Over 147,000 student dropouts in 2007-2008: education ministry

More than 147,000 students have dropped out for the 2007–2008 academic year which started last September, accounting for nearly 1 percent of all students, Vietnamese education authorities reported.

The latest statistics showed an increase in dropouts in primary, secondary and high school levels compared to the previous total figure of 119,000 students reported at a press conference held by the Ministry of Education and Training (MoET) in March. Primary school absentees have risen by 6,304, while secondary schools saw an increase of 7,000. High school dropouts have gone up by 14,437. The difference is caused by rising truancy and incorrect statistics provided earlier by localities, according to the ministry. Several reasons that contribute to student dropouts include overloaded curriculum and inappropriate instructional and assessment methodologies applied. In total, 0.28 percent of primary school students, 1.14 percent of secondary school students and 2.02 percent of high school students have left school this academic year. One-third of all reported dropouts belong to the Mekong Delta region. The MoET is conducting studies and making plans to eliminate truancy through various solutions including supporting underprivileged students.

Vietnam’s exports to US grow at slower pace

A customer looks at rattan-made products at an international furniture fair in February in HCMC Exports to the US slowed in the first quarter compared to the same period a year earlier, suggesting that a struggling American economy and a stronger dong may have reduced demand.

Shipments to the US rose by 23 percent in the first quarter to US$2.78 billion, according to figures from the US International Trade Commission. In the first quarter of 2007, they had risen 26 percent. The US is Vietnam’s largest market. The dong rose on March 21 to its strongest against the dollar since 2005, before weakening after the central bank said it was buying dollars to help exporters. The US economy has expanded during the last two quarters at the slowest pace since 2002. “The weak dollar has hurt,’’ said John Marron, managing director of Vietnam’s Midas Clothing Ltd. in Ho Chi Minh City. “Clothing exporters were trying to get more European business instead of American business.” Apparel shipments to the US rose 31 percent in the first quarter to $1.14 billion, slowing from the 45 percent growth rate in the first two months. “Wages have gone up and so have raw-material prices,” Marron said. Vietnam’s yearon-year inflation rate in April was 21.4 percent, the highest since at least 1992. Furniture and footwear First quarter furniture exports rose 23 percent to $332 million, again a slowdown from the 29 percent growth rate in the first two months, while footwear shipments rose 17 percent to $293 million, an acceleration from the 13 percent growth in the first two months. A US economic slump could hurt Vietnamese furniture exports more than shipments of lower-end goods like clothes or shoes, Ayumi Konishi, the Asian Development Bank’s country director for Vietnam, said last month at a conference in HCMC. Exports of crude oil to the US more than doubled in the first quarter to $177 million from $85 million. Vietnam is Southeast Asia’s third-biggest producer. Seafood shipments to the US advanced 18 percent to $164 million. “Vietnam’s aquaculture industry is thriving,” the agricultural attaché’s office at the US embassy in Hanoi said in a report last month, which predicted “continued strong growth in this sector.” Shipments of coffee to the US, of which Vietnam is the world’s second-biggest producer, fell 7 percent to $94 million. There has been a “tightness of supply seen from Vietnam,” Fortis Bank SA/NV and VM Group said in a report last month which cited a recent fall in prices as discouraging sales by coffee farmers. “The Vietnamese coffee industry has sensed its ability to withhold commercialization of its coffee to help stimulate higher prices going forward.” Car shipments surge US exports to Vietnam more than doubled in the first quarter to $774 million from $307 million, as shipments of cars surged almost sixfold to $121 million. “While yes, we’ve got a big trade deficit, our exports are coming up,” Michael Michalak, US ambassador to Vietnam, said in comments made in March to students and faculty at the Diplomatic Academy of Vietnam in Hanoi. He cited the expansion of Vietnam’s middle class as a reason for the strong growth this year in US exports to Vietnam.

Supermodel Marisa Miller heads Maxim's Hot 100 list

Victoria's Secret model Marisa Miller poses during an appearance at the Victoria's Secret store in New York April 2, 2008 American supermodel Marisa Miller has knocked actress Lindsay Lohan from the top of men magazine Maxim's list of the 100 hottest women in the world, the magazine said on Wednesday.

It was the first time that Miller, 29, a Victoria's Secret model, appeared on the annual list and comes after she also graced the cover of the 2008 Sports Illustrated Swimsuit issue. "(Miller) embodies the official return of the all-American supermodel. Not since Cindy Crawford ruled the catwalk has a pinup born and bred on U.S. soil so thoroughly captured the imagination of the American male," noted Maxim editorial director James Kaminsky. Lohan, who topped last year's list of the Hot 100 "Ultimate List of the World's Most Beautiful Women," fell to a somewhat lukewarm No. 9. "After a tumultuous year involving a car wreck and rehab, La Lohan had Hollywood wondering if she was worth the trouble," said Kaminsky. Miller was followed by actress Scarlett Johansson, a "dangerously curvy bombshell" who, according to Maxim, also possesses "the acting chops to back up her mind-melting hotness." And while Jessica Biel may have starred on the U.S. family-friendly television drama "7th Heaven" as a preacher's daughter, the actress is starring at No. 3 on the Hot 100. Britney Spears just cracked the Top 20 in the ninth annual list, squeaking in at No.19 after a year that included stints in rehab and a notorious head-shaving incident. The rest of the list includes the usual suspects - Beyonce, Charlize Theron, Jessica Simpson, Jennifer Love Hewitt, Heidi Klum, and some new faces, including 22-year-old Ashley Tisdale from the hit tween movie series "High School Musical." Rounding out the Hot 100 women in film, television, music, sports and fashion at No.100 is Tila Tequila, the self-professed bi-sexual TV reality star.

Vogue censored

Contestants at the 2008 Vietnam Super Model Contest held last March were told by authorities to cover up with silk shawls during the swimwear competition The local fashion industry calls Vietnam’s censorship laws backward and irrational.

Local fashion designers say that archaic censorship rules are holding the fashion industry back. The “Regulation of Performing and Organizing Professional Arts Activities” prohibits all stage performers – whether musicians, singers, dancers, models or circus acts – from wearing any makeup or clothing that might be considered lewd or tawdry. The regulation, which was passed in 2004 by what was then the Ministry of Culture, Sports and Tourism, sets no guidelines for what might be considered inappropriate. Fashion show organizers must obtain approval for their shows from the municipal Department of Culture and Information before the performance takes place. All clothes to be showcased, or at least drawings of the clothes, must be submitted to the authorities for censorship. The department then asks organizers and designers to redesign clothes it sees as either scanty or immoral. Designers complain that such censorship only ensures the Vietnamese fashion industry’s provinciality. They say authorities’ decisions are often arbitrary and disrespect designers’ creative talents while disregarding international trends in beauty and style. Award-winning designer Ngo Thai Uyen calls such censorship unreasonable. “Censorship towards state-run shows is always less harsh than those organized by private companies,” she says. “I always have to remake my dresses that show models’ bare backs. Since there’s no clear explanation as to what is considered inappropriate, the censors’ views are biased and subjective, based on their own sensibilities,” she says. “I think the censors should be knowledgeable about fashion and the arts. They shouldn’t be so rigid as to shield every bit of skin that is uncovered. This is why our local industry lag behind the times,” said Uyen. While designer Vo Viet Chung says he is very happy with the local fashion industry’s recent development, he also criticizes state censorship of the art. “The censors need to differentiate between two concepts – sexiness and beauty. A trashy half-naked disco dancer is definitely different from a lady in a party dress that reveals her bare back. Designers are responsible for their products. We understand the difference between moral and erotica,” he says. “Inflexible censorship steals our creativity.” Another point of disagreement among designers and censors is swimsuits and lingerie, which are banned from fashion shows but are still a large part of national beauty pageants and contests. Hoang Ngan, designer and fashion lecturer at Ho Chi Minh City Architecture University, said “I don’t understand why swimming suits and lingerie are prohibited at fashion shows while they are still advertised by the mass media at supermarkets and other public places.” “There is a great demand for underclothes and swimsuits in Vietnam, but these products are not allowed at local fashion shows. Look at our beaches and we can see the result of such unreasonable regulations. Most Vietnamese wear T-shirts and shirts and other unfashionable clothes at the beach.” Even at some beauty pageants, contestants must wear silk shawls to cover their shoulders or chest during swimsuit competitions.

Miss Universe tickets go on sale

Tansey Coetzee will represent South Africa at Miss Universe 2008 to be held in Nha Trang from July 8-14 Tickets for Miss Universe 2008’s three main events, which will be held in Vietnam, went on sale Tuesday.

Tickets for the pageant’s Presentation Show, Dress Rehearsal and Final Show can be booked at locations across the country. “This is the first time Vietnam has hosted the Miss Universe pageant and the three shows are considered the most important events of the pageant,” said Miss Universe Organizing Board Vice Chairman Nguyen Quoc Toan. “We hope the pageant will bring everyone unforgettable experiences from the world’s leading beauty pageant.” This year’s pageant will be held at the Crown Convention Center, Diamond Bay in the beach resort town of Nha Trang in Khanh Hoa Province. The Presentation Show will take place on July 8. Over 80 contestants will compete in swimsuits, evening gowns and traditional clothes. Based on these contests and a personal talent competition, the audience will decide which contestants will compete in the final show. The Dress Rehearsal for the Final Show will be held on July 13. Spectators are welcome to watch the rehearsal. The two events will not be broadcast but tickets for each event range US$25-500 per person. Celebrities from all over the world will attend the Final Show on July 14. Tickets are available at $50-1,800. Tickets can be bought at the Unicorp. Office, 600 Dien Bien Phu Street, Binh Thanh District in HCMC and other authorized agents all over the country. Though tickets can be paid for now, they will not be delivered to buyers until a later date. Online booking is also available at www.missuniverse2008.com and www.unicorp.vn/ticket. More information can be found at the Web sites or at the Miss Universe hotline: (08) 247 8898.

Property investors expect little for now

An apartment block under construction in HCMC’s District 1 Real estate investors are not holding their breath for big returns this year as the government’s tighter credit policies have pushed the property market into a slump.

Property traders who once thrived in Vietnam’s hottest market have set more humble targets until the new real estate freeze thaws. Though property demand looks set to climb in the long term, the inability to buy real estate on loans has cut short term demand as speculators dump property to meet higher interest rates. Eden Joint Stock Company, which scooped up billions of dong in profit from its real estate investments last year, is not optimistic about the property market’s short term future. Eden’ 2008 revenue target of VND105 billion (US$6.5 million) is a modest 12 percent increase on last year, nowhere near the kind of growth it experienced in 2007. And the company’s shareholders have said even this goal would be difficult to meet. Sleep after the storm Last year, many joint stock companies raked in major profits trading real estate even though the field was not their specialty. Eden Joint Stock, a financial service provider as its core operation, is a good example. Its eight real estate investments last year earned it VND28 billion ($1.73 million) in pre-tax profits – more than four times as much as the profits from its key line of business. Property potentials were so great that Eden has since established a real estate company to take charge of its property investments. No. 8 Construction and Investment Joint Stock Company’s President Huynh Huu Phuoc said real estate also proved to be a fertile feeding ground for his company last year. Various new urban, high-rise, and apartment projects added VND47 billion ($2.91 million) to the company’s profits, far surpassing the firm’s expectations. Phuoc said things would not be so easy this year. Since the government tightened up on credit – especially speculative borrowing – as part of a larger effort to cool the overheating economy, property sales and prices have dropped. In HCMC, prices have fallen by as much as 40 percent. Units at the Thanh My Loi residential project in District 2 are now sold at only VND25-30 million ($1,548-1,858) per square meter, down from 35-40 million ($2,167-2,477) just last December. HCMC’s 500 property projects currently under construction may lose some tens of trillions of dong to declining prices, real estate experts have said. Experts blame the current slump on small-scale and speculative investors who are dumping properties to avoid losses as banks have increased interest rates on loans. These properties have become both cheap and undesirable. But Vinacapital was quoted by Bloomberg as saying the downturn would be short-term as demand for property in Vietnam, especially hotels, offices, retail space and land for residential developments still far exceeds supply. Phuoc from No. 8 Construction and Investment agreed. He said despite tight monetary measures, his company would continue to invest in high-end apartments, industrial zones, commercial complexes and rental office this year. Specifically, Phuoc said No. 8 would build 10,000 new apartments for low-and-middle-income buyers over the next five years. “The demand for this sector is particularly great,” he said. “You don’t run the risk of losing here.”

Former investigator of PMU18 crimes could face charges

Major General Pham Xuan Quac speaking at a press briefing as head of the team investigating PMU18 for criminal activities in 2006 Filing comes one day after reporters arrested for coverage of PMU18 corruption

Police aim to press charges against a senior police officer who was in charge of investigating the PMU18 scandal that shook the country two years ago. The Central Police Department yesterday submitted proposals to the Central People’s Procuracy – the state prosecutor’s office – to charge Retired Major General Pham Xuan Quac with “abuse of power” for actions he took while heading the investigation into the PMU18 scam in 2006, police said. Quac, 62, was also the former chief of the Central Social Crimes Department. He would be put under house arrest pending further investigations, police said. Quac’s subordinate on the PMU18 investigation team, senior Lieutenant Colonel Dinh The Huynh, was taken into custody on Monday on the same count. Also on Monday, Thanh Nien correspondent Viet Chien and his Tuoi Tre counterpart Van Hai were arrested in Hanoi for their coverage of the PMU18 scam. They were also charged with “abuse of power.” Chien had used Quac as one of the major sources for his PMU18 stories. When the PMU18 story broke in 2006, Quac was tasked with investigating Bui Tien Dung, the then chief of the Project Management 18 (PMU18) under the Ministry of Transport, for illegal gambling. Dung was then arrested in 2006 on charges of gambling away US$759,800 in state funds. He was also accused of offering nearly VND1.2 billion ($75,000) in bribes to cover up his alleged crimes. Deputy Minister of Transport Nguyen Viet Tien was also arrested in April that year. Minister of Transport Dao Dinh Binh tendered his resignation a short while later. But the charges against Tien were dropped last March and he was reinstated as a Communist Party member this month. As the PMU18 investigation was expanded in 2007, Quac retired. Following the PMU18 investigation, several informal sources accused general Quac and his subordinate Huynh of divulging confidential information pertaining to the investigation. Others also accused Quac of capitalizing on the media to pursue personal gains. At that time, Quac denied all allegations against him, saying his actions were by no means personally motivated. Speaking with Thanh Nien yesterday, Quac said he was very disappointed over the possible charges. He said he hoped he would be vindicated soon. During Quac’s tenure as the chief of the Central Social Crimes Department, he was credited with helping to expose many of the country’s biggest criminals, including the country’s most notorious mob boss Nam Cam, who was executed in 2004. Quac was once hailed as a hero for his vital role in exposing the PMU18 scam.

Hanoi police bust medical waste racket

Some bags containing untreated medical waste confiscated by Hanoi police at the K Hospital last August Police in Hanoi are investigating a case uncovered earlier this week in which staff from the Central Hospital for Tuberculosis and Lung Diseases were allegedly caught selling untreated medical waste to outsiders.

Police in Ba Dinh District have detained two individuals including Le Xuan Hien, 58, a contract worker who operates the hospital’s waste incinerator and Nguyen Thi Hom, 58, a scrap trader. The incident was exposed Tuesday evening when local police caught Hom moving untreated medical waste out of the hospital over a fence. They confiscated 11 bags which included medical tubing and injection needles still covered with blood. Hom told the investigators she had bought the waste from a staff member in the hospital. On Wednesday, police detained Hien who confessed he had been selling the untreated waste to Hom and others who would then recycle the waste into sellable items. The seized medical trash has been taken for laboratory tests to determine how dangerous it may be. Based on the results, authorities will impose penalties on those involved. Further investigations are continuing. Earlier rackets exposed Last year, police uncovered similar operations at other Hanoi hospitals including Bach Mai, K (Cancer), and Viet Duc Hospital. The Viet Duc Hospital was subsequently fined VND20 million (US$1,200). One staff member was fired and hospital officials pledged to penalize any others found to be involved. In a move to crack down on the sale of untreated medical refuse, the Government Office last September instructed ministries to thoroughly examine waste treatment processes at hospitals and health centers around the nation. It further instructed the health, security, environment, and human resource ministries to set up inspection teams to scrutinize waste-control and processing facilities. Local authorities have also been instructed to urge health centers to comply with waste regulations and cooperate with inspectors. Tests have shown that just one untreated gram of medical waste is capable of transmitting 11 billion pathogens into the environment.

Sacombank assets dip 2.6 percent in April

Sacombank tellers at work in HCMC Saigon Thuong Tin (Sacombank), Vietnam’s second-biggest bank by market value, has said it had total assets of VND73.25 trillion (US$4.58 billion) at end-April, down 2.6 percent from a month earlier.

The Ho Chi Minh City-based bank said January-April gross profit jumped 40 percent to VND536 billion ($33.5 million). In a statement, the bank said “the unpredictable trend of the global economy” in the January-April period had been difficult, but “Sacombank maintained the positive result thanks to its accurate economic forecast and appropriate business plan.” Sacombank shares closed down 0.6 percent at VND31,200 ($1.93) Thursday. The lender expects a 38 percent rise in gross profit this year to VND2 trillion ($124 million) and lending growth of 34 percent, slower than last year’s expansion as the central bank has taken steps to tighten money supply to fight double-digit inflation. Last year Sacombank’s gross profit jumped 167 percent, its assets also soared 156 percent and loans jumped 136 percent. The World Bank’s International Finance Corp., Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam. Sacombank is set to start operating a VND300 billion ($19 million) gold and gem company in July.

Vietnam ministry acts to curb student dropouts

The Ministry of Education and Training has announced it is currently conducting studies and making plans to eliminate subject areas that are extraneous for primary and secondary students in disadvantaged areas.

The move will help students concentrate more on main subjects and strengthen their basic knowledge, the ministry said. It also plans to utilize funds from the government’s Program No. 135, which aims to eliminate poverty in 1,644 communes, to support underprivileged students financially. These steps represent direct and immediate solutions to mitigate student dropouts in remote and mountainous areas, in response to the total number of 119,000 dropouts nationwide for the first term of the academic year. The ministry has requested local departments of education to submit reports on students’ truancy, yet to date only 22 of 64 departments have fulfilled the task, according to the ministry.

Hanoi mega-metropolis plan lauded

www.webtrongoi.com

The Viet Tower building in Hanoi The planned expansion of Hanoi has been given the thumbs up by a leading international real estate company, which says the plan will stimulate the over-populated capital and surrounding areas.

Under the mega-metropolis plan, which received the green light from Prime Minister Nguyen Tan Dung earlier this week, Hanoi will balloon to three times its current size by swallowing the whole of neighboring Ha Tay Province and parts of two others. The expansion “will allow unified planning and development of infrastructure projects” throughout the new “Hanoi Metropolitan Statistical Area,” Associate Director of CB Richard Ellis Vietnam (CBRE) Renato Shordon said Tuesday as he released a report on Hanoi’s real estate market. The report predicted the plan would generate an enormous amount of infrastructure construction. The metropolitan administration, meanwhile, would have more money to spend on infrastructure and public facilities from its expanded tax base, Shordon said. The expansion will increase Hanoi’s area to 3,349 square kilometers from 922 square kilometers and double its population to 6.2 million from 3.4 million. Hanoi officials have said the expansion is necessary for the capital city to function better. But before taking effect, the plan must be approved by the National Assembly, which is scheduled to consider it on May 13. The expansion blueprint has already fueled spikes in housing and land prices in the proposed expanded area, which comprises Ha Tay Province, a district of Vinh Phuc Province and four communes of Hoa Binh Province. There could be “up and down cycles due to speculating on Hanoi expansion,” the CBRE report forecast. However, “prices will stabilize based on standard market practices.” The expansion could also create “a slowdown in the planning approval process given the amount of on-going developments.” Market trend Despite the relatively quiet real estate market in the country’s metropolises, especially in Ho Chi Minh City, foreign investors were “still confident in the market’s potential,” the report said. Of the total foreign direct investment (FDI) of US$5.4 billion in the first quarter, real estate accounted for more than $4.5 billion. FDI in the market for all of last year was just $5 billion. Office and apartment projects and hotel and resort projects maintained their glitter, making up 57.1 percent and 41.4 percent of real estate FDI. For Hanoi, a lack of supply will continue to keep condominiums and land prices at high levels. For the same reason, rents in most sectors would keep rising, the report said. New supplies would be quickly absorbed but still unable to satisfy demand, the report said. The average monthly office rent increased by 25 percent from the last quarter to $50 per square meter, higher than in several other Asian capitals, including Beijing and Bangkok. The average rent of retail space ranged from $45 to $55 in mid-range project to $85 for first-floor space in major shopping centers.

Vietnamese lawmakers hear proposed drug law revisions

Monk Danh Nhuong, a National Assembly member, discusses the anti-drug law Vietnam’s security chief presented the National Assembly with revisions to the Drug Prevention and Combat Law, calling for more preventative measures to be taken against the dope problem.

The Minister of Public Security Le Hong Anh presented the supplements, which stress the prevention of drug abuse, to legislators in Hanoi Thursday. A ministry report on the revisions called drugs the root of social disorder, crime and the HIV/AIDS surge in Vietnam. The ministry reported that 120,000 people were involved in 76,000 drug-related cases between 2001, the year after the Drug Prevention and Combat Law was enacted, and last year. Over the same period, 200,000 drug addicts went through drug abuse treatment programs. The report warned that drug-traffickers would try to bring more drugs into the country and said that the ministry expected a rise in the number of rural addicts, especially among adolescents and the unemployed, due to urbanization. The lawmakers will debate the revisions and supplements, which include implementing detoxification programs and focusing on the generation of employment for former addicts, during the Assembly’s weekend session before voting on the issue. Meanwhile, legislators heard Defense Minister Phung Quang Thanh present a bill to amend articles of the Law on Officers of the Vietnam People’s Army. They also heard a report by Minister of Labor, War Invalids and Social Affairs Nguyen Kim Ngan on the results of trial management and vocational training centers for former drug users in Ho Chi Minh City and other localities.

www.webtrongoi.com

Prepping for the pageant

Hollywood stage designer Joe Stewart (in black) presents a model of the stage for the 2008 Miss Universe pageant in Nha Trang Town A delegation of the Miss Universe Organization (MUO) wrapped up their last survey trip to Vietnam Thursday, announcing that the beach town of Nha Trang is well-prepared to host the 2008 pageant in July.

Led by Rachel Frimer, vice chairwoman of the MUO’s production board, the delegation arrived in Vietnam on April 29 to check venue facilities and local accommodations as well as introduce the stage design to be utilized for the final round. At the close of the trip, Frimer declared that Nha Trang is on target to fulfill all the requirements meeting international standards to put on the prestigious event. Nguyen Quoc Toan, the deputy head of Vietnamese Hosting Committee (VHC) and director general of Unicorp., expressed confidence in completing all necessary infrastructures on time. The centerpiece of the show – the Crown Convention Center – is expected to be completed by May 31. Toan also revealed there would be two power systems for the contests, one of which is an electricity generator imported from the US “We also rented a sound and lighting system from the US which costs some US$3 million,” he said. In the pageant’s history, Panama and Vietnam are the only two countries that built new convention centers to meet MUO’s hosting conditions. James Dunne, the construction chief who spearheaded Panama’s preparations, has aided local colleagues in designing and building the pageant’s venue. “In Panama, we only had to focus on face-lifting an already-built theater, which took us three months,” Dunne said. “Your center is of a larger scale, and thus pressure is greater.” More than 500 workers have been working day and night at the construction site to complete the project on time. “I am very impressed by Vietnamese workers who are both skilled and hard-working,” Dunne praised. “Those who are currently working on the dome are far more competent than I had previously expected before coming here.” Hollywood help A miniature model of the pageant’s stage built by renowned Hollywood stage designer Joe Stewart absolutely dazzled the Vietnamese Hosting Committee. Stewart’s revolving stage incorporated the beautiful landscapes of the country, featuring magnificent tropical forests, the World Heritage Ha Long Bay, and quaint ancient streets of the historic Hoi An town. The event will be capped by the performance of a giant bronze drum, to be played at the crowning ceremony of Miss Universe 2008. Discussing with VHC via telephone, NBC’s Chief Director Phil Gurin, who is the scriptwriter for the pageant’s grand finale, said Vietnam’s cultural features will be infused in the stage design and prominently displayed during the program’s contents. Gurin added that he wanted famous Vietnamese artists to participate in the event’s performances. VHC’s Head and Deputy Chairman of Khanh Hoa People’s Committee Le Xuan Than said the pageant’s presentations will introduce the images of Vietnamese culture to more than one billion audience members worldwide. www.webtrongoi.com

Vietnam metro's broke bus drivers beg for relief

Traffic gridlock is just one of the headaches experienced by bus drivers in Ho Chi Minh City Unsatisfactory subsidies, rigid regulations and meager incomes have forced many Ho Chi Minh City bus drivers to walk away from the industry.

Nearly three months after fuel prices rose, bus drivers say government subsidies are too low to allow buses to run at a profit. Ho Chi Minh City’s bus network is slowly grinding to a halt as drivers, fed up with the paltry subsidies and heavy fines, look for other jobs. One morning in May, a group of bus drivers were having coffee at a street-side stall in District 1 instead of driving their buses. They said they simply could not afford to keep their buses running. Nguyen Doan Thanh Phuong, a member of the Rang Dong Bus Cooperative, said he was losing VND300,000 (US$18.75) a day because inadequate subsidies did not cover the higher cost of fuel. The majority of HCMC’s 3,200 buses run on diesel, which rose by VND3,700 (23 cents) to VND13,900 (88 cents) a liter on February 25. In March, the HCMC government instructed the Department of Transportation and Public Works to allocate an additional VND122 billion ($7.7 million) to financially assist the city’s bus services. But the subsidy plan has not materialized, leaving bus owners with staggering losses. Despite the Department of Transportation and Public Works earmarking around VND4 billion ($245,000) to keep bus services going, the HCMC Bus Cooperative Alliance said it was not enough. The alliance also said monthly tickets, which are not purchased directly from bus owners, were becoming more popular with passengers, further reducing bus owners’ incomes. The Rang Dong Bus Cooperative said it had halted 10 bus routes due to heavy losses. The Saigon Bus Company was also struggling financially, revealing monthly losses of some VND2 billion ($126,000) in the first quarter. The City Transportation Company (CITRANCO), which runs about 100 buses in HCMC, recorded losses of VND1.5 billion ($93,750) in the first quarter. Many affected bus owners called on the government to crank up financial assistance for bus owners to enable them to turn a profit. Bus owners said they were in limbo as they could not afford to suspend operations but neither could they afford to continue. With meager salaries of around VND3 million ($188) a month, bus drivers are also regularly fined because HCMC’s traffic gridlock leads to many missed deadlines. Each bus is fined VND800,000 ($50) if it fails to arrive at designated stations on schedule. The fines were only VND200,000 ($12.50) last year. Bus owners also slammed the Department of Transportation and Public Works for slapping the “harsh” penalty of VND800,000 on buses which don’t turn on their air conditioners. The city provided VND562 billion ($35.5 million) in subsidies to bus services last year and, prior to the fuel price hike, had planned to reduce the funds to VND450 billion ($28.4 million). On average, HCMC bus transport system welcomes one million passengers daily, accounting for about 5 percent of local residents’ traveling demand. The city expects to raise this rate to 8 percent by 2010 and 15 percent by 2015.

Vietnam eyes Thai export market share, says securities firm

Guests peruse an international machinery and technology exhibition in HCMC in February last year Vietnam may capture market share from Thai exports in areas including apparel, office machinery, and glass and plastic products, SCB Securities Co. said in a report on the two Southeast Asian nations earlier this week.

Vietnamese exports rose 190 percent between 2002 and 2007, reaching US$48.4 billion last year from $16.7 billion five years earlier, according to figures from the General Statistics Office in Hanoi. Over the same period, Thai exports rose 121 percent to $152.5 billion from $68.9 billion, according to Thailand’s Ministry of Commerce. Vietnam’s total exports are still small and the overlap with the structure of foreign-bound shipments from Thailand is limited, the Bangkok-based securities company said. Thai exports are dominated by machinery and transport equipment instead of food and textiles as in Vietnam. Yet, areas where Thailand has high labor costs are at risk, SCB said. According to the company, salaries in Thailand’s apparel and footwear industries are about three times those in Vietnam, while in manufacturing industries the comparative figure rises to about 3.4. This labor compensation disparity leads SCB to conclude in its report that “Vietnam is poised to compete strongly.” Labor productivity “In manufacturing, higher labor productivity in Thailand does not appear adequate to compensate for much higher wages relative to Vietnam,” the broker said. “Thailand’s inability to move substantially up the value chain increases its susceptibility.” Many Japanese companies have relocated overseas production bases to Vietnam from Thailand in the past three years, in part to take advantage of lower operating costs in Vietnam, the Bangkok-based Nation newspaper reported in December 2007. Vietnam’s labor force has higher secondary-school attainment levels than Thailand, SCB said in its report. “The Vietnamese are known to be quite interested in education, and that’s beginning to reap benefits,” said Chris Bruton, Bangkok-based director for Thailand and Indochina at research and consulting company Dataconsult Ltd. Other challenges Vietnam is facing significant obstacles in physical and managerial infrastructure, and the cost-of-living for expatriate workers is about 30 percent higher than in Thailand, SCB said. “The cost of expat housing has increased tremendously recently, and the cost of employing Vietnamese executives is also rising due to a lack of highly skilled labor,’’ said Alain Cany, Chairman of the European Chamber of Commerce in Vietnam. “But the willingness of young Vietnamese to learn makes me extremely positive that Vietnam can catch Thailand.” While Vietnamese economic growth is likely to outpace Thailand for the foreseeable future, gross domestic product per capita is unlikely to catch up to Thailand by 2050. Thailand should also be able to maintain its edge over Vietnam in service areas such as tourism, according to the report. “Vietnam and Thailand have been rivals for a long time,” said Bruton of Dataconsult. “It’s good for Thailand to have Vietnam there, snapping at the heels.”

Experts call for better state company management

PetroVietnam, a state-owned enterprise, has expanded into the property sector in addition to oil and gas exploitation Something must be done about state companies that guzzle investment, yield low returns and squander funds in fields they know nothing about, said delegates at the State-Owned Enterprise (SOE) Reform Conference recently.

One of the country’s largest state-owned companies, the Vietnam Shipbuilding Industry Corporation (Vinashin), has a debt to equity ratio of almost 22, according to a Ministry of Finance report discussed at the conference. Of Vinashin’s VND80 trillion (US$4.9 billion) in total assets, equity capital accounts for over VND2 trillion ($124 million), and debt capital makes up for another VND47 trillion. For many experts, the figures are troubling. VPBank board member Nguyen Quang A said a wise bank would never lend to a business with such a high a debt to equity ratio. “This is simply too risky,” A said. For those attending the conference, Vinashin was merely one example of reckless financing. According to the finance ministry, the country’s 70 state-owned corporations had borrowed over VND448.2 trillion as of last December – 1.4 times higher than their total equity – and invested a large chunk of it riskily in fields outside their core operations. Doubtful returns The efficiency of the state-owned business sector, especially major state-run corporations, has raised passionate debates over the past several years. SOEs account for as much as 60 percent of domestic banks’ loans and 70 percent of foreign loans, yet produce only 40 percent of gross domestic product (GDP). Additionally, their production relies chiefly on their almost exclusive right to exploit the country’s natural resources. The oil, coal and electricity fields, for instance, are dominated by state-owned monopolies. Major state-owned corporations have drawn criticism lately for borrowing extensively to invest in fields outside their expertise – namely, stocks, real estate, insurance and banking. The finance ministry reported that 28 out of 70 state-owned corporations have invested a total VND23 trillion – or an 8.7 percent of their equity – in these fields. Director of the Central Institute for Economic Management’s (CIEM) Macroeconomic Policy Department Nguyen Dinh Cung said that although diversifying investments is not a problem per se, it is best for companies to invest in areas where they have a comparative advantage. “That means each company should focus on – and do its best in – a particular field before expanding into others,” Cung said. However, he emphasized that the expansion should be closely related to the original field. “Textile businesses may expand into raw material production, and transporting services companies may think of exporting and distributing,” he said. “But if they all invest in real estate, there’s a problem.” The finance ministry reported that returns on equity at the 70 state-owned corporations reached 19 percent last year. Critics say this figure may not take into account the high interest rates on bank loans – varying up to 20 percent per year – that these companies have to pay. Speaking at the finance ministry conference, CIEM business research, reform and development department’s director Tran Tien Cuong said the finance ministry only knows how government capital is spent. As for how and where state-owned corporations invest their bank loans, it is difficult to monitor. But the most controversial aspect of SOEs in Vietnam is their tendency to cross-borrow or establish their own banks as a way to secure money to finance their investment projects. The Steering Committee for Business Development and Renovation’s acting deputy director Pham Viet Muon told the finance ministry conference such practices easily lead to over-lending as corporation-owned lenders may review projects less objectively than independent ones. Muon also said over-expanding is likely to strain state-owned corporations’ management capacity, increasing inefficiency. For instance, the number of member companies at these corporations has jumped by 10 percent. Muon said last year, Vinashin alone established 43 new member companies as well as 111 other joint businesses with others. The call for better management of state-owned corporations’ investments has intensified lately as the stock and real estate markets experience turbulence. Since the beginning of the year, the country’s stock index, VN-index, has slumped by 45 percent and real estate prices have gone down by 30-50 percent. The receding of the stock and real estate markets has raised fears that state-owned corporations would not be able to make enough profit to pay their debts. The burden would then be shifted to their creditors – mostly state-owned banks. Another scenario, in which state-owned corporations sell stocks or real estate as these markets tumble, is not any less disheartening as such dumping would only drive down the markets further. Cung from the CIEM said the first step towards the better management of state-owned corporations is to distinguish between government ownership and government supervision. Ministries, including the Ministry of Finance, are at present charged with administrating these companies. But the government should also establish a different agency to act as the government stakeholder at these companies, Cung said.

US firm seeks approval to invest in nuclear power plant

Politburo member Truong Tan Sang (R) receives the US business delegation Wednesday US firms are eager to invest in hi-tech industries in Vietnam including nuclear energy, according to the head of a US business delegation that met with Prime Minister Nguyen Tan Dung on Wednesday.

Speaking Wednesday at a press briefing in Hanoi, Matthew Daley, president of the US-ASEAN Business Council and leader of the 23-member business group on a three-day trip to Vietnam, said US companies are keen to invest in Vietnam. He said an unnamed US firm is seeking government approval to set up a nuclear power plant in Vietnam, which currently has no nuclear power plants in operation. Daley also disclosed a member of the delegation was looking for local partners to set up a hi-tech float glass plant, geared toward Vietnam’s automobile industry. “General Electric [one of the 23 US firms] will invest US$100 million in a project to manufacture components for wind and gas turbines in Hai Phong City,” he said. During an earlier meeting with the US delegation, Vietnam’s Prime Minister Nguyen Tan Dung praised the role of the US-ASEAN Business Council for hosting the trip and noted the contributions made by US businesses in boosting bilateral ties between the two countries. He also said the Vietnamese government would create favorable investment conditions for US companies. The delegation included executives from General Electric, Boeing, Chevron, ConocoPhillips, The Dow Chemical Company, ExxonMobil, Fedex, Ford, IBM and Qualcomm. The US-ASEAN Business Council is a private, nonprofit organization which works to expand trade and investment between the US and Association of Southeast Asian Nations (ASEAN) member states.

Corporate tax cuts could woo investment, say lawmakers

Despite an expected annual loss of VND5 trillion, the proposed corporate tax cut would help fortify global competitiveness, says Finance Minister Vu Van Ninh A proposed corporate tax cut would help lure more foreign investors to Vietnam without lowering government tax revenues, said several National Assembly (NA) representatives Wednesday.

At the Assembly’s meeting Wednesday, lawmakers focused on a proposed amendment to 1997’s Corporate Income Tax Law that would cut corporate income taxes from 28 – 25 percent. In a report released at the meeting, Finance Minister Vu Van Ninh said the state coffers would lose VND5 trillion (US$310 million) per year on the tax cut. But Ninh also said the loss could be worth its weight in economic development by allowing companies in Vietnam to become more competitive. The NA chairman of the Financial and Budgetary Committee Phung Quoc Hien said the tax cut worried him as several regional countries still applied corporate tax rates of over 28 percent. Many experts were also convinced that high corporate taxes would not impede foreign investment, Hien said. Deputy Nguyen Van Hien from the northern port city of Hai Phong blamed superfluous formalities, not high corporate taxes, for deterring foreign investors from Vietnam. But a majority of lawmakers at the meeting shrugged off worries that the tax reduction would hurt tax revenues, arguing that the increasing number of business openings would offset the decrease. The recent general trend in Asia has been to reduce corporate taxes to attract foreign investors. Singapore recently lowered its corporate tax from 20 percent to 19 percent while China gave corporations an 8 percent break, from 33 – 25 percent. Deputy Phuong Huu Viet from the northern province of Bac Ninh said similar concerns had arisen when the government reduced the corporate tax from 32 percent to 28 percent years ago. But in fact, the government’s tax revenues had not decreased after the cut, he said. Viet even proposed lowering the rate to 20 or 22 percent. Deputies also slammed a regulation that would prevent businesses from enjoying tax deductions on workers’ perks if they paid employees above regulated maximums on benefits such as healthcare, insurance and food allowances. Deputy Dang Ngoc Tung of Ho Chi Minh City said such a restraint would only hurt the workers. Nguyen Huy Can, also from HCMC, agreed, saying 70 percent of HCMC-based firms were paying above regulations for workers’ benefits. Deputy Nguyen Thi Nguyet Huong of Hanoi suggested a tax deduction for charity spending be implemented, but Hanoi deputy Pham Thi Loan warned that a tax deduction on charity activities must be acknowledged by the beneficiaries and the Fatherland Front to prevent money-laundering. At the session, deputies also discussed proposed real estate and valued-added taxes.

Local singer to perform international hits

Vocalist Duc Tuan is set to perform a live show titled “My secret passion” featuring some 19 well-known international oldies in Ho Chi Minh City on May 13.

The show will include Broadway music and romantic pieces like The Phantom of the Opera, Love changes everything, Sunset boulevard, Le temps des cathedrals, and Can’t take my eyes off you among others. Tuan, who graduated from the Foreign Trade University and can speak fluent English, will also perform several songs with female vocalist Ngoc Tuyen. Also the winner of HCMC Television’s Singing Contest 2000, Tuan has made a name for himself as a soulful crooner. He has performed at several prestigious events in the past including Thanh Nien’s Duyen Dang Viet Nam (Charming Vietnam) Gala. Tuan will perform at Khong Ten Cabaret, 147 Bis Hai Ba Trung St., Dist. 1.

Spidey and Bond DVDs headed to Vietnam

Sony Pictures Home Entertainment (SPHE) will become the first major US studio to release DVDs in Vietnam.

The studio has partnered with Vietnamese company Galaxy Studio for distribution. Releases begin Friday (May 9) with a group of 15 titles, including “Casino Royale,” “Surf’s Up” and the “Spider-Man” franchise. Plans call for the release of about five to 10 DVD titles per month and the eventual launch of high-definition Blu-ray Disc releases. The deal “represents the industry’s first major step in developing this untapped market,” said T. Paul Miller, SPHE’s senior vice president international.

Israeli folk band to rock Hanoi

Oy Division, a unique Israeli band which performs the old folk music of Eastern-European Jews known as Klezmer, will hit Hanoi stages from May 12-13.

Organized by the Israeli Embassy to Vietnam, Melia Hanoi Hotel and Tuoi Tre Theater, the shows aim to commemorate the 60th anniversary of the State of Israel and the 15th anniversary of diplomatic relations between Vietnam and Israel. The band’s repertoire is a mix of instrumental wedding music, folk songs and songs originating in Yiddish theater – old music played with the exuberance of the punk style. On their MySpace blog, Oy Division shares with fans that “the members of Oy Division do not adhere to the modern Klezmer style nor do they try to make it contemporary in any way, but rather try to recreate and bring back to life the nearly extinct pre-war Jewish music the way it had been originally performed.” The five group members hail from a variety of musical backgrounds. Eyal Talmudi is a leading inter-national reed player, who regularly tours with the Balkan Beat Box. Noam Inbar is the bass player and lead singer of the experimental Israeli punk band H’Billuyim. Assaf Talmudi is an established record producer and composer, and a lecturer at the Haifa University’s Department of Music. Gershon Leizersohn is a graduate student in the Tel Aviv University’s music department who regularly plays in classical music orchestras. Avichai Tuchman is an independent musician and producer. The two shows will be held at Melia Hanoi Hotel’s Latino Bar and Tuoi Tre Theater on May 12 and May 13, respectively.