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Vietnam’s President Sang says low growth a must while restructuring

Jan 22, 2013. Vietnam must accept “low” economic growth while it restructures its economy and should aim for annual expansion of at least 5 percent, according to President Truong Tan Sang.

Growth less than 5 percent would be “dangerous,” and spur high unemployment, Sang said in a Jan. 21 interview with Vietnam News Agency, the official state media. The country should try to gradually boost growth to 7 percent to 8 percent and stabilize the macro-economy, he said, without specifying a time frame.

Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending damped domestic demand, adding pressure on the government to revamp the financial system and attract more foreign investment. Gross domestic product rose 5.03 percent last year, down from 5.89 percent in 2011.

The World Bank is concerned about the country’s monetary policy loosening as it faces the risk of double-digit inflation in 2013, Deepak Mishra, the lender’s lead economist for Vietnam, said today at a business meeting in Ho Chi Minh City.

Weaknesses in the economy include the “low” quality of the country’s workforce, Sang said. “We ourselves, who manage and lead the country, have not created a favorable business environment and have not trained a high-quality workforce for companies,” he said in the interview.

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Business and Investment Opportunities in the “New” Myanmar

Business and Investment Opportunities in the New Myanmar

“Myanmar is undergoing significant transformations to its politics and economy and appears to be making the reforms necessary to open the country to the world. President Thein Sein’s rise to the presidency may have been marked with some controversy due to complaints about the legitimacy of the election; however, his actions as President deserve the international acclaim he has received. Myanmar remains an enigma. Its natural resource wealth and large population, combined with recent overtures toward inclusiveness with the international community offer incomparable promise, but the amount of progress it must sustain to truly develop remains large. Myanmar has signaled to international investors that the country wants to become more business friendly and now welcomes investments that may advance its economy.”

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Executive Summary: Business and Investment Opportunities in the “New” Myanmar, KWR International, Mar 2012, pdf, 7 pages

Survey on Myanmar’s Business and Investment Potential

To better understand the needs of foreign companies and investors as they consider business, trade and investment opportunities in Myanmar, KWR International, Inc. (KWR) is conducting a survey in cooperation with the Myanmar Development Resources Institute and Mingalar Myanmar. We are very grateful for your interest and response. Please also forward the link to this questionnaire to others with a potential interest.

Survey on Myanmar’s Business and Investment Potential

Business and Investment Opportunities in the New Myanmar

A toxic cocktail … European debt crisis, U.S. economic stagnation, a very critical situation in VN

When: Thu, Sep 6th 2012 5:30 pm to 8:30 pm
Where: New World Saigon Hotel, Ho Chi Minh City
What: AmCham Members Networking Night with Dr. Le Dang Doanh

Le Dang Doanh, VN Institute of Development StudiesDr. Le Dang Doanh, a prominent economist and a former top official at a government research organization, was recently quoted in the NY Times: “The problem in Vietnam is a very, very toxic cocktail from the European debt crisis, the stagnation in the U.S. economy plus a very critical situation in the domestic economy,” Mr. Doanh said. “It’s a very dangerous mixture.”

Stabilization policies since February 2011 have slowed the roller coaster ride of credit growth, inflation, and the economy. Many AmCham companies seem to be doing well, but there seems to be a malaise in the Vietnamese economy, with SOE reform lagging, non-performing bank loans, land disputes and conflicts, and the Vietnamese local economy seems to be under stress.

With FDI plunging (down 67% in the first seven months of 2012), and continuing lack of productivity growth, some observers talk about Vietnam getting caught in the “middle-income trap.” Indonesia, Malaysia, Bangladesh, Myanmar seem more attractive investment destinations than Vietnam, according to news reports and a survey by A.T. Kearney Consultants.

Foreign Policy magazine announced “the end of the Vietnamese miracle”. And the New York Times even reported In Vietnam, Fears of an Economic Meltdown.

Please click this link to Register Online for this important event.

After the unlearned lesson: Vinashin, VinaLines, and other SOEs’ inefficiencies, comes a dear price to pay: Nguyen Duc Kien, ACB and HCMC stock market. And the New York Times recently reported that In Vietnam, Message of Equality Is Challenged by Widening Wealth Gap (SOEs), which highlighted corruption/nepotism in State Owned Enterprises.

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In Vietnam, Growing Fears of an Economic Meltdown: NY Times

In Vietnam’s major cities, a once-booming property market has come crashing down. Hundreds of abandoned construction sites are the most obvious signs of a sickly economy.

A senior Vietnamese Communist Party official, speaking in the ornate drawing room of a French colonial building, compared the country’s economic problems to the market crash 15 years ago that flattened many economies in Asia.

“I can say this is the same as the crisis in Thailand in 1997,” said Hua Ngoc Thuan, the vice chairman of the People’s Committee of Ho Chi Minh City, the city’s top executive body. “Property investors pushed the prices so high. They bought for speculation — not for use.”

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U.S. a key partner in Vietnam’s journey – Fred Burke

Jul 2, 2012. Vietnam has undertaken a road to spectacular socio-economic growth in the past two decades and the U.S. has been an integral part of its dynamic journey, writes Fred Burke.

Two decades ago, when Vietnam and the U.S. started the process of normalizing their relations, few could have imagined the depth and breadth that the bilateral relationship would achieve today. In the early 1990s, Vietnam’s economy was on its back, hammered by years of wars and embargoes. Abject poverty was visible on virtually every street corner.

What a contrast today’s Vietnam presents. Commerce bursts out of every household, new industrial zones and housing developments sprawl on the outskirts of the cities, Overseas Vietnamese return to play a constructive role in the economy, and ever increasing numbers of young Vietnamese people are learning new skills at U.S. educational institutions. Perhaps most of all, bilateral trade has grown phenomenally.

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Weekly Update Jun 18: Real Estate Networking, Palooza, Independence Day Picnic

Highlights

Independence Day Picnic Door Prizes • Airline tickets to USA, Resort Stays, More!
Th, Jun 21 Networking Night: Ready-built factories & warehouses: status and trends
We, Jun 27 AmCham Palooza Party at Purple Jade, Intercontinental Asiana Saigon
Presentation: eCustoms at Intel Products Vietnam
Welcome to new AmCham companies • Jan ~ Jun 2012
Vietnam Outlook: World Bank East Asia & Pacific Update, May 2012
Vietnam Economic Indicators: World Bank East Asia & Pacific Update, May 2012
The unlearned lesson: Vinashin, VinaLines, and other SOEs’ inefficiencies
Sep – Dec AmCham Scholarship 2012
Tu, Nov 6, U.S. General Elections Day • U.S. Voter Registration Web Sites

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Private sector should be economic driver: Pham Do Chi

Pham Do Chi Pham Do Chi, Senior Economist, STAR Plus Program

Saigon Times. Apr 19, 2012. Macroeconomic uncertainty is among the biggest problems the country is facing. Efforts are being made to restructure the economy so as to achieve stability. The Saigon Times Daily talked with Pham Do Chi, senior economist of the Star Plus Program, former expert at the International Monetary Fund (IMF), on the fundamental issues of Vietnam’s economy. Excerpts:

The Saigon Times Daily: There have been production stagnation, high inventories and bankruptcies. And the central bank has signaled interest rate cuts. Vietnam is entering another battle against economic downturn. What is your comment on this?

Pham Do Chi: The problem lies in the fiscal policy, given the high public spending that has been pressuring the monetary policy over the past years, building up inflationary pressure. Actual inflation is caused by the lax fiscal policy. The Government has overemphasized public investment. As evidence, the public investment rate of Vietnam is the second highest in Asia, at 42% of GDP, only after China. Furthermore, as the incremental capital output ratio (ICOR) remains high meaning investment efficiency is low, it is necessary to further slash public investment, and encourage private investment instead. This will be a long-term effective dose for inflation.

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Vietnam: Reform to Stabilize Economy

PHNOM PENH. Apr 3, 2012. Vietnam Prime Minister Nguyen Tan Dung said he is stepping up plans to revamp the country’s bloated state sector that have led to a series of debilitating credit-rating downgrades and pressured Vietnam’s fragile currency.

In written responses to questions posed by The Wall Street Journal on the sidelines of a regional summit in Cambodia, Mr. Dung said he plans to push Vietnam’s state-owned enterprises into closer competition with the private sector to make them more efficient, and to revive a stalled series of partial privatizations, a process known in Vietnam as “equitization.” Creating a more level playing field between the private and state sectors, Mr. Dung said, “is one of the key components of economic restructuring.”

Vietnam’s once-booming economy has foundered in recent years, thrown off balance in part by burgeoning debts at some of its sprawling state-owned enterprises. Mr. Dung’s government previously had adopted a policy of encouraging Vietnam’s big state-owned firms, which control about 40% of the country’s economic output, to diversify into new industries and provide a powerful counterweight to a deluge of foreign investment into the nation.

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Weekly Update Apr 9: Business Gets Social 2012, Protect Brand Value, Palooza

Highlights

HCM City & S. Key Economic Region Infrastructure: Ports, Industrial Parks (update)
Welcome to new AmCham companies • Jan ~ Apr 2012
Member Survey 2012
AmCham Vietnam Direct Selling Committee – About Us
Tu, Apr 10 Legal Committee Meeting
Fr, Apr 13 Business Lunch: Business Gets Social 2012
We, Apr 25 Business Lunch: World IP Day – Protecting Your Brand Value in Vietnam
We, Apr 25 AmCham Palooza Party
FDI Rivals Turn Up the Heat on Vietnam
Myanmar: the Next Tiger? Hub for Low-cost Manufacturing (BusinessWeek)
Bangla Desh: the Next Apparel Sourcing Hot Spot? (McKinsey)
Bitexco Financial Tower: a new HCM City icon
Advance Notice: Sep – Nov AmCham Scholarship 2012

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Why you should ignore the crowd and buy Vietnam

Once viewed as the next ‘Asian Tiger’, sentiment on Vietnam is now pretty glum

“The government’s focus on breakneck growth at the expense of economic stability has led to growing inequality, soaring inflation, a lack of confidence in the currency and fears of a banking crisis.

“Domestic overheating, coupled with the deterioration of the global economy, has forced many investors, foreign and Vietnamese, to revise their view of the country’s prospects. Deep-seated problems, such as corruption, poor education and infrastructure bottlenecks – all often overlooked by investors in the boom years – have moved into sharp focus.

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