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Tony Milton MRICS

BSc (Hons) Est Man

Fast Facts

Date : Sunday, 04 October 2009
Category : General Economy

CHRONOLOGICAL ORDER : Scroll to bottom for latest info


290110-Formally, a majority of banks of¬fer a deposit rate of 10.49% but after all their promotions are priced in, the actual rate will rise to as much as 12% or 13%. It is pretty clear that if banks lend at 12% as required, they will certainly incur great losses. To warrant prof¬itability, banks have no choice but to resort to all sorts of fees which were once banned, such as those for service consulting, evaluation, asset assurance and management. Certain firms have been forced to borrow at 3% per month, or 36% per year, as borrowing costs trebled from last year. But this is not factored into interest rates which banks try to keep at artificially low levels to dodge the rate rule, thus giving fertile ground for informal, if not illegal, credit activity. Deputy chairman of the National Assembly Economic Committee throws his support behind the abolition of the base rate because as long as it is in place, banks will be compelled to violate law. With such exorbitant real inter¬est rates in place, companies must manage to warrant a minimum rate of return of 20% per year so as to cover borrowing costs, payrolls, and depreciation and amortization. However, under the current cir-cumstance, it is clearly impossible to earn such a profit and ultimately investment will be crowded out, thus erasing some of the gains made through the stimulus and posing downside risk to the nation's higher growth target. SGT

050110-GDP growth in 2009 : -
Industry & Construction – 5.52%
Agriculture, forestry & fisheries - 1.83%
Services - 6.63

250110-Domestic private enterprises have failed to step up to the plate in the decade since the Enterprise Law came into force. Domestic pri¬vate enterprises have devel¬oped in terms of quantity, but not quality, by from 31,767 in 2000 to 178,852 in 2008, accounting for nearly 50% of registered enterprises nationwide. But the return on assets ratio at domestic private enterpris¬es increased from 1.63% in 2000 to 1.76% in 2008. Meanwhile, the fig¬ures at state-owned and for¬eign invested enterprises were 3.38% & 9.55% respectively. In the list of the 500 largest enterprises in 2009, private enterprises accounted for only 29% however most of them are equitised state owned enterprises. About 60.3% of domestic private enterprises are formed by tiny-scaled household businesses that reflect nepotism manage¬ment. VIR

250110-According to a Ministry of Labour, Invalids and Social Affairs' report, in 2009 there were 216 strikes in Vietnam, equal to only 30% of 2008's total strikes. However, 157 of the 216 strikes were at foreign-invested enterprises, with 114 strikes staged at garment and textile enterprises and 155 strikes at the country's SKER. VIR

160110-Exports Imports
2008 62.69 80.74
2009 56.73 68.71

160110-Industrial Production 2009
Total Value VND696.6tr / $37.6bn – up 7.6% yoy
Private Sector – 9.9%; Foreign Investment Sector – 8.1%; State Sector – 3.7%. MPI

160110-Vietnam’s Economy 2009
GDP Growth – 5.32%
Inflation – 6.88%
Industrial Growth – 7.6%
Total Investment – VND704.2tr / $38bn - up 15.3%
Investment against GDP – 42.8%
Retail Trade – 18.6%
Exports – Down 9.7%
Poverty Rate – 12.3%

140310-As many as 708 of 1,254 FDI en¬terprises that made tax declarations in 2008 reported losses. Most of them specialised in manufacturing, garments, footwear, and communications, and were from Asian coun¬tries and territories. South Korea ranked the highest in enterprises reporting business losses, making up 30% of the total loss-reporting companies; followed by Singapore (12.57 per cent), Japan (9.04%) and Taiwan (7.49%). Since 1998 over 50% of FDI enterprises making tax dec¬larations at HCM City Taxation Bureau have reported losses. The "false losses, real profits" situ-ation was created by using "price transfer" strategy, which means the FDI enterprise raised the prices of materials bought from its parent company abroad. This activity fetched real profits to the parent company abroad while causing false losses to the FDl enterprise in Viet Nam. This strategy is made possible as these FDl enterprises' customers and suppliers are also their parent companies and thus able to trans¬fer profits abroad where corporate income tax is exempted or lower than that in Viet Nam. The profit transferring mode also helps FDI enterprises dodge corporate income tax and profit trans¬ferring fees. Taxmen said while over 50% of foreign-invested garment companies declared losses, most Vietnamese-invested garment enterprises earned profits in the same period. The taxation agencies remained powerless in these "price transfering" situation as there was no mechanism for pricing ma¬terials imported from FDI enter¬prises' parent companies. VNN

060410-Frederick Nixson, a profes¬sor from United Kingdom's University of Manchester said: "The FDI that has taken place is concentrated heavily in low technology sectors. The size of foreign invested enter¬prises - both in terms of employment and fixed capital per employee, is low." He said FDI sources were predominantly other regional competitors, only a little fur¬ther up the developmental lad¬der. There was a little inward investment by technological leaders in high technology products in Vietnam. "When coming to Viet¬nam, most foreign investors said they would bring modern technology into the country and transfer them to local part¬ners and workers. However, over the past decades, how many of Vietnam's total nearly 11,000 attracted FDI projects have really invested in high technologies? The number of such projects is not much, I think." VIR

100510-Informal sector represents 20% of GDP The informal sector absorbs 11 million of 46 million jobs in Vietnam and contributes around 20°% of gross domestic product (GDP). The sector, however, re¬mains unfamiliar although the nation has launched more surveys and polices. SGT

100610-Public Debt as % of GDP : -
2007 33.8%
2008 36.2%
2009 41.9%
2010 44.6% - est

010710-More foreign-invested enterprises (FIE) in HCMC have reported losses in recent years and transfer pricing is claimed to be one of the reasons behind this fact. Loss-making FIEs have increased steadily, according to the deputy director of the HCMC Tax Depart¬ment. "Our statistics showed over 60°% of the FIEs in the city posted losses in 2009." SGT

220710-According to HCMC Taxation Department, 60% of the 3,500 foreign-invested enterpris¬es (FIEs) operating in the city reported losses in 2009 and 50% in 2008. Meanwhile, Lam Dong statistics showed that there were up to 104 out of the total of 111 FIEs operat¬ing in the province having reported losses. VIR

260710-HSBC Small Business Confidence Monitor said Viet Nam remains at the top of the 21 markets surveyed with an index of 164, followed by Tur¬key (138), Singapore (136), the Middle East (132), mainland China (123) and India (121). About 70% of Vietnam¬ese SMEs say they will increase their capital expenditure in the year's 2nd Half, while the glo¬bal rate is 41%. VNN

260710-Vietam has climbed 9 spots to tie with Indonesia as the 2nd most confident country in the world according to Neilsen’s Global Consumer Confidence Survey. VNN

270710-Vietnams foreign debt stood at 39% of GDP by the end of 2009. The country's total foreign debt was around US$23.9bn between 2005 and 2009. SGT

280710-Japan held nearly 42% of Viet Nam's total foreign debt at the end of 2009, followed by Singapore at 27%. Al¬though the US dollar is the key trading currency, it accounts for only 16.6% of Viet Nam's debt currency structure. Foreign debt was equal to 39% of the nation's gross do¬mestic product (GDP) at the end of 2009, and a new Ministry of Finance report has estimated that this would reach 44.6% this year - very close to its set maxi¬mum threshold of 50%. VNN

280710-During the 2004-2008 period, the elasticity coefficient of job creation relative to gross do-mestic product (GDP) growth were 0.28%. That means for every 1% in GDP growth, only 0.28% more jobs was created. At the same time, the figure for Brunei is 1.27%; Singapore and other Southeast Asian countries 0.58%. Although the working population of Vietnam is relatively abundant and young, 9.9 million people between the age of 14 and 15 in 2007, most of them are unskilled. 65.3% of the labor never undertakes any training courses. In Vietnam, the majority of work¬ers are still willing to accept low ¬income jobs but not unemployment as the social security system is not developed. Thus, unemployment is not high, around 2% annually (from 2000 till now). Nonetheless, the lack of jobs is an undeniable reality. According to an analysis of the In¬ternational Labor Organization (ILO) in 2008, labor productivity in Viet¬nam from 2000 to 2007 increased considerably from VND7.1m to VND10.1m (base price in 1994), yet not even half as much the figures for China. If calculated in U.S. dollar, the absolute increase rate of labor productivity seemed to be drastically lower. The average output per labor of Vietnam was US$5.702 (2008), equivalent to 61.4%.of4he average of ASEAN, 22% of Malaysia and 12.4% of Singapore. Such low labor productivity partly explains why production costs, com¬modity prices and competitiveness of Vietnamese products still trail far behind China. The rate of labor increase from now till 2015 is forecast to be 738,000 people per year, which is among the top in the region and is exerting pressure on the economy and society. The target is set to raise labor productiv¬ity in 2015 by 1.5 times compared to 2010, according to the Labor and So¬cial Science Institute. The feasibility of this target is in doubt, as the trend of labor move¬ment from rural to urban areas, from agriculture to industry is getting more popular. SGTW

Average Monthly Pay
1998 2002 2004 2006 Av Change / year
Domestic Enterprises
- Household Businesses 552 606 649 664 2.3%
- Private Businesses 554 771 852 936 6.8%
- State Run Businesses 572 1,002 1,077 1,103 8.6%
Foreign Invested Enterprises 680 1,037 1,044 1,316 8.6%

070810-As of the end of last month, 23 commercial banks had submitted their plans to the State Bank of Viet Nam (SBV) for increas¬ing their charter capital to VND3 tril¬lion (US$156.25 million) this year in accordance with new regulations. None of the plans called for a bank closure or merger with another in¬stitution, the SBV said this week. However, the plans would require the banks to attract VND30 trillion ($1.56 billion) in new investment over the next 4 months, which seems no easy task for unlisted banks at a time of fairly restrictive monetary policy. The higher charter capi¬tal regulations was issued four years ago, but May this year, 23 out of 4 credit insti¬tutions still had charter capi¬tal below VND3 trillion ($156.25 million). The central bank has vowed to close these banks down or force them into merg¬ers with larger institutions if they fail to meet the capital requirements by year's end. "The stock market is gloomy. That's their chal¬lenge." The SBV has previously extended the deadline for commercial banks to meet the higher capital requirements. Commercial banks were required by law to reg¬ister capital of at least VND 1 trillion ($52 million) by the end of 2008, but only 28 banks met the requirement by the deadline. Another 10 banks only managed to meet it by the end of 2009, with the central bank granting permission for the delayed compliance. This time, however, the, SBV is saying the deadline is hard-and-fast. Complicating the pic¬ture is the expected intro¬duction of even stricter re¬quirements, under which commercial banks would have to register capital of VND5 trillion ($260.42 mil¬lion) by December 31, 2012, and VND10 trillion ($520.83 million) by De¬cember 31, 2015. The policy aim is to eliminate weaker banks in order to strengthen the over¬all quality and security of the financial system. VNN

060910-Vietnam is in danger of falling into the middle income trap within a decade, which will result in diminished growth unless long term solution were implemented, according to the Brookings Institute. Growth was heavily dependent on credit and the presence of large economic groups which work to hinder future growth. According to the World Bank the GNI per capita in 2008 was USD$890 making it a low income country. VNN

070910-The Mekong Delta includes 13 cities and provinces with a population of 18m has a coastline of 700km, and contributes 20% of the country's GDP. Its annual growth rate averages 10-12% during 2006-10. The Delta was also Viet Nam's leading agricultural and seafood¬ producing region, accounting for 90% of total rice exports and 60% of seafood exports. The region’s annual economic growth reached from 10-12% in the 2006-10 period. VNN

100910-Tay Ninh has increased average GDP to 14% annually, income per capita to nearly USD$1,400 per year and a poverty rate of less than 3?%. VNN

210910-In-a new glo¬bal survey of 523 companies representing all major in¬dustries, Viet Nam has emerged for the 3rd con¬secutive year as the top in¬vestment target outside of the so-called BRIC coun¬tries of Brazil, Russia, India and China. Viet Nam has continued to benefit as companies have sought new sources of growth beyond BRIC, ac¬cording to a report entitled "Great Expectations: Doing Business in Emerging Mar¬kets". "Viet Nam has been on the radar of manufacturers looking to move beyond China for some time. With its large, well-educated workforce, the country has good pros¬pects for moving up the value chain." The survey was conducted by UK Trade & Investment in cooperation with the Economist Intelligence Unit. About 71% of respondents agreed that emerging markets beyond BRIC collectively offered an opportunity too great to ignore, with 19% choosing Viet Nam as an investment destination. The Economist Intelli¬gence Unit said Viet Nam headed a 2nd Tier of tar¬get countries it called the CIVETS, encompassing Co¬lombia, Indonesia, Viet Nam, Egypt, Turkey and South Africa. Like BRIC, this group was geographically dispersed and contained obvi¬ous variations - but there were also important similari¬ties. All had sizeable and young populations, diversi¬fied economies not excessively reliant on commodi¬ties, and reasonably sophisticated financial systems. Collectively, CIVETS were forecast to account for up to 20% of the G7’s total GDP, making them a significant global market in their own right, the report said. VNN

CIVETS: A promising outlook
Pop GDP/head CPI Public debt Av annual real %
(million) (US$ PPP) (% av) (% GDP) GDP growth 2010-20
Columbia 46.9 8,920 2.6 47.3 3.6
Indonesia 243 4,230 5.1 27 5.6
Viet Nam 87.8 3,150 9.3 52 5.9
Egypt 84.7 5,910 11.8 80.3 5.6
Turkey 73.3 12,740 8.7 48.7 3.9
South Africa 49.1 10,730 5.8 33.3 3.3
Forecasts for 2010 unless otherwise Indicated. Source: Economist Intelligence Unit, Country Data.

121010-Increasing public debt may upset Vietnam's financial security as it is reported to have broken the sensible limit of 50% of GDP. The public debt rate would reach 52.6% of GDP by late this year and is expected to increase to 57% next year. Vietnam's public debt rate has increased from 33.8% of GDP in 2008 to 41.9% in 2009 and is expected to be 44.6% at the end of 2010. Howev¬er, the World Bank in June, 2010 forecasted that Vietnam's public debt would be 47.5% of GDP for 2010. Over the past years, the govern¬ment's overspending has mounted. For example, the budget deficit was 5.64% of GDP in 2007, 4.8% in 2008, 6.9% in 2009 and expected to be 5.95% in 2010 and 5.5% in 2011. Minister of Finance said the government had to accept overspending and increased debt to augment investment in the country's socio-economic infra¬structure network and economic growth. He said fast-industrialising Viet¬nam's total incomes could basically meet the country's demand for expenditures in social welfare, salaries and payment of debts. Only a small part of the revenues was ear¬marked for development invest¬ment. The NA Financial and Bud¬get Committee suggested the government control the public debt at a maximum rate of less than 60% of GDP. VIR

141010-In the last 2 years, despite the economic crisis, port and logistics operations in the country were encouraging due to the Government's effective economic management and the efforts of the maritime sector. From handling 197m tonnes of freight in 2008, the sector's output increased to 251 million tonnes in 2009. From 1,199 vessels weigh¬ing 4.38m DWT in 2007, the county's fleet increased to 1,598 ships and 6.3m DWT last year. The target for the maritime industry by 2020 is to be the largest component of Viet Nam's sea-based economy which is expected to contribute 53-55% of GDP. SGT

181010-An online survey conducted by the UN Development Programme (UNDP) and online newspaper VietNamNet showed that a large number of people still believed adminis¬trative procedures required too much paperwork (67%) and that personal connections played a large part in completing proce-dures (73%). Nearly half of respondents said they found land-use rights re¬lated procedures the most an¬noying. VNN

221010-The state corporate sector's ICOR (Incremental Capital Output Ratio) - the extra capital needed to increase one unit of output-has kept rising over the years, now at between 8 and 14. Meanwhile, the private sec¬tor with limited incentives from the Government has proved to be more efficient with the ICOR index rang¬ing from 3 to 5, and thus contributed significantly to the nation's growth. Half the total amount of investment in the economy is sucked into the state corporate sec¬tor. But this sector's contributions to the economy have been largely insig¬nificant despite the huge investment being funneled into state firms by the Government. What's more, they have been steadily falling over the years. Fulbright Economics Teaching Program says that the state-owned enterprisers generated 30% of GDP in 2001-2005 but the ratio dipped to 28% in 2006-2009. Their contributions to GDP growth plunged from 33% in 2001-2005 to 19% in 2006-2009 because the state corporate sector's GDP growth slowed down from 7.6% to 4%, half the percentage achieved by the private sector. The state corporate sector work¬force has also declined over time. A survey by the General Statistics Office shows the combined workforce of state owned businesses slid from 44% in 2001-2005 to 24% in 2006-2008, and even worse, massive layoffs happened at these companies with new job creations dropping from minus 4% to minus 22% in the cor¬responding periods. In 1995, the proportions of indus¬trial production value in the state and private sectors were equal but changed to 20%-80% in 2009. The picture about the state cor¬porate sector is pretty clear now. It has failed to live up to expectations that it leads the economy. Resources should have been channeled into where efficiency of capital use is greater, more jobs are generated, and productivity is higher. The state has kept insisting on championing a level playing field for all, so it is a paradox to emphasize the lead role of the state corporate sector only. It is the state that, through tools such as taxes and investment incentives, can orient businesses in all sec¬tors toward the fields that most benefit the economy. SGT

051110-The Government estimates public debt will total about 56.7% of GDP by the end of 2010. The figure will include Government debt totalling 44.5% of GDP and loans that it has guaranteed totalling 12.2% of GDP. Foreign debt will total 42.2% of GDP. International practice would have had the money the banks and State-owned enterprises owe in the to¬tal, one deputy argued. "Our public debt must be no less than 70% of the country's GDP based on that definition," he said. VNN

051110-"We spend (money) but how it is spent is unknown. I have been serving as a National Assembly deputy for Hanoi City for almost 10 years but have not seen a single provincial report on spending. "The ef¬ficiency and transparency questions are not yet adequately addressed, he says, and this is why some people in the legislature have yet to have full knowledge of the Vinashin situation. "Vinashin racked up losses of VND2.6tr / $133m within 2 years but no one knew about that. There have been in¬stances where provinces keep budget revenue estimates artificially low so that at the end of year, they can take pride in higher-than-expected results. In worse cases, they may sell land or forward tax revenue from one year to another to turn out good figures." Stressing the matter of transpar¬ency, the deputy of LangSon says the 56.7% proportion of public debt in GDP as put by the Government is du¬bious. But an economist projects the figure at a staggering 70% based on international calculation practices, requesting the Government to have a detailed report on the public debt. Public debt has grown steadily, from 33.8% in 2007 to 36.2% in 2008 and 41.9% in 2009, and it is forecast to leap to 44.6% in 2010 and the 50% safety threshold is just self-imposed. SGT

151110-Statistics by the HCMC Taxation Department showed that over 1,100 foreign di¬rect investment enterprises out of 2,190 operating in the city declared losses last year, up from 965 in 2008 and 591 in 2007. Many of the en¬terprises announced losses of 6 to 10 consecutive years. However, tax authorities doubted these figures and said that nearly VND6 trillion (US$300 mil¬lion) in losses had been transferred overseas to become profits of their parent companies. They were then able to evade paying tax. Despite the loss declarations, many companies have been grow¬ing in terms of turnover, network and market share. VNN

171110-Manchester University said investment opportunities in Vietnam looked attractive as some regional economies like Thailand and Indonesia were try¬ing to limit increasing hot money inflows by imposing higher capital gain taxes on foreign investors. "These unwelcome attitudes will direct money flows into Viet¬nam, triggering for the return of foreign portfolio investors (FPI) to the country." Meanwhile, domestic con¬sumption demand was high and private sector was increasingly contributing to economic growth, another favourable indicator for foreign eyes. "Last but not least, while other regional markets soar sharply, Vietnam's market has become rel¬atively cheaper and the domestic market will return to foreign investors' radars." Vietnam's stock market PE ratio is at around 10.3 times, compared to regional peers Indonesia 20.7, Malaysia 18.1, Philippines 14.9, Thailand 15.5, according to unofficial statistics. During the year to date the VN¬Index lost around 9% while other regional markets soared sharply on "hot money" with Philippines jumped 43%, Thailand soared 38% and Indonesia 33%. VIR

261110-The country's ICOR was 3.5 in 1991-95 and jumped to 6.6 in 2008 and 8 in 2009. In other words, Viet Nam has to spend VND8 worth of capital investment to generate VND1 worth of growth. Fig¬ures showing investment as a percentage of GDP jumped to more than 46% in 2007 from 18% in 1990. Government measures to con¬trol inflation had reduced it to about 41% but the gross rate still averaged almost 43% of GDP between 2006-10. The figures were much higher than those of the newly¬ industrialised economies and territories of 1960-80. The investment as per cent of GDP in South Korea was 23.3% and Taiwan 26.2% but they still gained economic growth of 7.9% and 9.7%. It's a worry that the more we invest, the less the investment efficiency is. VNN

291110-The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment says local enterprises have trans¬ferred a total of US$1.79 billion to invest in foreign countries since 1989, when Viet Nam began in¬vesting abroad. But profit repatriated to Viet Nam was $39 million in the last 21 years, a re¬turn of just 0.46%, the agency estimates. Local firms have invested in 410 projects abroad since 2006 with a total registered capital of $7.05 billion. In the 1989-99 period, only 17 projects with a combined capital of $13.6 million were licensed. VNN

061210-The Fulbright Programme, identified some salient features : Viet Nam is not a major oil producer but 21 out of the 100 biggest companies have operations relating to petroleum and gas; 5 of the firms trade in gold, silver and jewelry and another 6 all local and serving the domes¬tic market, are in alcohol, beer and cigarette businesses, all are local and serve domestic markets, though the prosperity level in the country is below the world average; 67% of the top 100 were State owned enterprises, who camel their positions through near exclu¬sive access to natural resources or monopolistic control in the domes¬tic market in sectors like electricity and not because they were competi¬tive. Many of these firms were big, like the national power utility but not strong, citing Vinashin as an example. VNN

121210-Vietnam's public debt is expected to be 52.6% of GDP by the end 2009, or over VND10m / $513 per capita. The Government's outstanding debts jumped from 36% to 41.9% during the 2009-2010 period. SGT

121210-At the end of October, Vietnam had had 71 foreign credit institu¬tions, comprising 51 foreign bank branches, 5 joint stock banks, 5 wholly foreign owned banks, 6 finance companies, 4 finance leasing companies, and 48 represen¬tative offices. Some institutions have wholly owned units and branches being co-existent, such as HSBC, ANZ, and Standard Chartered Bank. This year has seen the networks of foreign owned banks expanding steadily. After one year of operation, 5 foreign owned banks have 14 branches at provinces. There are also 4 branches of foreign banks and 2 financial companies licensed to operate in Vietnam. SGT

151210-According to Maersk and Vietnam Business Forum’s Port Group, logistics costs in Vietnam are equivalent to 25% of GDP, whereas they are only 13% in Malaysia & Indonesia, 18% in China, and 19% in Thailand. The reason is poor infrastructure, congestion, added lead in time, less transparency and predictability in supply chian, and inefficient trucks with no weight restriction enforcement. VIR

301210-Vietnam's exports in 2010 reached US$71.6 billion, up 25.5% from 2009 and much higher than the target of 6% set by the National Assembly. According to the Gen¬eral Statistics Office, apparel was the top export commodity, earning US$11.1 billion. Meanwhile, imports were US$84 billion, leaving a trade deficit of US$12.4 billion. SGTW

301210-Disbursed FDI in 2010 is estimated at US$11bn, up 10% from 2009. According to the MPI, fresh FDI in 2010 reached US$18.6bn, down about 18% year-on-year and below the target of US$22-25bn. Of this amount, fresh capital for new projects made up US$17.2bn and added capital for opera¬tional projects US$1.4bn. Real estate attracted US$6.8bn, processing and manufacturing industries US$5b and power, gas and water supply and distribu¬tion US$2.9bn. Exports by FDI enterprises (excluding crude oil) were US$33.8bn and imports US$36.5 bn. SGTW

301210-The SKER contributes nearly 60% of Vietnam’s tax revenue and over 70% of outbound sales. SGTW

301210-Vietnam’s Top 10 Export Markets (Jan-Oct) USD$bn
1. USA 11.6
2. Japan 6.1
3. China 5.3
4. Switzerland 2.6
5. South Korea 2.3
6. Australia 2.1
7. Singapore 1.8
8. Germany 1.8
9. Philippines 1.5
10. Malaysia 1.5

301210-Vietnam’s public debt is 52.6% of GDP or over VND10m / $513 per capita. Outstanding debts jumped from 36% to 41.9% during 2009-2010. SGTW

311210-The real estate sector attracted the largest share of FDI with USD$6.84bn in 2010. VNN

301210-The Vietnam insurance market has grown in 2010 with total in¬surance premium expected at over VND30tr / $1.54bn, a 20.3% yoy increase. Life insurance premiums total VND13.6tr / $697m, up 16% against 2009. SGT

050111-The Grant Thornton International Business Report, which was released yesterday, indicates 62% of Vietnam's privately held business owners are optimistic about the country's economic performance this year, which is lower than the 72% for 2010. The 62% is significantly higher than the global average of 23% and the Asia Pacific (excluding Japan) average of 50%. Vietnam is also above 50% for Malaysia, 42% for mainland China and 39% for Thailand, but below 93% for India, 87% for the Philippines and 65% for Singapore. SGT

061110-PetroVietnam generated a record revenue of $24.5bn or 24% of Vietnam’s GDP in 2010. SGT

110111-According to the Central Institute of Economic Management, between 1991 and 2009, Vietnam's GDP grew 7.45% annually, and GDP per capita increased 5.7% per annum to reach $1,064 in 2009, bringing Vietnam in the group of middle-income countries. GDP growth still relied on exten¬sive investment capital, which comprised 29.8% of GDP during 1991-1995, 51.2% between 1996-2000 and 60% during 2001-2005. The MPI reported Vietnam's labour productivity remained far lower than other regional countries, reaching only 38% of China and 27% of Thailand in 2007. Meanwhile, Vietnam had to consume 1kWh of elec¬tricity to make less than $0.9 in GDP, the least efficiency in the world. By comparison, the Philippines earned $1.8 in GDP from the use of the same amount of energy while it was $2.2 in South Korea. In some advanced countries 1kWh of power could help produce $5 in GDP. The MPI's Development Strategy Institute said envi¬ronmental pollution was the biggest headache for all localities with almost all rivers in Vietnam being pol¬luted and natural resources overexploitation being com¬mon. They also underscored the fast enlarging poverty gap, despite "impressive poverty reduction achieve¬ment" with the poverty rate falling quickly from 58.1% in 1993 to 9.45% in 2010. The quality of poverty reduction remained problematic with the poverty rates in many areas remain¬ing 4 times higher than the nation's average. VIR

110111-The HCMC Taxation Department report¬ed late last year that 60% of the 3,500 FIEs operating in the city reported losses in 2009 and 50% in 2008. Meanwhile, 104 out of 111 FIEs in Lam Dong province reported losses. Head of Vietnam Eco¬nomics Institute said that decentralisa¬tion of investment licensing had prompted localities to race for attracting foreign direct investment (FDI). "But localities' weak management has given opportunities to many FlEs in overexploiting natural minerals and polluting the environment. Vietnam's complicated investment policies are preferred by many FIEs, because they can find loop-holes in such policies." In 2009, FDI comprised 25.5% of the total investment in Vietnam and FIEs contributed 131.3% to the nation’s GDP. FIEs employed nearly 4% of Vietnam's labour force. They also comprised 57.6% of Vietnam's total export-import turnover in 2010. VIR

110111-FDI disbursement in 2010 was about USD$11bn, a 11% increase on 2009. The committed capital in 2010 was USDS$18.59bn, down 17.8% on 2009. The government expects to lure at least USD$11bn in implementation capital in 2011. VIR

110111-Vietnam’s economy 2010 : -
GDP growth 6.78%
Inflation 11.75%
Per Capita Income $1,168
Exports $71.6bn (up 25.3%)
FDI $18.6bn
Trade Deficit $12.4bn
International Visitors 5m
Industrial Growth 14%

110111-Added Value General Output
1995 42.5%
2000 38.45%
2005 29.63%
2007 26.3%
2010 (est) 21%

200111-Real estate accounted for 36.8% of the total registered capital in 2010 with 27 new projects worth USD$6.7bn and 6 projects with additional USD$132m. SGTW

2005 2008 2009 2010
Total Investment Capital – USD$bn 6.8 71.7 23.1 18.6
Disbursed Capital – USD$bn 3.3 11.5 10 11

200111-Total registered capital to date of over 11,900 projects has already passed USD$191bn whilst disbursed capital (according to incomplete statistics) has reached less than USD$90bn. SGTW

200111-The development of HCMC’s logistics sector is hamstrung by appalling transport infrastructure, which sparks off severe congestion and skyrocketing transport costs. The latter accounting for 30-40% of product prices in Vietnam, far higher than in other countries (about 15%). SGTW

200111-Economic Targets for 2011

GDP growth 7 – 7.5%
Inflation 7%
Per capita Income USD$1,300
Exports USD$78bn
FDI USD$20bn
Total Investment USD$47.7bn
Budget Revenue USD$30.15bn

270111-According to the Tax Department in HCMC where 40% of FDI enter¬prises in Vietnam are based, the rate of FDI firms reporting losses slid from 39% in 2008 to 34% in 2009. Deputy Minister Tuan expects the figure will drop below 30% or as low as 15% in the next few years as authorities look more into financial reports to compare global and regional prices. SGT
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