Saturday, December 29, 2007

Viet Nam targets 5 million foreign visitors in 2008



Viet Nam targets to welcome 5 million foreign visitors in 2008, or a year-on-year increase of 19 percent.

At a conference on the tourism sector’s 2008 tasks held in Ha Noi on December 27, Minister of Culture, Sports and Tourism Hoang Tuan Anh stressed that the sector in 2008 and following years will focus on advertisement and market expansion.

According to him, the sector should pay attention to developing tourist products as well as personnel training to meet the customers’ requirements. It should also mobilise all resources to develop entertainment facilities, particularly for community-based tourism, with an aim to reduce poverty.

The Tourism Administration announced an impressive record of 4.2 million foreign visitors in 2007, up 17.2 percent over 2006.

China led the country’s top ten biggest markets with over 500,000 visitors, followed by the Republic of Korea with 440,000, the US with 376,000. The number of visitors from Japan, Taiwan , Australia and France also increased.

In 2007, Viet Nam became one of the 20 most favourite destinations selected by 30,000 readers worldwide of the Conde Nast Traveller magazine.

Viet Nam’s tourism sector in 2007 received 47 investment projects capitalised at 1.8 billion USD, a surge of 196 percent over last year. Thus since 1988 up to now, 235 foreign-invested projects have injected 6.16 billion USD into the sector.



Vietnam to have Disneyland-style $ 1.3-billion theme park

HANOI (Xinhua): Vietnam's first Disneyland-style theme park with investment of $ 1.3 billion in Vietnam' s southern Vung Tau city is on the verge of getting an investment certificate.

Good Choice Imports-Exports and Investment Inc., affiliated to U.S. realty and investment firm PDE, last month submitted an investment application for the Vung Tau World Theme Park project, which will cover nearly 200 hectares in the coastal city, local newspaper Vietnam Investment Review reported Monday.

The project will house an 88-storey office building, a "Wonder of the World" site, where spectators will find replicas of the Eiffel Tower, Golden Gate Bridge and the Egyptian Pyramids, an international conference center, shopping malls, luxurious hotels, 3D cinemas, and open-air stages.

The theme park will be able to accommodate 100,000 visitors around the clock. Some components of the park will become operational after 2010, said the newspaper.

HANOI (Xinhua): Vietnam's first Disneyland-style theme park with investment of $ 1.3 billion in Vietnam' s southern Vung Tau city is on the verge of getting an investment certificate.

Good Choice Imports-Exports and Investment Inc., affiliated to U.S. realty and investment firm PDE, last month submitted an investment application for the Vung Tau World Theme Park project, which will cover nearly 200 hectares in the coastal city, local newspaper Vietnam Investment Review reported Monday.

The project will house an 88-storey office building, a "Wonder of the World" site, where spectators will find replicas of the Eiffel Tower, Golden Gate Bridge and the Egyptian Pyramids, an international conference center, shopping malls, luxurious hotels, 3D cinemas, and open-air stages.

The theme park will be able to accommodate 100,000 visitors around the clock. Some components of the park will become operational after 2010, said the newspaper.

Vietcombank IPO raises 656 million dollars: stock exchange

HANOI (AFP) — Vietcombank raised about 656 million dollars this week when it sold 6.5 percent of its shares, becoming the first Vietnamese state-owned bank to conduct an initial public offering.

The move comes as part of a drive to open up communist Vietnam's banking sector, with four more state-run commercial banks due to sell shares and be listed on the stock exchange next year.

The Vietcombank IPO raised about 10.5 trillion dong or 656 million dollars, the Ho Chi Minh City stock exchange said on its website.

Vietcombank, also known as the Bank for Foreign Trade of Vietnam and valued at about 10 billion dollars, sold 97.5 million shares at an average price of 107,860 dong, up from a starting price of 100,000 dong.

Vietnam, which booked 8.4 percent economic growth this year, has a population of 84 million with rising spending power, but a nascent banking sector that is expected to grow rapidly in coming years.

Vietnam joined the World Trade Organization in January and has committed itself to opening up its banking industry to outside financial institutions. Several foreign banks have bought stakes in Vietnamese banks.

Vietnam, which launched its doi moi, or renewal, market reforms two decades ago, also plans to sell stakes in other state-owned enterprises, including large telecom companies, next year.

Vietnam Year End Business News

USD/VND exchange rate margin extended


The Governor of the State Bank of Viet Nam (SBV) on December 24 decided to widen the US dollar and Viet Nam dong (USD/VND) exchange rate margin to +/-0.75 percent from +/-0.5 percent.

The USD/VND exchange rate margin was widened from +/-0.1 percent to +/-0.25 percent on July 1, 2002 and from +/-0.25 percent to +/-0.5 percent on December 31, 2006.

Hai Phong earns over 1.2 billion USD from exports

The northern port city of Hai Phong ’s export turnover is estimated to reach a record of 1.217 billion USD in 2007, a 20 percent year-on-year increase, exceeding the mark of 1 billion USD for two consecutive years.

To the figure, the centrally-run economic sector contributed 131.3 million USD, up 56.2 percent; the locally-run sector, 481.1 million USD, up 0.2 percent and the foreign invested businesses, 604.8 million USD, up 34.7 percent.

In detail, seafood earned of 36.5 million USD; plastics (66.9 million USD); garment and textile (104.7 million USD); footwear (340.8 million USD); electronic products (57.5 million USD); and electric wire and cable (131 million USD).

Nam Trieu, Bach Dang, Ben Kien and Song Cam shipbuilding companies in Hai Phong have built large cargo ships for export under contracts signed with foreign partners, raising their export earnings by 50 percent over last year.

HCM City: FDI increases 16 percent

Ho Chi Minh City attracted nearly 2.6 billion USD of foreign direct investment (FDI) this year, a 16 percent increase over last year.

The city licensed 460 foreign investment projects with a total charter capital of 2.28 billion USD and permitted a total additional capital of 310. 9 million USD for 197 other projects

The real estate sector and consultancy service represented 53.3 per cent of the said investment capital; the industrial parks and processing zones, 6.5 percent; and high-tech parks, 6.2 percent.

HCM City now houses 2,610 operating projects totalling more than 16.55 billion USD, or 20.4 percent rise in the number of projects and 13.6 percent increase in capital compared to last year.
In 2007, FDI businesses make up 20.1 percent of the city’s GDP, 11 percent increase over last year. The sector obtained an industrial production value of 130,544 billion VND, a 19.3 per cent year-on-year increase. High growth was seen in the production of automobile (61.9 percent), building materials (23.4 percent), radio and TV sets (35.7 percent).

These businesses earned a total export turnover of almost 4.9 billion USD, up by 36.5 per cent over last year.

Ha Noi: export revenues increase 22 percent

Ha Noi’s export value in December was estimated to reach 413.6 million USD, thus bringing the city’s total export revenues in 2007 to surpass 4.35 billion USD, a year-on-year increase of 22 percent.

To the figure, the State-owned sector contributed 2.25 billion USD, the foreign invested sector, 1.69 billion USD and the private sector, nearly 413 million USD.

The foreign invested sector recorded the highest growth rate of 28.2 percent, while the State sector, an 18.3 percent increase.

Laser jet printer registered the highest export value of 960.377 million USD and the growth rate of 40.5 percent.

Agricultural products were also among top currency earners, posting a year-on-year increase of 14.7 percent. Garment recorded a growth rate of 14 percent, while footwear and leather item, 11.3 percent.

Meanwhile, the export value of electronic products fell 13.5 percent year-on-year due to the decreasing price and limited export market.

Total import value of Ha Noi-based businesses is forecast to exceed 14.94 billion USD, a year-on-year increase of 21 percent. The figure included more than 4.9 billion USD spent on petroleum.

The import value of equipment, machinery and materials, excluding petroleum, was over 7.45 billion USD, and consumer goods, 2.2 billion USD.

VN-Index close to 900 points after big loss

The VN-Index at the Ho Chi Minh City Stock Exchange (HoSE) continued its downward trend by declining 12.43 points to finish at 918.43 points at the December 25 trading session.

By the end of the session, only 7.4 million shares worth 634 billion VND ware traded.

Blue chippers, including Hau Giang Pharmaceutical JSC (DHG), Kinh Do Corporation (KDC) and North Kinh Dong Food JSC (NKD) experienced decreases of between 2,000 VND and 6,000 VND per share.

The HaSTC Index at Ha Noi bourse also fell 5.93 points to close at 325.64 points with 1.8 million shares worth 179 billion VND changing hands, the lowest value over the last four months.

Biggest losers were seen among new listed shares, including Kinh Bac Construction Company (KBC), with 22,400 VND decrease and Quang Nam Mineral Industrial Company (MIC), which suffered a 15,000 VND drop.

Viet Nam-Laos railway under consideration

The Ministry of Transport has appointed the Viet Nam Railway Department (VRD) to make a feasibility study on the construction of a railway linking Viet Nam and Laos .

As part of the trans-Asia railway system, the route will start at Veuntai village, 12 km north of Thakhet city of Laos , and finish at Mu Gia Pass in Viet Nam ’s central Quang Binh province.

The project is estimated to cost 450 million USD, said VRD Deputy Director Nguyen Van Doanh.

Quang Ngai: Oil spill from ship collision

More than 170 cubic metres of diesel oil split to the sea when two cargo ships collided off shore the Ba Lang An cape of central Quang Ngai province on December 23.

According to Phan Hong Khanh, deputy head of the Dung Quat port’s service bureau, a 1,800-tonne vessel, Hai Xuan 09, was shipping more than 1,700 tonnes of cement from Thanh Hoa to Khanh Hoa, when it hit Ha Loc 08, a 17,000-tonne oil tanker carrying 1,300 tonnes of diesel oil on route from southern Vung Tau port to central Da Nang port. The oil tanker was seriously damaged.

Quang Ngai province has sent a rescue team to assess environmental pollution caused by the accident and asked for measures to prevent oil from spreading on sea.

The cause of the accident is under investigation.

Viet Nam plans to build 6,000 km of expressway

Viet Nam is expected to build nearly 6,000 km of expressway between now and 2020, according to a plan mapped out by the Ministry of Transport.

Under the plan which has been submitted to the Government for approval, around 765 trillion VND will be needed to develop all routes of expressway, including two North-South routes with a total length of 3,520 km.

In addition, six routes in the northern region, which are 975km in total length; three routes in the central and Central Highlands region, 265 km; six routes in the southern region, 834 km, and three belt roads in Ha Noi and Ho Chi Minh City, 286 km, will be built.

Bourses welcome new members

The Ho Chi Minh City Stock Exchange (HoSE) will welcome a new member, Lilama 10 Joint Stock Company under the Viet Nam Machinery Installation Corporation (Lilama), on December 25.

The Lilama 10, coded L10, will offer 9 million shares at the HoSE.

Lilama 10, after 50 years of operation, carried out hundreds key projects in the country, including Hoa Binh, Yaly, and Son La hydro-power plants, Pha Lai 1, 2 and Uong Bi thermal plants, But Son, Nghi Son, Hoang Mai and Chinfon cement plants and the Dung Quat oil refinery.

In December, Ha Noi bourse, HaSTC, also welcomed three subsidiaries of the Viet Nam Construction Import-Export Corporation (Vinaconex). They were Vinaconex 3, coded VC3 with 8 million shares; Vicostone (VCS) and Vinaconex Xuan Mai (XMC) each with 10 million shares.

Vinaconex plans to have additional four subsidiaries to make debut at the HaSTC.

Petrovietnam 2007 sales rise beats forecast

Petrovietnam 2007 sales rise beats forecast

Sat Dec 29, 2007 12:13am EST

HANOI, Dec 29 (Reuters) - State oil group Petrovietnam estimated revenues this year would jump 13.1 percent from last year to 203.7 trillion dong ($12.7 billion), beating its own expectations, a state newspaper reported on Saturday.

In October, the unlisted group said revenues this year would rise 9 percent to 190 trillion dong, 13 percent above its annual target, as the group expands into the financial sector and lets several subsidiaries go public.

Petrovietnam now estimated revenues to be 21 percent above the 2007 target, reaching 203.7 trillion dong, the Tien Phong (Vanguard) newspaper cited a company report as saying.

"The year 2007 has marked the group's first step in developing crude oil trading overseas," it said without elaborating.

Petrovietnam has entered agreements with big oil firms including BP (BP.L: Quote, Profile, Research) to look for new crude sources to replace falling output from the Bach Ho field, Vietnam's largest oil field, the newspaper said.

Vietnam's crude oil output this month is expected to fall 10.5 percent from last month to 298,000 barrels per day (bpd). Average daily output for the whole of this year would decline 7.8 percent from last year to 312,000 bpd, the government said.

Daily production has been running below the peak of 434,000 bpd reached in January 2004, following lower output at Bach Ho. The field's supply would drop by an average 1.06 million tonnes per year by 2014, its operator Vietsovpetro said.

Crude exports, Vietnam's top foreign exchange earner, would hit a record $8.5 billion this year, 2.6 percent higher than 2006 thanks to high oil prices, the government said.

Foreign exchange revenues make up 70 percent, or $8.85 billion, of Petrovietnam's total, it said but gave no profit figures.

In October, Petrovietnam sold 11.93 percent of its financial arm, Petrovietnam Finance Corporation (PVFC), to the public. Petrovietnam eventually plans to reduce its holding in PVFC to 60 percent next year from 70 percent now.

On Thursday, PVFC sold a 10-percent stake worth $217 million in itself to Morgan Stanley (MS.N: Quote, Profile, Research). It is looking to sell another 8 percent to a second foreign investor before its share trading debut on the domestic stock market in the first quarter of 2008.

Petrovietnam also plans to set up a commercial bank and is awaiting central bank approval.

Next year. Vietnam's crude oil exports are expected to drop 6.2 percent to 300,000 bpd as the country's first oil refinery, the 140,000-bpd Dung Quat plant, would test run in the last quarter, using Bach Ho oil.

The $2.5-billion refinery would be fully operational by the first quarter of 2009, the government has said. (Reporting by Ho Binh Minh; Editing by Jan Dahinten)

Sat Dec 29, 2007 12:13am EST

HANOI, Dec 29 (Reuters) - State oil group Petrovietnam estimated revenues this year would jump 13.1 percent from last year to 203.7 trillion dong ($12.7 billion), beating its own expectations, a state newspaper reported on Saturday.

In October, the unlisted group said revenues this year would rise 9 percent to 190 trillion dong, 13 percent above its annual target, as the group expands into the financial sector and lets several subsidiaries go public.

Petrovietnam now estimated revenues to be 21 percent above the 2007 target, reaching 203.7 trillion dong, the Tien Phong (Vanguard) newspaper cited a company report as saying.

"The year 2007 has marked the group's first step in developing crude oil trading overseas," it said without elaborating.

Petrovietnam has entered agreements with big oil firms including BP (BP.L: Quote, Profile, Research) to look for new crude sources to replace falling output from the Bach Ho field, Vietnam's largest oil field, the newspaper said.

Vietnam's crude oil output this month is expected to fall 10.5 percent from last month to 298,000 barrels per day (bpd). Average daily output for the whole of this year would decline 7.8 percent from last year to 312,000 bpd, the government said.

Daily production has been running below the peak of 434,000 bpd reached in January 2004, following lower output at Bach Ho. The field's supply would drop by an average 1.06 million tonnes per year by 2014, its operator Vietsovpetro said.

Crude exports, Vietnam's top foreign exchange earner, would hit a record $8.5 billion this year, 2.6 percent higher than 2006 thanks to high oil prices, the government said.

Foreign exchange revenues make up 70 percent, or $8.85 billion, of Petrovietnam's total, it said but gave no profit figures.

In October, Petrovietnam sold 11.93 percent of its financial arm, Petrovietnam Finance Corporation (PVFC), to the public. Petrovietnam eventually plans to reduce its holding in PVFC to 60 percent next year from 70 percent now.

On Thursday, PVFC sold a 10-percent stake worth $217 million in itself to Morgan Stanley (MS.N: Quote, Profile, Research). It is looking to sell another 8 percent to a second foreign investor before its share trading debut on the domestic stock market in the first quarter of 2008.

Petrovietnam also plans to set up a commercial bank and is awaiting central bank approval.

Next year. Vietnam's crude oil exports are expected to drop 6.2 percent to 300,000 bpd as the country's first oil refinery, the 140,000-bpd Dung Quat plant, would test run in the last quarter, using Bach Ho oil.

The $2.5-billion refinery would be fully operational by the first quarter of 2009, the government has said. (Reporting by Ho Binh Minh; Editing by Jan Dahinten)

Sunday, December 23, 2007

Vietnam to buy 30 Airbus airplanes

HANOI, Dec. 21 (Xinhua) -- Vietnam Airlines, the country's national flag carrier, and the Vietnam Aircraft Leasing Company (VALC) will buy 30 airplanes from Airbus, Vietnam News Agency reported Friday.

Under a contract signed here Friday, the airline will buy 10 A350-900 XWB and 10 A321 aircraft, and the VALC will purchase 10 A321.

The France-based plane maker will deliver the first A321 to Vietnam in 2012, and the first A350-900 in 2016.

The 10 aircraft purchased by the VALC will be rented by Vietnam Airlines for 12 years, said the agency.

Vietnam Airlines, which is currently operating 47 aircraft, plans to have a fleet of 86 by 2015 and 110 by 2020.

Vietnam's air industry served nearly 7.9 million domestic and foreign passengers in the first 11 months of this year, posting a year-on-year rise of 15.7 percent. Meanwhile, the industry transported 119,700 cargoes, up four percent, according to the country's General Statistics Office.

Vietnam's aviation market is expected to annually grow 12-14 percent in the 2006-2010 period, 9-11 percent in the 2010-2015 period, and 10-12 percent in the 2015-2020 period, according to the Civil Aviation Administration of Vietnam.





The World Is Watching Vietnam's Big IPO

Hopes are riding high, but lackluster interest in Vietcombank's privatization means there could be trouble ahead

The long-awaited and oft-delayed initial public offering of Vietnam's largest state-owned bank is finally under way. The deal for Vietcombank is expected to raise $600 million—or more than the entire market capitalization of the Ho Chi Minh Stock Exchange just two years ago.

While the partial privatization will only see 6.5% of the bank's shares sold, the deal is being watched closely by foreign and local investors alike. Its success or failure will play a big part in determining whether other coveted state assets will follow. "The sentiment is this is the gate in front of the flood of central state privatizations," says Tung Kim, a managing director at Indochina Capital, a investment bank in Ho Chi Minh City. "Symbolically and politically this is true."

To date, few Vietnamese companies have had enough heft for foreign investment funds to consider. More than $9 billion has been raised globally for investment in Vietnam—from high-net-worth clients in Zurich, hedge funds in New York, retail buyers of mutual funds in Hong Kong, and more—but some $2 billion of this still hasn't been deployed, for lack of investment opportunities. Foreigners are restricted from holding more than half of listed companies, and they can own just 30% of banks such as Vietcombank.

Price is Unjustifiably High

Initial indications suggest the Vietcombank deal is proving a tough sell. The issue was only oversubscribed by 1.25 times according to preliminary figures—compared with recent Chinese debuts that have seen demand exceed the shares on offer by 100 times. Shares in Vietnam are sold in a Dutch auction process, where investors first pay a deposit to participate. Then once the level of interest has been determined, investors make bids for lots of shares at a given price. The highest bidder gets the first lot of shares, then lower bids are fulfilled until all shares are sold.

The problem with Vietcombank is that the government has set a price floor of $0.62 per share that many seasoned investors find unacceptable. "We are content to let that [IPO] go by," says Andrew Leahy, a director of Dragon Capital in Ho Chi Minh City, a fund manager that has more than $2 billion under management. He says Vietcombank's price-earnings ratio of 78 based on 2007 results is unjustifiably high. Sacombank, a smaller listed commercial bank, is trading at just 19.7 times earnings.

Others point out that in many countries, bellwether privatizations are generally priced so IPO investors can make money once trading begins. That paves the way for successive privatizations, says Garry Evans, an HSBC Asia equity strategist in Hong Kong. "In this one, they are trying to take all the money off the table at stage one," he says. "This could derail privatization." Evans is also worried investors may forfeit the 10% deposits required to participate in the auction and never take delivery of their shares. During a botched IPO by Vietnam Insurance, or Bao Viet, more than 30% of investors did just that. Results of the auction will be published on Dec. 26.

Put Off By Vietnamese System

The lackluster demand may be partly due to a government clampdown on the banks. Bao Viet, for instance, was oversubscribed by 6.6 times earlier this year, but at the time, banks were willing to loan investors as much as 70% of the value of the shares they bought. The government has since tightened regulations on banks and brokerages, allowing them to lend no more than 3% on margin. The interest in Vietcombank "is quite impressive, since demand is not as reliant on credit as in the past," says Jonathan Waugh, director at PXP Vietnam Asset Management. "We all hope that those successful at this auction will go on to take ownership of their shares."

The Vietcombank deal underscores another peculiarity of the Vietnamese system—the way the price strategic investors will pay for a stake in an enterprise is determined. Rather than sell such stakes before an IPO, as China has done during its state bank privatizations, prospective investors in Vietnam must agree in advance to pay an average of the auction price. Earlier this year, several possible strategic investors in Vietcombank—including GE Money (GE) and Nomura Holdings of Japan —were reported to have shown interest but were unwilling to pay more than about 42¢s; per share.

Despite the worries over Vietcombank, the longer term prospects for Vietnam's stock market look strong. GDP growth has averaged more than 8% for the past few years. Multinational heavyweights such as Intel (INTC), Canon, and Compal have poured billions into manufacturing to take advantage of Vietnam's industrious workforce. And in January, Vietnam was admitted to the WTO. Although growing inflation could be a concern, Vietnam's population of 84 million, half under the age of 30, could still make it Asia's next economic tiger.

Balfour is Asia Correspondent for BusinessWeek

Balfour is Asia Correspondent for BusinessWeek based in Hong Kong .

TO UNDERSTAND MODERN VIETNAM, LOOK TO ITS CONFUCIAN PAST

William Ratliff

Sunday, December 23, 2007

Vietnamese students are in the streets of Hanoi and Ho Chi Minh City protesting what they call a renewed Chinese "invasion" of the Spratly and Paracel Islands in the oil-and-gas-rich South China Sea. Their last war was a brief one in 1979, though less than two decades ago a confrontation near the Spratlys left several dozen Vietnamese dead.

Vietnam claims the islands because they are off its coast, but with so many resources under the sea, several other nations in the region claim them as well, most forcefully China.

There has long been an intense love-hate relationship between these two countries, who share a border as long as that between the United States and Mexico. China's influence began in the second century B.C. and actually increased after Vietnam won its independence a millennium later. Many Vietnamese today play down this heritage, and only 3 to 5 percent of 85 million Vietnamese are identified as ethnic Chinese. Vietnam does have its own very specific identity. Still, as Vietnam National University law Professor Pham Duy Nghia has argued, to understand contemporary Vietnam, one must look back to its Confucian past.

Vietnam's war with the United States was a terrible and destructive experience, but it has far less significance for Vietnam today and tomorrow than the deeply rooted Confucian-based culture. Vietnam's reforms are themselves in many ways closely patterned on those launched almost 30 years ago in China and, despite periodic disputes relations between the two, are expanding exponentially.

The cultural heritage stands out in many ways. Most obviously, there is the elitist government that sees governance in moral terms and maintains a paternalistic relationship between rulers and ruled. Since it launched reforms in 1986, the Vietnamese government has set high goals to be achieved by pragmatic economic change, rapidly improved education and a strong goal-oriented work ethic, encumbered by corruption.

Other Confucian-influenced governments in East and Southeast Asia preceded Vietnam in exploiting these qualities and became Asia's economic "dragons" and "tigers," most moving in time beyond traditional Confucian institutional authoritarianism to some form of democratic governance. Countries in Asia without the Confucian background have had much less success with reforms.

Today, Vietnam is still a rapidly growing tiger cub, so to speak, because it got started late in its market-oriented reforms. This was because Le Duan, who succeeded Ho Chi Minh as Communist Party boss in 1969, rejected reconciliation at the end of the war in favor of a brutal campaign of reprisals. He further centralized the economy and focused his persecution especially on the Chinese-Vietnamese entrepreneurs who had made what was then Saigon so prosperous. Hundreds of thousands fled across or into the sea as "boat people."

When Le Duan finally died in 1986, Vietnamese pragmatists launched the "renovation" (doi moi) program that is remaking Vietnam today. While doi moi does not include democratization, as the continuing harassment and imprisonment of political dissidents demonstrates, it does recognize the need for the greater individual opportunity and personal initiative that in some other countries have in time resulted in more democratic governance.

Vietnamese and Chinese leaders today are pragmatic and know they have too many common roots and interests, bilateral and beyond, to get sidetracked into real conflict, even over oil in the South China Sea.

William Ratliff is a fellow at Stanford University's Hoover Institution and author of the forthcoming book "Getting Down to Business in Vietnam: Entrepreneurship in Asia's Tiger Cub" (Independent Institute).

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/23/IN6BU1MRT.DTL

This article appeared on page F - 2 of the San Francisco Chronicle

1968 Bob's "Operation Holly" Vietnam





On December 22 1968 Bob's "Operation Holly" performed at Cam Ranh Bay, Vietnam. This video records that event. The original film was silent, so the audio from his performance at Long Binh Army Depot that same Christmas is dubbed onto the video.

Each Christmas show ended with everyone singing "Silent Night". I don't think I will ever be able to sing that song or hear it for the rest of my life without crying and feeling that I am right back there again with the troops and Bob Hope and the rest of the entertainers. It truly was not the end to a visit with the troops but a beginning of new friendships that have lasted over the years. And each one living in my heart. ~ Wild Thing

Iran Ready to Construct Refinery in Vietnam

TEHRAN (Fars News Agency)- Iran's Deputy Foreign Minister Mehdi Safari voiced Tehran's readiness to cooperate with Hanoi in constructing oil refineries, facilities and installations in Vietnam.


Safari made the remarks in a meeting with the chairman of Vietnam's Oil and Gas Group, where the two sides discussed Tehran-Hanoi oil and gas cooperation.

During the meeting, the Iranian diplomat briefed the other side about Iran's potentials, possibilities, cooperation with other countries and projects in the oil and gas sector, and viewed Vietnam's long-term energy strategy as a good base for promising cooperation between the two sides in future.

"Tehran is ready to cooperate with Hanoi in constructing refineries, oil installations and facilities and launch oil and gas joint ventures in Iran or Vietnam or third countries," he said.

For his part, the Vietnamese official noted Iran's significant standing in the oil and gas industry, and said that he would pay a visit to Tehran in the near future to further discuss the two states' cooperation.

He proposed that Iran participate in the construction of a third refinery in southern Vietnam and in other exploration, extraction and development projects in that country.

The official also voiced Hanoi's enthusiasm for Iran's participation in the implementation of a project for the construction of Vietnam's second refinery.

American company to begin major tourist facility in Vietnam

Providential Holdings subsidiary awarded permit to begin major development project in Vietnam
22-DEC-2007 Intellasia | Market Wire (press release)
Dec 22, 2007 - 7:00:00 AM


Providential Holdings, Inc. (OTC BB:PRVH.OB -News), a company that provides advisory, merger and acquisition services as well as independently investing in Vietnamese economic opportunities, today announced its wholly owned subsidiary PhiLand Corp has set up PhiLand Vietnam, Ltd in Quang Nam Province and received a permit to begin development of a luxury tourist facility, Pointe91, in the Chu Lai Open Economic Zone in Vietnam.
Quang Nam province
Pointe91 is slated to become a seaside gated community that will feature a luxury boutique hotel, private residences and a country club. The 57-acre development represents an investment of US$35 million and is expected to begin construction in June 2008. Pointe91 is exempt from income taxes for the first four-years and for the next nine-years PhiLand Vietnam's income tax rate will be half of the regular 10% rate of the Chu Lai Economic Zone. Construction materials for the Pointe91 project are exempt from Vietnamese import taxes.

PhiLand Corp Project director Robert Buceta said, "We believe that Pointe91, as well as the larger South Hoi An project, will prove to be a popular destination for Vietnamese residents as well as foreign tourists. The South Hoi An project puts Providential Holdings at the forefront of coastal Vietnam's real estate market with plans to develop approximately 8,000 acres of waterfront property there. We look forward to moving ahead with our other projects in South Hoi An, which include luxury hotels, entertainment and recreation facilities, universities and residential housing."

About South Hoi An

Named as one of Vietnam's four World Heritage sites, Hoi An is a quiet riverside resort dotted with temples, shrines and Chinese style tile-roofed wooden houses girding a long narrow road. With its compelling architecture and history as one of Vietnam's most important international seaport towns, Hoi An is rapidly becoming a popular tourist destination.

The coastal areas of the central province of Quang Nam have already attracted the attention of both investors and authorities. Since 2004, these tourist areas have been developing strongly, registering over 166 projects with a total capital of over US$1.6 billion. For more information about PhiLand and the South Hoi An Project, please visit http://www.philandcorp.com.

About Providential Holdings, Inc.

Providential Holdings and its subsidiaries engage in a number of diverse business activities, the most important of which are M&A advisory services and investing in the rapidly growing economies of Vietnam and Asia. For more information on Providential Holdings, visit http://www.phiglobal.com. As part of its activities in Vietnam, Providential has been hosting seminars in conjunction with the Nasdaq Stock Market, the Vietnamese Chamber of Commerce and Industry and a leading US investment banking firm, to help Vietnamese companies go public and raise capital through the US financial markets.

A profile for investors can be accessed at http://www.hawkassociates.com/prvhprofile.aspx.

For investor relations questions regarding Providential, contact Frank Hawkins or Antonella Montagna, Hawk Associates, at 305-451-1888, e-mail: info@hawkassociates.com, or visit http://www.americanmicrocaps.com or http://www.hawkassociates.com. To sign up for free e-mail notification of future releases, visit http://www.hawkassociates.com/email.aspx.

Safe Harbor: This news release contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. Such forward-looking statements are made based upon management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.

Contact:

Investor Relations Contact:

Hawk Associates, Inc.

Antonella Montagna and Frank Hawkins

Phone: 305-451-1888

Email: Email Contact

17011 Beach Boulevard, Suite 1230

Huntington Beach, CA 92647

Telephone: 714-843-5455

Fax: 714-843-5452

Source: Providential Holdings, Inc.

Thursday December 20 December 20 2007

Wednesday, December 19, 2007

10 outstanding features of Vietnam’s foreign trade in 2007


11:23' 18/12/2007 (GMT+7)

VietNamNet Bridge – The Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade has pointed out the 10 most outstanding features of Vietnam’s foreign trade in 2007.

The turnover from coffee exports has exceeded the turnover from rice exports
Vietnam is expected to gain the total export turnover of $48bil this year, an increase of 20.5% over 2006. Meanwhile, the estimated import turnover is $59bil, up by 31% over 2006.

There are 10 outstanding features in import-export activities as follows:

1. There was a sharp contrast in exports in the first half of the year compared to the second half. The first half was considered a difficult period, when the export turnover was $3.74bil a month, while the second half saw a breakthrough, when the average monthly export turnover was $4.26bil.

2. The exports of key export items were very satisfactory. Nine items saw the export turnover higher than $1bil, four of which had the turnover of more than $3bil, two items had the turnover of more than $2bil.

This is for the second consecutive year, apparel exports can bring the second highest turnover, after crude oil. Wooden furniture ranks the 5th among the biggest export items. Vietnam has surpassed Thailand and Indonesia to become the biggest wooden furniture exporter in South East Asia, together with Malaysia.

Vietnam has fulfilled the yearly plan in rice export. Vietnam’s rice is now being exported at the prices equal to Thailand’s.

Vietnam’s rice has been exported to more than 70 countries and territories, including the difficult-to-please US, Japan and the EU.

The turnover from coffee exports has exceeded the turnover from rice exports. Seafood exports are satisfactory. Vietnam remains the biggest cashew nut exporter in the world, when its products are being consumed by 40 markets. The country holds up to 50% of the world’s pepper market and witnesses a very satisfactory year when the export price is double the previous year ($3,760/tonne vs $1,540).

3. Vietnam now can export valuable products. For the first time, Vietnam exported the equipments for steam-boiler which Russian TKZ group used to assemble the power plant in India. The Maritime Mechanics Service Company launched at Vung Tau port the oil rig serving oil and gas exploitation, which was then exported to Malaysia.

4. Vietnam has been trying to diversify its export items. It exports $300mil worth of cassava starch, higher than the turnover brought about by key products including tea, peanut, fruits and vegetables.

5. 2007 is the first year which witnesses the considerable growth rate in domestic invested enterprises’ export (23.1%).

6. Key economic centres keep leading in export. HCM City remains the No 1 in exports with $6bil worth of exports. Hanoi’s export turnover is expected to exceed the $4bil level, while Binh Duong exceeded $5bil.

7. Hundreds of exhibitions and trade fairs have been organized, which helped introduce Vietnam-made products to the world. Vietnamese enterprises participated in well known trade fairs abroad, including the one on wooden furniture in the US, on seafood in Europe, and the 4th CAEXPPO in Nan Ning, China.

8. Despite the high trade deficit, the payment balance is still within control. There are four reasons behind the increased imports: a) the national economy maintains high growth with high foreign investments; b) import material price increases; c) the export growth rate is lower than import growth rate (20.5% vs 31%); d) the effect from tax cuts and higher consumer demand.

9. Management authorities show shortcomings in material import management. The authorities disagree on whether to allow the importing of consignments of scrap steel.

10. Enterprises keep complaining about complicated import-export procedures. Statistics showed that every year, every enterprise has to spend 1,959.2 hours to fulfill tax duties. Directors of a company asked to be jailed, while another director asked to be shot, because they are on the verge of bankruptcy due to tax refund delays.

China, Vietnam clash over lonely islands

Protesters accuse Beijing of creeping invasion of Spratlys

Peter Goodspeed, National Post Published: Tuesday, December 18, 2007

Agence France-Presse

Vietnam and China have plunged into a new war of words over Asia's most hotly contested pieces of real estate, the Spratly Islands.

For the second week in a row, hundreds of Vietnamese nationalists have been holding rare public demonstrations outside the Chinese embassy in Hanoi and the Chinese consulate in Ho Chi Minh City.

Shouting anti-Chinese slogans and singing patriotic songs, they accuse China of staging a creeping invasion of the Spratlys, which have become one of Asia's major potential flashpoints.

Most of the islands are low-lying coral reefs and rocky outcrops in the middle of the South China Sea, home to little more than a few dozen seabirds. Some of them are so small they are covered at high tide.

Yet the island chain is strategically located in the centre of one of Asia's largest potential reservoirs for oil and natural gas, and surrounded by rich fishing grounds.

Six nations, including China, have staked overlapping claims to the 200 islands, rocks and reefs that make up the chain.

Vietnam, Malaysia, the Philippines and Brunei have claims to some of the islands, while China claims sovereignty over them all. Taiwan's claim is similar to China's.

There have been numerous military skirmishes in the past 30 years to reinforce the conflicting claims, the most serious in 1976, when China invaded and captured a nearby island chain, the Paracel Islands, from Vietnam.

Twelve years later, the two countries clashed again as their navies waged a brief battle off Johnson Reef in the Spratlys. Several Vietnamese boats were sunk and more than 70 sailors died.

Since then, Beijing and Hanoi have tried to ease tensions by promising to seek a diplomatic solution.

But China has continued to build military installations on some of the islands and reefs, insisting they are only shelters for Chinese fishermen.

More recently, the legislature in Beijing ratified a plan to manage the Paracels and Spratlys as a new administrative district of Hainan province, turning the islands into a new "county-level city" called Sansha.

That has infuriated Vietnam, which tried last spring to let drilling and pipeline rights for a US$2-billion gas field to energy giant BP in an area of the Spratlys off its southern coast.

When Beijing accused Hanoi of infringing Chinese territory, the company decided to halt exploration work.

Still, Vietnam insists many of the Spratly Islands lie within the bounds of its sovereignty and it resents China's claims, which are backed by an assertive new nationalism and one of its biggest military spending sprees ever.

Regional rivalries take on an added geopolitical importance because the islands straddle Asia's most vital seal lanes.

About 25% of world shipping passes through the region, carrying Middle East oil to Japan and the western United States.

Washington's alliances and defence agreements with countries in the region could drag the United States into a confrontation with China if the conflict over the Spratlys turns violent.

That concerns Washington, because in 1995 the U.S. Naval War College ran a series of computer war games simulating a conflict with China over the South China Sea, and in each case China won.

Since then, Beijing has spent billions modernizing and expanding its navy with an eye to a possible confrontation in the Spratlys.

China has filled a virtual power vacuum in the South China Sea after the end of the Cold War and the withdrawal of the former Soviet Union's navy from Vietnam's Cam Ranh Bay and the U.S. withdrawal from Subic Bay in the Philippines.

As if to assert that fact, China infuriated Vietnam by staging a naval exercise in the South China Sea in November near the Paracels.

Now, Beijing is accusing Vietnam of threatening relations between the two countries by permitting street demonstrations in front of the Chinese embassy for two weekends in a row.

The Vietnamese Foreign Ministry insists the protests were spontaneous and quickly ended by police.

But a Chinese Foreign Ministry spokesman said, "We are highly concerned over the matter. We hope the Vietnamese government will take a responsible attitude and effective measures to stop this and prevent bilateral ties from being hurt."

Vietnam to continue job expansion and education

Employment integral to development, says Deputy PM

An employment fair in Ho Chi Minh City that attracted droves of jobseekers
Deputy Prime Minister Pham Gia Khiem asserted that employment policies would be vital to Vietnam's development at a forum in Hanoi Monday.

“Implementing unemployment insurance policies for workers plays a key role in promoting a strong workforce, seizing new opportunities and creating new driving forces to propel Vietnam through all challenges,” said Khiem as he opened the first Vietnam Employment Forum.

The Deputy PM highlighted Vietnam's socio-economic achievements in its 20 years of Doi Moi (Reform) policies, including 8.5 percent GDP growth rate in 2007, better living conditions, and an average of 1.6 million new jobs created each year of reforms.

He said the high demand for employment, particularly for young and rural people, has become a major issue in Vietnam.

He also said he was concerned about the bulging gap between the rich and the poor.

The Deputy PM hailed the support from international organizations, including the International Labor Organization (ILO), saying the government would encourage their increased cooperation to chalk out employment policies.

He said international assistance would help Vietnam in “creating eight million new jobs in the 2006-2010 period, ensuring employment for nearly 50 million people and reducing the urban unemployment rate to below five percent by 2010.”

At the forum, United Nations Resident Coordinator in Vietnam John Hendra praised the government's efforts in reducing poverty and guaranteeing employment for its citizens.

He said employment creation and decent work would be key to human development, poverty reduction and social inclusion in Vietnam, adding that the forum was a good opportunity to discuss the most pressing issues that the country now faces.

“With the commitment already shown by the government of Vietnam, we will continue to work in partnership to ensure every single person in Vietnam has an opportunity for decent work,” he said.

According to the Ministry of Labor, War Invalids and Social Affairs, in 2006, 3.5 percent of Vietnam's laborers were illiterate, 23.5 had a high school education and nearly 32 percent had vocational training.

Saturday, December 15, 2007

Korea's SK Telecom Shines in Vietnam



Vietnamese listen to a lecture at the recently opened IT education center in Ho Chi Minh City, Vietnam. The center, funded by SK Telecom, covers 3,737 square meters and has eight floors. / Courtesy of SK Telecom

Mobile Carrier Opens IT Center in Ho Chi Minh City

By Kim Yoo-chul
Staff Reporter

SK Telecom (SKT), the fourth-largest mobile telecom service provider in Vietnam with a market share of almost 10 percent or 3.5 million subscribers, has established a firm foothold to narrow the gap with industry leaders in Vietnam by establishing an IT training center there.

SKT said Sunday that it has opened a free-of-charge IT training center in Vietnam's largest commercial city of Ho Chi Minh together with SK C&C and Korea's Soongsil University.

Dubbed the ``SKT-SSU IT Education Center,'' the $5 million venue will cover 3,737 square meters over eight floors. It will operate over the next 50 years.

The center, armed with international training curricula, will focus on CDMA and software studies, targeting Vietnamese students under the age of 32 that are knowledgeable in IT and have intermediate English skills, according to the company.

``Successful graduates will have a chance to work at SKT's new business or IT-related fields here with an additional advantage of scholarships for those who want to study IT further in South Korea,'' the company said.

The Vietnamese government has recently set the goal of increasing IT-related experts and program developers by 80 percent through 2020.

Currently, Vietnam has about 350,000 workers in the IT-related sector.

Vietnam Gateway to Cambodia, Laos

The plan comes as positive results, stemming from favorable market situations, have been raising the prospects for the company to increase its presence in the Southeast Asian country, neighboring Cambodia and Laos.

With distinguished additional merits including low fees, unique services and text-messages, SK Telecom has increased its market share dramatically to 8.8 percent this year from 3 percent in 2005.

``We are set to increase the number of `S-Phone' subscribers to over 5 million next year, enabling the company to maintain a solid fourth place where Vietell, MobiPhone and VinaPhone split the market evenly with 30 percent,'' SK Telecom CEO Kim Shin-bae said.

SK Telecom, the service provider of S-Phone, is the company founded between Saigon Postel Corporation and SLD Telecom (SK Telecom, LG Telecom & Dong Ah Telecom from South Korea). It started the service in July 2003.

``Japan's NTT DoCoMo, the United Kingdom's Vodafone and Norway's Telenor have opened offices across Vietnam in their long-term plans to set foot in Vietnam and its neighboring countries,'' an SK Telecom official said, adding that the education center is a tailored marketing scheme to get ahead of its competitors.

SK Telecom has acquired a license to operate CDMA services in Cambodia. The Cambodian market is known to have a brighter prospect with an existing mobile penetration of 35 percent.

yckim@koreatimes.co.kr

Vietnam's traffic is a mess

Looking for another avenue
00:01' 10/12/2007 (GMT+7)


VietNamNet Bridge - In any day of the week, you will see traffic snarl up Ho Chi Minh City’s already chaotic streets. Motorbikes, cars and bicycles are stuck for hours in narrow fume-clogged streets to the sound of a cacophony of horns.

The number of vehicles is increasing, while city streets are too narrow aggravating traffic jam. It is estimated that traffic jams cost the nation’s economic heart about $875 million per year.

Ho Chi Minh City is in the midst of an economic boom, but traffic jams are the scourge of the city. It is inhibiting, even restricting the city’s development.

The slow development of transport infrastructure is a hot issue that businesses, both foreign and local, are demanding be addressed by authorities.

Vietnam began its economic renovation programme in 1986 and the economy has recorded strong growth as it attempts to integrate with the emerging international order. Last year, the country’s economic growth was 8.2 per cent and it is expected to reach 8.7 per cent this year.

Over the past decade, the transport sector has positively contributed to Vietnam’s economic growth. Developing large-scale transport infrastructure in Vietnam has helped open up new business opportunities and promote income diversification and off-farm employment, facilitating the spread of economic linkages between growth centres and their surrounding rural areas, proving the importance of connecting remote areas to trunk routes with feeder roads.


However, the demand for transport is growing rapidly in line with the country’s economic development leaving transport infrastructure in a cloud of dust.


“Our country’s transport infrastructure is in a poor situation, with a small scale and limited capacity, which does not meet technical requirements or create smooth connections,” said Tong Quoc Dat, vice head of the Ministry of Planning and Investment’s Infrastructure and Urban Area Department.


According to a report from market researcher Business Monitor International, Vietnam’s road network is in a poor condition with only around 35 per cent of roads covered with asphalt. Improvements in network capacity and connectivity have led to truck speeds increasing from 40 to 50 kilometres per hour on average and bus speeds increasing from 50-60km/h to 70-80km/h on some routes.


However, increasing vehicle numbers and traffic speeds are not being met by infrastructure development.
Many transport infrastructure projects like the Ho Chi Minh national road, Lang-Hoa Lac expressway, Hanoi-Haiphong highway and a number of highways in the southern region, have been announced, but often little work has been completed. Investors and enterprises complain they would rather see action rather than words.

Vietnam needed to urgently build more highways to ease congestion situation and help enterprises save on transport costs, said Rick Howarth, general manager of Intel Vietnam.

Bridges are still a weak link in the system with 30 per cent of Vietnam’s 4,100 bridges restricted to low loads and 20 per cent are too narrow. Ferries were still operating in the northern and the southern economic zones, limiting the transport capacity of vehicles.

In the Southern Key Economic Zone, Dong Nai bridge is concerning many enterprises located in Dong Nai province and it is in danger of collapsing due to overloading. As a result, the government has announced a $100 million plan to build a new Dong Nai bridge.

The nation’s railway system is also coming off the rails. Communication equipment is outdated and only 40 per cent of the railway stations are supplied with semi-automatic signals. The quality of rail tracks and bridges is poor and many lines do not meet modern technical standards. Most of the investment in the sector is directed at strengthening bridges and stopping the network from deteriorating further. As a result, trains operate at low average speeds of 40 and 22km/h for passenger and freight trains respectively.

Ports and airports are also under strain. The country has 266 ports, but the lack of deep-seaport and poor port infrastructure is black cloud covering port sector development.


Nguyen Manh Kiem, chairman of Vietnam Construction Association, said: “Compared with developed countries in the region, Vietnam transport infrastructure is under average level.”

To improve infrastructure system, the Vietnamese Government recently raised its transport infrastructure investment. But, is it enough?


According to a World Bank report, transport expenditure in Vietnam increased by 21 per cent, per annum between 1994 and 2002.


“The large increase reflects the strong commitment of the government to modernise the transport system to support economic growth and is consistent with its policy to prioritise investment in transport infrastructure,” the report stated.


However, the construction of transport infrastructure was facing many difficulties, said Transport Minister Ho Nghia Dung.

The slowness in funds disbursement is one of the main difficulties of transport infrastructure development. During the first 10 months of this year, only $252 million was disbursed for transport infrastructure, accounting 64.2 per cent of government’s plan this year.

According to a prediction from Vina Capital chief executive officer Don Lam, the country needed about $40 billion between now and 2020 to develop its transport infrastructure.


The government was calling for investment from foreign investors and the private sector into large-scale infrastructure projects.


Nguyen Bich Dat, Deputy Minister of Ministry of Planning and Investment, said: “With a limited budget and a looming deadline for preferential financing, we urgently need capital.”

Another reason for the slow development of transport infrastructure is the problem of site clearance. Many infrastructure projects have failed to meet construction deadlines due to site clearance difficulties, with the Lang-Hoa Lac expressway, Thanh Tri bridge and Ho Chi Minh national road glaring examples.


Vietnam is considered one of the most attractive locations for foreign investment. Last year, about $12 billion was invested in Vietnam and the number is expected to reach $16 billion this year.

Most foreign direct investment (FDI) is channeled into locations with good transport infrastructure. Binh Duong, Dong Nai, Ho Chi Minh City, Hanoi, Ba Ria-Vung Tau and Vinh Phuc are the best locations for attracting FDI due to favourable transportation. However, transport infrastructure systems in these provinces are becoming congested.


Many investors are becoming concerned about Vietnam’s infrastructure development.

In order to ensure an 8 per cent economic growth rate after joining the World Trade Organization, infrastructure investment must increase to about 11 to 12 per cent of the nation’s gross domestic product instead of the current 9 to 10 per cent.


“If the transport infrastructure system is not improved, the attraction of FDI will surely be impacted,” said Tong Quoc Dat.


He added that poor transport infrastructure could stop investors from disbursing investment capital. “Transport costs will rise and safety will be compromised due to the congestion and low quality of transport infrastructure,” said Dat.

Vietnam's oil prices sink fishing industry

Oil prices sink fishing industry
15:26' 10/12/2007 (GMT+7)

VietNamNet Bridge – Thousands of fishermen in Ba Ria – Vung Tau province, which boasts the most developed fishing industry in Vietnam, are heavily burdened by debt incurred after the latest oil price increase.


At the end of November, Vung Tau City’s Mr. Bi’s fishing boat returned after two months at sea with a VND100mil deficit. Several powerful storms hampered fishing abilities but prices remained the same.

Mr Bi has decided to dock his boat until the situation improves. His four other boats, which are still at sea, will also stay upon return. “The longer I have boats in the water, the greater my losses are,” said Mr Bi, adding that even overly good fish sales cannot offset high fuel costs.

Tran Van Quan has also docked his two boats and cancelled his mid December fishing plans. According to Mr Quan, he would spend VND350mil ($21,870) on fuel for his vessels’ each voyage back when the price was VND8,700/litre; this would net him VND40mil ($2,500). Now that the oil price is VND1,500/litre he would have to spend an additional VND60mil ($3,750) on fuel, netting him a loss of $1,250.

Ba Ria – Vung Tau ship owners say they are been caught in a vicious circle. If their boats continue going to sea, they will certainly face losses. However, if their boats stay idle, they will break down.

According to Pham Tinh, Head of the Seafood Committee of Phuoc Tinh Commune and also a boat owner, after the Government announced the oil price increase in November, 100 fishing boats have been left ashore. Many households in Phuoc Tinh Commune fear that they cannot earn a living fishing anymore. Some shipowners have decided to sell their boats to pay their debts.

Mr Tinh said fuel expenses are the most substantial voyage expense. The 17% increase in oil price means a 17% increase in fishing expenses. Meanwhile, the prices of fish have only seen slight increases. Dried cuttle fish, for example, is still VND125-130,000/kg, while other kinds saw a slight rise from VND5,000 to VND5,200/kg.

The disabled fishing industry is not only making boat owners miserable, but is also adversely affecting fishermen. Nguyen Hau, who has been a fisheman for many years, said he could earn VND2.5mil a month before, though the job is very risky.

Mr Minh fears that he cannot find work if ship owners decide to leave boats ashore. “Fishing allows me to earn a little money to feed my wife and children. If I stay jobless, my children will die of hunger,” he said.

Monday, December 10, 2007

Vietnam's 'M' factors a key to success

'M-Factors' key to success in Vietnam, says adviser

KANANA KATHARANGSIPORN

Ho Chi Minh City _ Five M-factors _ money, manpower, mechanism, materials and marketing _ should be thoroughly considered by investors in Vietnam before they make commitments, according to Lt Cdr Preechachai Chauychoo, a former adviser on industrial park investment in Vietnam.

Industrial park space in Ho Chi Minh City today is oversupplied, making it harder for investors to get local loans. Terms are very tough while loan interest rates are quite high _ around 12% per year compared to 7% in Thailand.

''The cost for infrastructure development is about 15% higher than in Thailand due to higher costs of raw materials, transport and office overhead,'' said Lt Cdr Preechachai.

''Industrial park investment generates less profit than housing development, where developers are enjoying good sales from increasing demand.''

The former adviser to Thai Hua Industrial Park in Vietnam says skilled manpower in Vietnam is also in short supply and costs are high for qualified local staff. Investors can expect to pay wages to Vietnamese that are 3.5 times higher than they pay to Thai staff.

There's also a shortage of unskilled labour as the Vietnamese government is trying to attract people who had moved to Ho Chi Minh City over the past 10 years back to work in their home communities. The incentive is big-city wages for hometown jobs.

The cost of foreign employees also is 40% higher than in the past due to the higher cost of living in the city.

Lt Cdr Preechachai suggests that Thai investors bring their own staff including project engineers, sales management teams or even personnel managers as local labour productivity remains low.

''Their [Vietnamese's] efficiency is 30% lower than that of Thais,'' he said. ''They control their own time in working. Most of them spend the free time for further study, not overtime jobs, as they want to add more value to themselves.''

Some garment firms, he noted, have been unable to establish or expand business in Ho Chi Minh City as they need 3,000 factory staff but cannot recruit any. ''The best way is to use semi-automated production rather than fully manual due to the scarcity of labour.''

For an industrial park to succeed in Vietnam, he says that incentives alone are less important than an understanding of how to work with all levels of authority.

''Besides location, the most important factor for any property business, utilities are another key to success as infrastructure in Vietnam is not adequate. Investors should provide and develop good utilities in an industrial park.''

He suggests that investors planning an industrial park need to do a careful market survey and also make good use of public relations to attract business, as it is more valuable than advertising.

Investments in industrial zones are eligible for incentives from lower corporate income tax rates of 10-20%, instead of the regular 28%, no tariffs on profit repatriation, exemption from import duties and value-added tax if raw materials are sourced domestically.

Vietnam starts 1.6 trillion dong oil terminal

Van Phong Oil builds terminal

Vietnam's biggest and first oil and gas terminal project valued at 1.6 trillion dong will start construction on December 9 in the My Giang island, Ninh Phuoc commune, Ninh Hoa district in the Van Phong open economic zone in the southern province of Khanh Hoa.

The terminal will have an estimated storage capacity of one million cubic metres, of which 500,000 cubic metres will be completed in the first phase.

The terminal will be able to handle tankers of up to 150,000 dwt and equipped with modern technology. The project is carried out by the Van Phong Oil and Gas Warehouse Ltd Co.

The project is the cooperation between Vietnam Oil and Gas Corp with 55% of capital, Pjico Insurance Joint Stock Co with 15% and the Singapore-based PB Tankers Singapore Co with 30%. The project is expected to be in operational by 2009.

Sultanate, Vietnam plan joint ventures

MUSCAT — Maqbool bin Ali Sultan, minister of commerce and industry, received in his office here yesterday Nguyen Sinh Hung, deputy prime minister of Vietnam; and a delegation accompanying him, currently visiting the Sultanate.

The two sides discussed the possibility of setting up joint ventures. The Vietnamese side called upon the private sector in the Sultanate to invest in Vietnam, as the country possesses considerable human, industrial and agricultural resources.

The two sides proposed the creation of an investment fund to study financing joint ventures between the Sultanate and Vietnam.

The two sides also discussed the importance of signing mutual investment protection agreements in addition to other agreements such as avoidance of double taxation and agreements which support joint ventures between the two countries.

The meeting was attended by a number of officials at the Ministry of Commerce and Industry, Oman Oil Company and Omani Centre for Investment Promotion and Exports Development (Ociped).

l Dr Mohammed bin Hamad Al Romhi, minister of oil and gas, also received in his office yesterday Nguyen Sinh Hung and his delegation.

The meeting dealt with bilateral relations and cooperation, especially in the filed of oil and gas, in addition to the latest developments in international oil markets.

The meeting was attended by Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas, and a number of officials at the ministry.

Vietnamese rally outside China embassy over disputed islands

HANOI (AFP) — Several hundred Vietnamese protesters staged a rare demonstration outside the Chinese embassy in Hanoi on Sunday to defend the national claim of sovereignty over the disputed Spratly and Paracel islands.

Waving the red-and-gold Vietnamese flag, raising their fists and shouting "Defend the homeland" and "Down with China," about 250 people rallied for one hour as police stood by before the protest was peacefully dispersed.

"We love our country. We protest the occupation of Truong Sa (Spratlys) and Hoang Sa (Paracels)," shouted the protesters, mostly students, who had gathered in Lenin Park across from the gated diplomatic mission.

The two archipelagos, considered strategic outposts in the South China Sea, have potential oil and gas reserves and rich fishing grounds.

The Spratlys are claimed in full or part by China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan. All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls.

The Paracels -- which Chinese troops took from South Vietnamese forces in 1974 -- are also claimed by Vietnam and Taiwan.

The protest came after China last month set up the county-level Sansha administrative unit on Hainan island, which covers 2.6 million square kilometres (1 million square miles), mostly ocean, including the disputed isles.

The disputes stir strong passions in Vietnam, which remembers a millennium of Chinese rule and fought its last border war with China in 1979.

The two countries fought a brief naval battle in 1988 near one of the Spratly Island reefs, in which more than 50 Vietnamese sailors died.

The two communist-ruled countries normalised relations in 1991.

The issue has been hotly debated on blogs in Vietnam, and Vietnamese hackers at the weekend also defaced at least one Chinese government website with obscenities and a call to "stop invading" the islands.

"We need to do something with a long-term vision to settle this problem," said one protester, Hanoi engineering student Nguyen Duc Toan. "China is acting aggressively. We have a long history in Hoang Sa and Truong Sa."

The rally, which supported Vietnam's official stance, was tolerated by police, and local and foreign media were allowed to attend -- a rarity in Vietnam, where public protests are usually suppressed quickly.

Vietnam's foreign ministry earlier this month reiterated that it has "adequate historical evidence and sufficient legal basis to proclaim its sovereignty over both the Hoang Sa and Truong Sa archipelagos."

"Vietnam has a consistent policy of resolving sea-related disputes through peaceful negotiations and in accordance with international laws and practices," foreign ministry spokesman Le Dung said.

The islands have been flashpoints for years, and the number of disputes has risen as declining fish stocks in the South China Sea have forced fishing crews from Vietnam and elsewhere to sail deeper into disputed waters.

In July a Chinese naval vessel fired at a Vietnamese fishing boat near the Spratlys, sinking the boat and killing one sailor, reports said.

Vietnam's Chu Lai free trade zone incentives

Incentives for investments in Chu Lai free trade zone

Nhan Dan – All projects invested in the Chu Lai Free Trade Zone (FTZ) will enjoy a 10% corporate income tax throughout the year the project is in operation, according to a new decision signed by the Prime Minister on the organisation and operation of the Chu Lai FTZ in the Chu Lai Open Economic Zone in central Quang Nam province.

Under the decision, the Chu Lai FTZ is requested to be built into a centre for trade, imports, exports, international exhibitions and fairs,

In addition to the investment incentives stated in the Regulations for operation of Chu Lai Open Economic Zone, new business establishments set up from investment projects in infrastructure, hi-tech, special technology, clean industry and technology in the Chu Lai FTZ will also enjoy free tax for four years since they have taxable income and the taxation will be reduced by half in the following nine years.

Sunday, December 09, 2007

Vietnam expert details economic trends

Expert discusses ins and outs of the economy

VietNamNet Bridge – Vietnam will have a ‘hot Tet’ as commodities’ prices keep skyrocketing after the petrol price hike and the consequences of this year’s heavy flooding and epidemics, said Dr Le Dang Doanh, senior economist and former Director of the Central Institute for Economic Management.

Could you please tell us about the main causes of the low disbursement rate and high inflation?

Dr Le Dang Doanh, senior economist and former Director of the Central Institute for Economic Management.
Inflation is high because of several reasons. First of all, we bear the pressure of the globally high crude oil price. However, I have to say the impacts of rising oil prices on different economies differ. Developed countries have nuclear power to rely on and therefore are not as burdened by rising oil prices. While in other and usually less developed countries, 90% of energy comes from oil and natural gas.

In Vietnam, 51% of total energy comes from hydropower and 49% from other sources like gas and coal, as such, rising oil prices have a considerable impact.

The second reason Vietnam being victim to this year’s high number of tragic natural calamities and epidemics, which has badly affected the supply of food and foodstuff.

Finally, I think inflation is high because of problematic monetary policies. The State has spent a great deal of VND to purchase foreign currencies. I have to say that it is good to raise the foreign currency reserve, but once such a big volume of cash is put into circulation, price increases are inevitable.

The price increases in Vietnam are among the highest in Asia, even higher than China’s.

It seems that Government efforts to curb inflation have not been so successful. Would you suggest any other measures?

We should raise the deposit interest rates in order to attract more capital to the banking system. Commercial banks will have to push up disbursement by lending to feasible projects. In doing so, money would be used in the most effective way.

We can also raise money from the public by issuing government bonds. However, I’m afraid that the Government would lend this money to state owned projects, which prove to have low feasibility.

Experts say too many imports are also a major component of the increasingly high inflation rate. What are your thoughts?

Vietnam will have a hot Tet
When we import at high prices, we have to sell at high prices on the domestic market. However, I have to remind you that in Vietnam, the prices of several commodity items exceed global prices, like medicine and cars. Therefore, one should not blame the high CPI entirely on overly high imports.

By the way, the high trade deficit is really worrying. A long-term outlook suggests we will not have foreign currencies to import commodities if we can’t earn foreign currencies from exports. Besides, a high trade deficit also means weak competitiveness of locally made products.

I think there are three things we need to do.

First, improving the competitiveness of locally made products, so that consumers prefer using them rather than imported ones.

Second, we need to have a technical barrier in order to control imported products.

Third, we need to improve the capability of local distributors

How do you think the commodity price will perform in the coming months?

Prices will keep rising until Tet. We will have a ‘hot Tet’, especially in the central region, which has been victim to serious flooding.