Electrical rates may rise 5-10 percent
Last update 15/05/2012 12:07:29 PM (GMT+7)
Electricity prices may rise by between 5 and 10 per cent, if a proposal by the country's power provider Electricity of Viet Nam (EVN) is approved.
Head of the Ministry of Finance's Price Management Department Nguyen Tien Thoa, said EVN had three proposals on the table of price rises between 5 and 10 per cent.
Thoa said electricity production input costs had risen by 3.3 per cent, since the last price rise in December last year.
He said factors influencing the price rise included an exchange rate rise of 0.6 per cent, gas fuel price rises of 10.4 per cent, and a 40 per cent rise for FO oil, while coal prices decreased by 0.3 per cent.
EVN's production costs went up by more than VND15 trillion (US$714.2 million) due to exchange rate differences and other rising costs, he said, adding that the ministries of Industries and Trade (MoIT) and Finance (MoF) would review the proposal in the upcoming time.
A representative from the MoIT's Electricity Regulatory Authority of Viet Nam said the electricity price hike would be calculated by the two ministries with the target of making the price in line with the market economy while ensuring efforts to further curb inflation.
According to Government Decision No 24 on electricity management, EVN can raise power prices by a maximum of 5 per cent, if input costs rise by up to 5 per cent. With the 3.3 per cent increase in input costs, the electricity price hike would be possible.
Nguyen Minh Phong, head of the Ha Noi Institute for Socio-economic Development's Economic Research Division, said an electricity price adjustment would be normal in the context of the market.
However, Phong said the electricity price hike in the context of an economic downturn which put some businesses into bankruptcy.
He said calculations on petroleum and electricity prices had not been clear, resulting in an increase instead of a decrease.
Electrical rates to be set by enterprises, not centrally
The ministries of Finance and Industry and Trade have asked the Prime Minister to revise a part of the Law on Pricing related to retail electricity rates. Under the draft, the PM would only approve frameworks for electricity rates while the exact rates would be decided by enterprises.
The Mininistry of Industry and Trade, in a document submitted to the PM late last month, said the draft Law on Electricity stipulates that the retail rates would be classified by electricity units and approved by the PM. The Law on Pricing therefore should follow this direction, according to the ministries.
VNS
A new way of earning money in Vietnam: leasing space
Last update 15/05/2012 08:40:00 AM (GMT+7)
VietNamNet Bridge – Billboards have been hung on every space in big cities, on the roads to the airports, above buildings and houses, at schools and in parks. Urbanites now can live well with the new job of leasing space to billboards.
Billboards have been hung on Hang Xanh crossroads
Countless images of numberless products and services, from dish washing liquid luxurious cars, from cosmetics to cakes, now can be seen everywhere in big cities.
Billboards mushrooming everywhere
A beautiful and fashionable girl is seen standing next to an Attilta scooter on the crossroads of Hang Xanh in Binh Thanh district of HCM City. Next to the scooter and the fashionable girl are a lot of nutrition sausages for the youth. Commercial banks, namely Dai A Bank and Bao Viet Bank also occupy their positions at the busy crossroads.
On the other side of the road, people can see a lot of billboards showing the images of foreign language centers or brewery products. Each house bears on its shoulders at least one or a lot of billboards. The boards have been surrounding the houses, leaving the entrance doors only.
Pham Minh Phuoc, a local resident said that the billboards can turn landlords into billionaires. They would pocket hundreds of millions of dong a year from every billboard set up on the space around their houses.
The space leasing fee for billboards has always been very high because of the high demand. Manufacturers and service providers believe that it would be better to install billboards to advertise their products than posting ad shots on TVs, printing or online newspapers. Though they have to spend big money to lease space, their products would be more easily catch the eyes of the public.
Not only arising on commercial hub areas, billboards have also been set up at schools, from nursery schools to high schools. At the entrance door to the Hong Ha primary school in Binh Thanh district, one can see the words “Our school is green, clean and beautiful” and the image of Cream-O biscuit.
A wide range of products and services have been introduced to students and their parents with such the billboards. The products could be sweets, dairy products, while the services could be live skill training courses or foreign language centers. There are a lot of centers for parents’ choice, including Dong Du, Tan Van, Hoa Van, Thuong Mai, EMG Education (Your Bridge To International success).
Le Ngoc Diep, Head of the Primary Education Division of the HCM City Education and Training Department, said that enterprises now can enter schools through different ways. Some of them donate schools the boards, which can be used as notice boards. Of course, on the boards, one would see the names, the logos and the images of products on the boards, which proves to be a very effective advertisement method.
“I cannot understand why schools accept this, if this badly affects the schooling environment,” he said.
Enterprises ignore regulations
According to the HCM City Department of Culture, Sports and Tourism, the department has granted 22,500 licenses on implementing outdoors advertisement projects to enterprises and organizations over the last five years.
However, the number of billboards seen in the city is really much higher than the above mentioned figure. This means that a lot of billboards have still been installed without the permission of competent agencies. Even lamp posts, electricity poles, telephone boxes and trees could be used as the places for advertisement boards.
Under the current regulations, the billboards on highways must be installed on vacant area and 20 meters far from people’s houses, while a billboard must not be larger than 1.2x8m. However, in fact, no standard and no regulation has been followed by enterprises.
Source: Gia Dinh
Economist: Debt deferment for businesses not a valid solution
By Nguyen Hien | dtinews.vn | May 14, 2012 04:08 PM
Debt extensions for businesses will only prolong the existence of incompetent businesses, an economist said.
Dr. Le Xuan Nghia
Dr. Le Xuan Nghia, a member of the Advisory Council for National Monetary Policy, told DTiNews in a recent interview that it's vital to take measures to deal with enterprises’ bad debts in order to improve bank liquidity and help credit growth.
Why is the country’s credit growth still lower than expected, despite decreased interest rates?
Vietnam has experienced a decline in economic growth as a result of both the global economic downturn and risky domestic policy. The country’s fiscal policies have sometimes been too loose, and at others too tight.
The country’s money supply grew by over 10% in 2011, while credit growth rate was only 12%. The situation has put the nation in capital deficiency, resulting in stagnation in the real estate, commodities and securities markets.
Commercial banks have been compelled to tighten their lending policies, especially for small-and-medium-sized enterprises (SMEs) via devaluing collateral, reducing lending limits and increasing interest rates. This has pushed a lot of SMEs into a place where they are badly in need of capital and unable to access it. Many have had to file for bankruptcy.
Even though lending interest rates decreased recently, bank liquidity has yet to improve ,as the majority of SMEs continue to find it difficult to meet requirements for lending. The credit growth rate is much lower than the 17% expected for the year.
Many banks currently report that they have sufficient capital, but remain hesitant about providing loans, what do you think about this?
Due to economic difficulties, banks' confidence in enterprises has declined. There are many cases in which inter-bank lines of credit have been frozen. Large banks are not lending to smaller ones without large collateral requirements.
The same situation can be seen in relation to banks and businesses. Many businesses find it difficult to get loans. In general, we can see increasing inventories with decreasing demand. This leads to stricter loan requirements, which most SMEs cannot meet.
There are also signs of low liquidity rates among some banks. Although the inter-bank interest rate has gone down by 2.5% for overnight transactions, and 8% for term loans of 1 to 6 months, many banks are still unable to borrow. However they continue to gain liquidity by offering annual deposit interest rates of 16% or 17% for deposits over VND1 billion (USD47,915).
Debt extensions for businesses will only prolong the existence of incompetent businesses
So is there any solution to the problem?
A sever tightening of credit would be dangerous. It could result in a long-term recession, like the one we saw in Japan. There are a number of central banks around the world grappling with the same problem.
To avoid a credit freeze, banks must avoid taking on toxic debt, especially in the real estate industry. The banks really have no other choice than to restrict lending criteria. It will be up to the private sector to work out solutions for bad debts while decreasing lending interest rates.
The central banks of the US and some European countries have had to issue more money to take over bad debts taken on by commercial banks. This was done to free up the credit market and make it possible for viable businesses to stay afloat.
This shows that if the problem of bad debts is not resolved, there may be no other policy solutions available to improve the situation.
In short, a lot of the restructuring plans we have seen recently, especially the debt deferment programme requested by the State Bank of Vietnam, and even debt forgiveness, is just a stop-gap measure. It may help unprofitable businesses maintain operations for some time. But it is not a long-term solution, and may lead to liquidity problems for commercial banks.
The Government would do much better by directly taking over the debts of viable businesses to help them make it through these tough economic times.
Rate cut fails to lift bank lending
Updated May, 14 2012 11:11:21
A customer completes a transaction at HDBank's Hoan Kiem branch in Ha Noi. Many enterprises still find it very difficult to access bank loans , even though they are entitled to preferntial rates. — VNA/VNS Photo Tran Viet
HCM CITY — Bank loans with an interest rate of 15 per cent per annum are still beyond the reach of many enterprises involved in four business sectors that have been given preferential loan status.
On May 4, the State Bank of Viet Nam issued a circular, imposing a 15 per cent cap on lending interest rates for the four preferential sectors.
The beneficiaries include businesses operating in exports, agriculture and the support industry, as well as small- and medium-sized enterprises.
Both enterprises and the public have welcomed the central bank's move.
However, few eligible enterprises have been able to access bank loans at the lowered rates, although the new lending interest rate regulation has already come into effect.
Trinh Thanh Ninh, owner of a garment and textile trading company in HCM City's Tan Binh District, said he visited a local commercial bank to borrow VND100 million (US$4,762) on the first day that the 15-per cent lending interest rate began.
"Although my company meets all conditions as required by the circular, including business effectiveness and repayment ability, my loan application was still rejected by the bank," he said.
"A bank employee told me that the bank had to wait for detailed guidance from the central bank. Now they can give me a loan at 18 per cent rate per annum."
Huynh Thi Thu, director of the Hoang Thu Trade Service Company in District 9, said she wanted to borrow VND2 billion ($95,238) at the bank and use the money for her company's working capital.
"The bank refused to lend to us because they said the value of our assets used for collateral was very low, so we could not qualify," Thu said.
"The bank staff also told me that even if I could get the loan, I would have to accept an interest rate of 18 per cent per annum and not 15 per cent as regulated in the circular."
Although the central bank has lowered the lending interest rate to 15 per cent, few enterprises qualify for bank loans at the new rate, according to Truong Chi Thien, director of the Vinh Thanh Dat Food Joint-Stock Company.
Phong Phu Trade Service Joint-Stock Company is one of the few enterprises that has been able to receive bank loans at the 15 per cent interest rate.
Company director Luong Trong Tuan said: "With the new interest rate, we now feel more comfortable. But we had to go through many complicated procedures to get the lower rate."
Directors of many commercial banks point out that 97 per cent of enterprises are small- and medium-sized enterprises, and that the central bank has not given detailed guidelines on the interest-rate cuts.
Each bank has developed its own regulations on the new interest-rate cut.
At the Viet Nam Maritime Joint Stock Commercial Bank, for instance, customers in preferential sectors are still required to meet several conditions to gain access to loans with the 15-per-cent interest rate.
They must have had no overdue debts within the last 12 months and they must reveal their audit reports. They also must be classified in either Group A, 2A or 3A, which are categories of banks that have outstanding results. The HCM City Development Joint-Stock Commercial Bank said it could offer loans at a 15 per cent rate for SMEs involved in exports.
Although the central bank has placed a 15 per cent lending interest rate cap for enterprises in the four preferential sectors, this does not mean they can get loans, according to Tran Xuan Gia, general director of the Asia Commercial Bank (ACB).
Eligible enterprises that wanted to borrow cheap capital must show they had specific business strategies and assets for collateral, as well as repayment ability.
Banks were also enterprises, so they needed to ensure security for maintenance as well, Gia said.
After the central bank cut the deposit interest rate to 12 per cent per year, many banks also slashed their lending interest rates to 14 and 15 per cent per annum.
However, lending activities become volatile since the banks can not find many qualified customers, according to Gia.
Truong Van Phuoc, general director of the Viet Nam Export-Import Joint Stock Commercial Bank, said the bank had lent only VND600 billion ($28.6 million) from its VND1.4 trillion ($66.7 million) credit package.
Loans with an interest rate of 14 per cent per annum had been offered to enterprises to purchase rice for export, Phuoc said.
Many experts said the banks' slow capital disbursement for loans was due to concerns about the volume of bad debt, which increased in the first quarter of the year.
To avoid risks, many banks prefer using their capital sources to buy Treasury bills, despite the bill's low interest rate of 5 per cent. Although banks could earn more interest (15 per cent) on their loans, they fear that borrowers may not be able to pay back the loans.
Senior financial expert Nguyen Tri Hieu said that lowering the interest rates was not the most important task at this time.
The immediate issue was to seek ways to pump capital into the economy, he said.
To encourage banks to lend to small enterprises, the Government should set up a guarantee fund for small enterprises, he suggested.
Nguyen Dinh Cung, deputy director of the Central Institute of Economic Management, proposed settling bad debts, eliminating weak banks and lifting interest-rate caps on deposits and loans. — VNS
Commercial banks unpleased with ceiling lending interest rate
Last update 14/05/2012 02:40:00 PM (GMT+7)
VietNamNet Bridge – Not only having set up the ceiling deposit interest rate, the State Bank has also fixed the ceiling lending interest rate. However, the move has not been applauded by commercial banks.
The business circle, which repeatedly urged the State Bank of Vietnam to apply drastic measures to force commercial banks to pump cheap capital into the national economy, has “reached the summit of its hopes” when the central bank has defined the lending interest rate at 15 percent per annum for four groups of borrowers.
However, while businesses feel joyful, commercial banks feel unpleased about the decision.
Do Ngoc Quynh, a senior executive of the Bank for Investment and Development of Vietnam (BIDV), said on Dau tu newspaper--that no bank likes the ceiling interest rate mechanism.
He said the interest rate can be described as the “prices of risks.” Banks need to charge high interest rates on the loans with high risks, and charge lower interest rates on the loans with lower risks. If the interest rates are not high enough to cover the risks, banks would not make disbursement.
Sharing the same view, other bankers all have affirmed that they really want to push up lending, because credit remains the main source of income of banks. However, this may lead to the breaking of the risk management rules. The bankers said a “war” has broken out inside every bank between the business and the risk management divisions.
Truong Gia Tu, Deputy Risk Management Director of Techcombank, said bank business and risk management divisions can be compared as the accelerator and the break of a car. One would not dare to drive a car which does not have break.
The bank, which drives the car, needs to reach the finish safely. If the traffic is good, the economic conditions are favorable, bank can drive car at higher speed. Meanwhile, in difficult conditions, it needs to go at lower speed and use break.
Disagreeing with the opinion that commercial banks need to accept lower profits to share difficulties with businesses, Simon Morris, Techcombank’s CEO, has affirmed that banks, like other businesses, need to optimize their profit. He said that no one would share the loss with banks, if banks meet difficulties.
The weak risk management system is the biggest reason that makes banks hesitant to push up lending. Meanwhile, the imposition of the ceiling deposit and lending interest rates would make the risks higher, because the fixed interest rates would not be able to truly reflect the actual capital costs.
Quynh has stressed that it’s necessary to set up better risk management mechanism because the Vietnamese risk management system remains weak. BIDV has to give up the intention to open a representative office in Hong Kong, because the host localities require the proofs showing that Vietnam is applying the 25 rules of Basel II code and that the State Bank has the ability of implement the policies on the market.
Commercial banks have spent multi million dollars since 2011 on their risk management works. However, the bad debt has been increasing, which has made experts believe that banks would have to make higher provisioning against risks in the time to come.
Thoi bao Kinh te Vietnam cited a report by HSC Securities Company on May 11 said that the current average dong interest rate is 17.24 percent per annum. The lending interest rates have decreased by 0.7 percent over the last two weeks and 1.4 percent since early April. As such, the interest rates have decreased rapidly.
HSC thinks that the bottom interest rate of the current cycle would be 16-16.5 percent per annum.
C. V
Government to bail out domestic businesses
By An Ha | dtinews.vn | May 09, 2012 08:41 AM
The Ministry of Finance (MoF) announced five bailout packages including tax breaks and VAT moratoriums in order to support enterprises in overcoming economic difficulties.
Many business dissolved for short of capital
The MoF said that in early 2012, over 18,700 new businesses had been established, down 10.2% on the same period last year. Moreover, the number of dissolved and bankrupted companies is reported to have reached 10,350, of which 23.1% of the companies had existed for only one year and 41.9% for two years.
Those enterprises seeking licensing to operate in mining, real estate, banking and finance greatly reduced in number.
In the first quarter of 2012, revenue on goods and services dropped 7% compared to last year, the financial index declined while the cost of borrowing increased.
In order to help the enterprises and economy, five measures were agreed including management policies on the macro-economy, public expenditure, taxes and fees, prices and subsidies and tax administrative procedures.
MoF also proposed to provide an additional VND1 trillion (USD48 million) for dikes and infrastructure in rural areas.
The MoF will introduce a six-month VAT moratorium. This package will be applied to taxes due in April, May and June 2012. Land use fees will also be reduced by 50% and the deadline to pay fee extend by 12 months to enterprises in difficulties.
Corporation income tax collection will be reduced by 30% and the deadline will be extended for taxes due in the last nine months of 2011. The sectors to benefit from the measure include steel, cement, mechanical material manufacturers and waterway transport. Households focused on aquaculture or salt processing will be exempt from licensing taxes.
The ministry has also pushed back the introduction of a road maintenance fee payable by drivers to the end of 2012.
Landlords who rent rooms to workers, students or for use as private kindergarten classes will be exempt from VAT and income tax, on the condition that prices remain reasonable.
MoF said that the packages have to follow international rules and give support to those enterprises most in need. Combined with other fiscal policies, the move aims to lower interest rates and create favourable conditions for enterprises.
MOF says more businesses die young
Last update 09/05/2012 12:59:00 PM (GMT+7)
VietNamNet Bridge – Sixty five percent of the 10,350 businesses which got dissolved and bankrupted in the first quarter of the year were fledgling businesses which were established just one or two years ago.
Wonder Buy, a home appliance retailer, got bankrupted in early 2012
Businesses die young
The latest report just released by the Ministry of Finance showed that the economic difficulties have pushed a lot of businesses against the wall. While the number of newly set up businesses has been decreasing, the number of businesses, which have got dissolved, bankrupted or halted operation, has been increasing.
More than 18,700 businesses were set up in the first quarter of the year, a decrease of 10.2 percent in comparison with the same period of the last year. Meanwhile, the number of businesses reporting the halt of operation for definite time was approximate to the number of newly set up businesses.
Especially, the number of dissolved and bankrupted businesses was very high in the first quarter, reaching 10,350, up by 14.8 percent over the same period of the last year. Of this, 65 percent of businesses had been operating for just one or two years until the time of dissolution.
Statistics showed that 23.1 percent of the bankrupted businesses were the ones established one year ago, and 41.9 percent were set up two years ago. This shows that young businesses find it hard to survive the current difficulties.
Also according to the ministry, most of the businesses, which have halted operation for definite time and stopped production, are the ones in the fields of real estate and construction. Meanwhile, mining industries, real estate, finance, banking, insurance and construction were the business fields which saw the sharpest decrease in the number of newly set up businesses.
The noteworthy thing, according to the Ministry of Finance, is that most of economic sectors saw the turnover decreasing sharply in comparison with the same period of the previous year (15/21 main business fields). Construction, for example, had the turnover down by 26 percent, trade (retail, wholesale) down by 22 percent, production 9 percent, meal and restaurant services by 8 percent.
The total sales turnover of goods and services in the first quarter of 2012 dropped by 7 percent if compared with the same period of 2011, of which state owned enterprises saw the sharpest decrease of 14 percent. Meanwhile, foreign invested enterprises had the turnover increasing by 24 percent.
Since businesses have been unprofitable, the Ministry of Finance has reported the falls in domestic tax and export tax collection. It said that the tax collection from domestic sources was low at 140,813 billion dong, just equal to 96 percent of the same period of 2011, adding that this was for the first time it saw the decrease in the receipts from domestic sources.
The VAT collected in the first quarter of the year was 33,096 billion dong, which, though representing a 6 percent increase in comparison with the same period of 2011, was the lowest increase in comparison with the first quarters of recent years (26.2 percent in 2011, 35.6 percent in 2010).
Unpaid tax on the rise
By the end of 2011, the tax debts to be collected had accounted for 6.95 percent of the tax sum paid to the state budget. The tax debt had increased by 28.5 percent by the end of February in comparison with December 31, 2011.
Some production and business fields had the VAT tax debts increasing sharply in comparison with the same period of 2011, including real estate, transport, electricity and gas production and distribution, agro-forestry, seafood, mining, hotel services.
Source: TBKTSG
Banks to select borrowers for new lending rate cap
Tuoi Tre
Updated : Wed, May 9, 2012,12:39 PM (GMT+0700)
A man is pointing at the updated interest rate board of BIDV, with the deposit rate set at 12 percent a year
Photo: Lao Dong
The 15 percent cap on lending interest rates the State Bank of Vietnam imposed to aid four preferential sectors was officially applied yesterday, but banks said they have yet to implement the regulation as there are too many borrowers qualified for the low rate.
Borrowers operating in the four sectors subject to the ceiling rate, including the supporting industry, exporting and agriculture sectors, and small- and medium-sized enterprises, are estimated to account for as much as 60 – 70 percent of banks’ total outstanding loans, they said.
Hence, commercial banks said they will have to work together to develop a particular requirement for businesses which are able to access loans at the ceiling rate.
“We cannot let every business from the targeted sectors borrow at 15 percent a year,” they said.
According to a central bank circular, the maximum interest rate slapped on short-term loans in Vietnamese dong will be equal to the maximum deposit interest rate as required by SBV for terms from one month and above, plus3 percentage points a year.
Banks said the 3-percentage point gap between input and output interest rates is too low, so they have to calculate carefully on the loans to offer.
HSBC cuts Vietnam growth forecast to 5.1%
| Saigon Times | May 08, 2012 03:34 PM
HSBC Vietnam has adjusted down Vietnam growth forecast from 5.7% to 5.1% for this year, as the credit crunch is occurring faster than expected, says the bank’s macroeconomic report announced last Thursday.
Like other countries in the region, Vietnam’s economic growth has been led by credit over the last ten years, resulting in an average growth of 7%, but at the same time exerting pressure on inflation.
Therefore, the Government last year implemented monetary tightening measures to limit demand in a bid to deal with high inflation. As a result, credit growth dropped to 10.9% in 2011 from 27.7% in 2010.
Despite the central bank’s policy rate cuts in early 2012, the total loans have dwindled 1.9% as of March, showing that the local demand is much lower than expected.
Given the credit squeeze and a sudden economic growth slowdown in the first quarter to some 4%, HSBC predicted the central bank would further reduce policy rates in the next months.
Shrinking aggregate demand has pulled down inflation and the import demand considerably, thus trade balance and dong stability may improve. Exports may also decline as Vietnamese dong becomes less competitive and foreign demand is falling.
HSBC expressed concern about the declining import figures in the early months. The poor import growth reflects the sluggish domestic demand as well as more difficult production environment.
Though expecting the export growth to rise again in the coming months when lending rates are lowered, HSBC cut its forecast for the whole year growth to 14% from 20.6%. The private consumption growth is also predicted to slow down to 4.3%, versus the earlier forecast of 4.8%.
As inflation continues the downward trend, from 17% in last year’s January to 10% this April, the recent deposit rate cuts help relieve the burden on the market.
With inflation under control, Vietnam still has to face another long-running battle, said HSBC in its report.
Price pressure may shoot up in the second half of 2012 in Asia. Therefore, it is likely that the monetary policies of the central bank will fail to timely reflect the market, seriously affecting Vietnam dong.
To avoid rapid growth accompanied by escalating inflation, restructuring is a must to boost investment efficiency, and hence improve labor productivity, said HSBC.
When state agencies “forget” projects in calculating FDI
Last update 08/05/2012 08:00:00 AM (GMT+7)
VietNamNet Bridge – The head offices of the Ministry of Planning and Investment (MPI) and the Hanoi Planning and Investment Authority are just one kilometer far from each other. In principle, Director of the Hanoi Planning and Investment Authority is the subordinate of the Minister of Planning and Investment. However, the figures released by the two agencies in the age of information technology are as different as chalk and cheese.
MPI “drops” projects
A report by the Foreign Investment Agency under MPI showed that by April 20, 2012, Hanoi had attracted 11 foreign direct investment (FDI) projects capitalized at 4.6 million dollars in total. By that time, foreign investors had registered the additional investment capital of 92.8 million dollars for seven projects.
As such, Hanoi had attracted 92.8 million dollars worth of FDI more by April 20, 2012, ranking the 10th among provinces and cities in the FDI registered capital, according to MPI.
Meanwhile, the report by the Hanoi Planning and Investment Agency showed that in the first quarter of 2012, Hanoi got 64 projects (both newly registered and expanded projects) with the total registered capital of 147.6 million dollars. The sum includes 35.38 million dollars worth of 42 newly registered projects and 112.3 million dollars worth of 22 expanded projects.
As such, the figures about Hanoi’s FDI in the first four months of the year released by MPI were even lower than the figures in the first three months released by the local investment department. This might have been explained by the fact that the ministry has not counted on some projects.
In fact, the difference in the figures released by different agencies does not surprise people any more.
Earlier this year, a report about FDI by the Vietnam Association of Foreign Invested Enterprises VAFIE, also showed unreasonable points.
The report said an UNCTAD’s report on the global FDI in July 2010 showed that the implemented capital in Vietnam had reached 44 billion dollars by the end of 2009. Meanwhile, Vietnam’s Statistical Yearbook showed the figure of 67 billion dollars. If deducting 20 percent of the sum (which is believed domestically sourced capital), the actual FDI capital would be 54 billion dollars. This means the big gap of 10 billion dollars between UNCTAD’s and Vietnam’s figures.
The differences in statistical figures have raised worries about the reasonability of the government policies. The problem is that the figures have been updated in the official report of the General Statistics Office which will then serve the building up economic and investment policies.
Legal documents plentiful, but power still lacking
MPI and its dependent unit – the Foreign Investment Agency – usually have to send dispatches, urging local authorities and relevant branches to update FDI information in their localities.
MPI, for example, sent a dispatch on December 2, 2011, requesting the Vietnam National Oil and Gas Group (PetroVietnam) to report the FDI in the oil and gas sector in the fourth quarter of 2011 and the plan for the whole year 2012.
Meanwhile, the current laws stipulate that investors, state management agencies have the duty of fulfilling the obligations for statistical work.
Analysts have noted that in the dispatches, MPI only used the word “request” and asked for the cooperation of local authorities and relevant branches, which means that reporting is not a must. Meanwhile, in principle, local authorities and agencies have the obligations of fulfill their tasks as the state management agencies.
The analysts have also noted that Vietnam does not lack legal documents, but MPI seems to lack necessary power.
Kim Chi