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Crunch time as Vietnam set for education shakeup, again

LHP students, Crunchtime for VN EducationIn the most explicit gesture to shore up an education system that has been dogged by crisis at all levels, Vietnam’s top leadership has passed a resolution on an across-the-board overhaul of the sector. But will educators and experts, disenchanted with government platitudes about an education quagmire that threatens to drag down the workforce and stall the country’s development, buy into this latest move in the education reform?

“It is crunch time for a shakeup,” Hoang Tuy, a prominent Vietnamese educator, told Tuoi Tre (Youth) newspaper. “The leaders must decide if they want to fix the system or keep the status quo and hold back the country’s development with a backward education system.” Read more

Gov’t asked to create investor-friendly environment

Vietnam Business Forum, Dec 2012

Vietnam is still a promising destination for foreign investment in 2013, but the Government needs to urgently create a business environment friendly to investors if the country is to continue attracting foreign direct investment.

The year 2013 will see many other countries emerging as competitors in attracting investment, representatives of foreign business associations in Vietnam said.

Urgent need for improvements

Kim Jai Woo, chairman of the Korean Chamber of Commerce in HCMC (KoCham), told the Daily in an interview via email that the global financial crisis had lasted since 2008, but the global economy is expected to recover in 2013.

As China is cutting investment incentives for foreign companies, more Korean investors this year will come to Vietnam in areas of manufacturing and infrastructure, such as ports, bridges, and roads, said the KoCham chairman.

Nevertheless, if Vietnam fails to create an agreeable environment, Korean firms will shift their production to other countries, he added. There’re now about 2,500 Korean businesses operating in Vietnam.

Herb Cochran, executive director of the HCMC Chapter of the American Chamber of Commerce in Vietnam (AmCham), said Vietnam is no longer the top-rated investment destination for U.S. companies, since Indonesia, Malaysia, Bangladesh, and even Myanmar seem to attract more interest these days.

While many U.S. firms are successful in Vietnam, a growing number of AmCham companies are finding it more difficult to conduct business here than in the past years. Recent moves by the Government have caused numerous investors to rethink their business and expansion plans in Vietnam, Cochran said.

“Non-market administrative decisions on which items can be imported, how products can be priced, who can work in Vietnam, which programming can be broadcast on television, who can provide health care, and much more have contributed to a perception that investors are not welcome in Vietnam,” he added.

Given the current state of the economy, Vietnam should make every effort to entice foreign investment and resources. To retain existing and attract new FDI, Vietnam’s Government needs to listen to existing FDI companies, according to the representative of AmCham.

“We meet regularly with the Government in the Vietnam Business Forum and other consultations opportunities to discuss what the Government and businesses could do to attract more U.S. FDI,” said Cochran. “Unfortunately, not many of our recommendations have been accepted in recent years, nor have many recommendations from other foreign business associations or international experts,” he said.

In addition, Kim Jai Woo from KoCham added that the Government needs to pay more attention to decisive factors concerning investment, such as curbing production cost increase.

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Business leaders discuss investment environment at Vietnam Business Forum

Dec 4, 2012. Experts speaking at the Viet Nam Business Forum (VBF) in Ha Noi yesterday called for the Government of Viet Nam to take decisive action to enhance economic and financial reform to create a more attractive business climate.

The conference entitled ‘Restoring Economic Dynamism’ saw business leaders meet to discuss the challenges and opportunities for investment in the country.

According to Christopher Twomey, chairman of the American Chamber of Commerce (AmCham), Viet Nam faced challenges creating macroeconomic stability at a time of unacceptably high inflation, causing tension in the foreign exchange market and high interest rates.

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National Assembly may postpone state sector minimum wage increase

Oct 29, 2012. The Government is likely to delay its planned increase of the minimum wage next May due to shrinking State budget revenues.

Despite planning to increase the minimum wage from VND1.05 million (US$50.5) per month to VND1.3 million ($62.5) in May next year, deputies at a National Assembly meeting last week proposed delaying the increase.

The move will affect seven million people on the State payroll, as well as retired people.

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ADB/OECD Anti-Corruption Initiative for Asia Meeting in Hanoi

The country has made significant progress in battling corruption, from the highest powers down to the grass roots level, Huynh Phong Tranh, Vietnamese Government Chief Inspector, said in his opening speech.

“These changes reflect the determination and capacity of the whole political system and of all society to prevent corruption,” said Tranh.

However, as corruption grows increasingly complicated and sophisticated, he added, the Government’s achievements were only a starting point. The Vietnamese Government has decreed that combating corruption is a key element of its domestic strategy and therefore the fight against corrupt entities must be strengthened.

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Government to disband several State Owned Enterprises (SOEs)

HANOI, Sep 6, 2012. Minister Chairman Vu Duc Dam of the Government Office said the Prime Minister had closely directed the arrest of Duong Chi Dung, former head of the Vietnam National Shipping Lines (Vinalines).

Speaking at the regular press conference of the Government on Wednesday, Dam said after Duong Chi Dung had taken flight, the police issued an international arrest warrant for him. Now, Dung has been captured.

The Prime Minister strictly directed this process under the spirit that all people are equal before the law, without any exception, Dam stated. The Prime Minister also sought to clarify whether there was any act of abetting in Dung’s getaway.

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Weekly Update Sep 10: Coastal Clean Up, Consumer Product Testing, Outsourcing FDI, Cloud Computing

Highlights

Tu, Sep 11 Legal & VBF Liaison Committee Meeting
Sa, Sep 15 2012 International Coastal Cleanup Day
Tu, Sep 18 Consumer Product Testing and Certification (Textile, Toys & Footwear)
Th, Sep 20 Software, Labs, Business Process Outsourcing FDI in HCM City
Fr, Sep 21 Secure Cloud Computing
Th-Su, Oct 24-28 Hi-Tech Agro and Food Industry Fair HCM City
Fr-Su, Sep 21-23 AmCham Networking Weekend
We, Sep 26 AmCham Palooza Party
”European debt crisis, U.S. economic stagnation, a very critical situation in VN”
In Vietnam, Message of Equality Is Challenged by Widening Wealth Gap (SOEs)
President Truong Tan Sang addresses the nation on Vietnam’s National Day
Government to disband several State Owned Enterprises (SOEs)
New investment in education will boost Vietnam’s economic and social development
Arizona State University to help strengthen higher education in Vietnam
Tu, Nov 6, U.S. General Elections Day • U.S. Voter Registration Web Sites
Nov 13-21 Infrastructure Trade Mission to Indonesia and Vietnam

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WB calls for prudence in economy driving, reform of SOEs

HANOI, May 24, 2012. The World Bank (WB) has just warned that Vietnam should prudently weigh the two goals of stabilizing the macro-economy and stimulating the economic growth on the verge of downturn.

Victoria Kwakwa, WB country director for Vietnam, said that the economy has no choice but to either grow or remain stable. The country leaders must balance these two objectives and this is a challenge for Vietnam.

“Previously, we said economic stability is the main target, and now economic stability needs greater focus,” she said.

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Gov’t okays $ 1.4 billion bailout package for enterprises

May 7, 2012. The Government has approved a bailout package worth an estimated VND29 trillion, or some US$1.4 billion, suggested by the Ministry of Finance in a bid to rescue the struggling enterprises.

Relevant agencies are asked to survey and collect the exact figures of how many companies have suspended production, scaled down business and gone bust, said Vu Duc Dam, chairman of the Government Office.

The greatest problems for enterprises are now outlets for their products and difficult access to bank loans due to high lending rates, he said at the Government’s press conference last Friday.

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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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