More National Assembly seats proposed for non-party members 

A meeting held by the Vietnamese Father Front before the National Assembly elections on May 22

More non-party members should become National Assembly delegates while the number of parliamentarians from executive and judicial agencies should be reduced, the Vietnam Fatherland Front said at a meeting held to discuss elections to be held in May.

 

The VFF is an umbrella group of all public organizations in Vietnam. It is responsible  for whetting and approving candidates for the National Assembly elections.

The rate of people with no party membership in the legislative body should be at least 20 percent, instead of the 10 percent proposed by the National Assembly’s standing committee, VFF officials said at the Wednesday meeting.

 

National Assembly elections held on May 22 will elect 500 candidates who will be in office for five years.

 

Nguyen Tuc, deputy head of the front’s consultancy council on social affairs said the higher rate would create a more “democratic atmosphere.”

 

Agreeing with Tuc, Do Duy Thuong, former vice chairman of the Father Front’s Central Committee, said the restricted rate of non-party members has partly discouraged people with competence from nominating themselves.

 

Luu Van Dat, head of the consultancy council on democracy and laws, also said it would  be  good  to increase the rate of non-members. With members accounting for 60 percent of the National Assembly’s seats, the party’s leadership is already guaranteed, he said.

 

Vo Quoc Thang, chairman of Vietnam Association of Young Businesses, meanwhile, said was not necessary to regulate the rate of non-party members in the National Assembly.

 

As long as people are competent, they should be selected, he added.

 

Members of the Father Front also suggested decreasing the number of seats in the National Assembly held by people from the government.

 

Under the proposal of the National Assembly’s Standing Committee, the government will hold 20 seats, while authorities of provinces are given nine.

 

Tuc said it was important to reduce the executive numbers in parliament in order to prevent the practice of the government judging its own performance.

 

Thuong also said only the prime minister, deputy prime ministers, and some ministers should attend the National Assembly sessions, because cabinet ministers are in fact too busy to attend meetings that last for months.

 

Meanwhile, Dat said the number of seats held by people from judicial agencies in provinces should also be cut because only those from central judicial agencies are needed for the work.

 

It is also not essential that chairpersons of the People’s Committees in provinces hold seats in the National Assembly; they should deal with affairs in their localities, he added.

 

“It’s necessary to decrease the involvement of executive agencies in the National Assembly so it can operate professionally and hold meetings more frequently, instead of the very long meetings that are held once every two years at present,” Dat said.

 

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Hanoi claims it came in under-budget on anniversary party 

 

Hanoi spent VND265.928 billion (US$13.64 million) on its millennial anniversary, Hoang Manh Hien, vice chairman of Hanoi’s People’s Committee, said at a meeting on Wednesday, December 8.

The sum is far below some of the astronomical projections that have surfaced in recent weeks. If the figure is indeed accurate then the city managed to pull the event off well under-budget.

The money was spent on PR, cultural activities, and gifts among other things, according to Hien.

The city appears to have cut impractical and unreasonable addendums from the event budget, he told a meeting of the Hanoi People’s Council, the municipal legislature.

According to Hien, the Council had approved VND350 billion ($17.95 million) for the event.

City authorities recently called for a public report on expenditures for the week-long October festival after local media outlets reported rumors that the celebration cost VND4-5 trillion (US$205-257 million).

Last month, one lawmaker filed a note to the Finance Ministry asking officials there to address rumors that the festival organizers had blown VND94trillion ($4.82 billion), or on tenth of the country’s gross domestic product.

Municipal authorities roundly denied the allegations.

Still, even after the first official expenditure report, suspicion lingers among some city deputies.

Deputy Vu Duc Tan said the report is incomplete, considering that funding for the event came from more places than just the municipal budget.

Tan added that the report omitted several costly development projects that were supposed to conclude in time for the anniversary – like the 30 kilometer Thang Long Boulevard and Hoa Binh Park.

In the meantime, Nguyen Van Nam, Chief of the People’s Council’s Budget Committee, said the deputies will have to wait until all the expenditures have been settled on the balance sheet.

During the same meeting, several development-weary deputies criticized a proposal calling for high-rise construction along the city’s 40-kilometer riverfront.

Deputy Nguyen Viet Hung said the project, which was estimated to cost $7 billion, would pave  the city center with a high density of buildings.

Hanoi, he fears, could make the same mistake Seoul did when they developed the banks of the Han River. Hung said the plan would prove “a misery” that would sap the city of its “ancient and romantic” beauty.

Councilman and architect Tran Trong Hanh agreed.

Hanh argued that the project has already been criticized by many deputies and would transform the serene waterfront into a cold rampart. Hanh was equally concerned by a proposed adjustment to several sections of the river’s dyke which is almost 1,000 years old.

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.

Improve business environment to cope with global slump: meeting


The construction of the Nguyen Van Cu Bridge in Ho Chi Minh City was originally planned to finish in early 2007, but just 40-70 percent of the work packages have been completed so far.

Foreign and domestic businesses called on the government to boost exports, improve infrastructure and cut red tape.

Poor infrastructure, rising labor costs, tax-related problems and the tight monetary policy are undermining their operations, businesses said at a conference in Hanoi Monday.

The government must push ahead with reforms or risk dropping further behind its Asian competitors amid the global economic turmoil, foreign chambers of commerce warned at the Vietnam Business Forum (VBF) conference.

Infrastructure remained the biggest bottleneck for business growth in 2008, according to a report on a business sentiment survey released at the conference.

Insufficient and erratic power supply, congestion at ports and poor roads badly impede business operations, the report said.

“The under-development of infrastructure, especially roads, ports and electricity, is still a serious issue for Japanese manufacturing companies,” Matsuda Noriyasu, chief representative of the Japan Bank for International Cooperation, said.

The rise in labor costs is becoming a new concern for Japanese investors, he told the government officials, diplomats and executives who gathered at the conference, which took place ahead of government meetings with the World Bank, the International Monetary Fund, and other international donor organizations on December 4.

“In the past, the labor environment in Vietnam was a positive factor encouraging foreign direct investment,” Michael J. Pease, chairman of the American Chamber of Commerce, said. “Recently, however, it has become a negative factor, especially when considering investment in the next five years.”

Labor costs in key export industries will increase by 20 percent to 30 percent from January when planned increases in wages and social insurance kick in.

Other recent actions that have hurt Vietnam’s attractiveness include the imposition of onerous documentation and notification requirements for obtaining work permits, and changes in the personal income tax law that make several previously non-taxable benefits taxable, Pease said.

He listed housing, education, transportation and home leave.

Besides, one of the impediments to Vietnamese corporations accessing the international capital markets is the imposition of “withholding tax” on interest payments to offshore lenders, Ashok Sud, chief executive of Standard Chartered for Vietnam, Laos and Cambodia, and head of the bank working group of the Vietnam Business Forum, said.

“Perfect storm”

Lawyer Fred Burke, delivering a VBF report, warned that Vietnam-based manufacturers are just beginning to feel the effects of the global crisis.

“Based on an export-led growth model, our manufacturers and other exporters are confronting a ’perfect storm’ of external challenges,” he told the meeting.

Key threats, he said, include falling demand in export markets and plummeting world prices of commodities and crude oil, which Vietnam exports.

Burke, of law firm Baker and McKenzie, also warned of the risk of “serious foreign exchange shortages” in the coming months as foreign investment projects are delayed or cancelled, tourism drops off and overseas Vietnamese workers send home less money.

Pease said exports, which are estimated to be more than half of the country’s gross domestic product this year, would slow in 2009 due to lower consumer spending in the US, the European Union and Japan, which together account for 61 percent of export revenues.

“But by increasing productivity and reducing the cost of doing business, Vietnam can maintain and improve export growth.”

On the other hand, the expected drop in exports may offer Vietnam an opportunity to catch up on infrastructure development, he said.

Often corruption delayed infrastructure, he added.

Tax cut pondered

The government could slash corporate income tax and interest rates on consumer loans to help companies weather the global financial crisis, officials said at the meeting.

Minister of Finance Vu Van Ninh said his ministry would consider a proposal by the business community to waive the 10 percent withholding tax on offshore interest payments.

Waiving the tax would help borrowers reduce investment costs and make their projects more attractive to lenders, Sud said.

Meanwhile, the State Bank of Vietnam (SBV) would adjust the interest rate ceilings on consumer lending, now capped at 150 percent of its base rate to make the loans attractive, deputy governor of the central bank, Nguyen Van Binh, said.

Deputy finance minister Tran Xuan Ha said his ministry has sought cabinet approval to expand foreign ownership in unlisted companies to 49 percent, or on a par with those listed on the main exchange. He gave no timeframe for the approval.

Replying to a request from stock investors to delay imposition of the capital gains tax on securities proposed in the new year, Ha said it needs parliament approval.

BANKS FACE ’CRISIS OF CONFIDENCE’

The banking system is threatened by a crisis of confidence because a quarter of lenders are undercapitalized, the bank working group said in recommendations to the government.

Of more than 80 foreign and Vietnamese banks, the biggest 20 deal with the majority of businesses, Ashok Sud, chief executive of Standard Chartered for Vietnam, Laos and Cambodia, and head of the bank working group of the Vietnam Business Forum, said.

The industry needs to consolidate, he said.

“Vietnam has too many banks given its size,” Sud said. “The bottom 25 percent could pose a threat to the confidence in the banking system through their instability and lack of critical mass.”

Loan growth is decelerating as Vietnam is poised for the slowest economic expansion since 2000 because the deepening global crisis is slowing exports. The benchmark stock index is heading for the biggest annual loss since postwar Vietnam started its first exchange in 2000.

“Vietnam should encourage consolidation in its banking sector to ensure fewer and more stable banks,” Sud said.

Ensuring stability

The central bank is seeking government approval this month for regulations covering bank mergers and acquisitions, Nguyen Van Binh, a deputy governor at the State Bank of Vietnam, said in response to the banking group’s recommendations.

Policy makers are concerned about “the quality of banks’ operations and how to ensure their stability, as well as making sure that no banks will collapse, causing a domino effect on the entire financial system,” Binh said.

Lending growth in October slowed to 1 percent from the previous month, compared with a 5.2 percent month-on-month increase in October last year, according to the latest monthly review by the central bank.

The State Bank has been trying to encourage banks to make more loans and protect the economy against the global financial crisis by cutting its benchmark rate three times on the past six weeks to 11 percent, from 14 previously, the highest rate in Asia.

A surge in lending last year triggered a rally in the VN Index to a record. The gauge has lost almost two-thirds from its high, spurring concern that domestic demand will decline.

Source: Thanh Nien, Agencies

Vietnam attends Asian parliamentary meeting


A National Assembly delegation led by Vice Chairman Uong Chu Luu has attended the three-day Asian Parliamentary Assembly in Jakarta that finished Saturday.

Addressing the plenary on Friday, Luu said Vietnam welcomes and supports the initiatives of the host country, Indonesia, and other Asian nations to step up cooperation in tackling the global financial crisis and preventing similar crises from occurring in the future.

He also said that natural disasters, depletion of natural resources and poverty are threatening sustainable growth and living conditions across Asia.

He urged APA members to step up cooperation in dealing with such problems to stimulate peace and prosperity.

The Vietnamese delegation took part in various activities at the meeting, including sessions of the executive board and committees, plenary sessions, debates on bills on cooperation between the APA and other multilateral organizations, and discussions focusing on the global financial crisis, climate change, and fighting poverty, corruption, and terrorism.

Source: VNA

Consultative group meeting opens next week


Government officials and international donors will discuss Vietnam’s socio-economic situation, the effectiveness of international aid and climate change at a meeting opening in Hanoi Thursday.

Ahead of the two-day 15th Consultative Group Meeting, titled “Stabilizing Vietnam’s Economy and Maintaining Its Growth Potential,” a separate Vietnam Business Forum will be held for private sector representatives, both local and foreign, on December 1.

The forum will focus on the local investment environment, the global financial crisis and its impact on Vietnam, the measures to maintain the competitiveness of Vietnam’s manufacturing and distribution sector.

Reported by Vinh Bao

Local IT training just not worth it: meeting


Students from Ho Chi Minh City’s University of Natural Sciences, one of Vietnam’s leading IT trainers.

IT training in most Ho Chi Minh City centers is still wasteful as only a few graduates can meet businesses’ requirements, said IT industry insiders at a conference.

A recent meeting on information technology (IT) development highlighted that IT job applicants in Ho Chi Minh City lack foreign language skills and expertise associated with their major courses of study. Experts chalked it up to bad schooling.

Less than 10 percent of graduates from Ho Chi Minh City IT training centers – including universities, colleges and vocational schools – found employment in the 2001-2007 period, according to figures released in a report at last week’s conference, titled Training and Developing IT Human Resources.

A representative from the HCMC software company TMA said only 10 of 100 recent applicants were qualified for recent job openings.

A survey by Quang Trung Software Developing Company showed 46 percent of IT employment candidates did not fully understand the fundamental aspects of the subjects they had majored in.

According to another survey conducted among IT graduates from the HCMC University of Natural Sciences, up to 40 percent of applicants were unemployed due to poor foreign language skills.

Ngo Hung Phuong, general director of Computer Sciences Consulting (CSC) Vietnam, said IT facilities and equipment were outdated at most schools.

Statistics from the municipal Department of Labor, War Invalids and Social Affairs showed that the city’s IT centers trained some 213,000 people during the period, but only 20,100 of them, or 9.4 percent, were hired in the sector.

Participants at the conference said such high unemployment meant that the IT training sector was wasting the billions of dong learners were spending on training.

Those who earned degrees in IT-related fields at universities saw the highest employment rate of all IT trainees, 87 percent, or some 13,000 out of 15,000 graduates.

Only 18 percent of college graduates with IT majors were employed, or 3,300 out of 18,000 graduates.

And only 2 percent of some 180,000 graduates from IT-specific vocational schools were hired in the sector, according to the report by the department.

But Phuong from CSC also said that while businesses complained of not finding qualified employees, they themselves contributed to the problem by failing to offer entry-level positions to new graduates.

He said most businesses required that job applicants have several years’ experience in the field.

Phuong said the number of experienced candidates was limited and companies were now hurting themselves by raising salaries to vie for talent.

He said they should instead offer opportunities to new graduates. Chu Tien Dung, President of the HCMC IT Association and director of Quang Trung Software Developing Company, said final-year students should be required to pass on-the-job business training at local companies to obtain the hands-on experience they’ll need after graduation.

He suggested that schools and businesses work together to create long-term internships.

BUSINESSES’ ASSESSMENT OF IT WORKER COMPETENCE

In terms of Unqualified Qualified Competent Good Excellent
Background knowledge 16% 25% 31% 23% 5%
Ability to adjust to new technology 6% 29% 36% 24% 5%
Foreign languages 38% 29% 23% 10% 0%
Group-work skills     18% 25% 21% 31% 5%

The survey was recently conducted at 80 businesses in Vietnam by Truong My Dung, principal of the HCMC University of Natural Sciences. (Source: TT, LAO DONG)

Source: TT, SGTT