Prime Minister pins high hopes on private sector

More than 31,000 illegal foreign labourers in Vietnam Economy shows signs of stability Nguyen Thi Xuan Mai, Director General of the Population and Labour Department, said that in the first two quarters of 2012, unemployment fell 0.34 percent to 3.62 percent in urban areas, and 0.37 percent to 1.65 percent in rural areas, compared to last year’s same period. Also in the first half of the year, 3.06 percent of labourers were underemployed, Mai said, stating that the rate remained at 1.92 percent in rural areas and 3.6 percent in the cities. Unemployment in Vietnam is equal to other countries in the region and much lower than many developing and developed countries such as South Africa (25 percent), Iran (11.5 percent), the Netherlands (9.6 percent), Spain (21.6 percent), and France (9.3 percent). Vietnam now has 47.1 million working age people, up 0.6 percent against the same period last year. Of that total, female workers account for 46.3 percent; 48 percent are working in the agriculture-forestry-fishery sector, 20.9 percent work in industry and construction, while 31.1 percent are employed in the service sector. In an effort to ensure social welfare, the Prime Minister has issued a decision on adjustment in lending levels and loan interest rates applicable to pupils and students to help poor households. The monthly minimum wage has also increased from VND830,000 to VND1.05 million, aiming to improve workers’ living conditions.... [read more]

Vietnamese are facing heightened economic pressures and competition from the effects of globalization as workers from China, India, and other developing Asian nations play an ever increasing role in the world's economy. Advances in technology and transportation now mean that Vietnamese workers more and more are competing with workers overseas—not just in manufacturing, but also in high-skill and most all of the high-wage sectors. Growth in information technologies, in particular, has facilitated deeper integration of economies across the globe while also posing both new opportunities and new challenges for the Vietnam economy. To assist the nation attain an economic leadership role in the world and promote broad-based growth at home, the MOST has initiated a US$110 million project entitled FIRST. The project targets the development of effective policies to support the country in research, innovation, and access to advanced information and telecommunications technologies. “Through the establishment of a worldwide network of Vietnamese experts, there will be greater co-ordination among Vietnamese in research and innovation,” said Dr Ta Ba Hung, a consultant for the project. Hung added that the project enhances knowledge-sharing among OVs with their domestic counterparts and encourages greater contribution to the country’s development. Innovation has long fuelled economic growth around the globe, often giving rise to new industries and new jobs. According to Hung, the growth of economies throughout the world has been driven largely by the pursuit of scientific understanding, the application of engineering solutions and continual technological innovation. What makes knowledge, innovation and technology such powerful…... [read more]

At a regular monthly meeting for March, they heard the country achieved a GDP growth rate of 4.96% in Q1 – the highest in the first quarter of the past three years. Export earnings rose 14.1% year on year, significantly contributing to the country’s trade surplus of US$1 billion, while inflation for March fell 0.44% compared to the previous month, a record low compared to the March figure of the previous years. Bank rates were further slashed, making it easier for businesses to access loans for production. Notably, more than 4,600 difficult businesses resumed operation, an increase of 48.9% from a year ago. Minister of Transport Dinh La Thang and Interior Minister Nguyen Thai Binh proposed speeding up disbursement of social development capital, as well as national key transport projects, along with better dealing with resettlement work and generating jobs for displaced people. Governor of the State Bank of Vietnam Nguyen Van Binh said the central bank is striving to settle between VND70-100 trillion in non-performing loans in 2014 and accelerating bank restructuring for credit organisations. Deputy Prime Ministers Hoang Trung Hai, Vu Van Ninh and Pham Binh Minh proposed easing difficulties for businesses in accessing bank loans, considering ODA capital allocation to make it more effective, expanding overseas outlets for key products, and further improving the investment climate. President of the Vietnam Fatherland Front Nguyen Thien Nhan underlined the need to develop aquaculture, show a stronger commitment to State-owned enterprise (SOE) equitisation, and combat epidemics. Other Cabinet members agreed…... [read more]

AIA Group Limited Chief Executive Officer Mark Adward Tucker made the statement at a reception given by Deputy Prime Minister Vu Van Ninh in Hanoi on January 21. Tucker said many big foreign companies acknowledge the Vietnamese government’s efforts in containing inflation and maintaining reasonable economic growth, boosting their confidence in the national economy. He noted that AIA has operated profitably since it was licensed in Vietnam in 2009. The group plans to inject an additional US$30 million into this market after having received approval from the Ministry of Planning and Investment. Deputy PM Ninh congratulated the insurance group on its outstanding performance in 2012 despite local and global economic difficulties. He said Vietnam is currently restructuring its economy and renovating the growth model to achieve sustainable development. This year, he said, the government will deal with bad debts burdening enterprises and banks, and mobilise resources for infrastructure construction. Stabilising the macroeconomy is the primary task of Vietnam, he told his guest. Vietnam possesses great potential for developing the insurance industry, but will only reward services and products meeting its market’s specific needs, said the Deputy PM. He recommended that the American Insurance group, with its experience and powerful financial capacity, invest in Vietnam’s worthy undertakings like infrastructure development or involve itself in financial-banking reforms, including insurance and securities companies.... [read more]

The Seeking Alpha article said that Vietnam has gradually overcome the most negative impact of the global financial crisis, but it will continue to be affected by the crisis to the degree that demand for imported Vietnamese products has declined. It predicted that the country’s exchange-traded fund (ETF) will grow significantly when other countries accelerate imports. The International Monetary Fund (IMF) forecast that the Vietnam economy would grow 6 percent this year. Professor Joseph Nye of Harvard University said Vietnam’s open economy and growth in foreign direct investment (FDI) and exports will help the country quickly escape the downturn. Earlier, Bloomberg said that the country’s economic growth in 2009 was only 5.3 percent due to a decline in exports and FDI. The gradually increasing demand for Vietnamese products will help its economy grow rapidly, said Bloomberg experts.... [read more]

VietNamNet Bridge - Analysts were cautious about the trade surplus of VND2.7 billion in 2016, saying that the figure did not show the entire picture of the national economy. The General Statistics Office (GSO) has released a report saying that Vietnam exported more than imported by $2.68 billion in 2016. Th country saw a trade surplus again after one year of trade deficit. In 2015, the trade deficit was over $3 billion. A trade surplus is always good news for Vietnam economy as it means that the country gets more money than it spends and there is no need to worry about foreign currency supplies. In previous years, Vietnam usually imported more than it exported. As a developing economy, it needed to import machines and input materials in large quantities to run domestic production. Therefore, a trade surplus was always hailed as a great achievement. However, Bui Trinh, a renowned economist, is cautious when talking about this year’s trade surplus as he still sees problems. Analysts were cautious about the trade surplus of VND2.7 billion in 2016, saying that the figure did not show the entire picture of the national economy. First, statistics show that foreign invested enterprises (FIEs) made up 70 percent of total export turnover, while exports from Vietnamese enterprises were modest. The export items were mostly telephones and phone parts, computers, electronics & electronic parts, and textile and garments, worth tens of billions of dollars. “The exports were mainly products made by FIEs and products in labor-intensive…... [read more]

Addressing the workshop on Vietnam economy, the Pforzheim mayor congratulated Vietnam for its success in economic reforms in the recent past, saying the country has great potential for development. Vietnam is an international investment attraction and a partner of German investors’ interest, emphasised the German official. The Executive Manager of the Economic and Scientific Cooperation organisation of the Baden-Wurttemberg state, Dr. Michael Hagenmeyer, recognised Vietnam ’s legal upgrade in service of economic reforms. Vietnam is ready for its economic reforms scheme through upgrading the legal framework for foreign investment and business operations, especially since the country joined the World Trade Organisation, said the senior economist. He also lauded Vietnam’s economic and investment law as the most opening in the region and its human resources with a majority in the working age and characterised with industriousness and enterprising will as a great advantage. April last year, a delegation of medium and small-sized enterprises from the Baden-Wurttemberge state, the third largest state in Germany, visited Vietnam to conduct market survey and also to launch the next phase of a mini-credit project for poor farmers. The project has been sponsored by the Sparkasse Bank, in association with the TYM Fund run by the Vietnam Women’s Union, to benefit the poor in 175 rural villages since 2005. As a result, 40,000 local poor farmer families with monthly incomes less than 10 Eur have managed to establish small production entities and develop animal husbandry for a better life For his part, Vietnamese Consul General Nguyen…... [read more]

HSBC names best banks in Vietnam More bank M&As expected in 2012: HSBC expert Vietnam economy grows impressively: HSBC According to HSBC’s "Vietnam 2012 Outlook: Some progress, but patience required" report which was released on February 20, inflation is easing and expected to reach single digits by the end of this year. However, the report says, Vietnam will see growth slowing, due to more cautious spending and weaker exports in 2012. In contrast to 2011, which began with a sharp weakening of the currency, high inflation, and several tightening measures, 2012 will be more stable thanks to the slower inflation, better management of the macroeconomic policy by the new Governor of the State Bank of Vietnam, and improved trade and fiscal positions, says HSBC. The leading banking corporation has also predicted that 2012 trade deficit will stabilize at US$10.1 billion (versus US$9.8 billion in 2011) and the consolidated government balance is expected to decelerate to 3.8 percent from 3.9 percent last year. For example, the VND has stabilized in recent months. The VND usually comes under a lot of pressure during the Lunar New Year festival (Tet), this did not happen in 2011 for several reasons including imports growing more slowly than exports and the remittances being robust; the SBV daily raising reference rate and allowing the VND to gradually depreciate, as well as intervening when the spread widened; many companies accelerating the pace of their USD loan payments; and the increasing demand for VND during the Lunar New Year…... [read more]

Economic growth still relies on circumstantial solutions Seeking opportunities for the economy next year The article says with monetary and fiscal tools in place, the Vietnamese economy performed well in the first half of 2012 while Asian economic growth was slow and European and US economies worsened. It cites several indices such as a 4.38 percent GDP growth in the first six months of 2012, while inflation was the lowest in three years at about 3 percent. Standard & Poor’s Credit Ratings raised its rating of Vietnam from negative to stable, saying that the government successfully took measures to tighten its finances. The exchange rate is basically stable; the foreign currency liquidity system has been improved; there is an abundant supply of foreign currency from rising exports; the balance of international payments surplus is quite large; and foreign reserves are improved. In the past six months, the total export turnover of Vietnam reached more than US$53.1 billion, a year-on-year increase of 22.2 percent. Economists also say there is every good reason to believe that the Vietnamese economy is in recovery, not at a standstill like in 2011. ”The Vietnamese economy has stabilized. These developments have increased investors’ confidence in the Vietnamese market,” the paper said.... [read more]

In a report released on October 2, HSBC says Vietnam has succeeded in cooling down its over-heated economy to sustain its macro level, but growth has not reached the targeted level and will probably stand at 5 percent this year. However, economic slowdown can be seen as an opportunity for the State to review structural shortcomings such as the troublesome business environment, unprofitable enterprises and inefficient public investment. The most positive sign is the rapid recovery of exports such as garments and textiles, footwear, rice, electronics, coffee and crude oil. The report recommends that the Vietnamese government prioritize stabilizing the macro-economic environment in order to restore both consumer and investor confidence. At the same time, it says the country should draw up a roadmap for bad debt settlement and develop a better strategy for the next steps in the industrialization process.... [read more]

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