HA NOI — Viet Nam, as ASEAN chairman, wanted to hasten trade and partnership negotiations between the association and the European Union, Prime Minister Nguyen Tan Dung said yesterday.
The two sides should focus on the Partnership and Co-operation Agreement, PCA, and the Free Trade Agreement, FTA, he told visiting EU Trade Commissioner Karel De Gucht.
The Prime Minister assured his guest that Viet Nam gave special attention to the boosting of investment, economic and trade co-operation with EU, and that any difficulties between them should be quickly eliminated.
He described the EU's extension of duties on leather-uppers for shoes imported from Viet Nam as unfair and said the decision was causing great difficulties for Viet Nam workers.
The EU should recognise Viet Nam's successful shift to a market economy and increasing integration with global commerce, he said.
Trade Commissioner Karel De Gucht agreed with the Prime Minister that it was essential that the EU and Viet Nam enhance their friendly relations, especially in economy, investment and trade.
He too wanted the proposed agreements between the EU and ASEAN quickly signed, he said.
Start talking
Viet Nam and the EU have agreed to start bilateral free trade agreement (FTA) negotiations.
A European Commission statement issued yesterday said work to start the official negotiations and an agreed framework for an FTA was now underway.
But a specific time for the negotiations had yet to be fixed.
"The commission will discuss next steps with the European Union Council and the Parliament," the statement said.
Viet Nam is the EU's fifth largest trading partner within ASEAN.
Yearly bilateral trade increased by about 12 per cent during 2004-08 and stood at US$16.23 billion last year. —VNS
INFRASTRUCTURE - Major projects to seek funding
HA NOI — Major infrastructure construction projects will continue to be an important driving force for the country's socio-economic development this year, but investment from the State budget into the sector will be narrowed.
Thus, the Ministry of Construction's main task this year will be to attract capital from other sources and use it effectively.
Prime Minister Nguyen Tan Dung highlighted this issue during the Government's online meeting on construction investment yesterday. Ministries, sectors, economic groups and 63 provinces and cities' authorities took part in the meeting.
Dung affirmed that 2010 was the last year to implement the Socio-economic Development Plan for 2006-10 and the Socio-Economic Development Strategy from 2001 to 10. Thus, efficient investment of capital usage would still be of significance in order to successfully implement the plan and strategy.
Capital from the State budget will only make up 15.9 per cent of the total funds that are poured into construction projects. Government bonds will account for 7.1 per cent and State's loans will be used for 7 per cent of the projects and plans. Therefore, the remaining capital needed will come from other sources.
This year, capital lured for development from all sectors is expected to reach VND791 trillion (US$41.6 billion), which is an increase of 12.3 per cent from last year and accounts for 41 per cent of the country's Gross Domestic Products.
The Prime Minister asked ministries, sectors and localities to reassess projects this month, allocate capital to qualified and prioritised projects and speed up the progress of the projects.
Authorities and investors had to review investment procedures and better implement resettlement plans to tackle the difficulties that accompany land clearance.
Ministries, sectors and localities were requested to work out suitable agreements to mobilise capital from domestic and foreign sources to reduce their dependence on the State budget.
Official Development Assistance capital that will be granted to Viet Nam in 2009 and 2010 was so large that investors should prepare well to use the capital efficiently, especially with climate change response and infrastructure projects.
It was necessary to encourage projects conducted under the Build-Operate-Transfer, Build-Transfer and Private-Public Partnership models, Dung said.
The Ministry of Finance had to work out plans for issuing bonds for the 2011-15 period and ensure financial security. Commercial banks were asked to continue creating favourable conditions for enterprises to access capital and improve production efficiency.
Last year, total capital set aside for capital construction projects was more than VND228 trillion ($12 billion), which represented a 98 per cent rise from the previous year. Of the total, 91 per cent was disbursed, which was a record for the country.
Private capital last year also surged by 54.4 per cent to attain VND28 trillion ($1.4 billion), foreign direct investment was VND119.2 trillion ($6.3 billion) and ODA capital was VND6.1 billion ($321,000). — VNS
FINANCE - Banks boosting credit operations after being allowed to apply negotiated interest rate
SBV's decision allowing commercial banks to apply the negotiable interest rates on medium and long loans is expected to act as a lever helping banks enhance credit operations in March. However, according to specialists, it is necessary to have other measures to boost the credit flow of banks.
During first two months of 2010, Vietnam's total payment rose by 1.39 percent against late 2009 while the capital mobilisation of banks fell 0.17 percent as the deposits of economic institutions slumped 5.94 percent and those of residents surged 5.57 percent. The credit supply to the economy (outstanding loans) increased by 1.4 percent.
The growth of total payment means of 1.39 percent in Jan-February of 2010 were as almost as high as the same period of previous years, such as 1.45 percent in 2006, 2.09 percent in 2007 and 1.82 percent in 2009.
Thanks to a surge in the deposits of residents at banks after Tet holidays, and a pre-Tet surplus of 13 trillion dong in banks' spare capital, the commercial banks now have a surplus of 30 trillion dong of working capital, leading to the less brisk transactions on the interbank market.
Particularly, last week the interbank trading turnover declined 22.088 trillion dong and $496 million compared with previous week. The average trading rate of the dong on the market tended to tumble slightly for all terms. The lending rate via interbank market was 12 percent pa at highest and 4.4 percent pa at lowest.
Therefore, after Lunar New Year, most commercial banks can ensure their payment capacity and meet enough payment demand of customers. Specialists expect that the credit growth in March will be higher thanks to the policy of applying negotiable interest rates on medium and long term credits.
Tran Van Vinh-director of Orient Commercial JS Bank (OCB) said that the credit growth depends on capital mobilisation. Because most commercial banks, especially medium and small sized banks, reached the high ratio of lending on deposits, so SBV ordered banks to lower the ratio, meaning that banks will have to enhance capital mobilisation if wanting to boost lending.
Capital mobilisation of commercial banks is slowing down due to the ceiling deposit rate of 10.5 percent pa. Hence, credit growth is strong in few big banks that have high deposits and working capital.
A lot of commercial banks admitted that the negotiations in deposit rates still are going on. With deposits of 500 million dong to few billions dong, customers can negotiate interest rates with banks.
In order to avoid the supervision of SBV, commercial banks offered promotions as raising capital and the cost for these promotions will be calculated into the negotiated interest rates. deputy general director of a joint stock bank said that the negotiated deposit rate of banks now averages at 13 percent pa plus the sum of money that banks have to deduct for risk prevention fund and liquidity reserve fund; the real deposit rate will climb to 15 percent pa. So banks will be forced to lend at 16-18 percent pa for profitability but the lending rate is too high as for many enterprises in need of capital for production investment and business.
It is predicted that developing medium and long credits for corporate customers in the forthcoming time could increase highly.
Depending on each group of customers, the negotiated lending rate at commercial banks is common at 14-16 percent pa, and loans for individuals carry the rate of 18-20 percent pa. Accordingly, commercial banks are racing to launch a series of promotion programmes, encouraging customers to borrow consumer loans for car and house purchase.
On March 3, Dr Le Xuan Nghia-vice chair of National Finance Supervision Committee at a conference in HCM City by Vietnam Chamber of Commerce and Industry (VCCI) said that with the current capital mobilisation speed, the credit growth of Q1 will average below 1 percent a month and that of entire 2010 will total at 19-20 percent. But, the market interest rates have not really been sustainable yet.
Specialists proposed that SBV should delete the ceiling deposit rate of 10.5 percent pa to stabilise the capital flow and soon ease the monetary tightening measures to help SMEs access bank loans easily.vns
INSURANCE - AIA Vietnam to expand two agency offices in Hanoi
AIA Vietnam Life Insurance Co Ltd has decided to expand its two agency offices in Hanoi located at Floor 7, Kinh Do Building at No 93 Lo Duc St and Floor 2, Hoa Binh Office Building, No 106 Hoang Quoc Viet St.
The expansion of the company's two offices in Hanoi was included in its business strategy in order to affirm the company's position in domestic markets. The new offices have been designed to bring in best services for customers as well as creating favourable working conditions for the company's agents to work conveniently and effectively.
As the 100 percent foreign-owned firm to be established in 2000, AIA Vietnam Co will celebrate its 10th year of operation in insurance industry in Vietnam.DTCHK
AVITATION - Vietnam Airlines licensed to form joint stock carrier
Hoang Trung Hai, the country's deputy minister has lately approved for the establishment of the new VietAir Airlines Joint Stock Co under the proposal of Vietnam Airlines.
The deputy minister required Vietnam Airlines to collect opinions from ministries of transportation, planning and investment, finance to consider the participation of Vietnam Aircraft Leasing Joint Stock Co in the new airlines of VietAir in order to submit to the prime minister for approval. At present, Vietnam has three domestic airlines of Vietnam Airlines, VietJetAir and Jetstar Pacific.TBKT
EXHIBITIONS - Two international exhibitions to open in HCM City
ProPak Vietnam 2010 and Plastics & Rubber Vietnam 2010 for international exhibitors will be held at the city's Saigon Exhibition and Convention centre in District 7 this month.
The two three-day exhibitions from March 18 to 20 have attracted over 370 companies from 30 countries and territories to showcase their latest technologies, machinery and equipment for the packaging, rubber and plastic industries. ProPak Vietnam 2010 is the country's leading exhibition of processing and packaging, which returns to HCM City to display a variety of processing, filling and packaging solutions for the growing food, fishery, beverage, pharmaceutical, electronic, health care and consumer goods manufacturing sectors. The event will be attended by nearly 170 companies from 21 countries and territories.
"Confidence in the Vietnamese domestic market is strong. Billion dollar investment plans, announced recently by industry giants in the food, beverage, cosmetic, healthy care, pharmaceutical and laboratory sectors among others/to expand production facilities point the way towards anticipated growth. Many businesses are stepping up their innovation efforts, reviewing long-established practices and expanding their technology base in order to be even better equipped than before to compete in the local and export markets;' said David Aitkeq, managing director of Bangkok Exhibition Services Co Ltd, the event organiser.
Meanwhile, Plastics & Rubber Vietnam 2010 will showcase the latest and the best in plastic materials, accessory products, machines and equipment for manufacturing and processing for the rubber and plastic industries.
The unique feature of the expo is the presence of the entire spectrum of plastic and rubber products manufacturers from tires to tubes, hoses and industrial components.
Plastics & Rubber Vietnam 2010 has attricted200 companies from 20 countries and territories.
According to Aitken, visitors will come from diverse industries, varying from automobile, chemical and petrochemical, medical and healthcare, computer and ICT, electrical and electronics, packaging, production and engineering to footwear and accessories, furniture, toys and sporting goods. Representatives from transportation, sales and marketing, purchasing, quality assurance, R&P as well as general corporate management functions will also attend, making the biennial event the largest communication and business platform in the industry.
The exhibitions are organised by VCCI Exhibition Service, an arm of the Vietnam Chamber of Commerce and Industry, Bangkok Exhibition Services Co. and Messe Dusseldorf Asia.VNS
Ports - Rent Aport Group plans to invest in Vietnam
People's Committee of the northern city of Hai Phong recently worked with Belgium-based Rent Aport Group's general director, Marc Stordiau and Dinh Vu Industrial Zone Joint Stock Co's general director, Filip Martens on investing in Hai Phong.
Marc Stordiau said that his group convinced some investors in Europe and Middle East to join investment projects in Hai Phong such as Lach Huyen port project and some others in Dinh Vu industrial zone (IZ). These investors will come to Hai Phong city to seek investment opportunities in forthcoming time.
Rent Aport Group holds stake into Dinh Vu IZ and committed to attend some projects of the Vietnam National Shipping Lines (Vinalines).
The group expects to invest in a storage area in Dinh Vu IZ with an area of about 400 hectares.
Filip Martens said that the company's whole profit of 150 billion dong in 2009 will be invested in completing infrastructure of Dinh Vu IZ in phase 2 and new projects.
Power - Electricity production output in February up 19pct
February's electricity production output reached 5.81 billion kWh, bringing the total figure in Jan-February to 12.87 billion kWh.
During February, commercial electricity output reached 5.98 billion kWh, increasing 19.2 percent compared to last February. Of which, electricity for industry and construction increased 24.3 percent and accounted for 48.5 percent, electricity for commercial areas, hotel and restaurant rose 13.8 percent and electricity for management and individual consumption was up 11.4 percent year-on-year and accounted for 40.9 percent. During the first two months this year, consumption power of electronic products showed increasing signs against the same period last year. In details, air conditioner posted a rise of 85.7 percent, refrigerator up 49.6 percent, washing machine up 18.4 percent and television 19.4 percent.dt
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