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Vietnam Ends WTO Negotiations
with Three Latin American Countries
Vietnam and Argentina signed an agreement on concluding their bilateral negotiations on the former's bid to join in the World Trade Organization (WTO) before President Tran Duc Luong left Buenos Aires yesterday. This was the third accord on the matter when Luong made his trip to three Latin American nations from November 16-23. The first two were signed with Brazil and Chile. While staying in Argentina, Luong and his host President Nestor Kirchner agreed to push up research and development (R&D) on agriculture, biotechnology, IT and the peace use of nuclear energy among others. They pledged to further increase bilateral trade while working for new opportunities for businesses from the two countries. They also expected the two governments would successfully hold the second bilateral economic consultations next year. Luong held talks with President of Senate Daniel Scioli and head of the Lower Congress Eduardo Camano. Vietnam and Argentina posted their two-way trade value at $152.12 million last year while the number was reported at $75.02 million in the first eight months in 2004. Around 40 local entrepreneurs accompanied Luong on the eight-day visit. They focused on industries such as oil and gas, electronics, telecommunications, garment and textile, industrial construction, plastic, medicine, rubber, cement, fruits and vegetables, rice, fertilizer and seafood. This is the third time the president has gone abroad this year. He made his first trip to Bangladesh and Pakistan in March and the second to Russia, Hungary and the UK in May. (The People Nov 24 p1, Pioneer Nov 24 p13, Vietnam Economic Times Nov 24 p1, Youth Nov 24 p16) Vietnam, Singapore Start WTO Negotiations Today Vietnam and Singapore will start their negotiations today on the former's accession to gain World Trade Organization's (WTO) membership, according to a source from the Vietnam Ministry of Trade (MoT). A member of the Vietnamese delegation revealed that the talks would focus on three major fields of service, mostly financial and banking systems, the open market for goods and the legal system. The talks are scheduled to end tomorrow. Vietnam has yet to reveal complete statistics on the number of countries that it has concluded bilateral negotiations on its accession to the WTO with. Vietnam has finished its negotiations with the EU, and several developing countries Brazil, Chile, Argentina and Cuba since the beginning of this year. Vietnam and the US, a major partner in the negotiation process to the WTO, however, did not reach an agreement on the matter during the first negotiation talks held between the two countries on October 25-28. The country was in the same situation with China. To date, Vietnam has completed eight rounds of negotiations on its accession to the global trade body. It must sit through ten rounds of negotiations and revise at least 30 laws and ordinances before it can be admitted to the organization. (Youth Nov 24 p16)
Overseas Remittance to Vietnam
Expected to Hit Record in 2004
Total money repatriated by overseas Vietnamese (Viet Kieu) will reach around $3.1 billion in 2004 after a sum of around $2.9 billion sent to the country so far this year, compared with a total of $2.7 billion in 2003. Of the total, money repatriated by Vietnamese living and working abroad to Ho Chi Minh City, Vietnam's economic hub, will be around $1.85 billion, up 11% on-year (via EAB Bank $550 million, Sacombank $450 million and Eximbank $250-280 million), compared with $1.66 billion last year. In January-September 2004, the city receives $1.355 billion of overseas remittances. The rise is very significant, especially when compared to foreign direct investment into Vietnam, a major source of investment, which reached about $3.5 billion in the first 10 months of this year, commented banking experts. In 1991, only $35 million was sent to Vietnam in the form of remittances, according to the State Bank of Vietnam (SBV). But 10 years later, the amount had shot up to a new record of $2.7 billion last year. Most of the remittance money comes from the US, Australia, Germany and other industrialized countries. According to unofficial figures, around 70% of the money was transferred to Vietnam via Vietnamese commercial banks. The fact that the SBV now permits Vietnamese residents to receive remittances from their overseas relatives in foreign currencies or gold is seen as a turning point in helping commercial banks gain dominance over other money-transfer systems in the market, said banking experts. For about 20 money-transfer agents in Vietnam, commercial banks have become really tough competitors. "Although we offer home delivery services just like banks, remittance money transferred via our agents have not risen," said Nguyen Huu Hoang, deputy director of a money-transfer firm in Ho Chi Minh City. The commercial banks' advantage in the remittance-transfer market is their low transfer cost and available sources of foreign currencies, Mr. Hoang noted. Furthermore, domestic commercial banks also have good relations with large international banks like Deutsche Bank Trust Company Americas, Standard Chartered Bank, H.O. London, Citibank, HSBC and ANZ, he added. For example, the Eastern Asia Commercial Joint Stock Bank (EAB) has established ties with 35 foreign money-transfer companies, while the Saigon-Thuong Tin Commercial Joint-stock Bank (Sacombank) has formed partnerships with up to 4,700 agents in nearly 80 countries. This type of co-operation helps domestic banks transfer money from other countries in just one day, Mr. Hoang stressed. There are about 2.7 million Vietnamese people living in nearly 90 countries and territories, 80% of them residing in developed countries. Countries having a large number of Viet Kieu include the US, France, Canada, Australia, Russia and the former East European communist countries. In 1999, the Vietnamese Government canceled all taxes on remittances to encourage such inflows, which are considered an importance source of hard currency for the country. (Youth Nov 24 p11, Young People Nov 24, Liberated Saigon Nov 17 p1) Vietnam's Investment Incentives Most Complicated in Asia Vietnam should simplify its system of investment incentives, which is considered the most complicated in Asia, to attract more foreign direct investment (FDI), according to a recent report on investment incentives in Vietnam. The report was prepared by the Ministry of Planning & Investment, the Mekong Project Development Facility (MPDF), the International Finance Company and the World Bank under the request of the Government of Vietnam to prepare for the compilation of the Joint Investment Law. "The investment incentive mechanism of Vietnam has many defects," said MPDF expert Ross Chapman, adding that the regulations on the tax-free and tax-reduction periods for the investors are unclear. Many investors do not venture to ask for investment incentives, although they are eligible for the incentives. The high procedure costs and brokerage commissions often reduce the benefits the investors may get from the incentives. "Many investors refuse to apply for investment incentives due to this financial issue," said Chapman. Moreover, the investment incentives are often accompanied by inconsistent requirements. "To make the investment incentives effective, they should be clear and simple, and the results of the investment incentives should be transparent and predictable," said Patricia Dodson, Second Secretary of the Australian Embassy in Vietnam. According to the Ministry of Planning & Investment, 80% of the FDI projects in Vietnam are located in industrial parks, which offer their own investment incentives. The remaining 20% are located outside and are subject to overlapping investment incentives offered by local authorities. Explaining the situation, Dodson suggests that Vietnam uses too many investment incentives for different purposes at the same time. "However, this is understandable because the country is turning from a centrally planning economy into a market one. (VNExpress.net Nov 23) Int'l Donors Vow to Maintain ODA Commitment for Vietnam Next Year The 12th Consultative Group (CG) Meeting will be held on December 1-2 in Hanoi, with official development assistance (ODA) commitment from around 50 bilateral and multilateral international donors to Vietnam in 2005 expected at the same level as this year. The meeting will discuss the achievements, challenges and prerequisites for socio-economic development for the 2006-2010 period, the strengthening of Vietnam's competitiveness and integration into the global economy, and further improvement of ODA effectiveness, looking forward to the second High Level Forum on ODA harmonisation. Regarding the ODA commitment by the donors to Vietnam which will be given at the meeting, Klaus Rohland, World Bank Vietnam Country Director forecasted the same level as its was seen in last year. "We cannot think of a sharp higher level of ODA commitment, as some of the donors are facing financial difficulties. We can hope for a sum that is equal to last year's level or a bit higher," he said. At the 11th CG meeting, the donor countries and international development organisations indicated that $2.834 billion would be allocated in support of Vietnam's poverty reduction and development agenda. According to the government, the country has so far this year signed deals to disburse about $1.4 billion in ODA including $1.2 billion in loans and $200 million in grants. Last year Vietnam received $1.72 billion in ODA funds. The exact figure of ODA commitment from foreign donors in 2005 is expected to be available at the end of the two-day meeting. Vietnam is expected to become a member of World Trade Organization by the end of 2005, when the country will face many challenges. Therefore, donors have agreed to help the country better prepare for the future," Rohland said. However, donors now estimate that in a little over a decade, Vietnam will no longer be eligible to receive ODA, he said. Mr. Rohland saw a considerable progress in ODA disbursement, which increased to 18% of the committed capital in 2003 from 13% in 2002. Nevertheless, he pointed out that complicated procedures and institutionalised corruption have harried the disbursement process. For example, a project planned for a five-year operating cycle will in reality take an extra 18 months to negotiate due to red tape and corrupt practices in Vietnam. Another project may expect two years preparatory work, but in Vietnam, three years are needed for the same task, Mr Rohland said. However, he said the Vietnamese government has shown determination to resolve such problems. In an effort to improve the situation, Decree 17 on ODA capital management is being revised, and should be issued early next year. The revised regulations will ensure more power is given to government offices in order to simplify administrative procedures. Corruption will also be a hot potato on the CG meeting agenda. The Government is developing what it calls 'a master plan' to eliminate corruption, as it is now aware of the importance of the work in ensuring stable economic growth. Vietnam is now in a better position to fight corruption than it was 50 years ago, he said. He was unable to give any concrete figures on the seriousness of corruption in Vietnam, since no specific survey could ever touch the matter. Mr. Rohland said it is time for the government to address the problem seriously. Corruption, like cancer, is more easily treated if it is discovered soon, he said. A chapter concerning corruption in Vietnam will be recorded in the 'Vietnam Development Report 2005 - Governance', which will be launched in several days. Besides that, two information reports to CG, 'Taking Stock' and 'Towards 2010 - a partnership report' will also be available at the same time. Within the framework of the CG meeting, the Vietnam Business Forum (VBF) will be held in Hanoi on November 29 by the WB private sector arm, the International Finance Corporation (IFC) and the Ministry of Planning and Investment (MPI). Vietnam received aid commitments of some $30 billion over the past 11 years with the three largest donors being the Japan Bank for International Cooperation, the World Bank and the Asian Development Bank, who account for more than 70% of the total foreign assistance this year. (VNA Nov 24, VietNamNet Nov 24, VoV Nov 24, Labor Nov 24 p4, Young People Nov 23 p2, Vietnam Economic Times Nov 23 p1, Vietnam Agriculture |
