interest rate differentials with developing Asia," the bank said.

"Asian authorities should therefore consider appropriate policy measures to manage a surge in capital inflows and to encourage stable long-term capital flows."

The ADB said Asia would also benefit from greater coordination to overcome fears of losing export competitiveness through unilateral currency strength.

"While price stability must remain the overriding objective of monetary policy, the global crisis highlights the need to prevent asset price bubbles through improved coordination between financial regulation and monetary policy to the region."

China steady, asean up

The ADB maintained a forecast of 9.6 percent growth in China this year, supported by exports and domestic demand, and expected it to ease slightly to 9.1 percent in 2011.

Indian growth was expected to pick up slightly to 8.7 percent in 2011 from 8.5 percent this year, driven by domestic demand, company profits and favourable financing conditions.

Forecast growth for the 10 economies of Southeast Asia has been revised up to 7.4 percent in 2010 -- the fastest since 1996, before the Asian Financial Crisis -- from 5.1 percent.

"The world economy is experiencing considerable uncertainty, though, and there are signs that economic activity across Southeast Asia is starting to decelerate," the ADB said, forecasting regional growth in 2011 at 5.4 percent.

Central Asian economies were benefitting from buoyant oil and metal prices, and remittance inflows, but the ADB said there were exceptions to the regional improvement.

"Country-specific circumstances, such as devastating floods in Pakistan, the ongoing political impasse in Nepal, and political unrest in the Kyrgyz Republic will weigh on future growth," the bank said.

 

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Vietnam sees Egypt potential market for agro-forestry, fisheries

Vietnamese businesses can open their representative offices and ask for licences for aquaculture and agro-forestry and fisheries product processing in Egypt to benefit from the country’s export preferential policies to other Middle East markets, said an Egyptian official.

Addressing a seminar on enhancing Vietnam-Egypt agro-fisheries cooperation held in Cairo, Egypt, Sunday, Head of the Federation of Egyptian Chambers of Commerce’s External Relations Section Hosam Baharia said two-way trade will increase fast as Egypt has a big demand for coffee, tea and other farm products and Vietnam’s high-quality and diversified products will meet Egyptian consumers’ different tastes.

For his part, Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said that two-way trade between the two countries recorded a year-on-year rise of 24 percent to more than US$200 million  last year with Vietnam ’s seafood exports making a large proportion.

In the context of the global economic crisis and unfavourable information on Vietnam ’s seafood quality in Egypt in the past, the increase is a positive sign of the two countries’ cooperation potential, reflecting Vietnam ’s seafood quality and prestige to Egyptian consumers, Tan said.

The result was attributable to the exchange of information and working delegations and other trade promotion activities, he said.

He went on to say that Egypt highly valued Vietnam ’s environmental-friendly agro-forestry and fisheries production process that meets quality and hygienic safety requirements.

Apart from fisheries, Vietnamese businesses expect that their cashew nuts, pepper and coffee will penetrate Egypt with a population of around 85 million people and other Middle East markets.

Vietnam ’s agro-forestry and fisheries export revenues has increased over recent years to almost US$16.5 billion by the end of 2009. Vietnam ’s seafood has been exported to more than 150 countries and territories. However, Vietnam ’s agro-forestry and fisheries market-share at Northern Africa, especially Egypt , remained modest and failed to meet the two countries’ potential and demand.

While in Cairo from Sept. 25-28, a number of Vietnamese businesses participated in the Agriculture and Food International Exhibition in Cair

 

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France supports Vietnam to protect consumers’ interests

Vietnam is one of the countries that pay due attention to protecting consumers’ interests and France is ready to cooperate and share experiences with Vietnam in this field.

The statement was made by French Ambassador to Vietnam Jean Francois Girault at a seminar entitled “Protecting Consumers from Asian and European Angles” which opened in Hanoi Monday.

The two-day seminar is co-organised by the Vietnam-France Law House and the Ministry of Industry and Trade (MoIT) with the support from the French Ministry of Foreign Affairs and the International Francophone Organisation (OIF).

Speaking at the event, MoIT Deputy Minister Tran Tuan Anh said that the rapid socio-economic development has not only brought in many opportunities for consumers but also yielded violations of their interests.

Meanwhile, there are many shortcomings in the existing law’s regulations that raise difficulties for the detection and settlement of violations, he added.

“Therefore, building a law on consumer protection is a necessary requirement and an useful tool to protect the legitimate interests of consumers,” Anh said, adding that the draft Law on Consumer Protection is expected to be approved at the National Assembly’s upcoming session scheduled for October this year.

According to Dr. Nguyen Nhu Phat, Director of the Institute of State and Law under the Vietnam Academy of Social Sciences, Vietnam’s law has acknowledged basic rules on protecting consumers’ rights, including the rights to be informed, to safety, to select and to complain as well as regulations on responsibilities of agencies, units and individuals in protecting consumers.

However, the protection of consumers in Vietnam is still limited as few people know regulations on consumer protection, he noted.

Experts from France, Thailand, Cambodia and Laos emphasised the importance of protecting consumers’ interests in the market-oriented economy and integration process.

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ANZ launches new service for wealthy retail clients

Photo: Thoai Tran

Australia and New Zealand Banking Group Vietnam has launched a new product for retail customers with assets of more than US$50,000.

Signature Priority Banking will give them preferential treatment, including access to the newly created Signature Priority Banking lounges at ANZ offices in Ho Chi Minh City and Hanoi, priority tellers, and 24/7 hotlines.

At the lounges it will offer them consultancy on mortgages, insurance, and wealth management products backed by a team of specialists.

SPB clients will get debit cards and pre-approved credit cards, 24/7 phone and internet banking services, banking and wealth management services including savings, current accounts, structured products like dual currency investment and banc assurance. They will enjoy preferential rates and pricing on banking transactions.

The customers will get invitations to ANZ’s lifestyle events, rewards programs, seminars on investment strategies and outlook held every two or three months with ANZ specialists in Vietnam and neighboring countries taking part.

Vietnam is the sixth market in the region after Hong Kong, Taiwan, Singapore, Indonesia, and China where ANZ is offering SPB.

Vietnam is a promising market for the product since the size of the middle class is forecast to grow from 7 million in 2003 to 25 million by 2013, Hans-Peter Borgh, ANZ’s Head of Affluent Banking Asia Pacific, said.

Market research company Euromonitor International recently forecast that Vietnamese households with annual disposable incomes of $5,000-15,000 will top 2.5 million this year and 10 million by 2020.

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Export turnover increases 23.2 percent

The country's export turnover reached an estimated US$51.5 billion during the first nine months of the year, an increase of 23.2 percent compared to the same period last year, reported the General Statistics Office.

The domestic sector earned $24.1 billion, a 19.7 percent increase, while the foreign-investment sector fetched $27.35 billion (including crude oil), a 26.5 percent increase.

Export commodities earned more than $1 billion in revenue.

Coffee, cassava and cassava products, and crude oil declined in export turnover in comparison to the same period last year.

The country imported $60.1 billion in commodities during the first nine months, an increase of 22.7 percent compared to the same period last year.

Imported commodities that earned the highest import turnovers included textiles, up 26 percent ($3.84 billion); electronics, computer and computer accessories, 30.6 percent ($3.5 billion ); metals, 72.8 percent ($1.8 billion); and plastics, 36 percent ($2.7 billion).

According to the GSO, the trade deficit was restrained to $8.6 billion during the first nine months of the year, which accounted for only 16.7 percent of the total export and import turnover.

The GSO's Commerce Department director Le Minh Thuy said the current trade balance lacked equilibrium as export turnover rose due to inflated prices of several export commodities, including crude oil, cassava, coal, pepper and cashew nuts.

Gold and gold products accounted for a major proportion of export revenues. If the GSO did not include gold exports, the trade deficit during the first nine months of the year would have been $11.4 billion instead of $8.6 billion.

Thuy said tough policies concerning import controls needed to be implemented to ensure the efficient development of the export sector.

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Competition heats up in domestic airline market

Competition in the local airline market is set to get tougher as large carriers try to boost sales with lower airfares and new players get ready to launch their service, experts said.

National carrier Vietnam Airlines has launched a new program, offering discounts of up to 50 percent on domestic flights. Its airfares now cost between VND400,000 and VND860,000.

Low-cost carrier Jetstar Pacific have been selling 1,000 tickets at only VND100,000 from September 9 to October 10.

Vo Huy Cuong, head of the Civil Aviation Administration’s Air Transport Department, said airlies typically offer cheaper fares during the low season from September to October.

When both Vietnam Airlines and Jetstar Pacific cut their prices, the competition would get really tough on new players like Air Mekong and Blue Sky Air, said Cuong.

Air Mekong, a private air carrier that has partnered with Skywest Inc., will start its flights on October 9. The company will use four CRJ-900 aircraft produced by Montreal-based Bombardier Inc. for 20-30 flights per day.

An Air Mekong representative said the carrier is prepared for the competition. Each airline has its own strategies and Air Mekong will focus on business class services, the representative said.

Meanwhile,  Blue Sky Air, another new carrier, said it would also have its own niche market, using helicopters for its on-demand service.

An expert who wished to be unnamed said as private carriers are not supported financially by the government, they have to take measures to prevent losses in the long term otherwise they would be caught in another Indochina Airlines’ situation.

Indochina Airlines, the first private airline to run flights in Vietnam, early this year suspended its services due to debt problems.

The expert also said unlike Vietnam Airlines, smaller carriers are now allowed to operate international routes and thus they will not have more revenues to offset losses caused by domestic services.

Cuong said that the market has great potential for growth, but all the players would need to be competitive enough to stay in the game.

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