The discrepancy between ASEAN’s rich and poor members “is quite wide” and could undermine efforts to create the single market, ASEAN secretary general Surin Pitsuwan told reporters. “A house divided by such a gap is not stable,” he said.

According to ASEAN statistics, GDP per capita in the bloc ranges from US$419 in Myanmar to more than $36,000 in Singapore.

Surin said the gulf within ASEAN had widened because some countries were better able to attract investment as the global economy recovered from the crisis which struck in 2008.

Perera said that “other things being equal, you tend to get more inequality” as a consequence of globalization, and a development gap may be more significant within countries than between them.

Another strategy, he said, is an infrastructure fund that the region’s finance ministers have agreed in principle to establish.

In Vietnam alone, the European Chamber of Commerce has cited estimates that the country needs around $70-80 billion of infrastructure investment over the next five to 10 years.

Foreign businessmen in the country have frequently expressed concern about the lack of seaports, roads, electricity and other essential infrastructure.

Vietnam must rethink growth strategy

Vietnam must rethink the growth strategy that propelled it from poverty to the ranks of Asia’s fastest-growing economies, analysts say, or risk stagnating.

The country, which aims to become an industrialized nation by 2020, risks losing out both to poorer, lower-wage nations and richer ones that are more innovative and have a higher-quality labor force, they say.

“Vietnam is at a critical juncture in its economic and social development history,” the World Bank’s country representative, Victoria Kwakwa, said last week at a seminar organized with the Vietnam Academy of Social Sciences (VASS).

The Vietnamese economy depends too much on exploitation of natural resources and its industry, often dominated by large state-owned groups, lacks dynamism, they said in a joint report which added that transport and other infrastructure is underdeveloped.

Another obstacle is education, which experts have said is far from an international standard, afflicted by corruption and unsuited for providing the skilled workforce the country needs.

Annual income per capita grew from less than US$100 in 1990 to about $1,200 this year, while the poverty rate fell from 58 percent in 1993 to about 12 percent in 2009, said the World Bank-VASS report.

At the seminar, Prime Minister Nguyen Tan Dung predicted that real per capita gross domestic product will rise to between $3,000 and $3,200 in 2020.

Experts say such figures do not tell the whole story and that growth is coming at the price of increasing inequality between urban and rural areas.

Vietnam suspends new head of shipbuilding group

The Vietnamese government has suspended the head of one of the country’s largest state-owned enterprises for alleged mismanagement less than two months after he took office, state media said Monday.

Tran Quang Vu, the chief executive officer of Vietnam Shipbuilding Industry Group (Vinashin), was suspended Friday decision to allow an investigation into Vinashin’s recent operations, the state-run newspaper Thanh Nien quoted Nguyen Xuan Phuc, head of the government office, as saying.

The suspension occurred less than a month after police arrested Vinashin chairman Pham Thanh Binh for alleged mismanagement that led the company to the brink of bankruptcy.

The government appointed Vu, the former chief executive officer of one of Vinashin’s top subsidiaries, chief executive of Vinashin on July 1, but media reports said Nam Trieu Shipbuilding Industry Corporation also got into financial trouble under Vu’s management.

Dairy firms told to register prices by October

Dairy firms will have to register prices of powdered milk products with authorities starting this October, according to a new guideline issued by the Ministry of Finance.

Nguyen Anh Tuan, deputy head of the ministry’s Price Management Department, said the move was aimed at stabilizing prices on dehydrated children’s milk and to curb unreasonable price hikes in this market.

Tuan said that, under the new law, businesses must register production and material costs with government regulators to ensure fair market values. The information would be kept secret by the authorities, he said…

However, Rashid Qureshi Aleem, CEO of Nestle Vietnam, said the rule may place significant administrative burdens on every aspect of the production chain for an extensive list of products.

The CEO argued that competition was the best stabilizer for the market and the government should maintain a competitive and fair market for all players. Aleem asserted that competitive solutions function better in the market than these sorts of sweeping administrative gestures.

If a government imposes a mandatory price ceiling that is too low, the suppliers of that product could withhold the goods from the market, or sell them to customers outside of the country, Aleem said. This game could lead to dairy shortages and black-market sales of the goods at a higher price.

SJC warns gold traders of counterfeit product

Vietnam’s largest gold trader, SJC, on Thursday alerted the public that counterfeit products bearing the company logo are circulating on the market. The company offered to verify the quality of all gold bars bearing its brand name, free of charge.

Real SJC gold bars are 99.99 percent pure, while counterfeit products have less gold content, between 95 percent and 98 percent, the company announced at a press briefing.

SJC also warned that some sellers are shaving a small amount of gold off the four corners of SJC bars, robbing buyers of between 0.7-1.2 grams. The trick allows these sellers to skim VND1.1 million off every one tael.

Jewelers ask to be held to higher gold standards

In a somewhat ironic development, local jewelers are asking the government for tighter control over their business.

The jewelers are troubled by unfair, corner-cutting practices by some of their peers who they say are not paying enough attention to quality or credibility.

Cao Thi Ngoc Dung, director of Phu Nhuan Jewelry (PNJ), said she was worried whenever her firm launched new products because they could be undercut by counterfeits offered at lower prices.

Nguyen Van Dung, director of My Linh Ngan Jewelry, said it was easy for consumers to buy rings, chains and other jewelry with lower gold content than claimed in several jewelry shops in Vietnam.

For example, he said, 18-carat jewelry should have 75 percent gold content but jewelry sold in many shops had a lower content of the precious metal at just 65 to 68 percent, and in some cases, even 51 percent.

Along with China and India, Vietnam is among the world’s largest consumers of gold and local consumers prefer 14, 18, 20, 22 and 24 carat jewelry. Typically, jewelry cannot be made with 24 carat gold. It is mixed with other substances to make it stronger. Some jewelry shops claim that their items are made with 24 carat gold when the actual content could be 23 or 22 carats.

Dung of My Linh Ngan, who is also chairman of the Saigon Jewelry Association, said it was difficult for local consumers to assess gold content in jewelry or other products because there was no state monitoring agency to protect them.

He said producing and trading in gold jewelry that was “under standard” has become an accepted practice in Vietnamese shops, and shopkeepers agree to sell jewelry despite knowing that the claims of gold content are wrong.

Dung of PNJ said the gold industry created more value in a product and brought in more foreign exchange than the garment industry, so it deserved to be supported by the government.

The country’s biggest gold jewelry firms earned thousands of billions of Vietnamese dong from jewelry a year, she asserted.

VEF: Business for a cause

The slight, mustachioed entrepreneur made his fortune managing a recycling firm in California. Now, he’s hoping to afford opportunities in education to eager students in Vietnam who may lack the means to make it to American universities.

Last February, President Barack Obama appointed David Duong to serve on the Vietnam Education Foundation (VEF)—a scholarship organization run by the US State Department.

David Duong made his fortune as CEO of California Waste Solutions, a top US recycling firm. He returned to Vietnam to create Vietnam Waste Solutions, which collects and processes solid waste in Ho Chi Minh City.

“I am not interested in business only,” David Duong said. “I also care about education. That I invest in Vietnam, care about the country and the Vietnamese community is no secret. That’s why US Congresswoman Barbara Lee and others nominated me for the position [at VEF].”

In Vietnam, David Duong’s company has furnished schools with computers and established scholarship funds for promising, underprivileged students. He has also created entities to help families overcome poverty which is often cited as one of the main reasons that young students cease attending school.

“I don’t want to just hand out fish,” said the businessman. “We’re teaching people to fish here.”

According to David Duong, VEF spends US$4-6 million annually to fund higher-level education for Vietnamese students who wish to study in America. Under the VEF scholarship program, after finishing their two- to four-year course, the students return to Vietnam to serve their homeland.

David Duong said that interested applicants can request recommendations from their schools, or contact VEF’s office in Hanoi to apply for the scholarships. They must pass interviews with professors from the US in order to obtain the honorarium.

David Duong’s latest project aims to bring American University campuses to Vietnam.

He said that instead of sending the students to America, the idea of bringing US universities to Vietnam could help more students enjoy high quality education at a more affordable cost.

“All of the things I do for the benefit of the two countries, I think, will surely bear fruit,” David Duong said. “I believe I will have the full support of the Vietnamese government since both the Minister of Education and Training and the Prime Minister are determined to improve the quality of local education,” David Duong said.

2009 Malaysia and Vietnam made submissions to extend their continental shelves beyond 200 nautical miles into the South China Sea, and China objected to their submissions. While adding a layer of complexity to the South China Sea disputes, the submissions and objections also clarified the claims of the competing states.

Vietnam devaluation fails to stem dong’s fall

Vietnam must have hoped that Tuesday’s devaluation of the dong would stem the downward pressure on the currency, but on Wednesday it was trading even lower on the black market suggesting the possibility of further devaluations.

The central bank moved to devalue the dong by two per cent to 18,932 against the US dollar in a bid to stem the country’s ballooning trade deficit. On Wednesday, however, the dong traded even lower in the black market, falling to 19,480 from 19,320 the previous day.

Vietnam’s trade deficit hit $7.4bn in the first seven months of this year, double the rate for the same period last year. Economists said the continuing pressure on the dong indicated that Vietnam’s trade deficit would continue to expand, and that the economy might have trouble meeting World Bank growth forecasts of 6.5 per cent for the year.

“I don’t think that a 2 per cent slide in the [dong] will do much about the trade deficit,” said Jonathan Pincus, dean of the Fulbright Economic Teaching Program, a Harvard-affiliated school in Ho Chi Minh City. “But I think the dong is still over-valued, and this is a move in the right direction.”

Le Dang Doanh, former director of Vietnam’s Central Institute for Economic Management, said the devaluation was unlikely to be the last one this year.

“I don’t see any sign that companies will find it easier to buy dollars from banks,” Mr Doanh said. “Vietnam has not balanced its demand for dollars. In order to balance it, Vietnam needs a new inflow of dollars, but none has appeared.”

Mr Doanh said demand for dollars was also driven higher by traders trying to arbitrage the large gap in interest rates on dollar-denominated and dong-denominated bank accounts. Early this year, the government limited interest on dollar accounts to roughly 5 per cent to discourage dollarisation of the economy, while rates on dong accounts are 10 per cent or higher.

Many depositors borrowed dollars, bought dong, and deposited them to reap high interest. When a bulge of such loans came due last month, demand for dollars to repay them spiked, driving up black market exchange rates.

Ultimately, Mr Pincus says, the devaluation is the latest expression of Vietnam’s “trilemma”: the country attempts to maintain a fixed exchange rate, independent monetary policy, and an open capital account at the same time.

While the country tries to maintain capital controls, these are frustrated by the large quantity of gold and dollars held outside of official financial institutions.

Vietnam’s dong has worst week since February on devaluation

Vietnam’s dong had its worst week since February, dropping to a record low, after the central bank devalued the currency for a second time this year to help reduce the trade deficit.

The dong rose Friday for the first time since Aug. 18, when the State Bank of Vietnam set the daily reference rate 2 percent lower at 18,932 per dollar. Government data show the trade deficit in the seven months through July almost doubled to $7.4 billion from a year earlier, while the International Monetary Fund said on June 9 the nation’s foreign-currency reserves have fallen to the equivalent of seven weeks of imports from coverage of less than two-and-a-half months in December.

“The devaluation makes sense, given that the country is still running a sizable deficit and the level of reserves is relatively low,” said Tai Hui, the head of Southeast Asian economic research at Standard Chartered Plc in Singapore. He forecasts the dong will trade near 19,500 for “at least the next several weeks.”

The dong fell 2.1 percent this week to 19,475 per dollar as of 2 p.m. in Hanoi, the biggest five-day decline since the currency was previously devalued on Feb. 11, according to data compiled by Bloomberg. The currency climbed 0.1 percent Friday after the central bank kept the reference rate unchanged, according to its website. The dong is allowed to trade 3 percent either side of the rate.

The currency has slumped 5.1 percent so far this year, the worst performance among 16 currencies in Asia monitored by Bloomberg.

Vietnam should “allow freer movement of dong,” Mark Mobius, who oversees about $34 billion as executive chairman of Templeton Asset Management Ltd.’s emerging-markets group, said Thursday. “That means allowing the market to determine where the dong rate should be. The best way is by changing the regime and allowing people to buy and sell dong on the street at the market rate.”

Weaker dong sends shares down on both bourses

The State Bank of Vietnam’s Aug. 18 decision to depreciate the dong by another 2 percent accelerated the downward slide of shares on both national stock exchanges on the same day, with nearly 80 percent of codes shedding value despite an overnight rise on Wall Street.

The depreciation of the dong from 18,544 VND to 18,932 VND per US dollar was part of an effort to control the nation’s trade deficit, the State Bank said.

In response, the VN-Index lost 1.73 percent to close at 455.49 points, while the value of trades on the HCM City Stock Exchange fell 7 percent to a one-month low of just 988 billion VND (51.2 million USD). Volume reached just 37 million shares.

VN Index surges by end of session due to rumours

Trading remained gloomy on August 20th’s session with low market liquidity at 3-4 million shares in both bourses.

After the first trading session, the index of Hochiminh Stock Exchange (STC) kept dipping 0.17 point or 0.04 percent to 452.06 points. In the following phase, the downtrend continued and pushed the VN Index fall to below 450-point threshold.

On the northern floor, the situation showed no positive signal. HNX Index dropped 0.7 percent to 131.3 points at 9:15 AM.

However, there appeared the rumour that the State Bank of Vietnam would lower interest rates by 1 percent and the obligatory monetary reserve ratio in dong by additional 2 percent. The information released via forums, messengers, and other means of communication and pushed the VN Index to increase by 2.61 points or 2.61 percent from deep declining trend and ended at 454.84 points at closing time.

However, the investors soon realised that the rumours about declining trend in interest rates were to confused the market for profit-taking purposes. The stock traders were disappointed and massively sold, leading the HNX index to drop again.

Audit officials probed for accepting bribes

Police in the central province of Quang Ngai Monday said they have arrested four State Audit officials for allegedly taking bribes.

Nguyen Van Quyen, Nguyen Quang Dang, Nguyen Quang Thanh, and Ngo Hong Minh, were caught red-handed accepting VND290 million (US$15,187) from contractors working on the Di Lang – Tra Trung Street project Saturday, police said.

Initial information showed that the officials asked the contractors to pay them VND500 million ($26,184) to ignore mistakes discovered in their audit of the government bond-funded project. Police say the contractors and investors felt that the findings of the audit were unreasonable.

The four Hanoi officials tasked with auditing projects in Quang Ngai were also accused of hitting up investors and contractors from other projects for money, prompting some victims to contact police.

During their raid of the four officials’ rooms at the Hung Vuong Hotel, police say they confiscated over VND600 million ($31,421) in cash.

A leader from Vietnam’s State Audit Office said the officials will be suspended, and the findings of their audits of related projects will be deemed void.

Mathematician Ngo Bao Chau wins the Fields Medal

Vietnamese-born mathematician Ngo Bao Chau on Thursday won the maths world’s version of a Nobel Prize, the Fields Medal, cementing a journey that has taken him from war-torn Hanoi to the pages of Time magazine.

Ngo, 38, was awarded his medal in a ceremony at the International Congress of Mathematicians meeting in the southern Indian city of Hyderabad.

The other three recipients were Israeli mathematician Elon Lindenstrauss, Frenchman Cedric Villani and Swiss-based Russian Stanislav Smirnov.

Ngo, who was born in Hanoi in 1972 in the waning years of the Vietnam war, was cited for his “brilliant proof” of a 30-year-old mathematical conundrum known as the Fundamental Lemma.

The proof offered a key stepping stone to establishing and exploring a revolutionary theory put forward in 1979 by Canadian-American mathematician Robert Langlands that connected two branches of mathematics called number theory and group theory.

Ngo’s achievement was brought to wider public recognition by its inclusion in Time magazine’s list of the top 10 scientific discoveries of 2009.

“It’s as if people were working on the far side of the river waiting for someone to throw this bridge across,” Peter Sarnak, a number theorist at the Institute for Advanced Study (IAS) in Princeton, said of Ngo’s breakthrough.

“And now all of sudden everyone’s work on the other side of the river has been proven,” Sarnak said.

The Fields Medal, founded by the Canadian John Fields and first awarded in 1936, is widely viewed as the highest honor a mathematician can receive.

HCMC disagrees with ministry’s online curfew

The Ministry of Information and Communications should cut the supply of online games service rather than institute online curfews at Internet cafes, according to Ho Chi Minh City authorities.

The response came after the ministry ordered the suspension of internet service to all internet cafes nationwide from 11 p.m. to 6 a.m. from this September 1.

However, in a written reply to the ministry’s demand, HCMC Department of Information and Communications said there is no legal basis for a government body to order the suspension of internet service to internet shops after their business hours.

According to the department, not all Internet shops have broken the law and there is, subsequently, no reason to punish their businesses.

The city agency proposed that the ministry order online game providers to cut their services to Internet shops from 10 p.m. to 8 a.m., arguing that the move would be more practical and effective.

Growing up fast: Vietnam discovers the consumer society

For retailers and consumer goods companies, Vietnam is an attractive market: the economy is growing briskly and sustainably, and the population is adding a million people a year. Even more important, the country’s middle class is growing fast: from 7 million households in 2003 to an estimated 25 million in 2013. Vietnam’s literacy rate is 92.5 percent, and from 2003 to 2008 the number of college and university students nearly doubled. The cities, though mostly small, are expanding rapidly. Six of them—Can Tho, Da Nang, Haiphong, Hanoi, Ho Chi Minh City, and Nha Trang—account for 40 percent of the country’s sales, according to AC

The Vietnamese government estimates that retail sales reached $39.1 billion in 2009—almost twice as high as five years earlier. And the country has room to grow: per capita retail sales, at $450, are among the lowest in Asia.

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An American warship docked Tuesday in central Vietnam where the former foes planned to conduct naval training in a sign of growing military ties amid new warnings from China for the U.S. to stay out of its backyard.

The USS John S. McCain’s port call comes as the U.S. and Vietnam celebrate 15 years of normalized diplomatic relations following a bloody war that remains an open wound for many veterans. The two governments, while ideologically different, have embraced on a number of issues, including a recent stance against China’s territorial claims over the South China Sea.

On Sunday, the U.S. Navy hosted a delegation of Vietnamese military and government officials on the USS George Washington, a hulking nuclear-powered aircraft supercarrier cruising in waters off Vietnam’s central coast. Chinese military ships were seen shadowing the carrier in the distance.

“These waters belong to nobody, yet belong to everybody,” Capt. David Lausman, commanding officer of the George Washington, said Sunday aboard the mammoth carrier that can carry up to 70 aircraft, more than 5,000 sailors and aviators and about 4 million pounds (1.8 million kilograms) of bombs. “China has a right to operate here, as do we and as do every other country of the world.”

Vedan agrees to pay Dong Nai farmers $6.26 mln

Vedan has agreed to pay almost VND120 billion in compensation to farmers in Dong Nai Province for polluting a local river and affecting their livelihoods.

The money, equivalent to US$6.26 million, will be paid to farmers in four communes in Long Thanh and Nhon Trach Districts, the Taiwanese MSG producer informed the province people’s committee Wednesday.

The company has asked the farmers to accept the settlement and not file lawsuits.

On Monday it had agreed to pay VND53.6 billion to farmers in Ba Ria-Vung Tau and VND45.7 billion to those in HCMC.

Last month it had offered a total of VND130 billion, outraging the farmers who said it was too little compared to their losses.

The farmers then put forward new claims based on calculations by the National University’s Environment and Natural Resources Institute, which said Vedan caused 89 percent of the river’s pollution.

Many have also started to file against the company, while two major supermarket chains, Saigon Co.op and Big C, began a boycott against monosodium glutamate and other seasoning products made by Vedan.

In September 2008 the company was caught red-handed by environmental police dumping untreated waste into the 76 km Thi Vai River which runs through HCMC, Dong Nai, and Ba Ria-Vung Tau.

Subsequent investigations found it illegally discharged 105.6 million liters of untreated sewage every month between 1994 and 2008, destroying fish and shrimp ponds and ruining farmlands along the river.

China buying more rice from Vietnam

Unseasonal and unexpectedly large purchases of Vietnamese rice by Chinese importers have sparked national food security concerns among industry insiders as well as local experts.

Local rice companies said Chinese importers increased buying of Vietnamese rice at the end of June. They noticed that many ships had docked in the Mekong Delta to collect the rice.

Cao Minh Lam, director of the An Giang Import Export Company, said Chinese importers were even offering high prices for low quality rice; and they transport the rice both by sea and via border gates between the two countries.

China has imported as much as 600,000 tons of rice from Vietnam since April. The purchase through border trade “is not surprising and within control,” Deputy Minister of Industry and Trade Nguyen Thanh Bien said.

Truong Thanh Phong, chairman of the Vietnam Food Association, said there has been speculation that China has lost 14 million tons of rice due to floods. “Supposing this is true, China will open its door to import rice and in that case both the Vietnamese and global rice markets will be messed up,” he said.

If Chinese importers continue to purchase rice from Vietnam, local companies may run out of the grain for export and there could be a shortage in the final months of the year, Phong said. The food association said it has asked member companies to brace themselves for such a scenario, he added.

Nguyen Dinh Bich, a trade expert, said when Chinese provinces near Vietnam are hit by bad weather, they prefer buying rice from Vietnam to save time and money, instead of transporting the grain from faraway regions in China.

Plainclothes traffic cop suspended for shooting student

Police in the northern highlands province of Thai Nguyen have placed a traffic officer on a three-month suspension for allegedly shooting and injuring a student during a controversial patrol last week.

Initial reports indicate that second lieutenant Truong Dinh Hoang and his senior colleague Nguyen Ngoc Hau of the police department in Thai Nguyen Town were on a plainclothes patrol last Friday night (August 6) when they found Nguyen Tuan Hung and Hoang Thi Tra riding a motorbike without wearing helmets.

The officers asked the couple to stop, said Hung, a senior student at the local Viet Duc Industry College, said. But he refused to follow the order as he did not know they were officers. He feared that they were up to no good.

They fired into the air, forcing them to stop, Hung said, adding that a shot fired as the police caught up with them, struck Tra, a student of the Thai Nguyen University of Education, was shot in her right thigh.

Hanoi girl crowned Miss Vietnam 2010

Dang Thi Ngoc Han, a 21 year-old student from the Hanoi University of Industrial Fine Arts, won the Miss Vietnam 2010 title in the northern province of Quang Ninh on August 14.

TEDxSaigon held for the first time

The first ever TEDx event was held in Vietnam at RMIT on August 15, 2010: TEDxSaigon 2010 — “Dream, Diversity and Development”.

TEDxSaigon 2010 website

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The United States is in advanced negotiations to share nuclear fuel and technology with Vietnam, including a proviso that would allow Hanoi to enrich uranium on its own, the Wall Street Journal reported Friday.

Congressional critics of the deal say the terms would undercut the more stringent demands placed on its partners in the Middle East, which had been required to renounce uranium enrichment in exchange for nuclear cooperation, the report said.

The newspaper cited US officials as saying that negotiators have given a full nuclear cooperation proposal to Vietnam.

China, which shares a long border with Vietnam, has not been consulted, the officials said.

The Journal said Vuong Huu Tan, director of the Vietnam Atomic Energy Institute, said the two sides reached an initial agreement on nuclear cooperation in March and hope to finalize it later this year. He said Vietnam did not plan to enrich uranium.

Power supplies continue to be a problem, EVN says

Electricity of Vietnam (EVN) on August 5 announced that power supplies this month would continue to face difficulties due to unpredictable weather patterns and repairs under way on many of the country’s thermal power plants.

According to EVN estimates, this month, the power sector could generate an average 300 million kWh per day, 1 million kilowatts higher than July, but the national grid had no reserve capacity.

In particular, water levels in the Ialy, Tri An, Thac Mo and Ham Thuan reservoirs had been closer to levels at which hydro-power plants could no longer operate. The water level in the Tri An Reservoir was only 0.1m higher than dead level at which point it was no longer safe to operate turbines, while the difference at the Thac Mo Reservoir was just 0.5m.

Therefore, to ensure stable electricity supplies for production and consumer use, EVN had asked their hydropower plants in the north to accumulate water to as high levels as possible, continue increasing capacity of coal-and oil-based thermal power plants and buying electricity from China .

In the first seven months of the year, EVN produced 33.15 billion kWh and bought from abroad 21.70 billion kWh, an increase of 5.59 percent and 38.52 percent on the same period last year.

Property Developers Ignore Rules

Local district authorities are not closely monitoring violations of construction regulations, according to a report from the HCM City Construction Department. Building beyond the allowable height was the most common violation.

On Tran Binh and Le Tan Ke streets in District 6, houses must not exceed 18.9 metres high, but many were found to be 21 metres high, with unlicensed basements and additional floors.

The department said another common violation was the unlicensed change of building function by owers.
In Tan Binh District, 91 construction sites were inspected, and many of them were hotels or offices that had not been approved.

the MAP Company must pay VND200 million (US$10,000) for supervisory fees to demolish five floors of a building at 20-22 Thai Van Lung Street within three months. Five floors were built without approval, and six floors licensed by the city will remain.

In addition, District 1 authorities have told investors of a building at 24 Thai Van Lung Street that it would demolish the top seven floors of the building on Friday if the investors refused to do it.

Hanoi Property Speculators Surveyed

Most properties in Hanoi are bought for investment purposes with only 38.1 percent homebuyers purchasing real estate for their own housing needs, a new survey has found.

Among the investors, 47.7 percent aim at quick profits while 52.3 percent buy properties for rental and other long-term purposes.

Only 20 percent of real estate investors in Hanoi use bank loans to finance their investment while the rest purchase properties with their own money or get financial support from friends and family.

The survey, conducted in the first half of 2010, also found that property investors are more interested in buying mid-range apartments than luxury ones in the near future.

Retail Booms

Vietnam’s distribution services has achieved significant growth. Retail-distribution system is contributing up to 14 percent of GDP, employing more than five million workers, the highest in the service sector.

The year 2009 was considered a rough year due to impact from global economic recession. However, Vietnam’s retail turnover and services still posted a rise of 18.6 percent. During the first seven months this year, the figure was estimated at 877.5 trillion dong, rising 26.4 percent from the same period last year.

Number of mobile subscribers nearly double Vietnam’s population

Vietnam had 157.8 million subscribers, including more than 140 million mobile subscribers, by the end of July 2010, up 46.3 percent from the previous year, according to the General Statistics Office.

Vietnam Post and Telecommunications Group (VNPT), with two mobile networks named VinaPhone and MobiFone, accounted for 82.8 million subscribers, an increase of 40.7 percent, including 11.6 million fixed and 71.2 million mobile subscribers. Viettel, S-Fone, EVN Telecom, Beeline and Vietnamobile had over 61 million subscribers.

According to the General Statistics Office, the number of new subscribers in the last seven months reached 29.6 million, growing by 11.8 percent from last year.

According to statistics, the number of mobile subscribers in Vietnam is nearly double the country’s population. However, Mobile operators said that only 50 percent of the population uses mobile services.

Breastfeeding losing ground to milk formula

“Exclusive breastfeeding rates have increased in most regions in the world, but this is not the case for Vietnam,” said Roger Mathisen, Nutrition Specialist for UNICEF Vietnam.

Vietnamese mothers blame their failure to exclusively breastfeed babies on inadequate maternity leave, which is just four months. They say the need to get back to work forces them to wean the babies away from breast milk early on. Others admit they are not completely confident they will have enough breast milk for their babies or do not know how to breastfeed properly. Then there are those who say breast milk by itself is not ideal or sufficient nutrition for infants.

The blame for a cornucopia of confusion and misinformation that still surrounds exclusive breast-feeding in Vietnam has been laid at the door of aggressive marketing campaigns run by formula milk companies who stand to make huge profits.

Formula sales in Vietnam jumped 39 percent in 2008, according to a study by The Nielsen Company, a US-based market researcher. Another survey found that the industry spent more than US$10 million on advertising in that year, placing it among Vietnam’s top five advertisers.

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The U.S. response was unveiled July 23 in Hanoi when 12 nations — Vietnam as the first and the United States as the last — raised the issue of the South China Sea at an annual security forum of the Association of South East Asian Nations. Calling freedom of navigation on the sea a U.S. “national interest,” Secretary of State Hillary Rodham Clinton offered to facilitate moves to create a code of conduct in the region. And then she said: “Legitimate claims to maritime space in the South China Sea should be derived solely from legitimate claims to land features.”

Translated, it meant that China’s claims to the whole sea were “invalid,” said a senior administration official, because it doesn’t have any people living on the scores of rocks and atolls that it says belong to China.

Foreign Minister Yang reacted by leaving the meeting for an hour. When he returned, he gave a rambling 30-minute response in which he accused the United States of plotting against China on this issue, seemed to poke fun at Vietnam’s socialist credentials and apparently threatened Singapore, according to U.S. and Asian officials in the room.

“China is a big country and other countries are small countries, and that’s just a fact,” he said, staring directly at Singapore’s foreign minister, George Yeo, according to several participants at the meeting.

On Monday, Yang issued a statement on the Foreign Ministry’s Web site saying that there was no need to internationalize the issue, that China was still intent on solving all of the disputes bilaterally and that China’s view represented the interests of “fellow Asians.”

China blasts Clinton’s maritime venture

China’s military has condemned a US intervention in the long dispute over maritime borders in the South China Sea, less than a day after Beijing said it had conducted a large naval exercise in the area.

Hillary Clinton, US secretary of state, angered Beijing after she joined a call at an Asian regional security forum last week for a resolution of the sovereignty dispute over the Spratly Islands and maritime borders in the South China Sea. She called the sovereignty issue a “leading diplomatic priority”.

But on Friday, in its first official response to Mrs Clinton’s comments, China’s military said it opposed the “internationalisation of the South China Sea issue”.

The language was moderate compared with comments from some military scholars and state media over the past week. A military spokesman also said that China’s navy would “respect the freedom of the passage of ships or aircraft” through the South China Sea.

Analysts questioned this assurance on Friday, pointing to repeated clashes between Beijing and Washington over the movement of US surveillance vessels in the area.

Vietnam’s Debt Rating Lowered by Fitch on Foreign Borrowing, `Weak’ Banks

Vietnam’s debt rating was lowered by Fitch Ratings on concern about the nation’s “inconsistent” economic policy, foreign-exchange reserves and banking system.

The country’s long-term foreign and local-currency ratings were cut to B+ from BB-, with a stable outlook, Fitch said in a statement today. The new rating is four steps below investment grade and contrasts with improving creditworthiness this year among emerging markets from Indonesia to Ukraine.

Fitch highlighted a budget deficit it expects to stay “high” at 7.6 percent of gross domestic product in 2010, which the government is financing partly by issuing foreign-currency debt even when the nation is running a current-account deficit.

“Vietnam’s sovereign creditworthiness has deteriorated on the back of weaker external finances and rising external financing requirements amid an inconsistent macroeconomic policy framework,” Ai Ling Ngiam, a director in Fitch’s Asia Sovereign team, said in today’s release. She also cited a “weak banking system.”

Vietnam cracks down on online games

Luu Vu Hai, director of the electronic information and broadcasting department of the Ministry of Information and Communication said the measures include temporarily stopping the licensing of online games, banning online game ads and cutting off internet access to shops providing online games from 11 pm to 6 am…

According to government figures 44 local and 35 foreign online game providers are active in Vietnam. Violent online games account for 77 per cent, gambling for 9 per cent and 14 per cent of the games involve football, dancing or racing.

The state-run newspaper Viet Nam News said a recent survey conducted by the education ministry showed between 70 and 76 per cent of primary school children played online games on weekdays in Hanoi and Ho Chi Minh City. On the weekend, 100 per cent of the respondents said they played online games.

Tran Ngoc Huong, chief inspector of Ho Chi Minh City’s Department of Information and Communication, said online games had a bad influence on players’ health and school performance and caused crime when players ran out of money.

There has been a public and media outcry recently about the negative influence of online games after several murders by youngsters. In April, a 16-year-old schoolboy allegedly cut his grandfather’s throat after he was refused money for online games.

Major vehicle insurers fined for price fixing

Officials from the Ministry of Industry and Trade fined 19 insurers for colluding to raise vehicle insurance fees on Thursday.

Among them are Vietnam’s leading insurers Bao Viet and Bao Minh, the insurance body of Vietnam’s largest lender Agribank and the Bank of Investment and Development of Vietnam (BIDV).

Vietnam’s inefficient state firms in spotlight

The near-bankruptcy of one of Vietnam’s largest state-owned enterprises highlights a lack of oversight and easy access to capital by the inefficient business groups, observers say.

In early July the ruling Communist Party announced that the chair of shipbuilder Vinashin, Vietnam Shipbuilding Industry Group, would be reprimanded for pushing the firm to the brink of bankruptcy.

Garment material imports shooting up

The import revenue of garment materials has never been so high as in the first months of 2010. According to the Ministry of Industry and Trade, to date, garment companies have spent more than five billion dollars to import materials, including $2.8 billion worth of fabric, an increase of 27 percent, and $350 million in cotton, an increase of 75 percent over the same period of 2009.

Garment producers needed to expand imports. The garment industry must step up production to fulfill increasingly high numbers of orders. The producers also attributed high import revenues to sharp price increases of materials.

Banking paradox could hinder economic growth

A digital board shows interest rates at a TrustBank branch in Ho Chi Minh City’s District 3.

The banking system is caught in a conundrum. Small banks are finding it difficult to attract deposits following interest rate cuts, while their larger brethren are not happy with surplus cash they cannot make good use of.

Tran Son Nam, general director of TrustBank, said the bank’s deposits fell by nearly VND20 billion within just one week when it cut deposit rates to under 11 percent early this month.

In an attempt to retain clients, the bank, based in the Mekong Delta province of Long An, had to adjust its rates to 11.2 percent, the highest level allowed under an industry agreement.

Provincial chief sacked, expelled from Party

Ha Giang legislators voted on July 28 to dismiss one of their own.

Nguyen Truong To, 57, has served as a member of the legislative body since 1999. He was elected chairman of the Ha Giang People’s Committee, the provincial government, in 2005.

The police investigations have alleged that To carried on an affair with a sex worker in 2005, while serving as head of the provincial Department of Planning and Investment. Earlier this year, two teenage sex workers accused To (in addition to police and their high school principal) of paying them for sex.

Filling station admits cheating customers

Hanoi police and standards inspectors have uncovered their biggest case of petrol-station cheating to date.

Nguyen The Loc, director of the enterprise in Co Nhue commune in Hanoi’s Tu Liem district, allegedly admitted installing an illegal electronic chip to defraud customers in May this year.

It is estimated that he cheated them of a total of about VND15 million (US$780) every month for about three months.

Dodgy helmets flood market and fill hospital beds

Uncertified, cheap helmets flood the market because, according to many helmet sellers, most buyers are intent on avoiding arrest by the traffic police, not on avoiding brain injury.

Tuoi Tre and the Research Centre for Consumer Consulting then randomly bought 31 helmets from eight stores and one supermarket in Districts 3, 5, 11, Binh Thanh and Go Vap for testing at Centre for Quality Measurement No.3 in HCM City. Notably, 18 of the 31 helmets have been certified to meet quality standards by STAMEQ.

The tests show that 71 percent of the samples (22/31 helmets) failed to meet quality standards. The plastic covers of two of the samples crumbled during testing.

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