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height="113"> Interactive Newsletter of economic news and analysis
Authorities tight control on Internet usage
Foreign Finance Company inspected in HCM
Vietnamese Business executives being trained by USA School
U.S. - Vietnam to resume trade talks
Hollywood shooting a movie in Vietnam
Vietnam's relations with USA
Vietnam and its creditors
Nissan going for a Manufacturing Venture in Vietnam
New flight from Vienna to HCM
Credit card in Vietnam
Vietnam will get its first U.S. fast-food restaurant
Vietnam will post higher economic growth
No turning back on reforms ... The door will be open wider.
In 1995 investment to $7.2 billion
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The air-traffic to Vietnam is increasing at speed. Lauda Air - the Austrian airline operated by former world motor race champion Nikki Lauda has extended its weekly Vienna-Bangkok flight to HCM city.
The flight leaves at 10.25 pm on fridays arriving Bankok at 3.05 pm next day, and continue to Ho Chi Minh's Thank Son Nhat airport at 5.40pm. There are connecting flights from London Gatwick and Manchester.
Most major airlines flying to Singapore and Bankok have some service or connection available now and many are still in negotiations.
CGTD has published a Transportation Industry directory which include all land, air and sea transport companies and an introductory chapter on the industry.
Mastercard International Inc. has concluded a joint venture with Vietcombank - a
state bank - toward a goal of 500,000 credit and debit card users among Vietnam's young
population of 74 m people within 5 years.
The target market is the growing number of Vietnam's newly rich, especially in Southern
Vietnam's main urban center - Ho Chi Minh City - as well as small companies and govt
officials who travel overseas.
Vietnam - very much a cash based society - is changing quickly to the modern life style
and credit card is one of the conveniences which make sense if used properly.
"Working with Mastercard to establish the electronic infrastructure to support credit
card payment, we will radically change the way people pay" Mr Vu Viet Ngoan - the
executive director of Vietcombank says.
Vietcombank - will have Asia Commercial Bank iin Ho Chi Minh along with Export-Import Bank of Vietnam and Firstvina Bank as partners.
Mastercard will help develop programs to educate consumers on how to control their spending and to use their cards. The extension of credit may also help improve the country's banking system by installing confidence - Mr Donald Van Sotne - Sr Vice president and General manager for Southeast Asia for Mastercard.
1000 Locations will initially accept the card. The move definitely will help international travelers right away - last year Vietnam received 1 Million tourists and travelers and it is expected that the number will go above 3 Million by 1997. That is really growth?
Mastercard has launched Vietnamese language promotions with the local partners. You
must have seen that lately Hanoi is carrying out a social evil campaign largely directed
at English language advertising.
Mastercard - is concerned the extent of potential fraud - especially in the early stages
of the market's development as the company already witnessed in other South and SouthEast
Asian markets.
Visa - based in SF bay area - will be plunging soon - we believe!
CGTD has available a directory on Banking, Finance and Insurance industry.
on May 5th with the opening of a Texas Chicken outlet in central Ho Chi Minh City,
formerly Saigon. The two-storey, 100-seat restaurant would serve southern fried chicken in
a Texas atmosphere of exterior arches and teal, yellow and red logos.
Unlike most other Asian countries, communist Vietnam has long resisted the approaches of
Western fast-food chains wishing to set up big-city outlets.
Breaking into Vietnam's growing consumer market is especially tough for American fast-food
chains despite normalisation of relations between the two old enemies. The Hanoi
government is highly suspicious of the creeping influence of Western culture, which it
brands ``peaceful evolution.''
Texas Chicken is part of the Atlanta, Georgia-based Churchs Chicken chain, a subsidiary of
America's Favorite Chicken Company (AFC).
The Ho Chi Minh City restaurant is part of a development between AFC and a privately-owned
Indonesian company called PT Cipta Selera Murni to build 10 Texas Chicken outlets in
Vietnam by the end of the century.
CGTD has available a directory
on Food, Beverage and food processing industry.
Vietnam will post higher economic growth
Vietnam will post higher economic growth this year while keeping inflation in check.
Le Van Chau, vice minister and deputy governor of the State Bank of Vietnam, said he
expected gross domestic product growth of 10 percent in 1996, against 9.5 percent in 1995.
"inflation should be around the same level as GDP growth. ``More or less, it might be
from 9.5 percent to 11.0 percent,'' he said.
Inflation was 12.7 percent last year.
He said Vietnam had implemented a number of policies to attack inflation.
``We had a pricing policy, a transportation policy and the policy for the relationship
between commodities and money supply. There's also the monetary policy of the Central
Bank,''
The government was happy with foreign direct investment flows into the country. ``It's
coming in the way the Vietnamese government wished it, although we are trying to readjust
the investment structure and policy to create incentives for foreign investments.'' More
state assets would be privatised. ``The Vietnamese government will continue the
privatisation of a number of state-owned enterprises. It should be done on a gradual basis
and we should do it in order to create commodities for the stock market in the future.''
There could be no turning back on reforms - "Vietnamese Deputy Minister of Foreign affairs
Vietnam's ruling communist party will press ahead with reforms that have opened the
country's economy to the world".
Hanoi's continued commitment to the policy -- first introduced in the late 1980s -- would
be endorsed by the country's first party congress in five years, due in late June."
``For economic reasons there's no way to go back... For political reasons we have
established a situation which is convenient for us to go ahead with this policy.
``On the one hand we have the need to open the door more widely...on the other hand we
have the conditions to do so. So that is why there is no possibility that we should turn
back,''
Vietnam's open-door policy has transformed the Southeast Asian country, viewed during the
1980s as a virtual pariah state, into a respected member of the international community.
But hardline statements and decrees recently had raised concerns among foreign
businesspeople and diplomats that some sectors of government favoured turning the clock
back.
Mai dismissed such suggestions.
``The reason is quite simple. The main aim of the years to come, that is from now to year
2000 and then the strategy from there to the year 2020... is that the economic development
of Vietnam should enter another stage which is industrialisation and modernisation.
``Because of that we need badly more cooperation from the outside.'' Mai said Vietnam
needed some $50 billion in investment over the next five years, of which about half was
expected to come from external sources.
Vietnam had joined the Association of Southeast Asian Nations, had applied to join the
World Trade Organisation (WTO) and was moving towards membership of other international
bodies including possibly the Asia Pacific Economic Cooperation (APEC) grouping.
``We should integrate more and more into the world economy and the regional economy so
that we can have good technology, we can have capital,''
``We know that there are a lot of challenges. And maybe (some) interests... can be
threatened by joining the WTO, but there are benefits too. Otherwise it's very difficult
to do business with others,''
Latest official figures show foreign investors have earmarked $19.3 billion for 1,393
projects in Vietnam. However, less than a quarter of that sum has so far been disbursed.
Vietnam approved licenses for 90 foreign investment projects worth $1.322 billion in
the first four months of 1996, a figure domestic media variously reported as
representing both a surge and a plunge.
A Ministry of Planning and Investment (MPI) official said on Monday applications for a
total of 118 projects worth $4.386 billion had been received since the start of the year.
But the MPI was unable to provide comparative figures for the same period in 1995 and
newspapers had different readings of whether they showed a slowdown or continuation of the
foreign investment boom of recent years.
An MPI official as saying a total of 134 projects had been approved in the first four
months of 1995 worth $2.579 billion, equivalent to almost double the latest total.
Vietnam reported last month what it said were record foreign investment levels for the
first quarter of this year with licenses for projects worth $1.15 billion granted since
January, up 27 percent over the first three months in 1995.
However, the semi-official youth newspaper Thanh Nien reported a week earlier that Hanoi,
which is seeking a more active role in managing foreign investment, expected pledges to
slide this year for the first time since Vietnam opened its doors in 1988.
Foreign investors have earmarked a total of $19.3 billion for 1,393 projects in Vietnam so
far. In 1995 investment leapt 80 percent to $7.2 billion.
CGTD has available a directory on Joint ventures and projects - detailing present and future proejcts + projections.
The office in Ho Chi Minh (HCM) City of Peregrine Investment Holdings was inspected
last week by Vietnam's Finance ministry officials. Peregrine is a large Hong Kong based
corporation.
Nguyen Trung Truc - the managing director of Peregrine in HCM was quoted as the officials
turned up without any prior warning at the Company's offices. They spent some hours
examining the papers.
The law of Vietnam - doesnot allow trading company representative office usually. The authorities periodically uncover cases of abuse and have closed down the illegal offices. Usually they have closed the offices engaged in piracy or smuggling or unlawful activities.
Vietnam has drafted tough rules to control the net activity. Foreign and local businesses would be allowed to offer internet services but would have to register with the country's telecom authority.
"The provider must ensure effective technical filters to deter adverse information flows from abroad penetrating into Vietnam." the new draft says. The inspections would be mandatory.
Draft rules are considered to be final government policy. The leadership in Vietnam feels that the use of net could cause of "peaceful evolution" , a term used by Hanoi to alleged subversive acts by western countries. This fuzzy language in other words mean - you can not do whatever you want and follow the instructions and rules set by the authorities.
The first batch of 30 senior managers from Vietnam have just begun the course in Hanoi,
which lasts about 13 weeks and provides intensive study in the fields of accounting,
business planning, marketing and other management skills.
The course includes a trip to the USA where participants will visit Boeing and New York
Stock Exchange and other similar organizations/
The Amos Tuck School of Business Administration at Dartmouth College, New Hampshire has begun a co-operative executive program with the Vietnam National University's new Hanoi School of Business.
Many Vietnamese University campuses are in planning stage to start their own business
and management training courses as the demand for trained managers is growing faster than
the supply.
CGTD Research has published a directory
with a listing of all major Vietnamese Colleges, Universities and Research centers.
Nissan Motor Co. announced a plan for a joint venture to produce cars in Vietnam. The
Japanese automaker said it is seeking government permission for the proposed partnership
with Danang Automobile Mechanical Factory.
Under the plan, a new plant would be built in Danang and begin production in spring 1998.
The factory will make Nissan Sunny sedans and Vanette wagons, with an estimated production
of 1,000 units the first year.
Danang Automobile would hold a 25 percent stake in the vneture, which is capitalized at
$18 million. The remaining 75 percent will be held by Nissan TCP Pty, Ltd., an investment
company formed jointly by Nissan; Tan Chong and Sons Motor Co. Sdn. Bhd., Nissan's
manufacturing and sales arm in Malaysia; and Japanese trading company Marubeni Corp.
CGTD has published a directory
on Automobile, Vehicles, Motor cycles and bicycles industry - available at a very
reasonable price, which gives a complete picture of the industry plus a complete directory
listing of all companies in the sector.
The United States and Vietnam tentatively agreed this month to resume trade talks
after a five-month recess that allowed each side to study the other's system. Vietnam has
been pressing for speedier work on a trade agreement in hopes of widening its access to
the U.S. market.
U.S. Undersecretary of Commerce Timothy Hauser told reporters that he proposed an
expert-level meeting in mid-April. Vietnam's Trade Ministry said it accepted. The
highlight of Hauser's day was opening a permanent U.S. trade office in Hanoi with two
American staffers.
Trade and investment have been Vietnam's top concerns since establishing diplomatic relations with the United States last summer. Officials have expressed impatience with the slow progress of normalizing trade relations, and especially with the United States' failure to extend most-favored-nation trade status.
The main barrier is a U.S. requirement that favored trade partners allow free emigration. President Clinton can waive the requirement on an annual basis, as he has for China. The United States also wants Vietnam to reduce import barriers, strengthen its commercial laws and protect copyrights.
Vietnam's 6th largest investor , at more than $1 Billion, the USA is moving closer
to Vietnam. Vietnam and the US ended decades of formal animosity last year when Mr Clinton
announced the normalization of diplomatic ties with Hanoi.
Progress, however, full economic and trade normalization has been very slow over the past
12 months. There is a feeling in Vietnam that the US government machine is seeking to
undetermine Hanoi's leadership. The party's newspapers write attacking stories.
There are lots of interests against Washington's closeness to Vietnam. In end April
1996, Mr Clinton signed a bill banning expansion of the US diplomatic presence in Vietnam
unless Hanoi cooperated in efforts to account for missing American servicemen.
Vietnam's deputy foreign minister Le Mai - is an expert on US Viet relations - denies that
Hanoi was indifferent to the issue of Missing Americans. He said the effort to find the
remains of dead Americans had spread down to the village level. He informed that even
peasants were working on cases where remains are scattered in the forests or in the
sea." He knows that in an election year - things are quite difficult to push further.
"
For Vietnam, an agreement would further open the door for its fast-growing economy
to the international capital markets.
Earlier in Hanoi, central bank governor Cao Si Kiem announced that the London Club talks
would resume on May 14-15 and that he hoped for agreement in the third quarter.
Bankers are hoping that next week's round of negotiations between Vietnam and its
creditors will finally wrap up lingering talks on the country's $800 million of foreign
commercial debt. ``I'd say it will be another nine months before it's all completed,''
said Frans Yonkers, Asian debt economist with ING Barings.
A key sticking point is Vietnam's insistance on forgiveness of half the outstanding
principal, in line with an earlier accord with the Paris Club of government creditors.
Banks are adamant that is too much.
One banker said he hoped the World Bank -- which has offered Vietnam $1.5 billion in loans
over the next three years -- had told Hanoi not to push too hard on this issue for the
sake of securing a deal with creditors which would open up the international financial
markets more to the country.
``Clearly, creditor banks are not willing to be quite so generous,'' he said, adding they
would probably be prepared to accept nearer a 35 percent write-off.
News of next week's talks had little impact on Vietnam's foreign debt on the secondary
market, where it is trading at around 80 percent of face value. A banker with one creditor
said that if the talks dragged on much longer, his bank would consider going it alone and
suing to recover its money.
Late last year, Abbotsford Investments sued state-owned Vietcombank for repayment of $1.5
million but later agreed to settle the debt through a third party, a move which raised the
spectre of similar suits.
More than half the debt is in overdue interest which is not forgiven and bankers said the
squabbling over how much principal to write off had more to do with dogmatism than need.
Once it sews up an accord with Western creditors, Vietnam still has to sort out large
debts to the former communist bloc, mostly to Russia, of some $2 billion.
CGTD offers a publication dedicated to Banking, Finance and Insurance sector of Vietnam - with a report and directory of all companies.
``The Royal Way,'' the film is an adaptation of a book by Andre Malraux. Andrei Konchalowski, a Russian, is set to direct a U.S. movie to begin shooting in Vietnam in October, marking the first time an American picture has been filmed in the Southeast Asian nation.
The $15 million to $20 million production is expected to be shot in six months in the
northern part of Hoa Binh and in the central highlands, said Do Duy Anh, director of
international cooperation for the Vietnam State Movie Bureau. The plot concerns an
American who comes to do business in Vietnam after World War II but becomes involved in
helping the Vietnamese insurgency against French colonial rule.
The films script was first approved by Vietnamese officials in 1994 but production has
apparently been held up because of financial difficulties.
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