Keep up-to-date about U.S.-Vietnam trade and investment with Weekly Updates.
Upcoming Events and Activities (next two weeks)
Plan ahead. Click here to see all upcoming Events and Committee Meetings
Mo, Jun 16 How competitive is your compensation strategy? Directly shape trends in the market … Navigos Group’s Salary Survey 2008. Following the successful run of last year’s 2007 Salary Survey, Navigos Group is now gearing up for the Vietnam Salary Survey 2008, which opens its doors for participants starting on April 14 to July 12, 2008. We have amended our schedule further this year to coincide with your needs better as you have told us. Put your company in the position to directly shape trends in the market, and especially in your industry.
Mo, Jun 16 Direct Selling Committee Meeting. with special guest Ms. Tamuna Gabilaia, Executive Director of the World Federation of Direct Selling Associations, who will be in Vietnam for the APEC/CEPI conference in Ha Long Bay, June 19-20.
We, Jun 18 Welcome reception for U.S. Commerce Assistant Secretary Hernandez and Business Mission with U.S. companies that represent a diverse cross-section of U.S. industries with a strong interest in doing business in Vietnam. Click the link for information on the mission and to register for the event.
List of companies participating in the Business Mission Companies include turbine electric power, construction materials, compatible consumer printing supplies, pelletizing and drying systems for the plastics industry, architect/design, satellite communications technology, personal care products, machine tools and manufacturing machinery, building cleaning service franchise, and more. Click the link for list of companies with links to their web sites to learn more about their products and services and to contact the U.S. Commercial Service about arranging an appointment.
We, Jun 25 Deadline to submit application for Speech Contest at Independence Day Celebration for young Vietnamese (ages 16-25).
Sa, 28 June 2008 Independence Day Celebration and Family Picnic Join us for an old-fashioned celebration with scrumptuous food, fun and games for children and parents, great door prizes, and good music at AmCham’s Annual Independence Day Celebration and Family Picnic. Limited to 600 AmCham Members and their Family and Guests. This week is the last chance for members to finalize sponsorship for the event, and sponsors’ logos will be printed on Tickets starting May 27. Tickets available on June 7.
Mo-Tu, Sep 8-9 “Operational Auditing: A Risk & Self-Assessment Based Approach” by: James Roth Ph.D., CIA, CCSA. You will not just hear about value-adding audit practices. You will get the actual audit tools and learn how to apply them – including the challenges and how to tailor them to your own organization’s culture and management style. Click the link for more information and to download the registration form.
Sa, Dec 6: AmCham Governors Ball: SAVE THE DATE A formal event held in the festive style of the season, to raise funds for community support programs funded by and through the AmCham-United Way partnership.
News and Issues Updates
Click this link to read the below and more News Highlights: Business, Trade, and Investment in Vietnam and Asia.
Is Vietnam facing a currency crisis? (Moody’s – 13 Jun 08) Is Vietnam headed for a currency and balance of payments crisis? A number of emerging market analysts have sounded the alarm, but currency speculators may get burned if they are betting on the kind of rout that brought down the Thai baht in 1997. Yet the government should not have responded to these concerns by declaring that it has sufficient foreign reserves to defend the dong. The bitter lessons of the Thais and Indonesians in 1997 are very clear: even US$ 22 billion can be used up very quickly when the currency is under heavy pressure from determined and well-financed speculators. The only way to regain credibility is by employing serious tools to attack the roots of the problem, which are an overheating economy and excessive inflation.
Vietnam on brink of Thai baht-style currency crisis of 1997 (The Times – UK) On June 10 the State Bank of Vietnam effectively devalued the dong 2 per cent against the dollar, a move that analysts said was designed to head off a speculative attack on the embattled currency. The move highlighted concerns that Vietnam, where consumer price inflation is running at more than 25 per cent, is poised to suffer an exodus of foreign-controlled capital.
Tougher rules for informal market in dollars “We will supervise agents’ daily trading activities to ensure all foreign currencies bought from the public are sold to commercial banks at the end of the day,” he added. Under the Foreign Exchange Management Ordinance, agents are only authorised to buy foreign currencies from the public and resell them to commercial banks. Reselling to other buyers is prohibited.
Vietnam will surely overcome difficulties: Deputy PM “Vietnam will surely overcome all difficulties and challenges to stabilise its economy and move ahead in the coming time. The Vietnamese government and people are determined and are exerting efforts to overcome difficulties and challenges.” According to MPI Minister Phuc, in the remaining months of 2008, the government will implement three missions: tighten the monetary policy to maintain stable credit growth; control import-export activities; and curb the trade deficit.
State Bank of VN raises rates to fight inflation SBV sets prime rate at 14%. Maximum bank loan rates are 21 percent (1.5 times the prime rate), according to the Civil Code.
Some shipping companies, airlines refuse payment in VND In principle, only the VND is accepted in payment for transactions carried out in territory of Vietnam. If firms unilaterally applied the free-market exchange rate, it would violate the current Ordinance on Forex Management. One shipping company said that if clients make payments in VND, the exchange rate for payment will be the exchange rate announced by Vietcombank plus the surcharge of 10%. Airlines also have been trying to impose their own terms, because it is now difficult to collect dollars to pay foreign airlines due to the dollar price fluctuations.
Anheuser-Busch, GANNON to distribute Budweiser in Vietnam Gannon Distribution will sell the beer that will be brewed and packaged at the Anheuser-Busch brewery in Los Angeles. Budweiser will initially be available in Ho Chi Minh City as well as select chain outlets across the nation.
Vietnam’s long term prospects remain strong, despite macroeconomic turbulence (World Bank) The IMF Senior Resident Representative reminded the Government to respond to signs of weakening economic indicators, which are beginning to weigh on investors’ sentiments. He also urged transparency and timely data provision on key economic and financial variables. “We have been encouraged by the recent speeches by the Prime Minister and other senior officials which have clearly laid out the economic challenges the country faces, and the broad policy strategy for addressing them. The priority now is to translate that strategy into a concrete and convincing policy package that will bolster investor confidence and restore macroeconomic stability,” he said.
Vo Van Kiet, who led Vietnam to freer markets, dead at 85 In his term as prime minister, and as the most senior southerner in the Communist Party and the government, Kiet was a leader in Vietnam’s market-oriented economic changes known as “doi moi” – meaning renovation or renewal – in the late 1980s and 1990s. The changes began the overhaul of Vietnam’s failed Soviet-style system.
Vietnam’s bonds plunge, Yields exceed 19%, VN Dong slumps 2% The State Bank of Vietnam raised the benchmark interest rate to 14 percent, from 12 percent. Banks are allowed to charge borrowers as much as 21 percent. “People may turn more to dollars now since the new reference rate signaled the government will let the dong depreciate faster,” said ANZ VN Banking Group CEO. “It will put more pressure on the dong’s devaluation and if the central bank wants to maintain dong’s value, it will have to spend more U.S. dollars to buy dong.”
Vietnam may intervene in currency markets to support the VN Dong Morgan Stanley said on May 28 that Vietnam is headed for a “currency crisis” because the current-account deficit may swell this year to an “unsustainably large” level. Deutsche Bank AG also predicts a dong devaluation because of quickening inflation. However, Vietnam has enough foreign-exchange reserves for the government to step in to maintain the value of the dong, said Prime Minister Nguyen Tan Dung.
Vietnam raises interest rate to 14%, highest in Asia, lets VN dong fall State Bank of Vietnam will raise the base rate to 14 percent from 12 percent to stabilize the economy from Jun 11. The bank also lowered the dong’s reference rate for June 11 by 2 percent to avoid currency speculation.
Vietnam devalues currency Vietnam effectively devalued its currency by almost 2% June 10 to bring official exchange rates closer to free-market rates, which have fallen sharply as Vietnamese investors buy dollars to escape soaring inflation. In a statement on its Web site, the State Bank of Vietnam said it will set June 11’s official exchange rate at 16,461 dong per dollar, from 16,139 dong on Tuesday.
Vietnam’s troubled economy Halfway through 2008, Vietnam’s government finds itself grappling with soaring prices, collapsing markets and an increasingly restive workforce. Inflation, now running at an annual rate of 25%, is eating up much of the gains made by citizens over the last several years. Vietnam’s stock market, which has fallen 58.5% since January, currently holds the unhappy title of being the worst-performing in the world. Moody’s, which grades creditworthiness, lowered Vietnam’s ratings outlook last week to negative from positive. Poor ratings signal that banks may have trouble meeting their financial obligations, undermining investors’ confidence in the country. In a nutshell, the economy overheated and the government was too slow to respond, said UNDP chief economist.
Faro Technologies Inc. Agrees to Pay $ 1.1 Million Penalty for corrupt payments to Chinese officials On several occasions in 2004 and 2005, a Faro employee authorized corrupt payments directly to employees of state-owned or controlled entities in China to secure business for Faro worth approximately $ 4.9 million. Certain Faro employees decided in 2005 to route the corrupt payments to Chinese government officials through a shell company to “avoid exposure,” according to internal e-mails. As a result, in January 2005 Faro China entered into a bogus services contract with an intermediary, using it to pay the bribes on behalf of Faro.
AGA Medical Corporation Agrees to Pay $ 2 Million Penalty for corrupt payments in violation of FCPA In recognition of AGA’s voluntary disclosure and thorough review of the improper payments, its cooperation with the Department’s investigation, the company’s implementation of enhanced compliance policies and procedures, and the company’s engagement of an independent corporate monitor, the Department has agreed to defer prosecution of AGA for three years.
Beware corrupt payments abroad A company with operations abroad looking for some excitement can likely find it by avoiding affirmative management of its risks arising from the potential that corrupt payments are made in its foreign operations. The risks are much greater than even serious financial penalties: major loss of revenue; trashing of corporate reputations; good deals going south through discovery, after-the-fact, of corrupt payment schemes in acquisitions and joint ventures; and individuals losing their jobs—and their liberty—are all features of the fallout from enforcement cases.
Tricky Terrain on the Foreign Corrupt Practices Ace The FCPA covers corrupt payments to what you think of as government officials. But in fact it applies to any employees of government departments, government agencies and instrumentalities. Then there are two other parts that apply to public companies. Those deal with books and records and internal controls. The issue for many public companies is that the books and records provisions are very easy to violate because thereâ€™s no intent required, unlike the anti-bribery provision where you have to have a corrupt intent. So it’s the broad definition of foreign officials, it’s the influence of gifts and entertainment and it’s also the use of intermediaries, agents, consultants, business facilitators, whatever you want to call it. Those really impact cases.
EU removes Vietnam from footwear tariff preferences (GSP) The European Union is removing Vietnam’s footwear industry from a preferential tariffs programme for exports to the bloc after deciding the sector had become one of the most competitive in the world. Footwear ranks third in Vietnam export value after crude oil and garments.
Click this link to read more News Highlights: Business, Trade, and Investment in Vietnam and Asia.
Event Presentations, Downloads, and PHOTO ALBUMS
Event Presentations and PHOTO ALBUMS Did you miss an AmCham event? Were you there but wanted to have a copy of the presentation? Didn’t get the business card of the person you were talking with? Now you can download the presentations by clicking on the above link. Also, you can see a list of people that attended the event, with links to their company contact information.
Presentation: Grade A office rents in HCMC to reach US$ 100/sqm. Can you afford it? Rising office rents affect us all, whether your company is in a shop house or a Grade A office tower. Savills Vietnam believes Grade A rents will top US$ 100 per sqm in the next 2 years. Have you planned for this in your budgets? Couldn’t attend the lunch on Th, Feb 28? Click the link to download the presentation and find out where the market is going and decide how it affects your business.
Online Membership Directory Looking for information on AmCham members? Click here to browse the Online Membership Directory for information about and contact points for our 400 member and associate companies, and about 800 representatives. Also with links to their company web sites for even more information about American and international businesses in Ho Chi Minh City.
Your announcement in AmCham’s Weekly Update email Early each week, AmCham’s Weekly Update email goes out to nearly 800 representatives of over 400 AmCham member and associate companies, plus thousands of subscribers in Vietnam, Singapore, Japan, and the USA. We welcome event announcements that are of interest to our business readers.
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Google’s CEO on “Cloud Computing” Google is a cloud computing server, and in fact we are spending billions of dollars, this is public information, to build data centers, which are in one sense a return to the mainframe. In another sense, they’re one large supercomputer. And in another sense, they are the cloud itself. 27 Apr 2008.
From South Asia to iTunes How a husband-and-wife team turned an Indian music podcast series into a business and is making the most out of its Apple storefront on its Web site, where it sells Indian music from Bollywood hits to Bhangra classics, remixed with rap and pop, via iTunes, Apple’s online music store. 06 Apr 2008.
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Keep up-to-date about U.S.-Vietnam trade and investment with Weekly Updates.