Philippines and Vietnam ink rice supply accord

The Philippines could be assured of 1.5 million metric tons of rice imports annually from Vietnam starting this year, barring natural disasters and harvest losses in that country.

Malacañang, in a statement, announced that President Arroyo witnessed Wednesday the exchange of instrumentalities between the Philippines and Vietnam on a three-year agreement on the sidelines of the Philippine Reform Agenda Forum organized by the World Bank (WB) at the Fontana Conference Center in Clark Freeport in Pampanga province.

The Memorandum of Agreement on (MOA) was earlier signed by Agriculture Secretary Arthur Yap and Vietnamese Industry and Trade Minister Yu Huy Hoang, said the Palace statement.

Yap reportedly said the agreement with Vietnam would help beef up the National Food Authority's (NFA) stockpile and guarantee enough stock of rice amid the tightening of supply in the world market, said the report.

The statement said that the rice supply agreement between the two member-countries of the Association of Southeast Asian Nations (ASEAN) states that the "Vietnamese government agrees to sell, unless under circumstances of natural disaster and harvest loss, and the Philippines agrees to buy up to 1.5 million metric tons of Vietnamese white rice annually starting 2008, subject to market and production conditions and to terms allowable under applicable laws of both countries."

Officials of the two countries reportedly also agreed to take "strict measures" to stop illegal rice trading between the two countries.

The statement said that Vietnam Southern Food Corp. and the NFA are the agencies of their respective governments authorized to implement the terms of the MOA, which will be in effect for three years.

The agreement will be automatically renewed for another three years, unless terminated by either of the parties through diplomatic channels six months prior to the intended date of termination.

Vietnam and the Philippines signed the agreement "in order to ensure that the rice market is stable in both countries and to cushion the adverse effects of climate change, pest infestation, drought, floods and other calamities that are being experienced and may hereafter be experienced by the ASEAN countries," said the statement.

New Vietnam wells show more natural gas -Chevron

By Annika Breidthardt

SINGAPORE, March 25 (Reuters) - U.S. energy major Chevron has found more natural gas at its Vietnam offshore field, likely boosting the over $4 billion project's resource base, as the Southeast Asian country is grappling with growing power demand.

Hank Tomlinson, Chevron Corp's (CVX.N: Quote, Profile, Research) country manager for Vietnam, told Reuters he hoped to conclude talks with state-owned PetroVietnam on selling the gas in first-half 2008.

An agreement is needed to keep the project on track to meet a 2012 target for first production, a goal that has slipped once due to ongoing negotiations.

"The joint venture partners believe that the in-place gas for the development is in excess of 5 trillion cubic feet of natural gas," Tomlinson said in a telephone interview.

That is up from previous Vietnamese government estimates that put the resources at the development of block B, 48/95 and 52/97 at up to 4 trillion cubic feet (tcf), or 16 percent of the country's total reserves.

The resource base could grow as a result of two successful wells drilled several weeks ago.

Chevron, which holds a 43 percent stake in the offshore development off the southwest coast of Vietnam, drilled one well inside the current development area to find there were large quantities of additional gas resources deeper in the reservoir than previously verified.

It also drilled an exploration well outside the development area that confirmed additional hydrocarbon potential in a new trend in block B and 48/95.

The latest drilling results could raise total in-place gas resources for the combined blocks to more than 6 tcf.

Tomlinson said Chevron did not plan any further drilling until it could resolve commercial terms.

He declined to give an estimate on the size of the commercially recoverable reserves, which are normally much smaller than in-place estimates.

The increase comes as Vietnam is struggling to generate enough power to fuel surging economic growth, forcing it to import electricity, open the sector to foreign investment and burn more of its coal and imported fuel to meet demand.

Demand in Vietnam, a country used to frequent power outages, is expected to grow by 15.8 percent to 80 billion kilowatt hours this year.

Chevron already has other projects in Asia. It said earlier this month it planned to develop a $3.1 billion project in Thailand, Platong Gas 2.

It operates an already existing gas project in Bangladesh, and is working on other projects in Indonesia and China.

COMMERCIAL TALKS

Chevron was still in commercial talks with the Vietnamese government to agree, among other issues, the price at which it will sell its gas and taking more equity stakes, Tomlinson said, adding the company targeted an agreement this year.

Chevron is considering taking stakes in all three parts of the integrated gas development -- from exploration to power plants -- to ensure the project gets the go-ahead and to secure an outlet for its gas.

Such a deal would break with Chevron's usual reluctance to invest outside its core exploration and production areas, but would not be a first for Chevron or other majors.

In Thailand, Chevron, the largest gas producer in that country, holds a stake in the 700-megawatt TriEnergy power plant. BP (BP.L: Quote, Profile, Research) is considering a similar move in Vietnam.

The lack of infrastructure in many developing countries, especially for gas, is encouraging upstream firms to secure a market for their resources by investing in power plants and other downstream facilities.

The project should produce more than 500 million cubic feet a day of gas at full production, expected to be reached within five to seven years after start up, Tomlinson said.

That would represent about 70 percent of Vietnam's natural gas production in February, government figures show.

The project will cost about $4.3 billion, including the offshore part and the pipeline to the power complex, not the power plant itself, Tomlinson said. Engineering and construction costs for upstream projects have risen significantly over the past few years in line with rising costs for labour and steel. (Editing by Ramthan Hussain)

Vietnam's rice field loss threatens food security: minister

HANOI (AFP) — Vietnam's rapid industrialisation is threatening the country's food security as rice fields are being lost to development, the agriculture minister has warned, state media reported Monday.

The growth of cities and new industrial parks could mean Vietnam stops exporting rice in coming years, Cao Duc Phat, the minister of agriculture and rural development, said according to the Vietnam News daily.

"The increasing allocation of farmlands for other purposes is a major threat to food security with many plots of fertile lands being turned into urban areas and industrial parks," Phat was quoted as saying.

More than 500,000 hectares (1.2 million acres) of farmland had been converted between 2001 and 2007, and last year alone 125,000 hectares of rice fields had been lost, he reportedly said.

At the current trend of arable land loss, rice production in Vietnam -- one of the world's largest exporters of the food staple -- was expected to fall by about 1 million tonnes of rice per year, he said.

"In five years, the loss is expected to equal current rice exports," he reportedly said. "It means that we will no longer have extra rice for export and, in the long term, the country's food security will be threatened."

Phat said Vietnam's urbanisation and industrialisation were necessary but that agriculture remained the country's "strong point," adding that new industrial zones should be built in hilly areas and on exhausted farmlands.

Vietnam shares fall to 16-month low

* Down seventh day in a row

HANOI: Vietnam shares fell for the seventh session in a row and closed at a 16-month low on Monday as recent government plans to buy stocks failed to boost investor confidence.

Traders said a plan announced on March 6 by the state investment arm, the State Capital Investment Corp, to buy shares, had made little difference to the fledgling $14.6 billion exchange. Few details were disclosed about the plan. A liquidity crunch in recent months partly created by central bank monetary tightening policies to tame double-digit inflation has hit markets.

“The market is in desperate need for good news to regain investors’ confidence but there isn’t any,” a Hanoi-based stock market analyst said. “Government measures seem to have little lasting impact.”

The Ho Chi Minh Stock Exchange lost 4.5 percent to close at 521.07 points, the lowest since Nov 7, 2006; the month Communist-ruled Vietnam won approval to join the World Trade Organisation.

The index has fallen 20 percent in seven sessions. The Vietnam index is down 44 percent this year, making it the worst performing index in Asia. The over-the-counter Hanoi Securities Trading Center fell seven percent to 178.6 points on Monday.

On March 10, the State Bank of Vietnam widened the trading band of the heavily managed currency to +/-1 percent of the official rate from +/-0.75 percent, one of a series of moves aimed at tackling inflation. reuters

Samsung to build large mobile phone plant in Vietnam

Samsung's handset division keeps growing like crazy. Last year they've produced a total of 160 million mobile phones and this year they're shooting for 200 million mark. Half of the mobile phones shipped last year were made in Korea, while other half is built in Samsung's factories in China, Brazil and India. And they keep expanding…

The Korean giant is set to build a new factory in Vietnam that at some point will be able to produce up to 100 million units per annum. The location is already set and reportedly it's the citizens of the Bac Ninh Province which will benefit the most from the new facility. Either later this year or early next year, they'll start with production capacity of 30 million handsets, with a view to raising its annual production capacity to 100 million units.

You would think labor in China is affordable, but apparently Vietnamese are ready to work for half of the money their Chinese counterparts are. In addition, Samsung Vietnam's location is beneficial for the Korean company as it can easily export handset to rapidly growing markets in the region, such as Thailand, Malaysia and Cambodia, at lower tariff rates.

So what can we say except good luck Samsung! Maybe it's a good idea to transfer the production of low-end handsets to other, non-Korean factories, while keeping cream de la cream for the domestic labor. Or you already do so?

Vietnam's property market

Property fever and burnt fingers

23:48' 23/03/2008 (GMT+7)

VietNamNet Bridge - Vietnam’s property market in 2007 underwent numerous ups and downs, with fluctuations varied from each locality. However, some key trends have emerged this year which should see the market develop more soundly, writes Dr. Dinh Van An*. Nailing down accurate information about the nation’s property market is often difficult. However, it is clear that in some new urban areas, land prices doubled or tripled last year, with some lots in new urban areas in Hanoi and Ho Chi Minh City increasing from $3,120-3,750 per square metre to $5,000 by the end of 2007. Land prices in old Hanoian streets have exceeded $6,250 per square metre, with a square metre worth $62,500 in some places. It now appears prices have stopped rising and are settling. However, property price increases have not taken place in all segments or places. Land and apartment prices rose rapidly in such major cities as Hanoi, Ho Chi Minh City and Danang, but remained almost unchanged in other areas. The increases are not sustainable because transaction volumes were not high and the fever caught small segments of major cities’ wider urban property markets. It is thought the fever was also triggered by expanding banks’ property loans. Regarding the high-end segments in 2007 and early 2008 various investors such as corporations, groups and other large-scale local and foreign firms, jumped into the market with many big businesses channeling funds out of stocks and into the property market. In 2008, real estate has become an important investment channel of many local groups, particularly the emerging corporations such as REE, FPT, EVNLand and LilamaLand. Contrary to the bustling participation of the non-state economic sector in real estate development, capital for the construction of technical and social infrastructure mainly comes from the state budget. Meanwhile, the change of agricultural into non-agricultural land shows many discrepancies because the legitimate rights of those who lose agricultural land are not protected as laws state, leading to public petitions. What caused that fever? The property market’s institutional matters are showing more discrepancies. During 2003-2007, a series of legal documents and frameworks such as the Land Law in 2003, the Housing Law in 2006 and the Property Trading Law in January 2007 or Decree 84/2007/ND-CP were issued, as part of the noteworthy government’s and National Assembly’s efforts in addressing hurdles to investment, especially related to land ownership and clearance. However, according to Jones Lang LaSalle, one of the world’s leading property consultants, Vietnam still has many legal and policy risks and the market lacks transparency. The country’s property market remains fragile and short on information and data to pinpoint the market’s developments. No state agency can now provide reliable statistics about property trading volumes and prices, while this is merely a basic piece of information to supervise, evaluate and manage the market. The lack of transparency is even more serious in the primary market, where the state allocates or leases land to project investors and businesses. Banks’ property credit figures are not accessible to outsiders. A lack of information is one of the market’s biggest problems at the moment. A number of banks like Sacombank, AB Bank and ANZ have offered credits for house buyers with 10 to 20-year terms. The commercial banks, mainly trading short-term capital, seemed to have oversponsored these loans which are basically long-term. By this month, total outstanding property loans of Ho Chi Minh City’s commercial banks reached VND34.5 trillion ($2.15 billion), making up 10 per cent of the whole system’s outstanding loans. Of course, more specific figures are needed to evaluate whether the lending was measured. That the banks joined the property market directly via establishing trust or investment funds, or trading properties directly, makes insider trading likely. A number banks do property business via its affiliates such as ACB Real, Sacomreal, VPREIT and BIDVLand. More specific figures are also needed to prove if there is insider trading or not. The communicating effect with the stock market is another reason behind the property’s fluctuations last year. In March 2007, after enjoying robust profits, stock investors withdrew large amounts of capital from the bourse and into the property market, triggering a wave in property price rises. The VN Index rocketed from 883.9 points on August 6, 2007 to more than 1,100 on October 18, 2007 before falling. Many funds and listed firms have channelled capital flows into the property market. Vietnam is a new investment target of American and European real estate funds. As European and US property markets are on the wane, investment capital travelled to Asian and Middle Eastern nations with Vietnam one of the hottest destinations. Of the total $20 billion of foreign direct investment Vietnam attracted last year, up to $5 billion was sunk into the property market. This month, South Korean investors started implementing the Cantavil project with a total investment of around $250 million, while other foreign investors are seeking property opportunities in Vietnam. Real demand for property, particularly that for housing, is increasing rapidly. Every year, Vietnam’s population increase by about 1.1 million and if each person requires an average land area of nine or 10 square metres, residential land needs to increase dozens of millions of square metres, per year. Meanwhile, the nation can build just half a million square metres of housing accommodation each year. People’s rising incomes are also increasing the appetite for new soil. Last but not least, the policy of allowing Viet Kieu and foreigners to buy houses displays more market openness, provoking investors and speculators to seek supposed opportunities. Major risks of the property price rises in 2007 and early 2008 An economy relying too much on property to develop will sooner or later pay a dear price. Property is a strong force of any economy, but it should not attract too many national resources. It is necessary to prevent businesses and investors from viewing property as an easy way to get rich. The short-term benefit of a minority will cause serious harm to the economy in the long run. A nation’s resources and labour should centre on basic construction, technical, technological and research areas and not be excessively pumped into land and houses. High land prices lead to several outcomes. Money will move to a small group of responsive speculators, while farmers who sell their land will enjoy small benefits from price gaps. Businesses and investors will be forced to pay higher costs for land access, clearance and compensation. End-users have to pay unreasonably high prices. Poor people, as a result, cannot buy houses at such high prices. “Debt repayment capacity” of property investors and speculators has reached a seriously dangerous limit. The highly important rate between the money a middle-class family has to pay monthly for buying a house and the post-tax salary is now too high. International practices show a middle-class family uses only 33 per cent of their savings for buying a house but this rate has amounted to more than 100 per cent in Vietnam that possibly leads to a debt crisis. Of note, lending interest rates rose rapidly by the end of 2007 and as a result borrowers have to pay higher than expected. Property prices in Vietnam now rank as some of the world’s highest. Office rents in Ho Chi Minh City are the 17th most expensive in the world. The rentals for grade A offices in the southern hub have increased by 52 per cent compared to those in 2006 and by 30 per cent in Hanoi. Respective rises for the rentals of grade B offices are 35 per cent and 40 per cent and for grade C offices, 35 per cent and 45 per cent. Higher rentals cause higher business costs, hence lowering the competitiveness in of Vietnam’s economy in comparison with regional competitors when taking costs into account.One of the top concerns these days is the market’s environment. Finding information for buying and accessing land and houses is obviously difficult. Many projects have been operational and a lot of land has transformed from agricultural purposes to housing. However, it is not easy to monitor the land being traded. This phenomenon, stemming from both businesses and secondary investors, creates an environment of low transparency, leading to high speculation. The property market in 2007 and early 2008 has grown, but contained several shortcomings. To make it develop soundly and contribute to economic growth, help fight inflation, the institutional, banking, financial and market regulatory measures should be implemented smoothly. Only coordinated policies from management agencies at central and local levels can succeed. *Dr Dinh Van An is director of the Central Institute for Economic Management. (Source: VIR)

Read on >>
	State takes lead on land (23/03/2008)
	Viet Kieu now close to home ownership parity (23/03/2008)
	Samsung to build handset plant in Northern Vietnam (23/03/2008)
	Gold investors should understand world markets (23/03/2008)
	BUSINESS IN BRIEF 23/3 (23/03/2008)
	Central region lures 1.2 billion USD in FDI (23/03/2008)
	Banks agree on 11 percent cap for deposit interest rates (23/03/2008)
	Czech marks progress in bilateral trade (22/03/2008)
	Vietnam, Czech Republic boost ties with huge deals (22/03/2008)
	Challenge Fund makes debut to help the poor (22/03/2008)
	Vietnam, RoK businesses make deals in Seoul (22/03/2008)
	Taiwanese firm gets green light for tree plantation (22/03/2008)
	Building trademarks for craft villages (22/03/2008)
	BUSINESS IN BRIEF 21/3 (21/03/2008)
	How many banks is enough for Vietnam? (21/03/2008)

Vocational training gets needed boost

VietNamNet Bridge – A co-operation project between the Viet Nam Oil and Gas Group (PetroVietnam) and one of the nation’s top universities will help boost vocational training in Vietnam, Deputy Prime Minister and Minister of Education and Training Nguyen Thien Nhan said at the signing ceremony. PetroVietnam director Le Minh Hong and deputy director of Ha Noi National University Vu Minh Giang inked a comprehensive co-operation agreement in the capital yesterday. Nhan lauded the ceremony as a "historic event between a leading enterprise and a leading university," which would help the quality of training in Vietnam meet demand. According to the agreement, the two sides will build a co-operation model on training and studies in science and technology that will meet international standards. The plan will aim for top quality education that will put Vietnam in the running for the Nobel prizes and other prestigious awards. The Ha Noi National University will organise training courses and give top students the chance to work at the Viet Nam Oil and Gas Group. The two sides will invest in writing up a plan to promote talent and build an Oil and Gas Institute with a high-tech laboratory at the university. The group will also sponsor a fund to develop science and technology at the university. The agreement also includes the Green Hoa Binh project in the northern province of Hoa Binh. Under the plan the Viet Nam Oil and Gas Group will build an urban area around the university. Government efforts Providing vocational training to meet demand in Vietnam was also order of the day at a conference in the capital recently. Speaking at the event Prime Minister Nguyen Tan Dung said the Government encouraged businesses to train human resources at various levels, especially big enterprises and groups who wanted to open vocational training schools. Dung said vocational training had seen some progress recently but was still lacking standards needed to keep up with the national industrialisation and modernisation process. The State would continue to boost investment in training and education and carry out preferential policies in high-tech areas, Dung said. The PM urged the education sector to improve the quality of their training courses so as to provide 50% of workers with a better education by 2010. The nation needed more universities and colleges to ensure 200 out of 10,000 people could get access to university education, he said. The sector should define the responsibilities of learners as well as support agencies, enterprises and production units that use trained labourers. Dung said the current credit programme for students at universities, colleges and vocational training schools was a good way to train human resources. But the State needed to make clear distinctions on who exactly could take out a loan and regulate the responsibility of the learners and their families, the State and employers to control use of the loan and ensure it is paid back in time. Attending the conference were Deputy Prime Ministers Pham Gia Khiem and Nguyen Thien Nhan and representatives from the ministries of Education and Training, Labour, Invalids and Social Affairs and Finance, Government Office and General Department of Vocational Training. Recently, the Ministry of Education and Training joined forces with Viet Nam Television, Viet Nam Study Promotion Association and Bank for Export and Import of Viet Nam (Eximbank) to implement the programme "Lighting the Future," to be broadcast on VTV 1 at the end of this month. General director of Eximbank, Pham Van Thiet, said project organisers, as well as the bank, would grant scholarships worth VND10mil (US$625) each to disadvantaged students. They will also open a fund at the bank so people can make donations to help the students. (Source: Viet Nam News)

Bronzeoak, PetroVietnam unit to build bioethanol plant

Eric Watkins Senior Correspondent

LOS ANGELES, Mar. 14 -- The UK's Bronzeoak Group entered into an agreement with PetroVietnam Tourism & Service Co. (Petrosetco), an affiliate of state-owned Vietnam Oil & Gas Corp., to build a bioethanol production plant in the Dung Quat Economic Zone of Quang Ngai province.

Provincial chairman Nguyen Xuan Hue approved the joint plan, valued at $138 million, which will see construction of a facility able to produce some 150 million l/year of ethanol from about 1 million tons/year of cassava.

The factory will be developed on 30-50 hectares, and products will be supplied to the local market for the manufacturing and transport sectors. Petrosetco will hold a 51% stake and Bronzeoak 49%.

In July 2007, BP PLC said it would support Bronzeoak's development program of large scale bioethanol production facilities throughout Southeast Asia and Africa by investing in selected projects as well as contributing its knowledge and network of downstream operations to help accelerate the program.

"BP's support will provide a great boost to our program and allow us to accelerate our development activities during the next 5 years," said Graham Stowell, Bronzeoak managing director.

Last March, Petrosetco and Japan's Itochu Corp. signed a memorandum of understanding to establish a joint venture for the construction of a bioethanol production plant in Vietnam using tapioca chips to produce 100 million l/year of 99.8% pure ethanol for use in manufacturing and transport.

According to the two partners, the factory will be built in Ho Chi Minh City's Hiep Phuoc Industrial Park, with production expected to start in first quarter 2009. Construction on the project, expected to cost $80-100 million, is due to begin this quarter.

Contact Eric Watkins at hippalus@yahoo.com.

To access this article, go to: http://www.ogj.com/articles/article_display.cfm?ARTICLE_ID=323102&p=7

Dung Quat industrial park appealing to investment

13:19' 16/03/2008 (GMT+7)

VietNamNet Bridge - So far, 144 projects have registered to invest in Dung Quat industrial park in the central province of Quang Ngai , of them 95 have received licenses. Major projects include an oil refinery invested by the Viet Nam Oil and Gas Group (PetroVietnam) with an investment of 2.5 billion USD and a 3 billion USD steel project by the Tycoons Worldwide Steel company. Other projects include a shipyard built by Vinashin at a cost of almost 400 million USD, a 260 million USD plant by the Doosan-Viet Nam Heavy Industry Ltd. Co., and a polypropylene factory by the PetroVietnam with an investment of 200 million USD. Other 49 projects, capitalized at 10.5 billion USD, have got approval for investment by either the Government or the park’s management board. So far, 43 projects have been put into operation, providing jobs for over 10,000 workers with two-thirds being locals. The management board head, Tran Le Trung, said the park has fulfilled the the target on investment licensing set forth by the province for 2010. He added that up to 2010, the park will need some 31,000 workers for various industries, especially mechanics. To meet demands for skilled workforces, Provincial People’s Committee Chairman Nguyen Xuan Hue has approved a programme of vocational training and labour supply for the park in the 2008-2010 period with a budget of over 212 billion VND to train 29,000 skilled workers. (Source: VNA)

Vietnam's shipbuilding industry sets sail

'Vietnam expands ship building capacity' .

Viet Nam is one of the five leading shipbuilders in the world, according to Fairplay, an international shipping weekly magazine based in the UK.

Nguyen Quoc Anh, general director of the Viet Nam Shipbuilding Industry Group (Vinashin), said the ranking was made because of the country’s young, dynamic, and skillful labour force and its shipbuilding technology. To maintain a top position, though, the proportion of local content in ships made in Viet Nam should be increased, he added. Vinashin, the country’s largest shipbuilder, plans to increase the proportion of local content to 65 per cent by 2015.

Vinashin also plans to open its rolled steel plant with an annual capacity of 500,000 tonnes to build ships in the third quarter of the year. It will also produce its first engine for ships in the fourth quarter of the year. Vinashin is currently negotiating with Swiss producers to produce modern ship engines that are environmentally friendly, according to Anh.

Increasing equipment investment - . ..

Viet Nam’s largest shipping exhibition, Vietship, opened in Ha Noi’s My Dinh National Conventional Centre yesterday. Speaking at the event, Deputy Prime Minister Nguyen Thien Nhan said the exhibition would create more opportunities for domestic ship-builders to boost co-operation with their foreign counterparts in investment, technology transfer and trade promotion.

Nhan also praised the industry’s achievements, adding that maritime science and technology was a top priority for the nation under its economic development strategy. The country aimed the sea-related economy to make up 53 to 55 per cent of the country’s GDP; around 60 per cent of the country’s total export turnover.

Aro

Vietnam’s boat building industry expanding - . ..

und 400 of the world’s leading firms and organisations involved in the maritime industry attended the event and hundreds of millions of US dollars worth of deals were expected to be signed. The exhibition aimed to turn the domestic shipbuilding industry from assemblers into manufacturers, Vinashin’s Nguyen Quoc Anh said.

by http://vietnamnews.vnagency.com.vn - 1:12 AM Sun 16 Mar 2008 GMT

First satellite readies for April launch out of French Guyana

(13-03-2008)

HA NOI — Viet Nam’s first satellite is set to blast off from Korou, French Guyana on April 12, with the aim of boosting the country’s maritime economy.

Vice general director of the Viet Nam Posts and Telecommunication Group (VNPT) Nguyen Ba Thuoc said the satellite would be used for offshore fishermen, oil workers and people living on islands and remote areas of the country as part of the nation’s recently revealed maritime strategy.

"Certainly, the satellite is a commercial project and we expect to make profits but another goal is to provide non-profit telecommunications services in areas which other means of communications find hard to reach."

Thuoc said that the VNPT was proposing that the Ministry of Posts and Telematics uses the public telecommunications fund to subsidise these customers of the satellite services.

The US$200 million Vinasat-1, built by the US giant Lockheed Martin and launched by the European Union Arianespace, is scheduled to go into orbit at 132 degrees east – a position that Viet Nam registered with the International Telecommunications Union (ITU) in 1999.

Vinasat-1 will provide more than 200 digital television channels and tens of thousands of Internet data transmission and telephone channels. The satellite is expected to cover Viet Nam, Laos, Eastern Asian nations, India and Australia. It has a lifespan of 15 years.

The new satellite will save the country around $15 million each year in leasing costs, according to project director Hoang Minh Thong, but in the age of emerging Internet-based telecommunications, satellites are not as economically viable as they used to be.

"Certainly, telecommunications via optical cables are more efficient than satellites," Thong said.

"But as recent events have proved, satellites can provide vital telecommunications services when these cables collapse."

The launch of Viet Nam’s first satellite was also significant in terms of national security, as it would improve the stability for the country’s information network, the project director said. It would also fly the Vietnamese flag in celestial orbit, he added.

National Viet Nam Television will be among the satellite’s first leasers, according to VTV general director Vu Van Hien. Hien said he believed the new satellite would improve his company’s broadcasting services. — VNS

Passion For Reason : Spratly Islands 101

By Raul Pangalangan Columnist Philippine Daily Inquirer

Posted date: March 14, 2008

MANILA, Philippines -- Joint Development in Mineral Agreements is not controversial in international law. What makes the China-Vietnam-Philippines 2005 Joint Marine Seismic Undertaking (JMSU) suspect, if not downright unlawful, is that it was signed in violation of the Philippine Constitution, and may have been signed in exchange for bribe-tainted loans. It isn’t that we sold potentially oil rich shores so cheaply, but that we bartered our souls. One, we must distinguish between title over land and title over the waters surrounding the land (or to be more precise, over the maritime territories, which will include the submerged lands and the resources beneath what is called the continental shelf). Each kind of title is derived from a different source. Our title over our islands derives from the 1898 Treaty of Peace between Spain and the United States: “Spain cedes to the United States the archipelago known as the Philippine Islands, and comprehending the islands lying within the following line: ….” Significantly, the Spratlys lie within those lines demarcated within the treaty limits. (The United States paid Spain the sum of $20 million. It could’ve been a neat real estate deal, except that we, the dark-skinned natives, were only accidentally part of the package—and proudly waged war.) On the other hand, our claim over the waters and the maritime zones derive from the 1982 Convention on the Law of the Sea, which grants us the sole exploitation rights over our natural resources within our Exclusive Economic Zone (which extends to 200 nautical miles around the coastal state) and, more relevant to fossil fuel extraction, to our continental shelf (defined as the “natural prolongation of the land mass” up to the same 200 nautical mile limit). Within that framework, “joint development zones” are not a problem. Indeed, in our part of the world, there have been other such cooperative regimes: Thailand and Malaysia; East Timor and Australia; Malaysia and Brunei; and China and Vietnam. These are in fact fostered as provisional regimes so that states can access their mineral assets without having to wait until a final “boundary delimitation” that typically takes one or two generations. That is exactly what the Chinese are saying: The JMSU is a way of “shelving disputes and going in for joint development.” That is what the ASEAN’s Manila Declaration of 1992 says: “South China Sea issues involve sensitive questions of sovereignty” and so its members should “explore the possibility of cooperation ... without prejudicing the[ir] sovereignty.” That is also what the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea urged: to “exercise self-restraint [and] refrain from [engaging in] activities that would complicate or escalate disputes.” Moreover, cooperative zones do not entail loss of territory. Indeed, considering that the Philippines has neither the capital nor technology, the only thing it can share with its partners is exploitation rights over part of its territory. That is why the JMSU contains this disclaimer: the agreement “shall not undermine the basic position held by … each Party on the South China Sea issue,” adverting to the perennial debate over who owns the disputed Spratly Islands in what some Chinese experts call “a Chinese pond.” The real problem lies elsewhere. It lies in the Philippine Constitution, which reserves to the state the exclusive power of “exploration, development, and utilization of natural resources,” although it can choose to do so through cooperative agreements with Filipino corporations. That clause ends with the reporting requirement—not complied with, either—namely: for the President to notify Congress of every such contract within 30 days. The official Malacañang line now is that the JMSU is “purely scientific in nature”—not exploratory—and is solely for geological data-gathering to test a portion of the Spratlys for possible oil reserves. However, its worst enemy is itself, via its own statements in the website of the Philippine Information Agency (PIA). According to the PIA, Press Secretary Ignacio Bunye said at a press briefing in the Shangri-La Hotel: “The discussion (between President Arroyo and Premier Wen) centered on the joint exploration of the three countries…. The first phase or the exploration phase has been completed and the Chinese Premier expressed hope that the three countries would continue the cooperation on the developmental level.” Finally, contemporaneous statements by the other partners, China and Vietnam, and by Malacañang itself, repeatedly use the word “exploration.” Finally, it is not as if there is a bright-line distinction that divides the “scientific” from the “exploratory.” Eduardo Mañalac, former president of Philippine National Oil Co., has stated that from an engineer’s standpoint, what the JMSU contemplates is already “exploration” for all practical intents. But the Palace could have been more believable if the scientific study had been undertaken by an academic or scientific agency. What makes the official line implausible is that the deal was signed by three commercial corporations engaged in actual petroleum extraction. A geological study does not become “scientific” merely because it uses expert methods. It becomes so because it aims to discover truths that lie beneath the surface, whoever profits or loses. Just like the protesters at Mendiola Street are scientific, while Ms Arroyo’s minions are exploratory. * * * I will give a five-day lecture on this topic (Aug. 11 to 15) this summer at The Hague Academy of International Law, entitled “Disputed Islands in the South China Sea and Southeast Asia under International Law.” If interested, check out the website at http://www.hagueacademy.nl. * * * Comments to passionforreason@gmail.com

Investors in China, Vietnam can expect 20% return on investment

SINGAPORE : Amid worries about an economic slowdown in the US, economists remain positive about growth in China and Vietnam.

The two economies are expected to continue booming, and according to US financial services giant Citigroup, investments there can reap returns of as much as 20% this year.

The economies of China and Vietnam are seen as among the fastest-growing worldwide.

China's GDP is expected to grow some 10.5% this year, and Vietnam's 8.1%. This will outstrip the average of 5% forecast for Asia as a whole.

Citigroup said investments in Vietnam and China can see returns of up to 20%.

"Let's say we use the US dollar to measure the return for foreign investors, and the return should be around 20%. One, we are expecting 7.5% currency appreciation this year. Two, profit growth in China should be comparable to the nominal GDP growth which was 14% in the past decade," said Shen Minggao, VP, APAC Economics & Market Analysis, Citi.

"If your firm is able to grow alongside the Chinese economy, then you should be able to grow at around 14%. So put them together, (you get) at least around 20% nominal rate of return measured in US dollars," he added.

Industries in China seen as having the best returns include food, luxury goods, manufacturing and the energy sector. Environment-related investments are also seen enjoying a boost.

"The government will try to invest more to improve the environmental condition. Those that are related to pollution treatment and also electric & energy efficiency improvement will benefit," said Shen.

For Vietnam, Citigroup said infrastructure, tourism, information technology and agriculture will see strong growth.

In infrastructure alone, Vietnam expects about US$7 billion in infrastructural developments this year.

"What is also amazing is that there is tremendous amount of opportunity in the agricultural sector. To get a 2% or 3% growth in any one country is considered to be fantastic, in terms of agriculture. Vietnam actually sees 6-7% growth. It is currently the world's largest exporter of coffee cashews, and second largest exporter of coffee, rice and peppercorn. So it is a huge producer of commodities, and as the global population increases and the agricultural land size decreases, commodity prices are going to rise," said Faisal Ameen, Managing Director & Country Head (Vietnam), Citi.

Overall, Vietnam remains attractive because of its low cost, which according to experts, is relatively lower than China.

GDP per capita in cities of Vietnam such as Hanoi and Ho Chi Minh is at US$1,000 and US$1,600 respectively while China's four cities including Shanghai, Shenzhen, Guangzhou, and Beijing sees about US$9,600 on average.

Citigroup expects Vietnam to attract at least US$15 billion in foreign direct investments this year, and China will see US$90 billion worth of foreign direct investments. - CNA /ls

Vietnamese investors expand overseas activities

20:11' 10/02/2008 (GMT+7)

VietNamNet Bridge - The Vietnam Oil and Gas Group (PetroVietnam), which has got involved in building a 1.8 billion USD electric power project in Laos , has intended to launch a series of investment projects in the neighbouring country in the near future. To this end, PetroVietnam has set up a representative office in Laos, planning to kick-start a number of projects on oil and gas exploration in Pakse and Vientiane, break ground for a petroleum depot and an entrepot in Laos’ southern region and some mining projects. Many other companies, involved in farm produce and forest product processing, IT and telecoms, are also preparing for their investment projects abroad. According to the Ministry of Planning and Investment, overseas investment activities are bustling thanked to the government’s promotion policies, especially a decree on overseas investment, and simplified related procedures. Last year, Vietnamese businesses had 64 investment projects licensed abroad with a total investment capital of almost 400 million USD, raising the country’s number of overseas investment projects to 249 and the total registered capital to nearly 1.4 billion USD since the country promulgated the Law on Foreign Investment in 1988. Vietnamese businesses have invested in 35 foreign countries and territories with the largest number of 86 projects capitalised at 584 million USD going to Laos . It was followed by Cambodia with 27 projects and a total capital of 88.4 million USD, and Russia with 12 projects and a total capital of 48.1 million USD. Some East European, North African, Latin American, and Middle East countries are also attractive destinations to Vietnamese investors. Vietnamese businesses have shifted from trading to producing competitive products, meeting the demands of local markets with increased market shares and expanded production areas. Agricultural projects represent 36 percent of overseas projects and 40 percent of the total overseas investment capital; and industrial projects, 26 percent and 37.6 percent, respectively. The remainder of the overseas capital has been poured into services. According to the Overseas Investment Department of the Ministry of Planning and Investment, this year, the total overseas investment by Vietnamese businesses is estimated to reach 500 million USD, a 20 percent increase over last year. Overseas investment projects by Vietnamese businesses mainly focus on oil and gas, electricity, mineral exploitation, telecoms, transport and communications, import-export and retail sales. Phan Huu Thang, head of the Overseas Investment Department, said that overseas investment projects by Vietnamese companies have gained initial good results, citing the oil and gas exploration and exploitation projects by PetroVietnam in Algeria and Malaysia, the 60 million USD rubber planting project in four Lao southern provinces by the Vietnam Rubber Corporation and the Dak Lak Rubber Company.

Vietnam Lifts Investment Cap for Foreigners

The country's Finance Ministry has raised the maximum ownership stake that foreigners can acquire in unlisted public companies to 40% from 30% to stimulate foreign investment

by Lara Wozniak

Vietnam's Finance Ministry has raised the cap on foreign ownership in unlisted public companies to 40% from the current 30% to boost foreign investment in the local market.

According to local press, finance minister Vu Van Ninh also said in a statement on Saturday on the government website that the ministry would not impose a previously planned income tax on stock investors this year.

And last week the State Capital Investment Corporation (SCIC) took what it billed as "urgent" measures to support the stockmarket after recent declines and announced an unprecedented plan to buy back shares. It posted a message on its website saying it was: "urgently identifying a list of investment portfolios, size and methods of the investment in compliance with the government's directive for implementation".

The statement said the move was subject to final government approval and its website would be updated with information.

Together these measures are clearly designed to attract new investors and restore confidence among existing ones—after all, the nation is struggling with double-digit inflation and the local stockmarket has lost more than a third of its value this year after a rollercoaster ride last year.

Vietnam defines unlisted public companies as those with a registered capital of more than Vnd10 billion ($624,000) and that have more than 100 investors.

This means that foreigners will soon be able to buy a greater percentage of shares in more than 1,000 Vietnamese companies. There are currently 150 companies listed on Ho Chi Minh Stock Exchange and 130 companies on the official over-the-counter market in Hanoi, and the State Securities Commission is managing trade in shares of 850 unlisted public companies.

Foreign ownership is estimated to account for 25% of the Ho Chi Minh Stock Exchange's total market capitalisation of $18 billion, according to the SSC. In terms of what stocks foreigners buy—they can now own up to 49% of the shares in non-bank listed companies and 30% in banks.

As a result, the market on Monday recorded another day of gains with both the Ho Chi Minh Stock Exchange and the Hanoi stock exchange rising by 2.8% and 3.3% to 658 and 233 respectively. However, one trader pointed out that unlike the last couple of trading days, not all stocks rose or hit the upside limit and some actually fell or were unchanged. Many analysts reckon that once the rally loses steam, stock selection will become more important as good companies at reasonable valuation would outperform average companies at high multiples.

One trader pointed out that the increase is a minor acceleration of Vietnam's WTO undertakings (100% foreign ownership by 2009 except some specific sectors) and what it means for OTC stocks is that foreign buying will increase for those counters where the ceiling of 30% has been reached. He added that it may not, however, have a significant impact on the market as intended because OTC trades are not publicly visible unlike those on the two centers where the indices reflect investor sentiments with volume/value and foreign/domestic participation.

Domestic retail investors, who dominate trading, have bailed out of the Ho Chi Minh City and Hanoi stockmarkets in the past month as inflation hit 15.7% in February, the highest in 12 years.

Vietnam Investors Conference Postponed

By Matt Steinglass Hanoi 11 March 2008

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Vietnam's financial markets have had a tumultuous year. The once high-flying stock market has fallen more than 30 percent, since January 1, and inflation has ballooned. A major investors' conference was scheduled to start Tuesday in Hanoi ,but last week, the government called it off. Matt Steinglass has more from Hanoi.

The Euromoney Vietnam Investment Forum was supposed to bring hundreds of the world's top money managers to Hanoi. The scheduled keynote speaker was Sandy Flockhart, head of Asia operations for HSBC - one of the world's top-five banks.

Sandy Flockhart, HSBC Asia Pacific chief executive officer attends a news conference in Hong Kong (File Photo)

But, HSBC spokeswoman To Quynh says, last Thursday, HSBC got a call saying Flockhart would have to reschedule.

Quynh says the government asked Euromoney, the conference's organizer, to postpone it until September.

The government said it was worried about "a combination of pressing macro and micro-economic concerns." Vietnam's stock market is the worst performer in Asia this year.

But investors criticized the decision, saying the government had missed an opportunity to reassure investors and ask for advice. Le Dang Doanh is an outspoken Vietnamese economist and a former advisor to the prime minister.

Doanh says the more difficult the situation is, the more important it is to have an open dialogue with investors, to calm their suspicions and concerns.

Vietnamese officials have gotten used to reporting good news. The country's economy has grown more than seven percent a year since 2001.

After Vietnam joined the World Trade Organization last year, foreign investment flooded in - topping $20 billion last year.

But the influx of dollars created upward pressure on the exchange rate of the Vietnamese dong, which could have hurt exports. To keep the dong from rising, Vietnam's State Bank bought dollars and that contributed to inflation. Benedict Bingham, the International Monetary Fund's representative in Hanoi, explains.

"That left the banking system with an excess of dong. And, it was that surplus of dong liquidity in the first half of last year that generated the rise in bank credit, and that rise in bank credit contributed to the increase in inflationary pressure," said Bingham.

A female worker works on shirts to be exported to USA at Garment Company 10 outside Hanoi, Vietnam (File Photo)

Meanwhile, the dollar was falling, making it even harder to keep the dong from rising. Prices for the commodities Vietnam imports were rising, too.

Then, Vietnam had its coldest winter in 40 years, driving up food prices. In February, inflation was nearly 16 percent.

To fight inflation, the government raised interest rates and ordered banks to reduce loans and increase their reserves.

But that hurt the stock market, as investors sold shares to repay loans. The Vietnam index has lost about a third of its value this year.

Some investors criticized the government for acting too late and too harshly. Peter Ryder, chief executive office of Indochina Capital, says Vietnam is still in a learning phase as its capital markets develop.

"I would kind of give them about a C-plus at this point in time. The fact that they are trying to do something about it instead of ignoring the situation is definitely a plus," said Ryder. "The fact that they have struck as dramatically as they have as late in the game is a bit of a minus."

Ryder and other foreign investors still have long-term confidence in Vietnam's markets. The economy still is expected to grow by more seven percent this year.

But on Monday, the IMF's Bingham pressed the government to fight inflation by allowing the dong to rise against the dollar, rather than by setting targets for the amount of credit banks can extend.

"I think the government is fully aware of the problems posed by the rise in inflation, and also of the widening of the trade deficit. I think what we are also seeing now, however, is a broader debate on the instruments to address the rise in inflation in this economy. And I think that debate isn't settled yet," said Bingham.

Last week, Vietnam said it would allow the dong's exchange rate to float a bit more freely - just half a percentage point around the official target. The question is whether this will be enough to keep the economy from overheating and to reassure jumpy investors.

Peter Ryder is not sure.

"I still think we have not see the end of the volatility and perhaps even downward pressures," he said. "So, you know, buckle up!"

With rising inflation, the falling dollar and volatile stock markets, investors and government economic officials expect to have their hands full.

PetroVietnam boost implementation of ten key projects

At the construction site of the Nhon Trach 1 Electric Power Plant No 1. Nhan Dan - The Vietnam Oil and Gas Group (PetroVietnam) announces that it has pooled efforts to boost the implementation of ten key national oil and gas projects from the beginning of 2008. These include the Ca Mau 2 Electric Power Plant project, the Phu My-Nhon Trach gas pipeline project; the Nhon Trach Electric Power Plants No 1 and No 2; the Block B-Omon Pipeline project; the Dung Quat Oil Refinery; the Nghi Son Petrochemical Complex; the southern refinery, the southern petrochemical complex and the Ca Mau Netrogenous Fertiliser Plant.

Vietnam introduces oil rig construction project

The Ministry of Industry and Trade has submitted to the central government a project to manufacture oil drilling platforms, to be developed by Vietnamese oil drill maker PV Shipyard.

The first project entails building a 60-meter self-elevating mobile drilling unit that meets international standards. The automatic platform, to be floated at sea, represents Vietnam’s first mechanically engineered product employing high-level technology. PV Shipyard based in Vung Tau has signed a cooperative agreement with LeTourneau Technology Inc., a US manufacturer of front-end loaders, log stackers and self-elevating mobile offshore drilling rigs, to develop projects to build mobile oil platforms in Vietnam.

Vietnam to Launch 1st Satellite

HANOI, Vietnam (AP) — Vietnam is preparing to launch its first satellite, hoping to improve the country's telecommunications to keep pace with its rapid economic development, officials said Wednesday.

Vinasat No. 1 is scheduled to be launched April 12 from Kourou spaceport in South America, and will be ready for use in May, Nguyen Ba Thuoc, vice general director of state-owned Vietnam Post and Telecommunication Corp., or VNPT, told reporters.

The $200 million satellite, which has a medium transmission capacity, will help make Internet and television accessible nationwide, Thuoc said.

"Vietnam has reached the point where significant improvements of the telecommunication infrastructure are needed for its economic and social development," said Thuoc. Better telecommunications would bring more investment into the country, he said.

Currently, businesses and the Vietnamese government are renting satellites from Australia, Thailand and Russia.

Vietnam's economy has grown at an average annual rate of more than 7 percent for the last 10 years. It has 19 million Internet users, and more than 40 million telephones, according to government figures.

Vietnam's shipbuilding industry sets sail

(12-03-2008)

Visitors look at a model of a Vinashin ship at the Vietship Fair 2008 in Ha Noi yesterday. — VNS Photo Doan Tung

HCM CITY — Viet Nam is one of the five leading shipbuilders in the world, according to Fairplay, an international shipping weekly magazine based in the UK.

Nguyen Quoc Anh, general director of the Viet Nam Shipbuilding Industry Group (Vinashin), said the ranking was made because of the country’s young, dynamic, and skillful labour force and its shipbuilding technology.

To maintain a top position, though, the proportion of local content in ships made in Viet Nam should be increased, he added.

Vinashin, the country’s largest shipbuilder, plans to increase the proportion of local content to 65 per cent by 2015.

Vinashin also plans to open its rolled steel plant with an annual capacity of 500,000 tonnes to build ships in the third quarter of the year.

It will also produce its first engine for ships in the fourth quarter of the year.

Vinashin is currently negotiating with Swiss producers to produce modern ship engines that are environmentally friendly, according to Anh.

Boost in co-operation

Viet Nam’s largest shipping exhibition, Vietship, opened in Ha Noi’s My Dinh National Conventional Centre yesterday.

Speaking at the event, Deputy Prime Minister Nguyen Thien Nhan said the exhibition would create more opportunities for domestic ship-builders to boost co-operation with their foreign counterparts in investment, technology transfer and trade promotion.

Nhan also praised the industry’s achievements, adding that maritime science and technology was a top priority for the nation under its economic development strategy.

The country aimed the sea-related economy to make up 53 to 55 per cent of the country’s GDP; around 60 per cent of the country’s total export turnover.

Around 400 of the world’s leading firms and organisations involved in the maritime industry attended the event and hundreds of millions of US dollars worth of deals were expected to be signed.

The exhibition aimed to turn the domestic shipbuilding industry from assemblers into manufacturers, Vinashin’s Nguyen Quoc Anh said. — VNS

Iran, Vietnam ink $115m oil deal

Tehran Times Economic Desk

TEHRAN, Mar. 12 (MNA) – National Iranian Oil Company (NIOC) and PetroVietnam Exploration Production Corporation (PVET) signed a contract on oil exploration and development of Danan oilfield Wednesday.

Danan oilfield measures over 5,400 sq. km. in area and is located in Ilam Province, west of Iran.

The Vietnamese company is to carry out the 115-million-dollar contract in four years that includes study and analysis of seismography data with drilling at least three wells.

This is the second contract for exploration and development of 17 oil and gas blocks in Iran for which a tender was held last year, PIN reported.

The deal has been signed in line with the policy of attracting giant international oil companies for investment in the upstream oil sector of the country.

On the sidelines of the signing ceremony, the NIOC managing director said Iran has planned for boosting its oil output by 70,000 bpd.

Seifollah Jashnsaz added for the time being Iran produces 4,180,000 barrels of oil per day.

Vietnam's Business News

HCMC - Saigontourist Travel Service Co. will welcome nearly 5,000 cruise ship passengers between today and March 17. The company says five cruise ships will be anchoring in the city, namely Costa Allegra, SuperStar Libra, Europa, Columbus, and Saga Rose, the last-named ship from England making its first trip to the country with 800 passengers and crew members. The company has since early 2008 to the middle of this month welcomed nearly 13,000 sea passengers.

HCMC – The Southern Airports and Services Company (Sasco) and H.M.Sky GmbH Company last week jointly launched Viethaus in Germany’s Berlin City, which is a center for promoting trade, investment, culture and tourism between Vietnam and Germany. The center will help enterprises of the two country promote economic and trade ties. The total invested capital for the Viethaus center amounts to 10 million euro.

HANOI - A local company has submitted dossiers to the Vietnam Civil Aviation Administration to establish a private air carrier named Air Speed Up, which will be a domestic airline with a chartered capital of VND200 billion, Tien Phong reports. The company plans to launch the first commercial flight in October this year if the license is forthcoming. There are currently four air carriers in the country, comprising Vietnam Airlines, Pacific Airlines, Vasco, and Vietjet.

VUNG TAU - Hoa Sen Building Material JS Company last week inaugurated a building material factory of the same name in southern Baria-Vung Tau Province, Nguoi Lao Dong reports. The company has invested VND85 billion in the first phase of the project, whose total investment will amount to some VND350 billion, and its key products include plastic and steel pipes, and pre-structured aluminum bars for construction.

THANH HOA - Nghi Son Cast Iron JS Company last week started work on a cast-iron factory in Nghi Son Economic Zone in northern Thanh Hoa Province, according to Sai Gon Giai Phong. The company will spend VND1.47 trillion in the first phase for completion in September next year, with an annual output of 750,000 tons of steel a year, which will triple to 2.25 million tons down the road.

HCMC - Sacombank on Friday signed an agreement with Dalat University to invest VND25 billion in the institution in the Central Highlands’ resort city of Dalat, according to Tuoi Tre. With this investment, the local joint-stock bank will hold a 25% stake in the university.

HAI PHONG - Pha Rung Shipyard, a subsidiary of Vietnam Shipbuilding Industry Group (Vinashin), on Saturday handed over a 20,000-ton vessel named Vinashinbay to Vinashin Shipping Company. The vessel, 165.5 meters long and 25 meters wide, has a cargo hold of some 26,500 cubic meters, and can navigate at 11 nautical miles and hour.

BINH DINH - Binh Dinh Province in Central Vietnam has just allowed Con Tau Vang Transport-Tourism Company to launch a five-star train service between the provincial capital Quy Nhon City and HCMC, beginning April 2. The train will run daily between the two localities, with the fares some 30% to 50% higher than normal fares offered by Vietnam Railway.

Vietnam’s second private airline awaits permission for takeoff

Vietnam’s aviation authorities said Sunday an application to establish a new private air carrier is pending the transport ministry’s approval.

Deputy Head of the Civil Aviation Administration of Vietnam (CAAV) Lai Xuan Thanh said the new carrier, Air Speed Up, had a registered capital of VND200 billion (US$12.5 million). If approved, the company would become the second private airline in Vietnam after Vietjet Air, which has just received official permission to begin operation recently. Air Speed Up plans to launch its first flight this year and will only offer domestic flights in its first five years of operation. The airline will provide low fares by minimizing service costs, said company director Ha Dung. The other three air carriers in the country – Vietnam Airlines, Pacific Airlines, and Vasco – are all fully or partly state-owned. Governmental regulations require that an airline company have a total capital of at least VND200 billion ($12.5 million) to operate domestic flights and VND500 billion ($31.25 million) in order to provide international flights. Source: Tuoi Tre

Affluent towns rising in Vietnam

Economic growth fuels plans for new cities with amenities aimed at urban professionals.

By Grant McCool, Reuters
March 10, 2008

HO CHI MINH CITY, VIETNAM -- A new city has risen out of a swamp south of the winding Saigon River, part of a real estate boom that is reshaping lifestyles in developing Vietnam and enriching some speculators.

The smooth roads, condominiums, apartments, offices, convenience stores and restaurants of Phu My Hung (Saigon South) are a far cry from the congested, squalid streets and housing in much of Vietnam's largest city of about 8 million people.

Saigon South was chosen by the Communist Party government as a model for new towns across the Southeast Asian country, whose emerging market economy is growing at more than 8% a year, prime time for property developers and investors.

"The schools, the shopping, security and everything are very convenient and very different from where I grew up," said Le Uy Linh, 32, who bought a villa in Phu My Hung three years ago.

She was born and raised in District 5 of the old city, which most people still call Saigon.

Linh is director of an investment firm and other companies. She and her husband, a doctor, have two children. They are typical of the young professionals the "new towns" want to attract.

Plans called for the streets to be a certain width, for a certain mix of greenery and a mix of tenants, Vietnamese and foreigners who work in the city.

In the style of South Korea, Taiwan, Singapore or the Philippines, plans for a plethora of "new towns" outside of crowded cities are replete with spacious housing and schools, businesses, golf courses, movie theaters and concert halls.

Several such developments have been built in and around Ho Chi Minh City in the south, the capital Hanoi in the north and the central city of Danang.

Set on large tracts of land, they epitomize a higher standard of living that a new Vietnamese urban middle class aspires to -- and that was unimaginable for earlier generations who endured hardship in the Soviet-style command economy.

The government began gradual economic reforms in 1986, but it was not until the last five years or so that market-oriented capitalism became more conspicuous. A year ago, Vietnam joined the biggest free-trade club, the World Trade Organization.

Since last summer, local small investors have been turning away from the fledgling stock markets to buy real estate, lining up in thousands to deposit cash for condos and apartments that have not yet been built.

They included the Vista high-end complex of Singapore's CapitaLand, Southeast Asia's largest property developer. In February, the group announced plans to expand in Vietnam. Speculation is rife and some economists and businessmen see a property market bubble.

The Vista was fully booked at prices that rose to about $250 a square foot from about $125 a square foot in just weeks.

"Vietnam is still a poor country, yet some of these prices are more like New York, Tokyo or Singapore," said a financial services executive who asked not to be identified. "It's not just about lack of supply."

Prices for some city luxury apartments tripled last year and speculation is rife. Office rents in Ho Chi Minh City shot up in the last year by 40% and will cost about $6.50 a square foot this year as foreign companies expand, commercial real estate agents said.

Marc Townsend, managing director in Vietnam of CB Richard Ellis, the global commercial real estate services firm, said that "it all comes down to lack of supply."

Vietnam and India get down to business

HCM CITY — Bilateral trade between Viet Nam and India last year reached US$1.5 billion, a huge growth compared with $490 million in 2003, said Deputy Minister of Industry and Trade Le Duong Quang on a talk show hosted by the Indian Business Chamber of Commerce (INCHAM) yesterday in HCM City.

The "India – Viet Nam Business Opportunities" talk show was attended by India’s Ambassador Lal Thla Muana, Mohan Kumar of the INCHAM Board of Governors-Investment&Legal, and other officials and businessmen.

In trade with India, Viet Nam has a deficit. To solve this problem, the Government of Viet Nam has asked the Government of India to reduce the imbalance by increasing the export of Vietnamese products to India, Quang said.

Both sides affirmed that they have established a long-standing diplomatic and economic relationship, of which trade ties have been continuously improved.

At present, India is the biggest market for Viet Nam in South Asia.

Quang said Viet Nam is gaining a place in the international arena, adding that the country has become a true partner for many countries and territories in the region and around the world.

Ambassador Lal Thla Muana affirmed Prime Minister Nguyen Tan Dung’s visit to India last July reflected the two countries’ close relationship in both economics and diplomacy.

Mohan Kumar said foreign direct investment from India to Viet Nam was $700 million as of August 2007, creating jobs for 5,000 Vietnamese workers.

Indian investors have been focusing on oil and gas exploration, pharmaceuticals, sugar, fabricated steel and office equipment. — VNS

Viet Nam aims at German market

Viet Nam’s commercial attache to Germany, Nguyen Minh Gon, spoke to Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) on export matters concerning Vietnamese enterprises and the German market

Could you give me a rundown on Vietnamese enterprises’ exports to the German market last year?

According to the statistics of the German Customs Office, Viet Nam’s export turnover to German was US$2.5 billion, but the Viet Nam Customs Office’s statistic is just $1.8 billion. The difference is the result of certain goods being imported into Germany through a third country bearing the "Made in Viet Nam" mark and still being considered Vietnamese goods.

Presently, Viet Nam exports 230 items and groups of items to Germany. Apart from items with high turnover like textiles, footwear and coffee, items such as mam tom (shrimp paste), manhole covers and handicrafts also have been exported in large quantities to the German market.

What do you think about the possibility of increasing export turnover to the German market this year and in years to come?

Annual goods purchasing power in Germany is $550 billion. At the moment, goods from Viet Nam account for only 0.2 per cent of the German market demand for imported goods. That means that the German market holds potential for Vietnamese exporters.

In addition, the market is in need of almost every item. The goods needed are not only to serve the German market but also those of other European countries, as Germany is a prominent partner in the European Union and in Europe in general.

I know many Vietnamese enterprises claim that German partners are hard to work with. In my own experience, however, they are difficult to work with only at first, due to their firm principles. Once both sides get used to each other’s work style, relations become easier.

What would you advise Vietnamese enterprises about dealing with German partners?

I recognise that most Vietnamese enterprises export various items to the German market, without focusing on particular specialty items. That’s why most Vietnamese enterprises lack special trademarked goods. I strongly recommend Vietnamese enterprises specialise in certain kinds of goods and enhance their staffs’ professional skills and foreign language capabilities.

Viet Nam is the 150th member of the World Trade Organisation (WTO), and it should offer goods with quality that rivals other WTO members’ exports to the German market. Yet we should offer even more reasonable prices in order to compete.

Most exports from Viet Nam to the German market are textiles and footwear. However, most of them enter the market through subcontracts, whereby Vietnamese enterprises make the goods for foreign companies, without any trademark.

Coffee is the second-largest exported item from Viet Nam to the German market, but most of the coffee is unprocessed.

In addition to specialising in certain products, Vietnamese enterprises should process the products further to increase their quality and create trademarks for the products and the enterprises as well.

How do you think we can help enhance the role of Vietnamese enterprises through promotional activities by commercial associations in the German market?

I think we should promote trade through commercial associations with a clear focus on certain products. For example, Vietnamese tea is popular in Germany. But Vietnamese enterprises now directly export only 2,000 tonnes a year. German enterprises import the rest from Viet Nam via British traders.

When I asked German traders why they didn’t import all the goods directly from Vietnamese enterprises, they answered that they would like to do so to reduce their costs. By importing Vietnamese tea through British traders, however, they could avoid risks. For example, if they have signed contracts with Vietnamese partners to import tea at certain prices, the international market price rises, and Vietnamese enterprises do not want to transport the goods anymore. This will harm both sides’ reputations. — VNS

Vietnam, Germany find new spheres for further cooperation

VietNamNet Bridge - The Vietnamese and German governments have agreed that transport, environment, energy and telecommunications are particularly suitable to their nations’ further cooperation, said a joint press release on the three-day Germany visit by Vietnamese Prime Minister Nguyen Tan Dung. According to the press release, PM Dung and his German host, Chancellor Angela Merkel, met and discussed measures and projects to enhance the bilateral relations and their cooperation at international and regional forums. The two government leaders expressed their pleasure at the fine developing relations and the agreements that were freshly signed during the visit from March 6-8. They described the establishment of the Germany-Vietnam University in Ho Chi Minh City as a new aspect for the bilateral cooperation in education. The German leader lauded the approval of a joint governmental declaration on judicial and legal cooperation. The two sides appreciated the dynamic development of their economic relations, putting stress on the newly-signed agreements, including those on Germany ’s involvement in a metro project in Ho Chi Minh City and a training project for young managers. The German side expressed wish to expand bilateral trade exchange and its willing to step up investment in Vietnam . The two leaders acclaimed the close and fruitful cooperation in development policies since 1990. The German leader extolled the Vietnamese Government’s achievements in the Millennium Development Goals (MDG) implementation. They confirmed the focal points of the two sides’ cooperation in development policies in the fields of economic development, environment protection and decentralised health care services. They agreed to further cooperation in these fields through government negotiation on development cooperation scheduled to be held in Ha Noi in April. The press release also said Vietnam and Germany will mark the 35th anniversary of the establishment of diplomatic ties in 2010 with festivals will be held in both countries.

No sell-out in Spratly deal--energy execs

By Abigail L. Ho
Philippine Daily Inquirer
First Posted 14:21:00 03/08/2008

MANILA, Philippines -- Energy executives at the forefront of the Joint Marine Seismic Undertaking (JMSU) among the national oil firms of the Philippines, China and Vietnam have denied accusations the agreement effectively gave up the country's claim to the disputed Spratly islands in the South China Sea.

In a joint statement, former Energy Secretary Vincent Perez and former Philippine National Oil Co. president Eduardo Mañalac said the JMSU had nothing to do with
politics, but was purely scientific in nature.

”The JMSU explicitly stated that the signing of the commercial agreement shall not undermine the position held by the Philippine government over the South China Sea. The agreement is designed to be scientific in nature and does not affect any territorial claims of the Philippine government,'' the statement said.

The Philippines and China forged a three-year agreement in 2004 to conduct a seismic study of an area spanning 142,886 square kilometers in the South China Sea, including the disputed Spratlys. When Vietnam, another Spratly claimant, objected, it became part of the tripartite JMSU, which is now being assailed as a "sellout" of the Philippines.
Some lawmakers said the agreement could have been in exchange for at least $8 billion in loans from China for, among others, the NorthRail and SouthRail projects and the National Broadband Network (NBN) deal.

But the energy executives said the agreement only entails seismic acquisition, processing and interpretation, and does not include any form of actual exploration.

Depending on the results of the seismic data processing and interpretation, PNOC Exploration Corp. (PNOC-EC), China National Offshore Oil Co. (CNOOC) and
Vietnam Oil and Gas Corp. (PetroVietnam) could decide to negotiate other agreements going beyond just data gathering.

”The JMSU is a commercial agreement between three national oil companies to jointly acquire seismic data. No exploration, drilling, and production activities were covered by the agreement. The JMSU is simply a data gathering effort among the three oil
companies,'' the joint statement said.

”The JMSU is not a treaty. If at the end of the three-year term of the JMSU no new definitive agreements are agreed on, then the JMSU expires by June 2008,'' it added.

The two former government energy officials said the JMSU was forged for no other reason than to enable energy independence and ensure energy security both in the country and in the region.

The JMSU, their joint statement said, was actually part of the government's five-point energy independence agenda launched in 2004, amid escalating oil prices and the country's high dependence on imported petroleum.

Under the five-point agenda, the government aimed to develop indigenous petroleum resources, promote renewable power, increase use of alternative fuels, form regional strategic alliances and strengthen energy conversation programs.

”The JMSU was part of our five-point energy independence agenda, to find and develop new indigenous petroleum reserves,'' the statement said.

”The JMSU was supported by the Philippine government to promote regional energy security. It hoped to contribute to the transformation of the South China Sea into an area of peace, cooperation and development. It was part of a strategic alliance to promote regional energy security, to lessen the region's dependence on Middle East oil,'' it added.

The agreement, the statement said, was likewise within the bounds of the Constitution and did not compromise the country's position regarding its claims on the disputed Spratlys.

Much care was taken to ensure that the government's claims would be protected, it added.

”PNOC was extremely careful and consistent in ensuring the constitutionality of the JMSU. PNOC closely coordinated with concerned agencies such as the (Department of Energy, Department of Foreign Affairs and Department of Justice) to ensure complete
staff work,'' it said.

The statement did not say why the agreement has not been publicly announced nor the full text released to the public.

The reported oil-rich Spratlys are being claimed in whole or in part by the Philippines, China, Vietnam, Brunei, Malaysia, and Taiwan.

Vietnam builds a future for itself

By Francesca Lombardo

Published: March 8 2008 02:00 | Last updated: March 8 2008 02:00

To many of us, Vietnam still brings to mind images of a stricken country living with the consequences of the Vietnam war, or "American war", as the locals call it. But in recent years it has moved away from its tragic past, forging a new reputation for itself.

Today, this one-party communist country not only boasts a fast-growing $55bn economy - second only to China in south-east Asia - and has ambitions to become a developed nation by 2020, but it is also one of the "hottest" property markets in the world. Property prices soared by 50 per cent in 2007, according to a report by Obelisk, a UK property consultancy, as foreign investors rush to tap into the next communist country that is ready to embrace a liberal economic model.

The influx of tourists and visitors are drawn to the stunning coast, its sandy beaches, alpine scenery, rainforests, extensive green fields and a sophisticated cultural heritage. And, as they come, they create a market for luxury property resorts.

Yet, those shrewd foreign property buyers who believe this is Asia's next China, may have to rein in their keenness for now and be prepared to wait.

While foreign property companies have managed to secure profitable "leasehold" deals in premium locations of the country by forming joint ventures with local enterprises, it is a different matter for individuals.

"Unless you are Vietnamese you don't 'buy' a house in Vietnam, you buy the right to use the property for 50 years at the most," says Matthew Powell, head of the Hanoi-based Savills International office.

The first housing law to open up the market to foreign buyers was approved in early 2006. "It was only for overseas Vietnamese though, but since many of them owned a US passport and no longer had their original birth certificate they didn't qualify as Vietnamese and therefore they couldn't buy," says Derek John, chief executive of TCK Group, a Hanoi-based hospitality and business consultancy.

This led the government to extend the right to lease properties to other categories of foreigners. Living and working in the country with a valid visa, owning your own company, being married to a Vietnamese citizen, contributing to the growth and development of Vietnam and living in the property are the only options at this stage that qualify foreign buyers to "own" properties under their name.

There is a way to get round such restrictions but it comes with the disadvantage of never openly owning the title deeds of your property.

"You can buy a share in a property development company which will allow you to "own" a unit within an off-plan project for all the length of the leasehold," says Powell, who has been living and working in the country's capital for five years. This is how some foreigners have been able to buy into the Nam Mai Resort, situated in the famous China Beach, or into the luxurious Vista development in Ho Chi Minh City, which was sold out in less than a day.

Prices in Hanoi have tripled in the past year alone, particularly in the luxury sector. "In 2006, new apartments were sold for $80,000 but by the summer of 2007 this rose to a massive $240,000," says James Gonzalez, market analyst at Obelisk.

In the financial and government district at the heart of the city, prices range from $4,000 to $5,000 per sq metre, according to figures reported by Savills International, whereas at the outskirts prices drop down to a more conservative $2,000 to $3,000 a sq metre.

But the fastest expansion has been recorded in an area called My Dinh Me, which with numerous offices is tipped to be the new commercial hub and possibly the new base of the financial district.

Located to the south is Ho Chi Minh City, the largest city in the country with a population of 11m people and with the biggest expat community. "Properties can fetch $6000 per sq metre at the centre or in the business district but opportunities to build any further are scarce since land is very much at a premium," says Powell.

Right in the heart of Ho Chi Minh City itself, there is the Hung Vuong Plaza, a first-class, self-contained, 30-storey complex comprising luxury retail, a commercial complex as well as two towers of residential apartments. Prices start from $200,000 for a three-bedroom apartment.

Another hotspot is Danang, a major port city on the coast of the South China Sea.

"The famous China Beach, which attracts a lot of international tourists, and the international airport makes it a sought-after destination," says sales consultant Charlie Prichard from Churchill Innovative Solutions.

Less developed but still attracting interest is the beautiful island of Phu Quoc, less than an hour's flight from Ho Chi Minh City. "It is considered to be the next Bali or Phuket," says Derek John. "There is a mix of some upmarket and more downmarket developments at this stage, but the potential, given the island's natural beauty and proximity to Ho Chi Minh City, is huge."

While the country is not short of opportunities to generate tangible profits, with housing laws changing constantly and strong restrictions tied to them, it may fail to entice a great deal of foreign buyers at this stage.

HSBC wins approval for Vietnam bank operation

Tue Mar 4, 2008 7:08am EST
LONDON, March 4 (Reuters) - HSBC (HSBA.L: Quote, Profile, Research) has obtained approval to set up a bank in Vietnam, making it one of the first overseas banks to incorporate there, Europe's biggest bank said on Tuesday.
Local incorporation will boost HSBC's organic presence as part of its dual growth strategy for Vietnam, which consists of strategic alliances and organic plans.
It plans to set up headquarters in Ho Chi Minh City, after the approval-in-principle from the State Bank of Vietnam.
In the last two years, HSBC has formed partnerships through investments in Techcombank, the third-largest joint stock commercial bank in Vietnam by equity, and Bao Viet, the country's leading insurance and financial services group.
Vietnam last year allowed foreign banks to establish local banks to offer a full range of services, as part of its WTO commitment to lift restrictions.
HSBC first opened an office in Saigon (now Ho Chi Minh City) in 1870, but that was closed in 1975. It opened representative offices in 1992 and made the Ho Chi Minh City office a full service branch in 1995. (Reporting by Steve Slater; Editing by Quentin Bryar)

Vietnam's Ba Ria –Vung Tau strives to receive 6.7 million tourists

Ba Ria –Vung Tau strives to receive 6.7 million tourists
11:39' 04/03/2008 (GMT+7)
VietNamNet Bridge - By the end of 2007, the total investment capital to the tourism sector in southern Ba Ria-Vung Tau province was VND94,230 billion, creating a firm foundation for the sector to develop strongly in 2008. The number of tourist arrivals to southern Ba Ria-Vung Tau province is increasing, showing a fine development trend in its tourism sector. In the past 10 years, tourism infrastructure has made significant progress. A number of new roads, transport, hotels and entertainment places have been built. Tourism services have also expanded. Tourists to Ba Ria-Vung Tau have a chance to join adventurous tours such as rowing and climbing mountains or tours of Dat Do, Long Dat, and Xuyen Moc communes. Opening new tours and improving the quality of services are main targets set by businesses. In 2007, six projects capitalised at nearly VND1,400 billion were implemented in the province. Ba Ria-Vung Tau was also active in selecting investors to develop ecological and cultural tourism. A sharp increase in tourism projects helped the tourism sector develop strongly and impressively. The tourism sector got a facelift thanks to new promotion and coordination activities. Strong investment by the State to infrastructure and businesses’ effort and dynamism has brought the best quality of services to tourists. The province now has 140 tourism businesses, nearly 130 hotels and resorts with around 5,000 rooms. Coming to the province, every tourist can find suitable accommodation and the best quality of services. Huynh Trang, a tourist guide who has 20 years of experience, said that Ba Ria-Vung has changed a lot, especially in tourism services and environmental protection. His customers acknowledged that the province is clean, beautiful and peaceful- the ideal place to relax. In 2008, the province considers tourism as a strength to develop its economy. The province will create most favourable conditions for business to invest in tourism projects. Furthermore, it will continue investing in infrastructure. The tourism sector will encourage businesses to change trading methods and to further improve the quality of services. Ba Ria-Vung Tau aims to receive 6.7 million visitors this year and earn VND1,230 billion, up 14 percent compared to 2007. To attract more investment and improve the quality of services, the tourism sector is accelerating promotional activities and human resources training.
(Source: VOV)

Nippon Oil Vietnam venture gains CO2 credits

Japan’s Nippon Oil Corp said over the weekend that its joint Vietnamese oilfield project has been awarded 4.49 million tons of carbon dioxide emission credits by the UN Clean Development Mechanism (CDM) program.
The award for the period between December 2001 and December 2005 marks the world’s biggest credit in terms of volumes, Nippon Oil, Japan’s top oil refiner said.
The Rang Dong offshore oilfield project, in which the Nippon Oil-led group serves as the operator, was recognized as a CDM project in February 2006 for collecting associated gas during oil production.
Part of the gas collected is transported via a pipeline for power generation.
Nippon Oil expects Rang Dong will be awarded a total eight million tons of CDM credits in the 10 years to 2011.
Nippon Oil’s joint venture with Mitsubishi Corp. has a 46.5 percent stake in the Rang Dong project, U.S. oil group ConocoPhilips has a 36 percent stake, while the rest is owned by state oil group PetroVietnam.

Essar Oil wins Vietnam offshore block, to invest 60 mln usd over 5 yrs

MUMBAI (Thomson Financial) - India's Essar Oil Ltd said its unit Essar Exploration & Production Ltd Mauritius was awarded an offshore block in Vietnam's Song Hong basin and that it would invest around 60 mln usd in exploration over five years.
The block, measuring around 5,925 square kilometres, was awarded under a recent licensing round where 7 offshore blocks were on offer, Essar said in a release.
At 1.48 pm local time, Essar Oil was trading down 3.84 pct at 231.45 on the BSE Sensex, underperforming the overall market that was down 1.93 pct at 16,355.19.
TFN.newsdesk@thomson.com
ami/ssa/lam

Kuwait sees Asia refinery deals by next year

Kuwait sees Asia refinery deals by next year
Reuters
Tuesday March 4 2008
By Rania El Gamal
KUWAIT, March 4 (Reuters) - State-owned Kuwait Petroleum Corp (KPC) hopes to finalise by next year deals to build new refineries and petrochemical plants with Chinese, Vietnamese and Indian firms, its top executive said on Tuesday.
Kuwait is also to award the contract for the construction of the country's fourth refinery, which it says will be the biggest in the Middle East, "this month or next month".
"We are currently negotiating with several parties ... which are China, Vietnam and India," Saad al-Shuwaib, Chief Executive of KPC, told reporters on the sidelines of an oil seminar.
KPC was particularly eyeing investments in refineries related to petrochemicals, he said.
"But we don't want to be alone. We want to get into a partnership with others and to own a certain percentage in it ... Today a refinery is not less than $5 billion... a refinery with petrochemical," Shuwaib said.
Last month, Vietnamese state oil group Petrovietnam said it was getting closer to an agreement with two companies including Kuwait Petroleum International to form a joint venture to build Vietnam's second refinery, with a capacity of 170,000 barrels per day (bpd).
KPC was in talks in December with Indian firms to build a large refinery and petrochemical plant in India.
It was looking at a large scale refinery with a capacity of 150,000-400,000 bpd, while the petrochemical project would have an ethylene capacity of up to one million tonnes.
More than 10 firms are bidding for the 615,000 bpd al-Zour refinery. The refinery is part of Kuwait's plans to boost refining capacity to 1.415 million bpd from the current 930,000 bpd. The project has been delayed but a KPC official said last month the contracts would be awarded in March. (Editing by Anthony Barker)

ADB to loan Vietnam 880 mln USD for transport development in 2008

HANOI, Feb. 29 (Xinhua) -- The Asian Development Bank (ADB) has agreed to provide soft loans totaling 880 million U.S. dollars to Vietnam, helping the country implement three projects on building expressways and roads this year, local newspaper Saigon Liberation reported Friday. Of the future loans, 500 million dollars will be used to finance the development of an expressway linking southern Ho Chi Minh city and southern Dong Nai province, 350 million dollars the construction of two bridges in the Mekong Delta, and 30 million dollars the technical preparation for the development of three expressways in both northern and southern localities. Besides the loans, the ADB will provide technical assistance to three projects on raising capacity of the Vietnamese transport sector, and upgrading a rail route and a national road in 2008.

US lead FDI in Viet Nam with 1.3 billion USD

VNECONOMY updated: 29/02/2008

The US has topped the list of 82 countries and territories investing in Viet Nam during the first two months of this year. This result is due to the US’s registered capital of more than 1.3 billion USD, accounting for 51.6 percent of the country’s total foreign direct investment (FDI). Prominent among the five US projects is the construction of a 1.29 billion USD hotel-entertainment complex in Ba Ria-Vung Tau province by Good Choice Inc. The project also helped the southern province lead the country in FDI attraction in the two-month period. American Chamber of Commerce (Amcham) Executive Director Adam Sitkoff says these results show US investors’ increasing trust in Viet Nam’s investment environment. On the sidelines of a conference to mark 20 years of foreign investment in Viet Nam late last year, Sitkoff said many US companies consider Viet Nam the world’s most attractive emerging market. In the first month of the year, US businesses such as Global Venture Inc., Pacific Development LLC and Millennium Global Solution Group (MIGS) came to Viet Nam and expressed interest in investing in several infrastructure projects, including an expressway in the Mekong Delta’s An Giang province and the Van Don Economic Zone in north-eastern Quang Ninh province. In addition to infrastructure, industry, telecommunication, tourism and services, US firms have also eyed the financial and banking sector through providing financial services or purchasing a stake in Vietnamese financial institutions. US leading investment company Franklink Templeton has announced it will buy 49 percent of the Vietcombank Fund Management Company and another US giant Morgan Stanley recently came to a joint-venture agreement with Ha Noi-based Huong Viet Securities Company. Amcham Executive Director Adam Sitkoff said he hoped Viet Nam will continue to improve its investment environment and help US businesses realise their investment strategies.

Vietnam shipping industry targets 10% world market share

In a press briefing to introduce the 4th International Shipbuilding, Maritime and Transport Expo-Vietship 2008, Mr. Nguyen Quoc Anh, Business General Director of the Viet Nam Shipping Industry Corporation (Vinashin), informed that Việt Nam ranked in the top-five of biggest ship-builders in 2007.
Vietship-2008 will be opened in Ha Noi on March 11-13. This is a big event of the world’s shipbuilding industry, presenting over 600 stalls of 400 companies among them two thirds come from the countries with advanced shipping industry.
"Vietship-2008 is a good chance for Viet Nam's shipping industry to approach to new environmentally-friendly technologies,'' said Mr. Ánh, adding that the event is a forum for domestic enterprises to increase their channels for capital mobilization in order to fulfill the goal of holding 10% of the world market share through clean technologies.
Last year, Vinashin handed over two 53,000-ton vessels and launched four others in the series of Diamond ships exported to the United Kingdom. By December 2007, the total value of the contracts inked between Vinashin and foreign partners (Japan, Republic of Korea, UK, the Netherlands, and Denmark) reached US $12 billion.
Vinashin plans to provide 65% domestically-built ships by 2020.

Ensuring growth target and price control in Vietnam

21:45' 01/03/2008 (GMT+7)

VietNamNet Bridge - The Government is working hard to adopt measures to control the increasing consumer price index and the impact of the recent increase in petrol prices on production and business activities, according to Cabinet ministers at a press briefing in Hanoi on February 28. Building petrol ceiling prices One of the hot issues which has captured public attention in recent times is the soaring prices of commodities, especially the increase in petrol prices. Minister of Finance Vu Van Ninh assured reporters that the Government still controls and has no intention to float petrol prices. He said that the decision to increase oil and petrol prices has been thoroughly taken into consideration by the Government. “The Government cannot incur losses forever,” said Mr Ninh. “The Government is only changing its management methods by permitting petrol trading businesses to fix prices in line with regulations of the market economy. However, it still controls the market through the price management mechanism that means selling prices are not allowed to be adjusted to higher levels than the fixed ceiling levels.” According to Minister Ninh, the Ministry of Finance and the Ministry of Industry and Trade will build ceiling prices of oil and petrol for businesses to register based on market factors. Minister Ninh also spoke of the Government’s efforts to curb the consumer price index (CPI) which spiraled to an alarming level of six percent in the first two months of 2008. He partly attributed the increase to incorrect forecasts and said that it is hard for the Government to meet the target of keeping the inflation rate lower than GDP growth rate this year. He said that the Government has worked out solutions for maintaining economic growth and bringing market price under control. The Finance Minister also announced that the Government has yet to discuss an increase in the price of electricity at the moment. It will pump VND9 trillion into the stock and real estate markets to help them develop healthily. In addition, it will support 30 percent of the interest rate from bank loans granted to fishermen to build large capacity vessels. Providing financial assistance for the poor At the press briefing, Minister of Agriculture and Rural Development Cao Duc Phat acknowledged that the historic 38-day cold spell had wrought havoc on agricultural production. About 120,000 cows and buffaloes died, mostly in northern highland localities where poor and ethnic people live. To help them overcome their heavy losses, Mr Phat said his ministry will assess and ask the Government to provide financial assistance for the poor and highlanders to help them resume production and stabilise their lives. Mr Phat said that localities which have newly transplanted rice destroyed during the cold spells are trying to complete the transplanting of additional winter-spring rice by March 15 as scheduled to ensure a high yield. Regarding the planting of organic vegetables in Hanoi, he said that the municipal People’s Committee is considering a VND5,000 budget to build organic vegetables growing areas to supply quality products for local consumption and for export. Ensuring landscape for Van Phong Bay area Reporters have expressed concern about the building of Posco-Vinashin steel complex at Van Phong deep water seaport in the south-central coastal province of Khanh Hoa. Minister and Chairman of the Government Office Nguyen Xuan Phuc reiterated the Government’s view that the construction of the complex must not affect the landscape, environment and the development of the seaport. On March 11, 2005 the Prime Minister approved a zoning plan for Van Phong Bay area till 2020. Accordingly, the area will be developed into an economic zone comprised of combined sectors such as tourism, services, port, industries and aquaculture, with the Van Phong international transit port as the core. A detailed zoning plan for the port was approved by the Minister of Transport on July 13, 2007 after being appraised by domestic and foreign consultants. Later, Posco group from the Republic of Korea proposed building a US$5.8 billion steel complex on the whole central area of Hon Gom peninsula at Van Phong port. On January 15, the Government Office asked for a halt to the construction of the transit port to make clear “a number of related issues”. Seven days later, Posco-Vinashin joint venture was permitted in principle to draft a steel plant project to be built on a potential position at the port on condition that the joint venture would use new technology to meet environmental standards. In addition, the Vietnam National Shipping Lines (Vinalines) was asked to start work on the two wharves as part of the Van Phong Port project to maintain its construction pace. Many scientists, maritime experts and the Department of Maritime asked the Government to reconsider its decision to allow the joint venture to implement the steel project. They reasoned that the project will not only occupy a large area of Van Phong international transit port and Van Phong economic zone, but also have a negative impact on the ecological environment of the bay.

Vietnam's trade deficit more than tripled in first two months

Vietnam’s trade deficit more than tripled in the first two months of the year, the government estimated, as steel imports surge and the prices of other goods purchased overseas soar.

The shortfall more than tripled to US$4.29 billion from $1.2 billion a year earlier, according to figures from the General Statistics Office (GSO). Exports advanced 29 percent to $8.71 billion, while imports jumped 64 percent to $13 billion. The figures were released on a day when Vietnam also reported that inflation accelerated to a year-on-year rate of 15.7 percent this month, the highest since 1995. Together, the figures point to strong increases in demand, as Vietnam’s economy expands at the fastest pace in more than a decade. “Vietnam is in a vulnerable position because virtually all of the raw materials that are used by a range of industries have to be imported, and international prices are rising right now,’’ said Fiachra MacCana, head of research at HCMC Securities Corp. “It might be in the long-term interest of Vietnam at this point for economic growth to slow down in order to cut inflation and reduce the trade deficit,’’ MacCana said Wednesday. Imports of machinery and equipment rose 33 percent to $2.2 billion, while purchases of petroleum products from abroad climbed 14 percent by volume and 71 percent by value to $1.63 billion. Steel imports surged 115 percent by volume and 161 percent by value to $1.47 billion, Wednesday’s report showed. The Ministry of Industry and Trade forecasts the country’s trade deficit may hit a new record of $17 billion this year, up from over $12.4 billion in 2007. But several economists estimate that the import minus export figure may be even higher, between $18 and $19 billion. Whatever the final figure, experts agree that Vietnam has been importing much more than is advisable for its economy. In recent years, the country’s imports have increased by leaps and bounds. Import surplus almost tripled from 2006 to 2007. Real estate The Southeast Asian country’s “strong economic growth and rapid urbanization’’ have created opportunities for property developers, according to Singapore’s CapitaLand Ltd., which has established a $300 million fund to invest in Vietnam’s real estate market. Property may not be the only reason for an increase in steel imports, because a lot of the projects out there are still in the proposal stage, said Brett Ashton, HCMC-based managing director of the Vietnam unit of the UK’s Savills Plc. “There are also plenty of new factories and roads being built,’’ Ashton said. “But the property market probably has something to do with it.’’ On the export side, crude oil shipments gained 46 percent by value to $1.68 billion, even while volume slipped 11 percent. The global price of crude oil, of which Vietnam is Southeast Asia’s third-biggest producer, has been about two- thirds higher on average this year than in the same period in 2007. Textile exports Garment and textile exports jumped 42 percent to $1.46 billion, according to the GSO figures. Since its accession to the World Trade Organization, Vietnam has been freed of quota restrictions on its textile exports, and these have grown very rapidly,’’ Janet Yellen, the president of the Federal Reserve Bank of San Francisco, wrote in a letter dated February 22 and posted on the bank’s website. Footwear shipments advanced 25 percent to $769 million, while exports of coffee, of which Vietnam is the world’s second-biggest producer, slumped 24 percent by volume and 5 percent by value to $508 million, the statistics office said. “Vietnamese farmers are much better off than they were at this time last year, and are holding onto much of their product, as they watch the price go steadily higher,’’ Fortis Bank and VM Group said in a report this month on agricultural commodities.