Oil tanks at the Dung Quat Oil Refinery, Vietnam’s first such facility, in the central province of Quang Ngai. The country imported 26.2 percent fewer oil products by volume but the value fell 60 percent to $753 million during the first two months. Vietnam has reported its first year-to-date trade surplus since 2006, as companies slash overseas purchases of equipment and raw materials amid tumbling demand.

The surplus for the first two months of the year totaled US$290 million, compared with a deficit of $5.13 billion in the same period a year earlier, the General Statistics Office (GSO) said Wednesday in Hanoi. Exports fell 5.1 percent to $8.02 billion, while imports plunged 43.1 percent to $7.73 billion, according to the preliminary figures. The GSO also revised the trade surplus for January to $390 million, up from an initial estimate of $300 million. “Due to the impact of the world economic turmoil on the Vietnamese economy, the country was forced to strongly reduce its imports. It is the first [monthly] trade surplus we’ve had since 2006,” AFP quoted a GSO official as saying. Vietnam has not posted a full-year trade surplus since 1992. The economy last year suffered from a widening trade deficit and double-digit inflation but both have been brought back under control. Now, however, the government faces the challenge of protecting the economy from the worst of the global recession, and the authorities have taken aggressive monetary easing steps while drawing up a modest fiscal stimulus package. Still, the trade data suggested the economy was feeling the effects of the downturn. This year’s reversal may indicate a sharp slowdown in Vietnamese economic activity. “A positive trade balance in Vietnam would worry me a bit, because it would suggest that economic growth isn’t there,” said Alain Cany, chairman of the European Chamber of Commerce in Vietnam. “Vietnam needs to import in order to grow. It is not self-sufficient.” Economic growth slowed to 6.2 percent last year from 8.5 percent in 2007. The government hopes to keep it at 6-6.5 percent this year, though the International Monetary Fund and others forecast growth to be closer to 5 percent. Prime Minister Nguyen Tan Dung earlier this month said he expected the slowdown to end by May. The improvement in Vietnam’s trade balance “is largely a reflection of weaker domestic demand, which is cutting into imports,” said James McCormack, head of Asia sovereign ratings at Fitch Ratings in Hong Kong. “It’s been surprising to see just how weak the import numbers have been in Asia.” In the first two months of 2009, Vietnam spent $412 million on steel, down by 74.2 percent and $169 million on fertilizers, down 33.7 percent. Machinery and equipment imports fell 24 percent to $1.77 billion, while petroleum-product imports fell 26.2 percent by volume and 60 percent by value to $753 million. The country on Sunday opened its first crude oil refinery in the central province of Quang Ngai, which operator Vietnam Oil & Gas Group, known as PetroVietnam, says may meet about one-third of the country’s fuel demand next year. Imports of inputs used in garment production slumped, with purchases of cloth slipping 4 percent to $494 million. “Orders are down for light export industries,” said Cany of the European Business Chamber in Vietnam. “Probably some companies were surprised by the extent orders fell and they were overstocked, which significantly reduced their import demand.” Mixed export results Exports were buoyed by an estimated rise of more than 3,000 percent in sales of precious metals and gemstones to $939 million. Garment and textile exports were up by 0.7 percent to $1.27 billion. Rice exports were estimated to have more than doubled at $399 million. The US Foreign Agricultural Service this month cut its forecast for rice exports this year by Thailand, the world’s biggest shipper of the grain, citing “increased competition” from Vietnam. Rubber exports, however, slipped 50 percent to $101 million in the first two months of the year. Coffee exports slipped 10 percent by value to $440 million. Vietnamese coffee farmers have been withholding sales to the market since the end of the country’s Tet (Lunar New Year) holiday in late January, according to a February 23 note from Hong Kong-based SW Commodities. “Exports from Vietnam depend largely on the prices of key commodities,” said Adam McCarty, chief economist at Mekong Economics Ltd. in Hanoi. Crude oil shipments fell 42 percent by value to $958 million, as global prices of the commodity have been an average of 57 percent lower so far this year than during the same period a year earlier. By volume, crude oil shipments rose 27 percent. Crude oil is Vietnam’s biggest foreign exchange earner. “Vietnam’s oil output should increase to about 16 million tons this year,” said PetroVietnam Chairman Dinh La Thang, in a February 21 interview in the town of Quang Ngai. The state-owned company said at the end of December that it produced about 15 million tons of crude oil and condensate in 2008. Vietnamese crude oil production may reach 20 million tons annually by 2012 and the country hopes to be able to sustain that level of output for as many as seven years, Thang said. Although crude oil output is expected to rise, the government said December 31 that crude exports may decline 13.7 percent this year because of the operation of Dung Quat oil refinery. FDI down Vietnam drew more than $5.3 billion from foreign investors in the first two months of the year, or 70 percent of the same period last year, the Ministry of Planning and Investment’s Foreign Investment Agency said in a report Wednesday. The country granted licenses for 67 new projects with total registered capital of more than $1.5 billion in January and February. Investors of 10 existing projects were allowed to increase their capital by a total of more than $3.8 billion, according to the statement. Vietnam expects to receive $12 billion of pledged foreign investment in 2009, Phan Huu Thang, director of the ministry’s foreign investment department, said on Vietnam Television’s InfoTV early this month. The country last November said the overseas disbursement level, which represents actual cash received from promised foreign investment, may drop to as low as $10 billion in 2009 amid the global financial crisis. Source: TN, Agencies (With additional reporting by Ngan Anh)

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Vietnam Monday cut retail diesel prices by 1.8 percent to VND10,500 (61.8 US cents) per liter, in a move to help firms, especially transportation companies, cut operation costs.

The price cut took effect immediately, according to the Ministry of Finance. Prices of gasoline and kerosene remained unchanged at VND11,000 and VND12,000 per liter respectively. Vietnam exports about 16 million tons of crude oil each year but has to import all refined oil products. The country’s first oil refinery, Dung Quat, in central Quang Ngai Province, is scheduled to open later this month. Reported by Ngan Anh

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A customer examines the content and usage information of a milk product in District 3. Customers have become increasingly worried about the quality of milk products they are buying. Ho Chi Minh City health authorities and the national quality control agency have traded accusations over the delay in informing the public about the false labeling of protein content in milk products.

The city’s health authorities knew of the discrepancies four months earlier, but only chose to announce it last week. Last Friday, the HCMC Institute of Hygiene and Public Health announced that 37 of the 99 milk samples tested had protein content up to 30 times lower than what was displayed on their labels. The announcement followed growing public concern after the suspension a day earlier of a local firm, Hung Lam Joint Stock Company, for selling five different milk products that had very low levels of protein. Thanh Nien has found that last October, the southern branch of the Vietnam Standard and Consumer Association (VINASTAS) had sent a report to HCMC’s Department of Health to warn about several milk products that had protein content much lower than indicated on the labels. Speaking with Thanh Nien Monday, leaders of both the health department and VINASTAS blamed each other for the delay in announcing the results. Health Department Director Nguyen Van Chau said upon receiving the VINASTAS report, city health authorities had launched inspections [into milk products] and reported back to VINASTAS last December. In the report, the department acknowledged that several dairy products had incorrect protein levels mentioned on their labels. LOW-PROTEIN MILK PRODUCTS Vinacali Co. Ltd.: Intellac milk (400 grams, 500 grams), Supermilk (400 grams), Intellac for malnourished (500 grams) Bich Co Enterprise: Powdered Milk (500 grams), “Ha Lan” powdered milk (500 grams), “Ha Lan” fat milk (500 grams), High-calcium and Nutrition powdered milk (500 grams) Thanh Ngoc Co. Ltd.: New Milk Powdered milk (500 grams), “Ha Lan” fat powdered milk. CMB Ltd. Co.: Gold Weightton powdered milk (400 grams) Hoang Ngoc Enterprise: Titifood powdered milk (400 grams) Hung Lam Joint Stock Company: Calcium Food Milk, Brain Nutrition Food Milk, Mama Food Milk, Height-gain Food Milk, Food Milk for thin people. Nhu Trang Company: Maylac powdered milk Tua Cuong Phat Company: Milk powder, Holland Gold, New Zealand, High Nutritious powdered milk. Dai Hoa Company: Calyx Canxi But Chau said his department could not be blamed for hushing up the test results. “We thought we had informed the public [about those faulty products] through their representative agency [VINASTAS],” Chau said. The head of VINASTAS’ southern office, Nguyen Nam Vinh, confirmed Monday that the city health department had sent the test results to his agency last December. But Vinh slammed the department for neglecting its duty. The department should have expanded its investigations and made public the test results by itself instead of passing the buck to VINASTAS, Vinh said. Thanh Nien found that the city’s health department had also failed to report the problem to the Ministry of Health. Many inspections by the HCMC Institute of Hygiene and Public Health last year had uncovered several low-protein milk products. But the institute only made public those test results last Friday. Institute head Le Hoang Ninh argued that different test results last year would not have stood up to legal scrutiny to penalize any company. The institute had to report back to the Ministry of Health for further action, he said. Experts have said some dairy firms mixed cheap milk materials to package with labels claiming false protein levels to sell at high prices. Such ingredients have a major percentage of fat, no vitamins and very little protein - less than 2 percent compared with the standard of between 11 and 15 percent set by the World Health Organization. Consumers wary After the dubious milk products were made public, consumers have become very anxious about choosing dairy items. Many consumers have even brought with them the list of products to avoid when shopping, a milk vendor in District 3 said. Duong Thi Quynh Trang, the external manager of the Big C supermarket chain, said the firm has withdrawn the blacklisted Dollac 2 product from circulation. Big C has also asked its milk suppliers to send back the test results of their products within 10 days, Trang said. Earlier delays In May 2007, the Health Department blacklisted 10 soy sauce makers whose products contained the carcinogen 3-MCPD. But media investigations later revealed the department had in fact been aware of the problem since 2001 and had discovered at least 20 tainted soy sauce brands in 2005 and 2006 that were never publicized. The press reports infuriated the public, prompting the HCMC Inspectorate to step into action. Nguyen Duc An, the then health department inspector chief was sacked in September 2007. Nguyen The Dung, the former department director, was transferred to another job while his deputy Le Truong Giang was reprimanded. Last month, the Ministry of Interior instructed the HCMC government to revoke the dismissal decision against An. The ministry said the city had flouted regulations by not setting up a panel to review An’s sacking. The ministry also found there were not enough grounds to penalize An for dereliction of duty in overseeing the withdrawal and destruction of 3- MCPD-tainted soy sauce products in 2005 and 2006. Reported by Thanh Nien staff

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While some large textile and garment firms received enough orders for the first half of this year, smaller ones are still trying to get enough contracts to avoid layoffs, according to the Vietnam Textile and Garment Association Many workers in the garment and textile industry are expected to move from struggling small firms to larger ones as the economic downturn magnifies disparities in wages between the two categories, a union official said.

Vu Ngoc Quyen of the Trade Union of Garment and Textile Workers said while job-hopping is common in the industry, it was not a problem in the past thanks to small differences in salaries. Until six months ago, workers at small firms could do a lot of overtime work, meaning their total income was close to the wages paid by larger companies. But now, with the industry hit hard by the global economic turmoil, small businesses are struggling to maintain sales and their workers can no longer work overtime. With the gap in wages and bonuses gradually increasing, Quyen said it is likely that small companies would face a shortage of workers after Tet (Lunar New Year festival). Successful companies like Nha Be, Phong Phu and Viet Tien pay workers as much as VND2.6 million (US$148) a month on average while smaller firms pay around VND1.8 million ($103). Pham Xuan Hong, deputy chairman of the Vietnam Textile and Garment Association, said while some large firms received enough orders for the first half of this year, smaller ones are still trying to get enough contracts to avoid layoffs. The large companies will pay VND5-6 million as Tet bonuses while the smaller ones are likely to pay just a month’s wage or even less. A human resources manager at a garment and textile company employing 20,000 people, who wished to be unnamed, said his company recruited more than 500 workers in the last quarter of 2008, compared to around 90 a year earlier. But he said many workers applied to his company after their small enterprises closed down. His firm needs to employ 700 more, he said, admitting for the past several years it had been more than 1,500 workers short. But with supply expected to exceed demand, he said his company would focus on recruiting skilled workers after Tet. Tuan Nguyen Nghi, managing director of Nha Be Corp., said since the company has already received enough orders to remain busy for the first six months, recruitment would go on. Other companies’ layoffs give his the opportunity to hire experienced workers. Truong Lam Danh, deputy chairman of the HCMC Labor Union, said while many workers had lost their jobs recently because of the economic downturn, large companies like Viet Tien, Nha Be, Viet Hung and Viet Thinh regularly announce they are hiring. But the Vietnam Textile and Garment Association’s Hong warned: “Workers who want to keep their jobs at large companies or wish to work for them will have to concentrate on their skills since the sector is expected to face more problems.” Source: TBKTSG Online

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Hanoians buy food for Tet (Lunar New Year) holidays at street shops. From the making of several dishes to visiting relatives, Tet traditions have undergone a transformation.

As the main part of her Tet celebrations, Nguyen Thu Ha is in touch with some travel agents so she can take her family to the beautiful coastal city of Nha Trang for a holiday. For Ha, choosing an attractive place for her family to visit is the most interesting part of Tet preparations. As the 37-year-old chief accountant of a bank in Hanoi, she puts in long hours – as many as 12 – at the office every day, and she reckons her break is well-deserved. “My family wants to make use of the occasion to relax after one year of hard work. In addition, my son could learn swimming,” Ha says. She knows there is a world of difference between the way she prepares for Tet and what her mother used to do during her childhood. “My mother used to struggle to make some delicious food and get some new clothes for us every Tet. Now, we don’t have to worry about food, since meat and fish, which were on the dining table only at family parties or Tet during my childhood, have become a common part of our daily meals.” Vietnam's strong economic development has seen the emergence of middle class and high-income groups of people that can afford a luxurious lifestyle, which has spilled over into how they welcome Tet. Most of these people, especially in big cities like Hanoi, Hai Phong and Ho Chi Minh, no longer make the banh chung (square cakes made from glutinous rice, pork and green beans), lean pork paste and fruit jams during the Tet season. People choose blossoms trees in Hanoi to decorate their house during Tet Modernization means they have neither the time nor the inclination for such activities. Spending many hours at offices and factories leaves little time for cooking at home, and everything. Expensive imported items and locally-made food products that serve many budget levels are available in the market. From street vendors, groceries stores, and regional markets to plush upmarket trade centers, the options are plentiful if you have money. Already clogged with motorbikes and an increasing number of cars, streets in the cities are snarled on pre-Tet days as people rush to markets, supermarkets, trade centers and other shops. “The number of customers coming here during the Tet shopping season has increased many times over ordinary days. We have prepared more goods and mobilized more staff to serve them,” says Nguyet Anh, an employee of the Trang Tien Plaza in Hanoi. At a supermarket in the plaza, streams of customers with shopping carts loaded with foods, beverages, cosmetics and garments cram through its narrow doorways. “In my mother’s generation, cooking used to be one of their joys during Tet. Now, we don’t want to spend much time on it [cooking]. We want to spend Tet relaxing,” says nurse Nguyen Thi Hanh, 27, while choosing some semi-processed chicken. People today also spend more time decorating their houses with flowers and bonsai for Tet. Many have spent hundreds of dollars on bonsai plants and trees with beautiful shapes for the holiday, which falls on January 26 this year. People in the north have a tradition of displaying peach blossoms and kumquat trees while those in the south display ochna plants that bloom yellow flowers during Tet. This year, many people in the south have chosen peach blossoms and kumquat bonsai mainly grown in Hanoi and the northern provinces of Bac Giang and Hung Yen, as well as that of ochna plants grown in southern localities, says gardener Nguyen Duc Minh, as he waters trees pruned in the shapes of pyramids, dragons, phoenixes and even waterfalls. There are other changes in the way Tet is celebrated, including one indispensable activity, which is to visit relatives and not leave without eating or drinking. That custom is changing now. Instead of welcoming Tet at home, many people are choosing beaches, including Nha Trang, Phan Thiet, Phu Quoc and Tuan Chau, while others prefer to travel abroad, mainly to regional countries like China, Singapore, Thailand and Malaysia. Another Tet tradition that has changed a lot in recent years is the offering of gifts. Previously, Tet gifts were locally-produced wine bottles and boxes of jams as offerings to parents, relatives and bosses as a sign of affection and respect. Now, many people choose to buy expensive gifts for their superiors with some presents destined for officials worth thousands of dollars. Amidst all the changes, there is a constant. Every New Year is awaited with expectations and hopes of greater joy and prosperity in the coming year. Reported by Bao Anh

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The “notorious” Van Thanh 2 Bridge opened to traffic last Thursday Ho Chi Minh City residents will have a new vantage point to the Lunar New Year’s Eve firework displays when the Khanh Hoi Bridge opens to traffic a day earlier.

The new bridge will connect District 4’s Nguyen Tat Thanh Street with District 1’s Ton Duc Thang Street when it opens on January 24. At 167 meters long and 22 meters wide, the bridge will be able to handle 30-ton trucks and would meet the demand for transporting goods from HCMC’s Saigon River to southeastern provinces, said Vuong Hoang Thanh, deputy head of the East-West Highway and Water Environment Project Management Unit. The unit is tasked with overseeing construction of the bridge. Another bridge belonging to the East-West Highway project and linking districts 1 and 4, the Calmette Bridge, is also set to open next Tuesday, Thanh said. The new Calmette overpass includes an intersection of six streets. Two major sections from District 1’s Calmette Street and District 4’s Doan Van Bo Street are scheduled to be completed on Tuesday, while the remaining sections connecting to the East-West Highway and Thu Thiem underground tunnel will be completed by the year-end. Thanh said the commission of the two new bridges would significantly ease traffic congestion at the city center. ‘Notorious bridge’ also ready The controversy-mired Van Thanh 2 Bridge also opened to traffic last Thursday after being rebuilt for more than a year. The bridge, on Binh Thanh District’s Nguyen Huu Canh Street, is also expected to resolve traffic gridlocks from HCMC to neighboring provinces in a big way, an official said. After being put into operation in 2002, it was found soon after that the bridge was sinking on both sides. In 2007, the city approved a 10-month repair project costing VND141 billion (current US$8 million) to upgrade the road on both sides. The Tan Thuan Bridge 1 in District 4’s Nguyen Tat Thanh Street also opened to traffic last Thursday. Another bridge-opening in the offing is that of the Nguyen Van Cu Bridge over Ben Nghe Canal that connects districts 1, 4, 5 and 8. The section linking districts 1 and 5 with District 4 will open very shortly, while that connecting districts 4 and 8 is scheduled for completion soon after the Tet holidays. The bridge will ease traffic congestion on the Nguyen Tri Phuong, Y and Cha Va bridges. Reported by Phuong Thanh

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Workers at Saigon 2 Garment Company. Apparel makers anticipate a tough year ahead and want the government to give them a helping hand. The textile and garment industry is demanding government assistance to overcome the export hurdles posed by the recession.

At a meeting organized by the Vietnam National Textile and Garment Group (Vinatex) with Deputy Minister of Industry and Trade Bui Xuan Khu in Ho Chi Minh City Wednesday, apparel exporters suggested that the government should consider introducing a package of three measures. The first is for assisting workers in businesses facing export difficulties or considering layoffs, Le Quoc An, chairman of the group and of the Vietnam Textile and Apparel Association, said. He suggested spending 1 percent of the total garment export earnings. The second, worth VND5 trillion (US$294 million), is for subsidizing exporters’ bank credit. An said the rate offered by banks may have fallen to 12 percent recently but it is still too high at a time of recession. The third measure is for promoting the industry in the international market at a cost of VND50 billion ($2.94 million). Vietnam’s main apparel markets are the US, Japan and the EU. Khu assured them that the government would support the industry since it is a major foreign currency earner. Textiles, in fact, replaced crude oil as the top earner last year at $9.1 billion after the plunge in oil prices. The industry also created more jobs than the others, he said, adding his ministry would submit the package to the government for approval. Shrinking orders An said Vietnam’s apparel producers had less export orders than last year. Foreign businesses were affected the most though they have more orders than local producers, he said. Many of them cut jobs and closed factories because of the economic slump in key markets like the US, Japan, and the EU, he said. He forecast exports to fall 15 percent year-on-year in the first quarter. But he said it is difficult to set a target for the whole year since no one knows when the recession would end. Bui Van Tien, general director of Viet Tien Garment Corporation, said recessions occurred in every decade, adding firms should not worry too much about them. But they should restructure their business and train human resources, he said. The industry would recover soon if apparel producers focused on the home market in addition to their traditional export markets, he assured. Reported by Minh Quang

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The Ho Chi Minh Stock Exchange moved lower Tuesday over growing concern about negative corporate earnings this year.

VN-Index lost 5.05 points, or 1.62 percent, to close at a 10-day low of 307.13. Of its 175 members, 26 gained and 113 declined. Trading remained quiet, with only 7.7 million shares being traded. “The outlook on corporate earnings is very gloomy, given the current economic situation,” Huynh Anh Tuan, chief executive officer of the Ho Chi Minh City-based SJC Securities, said. “Companies have started to release 2008 earnings and many of them have made losses or missed their profit targets. For those who managed to make some profit, it was because of the gains they made in the first half of 2008. “In addition, people also lost a lot of their confidence in the market after HSBC said the Vietnamese market is no longer investable for overseas investors. “Besides, almost half of January has passed but we are still not yet clear how and when the government is going to implement its US$6 billion stimulus package to boost the economy. So, the market has no momentum.” Dau Tu Chung Khoan (Securities investment) newspaper quoted Kim Long Securities Company Deputy General Director Pham Vinh Thanh as saying, “Companies with a strong cash flow and those not involved in finance are a good choice this year.” He added that petroleum, transport, technology and financial stocks would be his top picks when the market shows signs of recovery, without explaining his choices. How they fared Vinpearl (VPL) lost VND2,500, or 4.17 percent, to close at VND57,500. VFG Investment Joint Stock Company became a major shareholder in the resort operator after buying 5,045,000 shares, or a 5.05 percent stake last month, according to a report on the exchange’s website. Saigon Securities Inc. (SSI), the country’s leading brokerage, slipped VND1,100, or 3.63 percent, to VND29,200. ANZ Bank failed to buy around 1.4 million shares amid a “gloomy market and its low liquidity,” the exchange said on its website. ANZ now holds 18.35 percent in the Hanoi- based brokerage. Thu Duc Trading and Import Export Joint Stock Company (TMC) remained unchanged at VND21,500. The firm said on the exchange’s website that retail investor La Tang Duc bought 242,060 shares, or 6.05 percent, to become a major shareholder. Saigon Fishing Net Joint-Stock Company (SFN), a silk thread and fishing net producer, gained VND400, or 4.2 percent, its most in two weeks, to finish at VND9,900. The HCMC-based company will start buying back 100,000 shares from January 20, according to a stock exchange announcement. “The buyback volume is not huge, but given the daily trading volume of the shares, which is about several thousand a day, this buyback plan could move the stock,” Hoang Thach Lan, chief analyst at HCMC-based SME Securities Company, said. Reported by Hoang Uy

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An increase of less than 10 percent in retail electricity prices, as proposed by the Ministry of Industry and Trade, will not seriously affect production and daily life, Deputy Minister Do Huu Hao said Tuesday.

The impact of the proposed price hike on the economy and society had been carefully calculated, Hao said. In December, the ministry submitted to the government a proposal to raise retail power prices by less than 10 percent. Pham Manh Thang, head of the Electricity Regulatory of Vietnam, said the Ministry of Finance was assessing the proposal and the increase will be considered alongside the prices of coal and oil used for producing electricity. If the proposal is approved by Prime Minister Nguyen Tan Dung, the new retail power prices will take effect in late February, Thang said. The Ministry of Industry and Trade has proposed the first 50 kilowatt hours of electricity used by families each month be subsidized to minimize the effect of higher power prices on the nation’s poor The current average retail price in Vietnam is VND860 (5 US cents) per kilowatt hour, with power for production costing more than power for household use. Thang said the proposed electricity price increase was expected to wipe 0.05 to 0.07 of a percent off economic growth and push inflation up by 0.25 to 0.3 percent. Power and gasoline are the two products that determine the prices of almost all goods on the market, and both power and gasoline prices should not be raised at this juncture, Lao Dong (Labor) Newspaper quoted economist Dinh Son Hung as saying. Hung said an increase in power prices would undermine efforts to stimulate the economy this year in the face of a global economic slowdown. Nguyen Van Son of the Vietnam Standard and Consumers Association said local consumers would be unhappy with the price increase proposal. The proposal favored power producers and did not mention any efforts by the power industry to lower prices or anything about consumer rights, Son said. Hao said power prices were not being raised to help Electricity of Vietnam (EVN) offset its losses but to encourage investment in new generation capacity. The price increase was necessary to facilitate investment, Hao said, pointing out that electricity costs in Vietnam were lower than those in other Southeast Asian countries. State-owned EVN currently controls all power transmission grids and retail networks, including the Hanoi Electricity Company and Ho Chi Minh City Electricity Company. EVN had previously submitted a plan to the government proposing increases of up to 20 percent in the retail price of electricity. According to the proposal by the Ministry of Industry and Trade, the state will subsidize the first 50 kWh of electricity used by local residents each month to minimize the effect of the price hike on low-income families. Up to 2.5 million poor households in Vietnam use less than 50 kWh of electricity per month, Hao said. He also said from 2010 power prices will be adjusted in accordance with input costs. Hao said his ministry will coordinate with the Ministry of Finance in deciding power price adjustments of 5- 7 percent. Price changes of more than 7 percent will require approval from the prime minister. Vietnam, whose electricity capacity stands at some 15,000 megawatts now, is expected to increase capacity by 4,000MW a year by 2025. Meanwhile, the country now is out of sources for hydroelectricity plants, which need less investment than thermoelectricity or nuclear power plants. Vietnam’s relatively low electricity prices have attracted many steel, cement and chemical production technologies from other countries. Last year, Vietnam’s power demand jumped around 16 percent while supply only rose 12 percent, forcing the government to import electricity from China and rotate power outages across the country. Vietnam plans to generate about 83.3 billion kWh of power this year to support an economy forecast to grow by 6.5 percent. Reported by Ngan Anh – Xuan Toan

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Swiss and German institutes will help Vietnam train international marketing and export management experts in an attempt to improve the image of local businesses in the global market.

Switzerland-based European Institute of Foreign Trade and German Reutlingen University’s Export Academy will collaborate with TFF (Training For the Future), a Vietnamese business training school, to offer courses from April. A TFF official told Thanh Nien Daily Tuesday the 18-month courses, partly funded by the Swiss government, would offer essential knowledge about marketing and export skills in an international setting. Those who complete the courses will obtain masters degrees in international marketing and export management. Reported by Minh Quang

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If you are looking for space or a place to unwind, to treat our family to a getaway weekend or celebrate your honeymoon, there is a quite area on the Saigon River bank that is just the ticket.

Six kilometers from downtown, the Thao Dien Village offers guests the space they need in a luxurious, colonial setting. The newly opened “village” is a 13,000 square meter complex on Nguyen Van Huong Street in Ho Chi Minh City’s plush District 2. The complex comprises a 22 room colonial-style hotel called An Phu, an event hall, a water puppet theater and other facilities. Active sorts can make use of the fitness club with a variety of workout programs on offer, a sumptuous spa welcomes those in need of deep relaxation and its riverside pool is a good place to cool off. The greenery that surrounds the complex and the spacious lawn overlooking the river are ideal for children to “burn” their energy. Thao Dien Village has four restaurants with different styles that seem to have something for everyone. Well-known Vietnamese fine dining establishment Ngon Restaurant has opened its second location here with a beautifully decorated, dark wood traditional dining room. Ngon is open for breakfast, lunch and dinner with main courses ranging from VND 120,000 to VND340,000 (US$6.84-19.40). Next door is a slightly funkier and less formal Japanese restaurant where the staff are all smiles, the sashimi is fresh and the menu is extensive and well priced. Only a handful of items on the twelve-page menu run over VND100,000 ($5.7). Of the Asian options, however, it’s the Chaba Thai Restaurant that has people talking. The soups, curries, vegetables and desserts are purported to be the best in town. The Villa Romain Restaurant beneath the hotel offers fine Italian dining with views across the lawn to the river. Upstairs, the hotel rooms are spacious with wooden floors, there are terraced areas and yet another lovely pool. The traditional water puppetry show, held three times per week, is well worth a visit by itself. Thao Dien Village is an antidote to the hectic city life and if you’re in need of a getaway, but short on time, schedule a day of two at the An Phu Hotel. Reported by Thuy Nhien

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Early birds at the Hanoi tax office arrive to get a slot number for submitting applications for the permanent tax code. The Personal Income Tax Law will take effect next Thursday as scheduled but the Party Politburo will take the final decision on how it will be enforced, the vice speaker of the Vietnamese parliament said Saturday.

There have been calls for deferment of the law because of its possible impacts in the context of an economic slowdown when the need of the government is to stimulate investment and boost consumer spending. The law stipulates that the taxable income threshold is VND4 million ($238) monthly for both locals and foreigners working in Vietnam, with taxpayers allowed deductions of VND1.6 million (US$95) for each dependent. National Assembly (NA) deputy chairman Nguyen Duc Kien said that the government and the NA would refer three proposals on implementing the law to the Politburo, the decision-making committee of the Communist Party, to make a final decision. Under the first proposal, enforcement of the law will be postponed until July 2009 or January 2010. During that time, the ordinance on high-income people would still take effect but grant a 30 percent reduction. Under the ordinance, people whose monthly income exceeds VND5 million have to pay income tax without any deduction for dependents. Under the second proposal, a one-year waiver will be granted for incomes on capital gains and stock market transactions as well as those on the transfer of contributed capital and interest received on loans. A 30 percent personal income one-year tax cut for households and individuals who had been subjected to the corporate tax earlier is also included in this proposal. The third proposal made by the NA has all taxpayers having their tax payment deferred until next October when the NA convenes its year-end session, for further decisions. But the NA Standing Committee unanimously decided Saturday that the Personal Income Tax law would take effect on January 1, 2009 as approved at its plenary session in November last year. Tong Thi Phong, another NA deputy chair, also said it was unnecessary to convene an extraordinary session to decide upon this issue. The five-day session of the NA Standing Committee wrapped up Saturday in Hanoi. Rush for tax code applications By 4 a.m. on Friday, people were already queuing up at the Hanoi tax office, braving the chilly weather to submit applications to obtain tax codes. Nguyen Thanh Loc, an employee of a Hanoi-based transport and forwarding company, said he had to get up half an hour earlier so that he could be the first to hand in the applications for his firm. To his chagrin, however, he received slot number 28, meaning he could have to wait until the afternoon to have the applications processed. Pham The Dung, who arrived at the tax agency on behalf of an animal feed company, said his lot number was 34 despite the fact that he had come at 5a.m. Both Loc and Dung told Thanh Nien they had to come early because they hadn’t been served during the previous days because of the large crowds. Not as lucky as Loc or Dung, Linh, who represents the Hanoi Natural Science University, said she was not expecting her documents to be processed on that day because she arrived at the office only at 7:15 a.m. “I might as well come tomorrow,” Linh said. Every organization or company is required to hand in their applications by the end of this month so that their personnel are granted a permanent tax code. Each organization has deputed its representatives to carry hundreds of documents to the tax agency where the personnel are understaffed, leading to an overload. Many people have opted to come very early to pick up their slot numbers. Thanh Nien found a person at 3:30 a.m. on Thursday. But many people have complained about the way the Hanoi tax agency has handled their applications, saying it had used only two out of 10 counters to receive them. Only 32 firms were able to submit their documentation in a morning session, they said. Thanh Nien found that there was considerable pushing and shoving among applicants to get to the counter early. The tax office was asking applicants to start from scratch the next day if their paperwork was not accepted within the day, said Nguyen Xuan Hoang, an Amway company employee. Many people have resorted to staying in the queue no matter how hungry and thirsty they were, applicants said. Thanh Nien could not contact senior officials of the Hanoi tax office on Friday for a comment. Reported by Thanh Nien staff

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An American-Korean consulting team signed Friday a nearly-US$6-million contract with the Vietnamese government to develop a master construction plan for the capital city of Hanoi to 2030, with a vision to 2050.

The team, which comprises experts from the US Perkins Eastman and Korea’s Posco E&C and Jina, is expected to submit their draft plan to Prime Minister Nguyen Tan Dung for approval in June 2010 at the latest. They promised to preserve Hanoi’s 1,000-year-old characteristics in the planning. “The contract is of historical significance as it relates closely to the capital city’s future growth,” Deputy Chairman of Hanoi’s People Committee Phi Thai Binh said at Friday’s signing ceremony. Sub-contractors in the project include the Institute for Architecture, Urban Planning and Rural Development of the Construction Ministry, the Hanoi Construction Planning Institute and other local consultant units. The city officials want Hanoi to develop sustainably as the national political, administrative, cultural, scientific, educational and economic and international trade center in the 21st century. At present, the capital covers a land area of 3,344 square kilometers and has a population of more than six million people. Source: VNA

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The government promised Wednesday to spend around US$1 billion to spur investment and consumption and said it wants to lower taxes to help businesses as it seeks to fend off an economic slowdown.

The country battled runaway inflation and a widening trade deficit for much of the year by tightening monetary policy and curbing lending, but officials have become increasingly worried that the global credit crisis could drag down growth and have taken their foot off the brake and put it back on the gas pedal. The investment plan, outlined in a report at a cabinet meeting, came one day after the government revealed what will be the central bank’s fourth benchmark interest rate cut in six weeks, to take effect on Friday. “The focus is now on immediate measures to prevent an economic slowdown and a stagnant production and business environment,” the government report quoted Minister of the Government Office Nguyen Xuan Phuc as saying. “The government will set aside around $1 billion to boost investment and consumption,” it said, without giving details of how or when the money would be spent or where it would come from. The government also asked the Ministry of Finance to produce a list of taxes that could be reduced to help businesses. The ministry Wednesday recommended to the government to reduce 30 percent of corporate tax, apparently across the board, in the fourth quarter of this year, and by the same amount just for small and medium companies and companies in difficulties next year. The payment of the remaining amount could be delayed by six to nine months, the proposal said. The corporate tax rate is currently 28 percent and this will be reduced to 25 percent from January 1. The ministry is also considering delaying the imposition of capital gains tax on stock income until late next year to support investors and boost the stock market, Minister Vu Van Ninh told a meeting of financial officials Wednesday. The tax is scheduled to take effect on January 1. The ministry plans to help local companies sell bonds in a bid to reduce their dependence on bank loans as the economy slows and the global credit crisis raises borrowing costs. The ministry said in a statement on its website Wednesday that it would help businesses “increase issuance of corporate bonds instead of obtaining loans from banks.” “This will help companies get money quickly for projects while minimizing lending risk for banks.” Growth vs. inflation Gross domestic product, or the value of all goods and services produced in Vietnam, grew at a rate of 8.48 percent last year, but the latest government estimate for growth this year is 6.7 percent. At the beginning of the year, it expected growth of up to 9 percent. Even though the country saw its 13th consecutive month of double digit inflation last month, with the consumer price index 24.2 percent higher than in November last year, it is no longer the main concern for the government, the report said. It also said the government has lowered its annual inflation forecast to below 21 percent from its previous estimate of 24 percent. The revision, the second in as many weeks, was a result of lower world oil prices and aggressive policies to contain consumer price rises, it said. Lower world oil prices have helped Vietnamese oil product distributors cut fuel prices seven times since early October. Still, the effect of policies to keep the economy on track remains to be seen, given the flood of bad economic news coming from its big trading partners. The report said demand from the US, the EU and Japan for products like clothes and wooden furniture, Vietnam’s key exports, has dropped by up to 30 percent but did not state over what period. “Growth is expected to remain soft, not least because external demand has weakened a great deal, but also because conditions at home have deteriorated given the impact of previous monetary tightening, collapse in equity/property markets and an inflation shock,” HSBC said Wednesday. The Vietnamese stock market has been Asia’s worst performer this year, falling some 60 percent. Banks were loath to lend and with borrowing costs high, companies were unwilling to take on new debt. “Domestic demand has already slowed and will probably weaken more before getting better,” HSBC said. Buy Vietnamese The Ministry of Industry and Trade (MIT) will launch a campaign to encourage people to buy Vietnamese-made goods, the deputy minister said at a press briefing. Le Duong Quang said the campaign is designed to reduce local businesses’ large inventories and make up for lower international demand. Figures from the MIT show that exports in November were worth $4.8 billion, a 4.8 percent decrease from October. Retail spending in the last 11 months reached VND872 trillion ($52 billion), a year-on-year increase of 30.9 percent, according to data from the General Statistics Office. But adjusted for inflation, the increase will be a mere 6.2 percent, the lowest level in the last five years. Growth in consumption, which moved up sharply at the end of previous years, has slowed since September. Month-on-month growth in November was 1.7 percent, compared with 3 percent in October and 3.6 percent in September. The MIT also asked domestic businesses to replace the new-year cash bonus with coupons for Vietnamese-made goods. Source: Agencies

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Nine Vietnamese companies are showcasing their handicraft and textile products at the 28th India International Trade Fair (IITF) in New Delhi. Vietnamese lacquer paintings, woodwork, ceramics and textiles are on display, until November 27. More than 7,000 companies from 38 countries, including China, Japan, Russia, South Africa and Turkey, are participating in the event, which opened Friday. Vietnamese ambassador to India Vu Quang Diem expressed his hope that more Vietnamese companies would participate in events in India to promote the country’s exports and boost economic relations. On the same day, a two-week seminar on biotechnology organized by the International Center for Genetic Engineering and Biotechnology (ICGEB) concluded in the Indian capital. Scientists from ICGEB and other countries including Vietnam, Italy, Romania, Bangladesh, Brazil, Costa Rica and Egypt discussed issues relating to gene alteration technology. ICGEB, a UN scientific study organization, was established in 1987 with 57 official member countries. Source: VNA

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