Weekly Update Dec 24: Membership & Directory, Christmas, New Year’s and TET


Winners’ List … Prizes and Silent Auction Items at the Governors’ Ball
Mo-Tu, Jan 14-15 Lower Mekong Initiative Infrastructure Best Practices Exchange
We, Jan 23 Idea Foundry • for Business Creation and Entrepreneurial Accelerator
We, Jan 23 The Year Ahead: Summary & Outlook 2013 (CanCham Event)
Sa, Feb 9 – Su, Feb 17 TET Lunar New Year Holidays • 9 days • Plan ahead …
Su-Th, Feb 24-28 U.S. Chamber of Commerce Mission to Myanmar
Sa-Tu Mar 2 – 5 International Home + Housewares Show in Chicago
Th-Fr, Mar 21-22, 2013 APCAC Spring Conference
Mo-Tu, Apr 8-9 Asia Pacific Business Outlook, Los Angeles
Business leaders discuss investment environment at VBF
Vietnam Empty Office Towers Show Dreams Turned to Rubble
SOEs debts up 19% over 2011, equal 65% of Vietnam’s GDP
Rampant corruption in Vietnam: #1 Concern of Vietnamese Citizens

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Macroeconomic stability must be focus for Vietnam: Central Institute for Economic Management

Dr. Vo Tri Thanh, vice director of the Central Institute for Economic Management, spoke to the Daily on the country’s economic situation from now to the year’s end. Excerpts:

The Saigon Times Daily: There is suspicion that rapid interest rate cuts are signs of monetary easing. What do you comment on this?

– Dr. Vo Tri Thanh: In theory, how interest rates are set reflects the reality of money supply. However, the relationship between interest rates and money supply in Vietnam has always been unclear. Sometimes, interest rates pick up, and so does money supply, or vice versa. At present, interest rates are in decline but money supply does not rise.

What are your forecasts of economic trends in the years to come?

– (Economic woes) will continue. The way the world, or Vietnam, rescued the economy in the 2008-2009 crisis cannot be repeated. At the time, it was essentially pumping money through fiscal and monetary policy. Injecting money into the economy is an impossible mission at the moment since different and sustainable solutions are preferred. This is a turnaround for not only Vietnam but also the world economy. Growth and development models should be changed, leading to pain and loss of time.

In short, stability must be a focus, instead of injecting money into the economy. Moreover, stability is a prerequisite to change the way of doing business or making investments.

As for the world, there are currently four imbalances that require time to handle. The first imbalance lies between the real economy and the virtual one when financial bubbles are too big. The second is between the real economy and sustainable development and the environment. The third is the East-West imbalance, meaning the U.S. always suffers deficits, while East Asia has economic, trade and investment surpluses. And the last is the internal imbalance such as the euro zone public debt crisis. These four issues cannot be addressed soon.

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Vietnam banks may increase dollar purchases

Experts are warning of a a dollar shortage in Vietnam later this year

Jun 29, 2012. Banks with ample funds may start hoarding US dollars again as lending money on the interbank market at cheap interest rates has become less profitable, financial experts said.

There is concern that dong interest rates on the interbank market are too low, which will drive banks toward dollar assets, a general director of a Ho Chi Minh City-based bank said. Such a trend could lead to a dollar shortage, he warned.

Industry insiders also said around VND64 trillion worth of central bank bonds will mature over the next few months. That means a large amount of money will flow back to commercial banks.

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Vietnam, wracked by economic woes, plans new reforms

HANOI | Sun Nov 13, 2011. (Reuters) After four years of economic instability, Vietnam is embarking on reforms some believe could be its most significant since steps started in 1986 that ended stifling central planning and, eventually, turned the war-torn country into a tiger.

However, there’s substantial skepticism that policymakers can fend off resistance to major change from state-owned companies and other interest groups, including private conglomerates, whose influence has surged.

Months of heated discussion have produced a consensus that Vietnam, wracked by Asia’s worst inflation and other woes, needs to change tack, as it did 25 years ago when the “Doi Moi” (renovation) policy took flight.

“It’s not just talk anymore. This is serious business now,” Vice Minister of Planning and Investment Dang Huy Dong told Reuters. “We’ve gone through careful analysis, painful analysis, to see where the shortcomings are and areas for improvement.”

It’s far from certain, though, that the government will pursue reforms that are broad enough and deep enough to fix debt-ridden state banks and rein in inefficient state enterprises (SOEs) such as Vietnam Shipbuilding Industry Group, or Vinashin, which embarrassingly defaulted last year.

“The Vietnamese economy, once again, is at a crossroads,” said Le Dang Doanh, a reform-minded economist who has advised current and former leaders.

And this time, in Doanh’s view, moving decisively down a reform path is “more difficult because it touches powerful interest groups that are operating behind the scenes.”

There are optimists who believe Vietnam will make substantive change that undercuts what the World Bank calls “recurring and increasingly severe” economic instability.

But then there’s the big question: how far will the leadership go in implementing an agenda of major structural change?

Experts say the root of Vietnam’s boom-to-bust dilemma lies in excessive investment in inefficient state-owned corporations, which suck up capital and have diversified wildly from their core competencies into sectors such as property and stocks—both of which have faltered.

Cao Si Kiem, a member of the National Assembly’s economic committee and a former central bank governor, said the Politburo, the 14-man group at the pinnacle of political power, has concluded reform is needed to “restore people’s faith.” Party leader Nguyen Phu Trong gave the strongest and most public signal of top-level support for it in an October 10 speech reciting a litany of problems.

Trong said, “We must restructure the economy along with renovating the growth model,” laying out the three priorities: public investment, finance and state-owned enterprises.

Tran Dinh Thien, director of the Vietnam Economic Research Institute at the state-run Vietnam Academy of Social Sciences, said that speech amounted to “an announcement of action, that the whole party has agreed on restructuring of the economy.”

Government ministries have been told how to restructure themselves, and SOEs have been told to shrink holdings in non-core businesses.

Pham Chi Lan, the economist invited to talk with leaders, said “It’s a strong plan in which state-owned companies have to follow OECD standards of corporate governance. It’s also modeled on China in having clear criteria of productivity and technology advancement, instead of investment and revenue.”

“The difficulty is that the reforms directly impact the interests of some forces that the governing mechanism relies on,” said Thien of the Vietnam Economic Research Institute, who’s on a council advising the government on financial policy. “But not restructuring the economy is not an option.”

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Vietnam inflation may have peaked; now the hard part

(Reuters) – Inflation may have finally peaked in Vietnam. Now comes the hard part for policymakers.

It is too early to start unwinding tight monetary policy but pressure to do so will no doubt rise quickly if, as some economists expect, inflation starts to ease in the next month or so.

The stability of Vietnam’s beleaguered $ 100-billion economy and its attractiveness to investors hinge on whether policymakers stick to their guns, economists say. Also on the line is the credibility of freshly-reappointed Prime Minister Nguyen Tan Dung and his new central bank chief, Nguyen Van Binh.

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How to control the market

July 15,2011. Automatic import licences, price declaration and restricted import of automobiles, liquor, telephones and cosmetics are merely administrative tools

The use of administrative tools to control the market by many State management agencies may bring some benefits, but it causes consequences that take a long time to deal with

Vietnam has adopted many policies as administrative orders to manage monetary fields such as interest rates, credits and exchange rates. This way of management has, however, helped stabilize the monetary market, especially interest rates.

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Vietnam property market slows due to anti-inflationary measures

Jul 18, 2011. The property sector in Vietnam is going through a rough patch, weighed down by rising interest rates.

Monthly rents for Grade A office space in Ho Chi Minh city have dropped nearly 9 per cent on-year to about US$34 per square metre. This is according to research firm CBRE.

The residential property sector had fared worse, with prices across all segments plunging an average 17 per cent from a year ago.

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ADB sees room for Vietnam interest rate hike

Jun 14, 2011. The Asian Development Bank sees a bit of room left for policy rate hikes in Vietnam, but expects monthly inflation to start to come down this month and double-digit annual inflation to begin to ease in August.

Vietnam has been grappling with some of the highest inflation in the world. It has ratcheted up key interest rates since late last year and pledged a raft of other measures, including lower credit and money supply growth and fiscal tightening.

Still, the consumer price index rose to 19.8 percent in May from the same month last year.

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Weekly Update May 30: Customer Value Proposition, Labour Code, World Blood Donor Day, 7 Habits


We, Jun 1 Customer: Who Cares? Theory and Reality of Customer Value Proposition
Mo, Jun 6 VN: Global Investment Destination – An Arbitral Perspective (Hanoi)
Tu, Jun 14 World Blood Donor Day – AmCham CSR Group Event
Tu-We, Jun 14-15 “The 7 Habits of Highly Effective People” – Signature Program
Sa, Jul 2, 2011 Independence Day Family Picnic and BBQ
Thu, Jul 7 How to Manage a Crisis that Hurts Your Company’s Reputation?
Southern Key Economic Region: Ports, Industrial Parks, and Other Infrastructure
Asia Development Bank: “Skills Enhancement Project” Loan to Vietnam, 2010-2016

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Weekly Update Feb 21: U.S.-A/P Business Summit, Furniture & Home Accessories Fair, Cloud Computing


Mo, Feb 28 U.S. Education Information & Career Orientation
We, Mar 2 Challenges in Vietnam’s Multi-cultural FDI Workplaces
Th-Fr, Mar 3-4 U.S.-Asia/Pacific Regional Business Summit, Singapore
Fr-Mo, Mar 11-14 Vietnam International Furniture & Home Accessories Fair
Mo-Tu, Mar 28-29 APBO Asia Pacific Business Outlook, Los Angeles
Tu, Apr 5 Cloud Computing: Opportunities and Challenges in Vietnam

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