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City to stabilise prices of essential goods

Bao Viet Nam — Wed, 01 Oct 2008 13:22:16 +0000

HCM CITY — The Department of Industry and Trade (DoIT) and several relevant departments and businesses of HCM City have unveiled a plan to stabilise the prices of essential commodities for the 2008-2010 period and set the policy groundwork for the 2010-2015 period.

The plan is designed to tackle the speculation-based rise of certain essential goods prices, all the while developing retail networks to offer customers the most reasonable prices, according to DoIT.

Under the new guidelines, the city will pick businesses specialising in the production and trade of essential goods to collaborate with the city in planning the production, processing and purchasing of such goods to meet consumer demands and stabilise prices.

Businesses participating in the city’s price stabilisation programme will be eligible for interest-free loans to buy goods for reserve or promote production of daily essentials.

The municipal programme focuses on essential goods including rice, sugar, cooking oil, cattle and poultry meat, processed foods, eggs, and preventative and curative medicines.

Moreover, the city will also co-operate with various departments and enterprises to guarantee the supply and stable prices of 11 commodities deemed essential by the Central Government: gasoline, cement, construction steel, liquified gases, fertiliser, pesticides, veterinary medicines, salt, milk, railway transport and animal feed.

DoIT officials say the project will contribute to Government efforts to curb inflation, and demonstrates the State’s role in taking care of residents’ lives.

The People’s Committee of the city will review the plan sometime this month. —

ADB: VN needs to stabilise economy for robust 2010-2011

Viet Nam — Tue, 16 Sep 2008 09:37:34 +0000

The Asian Development Bank (ADB) said on September 16 that Vietnam needs to continue measures to stabilise its economy, even to slow growth in 2009 to be better prepared to resume strong economic growth in 2010-2011.

This was announced following concerns that Vietnam may be tempted to loosen its fiscal and monetary policies and boost public investment in an effort to spur the economic growth rate again as price pressures are projected to ease, along with a slowdown in growth and a narrower trade deficit.

“It should be clearly realised that there is a trade-off between the growth target for next year and the growth potential for ensuing years. Vietnam should be patient in shifting its policies towards economic recovery,” ADB Country Director for Vietnam Ayumi Konishi said at the launch of the Asian Development Outlook 2008 Update (ADO Update).

He added that targeting a lower growth rate of 6% next year, as compared to the projected 2008 growth of 6.5%, will provide more solid foundation for economic growth in 2010 onwards. However, he warned that although there have been the improvement in economic statistics in recent months, “in absolute terms, inflation and the trade deficit are still very high and it will still take some more time to firmly stalibise the situation.”

According to the ADO Update, inflation rates in 2008 and 2009 are estimated at 25 percent and 17,5 percent, respectively, while the current account deficit for this year is now seen at 13.5 percent of GDP and for 2009, 7 percent GDP.

The report noted that the State Bank of Vietnam needs to continue strenthening its prudential supervision of banks and – should any bank become financially distressed – act swiftly to prevent a systemic banking crisis.

Besides, efforts should be made to overcome challenges such as lack of availability of timely key data, temptation to loosen monetary and fiscal policies prematurely and weakness in capital absorptive capacity, said Economist, Governance and Public Sector Reform Officer of ADB Dao Viet Dung.
Despite near-term risks and challenges, “we strongly believe that Vietnam’s medium to long-term economic prospects remain good” with moderate external debt burden, rising foreign direct investment (FDI) inflow, and significant growth potential, ADB Country Director Ayumi Konishi said. –

State Bank of Viet Nam helps stabilise economy

Bao Viet Nam — Tue, 12 Aug 2008 11:15:31 +0000

During yesterday’s online interview on the Government’s website, central bank Governor Nguyen Van Giau re-affirmed the capability of the State Bank of Viet Nam (SBV) to effectively stabilise the foreign exchange (FX) market whenever the market showed an unbalanced supply-demand ratio due to sentiment and speculation.

What is the central bank’s master plan to balance the target of controlling inflation and the target of ensuring sufficient capital for enterprises?

Governor of the State Bank of Viet Nam Nguyen Van Giau. — VNA/VNS Photo The Anh

Facing the global economic bailout and the complicated changes in the domestic economy since early this year, the Government is determined to achieve three major targets: control inflation, stabilise the macro-economy, and ensure social security and stable development. Of these, controlling inflation is the first priority.

The SBV has simultaneously implemented five measures to manage the monetary market and banking system.

First, the SBV has withdrawn money from circulation, increased compulsory reserves in commercial banks, issued compulsory treasury notes, and controlled the growth of total payment methods and credit. All these measures are aimed at curbing total demand and consumer prices.

Second, the central bank has renewed the interest-rate management mechanism, and increased the prime interest rate, the refinancing rate and the discount rate. This was to create a reasonable interest rate corridor for outstanding loan growth, and to pursue positive interest rates [deposit rates higher than inflation rates].

Third, the central bank has managed a flexible exchange rate policy. The SBV has widened the daily trading band on inter-bank market to +/-2 per cent from +/-1 per cent against the interbank rate. The central bank also co-operated with authorities to check and stop speculation and illegal trading on foreign currencies in order to stabilise the FX market.

Fourth, the central bank raised support for commercial banks via open market operations and other refinancing methods. Capital was prioritised for manufacturing, export, major national economic projects, agriculture and rural development.

Fifth, the SBV has improved monitoring of the monetary market and credit institutions, and created a modern information system. So far, credit institutions are safe with capital adequacy ratio (CAR) higher than the regulated level.

The Prime Minister has emphasised that the central bank is the major tool for curbing inflation. So is it necessary to improve the central bank’s role?

As a state administrator on money and the banking system, the central bank plays an important role in stabilising currency values, controlling inflation, and boosting socio-economic development under a socialist orientation.

In Decision No 112/2006/QD-TTg, the Government ratified the master plan for developing Viet Nam’s Banking system towards 2010 and 2020. The project is designed to develop the central bank into a modern one in accordance with the standards of other regional central banks.

In the near future, the SBV will continue to perfect the legal framework of the banking business.

As a rule, demand on goods imports risen sharply in the latter part of the year, which results in high demand for foreign currency. How does the SBV plan to stabilise the exchange rate at the end of this year?

The ongoing measures of the Government to control the trade deficit lead us to estimate that by the end of this year, it will be less than US$20 billion. At this level, foreign reserves from many sources are sufficient to compensate for the trade deficit.

Moreover, remittance by the end of the year is expected to increase. Foreign direct investment disbursement and revenue from exports are also expected to move up. Thus, supply of foreign currencies is predicted to be in surplus and the USD/VND exchange rate is expected to be stable.

In case the market shows an unbalanced supply-demand due to sentiment or speculation, the central bank will be able to quickly return it to the right track.

In the coming months, the SBV will continue to flexibly manage the exchange rate policy based on market realities so as to encourage exports and limit imports.

Many experts assume that granting licences to set up new banks is rather ‘open’, particularly for a small economy like Viet Nam. What is the opinion of the SBV in this issue?

Implementing the government’s order, the central bank had stopped granting licences to new banks in 1996 to strengthen the existing banking system. However, pursuant of World Trade Organisation commitments, after 2006, Viet Nam was not be able to refuse licences to new banks.

Under international regulations, the SBV issued Decision No 24/2007/QD-NHNN on June 7, 2007 regulating the setting up of new banks. In the first seven months of this year, the SBV granted operating licences to a mere two banks -- LienViet Bank and TienPhong Bank.

Facing monetary difficulties in local and global markets, the Government has ordered the central bank to adjust the criteria for setting up joint stock commercial banks. As this is still ongoing, the central bank has paused granting licences to new banks.

The criteria will be changed with a view to ensuring that any new bank must have a strong financial capacity and be able to compete in this era of international economic integration. —

PM urges all to help stabilise the economy

Bao Viet Nam — Sun, 10 Aug 2008 17:10:18 +0000

Ha Noi — Prime Minister Nguyen Tan Dung has advised Vietnamese officials to follow President Ho Chi Minh’s advice on practising thrift and administrative reform.

Dung also said that if each citizen practised thrift, there was no doubt they would also contribute to stabilising the economy.

The Prime Minister was speaking to participants at a two-day meeting on socio-economic development organised by the Ministry of Home Affairs here yesterday,

Dung said the campaign to follow President Ho’s words on being efficient was an opportunity for local leaders to update their information on Viet Nam and help them perform their duties more efficiently.

He said the Government’s efforts to curb inflation had been successful. The consumer price index (CPI) had slowed, while the financial and monetary market had basically been stabilised.

Even the securities market, which had been through many ups and downs, had shown signs of recovery.

"In the first six months of the year, our economic growth rate was 6.5 per cent and is forecast to continue to increase in the second half," Dung told the meeting.

He said output of this year’s winter-spring rice harvest was aout 18 million tonnes, an increase of one tonne on the same period last year.

Dung said foreign direct investment (FDI) had increased rapidly and had reached the remarkable figure of US$45.2 billion so far this year.

In the same period, export turnover was nearly $36.9 billion, an increase of 37.7 per cent compared with the same period last year.

And, according to the Prime Minister, by applying resolute measures, the high import surplus has been checked initially.

"As a result, the CPI for July increased 1.13 per cent compared with that of June – the lowest since January," Dung said.

"However, the country is faced with many difficulties. If each citizen practices thrift, there is no doubt they will contribute to stabilising the economy," Dung added.

He asked all localities to continue implementing the Government’s eight measures to curb inflation.

Dung called on them to ensure capital for key projects, to monitor prices to avoid speculation and to step up activities against smuggling.

During the two-day training, scheduled to end today, participants are being informed about the implementation of policies to regulate the macro-economy, manage and develop the State budget, and ensure stable socio-economic development.

They will also be briefed on the advantages and challenges the country has faced since joining the World Trade Organisation nearly two years ago, on issues relating to the management of land, resources and the environment and on the management of economic security, anti-corruption measures and the maintenance of social order and security. —

Foreign experts: inner strength helps Vietnam stabilise economy

Bao Viet Nam — Tue, 01 Jul 2008 17:13:41 +0000

Vietnam’s inner strength and suitable policies will enable the country to stabilise the macro-economy, said participants to the Global Meeting of the Emerging Markets Forum 2008 in Hanoi on July 1.

The World Bank said it saw signs that the Vietnamese Government’s solution package to stabilise the national economy had taken effects, citing the slow-down in the price hike of non-food products in June and in monthly import growth rate as well.

The Vietnamese Government has revised this year’s GDP growth rate of 8.5-9 percent down to 7 percent in addition to cutting public spendings, postponing ineffective State-funded projects and new projects and applying a more flexible exchange rate.

Thirachai Phuvanatnaranubala, Secretary-general of the Securities and Exchange Commission of Thailand , agreed that the Vietnamese Government’s policies are on the right track.

“I have a strong confidence in the country and the measures introduced by the Vietnamese Government are already the right methods,” Thirachai told a Vietnam News Agency reporter on the sidelines of the meeting.

Thirachai said his confidence is based on the Vietnamese authorities’ eagerness to learn from international best practice and introduce international standards into the local market.

According to Bimal Jalan, former Governor of the Reserve Bank of India , Vietnam’s attraction of foreign investment and acceleration of production will help the country overcome current difficulties, including high inflation and trade deficit.

In the first six months of the year, Vietnam attracted 31.6 billion USD in foreign direct investment, 3.7 times higher than the same period last year. The country’s industrial production value rose 16.5 percent in the period.

However, Colin Grassie, Chief Executive of the Asia-Pacific region of Deutsche Bank, warned of a decline in emerging markets, including Vietnam, in the medium term, due to the effects of surging prices around the globe at present.

READERS COMMENTS on DARFUR CRISIS

werievents — Thu, 27 Mar 2008 03:29:40 +0000

Clean fresh water and humility

COMMENTS ON SUDAN CRISIS

h1>Make Sudan an Offer It Can’t Refuse

As Sudan brazenly defies the world’s wishes, and the death toll closes upon half a million, the pity is that the people of Darfur can in fact be saved.
This is the type of military logic that got the United States in trouble in Iraq. Sure, the projection of United States air power could destroy the Sudanese military, and perhaps even lead to the collapse of the regime. But what would happen after that? Who and what would deal with the potential anarchy?

— Tony Waters, Germany

When, oh when, is the United States going to take its self righteousness about which moral problem, as they define it, they choose to "ameliorate" off the table. And which is the next "dictator" or country the US chooses to "stabilise".

The rest of the world generally cringes when the US "helps".

The world would be much better off if you take your money, your morals, your troops and your helpers home and stay there. Your own economy might be better too.

Ask Vietnam, Cambodia, Thailand, Guatemala, Nicaraugua, Salvador, Panama, Chile, Argentina, Peru, Ecuador, Salvador, Iraq, etc. and a host of others who have refugees in the hundreds of thousands as a result of the internal effects after the US "helps" or invades the country concerned... and to put it politely, the opinions are less than satisfactory.

Try doing nothing for a change. It may help.

TP. Whasington