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Vinashin committee works on restructuring group

In Uncategorized on August 18, 2010 at 3:23 pm




Vinashin committee works on restructuring group


QĐND – Wednesday, August 18, 2010, 21:12 (GMT+7)


Permanent Deputy Prime Minister Nguyen Sinh Hung has reiterated the need to consolidate the Vietnam Shipbuilding Industry Group (Vinashin)’s operations to help the group stabilise and develop into the key component of the country’s shipbuilding industry. 

Mr. Hung, who is also head of the steering committee for the restructuring of Vinashin Group, made the statement at a working session in Hanoi on August 17. 


The steering committee should make accurate assessments of the operational capacity of Vinashin’s holding company, subsidiary companies, joint ventures and investment projects as well as the group’s debts to find out the best solutions for restructuring, he said. 


In an instruction signed on August 16, Prime Minister Nguyen Tan Dung required that any development plan for Vinashin should focus on three main operations, which are shipbuilding and repair, support industries for shipbuilding and training a skilled workforce in this field. 


He asked the Ministry of Transport to present a plan on restructuring the group to him within the fourth quarter of this year. 


The PM assigned the Ministry of Finance to be responsible for dealing with the group’s debts and devising schemes to ensure capital sources for production. 


He requested Vinashin to assess the operational capacity of the holding company, subsidiary companies, joint ventures and investment projects and its finance, asset deficiency and debts. 


He also asked the group to focus its resources on implementing its production plan and existing shipbuilding contracts, devise a scheme on loan repayment to credit organisations and review the group’s investment projects in the mentioned-above fields and sell or equitise the remaining fields within the law.

Source: VOV

Source: QDND

Political Bureau urges restructuring of Vinashin

In Uncategorized on August 9, 2010 at 3:20 pm




Political Bureau urges restructuring of Vinashin


QĐND – Monday, August 09, 2010, 21:37 (GMT+7)


The Political Bureau of the Communist Party of Vietnam Central Committee has decided to set up a steering committee in charge of assisting the country’s largest shipbuilder Vinashin to settle its operation and financial problems as soon as possible.

This was part of the Political Bureau’s conclusion on Vinashin on July 31 after hearing the Party Delegation of the Government reporting the group’s situation and opinions from the Party Central Committee Office, the Party Central Committee’s Inspection Commission, the National Assembly’s Economics Committee, the Ministry of Public Security and other central ministries and agencies.


The Steering Committee consisting of representatives of relevant ministries, sectors, branches of the Government and a number of Party units, is headed by Nguyen Sinh Hung, a Politburo member and Permanent Deputy Prime Minister.


It is tasked to work out policies and measures to help Vinashin develop its business line after getting stabilised.


In the conclusion, the Political Bureau recognised the wide-ranging and fast developments Vinashin has made since its foundation in 1996.


It cited the group’s important infrastructural facilities that enabled the ship building industry to grow at an annual average growth rate of 35-40 percent during 1996-2006 and its contingent of 70,000 experts and technicians capable of building various types of ships for economic, defence, security purposes and for export.


However, Vinashin is currently facing a lot of difficulties and due to management, weaknesses and some serious wrongdoings, the Political Bureau said.


It referred to the group’s reckless expansion and scattering investment, financial problems that made it end up on the brink of bankruptcy and come to a standstill in business and its investment projects, as well as its internal troubles that caused 17,000 of its workforce to leave the group.


The Political Bureau pointed out objective and subjective reasons behind the Vinashin case, underscoring subjective causes as the main ones.


It said direct responsibility in the case must be held by the group’s Management Board and its leadership, including the Chairman of the Management Board while laying stress on the lack of responsibilities among number of concerned State management agencies at the central and grassroots levels.


To remedy Vinashin’s weaknesses and fix its wrongdoings, the Political Bureau assigned the Party Delegation of the Government to take the lead in instructing such works as follows:


– Promoting what Vinashin has achieved in the past years, continuing to affirm the mechanical engineering industry as the major sector in the national strategy on industrialisation and modernisation and the ship building and repairing industry as the spearhead sector for the development of maritime economy and the country’s sea strategy through 2020 and the following years.


– Quickly restructuring Vinashin to stabilize its production and business and step by step strengthening its trademark to prevent it from going bankruptcy and collapsing as it will have adverse effects on the ship building industry’s development confidence rate and international debt payment as well as the country’s investment environment. 


– Urgently re-evaluating the performance of Vinashin’s parent company, its affiliates, integrated companies and invested projects in an accurate, objective, and honest manner to take specific and appropriate rearrangements.


In dealing with Vinashin’s debts and its increase of charter capital, especially those relating to the State budget, the Political Bureau asked the Government to work out feasible measures in line with Vietnam’s laws and international rules.


It asked the Government to ensure the harmony of interests of concerned parties and not to cause difficulties for other groups, corporations as well as credit organisations.


Besides, the Political Bureau requested that other economic groups and corporations are examined, inspected and evaluated accurately and their financial situation and production and business performance are disclosed publicly and transparently. 


It also urged the Government to promptly keep a close watch on these groups and corporations when they expand their investment into other fields out of their main business line.

Source: VOV

Source: QDND

Restructuring the national economy

In Uncategorized on July 31, 2010 at 7:18 pm




Restructuring the national economy


QĐND – Saturday, July 31, 2010, 21:30 (GMT+7)

Restructuring the national economy will play a decisive role in helping Vietnam achieve steady and sustainable growth, says Prime Minister Nguyen Tan Dung.


According to economists, restructuring the product categories should focus on giving priority to core products and avoiding failures made by other sectors, such as the automobile industry. The lack of viable support industries has led to a low percentage of domestic inputs. Vietnam does not yet have good support industries for its key export items, such as garments and textiles. The country needs to develop support industries for core products in the future.


Currently, the industrial sector does not have close links with the agricultural sector. Vietnam has to import most inputs for the agricultural sector, such as agricultural materials and machines. This is a huge loss for the industrial sector as it cannot build large rural areas into its domestic consumption market.


Regarding the agricultural sector’s outputs, Dr. Dang Kim Son, Head of the Institute of Strategy and Policy for Agriculture and Rural Development, says that half of Vietnam’s annual agricultural produce is exported but about 90 percent of them are raw products without trademarks. If the country applies new technology for processing coffee, rice and rubber, it will create a modern processing industry and agricultural outputs will become a positive factor in boosting the local industrial sector, he says.


For many years, Vietnam has made full use of its human resources to achieve a high economic growth rate but its Incremental Capital Output Ratio (ICOR) remains low in comparison with other developing countries in the region.


Dr. Nguyen Duc Thanh, Director of the Vietnam Centre for Economics and Policy Research (VEPR) under the University of Economics – Vietnam National University, says it is essential to mobilise different kinds of local resources to full advantage. However, if the country does not have strict mangement and inspection mechanisms, its national resourses will be wasted.


Mr. Thanh cites the link between industrial zones in Hanoi and those in Bac Ninh as a case in ppint. While Bac Ninh province has spent a lot of money on upgrading infrastructure, Hanoi is still reluctant to invest in major infrastructure projects for fear that investors will move to Bac Ninh on account of lower input costs there. Long An province and Ho Chi Minh City also face a similar situation. Other typical examples of wasting national resources could be seen in a number of provinces and cities which focus on building seaports and airports, as well as in the steel and cement sectors.


Vu Thanh Tu Anh, Director of the Fulbright Economics Teaching Programme, argues the inappropriate distribution of resources in different sectors in recent years has resulted in an unbalanced economy.


According to latest statistic figures the state owned economic sector contributes 34 percent of the GDP and makes up more than 33 percent of the total capital for social investment while using only 9 percent of the country’s total workforce. In the private sector these figures are 47 percent of the GDP, 32 percent of the total capital for social investment and 87 percent of the workforce.


The state-owned economic sector has enjoyed preferential treatment in terms of capital and real estate but its performance is remarkably inefficient by comparision with the private sector. Therefore, latter should be paid more attention.


In recent years, foreign direct investment (FDI) has been a major factor behind Vietnam’s economic development, however, the country should work out a suitable strategy to attract more FDI and make full use of it.


According to Nguyen Mai, Chairman of the Foreign Invested Business Association, Vietnam has so far disbursed US$60 billion of its FDI capital but the country only receives about US$1.5 billion from these businesses. The figure is too small in comparision with the priorities of land and natural resources that the FDI businesses receive. Another thing to be considered is that the FDI investors concentrate too much on land and real estate.


Former Deputy Prime Minister Vu Khoan stresses that the country’s economy is facing 3 inter-connected objectives. In the short run, Vietnam has cope with the impact of the global financial crisis and economic recession. In the middle-term, the country should catch up with new opportunities and deal with the challenges of the post-crisis period, while in the long run Vietnam should prepare for a 10-year socio-economic development strategy for 2011-2020.


The country needs to clarify the details of economic restructuring and focus on the quality of development. To support economic restructuring through renovating of development models, Vietnam should adjust its strategy to attract foreign investment giving priority to manufacturing, support industries, and high value added products as well as promoting cooperation between domestic businesses and foreign investors.


The Head of the Vietnam Economic Institution, Tran Dinh Thien, says that the country should basically change its domestic production structure to focus on higher added value industries. There should be a long term strategy of 5-10 years to form a national economic structure with such industries as its backbone. There should also be a transition period (2011-2013) before changing to the new development model. The renovation should occur in every aspect of the economy.


The premises for economic restructuring should also be considered, including forming a comprehensive mechanism for the market economy in line with administrative reform; developing the technology market; creating a fair competitive environment for all economic sectors; abolishing monopolies and developing high quality human resources.


The country’s future development should create a breakthrough in its productivity supported by skills and technology. Restructuring must be undertaken systematically and receive the support of the whole society.


Source: VOV


Source: QDND

PM urges Nghe An to enhance economic restructuring

In Uncategorized on July 5, 2010 at 4:09 pm




PM urges Nghe An to enhance economic restructuring


QĐND – Monday, July 05, 2010, 21:27 (GMT+7)

Agricultural restructuring, particularly the transforming of ineffective agricultural land will help create more steady jobs for local people, said Prime Minister Nguyen Tan Dung during his working visit to the central province of Nghe An on July 5.


He made a fact-finding tour of Nghe An dairy farming project in Nghia Dan district, which was licensed in 2009. The US$350 million project, which takes the province 4 years to complete, is designed to raise 45,000 New Zealand dairy cows and supply 500 tonnes of sterilized fresh milk per day.


To boost socio-economic development, Nghe An must utilize the potential and advantages of forest and agricultural land and minerals while developing human resources, sea ports and airports and attractive policies for more investment, said Mr Dung.


He urged the province to expand breeding and farming models by applying advanced technology to provide highly valued clean agricultural products. He requested it to streamline administrative procedures to encourage all economic sectors into investment and development with a key focus on economic zones, transport infrastructure, and human resource development.


The Government leader asked the province to make drastic changes in socio-economic development in disadvantaged districts, successfully organise Party congresses at all levels and fulfill all the targets set for this year.


On the occasion, Mr Dung visited Kim Lien relic site, and High Command Military Zone No 4, which was praised for having contributed to the country’s socio-economic achievements. He asked cadres and soldiers from the military zone to make a greater effort to build a pure and strong military unit, cope with natural disasters, ensure political security and boost production in order to improve material and spiritual lives.


Source: VOV


Source: QDND

Oil and gas group steps up restructuring plans

In Uncategorized on June 18, 2010 at 8:36 am




Oil and gas group steps up restructuring plans


QĐND – Thursday, June 17, 2010, 20:59 (GMT+7)

The Vietnam National Oil and Gas Group (PVN) is boosting its restructuring to increase its competitiveness in the market while limiting any competition from its subsidiaries. 


According to the head of PVN’s Board of Internal Controllers, Phan Thi Hoa, PVN will only hold 51 percent of the shares of its subsidiary companies that produce strategic products which can affect the national economy.


The group will also reduce its holdings in the PetroVietnam Construction Joint Stock Corporation and the Drilling Mud Joint Stock Corporation to 36 percent, said Hoa. PVN also plans to cut its capital stake in the PetroVietnam Insurance Joint Stock Corporation to 25 percent by 2015.


Moreover, the group is set to complete its transformation from being a holding company to becoming a single-member limited liability company on July 1 in line with the Business Law.


It also plans to turn the PetroVietnam Gas Corporation and the Petec Trading and Investment Corporation into joint stock companies, finish a project to change the Vietsovpetro Joint Venture’s forms of operation and list the shares of several of its subsidiaries on the stock market.


Under the plans, PVN will gradually curb its external investments and focus more on production, said Hoa.


Source: VNA


Source: QDND

Economic restructuring plan aims for sustainable development

In Uncategorized on April 14, 2010 at 11:32 am

As part of an economic restructuring project for the 2011-2020 period, Vietnam aims to improve its economic competitiveness, develop a sustainable economy, and boost income per capita to US$3,000-3,200.

The objective of the plan, which has been submitted by the Ministry of Planning and Investment to the Government for approval, is aimed at removing obstacles to economic development and enhancing quality, efficiency, competitiveness and value of key products and the economy as a whole.


Weaknesses

Despite positive signs of recovery in the wake of the global economic downturn, the country still faces many socio-economic challenges.

Workers at the HCMC Hi-Tech Park. Experts warn that the proportion of hi-tech products in the total export turnover has almost unchanged in the past ten years, just six percent. (Photo: tinmoi.vn) 

Average annual growth has tended to decline, economic growth is based mainly on exploiting natural resources, and efficiency in use of capital is low as is productivity. Production costs, meanwhile, have remained high and look to continue increasing. Together, these factors have weakened Vietnam’s economy.

The proportion of hi-tech products included in total export turnover has been almost unchanged in the past 10 years, at just 6 percent.  

Economic strength is also based on cheap domestic labor costs. Exports are mainly outsourced products while locally manufactured items have low added value as they are based on imported materials.

The number of national-brand products is also just a few. Products contributing the most to the country’s GDP and export turnover are not industrial products but come mainly from agriculture, fisheries and mining.

Of Vietnam’s 112 economic branches, only 26 contribute 1 percent each to the country’s GDP, according to the Ministry of Planning and Investment.

Truong Gia Binh, chairman of the FPT Management Board, said the country needs to create more groups representing national brands and promote them to the world.

Another weakness is that State-owned enterprises (SOEs) have yet to prove themselves as a driving force of the economy, while the private sector remains small and thus unable to boost economic development.


Meanwhile, the foreign-invested sector has developed vigorously but few technological transfers have been made from this sector to domestic ones. Vietnam is therefore kept reliant on international companies.

In addition, provinces and cities in economic zones have yet to cooperate effectively to promote comparative and competitive advantages of each locality.


Support for SOEs, SMEs

Dr. Cao Si Kiem, chairman of the Vietnam Association of Small and Medium Enterprises and member of the National Financial and Monetary Advisory Council, said, “Like many other countries, Vietnam is restructuring its economy in the post-crisis period to have more sustainable economic growth.


“We must meet what the world market needs and remove all obstacles to economic development. There should be specific solutions, both short and long term, for re-arrangement of SOEs and support for SMEs.”

Workers process rubber at the Long Thanh Rubber Plant in Dong Nai Province. Experts say the products contributing most to the country’s GDP and export turnover are not industrial products but are mainly from agriculture, fisheries and mining. (Photo: SGGP)

Public investment in SOEs accounts for 40 percent of GDP, but the average growth of these enterprises is just 10 percent, far lower than the 19.6 percent growth of the foreign-invested sector and the 43.8 percent growth of the private sector. Therefore, boosting efficiency of State spending on SOEs is an urgent issue to consider, according to experts.

Most SOEs are suffering losses, except around 300 that operate profitably, and the country now has more than 1,500 SOEs subject to equitization. However, this equitization work is being carried out sluggishly, according to the General Statistics Office.

When it comes to economic restructuring, the first thing to do is reorganize the business landscape, said Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry. “Firstly, State-owned groups and corporations should take a lead in technological renovation and self-reorganization,” he said.

In addition, infrastructural development and human resource training must also be strengthened to facilitate economic restructuring, Mr. Loc added.

The economic restructuring plan comprises three major tasks: first, improving the market economy in conformity to Vietnam’s World Trade Organization (WTO) commitments; developing infrastructure and stepping up administrative reform; and strengthening the training of human resources.


To help boost the competitiveness of the economy, experts say that State-owned corporations or groups should be equitized and operate under market mechanisms so they can play a steering role in a number of leading economic sectors.

The private sector should be developed both in quantity and quality, while the foreign-invested sector should focus on hi-tech products and make technological transfers to other economic sectors, especially the private one. 


To improve the efficiency of the economy, priority should be given to industries with higher competitiveness. In the future, such industries as metallurgy, electronics, oil refinery, IT and tourism services should become spearhead sectors, along with industries like textiles and garments, leather and shoes, and wood processing.


Comprehensive strategies

According to experts, agricultural production and quality of life in rural areas must also be enhanced. A system is needed that connects production, processing, distribution and consumption of key farm products like rice, coffee, pepper, cashews, and rubber in the Central Highlands and Southeastern regions.


The ultimate goal of economic restructuring is to increase productivity, quality, and efficiency of the national economy in each industry and even for each key product, experts said.

Workers at a pen factory of HCMC Thien Long Group. The private sector posts average annual growth of 43.8 percent, far higher than the 10 percent growth of SOEs and 19.6 percent growth of the foreign-invested sector. (Photo: SGGP)

To realize this, the country needs advanced hi-tech industry, agriculture, and services to replace economic results based mainly on natural resource exploitation and outsourcing. As for the service sector, it must create more high value-added services.

Dr. Tran Du Lich, a member of the National Assembly’s Economic Committee, agreed that economic development in Vietnam has been based mainly on the country’s cheap labor advantage, natural resource exploitation, and export outsourcing, which has ultimately had a negative impact on the national economy, he said.

“If these weaknesses are not overcome soon, the country is likely to continue suffering macroeconomic instability,” he said.

According to the Global Competitiveness Report, a yearly report published by the World Economic Forum, the national competitiveness of Vietnam ranks 82 out of 133 major and emerging economies for 2009-2010 – a drop of seven positions from the previous tally, experts said. 

Dr. Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, said, “Vietnam will create [more] chances for development if its economy is renovated in the right direction. Solutions to the restructuring the economy must be suitable for both internal and external conditions.” 

The restructuring project has so far launched 11 measures, including steps towards macroeconomic stabilization, restraining inflation, reducing budget deficit, improving market mechanisms, and giving equal support to all economic sectors. 
  
In addition, the Government will set up a general department for support private enterprise development and an investment guarantee fund for SMEs. It will also require credit institutions to earmark 30 percent of lending for SMEs.


The restructuring project also proposes that a national committee for renovation and development or a ministry of economic development be established to lead the restructuring of the economy.

“To make the project a success, we must determine what is to be done, who is to do it, and how to do it,” Dr. Kiem said.

Source: SGGP