Viet kieu ‘shooting star’ wishes to share his luck 

Nguyen Quang, a Vietnamese-Swedish entrepreneur, with the Male Shooting Star certificate awarded by international auditing firm Ernst and Young in Sweden in November last year

In early February this year, a leading Swedish daily, Göteborgs-Posten, used up a huge portion of its cover page for a photograph of Nguyen Quang, a Vietnamese-Swedish businessman.

Inside were two pages telling readers the story of a very young boy who arrived in Sweden with his father 30 years ago, and has risen, by dint of sheer hard work, to become one of Sweden’s largest food importers from Southeast Asia.

The 35-year-old director of Saigon Food AB became well known among the Swedish population after he was honored as the Male Shooting Star at the awards ceremony for Entrepreneur of the Year held by UK-based auditing firm Ernst & Young in November last year.

“Nguyen Quang started literally empty-handed. Today, his company is the market leader in food imports from Southeast Asia,” said a jury. “With a heart that beats for both employees and customers, Nguyen Quang is a good example for other entrepreneurs.”

Quang was modest about his success. “We have been lucky,” he said.

I met Quang at the end of February when he’d come to Vietnam to source Vietnamese food products to be shipped to his company in Sweden, and to do some charity work. He spoke to me about his journey from being empty-handed to handing out charity.

Soon after their arrival in Sweden, his parents opened up a grocery store. After returning home from school, young Quang would assist his parents in selling food and household items. He also helped deliver purchases to customers living near his house.

He studied economics at the university before he took over his parents’ shop and in 2004, established the Saigon Food AB in Gothenburg to sell food products coming from Southeast Asia. Two years later, his company directly imported such products before distributing them to not only Gothenburg residents but also those living in other cities.

“In the beginning I was working probably 75-80 hours a week. I worked in the office during the day and went around and delivered in the evenings. Sometimes I slept in a sleeping bag in the office.” Later his siblings joined him.

Most of Saigon Food AB’s products are shipped from Thailand while the remainder comes from Vietnam, Philippines and Malaysia.

However, that could change in the future.

 “Through the numerous times I have returned to my native country, I have realized that the quality of Vietnamese food products has become better and better, and are not inferior to Thai products. Thus, this year and next year, I will focus on importing more Vietnamese products like Sa Giang shrimp crackers, banh trang (rice paper), and mi trung (egg noodles).

“Many Swedish people love Vietnamese food after traveling to Vietnam as tourists. When they return, they would like to enjoy Vietnamese food again. I will import more of it to satisfy their demand,” he said.

Saigon Food AB’s revenues for 2009 reached SEK142 million (US$23 million.) His company has posted an average annual sales growth of 25 percent since it was set up.

Not just business

Quang has not seen his business growth in purely economic terms. He has seen it as an opportunity to help needy people.

Because Vietnamese as well as others of Southeast Asian descent who are somewhat advanced in years find it hard to get work in Gothenburg, Quang has welcomed these people into his company.

Saigon Food AB now has around 25 staff of Vietnamese, Chinese, Malaysian and Thai origins. He also helps out other entrepreneurs. Many Thai women, for instance, who have started their own shops because they were unable to find jobs, are his clients. “We try to be generous with credit, remembering what it was like for us earlier,” he told the Swedish newspaper.

Quang said he plans to buy a 15,000-square-meter area in Gothenburg to expand his business, and generate more jobs for Vietnamese-Swedish finding it tough to find employment.

He said though there are not many Vietnamese people living in the city, the community always gathers together for sporting, camping and cultural activities together during Tet (Lunar New Year) and other festivals. Saigon Food AB is one of the main sponsors of the Vietnamese Cultural Society in Gothenburg, which organizes these get-togethers.

Quang said he is always looking for ways to help people in his native country as well. While reinvesting all the company’s profits, he takes out “the normal salary (for himself) and a dividend that I give to the poor in Vietnam,” he said.

Over the last five years, he and his parents have returned to Vietnam many times for charity work.

“Every year, I come back to Vietnam twice for charity purposes. This time [February this year], I spent VND500 million ($24,000) buying medicines and some essential products to give the poor, the old, and the orphaned living in Dong Nai.”

The award jury noted that the tremendous growth of his company was also marked by “his generosity and constant hunger to evolve on all levels.”

“If you share the money and experience, it gives you extra energy and motivation,” he said.

Japan logs first trade deficit in almost two years 

A freight ship docks alongside a container wharf in Tokyo port.

Japan posted its first trade deficit in almost two years last month, officials said Wednesday, amid rising commodity prices and weak demand for its exports ahead of China’s Lunar New Year holiday.

The finance ministry said exports, a key driver of Japan’s economy, rose just 1.4 percent in January — the 14th consecutive month of growth, but a well off the 13 percent on-year surge in December.

That came as instability in the Middle East and North Africa pushed the price of oil and other commodities up amid concerns supplies could be cut, sending resource-poor Japan’s import bill up 12.4 percent.

And analysts warned that with commodity prices looking set rise further Japan could see its cost of imports continue to grow.

The trade deficit for export-dependent Japan, which is struggling to revive its sagging economy, stood at 471.42 billion yen ($5.7 billion), compared with forecasts for a 49.6 billion yen surplus.

“Exports to China grew by only one percent in January, compared with 20.1 percent in December,” said a finance ministry official.

“Overall exports, mainly to China and other parts of Asia where people celebrate the Lunar New Year holiday, slowed because of shipping adjustments,” he said of the lead-up to the holiday in early February.

The economy, hit hard by the global downturn, is however broadly gathering steam as wider overseas demand remains strong, and officials predict the trade balance will swing back to black soon.

“The global economy has been recovering since late last year while a relatively lower yen is also helping Japanese exporters,” said Hiroshi Watanabe, economist at Daiwa Institute of Research.

Japan’s economy has been buffeted in recent months by a strong yen, which made exports more expensive and eroded companies’ repatriated profits.

However, it has eased off its 15-year high of 80.21 against the dollar struck in November and is currently sitting around the high 82 yen mark.

Japan reported last month its trade surplus more than doubled in 2010 and exports to key trade partner China had hit a record high, as robust overseas demand indicated gathering momentum for its recovery.

December’s 13 percent growth in exports, the second consecutive monthly acceleration, also showed the economy, highly reliant on auto, electronics and machinery exports, was starting to bounce back.

But Watanabe said the trade balance could be squeezed further in the coming months because of higher commodity prices, especially crude from the Middle East where Japan sources 90 percent of its oil.

“There are three main factors behind the surging commodity prices,” he said. “Emerging economies are expanding further. Speculative capital is also hiking prices due to monetary easing policies of the world’s major economies.

“Finally, the instability in the Middle East is pushing prices of oil and other resources higher.”

Prime Minister Naoto Kan Tuesday summoned his key ministers for an emergency meeting as oil soared to two-year highs amid escalating violence in Libya and instability elsewhere in North Africa and the Middle East.

Wednesday’s trade data showed Japan’s January imports at 5.44 trillion yen as the country was forced to pay more for iron ore and petroleum products as well as oil.

Exports were 4.97 trillion yen, modestly higher than a year earlier, thanks partly to demand for steel and construction machinery.

The Bank of Japan this week upgraded its view of the economy for the first time in nine months on accelerating global growth but kept its easy monetary policy in place due to persistent deflation.

Japan’s real gross domestic product slipped an annualised 1.1 percent in the December quarter as expiring auto subsidies hit car sales, a new tobacco tax sapped cigarette demand and a strong yen hurt exports.

But the contraction was smaller than expected, and there are hopes the economy will pick up this quarter on improving demand from key partners such as China, which overtook Japan in 2010 as the world’s second economy.

Vietnam air travel set to grow 10.2 pct annually: industry group 

 

The International Air Transport Association (IATA) said Vietnam will see some of the world’s most significant industry growth in the coming years.

The association expects Vietnam’s airline industry will grow 10.2 percent annually by 2014 in terms of international passengers, making it the third fastest growing market after China and the United Arab Emirates.

Vietnam will also rank second in terms of growth in domestic passengers, after China, IATA said in a statement Monday.

The association expects the global airline industry to see 3.3 billion passengers by 2014, up 800 million from 2009. Asia will account for 45 percent of the increase, the association said.

“Despite some regional differences, the forecast indicates that the world will continue to become more mobile. This creates enormous opportunities but also presents some challenges,” said Giovanni Bisignani, IATA’s Director General and CEO. “To realize the economic growth potential that this will bring, we will need even more efficient air traffic management, airport facilities and security programs.”

In terms of air cargo, IATA expects international freight volumes to surge to 38 million tons in 2014, compared to 26 million tons in 2009.

The top three fastest growing international freight markets over the period will be Hong Kong, China and Vietnam, the association expects.

Could smartphones go stupid? 

A member of the media browses through the Acer M900 smartphone.

Smartphones are rapidly becoming ubiquitous, but they risk becoming a victim of their own success, so clogging networks they are unable to do many of the smart applications that fuelled their sales.

Analysts warn that the mobile industry soon faces growing pains, with congestion choking service at peak times and locations, and operators forced to hike prices and capping or slowing data use.

In either case many popular services that have driven smartphone sales could suffer.

Mobile industry leaders recognise this threat and it will be one of the key questions they address this coming week at their annual gathering.

More than 50,000 people from over 1,300 companies are set to attend the four-day Mobile World Congress opening Monday in Barcelona, including executives from dozens of top firms.

Sales of smartphones have rocketed over the past few years — nearly 470 million of them sold in the past two years according to Gartner market research firm — and developing nifty applications for them has become a major industry in itself.

But with each smartphone generating as much as 24 times as much data traffic as a regular mobile phone the volume of network traffic has exploded, with the network firm Cisco forecasting it to grow 26-fold by 2015.

Mobile operators have been hard pressed to keep up.

"The explosion in data traffic and the strain on networks is beginning to show with service quality already suffering," Torbjoern Sandberg, chief executive of Birdstep mobile connectivity firm, said in a recent statement.

While spectacular overloading of networks such as with AT&T in the United States and 02 in Britain in December 2009 — which the carrier linked to smartphone use — is rare, users more often encounter dropped calls and slower service at rush hour or in crowded public transport.

"Bandwidth congestion will continue to be a serious problem for operators, especially in the most populated areas during peak usage times," said Merav Bahat of Flash Networks, a company which helps operators improve network performance.

"It will not render smartphones dumb, but it will frustrate users who expect a wireline-like experience on their mobile device," she added.

Congestion hits first the bandwith-hogging and most popular smartphone application — video.

Video streaming already accounts for 37 percent of mobile data traffic, according to the latest Mobile Trends Report by Allot Communication, and Cisco expects video to account for two-thirds of traffic by 2015.

But frequent interruptions would render video streaming nearly unusable at peak traffic times.

Video calls on mobiles, which may finally take off this year, would also suffer, as would voice calls on alternative services such as Skype.

E-mail and web browsing would continue to function, but at slower speeds.

Operators have already begun put smartphone users on a data diet, either limiting use or slowing data speeds after a certain volume has been reached.

"Unlimited data has already come to an end because most operators realise there isn’t sufficient capacity available in the network," said Coleago Consulting CEO Stefan Zehle.

But expensive data diets stunt the development of the market, Magnus Rehle of Greenwich Consulting noted, leaving operators with the early adopters which are heavy data users rather than a mass subscriber base with different usage patterns.

Mobile operators are also scrambling to add more capacity, but according to recent calculations by network optimization firm Tellabs, they could run themselves into the red in three years trying to build to meet forecast data growth.

"Carriers can spend themselves bankrupt well before users run out of hunger for capacity," said Tellabs chief executive Rob Pullen.

A recent report by the A.T. Kearney consulting firm calculated that at current trends mobile operators will end up 21 billion euros ($28.5 billion) short of the amount needed over the next four years to expand their networks to keep up with forecast data growth.

A number of firms such as Flash Networks and Tellabs say that the problem is not smart phones but dumb networks, and offer technology that promises to create intelligent networks that optimize the flow of data, allowing operators to do more with less.

But as the A.T. Kearney report noted, improving networks and hiking fees for consumers is unlikely to be sufficient without addressing the video streaming sites who are paying almost nothing to pump huge amounts of data across networks to consumers and have few incentives to compress data.

The consultancy concluded there are "clear structural problems in the economic model" of the fixed and mobile Internet "making it increasingly inefficient and ultimately unsustainable as traffic growth continues…"

Vietnam needs to change growth model: Deputy PM 

Comsumer prices rose 11.75 percent in 2010

Vietnam has to change its growth model in 2011 as the country’s economy has thus far only achieved fast but not sustainable growth, says Deputy Prime Minister Nguyen Sinh Hung.

Speaking at a press briefing in Hanoi on Friday, he said the economy had expanded 6.78 percent in 2010, higher than the target of 6.5 percent.

But there were still weaknesses, including economic instability and a high inflation rate of 11.75 percent, causing difficulties for citizens, he said.

Besides, interest rates were still high while many business depend on financing from banks.

“In 2011, the government is determined to change the growth model and restructure the economy for fast and sustainable economic growth,” he was quoted by the Vietnam Economic Times as saying.

“This means the government has identified stability as the number one goal and it will not pursue growth at all costs,” he said.

Vietnam is aiming for a 7 percent growth in 2011.

Strategic plan aims at sustainable development: Vietnam PM 

Prime Minister Nguyen Tan Dung.

The government’s key priorities this year are to stabilize the macro-economy, curb inflation, restructure the economy, and improve social welfare to maintain sustainable growth, Prime Minister Nguyen Tan Dung said.

“Rising inflation, increasing bank interest rates, and the fluctuating exchange rates have created pressure in stabilizing macro-economy, and difficulties in production. This threatens sustainable development,” Dung said in a statement on the national Strategic Socio-economic Development Plan 2011-2020.

According to government statistics, Vietnam grew by 6.78 percent in 2010 but inflation touched 11.75 percent in the period.

Dung said that the 2001-2010 Strategic Development Plan has created an "impulsive force" for the next ten-year-plan. Apart from the Enterprise Law being passed, the government has facilitated growth of the private sector, attracted foreign investment, enforced administrative reform, and developed better relations with other countries by joining the WTO.

“During 2001-2010, we overcame many challenges and dealt with fluctuations in the world economy to achieve significant growth,” he said.

Sustainable growth is the predominant theme in the 2011-2020 development plan, PM Dung said.

Dung said the next ten-year strategy faces new challenges of a world in flux, impact of globalization, pressure to become a green economy, and keeping up with scientific and technological advances. He added that emerging economies around the world are quickly changing the world’s socioeconomic landscape.

In his statement, Dung said that Vietnam’s development plan for 2011 will focus on restructuring the economy, and supporting industries including tourism, transportation, logistics and seaport services. Agriculture remains an important sector that will attract investment in infrastructure and biotechnology, he said.

The 2011 plan also aims at favoring investors in production and trading with the government simplifying related procedures and regulations, offering better access to loans and promoting trade.

In social terms, the government targets to reduce the number of households living under poverty line by two percent in 2011, improving insurance services, healthcare and education.

On December 31, Deputy PM Nguyen Sinh Hung announced the poverty line will be raised to monthly incomes of VND500,000 in urban areas and VND400,000 in other areas. Earlier, the thresholds were set at VND260,000 and VND200,000, respectively.

“[The plan] requires a careful balance of economic and sociocultural development, to ensure an advanced and equitable society, without sacrificing our environment,” he said.

The ten-year plan set a general target of turning Vietnam into a modern, industrialized country by 2020 with a socialist-oriented market economy, environmental and administrative reforms, a skilled labor pool, technological developments, and infrastructure improvement in major cities.

Vietnam says will fight inflation, prices aren’t under control 

 

Vietnam will focus on fighting inflation in 2011 as the prices of some goods in the country aren’t yet under control and growth has created risks to macroeconomic stability, the government said.

Inflation accelerated to 11.09 percent in November, the fastest pace since March 2009. Economic growth for 2010 may reach 6.7 percent and accelerate to as much as 7.5 percent next year, the government said in a report released Tuesday at a conference in Hanoi.

“Prices of specific products, including milk and medicine, have yet to come under adequate control,” the government said. Vietnam’s economic growth “has generated new difficulties to macroeconomic stability,” according to the report.

Vietnam needs a “coherent package” of measures including higher interest rates to re-establish its monetary policy credibility and slow inflation, the International Monetary Fund said Tuesday.

The central bank said in a statement prepared for the conference it plans to prioritize macroeconomic stability and inflation control next year.

“The government is on the horns of a dilemma,” Australia’s Ambassador to Vietnam, Allaster Cox, told reporters at the conference.

“You’ve got the short-term needs for growth and employment generation, which are urgent to maintain social stability, and yet at the same time you’ve got to try and drive competitiveness and improve the economic engine to generate more efficiency to reduce the overheating.”

Credit may grow 25 percent to 27 percent this year, central bank Governor Nguyen Van Giau said in the State Bank of Vietnam’s statement.

‘Too high’

Lending growth of even 25 percent “is too high,” according to Masato Miyazaki, the IMF’s division chief for the Asia and Pacific department, who also said in remarks prepared for the meeting that the Vietnamese government’s actions often give an “impression” that it favors short-term growth “despite official statements to the contrary.”

Recent economic growth has been fueled by a rapid expansion in fiscal policy and credit, the United Nations said in remarks prepared for the meeting.

Vietnam faces an “increasingly deteriorating macroeconomic outlook,” the UN said, citing inflation, a current-account deficit and a weakening currency. “This is slowly eroding the public’s confidence and that of international investors and global capital markets.”

The implementation of “ad-hoc and trade-restrictive measures” to fight inflation such as price registration and import-licensing systems are unlikely to be sustainable and will contribute to hoarding, according to a joint Australian-Asian Development Bank statement to the meeting.

Binh Phuoc asked to make a big leap in economic growth

LookAtVietnam – The southern border province of Binh Phuoc should fully exploit its natural resources, including land, forests, and minerals to make a breakthrough in economic development, said National Assembly Chairman Nguyen Phu Trong.

During a visit to the province on March 11-12, Mr Trong acknowledged the socio-economic achievements that the local Party, administration and people have made since Binh Phuoc was re-established in January 1997.

He analysed difficulties and challenges facing Vietnam and Binh Phuoc in 2009 and asked the province to effectively implement the Party’s resolution on agriculture, farmers and rural development as well as the Government’s measures to maintain steady economic growth and ensure social welfare.

“Along with economic development, the province should seek ways to improve local people’s physical and spiritual lives and harmoniously settle pressing social issues such as housing, employment, education, health care and environmental protection, while creating an attractive investment environment for domestic and foreign businesses,” said Mr Trong.

He expressed hope that the local Party, administration and people of different ethnic groups would fully tap their potential to develop on a par with other provinces in the southern key economic region.

He acknowledged the province’s proposals concerning the management and use of forest land, infrastructure construction and the development of rural electricity, tourism, the border economy and industrial zones.

He said the National Assembly will examine and decide key issues within the scope of authorisation and send other contents to relevant agencies.

While staying in Binh Phuoc, Mr Trong visited the families of social policy beneficiaries, ethnic groups, village chiefs and soldiers at border guard stations.

Binh Phuoc, which has a 240km long borderline with Cambodia, is home to approximately 850,000 residents of 41 ethnic groups. It is relatively rich in natural resources, land, forests and minerals.

Despite economic difficulties last year, the province still achieved a high economic growth rate of 14 percent, double the national average.

VietNamNet/VOV

Economic growth topped 6 percent in 2008


The focus of the government’s $1 billion economic stimulus package announced earlier this month would be interest rate subsidies for small and medium businesses like the cooking oil factory pictured above, Minister of Planning and Investment Vo Hong

In the face of a dramatic global slowdown and raging inflation earlier in the year, Vietnam’s economy has proved resilient.

Vietnam posted an “impressive” economic growth rate of 6.23 percent this year despite the dramatic global events, Planning and Investment Minister Vo Hong Phuc said Wednesday.

The full-year economic growth rate just missed the government’s most recent target of 6.7 percent – lowered from an original target of 7 percent – and was slower than last year’s 8.5 percent growth rate.

Phuc told a press conference in Ho Chi Minh City the nation’s 2008 year-on-year inflation rate was 19.9 percent, significantly lower than the 30 percent touted earlier this year by some economists.

Foreign investment pledges to Vietnam this year exceeded US$60 billion, with around $10 billion disbursed, Phuc said.

Phuc said he hoped even more foreign investment would be pumped into Vietnam next year as a result of the favorable investment environment the government had rolled out.

The trade deficit this year stood at $17 billion, compared with the government’s target of $20 billion, Minister of Industry and Trade Vu Huy Hoang said.

The value of exports this year is expected to hit $63 billion, a 29.5 percent increase on last year, Hoang said, while the value of imports are estimated at $79.91 billion for the year, up 27.5 percent from last year.

Small, medium enterprises targeted

Phuc used the press conference to reveal more details of the government’s $1 billion economic stimulus package announced earlier this month.

The focus on the package would be interest rate subsidies for small and medium businesses, Phuc said. The subsidies would represent a 4 percent discount on the current commercial bank loan interest rates, he said.

Proposals to set the interest rate subsidies at 5 percent will be examined by the ministries of planning and investment and finance, Phuc said.

The stimulus package will also include funding for unemployment reduction programs and support for housing development.

The government plans to expand the package to $6 billion, including $1.2 billion to be raised by the sale of government bonds. The extra spending will be directed to tax exemptions and rebates or credit guarantees for offshore loans.

Phuc said in case of an emergency, the package could be funded by Treasury reserves. He stressed any drawing on the reserves would be fully transparent.

The National Assembly (NA) will decide whether the income tax law, set to take effect on January 1, will be delayed, Minister of Finance Vu Van Ninh said.

The government has referred the proposed delay to the NA Standing Committee, which is now in session, for a final decision, Ninh said.

PRIME MINISTER’S 2008 CONCLUSIONS

At the press briefing, Government Office Chief Nguyen Xuan Phuc conveyed Prime Minister Nguyen Tan Dung’s conclusions after a two-day cabinet session that wrapped up Wednesday.

In the context of the economic slump and a series of natural disasters, the government has steered the economy in an active, flexible, determined, timely and comprehensive manner.

The government has succeeded in keeping a close eye on macroeconomic management in the sectors of national foreign currency reserves, government debt and national debt. Social welfare policies have also benefited poor and low-income people. The country is considered safe and secure by other countries.

The government took responsibility for the lower-than-targeted economic growth rate of 6.23 percent this year as well as the high trade deficit in the first quarter of this year.

Reported by An Dien

World Bank lowers growth forecast for Vietnam


Vietnam’s shipments of staple items like garments and seafood, which until recently saw high export growths, are not expected to fall sharply, said the World Bank’s acting country director

Vietnam is expected to post gross domestic product (GDP) growth of 6.5 percent in both 2008 and 2009, lower than earlier predictions, the World Bank said in its semi-annual report released Wednesday.

In April, the Washington-based lender predicted 8 percent growth for Vietnam this year and 8.5 percent next year.

But its latest prediction is still more optimistic than the International Monetary Fund’s recent forecast of 5 percent for 2009. The growth rate last year was 8.5 percent.

The World Bank’s prediction is based on the expected impacts of the global financial crisis on Vietnam’s poverty reduction programs, export and investment, the bank’s acting country director in Vietnam, Martin Rama, said at a video conference.

The country’s shipments of some staple items like garments and seafood, which until recently saw high export growths, are not expected to fall sharply, he said.

But the global economic recession would see foreign direct investments decline, though not by too much, he said.

FDI inflows have remained robust so far, with approvals this year reaching a record level of US$59.3 billion, equivalent to about two-thirds of the GDP.

Assessing the government’s reaction to current difficulties, Martin Rama said the country has taken fairly good and effective action, but it should take more rapid, accurate and flexible measures.

Recently, the World Bank advised Vietnam to place priority on ensuring economic stability, developing its infrastructure and improving the efficiency of investments.

East Asia growth forecasts

East Asian economies would probably expand at the slowest pace in eight years next year, as easing export demand and declining investment and consumer spending portend “hard times” for the region, the World Bank said.

East Asia, excluding Japan, would expand at 5.3 percent next year, slower than the 7.4 percent rate the World Bank had predicted last April. Growth would probably be 7 percent this year, the bank said.

Fiscal stimuli and coordinated interest-rate cuts by governments and central banks around the world have failed to reverse a worldwide economic slump and the worst credit crunch in seven decades.

The World Bank Tuesday lowered its global growth projections, and predicted international trade would shrink for the first time in more than 25 years in 2009.

“The contraction of output in the developed economies may well last longer and run deeper, delaying a recovery in growth in East Asia,” the bank said. “In the near term, downside risks are substantial.”

The World Bank had said in April inflation would pose a greater threat to East Asia than the global slowdown this year. As crude oil and commodity prices fell from record levels, and consumer price gains peaked, it is now pointing to a worsening economic outlook.

Weaker exports

“Prospects for weaker exports, together with a projected decline in capital inflows, will constrain investment spending,” it said. “Private consumption is likely to be hit by more sluggish earnings, higher levels of unemployment, a reduction in household and corporate wealth, and an increased desire to save in uncertain times.”

Asian governments and their counterparts around the world are spending hundreds of billions of dollars to protect their economies from the global financial crisis. Slowing inflation would allow the governments to boost growth through expansionary fiscal measures, the World Bank said.

China last month announced a $582 billion economic stimulus plan, while South Korea unveiled a 14 trillion won ($9.7 billion) package of extra spending and corporate tax breaks, adding to almost $20 billion in income-tax reductions announced in September.

“A number of countries in East Asia have some room to loosen policy, as fiscal positions have generally improved in recent years,” it said. “To ensure fiscal stimulus packages achieve their objective of generating demand and jobs in the domestic economy, such packages will need to be well-targeted and temporary in duration.”

’Do better’

The World Bank said developing East Asian economies would be more resilient during the slowdown compared with other emerging-market regions such as Latin America, which it has projected will grow 2.1 percent next year.

“East Asia is expected to do better than the other developing regions in the world” by growing 4 to 5 percent in the next year, Vikram Nehru, the World Bank’s chief economist for East Asia, said in an interview with Bloomberg Television earlier this week. “That’s not spectacular, but still reasonably good.”

East Asia probably contributed to a quarter of global growth this year, and that may rise to a third next year, the World Bank said.

“The countries in the region will be better positioned to deal with the crisis to the extent that they are able to maintain macroeconomic stability, shift exports to faster growing regions in the world, substitute external with domestic demand, and continue with their structural reforms to strengthen competitiveness,” the report said.

Global forecast

The bank forecast slowing growth of just 0.9 percent for the world economy and said global trade volume would fall 2.1 percent, as the financial crisis takes its toll on rich and poor nations around the world.

“The global economy is at a crossroads, transitioning from a sustained period of very strong developing country-led growth to one of substantial uncertainty,” said World Bank chief economist Justin Lin.

The bank’s report came amid a slew of more bad news from companies and countries worldwide.

Anglo-Australian mining giant Rio Tinto said Wednesday it would slash thousands of jobs globally to cut its debt by $10 billion, as it battles falling mineral prices.

Canada’s central bank said the Canadian economy has slid into a recession.

The International Air Transport Association forecast that airlines would likely lose $2.5 billion in 2009.

“We face the worst revenue environment in 50 years,” said Giovanni Bisignani, the chief executive of the Geneva-based association.

Reported by Ngan Anh (With inputs from AFP and Bloomberg)