Vietnam - Macro economic review in week between Feb 6 and 11

Vietnam enjoyed a trade surplus in January 2012 after six straight months of trade deficits. Oil and gas prices may fall in the near future and many provinces call for investments in infrastructure, services and seaports.

These are outstanding macro economic news in the week between February 6 and 11.

From February 15, 2012, state-owned enterprises (SOEs) are not allowed to spend exceeding 500 million dong on equitisation process.

The prime minister approved to include Hai Ha seaport industrial zone in Mong Cai border gate economic zone. The initial investor of this industrial zone was Vietnam National Shipbuilding Industry Group (Vinashin), and then the group faced difficulties in finance, so the government transferred the project to Quang Ninh province.

The State Audit of Vietnam (SAV) has announced its auditing agenda in 2012 whereby SAV will audit three oil and gas firms and five financial institutions. Especially, SAV will audit the interest rate cap issue and real estate credit issue.

According to general Department of Vietnam Customs, Vietnam enjoyed a trade surplus of $170 million in January after six consecutive months of trade deficits, of which, FDI (foreign direct investment) companies have made key contribution.

At the meeting of Vietnamese Ministry of Industry and Trade (MoIT) in early of the week, the ministry's representative said that if the petroleum price in the world market continues to increase, the local gasoline price will be also adjusted up.

Oil and gas traders said that the petroleum prices in the world market since early February so far have increased highly (oil price has surged $3 and gasoline price has soared $8 per barrel), so these petroleum dealers have to suffer 1,700 dong loss for each litre of gasoline and 1.300 dong loss per oil litre.

Regarding electricity price, MoIT also declared that if the coal price in 2012 is adjusted basing on the market conditions, the electricity price will be also adjusted but under a roadmap to avoid sudden impacts to consumers.

At Electricity of Vietnam (EVN), according to the conclusion from SAV, the group currently suffers loss of over 15 trillion dong from forex rate difference.

Considering coal price, Vietnam National Coal and Minerals Industries Group (Vinacomin) continued to propose applying the market-based coal price due to the current coal price for electricity production is equal to only half of the coal mining cost and 25 percent of the coal at the same type for export.

The Ministry of Finance (MoF) last week decided to inspect the gas price of enterprises because since early January so far, gas prices have risen nearly 75,000 dong/per 12 kilogram cylinder, marking the highest level for 10 years.

MoF has recently been assigned to build and submit the prime minister a plan to establish corporate financial supervisory and management department to assess the efficiency of state-owned corporations and groups during the restructuring process.

Trade promotion funding is declining, from 170 billion dong during 2009 and 2010, to only 15 billion dong now.

As reported by Niesel, Vietnam's consumer confidence in the last months of 2011 increased again after three consecutive quarters of decrease and returned to the top 10 global consumer index.

Las Vegas Sands Group wants to invest in two resort complexes in Vietnam with total investment of up to $6 billion. However, the investment barrier for the group is that Vietnam does not officially allow opening casinos while the group's resort complexes have casinos.

Quang Ninh province is calling for investments in 18 key projects in five key areas including tourism and entertainment services, seaports, border gate and logistic systems, hubs trade, infrastructure, training and providing high quality human resources.

Ba Ria - Vung Tau province is also calling for investment in supporting industry and supermarkets. However, the province is now facing with the lack of infrastructure.

Head of Overseas Investment Department said that Vietnam's FDI attraction in the coming months will have positive changes. The country's low FDI attraction in January was due to the impact from prolonged Lunar New Year (Tet) holiday.

The US Export-Import Bank financed $1 billion for wind power project in Mekong Delta region during 2011 - 2015 period. Russia also pledged to offer $10 billion loan to build Ninh Thuan 1 nuclear power.

Japan's investments in Vietnam hit a record high in 2011 with about 208 Japanese companies investing in Vietnam with investment plans of about $1.8 billion. In 2011, Vietnam has also invested $631 million in Cambodia, taking the leading position amongst Asean nations.

Vietnam confirmed that it did not make dumping for wind power tower in the US. Foreign Ministry spokesman said the decision of the US Department of Commerce did not reflect the actual business and production activities of this commodity in Vietnam and was against the US commitment.

VietBiz24

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