Vietnam announces stimulus plan to help farmers

HANOI, Vietnam (AP): Vietnam has announced an economic stimulus plan to help farmers who are among those worst affected by the global recession, the government said Saturday.

Under the plan, farmers will have access to interest-free bank loans to buy farming tools and processing equipment, the government said on its Web site.

The government will also subsidize part of the interest paid on bank loans used to buy fertilizer, insecticide and construction materials, the report said. The state will subsidize interest payments of up to 4 percent on the loans, which typically carry interest rates of 10-11 percent annually.

The duration of the interest-free loans will be 12 months, while the maturity of the subsidized loans will be two years, the report, said adding the loans will only be used to buy domestically made products.

This stimulus plan will help “production and consumer in the agriculture and rural sector, one of the sectors worst affected by the global economic recession,” the report said.

The report did not say how much money the government will spend for the new stimulus plan.

The global economic downturn has cut into export demand, affecting export-driven economies such as Vietnam.

Vietnam’s exports grew only 2.4 percent in the first quarter of this year, comparing with the export growth of 29.5 percent for the whole year of 2008, according to the General Statistics Office.

Many of Vietnam’s export items are farm products, and the slowdown in exports have badly affected farmers, who account for more than 70 percent of the country’s 87 million people.

Vietnam’s economy grew only 3.1 percent in the first quarter, the lowest rate in a decade as the global economic slump dragged on exports and construction.

The country’s economy has expanded an average of 7 percent a year the past decade, but it began overheating last year with inflation skyrocketing and the trade deficit ballooning. The economic growth slowed to 6.2 percent in 2008.

The government has lowered its 2009 growth forecast from 6.5 percent to 5 percent.

International financial institutions forecast that Vietnam’s economy could grow between 4.5 percent to 5.5 percent _ still one of the fastest-growing in the world but significantly slower than the previous pace.

Earlier this year, the government announced a $1 billion stimulus plan as part of efforts to keep the economy growing.

The money was used to subsidize bank loan interest for enterprises. So far, local companies have borrowed more than 220 trillion dong ($12.5 billion) under that program.

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Vietnam top official on Japan visit

HANOI (AFP) — Vietnam’s most powerful official, Communist Party General Secretary Nong Duc Manh, was to arrive Sunday for an official visit to Japan, the country’s largest bilateral aid donor, the government said.

It is the second visit to Japan by Manh, whose last mission there was in 2002, the government said.

Manh was to stay until Wednesday.

“The trip is expected to beef up Vietnam-Japan exchanges and cooperation in all areas, especially in economy, trade, investment and official development assistance (ODA),” the government said on its website.

The state Vietnam News Agency said Japan is Vietnam’s second-biggest trade partner, after China, and is the country’s second-largest export market after the United States.

Manh’s visit comes less than one month after the two countries signed an agreement resuming the flow of aid loans — known as ODA — suspended during a corruption scandal.

Japan announced in December that it would suspend the loans after former executives of a Tokyo-based consultancy admitted paying kickbacks to a Vietnamese official overseeing a Japanese-funded road project.

In February, Tokyo said Vietnamese officials had given assurances that steps would be taken to prevent similar abuses. That led to the signing in March of a deal for low-interest loans covering infrastructure projects worth 83 billion yen (837 million dollars).

Vietnam has made efforts to improve the legal environment and increase measures to strengthen management and effective use of ODA projects, including fighting corruption.

Japan and Vietnam in December signed an economic partnership pact with a promise to cut tariffs on more than 90 percent of goods and services traded between the two nations within a decade.

Vietnam News Agency said that last year the value of Vietnam-Japan trade exceeded 15.5 billion dollars, and by the end of 2008, Japan had invested more than 17 billion dollars in more than 1,000 projects, ranking it third among foreign investors in Vietnam.

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Vietnam reduces taxes to push up demand: govt

HANOI (AFP) — Vietnam will reduce some tariffs on goods and services to push up demand in the face of an economic slowdown, according to a decision signed by the prime minister.

Value-added tax (VAT) on garment and textile products, cement, and motorbikes will be reduced by 50 percent between May 1 and December 31, said the ruling signed on Thursday.

Registration fees for cars with fewer than 10 seats will also be reduced by half, while garment and footwear enterprises will benefit from a 30 percent cut in corporate income tax for the fourth quarter of last year, it said.

The cuts were to “stimulate demand and consumption” and prevent an economic downturn, the government said in a statement.

A separate government announcement said farmers, who are suffering the most from the slowdown, will from May get concessionary interest rates for bank credits to buy Vietnamese-made farming tools and processing equipment. The credits will be interest free or reduced by four percent depending on the amount involved.

The majority of fast-developing Vietnam’s people remain farmers.

The moves are part of broad stimulus measures earlier announced by the communist government.

On Wednesday, Prime Minister Nguyen Tan Dung told visiting Singaporean Minister Mentor Lee Kuan Yew that the country’s economic growth would pick up and could reach between five and 5.5 percent this year.

In the first quarter of 2009, Vietnam recorded 3.1 percent growth, the lowest level on record.

The World Bank has projected the country would expand by 5.5 percent this year, while the Asian Development Bank said Vietnam could achieve 4.5 percent, still leaving it in better shape than most Asian economies despite a global downturn.

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New rules, market for Vietnam unlisted firms: officials

An investor sits watching share prices at a local securities trading floor in Hanoi

HANOI (AFP) — Vietnam will allow foreign investors to increase their stakes in non-listed companies and plans to set up a new trading floor for unlisted shareholding firms, officials said Friday.

The new ruling allows foreign firms to hold up to 49 percent of non-listed shareholding firms, up from 30 percent, said Vo Van Quang, office manager at the State Securities Commission of Vietnam.

Firms listed on the Hanoi and Ho Chi Minh City bourses have been allowed to hold stakes of up to 49 percent since 2005.

“This decision aims to widen and encourage indirect foreign investment in the Vietnam stock market,” Quang said.

The directive takes effect on June 1.

Vietnam also plans to launch a new trading floor in June for unlisted shareholding companies at the Hanoi Securities Trading Center, a senior government official told Dow Jones Newswires.

The new market is part of government efforts to help regulate the trade in unlisted companies’ shares, said the State Securities Commission official.

Vietnam has more than one thousand shareholding companies but less than half of those have been listed on either the Hanoi or Ho Chi Minh City exchanges, the official said.

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Vietnam announces stimulus plan to help farmers

HANOI, Vietnam (AP) – Vietnam has announced an economic stimulus plan to help farmers who are among those worst affected by the global recession, the government said Saturday.

Under the plan, farmers will have access to interest-free bank loans to buy farming tools and processing equipment, the government said on its Web site.

The government will also subsidize part of the interest paid on bank loans used to buy fertilizer, insecticide and construction materials, the report said.

The state will subsidize interest payments of up to 4 percent on the loans, which typically carry interest rates of 10-11 percent annually.

The duration of the interest-free loans will be 12 months, while the maturity of the subsidized loans will be two years, the report, said adding the loans will only be used to buy domestically made products.

This stimulus plan will help “production and consumer in the agriculture and rural sector, one of the sectors worst affected by the global economic recession,” the report said.

The report did not say how much money the government will spend for the new stimulus plan.

The global economic downturn has cut into export demand, affecting export-driven economies such as Vietnam.

Vietnam’s exports grew only 2.4 percent in the first quarter of this year, comparing with the export growth of 29.5 percent for the whole year of 2008, according to the General Statistics Office.

Many of Vietnam’s export items are farm products, and the slowdown in exports have badly affected farmers, who account for more than 70 percent of the country’s 87 million people.

Vietnam’s economy grew only 3.1 percent in the first quarter, the lowest rate in a decade as the global economic slump dragged on exports and construction.

The country’s economy has expanded an average of 7 percent a year the past decade, but it began overheating last year with inflation skyrocketing and the trade deficit ballooning.

The economic growth slowed to 6.2 percent in 2008.

The government has lowered its 2009 growth forecast from 6.5 percent to 5 percent.

International financial institutions forecast that Vietnam’s economy could grow between 4.5 percent to 5.5 percent – still one of the fastest-growing in the world but significantly slower than the previous pace.

Earlier this year, the government announced a $1 billion stimulus plan as part of efforts to keep the economy growing.

The money was used to subsidize bank loan interest for enterprises.

So far, local companies have borrowed more than 220 trillion dong ($12.5 billion) under that program.

http://thestar.com.my/news/story.asp?file=/2009/4/18/apworld/20090418120152&sec=apworld