Idea Kadhafi will step down ‘ridiculous,’ says son

The charred hand of a pro-Kadhafi fighter is seen as Libyan rebel fighters buried him in a communal grave near the western gate of Ajdabiya.

Libyan rebels rejected an African Union initiative for a truce accepted by Moamer Kadhafi, and said the only solution was the strongman’s ouster, an idea his son called “ridiculous.”

The rebel rejection came after NATO chiefs warned that any deal must be “credible and verifiable,” and as alliance warplanes were again in action against heavy Kadhafi weaponry pounding Ajdabiya and Misrata.

A delegation of leaders mandated by the African Union (AU) to stop the fighting in Libya arrived late Monday in the Algerian capital for two days of talks with President Abdelaziz Bouteflika, APS news agency reported.

“We are working to find a solution to this complex question and we are continuing our efforts to get out of this crisis,” Mauritanian President Mohamed Ould Abdel Aziz was quoted as saying on arrival.

He was accompanied by Congo’s President Denis Sassou Nguesso, AU Commission chairman Jean Ping and Ugandan Foreign Minister Henry Oryem Okello, APS said.

Kadhafi has accepted a proposed “roadmap” calling for an immediate ceasefire, boosted humanitarian aid and dialogue between the two sides, but the insurgents have rejected the plan, saying Kadhafi must go immediately.

US Secretary of State Hillary Clinton also stuck to US demands for Kadhafi to step down and leave Libya as part of a peaceful transition, but declined to comment on the proposed African Union deal before being fully briefed.

She told a news conference in Washington however that “there needs to be a transition that reflects the will of the Libyan people and the departure of Kadhafi from power and from Libya.”

Kadhafi’s son Seif al-Islam admitted that it was time for “new blood” in Libya, but called talk of his father stepping down “ridiculous.”

“The Libyan Guide (Kadhafi) does not want to control everything. He is at an advanced age. We would like to bring a new elite of young people onto the scene to lead the country and direct local affairs,” he told France’s BFM TV.

“We need new blood — that is what we want for the future — but talk of the Guide leaving is truly ridiculous,” he added.

In Benghazi, rebel leader Mustafa Abdul Jalil said the African initiative did not go far enough.

“From the first day the demand of our people has been the ouster of Kadhafi and the fall of his regime,” he said.

“Kadhafi and his sons must leave immediately if they want to be safe… Any initiative that does not include the people’s demand, the popular demand, essential demand, we cannot possibly recognise.”

NATO, meanwhile, said it struck more loyalist targets around Ajdabiya and the besieged port of Misrata on Sunday and Monday, destroying 11 Kadhafi regime tanks and five military vehicles.

The regime warned that any foreign intervention under the pretext of bringing aid into Misrata would be met by “staunch armed resistance,” the official JANA news agency quoted the foreign ministry as saying.

Diplomats in Brussels said on Friday that the EU was gearing up to deploy military assets for a humanitarian mission to evacuate wounded from Misrata and deliver food, water and medicine to the city.

NATO chief Anders Fogh Rasmussen warned that warplanes will keep pounding Libyan forces as long as civilians are at risk.

“I would also like to stress that the guiding principle for us will be how to implement the UN Security Council resolution fully, that is to protect the civilians against any attack,” he said.

Shamsiddin Abdulmolah, a spokesman for the rebels’ Transitional National Council, welcomed the African Union efforts, but demanded Kadhafi’s overthrow.

“The people must be allowed to go into the streets to express their opinion and the soldiers must return to their barracks,” he told AFP.

“If people are free to come out and demonstrate in Tripoli, then that’s it. I imagine all of Libya will be liberated within moments.”

He also demanded the release of hundreds of people missing since the outbreak of the popular uprising and believed to be held by Kadhafi’s forces.

South African President Jacob Zuma said earlier that Tripoli had accepted the African Union plan for a ceasefire.

“We also in this communique are making a call on NATO to cease the bombings to allow and to give a ceasefire a chance,” he said.

The rebels, however, doubted Kadhafi would adhere to a truce.

“The world has seen these offers of ceasefires before and within 15 minutes (Kadhafi) starts shooting again,” Abdulmolah said.

The rebels have said they would negotiate a political transition to democracy with certain senior regime figures, but only on the condition that Kadhafi and his sons leave Libya.

Meanwhile, Libya’s former foreign minister Mussa Kussa, who is in Britain after defecting from Moamer Kadhafi’s regime, told the BBC Monday that the restive nation could become a “new Somalia” if civil war broke out.

Source: AFP 

Bankers say dollar rate cap gives strength to dong

Local banks have lowered their interest rates on dollar deposits.

Economists and bankers are expecting a switch from dollar holdings to dong assets after the central bank capped the interest rate on dollar deposits.

The State Bank of Vietnam has capped dollar deposit rates at 3 percent for individuals and 1 percent for institutions, effective April 13. Local lenders will also have to raise their reserve ratio on deposits held in US currency from May onward.

Bankers welcomed the move saying it will end the race among banks to raise their dollar deposit interest rates. Before the rate cap was imposed, local banks were offering to pay up to 6 percent annually on dollar deposits.

Ly Xuan Hai, general director of Asia Commercial Bank, said dollar rates in most other countries remained under 1 percent while they surged unreasonably to 5-6 percent in Vietnam.

Hai said the new rule will discourage foreign-currency holdings and ease pressure on the dong.

His bank now sets interest rates between 2.90 to 3 percent on dollar deposits. That compares to a maximum interest rate of 14 percent on dong savings.

Another bank manager said depositors are expected to sell dollar deposits and switch to the dong because of the widening gap between local and foreign currency interest rates. Pressure on the dong will ease when the market no longer prefers the US dollar, he said.

The manager estimated that banks in Ho Chi Minh City alone had around US$10 billion in dollar deposits, more than half of which came from individuals.

Foreign-currency loans increased 13 percent in the first three months of the year. Even though foreign-currency liquidity at banks was ensured, the central bank said dollar lending rose unexpectedly.

Experts said even companies that don’t need to import goods prefer dollar loans so they can benefit from low borrowing costs. Interest rates on dollar loans are 6-8.5 percent, approximately half of dong lending rates.

The rate cap on dollar deposits will allow banks to lower their lending rates, but Hai of Asia Commercial Bank said a sharp decline is unlikely.

The amount of dollar deposits lenders must set aside will be increased next month, and this will prevent drastic cuts in lending rates, Hai said.

Economist Le Tham Duong, on the other hand, said a cap on interest rates may force banks to find ways around the new rule.

“An administrative order often results in dodging of regulations,” he said. “If corporate demand for dollar loans remains high and banks are unable to attract dollar deposits (at the new low rates), they will be forced to break the cap.”

Duong noted that local banks have already circumvented a similar cap on dong deposits.

The State Bank of Vietnam in February recognized the 14 percent rate cap on dong deposits established earlier by the Vietnam Bank Association.

News website VnExpress reported last week that many banks, including the bigger ones, were breaking the cap. As banks had trouble raising funds amidst soaring consumer prices, they tried to attract deposits with rates of up to 18 percent a year, the report cited an official of Vietnam Bank Association as saying.

Reported by Thanh Xuan 

Help readied for Vietnamese citizens in Ivory Coast: FM spokeswoman

A supporter of internationally recognised Ivory Coast leader Alassane Ouatarra mans a machine gun at a check point in the Angre district of Abidjan.

Vietnamese diplomatic agencies around the Ivory Coast stand ready to help Vietnamese citizens residing in the African country racked by unrest when needed, foreign ministry’s spokeswoman Nguyen Phuong Nga said Thursday.

 

Nga said the Ministry of Foreign Affairs has ordered the Vietnamese embassy in Morocco to ascertain the number of Vietnamese nationals as well as their living conditions in the country that is said to be on the brink of a civil war.

 

Thanh Nien reporters found that many Vietnamese residing in Ivory Coast mainly run restaurants and photography shops, while most laborers are former crew members of foreign fishing boats.

 

A reader in the southern province of Soc Trang said his elder sister and ten other Vietnamese citizens were hiding in a restaurant in Abidjan City, where the unrest is most intense.

 

Many other readers reported similar situations involving their loved ones.

 

Le Van Thanh, deputy chief of Overseas Labor Management under the labor ministry, said they have never granted licenses to any local laborer to work in the Ivory Coast, and so far no companies or individuals have registered for sending laborers to the country.

 

“We only know of laborers [who are sent overseas] legally, so we cannot know the number of Vietnamese laborers in the Ivory Coast,” Thanh said.

 

But, the labor ministry is responsible for securing the safety of all Vietnamese workers in all countries, he added.

 

The French embassy in Abidjan told Thanh Nien Thursday that Vietnamese people in the Iovry Coast can contact the UN force in the country as well as Opération Licorne (Operation Unicorn), a French peacekeeping force, for help.

 

Vietnam evacuated more than 10,000 workers from Libya recently after the country was hit by anti-government demonstrations and a government crackdown.

Reported by Thanh Nien Staff  

Forex crackdown has eased market tension: expert

A staff member counts US dollar notes at a bank in Ho Chi Minh City

The dong has strengthened against the dollar and dollar-denominated deposits have increased over the past week after the central bank clamped down on foreign exchange transactions in the unofficial market. On Thursday, the dollar traded at Vietcombank at VND20,865, down from VND20,880 a week ago.

Thanh Nien Weekly discussed the implications of the move with former State Bank of Vietnam Governor Cao Sy Kiem.

Thanh Nien Weekly: The government is strengthening surveillance of foreign currency trading in the black market. Will it be an effective measure given that the amount of foreign currency held by locals is very big, and administrative measures taken over the past ten years have been unsuccessful?

Cao Sy Kiem: The current measure aims to implement the foreign currency management ordinance which had been issued in the past. However, we did not implement it strictly, and this seriously affected foreign currency trading as well as supply and demand, resulting in speculation.

So, this measure is quite necessary. After strict implementation, the situation in the market is less tense, and the foreign exchange rate is down.

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However, the issue is whether the measure is applied for a long time or not, and how ordinary people’s demand for foreign currencies is met. The surveillance tackles those violating the law and speculators who harm the market. Thus this is a normal measure and should be supported.

We have not paid due attention to strengthening activities of relevant agencies to meet the demand of people for foreign currencies. There should be commercial banks or local individuals with licenses, so that people can easily buy or sell foreign currencies to banks at stable prices.

The government has asked the State Bank of Vietnam to come up with a plan for foreign currency and gold bullion management and de-dollarization of the economy, which will be approved by the government in April.

If this is approved, together with the current measure, the problems in the foreign currency market will be dealt with. The market will develop in a more stable manner, and speculation as well as illegal trade in foreign currencies will be prevented.

Would foreign currency trade still continue as an underground activity?

– Obviously, when the surveillance is strengthened, we can expect that the trade in the black market will be disguised and conducted secretly. So we have to take tough measures to prevent it

POSITIVE IMPACT

Nguyen Quang Huy, head of the central bank’s foreign exchange management department, said the foreign exchange market has shown positive developments and the exchange rate has stabilized because domestic exporters who were selling foreign currencies to banks and authorities had adopted tough measures to stabilize the free market. He conceded that this could affect some people who buy or sell foreign currencies in the free market. According to current regulations, people can buy dollars at banks to meet their legal needs. However, some banks are still cautious about selling foreign currencies to individuals. People could also use international payment cards to meet their foreign currency spending needs abroad, he said. The State Bank of Vietnam is considering some specific measures to make it easier for individuals to buy foreign currency cash from banks at reasonable prices.

In fact, one of the main reasons for the problem is the habit of hoarding foreign currencies. Is it easy to give up the habit?

– The habit is due to inflation and difficulties in buying foreign currencies from banks. As the Vietnamese dong is devalued, people buy dollars and gold as a way to protect their assets from inflation. So, we have to curb inflation, and when it is reduced, the dong’s value will increase. And when market management measures are brought into full play, speculation will be limited, helping narrow the gap in the exchange rates between the black market and the official market. When this happens, people will give up the habit.

In addition, our service should be better so that people find it easier to buy dollars from official channels. If it is easy for people to buy foreign currencies for legal needs like studying, traveling and getting healthcare abroad, they will stop hoarding.

However, it is not easy to buy foreign currencies from official channels.

– Yes, that is the current situation. However, the government has asked the State Bank of Vietnam to ensure that people can obtain foreign currency for their real needs even as it tightens controls over foreign currency trading.

Reported by Ngan Anh 

Wanted: Better products, and an even better attitude

An Audi waiting its turn at a gas station in District 1, Ho Chi Minh City.

My father once told me: “You lose not because your rivals are too strong to be defeated, but because you’re not strong enough to win. So, make yourself strong first.”

I think this lesson should be applied to the current problem facing the Vietnamese economy: the crazy import of luxury goods.

The General Statistics Office recently announced that Vietnam imported luxury goods worth a total of US$10 billion last year.

It’s not a shocking figure these days, considering how frequently we see cars costing millions of dollars, mobile phones costing hundreds of millions of dong, or foreign liquor bottles that cost the annual income of a civil servant.

What’s shocking is that even though high taxes have been imposed on luxury goods for years, the imports continue to increase.

There is a 300 percent import tax on cars on average, but Ferraris, Lamborghinis, and Aston Martins were still shipped to Vietnam last year. It is said that most “super luxury cars” are already present in Vietnam.

Some people argue that those who have money have the right to buy what they want, including branded and luxury goods.

However, with the country facing serious problems like the rising gap between the rich and the poor, and the scarcity of foreign reserves, not to mention an annual per capita income of just over $1,000, overspending on luxurious goods by rich people is no longer their own affair.

Certainly not when their behavior is worsening the country’s trade deficit.

To deal with this problem, administrative measures like taxing and placing restrictions on foreign currency loans aren’t enough.

What matters here is people’s attitude. Once a matter of shame, people actually think ostentatious consumption, especially of foreign goods adds to their prestige!

I feel that to change this belief, we need to improve the quality of domestic goods and services, while organizing a long-term campaign to promote their consumption.

If we have good products and services that satisfy consumers, foreign products will have no way to dominate local markets anymore.

In South Korea, for example, local consumers’ support of domestic goods has helped the car, electronics and cosmetics industries develop strongly not only within the country but in export markets as well.

If experts are alarmed by the import of luxury goods in Vietnam, it means that the Vietnamese people’s undue preference for foreign goods is also cause for alarm.

If we don’t act now to instill a sense of national pride, the country’s trade deficit problem will only gorw.

Reported by Nguyen Hang 

118 year old woman lost 7 sons in freedom struggle

Tran Thi Viet, 118, persevered after losing seven of eight sons to the war against foreign occupations.

She turns 119 in 2011, but Tran Thi Viet’s memores of events and people she has met over three centuries (19th, 20th and 21st) is still clear.

 

It is not just her age that makes Viet, named the oldest Vietnamese by the Vietnam Records Book Center this month, stand out.

 

The centurion with nearly 500 grandchildren and great-grandchildren, is one of the country’s greatest Heroic Mothers, with seven of her children dying battling French and American occupations.

 

Viet, a native of the southern province of Long An, said she got married when she was 21 and gave birth to ten children, including eight sons.

 

As the mother herself was illiterate and their family was too poor to afford tuition fees, all of children received very little formal education.

 

But they were aware of what they wanted to do when seeing their fellow country men killed and their villages destroyed by foreign powers.

 

All of her sons joined the Vietnamese forces to fight against occupations, and seven of them sacrificed their lives for the country.

 

In 1953, her eldest son, 37-year-old Nguyen Van Lien, was killed, leaving three children behind.

 

Seven years later another son, Nguyen Van Tao, died on duty, and a year later, her husband died of injuries sustained after joining an attack against the French colonial forces.

 

And in 1962 and 1963, Viet lost two more sons – Nguyen Van Kien and Nguyen Van Tri – to the foreign occupation.

 

In 1968, her youngest brother Nguyen Van Dau died in a campaign against the US forces.

 

On the same day in 1973, two more sons died in battle.

 

Losing seven sons to the war, including two whose bodies have never been found, didn’t stop the heartbroken mother from going on living, supporting her grandchildren and daughters-in-law who’d lost their husbands.

 

She went fishing and did all kinds of work to earn a living.

 

Now Viet lives with one of her grandsons and his wife in Long An’s Ca Gua hamlet.

 

Sometimes culture researchers come to listen to her singing southern lullaby songs which, according to them, can’t be found anywhere in books.

 

While it is a great happiness to have so many grandchildren and great-grandchildren, Viet’s grief has never faded away, even after so many years.

 

Nguyen Thi Nguyen, her granddaughter, said: “Many times I’ve seen grandmother lie in the hammock in tears. When I ask if she is okay, she would be silent for a moment, then say: ‘I miss your father and your uncles’.”

 

Source: Tuoi Tre  

Taxation: the middle path

High taxation rates = larger budget = more development.

Logical, yes. Realistic, no.

In fact, reasonable tax rates not only make it easy for people to pay them, but they also boost a country’s growth.

According to HSBC’s International Expat Explorer Survey 2010, 45 percent of foreign workers in Singapore earn more than US$200,000 annually, the highest percentage for any country.

The worldwide average is just 21 percent, according to the survey that interviewed 4,127 expats in more than 100 countries.

This is partly because Singapore imposes taxes which are much lower than other industrial countries, HSBC said.

Sixty one percent of surveyed expats in Singapore said they have more disposable income than when living in their country of origin.

In fact, people with annual incomes of over 320,000 SGD (US$245,749) pay an income tax of 20 percent, which is the maximum personal income tax.

Businesses, meanwhile, have to pay 8.5 percent of their profits as income tax, if they earn less than 300,000 SGD ($230,349) per year, and 17 percent in case of higher profits.

That’s why more and more intellectuals and skilled laborers, including Vietnamese, are moving to the country to work and live.

Several young Vietnamese people tell me that one of the reasons they would love working in Singapore is the low income tax rates.

A fresh university graduate usually earns 2,500 SGD ($1,919) a month at minimum or 30,000 SGD ($23,032) a year. The first 20,000 SGD ($15,350) is exempt from taxes, and the next 10,000 SGD ($7,675) is subject to a rate of 3.5 percent. So, the graduate pays just 350 SGD ($268.65) a year.

What about Vietnam?

If a graduate were to earn a similar income here, working for a foreign-owned corporation, he/she would have to pay VND69 million ($3,539) a year in income tax.

This is 12.3 times more than they would pay in Singapore.

What’s noticeable is that despite low income tax rates, Singapore still offers one of the best infrastructure systems, healthcare, education and quality of living in the world.

No wonder official statistics show that more and more foreign companies are opening branches in Singapore, while multinational corporations choose it as their headquarters in Asia.

Is there a lesson for Vietnam here?

Reported by Thuc Minh 

Venezuelan missile purchases worried US: WikiLeaks

People demonstrate in support WikiLeaks founder Julian Assange in Barcelona.

The United States tried to stop delivery of Russian anti-aircraft missiles to Venezuela in 2009 amid concerns it could pass them on to Marxist guerrillas in Colombia or Mexican drug gangs, The Washington Post said on Sunday, citing diplomatic cables from WikiLeaks.

Venezuela, where President Hugo Chavez heads a strongly anti-American government, received at least 1,800 of the SA-24 shoulder-fired missiles from Russia, the Post said, citing UN arms control data.

Secret US cables said Washington was concerned about the acquisition by Caracas of Russian arms, including attack helicopters, Sukhoi fighter jets and 100,000 Kalashnikov rifles, the newspaper reported.

It quoted a US State Department cable on August 10, 2009 to embassies in Europe and South America as saying Russian arms sales to Venezuela totaled "over $5 billion last year and growing." Concern about Spanish plans to sell aircraft and patrol boats to Venezuela were also cited in the cable.

Russia reported to the U. Register of Conventional Arms earlier this year the purchase totaled 1,800 missiles, the Post said. US Air Force General Douglas Fraser said publicly this year Venezuela could be buying as many as 2,400 of the missiles, the newspaper said.

A missile expert at the Federation of American Scientists in Washington, Matt Schroeder, told the Post the Russian missiles are among the world’s most sophisticated and can bring down aircraft from 19,000 feet.

"It’s the largest recorded transfer in the UN arms registry database in five years, at least. There’s no state in Latin America of greater concern regarding leakage that has purchased so many missiles," Schroeder was quoted as saying, in an apparent reference to reports of Venezuelan arms flowing to Colombian guerrillas.

Bush, Obama

The UN database also showed that from 2006 through 2008, Russia delivered 472 missiles and launching mechanisms, 44 attack helicopters and 24 combat aircraft to the OPEC member and major oil exporter, the Post said.

It said the cables showed the administrations of George W. Bush and Barack Obama both tried to stop the arms sales by suggesting to Russia the weapons could end up with the Revolutionary Armed Forces of Colombia, or FARC, a rebel group that Colombian officials say has received material support from the Chavez government.

"In early March, Secretary Clinton raised the sale with Russian FM Sergei Lavrov," the August 2009 cable says, referring to US Secretary of State Hillary Clinton and Russia’s foreign minister, according to the Post.

It reported that a February 14, 2009 cable from Washington to Moscow said FARC computer files seized by Colombia’s army showed Venezuela had tried to help with arms deals for the rebels.

It expressed concern that missiles acquired by the FARC, which is involved in drug trafficking, could end up in the hands of Mexican cartels that "are actively seeking to acquire powerful and highly sophisticated weapons."

Chavez and his government have consistently denied providing help to the FARC.

The August 2009 cable noted Russian ammunition sold to Venezuela was found in FARC hands and US officials raised the issue with Russian diplomats in Washington, the Post reported.

It said an official at the Venezuelan Embassy in Washington said envoys there could not respond to the allegations by US officials and that the Venezuelan Foreign Ministry did not respond to phone calls.

The US efforts to prevent the sales of arms by Russia and Spain to Venezuela appeared to strain ties with both countries, the Post reported.

It said an official in charge of disarmament issues at Russia’s Foreign Ministry, Anatoliy Antonov, told a US Embassy official in Moscow in 2005 that Washington was trying to restrict Russian access to the arms market.

Spain went ahead with the sale of patrol ships and corvettes, but was blocked by Washington from selling Caracas C-295 transport planes and patrol aircraft because they used sophisticated US electronics, eliciting a complaint by Spain’s foreign minister cited in a cable from the US ambassador in January 2006, the Post said.

Source: Reuters 

Higher rates hurting economy

The Hanoi-based Southeast Asia Commercial Joint Stock Bank (SeABank) on Thursday raised deposit interest rates to 18 percent early Wednesday before reduced them to 13.5 to 14 percent.

Interest rates in Vietnam have soared over the past few weeks after the central bank signaled tighter monetary policies to curb inflation and stabilize the foreign exchange market.

While raising interest rates can help contain inflation, very high rates can hurt the economy, Tran Hoang Ngan, a member of the National Monetary and Financial Policy Advisory Council, told Thanh Nien Weekly. A deposit rate of 12 percent is reasonable, as it is higher than the anticipated full-year inflation rate of 11 percent or so, ensuring that depositors can cover the higher prices of goods.

Thanh Nien Weekly: Each time the interest rates rise, several explanations are offered, such as stronger capital inflow into the stock market, higher inflation, and tightened monetary policies. What about the latest increases?

Tran Hoang Ngan: The higher interest rates are due to increasing inflation and exchange rates. To curb inflation and stabilize the exchange rate, the central bank increased the base rate, pushing up the interest rates in the banking market.

However, the (interest rate) hike should be seen as a short term phenomenon. The central bank should consider bringing them to a reasonable level. In theory, when inflation rises, countries will increase interest rates, but the increase must stand at levels firms can accept. This is where the central bank should come in.

The latest interest rate hike has hurt local production and business, so current levels should not be allowed to continue.

Some say that the capital mobilization capacity of commercial banks is still limited, and that this has contributed to the sharp rise. Would do you agree?

High interest rates are also due to the weak management of commercial banks. They increase the cost of credit for businesses.

Under the mechanism of free interest rates, we apply a policy of negotiable interest rates, which makes banks compete against each other to lure deposits through increased deposit rates.

The banking network has extended after some rural banks turned urban in 2006. Operating on a larger scale, the banks’ expenditures have increased, so they have to raise their interest rates as well. Besides, banks looking to strengthen lending operations increase deposit rates to increase their capital supply. Thus, their lending interest rates increase as does the risk they face.

In general, local banks’ business effectiveness is still low. The prices of banking stocks, which were high several years ago, are now very low. Some banks have seen their stocks falling below their face value. This shows that the banks’ use of capital has not been efficient or effective, and that it is necessary to restructure the banking system, merging weak banks with stronger ones and dissolving those without sufficient charter capital.

In the context of the economy always needing foreign capital, how is credit supply affected?

Our savings now are lower than investment requirements, so we need foreign capital sources. However, there is a problem with this as well. From foreign direct investment (FDI) projects, we expected technology transfer and a reduction in imports. However, after 20 years (of opening the market to FDI) we receive outdated technology, and the FDI sector sees a trade deficit.

Vietnam is one of the countries with the highest interest rates in the world. This will discourage investors and encourage people to deposit money in banks. So, prolonged high interest rates will destroy small firms in the country, causing a shortage of goods, and therefore, increasing inflation again. The central bank should intervene to keep interest rates at a reasonable level.

What do you think is reasonable?

It is the correct thing to do, to accept high interest rates to curb inflation, but not at extraordinary levels. So, keeping the deposit rates at 12 percent is reasonable, ensuring that it is higher than inflation. Our country’s full-year inflation is estimated at 11 percent, so a 12-percent deposit rate can help depositors cover the higher prices they pay for goods.

Inflation in Vietnam is caused by a number of factors not decided by money supply. Some countries have an interest rate policy based on base inflation in which non-monetary factors are not calculated.

For example, prices of crude oil and food in the market are not increasing because of higher money circulation in Vietnam, but because of world supply and demand.

So it is necessary to pay attention to this issue. Interest rate adjustments should be based on the base inflation rate, not the general inflation index (or headline inflation rate that has a larger basket of goods and services).

The latter is a measure of living standards that can be used to adjust wages, but the base inflation rate should come into play in formulating interest rate policies.

Reported by Ngan Anh 

Website launched to link Vietnamese diaspora

A website designed to connect the overseas Vietnamese (Viet Kieu) community in all parts of the world was opened on Wednesday (December 8).

Jointly launched by the Vietnam News Agency, the State Committee for Overseas Vietnamese under the Ministry of Foreign Affairs, and the Agency for Foreign Information Service under the Ministry of Information and Communications (MIC), the website – www.vietkieu.info – provides valuable information on the State’s guidelines and polices on overseas Vietnamese.

It also gives information about the activities of overseas Vietnamese regarding their homeland, showcasing outstanding achievements in particular.

The website is divided into national pages so that its readers can quickly learn about the lives of the overseas Vietnamese community in each country.

The Community News column will be supplemented with information from reporters, agencies for foreign affairs, overseas Vietnamese trade missions as well as overseas Vietnamese themselves.

Readers can find an overview of each nation and its relations with Vietnam.

The website also provides systematized State documents and policies divided into such categories as nationality, investment-business and verification of Vietnamese origin.

A list of overseas Vietnamese diplomatic agencies, associations, companies, trade centers and restaurants will be provided and regularly updated to facilitate business transactions and personal relations.

Source: VNA