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BUSINESS IN BRIEF 10/9   2010-09-10 - VietNamNet/VNA

Vietnam steps up in global competitiveness

 

 
Vietnam ranks 59th in the Global Competitiveness Report 2010-2011 of the World Economic Forum (WEF), up 16 steps over last year’s report.

 

In the report, which was announced on Sept. 9, Switzerland stands at the top of the ranks, followed by Sweden , Singapore and the US .

 

In Asia, Singapore was evaluated as the economy with the most competitiveness as it maintained third place in the rankings. Japan ranked sixth in the freshly-announced ranking.

 

The rankings are based on the Global Competitiveness Index (GCI), a survey of executives’ perceptions and hard data on a country’s so-called 12 "pillars": institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

 

Charmvit leader: “Let come to invest in Vietnam”

 

“Let come to invest in Vietnam ” is a strong message Chairman of the Republic of Korea (RoK)’s Charmvit Group Lee Dae Bong sent to other investors following his successes in the country.

 

Lee said: “After years of investing in China and Vietnam , I found that the investment environment in Vietnam is very good. I always take advantage of every opportunity to introduce Vietnam to RoK investors and international friends.”

 

According to Lee , Vietnam has a wide range of advantages as compared with regional countries. “However, I’m not really pleased with Vietnam ’s administrative procedures,” he added.

 

Charmvit is carrying out its largest project in the Southeast Asian country – the Grand Plaza complex – on Hanoi ’s Tran Duy Hung Street . It comprises a 28-storey first-class office tower, a 28-storey five-star hotel and a 5-storey trade centre.

 

The complex is marked as one of the important projects to celebrate Hanoi ’s 1,000 th founding anniversary. The hotel component is scheduled for completion by the end of this month to welcome distinguished guests invited to the millennial celebrations.

 

“I have devoted all my heart and mind to the project, especially the Grand Plaza Hanoi Hotel because of its importance to capital city of Hanoi . We were selected among almost 40 international investors by the Vietnamese Government,” he stressed.

 

Featuring 620 rooms, including 107 VIP ones, the Grand Plaza Hanoi Hotel will help the city provide better accommodations for international delegates to the anniversary and the ASEAN Summit later this year.

 

Lee said he would pour more investment in Vietnam , considering it as a way to strengthen friendly and cooperative relations between the two nations.

 

Thang Long-Espana Hotel: gift from Spain

 

Spanish artists are working on the Hanoi-based Sen Thang Long Hotel to turn it into the first hotel in Southeast Asia furnishing in an European contemporary artistic style.

 

According to the Second Secretary of the Spanish Embassy in Hanoi , C. Espada, this is a unique gift that Spain presents to Hanoi on the occasion of its 1,000 th birthday, representing the close friendship between the two countries.

 

Fifteen artists have been invited from Spain to do the decoration of the hotel’s 21 rooms, each with a different style.

 

The project, which was an initiative of the Spanish Embassy in Hanoi also opens up a new direction of bilateral cooperation, he added.

 

According to Espada, once completed in June 2011, the renovated hotel, to be renamed Thang Long-Espana Hotel, will be a symbol of the Spanish contemporary culture in Hanoi that helps Vietnamese people know Spain better and vice versa.

 

Le Hong Hai, Director of the Hanoi Tourism Corporation’s Thang Long Opera Hotel, which runs the Sen Thang Long Hotel, said this is an opportunity for Sen Thang Long to improve its infrastructure, personnel training and business capacity, thus promoting the trademarks for itself and the corporation.

 

Costs of the renovation at around 5 billion VND are mainly sourced from the Spanish Embassy’s cultural fund.

 

The first phase of the project is expected to be completed in December this year. Spanish visitors will receive a 20-percent discount of room rates for five years since the hotel’s re-opening.

 

SMEs need to be better audited

 

Small and medium-sized enterprises should improve their auditing standards if they wish to access much needed capital, a conference in Hanoi heard on Sept. 9.

 

There are about 450,000 enterprises in the country, according to Dang Van Thanh, chairman of the Vietnam Accounting and Auditing Association. He said about 96 percent of those firms are SMEs, which contribute about 40 percent of Vietnam ’s total GDP.

 

However, he said almost every business in the country faces difficulties accessing credit.

 

Statistics from the State Bank of Vietnam ’s Credit Department showed that just half of the 163,000 non-State enterprises had taken out bank loans, accounting for 27 percent of the country’s total debt.

 

"It means that half of the non-State businesses, most of which are SMEs, are suffering a capital shortage," he said.

 

Another investigation released by the Ministry of Planning and Investment’s Development Department shows that just one-third of SMEs has access to bank loans.

 

Nguyen Minh Tuan, deputy head of the Vietnam Chamber of Commerce and Industry’s Business Development Institute, agreed that accessing credit is a problem for SMEs.

 

Economist Nguyen Dai Lai said banks pay particular attention to production and business plans and capital ability when they consider loan applications.

 

"Financial transparency and demonstrating the ability to make a profit are vital for any business that wishes to get credit," Lai said.

 

To meet bank requirements, participants at the conference were told about the need for independent auditing.

 

"Independent auditing could increase the reliability and accuracy of businesses’ financial reports," Lai said.

 

Nguyen Thi Huong Nga, ANZ Bank’s country head of Credit Risk, said financial reports need auditing certification because it increases confidence in the information provided.

 

"However, many SMEs are not aware of the importance of auditing in answering capital questions," said Le Thi Hong Len, head of the Association of Chartered Certified Accountants (ACCA) Vietnam . Nguyen Thanh Trung, general director of Mazars, said financial reports are needed to access long-term credit businesses.

 

"Auditing is not a compulsory requirement for SME’s. However, it is helpful and makes accessing credit easier," he said.

 

Post-crisis opportunities, challenges highlighted

 

Numerous managers, economists and businesspeople gathered at a seminar in Ho Chi Minh City on September 9 to discuss the opportunities and challenges as well as Vietnam ’s policies and measures after the economic crisis.

 

Co-hosted by the Vietnam Investment Review (VIR) and the Association of Foreign-invested Enterprises, the seminar also served as a forum for the delegates to analyse the factors affecting the flow of investment and trade.

 

VIR’s Editor-in-Chief Nguyen Anh Tuan said that the global financial crisis had many adverse impacts on Vietnam in terms of exports, foreign direct investment (FDI), the stock market, international tourism and other fields.

 

However, Vietnam has managed to stave off the worst of the economic recession and stabilise its macro-economy thanks to concerted efforts by the government and the business community, he said.

 

Professor Nguyen Mai noted that FDI is considered the brightest spot in the country’s economic picture over the past two years, but Vietnam needs to improve the quality of this capital source.

 

While discussing the knock on effects on the stock market, the Vice Chairman of the State Securities Commission Nguyen Doan Hung emphasised the need to stabilise the market before implementing long-term targets, including enhancing the quality of auditing, information and corporate administration, tightening the supervision and protection of investments and dealing properly with securities companies suffering losses.

 

Dr. Le Xuan Nghia, the Vice Chairman of the National Financial Supervisory Committee, said that Vietnam is likely to face more monetary risks in the medium term, citing its foreign exchange rates.

 

The slow recovery of the global economy could hamper the flow of capital into Vietnam , worsen the depreciation of the Vietnamese dong and weaken the country’s international balance of payments, said Nghia.

 

More employed through job placement centres

 

About 224,000 people have been employed through the system of job placement centres and transaction floors each year during the 2006-2010 period, a rise of five percent compared with the figure before 2005, reported the Ministry of Labour, War Invalids and Social Affairs (MoLISA).

 

At a seminar to assess the effectiveness of job transaction floors on Sept. 9, MoLISA Deputy Minister Nguyen Thanh Hoa said that the information of labour supply and demand on the market are updated through job transaction floors, helping increase the efficiency of the link between labour supply and demand.

 

However, he pointed out difficulties in investment and infrastructure and the lack of officials that have slowed the operation of the centres and floors.

 

The number of people finding their jobs through the centres and floors now only represents 14 percent of the total of 1.6 million new jobs each year, he added.

 

The participants suggested the centres and floors finalise legal frameworks for job services, increase investment in infrastructure and equipment and devise training programmes for officials.

 

The ministry’s Employment Department said that it will develop the job placement centres under the World Association of Public Employment Services (WAPES) standard to raise the number of people employed through the network to 40 percent by 2020.


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