Vietnam PM pledges economic reform

Vietnams Prime Minister Nguyen Tan Dung has promised to push economic reforms and invited more foreign investment

Vietnam's Prime Minister Nguyen Tan Dung has promised to push economic reforms and invited more foreign investment

TOKYO (AFP) — Vietnam’s Prime Minister Nguyen Tan Dung promised Thursday to push economic reforms and invited more foreign investment as Hanoi tries to limit the global slump’s impact on the communist country.

Addressing a private economic forum in Tokyo, Dung also called for further aid and investment from regional powerhouses, particularly China, India, Japan, South Korea and Australia, to sustain growth in the rest of Asia.

He urged regional nations to continue coordinating their economic stimulus measures and boost trade and investment to maintain regional strength.

“Deeper regional integration and increased intra-regional linkages at different levels will be the key for Asia to be not only the first continent to overcome this crisis, but also to maintain its position as the world’s most important economic locomotive,” he said, speaking through a translator.

Although Asian nations, many of which rely on exports to the United States and Europe for growth, have been hit by the global financial crisis, intra-regional trade had softened its impact, he said.

Dung added that Vietnam would continue to restructure its economy, promote infrastructure programmes, push for administrative reforms, and put more emphasis on environmental protection.

In Vietnam, “we believe that the current crisis is… an opportunity to speed up restructuring, improve management and build the foundation for sustainable development,” he said.

Vietnam enjoyed 3.1 percent growth in the first quarter and expects five percent growth this year despite the global crisis, he said.

Despite the downturn, he said: “We believe that Vietnam will still be a dynamic economy and a reliable destination for investors.”

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Vietnam govt seeks to lower growth target

Vietnams lawmakers should lower the countrys economic growth target, a senior official has said

Vietnam's lawmakers should lower the country's economic growth target, a senior official has said

HANOI (AFP) — Vietnam’s lawmakers should lower the country’s economic growth target to around five percent in the face of an economic slowdown, a senior official said Wednesday.

The government asked the National Assembly to agree to reduce this year’s target from the previous goal of 6.5 percent, Deputy Prime Minister Nguyen Sinh Hung said at the opening of the legislature.

A lower target is required “to create momentum for better and more sustainable development in the following years,” he said, urging legislators to make the economy’s health their top priority.

The communist country’s economy expanded by 6.18 percent last year, its lowest level in almost a decade, and Hanoi said first-quarter growth was 3.1 percent, the worst on record.

But Vietnam was one of the few countries with growth in the first quarter of the year while the world’s major economies battled recession.

Hung said the global financial and economic crisis is difficult to forecast and continues to have a negative impact on Vietnam.

“Our difficulties remain numerous”, he said, although “there have been signs that we have got out of the most difficult period”.

The global downturn has hurt Vietnam’s exports, tourist arrivals, and private sector investment, Hung said.

The World Bank has estimated 5.5 percent growth for Vietnam this year and the International Monetary Fund (IMF) predicts 3.5 percent.

“It’s still going to be a tough global environment that Vietnam faces,” the IMF’s country representative, Benedict Bingham, told AFP.

Hung said that because of the downturn, state revenues have fallen while spending demands have risen, particularly for demand stimulation and social security expenditures.

The National Assembly will be asked to approve a maximum eight percent budget over-spending in 2009 to allow for the needed expenditures, Hung said.

In December the government announced a stimulus plan worth about one billion dollars.

During its 28-day sitting — almost all of which is behind closed doors — the assembly is expected to revise tax law as part of its effort to stimulate demand, officials said previously.

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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://biz.thestar.com.my/news/story.asp?file=/2009/4/19/business/20090419075356&sec=business

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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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

Vietnam could grow 5.5 pct this year: PM

HANOI (AFP) — Vietnam’s economic growth will pick up and could reach between five and 5.5 percent this year, Prime Minister Nguyen Tan Dung said Wednesday.

He was speaking during a meeting with Singapore’s Minister Mentor Lee Kuan Yew, who is on a visit to the country.

Dung told Lee that growth is expected to recover from the 3.1 percent announced in the first quarter — the lowest level on record.

“In our estimation, in the following quarters of this year we’ll have higher growth,” Dung said, a statue of the communist nation’s revolutionary hero Ho Chi Minh behind him.

“By the end of this year, Vietnam may be able to reach the economic growth rate of between five and 5.5 percent,” he said.

Dung was last month quoted as saying the government may have to ask the National Assembly, the country’s parliament, to reduce its growth target to five percent from the existing 6.5 percent for this year.

Vietnam’s economy expanded by 6.18 percent last year, its lowest level in almost a decade.

The World Bank has also projected 5.5 percent expansion for Vietnam, while the Asian Development Bank said Vietnam could could achieve 4.5 percent growth in 2009, leaving it in better shape than most Asian economies despite a global downturn.

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Vietnam Coffee-Farmers sell more as prices rise

HANOI, April 14 – Coffee sales in Vietnam further strengthened in the past week as farmers sold more stocks of the commodity to exploit higher prices and strong demand from exporters, traders said on Tuesday.

They said domestic prices had risen more than 6 percent in the past month on robust demand from foreign buyers as well as higher London futures prices.

On Tuesday, the industry body Vietnam Coffee Association (Vicofa) said domestic prices in Daklak, Lam Dong and Gia Lai, the country’s largest growing provinces, averaged 24,900 dong-25,000 dong ($1.4-$1.41) per kg, from 24,800 dong on Monday and 23,500 dong a month ago.

Free-on-board prices for spot shipments stood at $1,450 a tonne on Tuesday, up $15 from $1,435 on Monday and $1,430 a tonne a week ago, Vicofa said.

“We expect sales from farmers to stay strong throughout this week as the current price level should encourage them to unload stocks,” a trader in Daklak capital Buon Ma Thuot said.

Traders said discounts to London’s May contract stood at $120 per tonne for spot shipment, making Vietnamese robusta grade 2, 5 percent broken at $1,450 a tonne, free-on-board basis , in line with Vicofa’s reports.

About 5,000 hectares (12,400 acres) of coffee crops in Daklak, Vietnam’s top growing province, are being affected by a severe dryness, state media quoted the provincial government as saying this week.

The six-month dry season is in full swing in Daklak. It often ends late this month or in early May.

Vietnam, the world’s second-largest coffee producer after Brazil, forecast last week its exports of the commodity would be steady at between 900,000 tonnes and 1 million tonnes (15 million-16.7 million bags) this year and in 2010 [ID:nHAN497014].

The coffee crop year runs from October to September but all government reports on production and trade in coffee, 95 percent of which is the robusta variety used for making soluble coffee, are based on the calendar year.

Most of this year’s coffee exports will come from the 2008/2009 harvest that ended in January. Farmers often retain part of the current stock to blend with beans from the next harvest due to start in late October for sales.

The coffee association has revised down nearly 6 percent its estimate of the harvest output, to 16 million bags, from a December figure of 17 million bags.

Vietnam exported 10.08 million bags between last October and March 2009, up 16.2 percent from a year earlier, government statistics show. ($1=17,750 dong)

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