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VN Buss. News (Mr. 11-12/1997)
Mar 12: Vietnam: Bidding For Highway To Cambodia Seen Late In '97
Mar 12: Sumitomo 54 million dollar industrial park licenced in Vietnam
Mar 12: ADB gives Vietnam boost, but warns against project delays
Mar 12: Vietnam Dong Ends Steady, Stuck Near Bottom Of Band Vs Dlr
Mar 11: Indonesia businessmen should make market breakthroughs ...
Mar 11: U.S. Hails Agreement With Vietnam On Repayment Of Debts
Mar 11: Asian Dev. Bank Pledges $1.5 Bln To Vietnam 1997-2000
Mar 11: U.S.'S Rubin Says He Will Visit Vietnam In Early April
Wednesday, Mar 12, 1997
Vietnam: Bidding For Highway To Cambodia Seen Late In '97
Hanoi (DJ) -- Bidding for an approximately $290-million project to upgrade
the road between Ho Chi Minh City and Phnom Penh is likely to occur at the
end of this year or the start of 1998, Rajat Nag, the Asian Development
Bank's (ADB) program manager for Indochina and Thailand, said Wednesday.</p>
The upgrading of the road between the commercial hubs of Vietnam and
Cambodia is one of the centerpiece projects of an ADB initiative to improve
commercial intergration between the nations of the Greater Mekong
Sub-region (GMS).
The GMS consists of: Burma, Cambodia, Laos, Thailand, Vietnam and China's
Yunnan province.
The ADB has said it is ready to commit about $175 million toward the
Ho Chi Minh City-Phnom Penh road, about 60% of the project's expected cost,
Nag told a press conference.
The Bank is seeking co-financing for the remainder of the funds as well
as contributions from the Vietnamese and Cambodian governments.
'Work has moved beyond conceptualization,' Nag said.
But he noted that agreements on customs procedures, taxes and other
cross-border matters also will be required before the project can move
ahead.
Ho Chi Minh City and Phnom Penh are about 250 kilometers apart, and a
flight between the two cities takes only about 30 minutes. On the
current road, however, the journey can take up to 12 hours, depending
on border procedures.
In time, the ADB hopes roads from Bangkok to Phnom Penh and Ho Chi
Minh can be upgraded, even perhaps extending to the port of Vung Tau
about 100 kilometers southeast of Ho Chi Minh City.
Wednesday, Mar 12, 1997
Sumitomo 54 million dollar industrial park licenced in Vietnam
HAN0I (AFP) - Japan's Sumitomo Corporation has
received a licence to build a 54 million dollar
joint-venture industrial park on the outskirts of Hanoi, a
company official said Wednesday.
Sumitomo will take a 58 percent stake in Thanh Long
Industrial Park and Dong Anh Mechanical Company, controlled
by the Ministry of Construction, will take 42 percent,
Sumitomo project manager Akito Hiraishi told AFP.
The first phase of the project involves developing 128
hectares (316 acres) of what is now a paddy field bordering
the Red River across the Thanh Long bridge 10 kilometres
(6.2 miles) east of Hanoi, he said.
The project, which will include developing 172 more
hectares in later phases, is expected to cost an additional
100 million dollars and will generate turnover of two
billion dollars and employment for 3,000 people, Sumitomo
deputy general manager for overseas industrial parks
Katsumi Kurita said earlier.
Sumitomo faces strong competition from a plethora of
industrial parks launched by Taiwanese, Thai and
Singaporean companies in south Vietnam, where most overseas
investment has been concentrated.
But Kurita said his group's experience and worldwide
contacts will attract tenants. Sumitomo plans to model the
Hanoi industrial park after a successful venture in
Jakarta, he said.
He added other estates, such as the highly successful
Taiwan-backed Than Thuan Industrial Zone in Ho Chi Minh
City, appealed to small and medium sized companies, while
Sumitomo hoped to attract blue-chip companies looking for
value-added services.
"Our concern isn't just with building an estate. We are
also involved in helping market the products of companies
who come here," he said.
The project is licenced for 50 years and the site should be
ready by next year, after farmers are relocated and water
and power infrastructure is installed, Hiraishi said.
Sumitomo's other projects in Vietnam include a stake in
Hino Truck manufacturing, part of Sanyo Electric's washing
machine factory in Ho Chi Minh City and a wire harness
factory in Hanoi that will supply Toyota Motor Corp.'s auto
assembly plant to come on stream this year.
Wednesday, Mar 12, 1997
ADB gives Vietnam boost, but warns against project delays
HANOI (AFP) - The Asian Development Bank (ADB)
Wednesday gave Vietnam a welcome economic boost, pledging
loans of 1.5 billion dollars over the next four years, but
put the administration on notice its handling of the funds
could derail the deal.
The ADB said Vietnam's poor record of using previous aid
may prevent some of the funds being released and flatly
refused to become involved in a government-backed plan to
build the country's first oil refinery.
Rajat Nag, ADB programs manager for Vietnam, Laos,
Cambodia, Thailand and Burma, told a press conference here
the bank would lend the country up to 400 million dollars
per year from 1997 to 2000.
Some 800 million dollars committed for 1997 and 1998 was
basically locked in, but he said future funds could be held
up if the administration had not improved its performance.
"The disbursement rate is poor," he said.
"Vietnam must make significant project implementation
improvements so as not to jeopardise the flow of funds."
The loans would have a 10 year interest free period and be
subject to one percent interest per annum for the following
30 years.
Some 40 percent of the funds were to be spent on
infrastructure, 25 percent on rural development, 25 percent
on health and education and 10 percent on finance and
industry.
He also said the ADB would lend 175 million dollars to
upgrade the key 250 kilometre (155 mile) highway linking
southern Ho Chi Minh City and the Cambodian capital of
Phnom Penh, adding the project could start "this year or
early next year."
The ADB would help arrange financing for the portion it is
not funding, Nag said.
Since the ADB resumed lending to Vietnam in October 1993 it
has committed about one billion dollars in concessional
loans, making the country the largest recipient of ADB
funding.
But, Nag said, it had one of the poorest records of putting
aid to use.
"The implementation record is of really great concern," he
said, noting only six to seven percent of loans committed
had been disbursed, less than half the average 14 percent
for other recipients of ADB loans.
He blamed the sluggish uptake of funds on government
bureaucracy, unfamiliarity with ADB project procedures and
a lack of counterparty funding by the Vietnamese.
He added the ADB had put its 65 million dollar water supply
rehabilitation project in Ho Chi Minh City, approved in
1993, on its "B" rating watchlist for troubled projects.
"We need to see more progress or it starts to have a
negative influence on other projects in the sector," he
said.
The ADB gave Vietnam top marks for its macroeconomic
performance and for achieving an investment rate of close
to 30 percent of gross domestic product (GDP) in 1996. But
domestic savings rates were just 18 percent, creating a
potentially dangerous overdependency on overseas funding,
Nag said.
Last year aid donors from 23 countries and five
multilateral institutions including the ADB pledged 2.4
billion dollars in aid. Total aid commitments to Vietnam,
including the ADB's pledge Wednesday, have reached nearly
10 billion dollars -- roughly 40 percent of Vietnam's 1996
GDP.
Nag added the ADB had no intention of providing funding for
Vietnam's proposed first oil refinery.
"We wouldn't be receptive," he said.
"We have already budgeted 350 million to 400 million per
year, and have enough already," he added, speaking at a
press conference at which the bank pledged 1.5 billion
dollars in loans to Vietnam over the next four years.
When asked if the ADB would consider funding the project he
said "no."
Vietnam last month said state-owned PetroVietnam would
build the 1.2 billion dollar oil refinery at central Dung
Quat alone after rejecting an outside feasibility study.
Critics of the project have been sceptical about Hanoi's
ability to raise the cash on its own.
Wednesday, Mar 12, 1997
Vietnam Dong Ends Steady, Stuck Near Bottom Of Band Vs Dlr
Hanoi (AP-Dow Jones)--The Vietnamese dong ended steady against the
U.S. dollar in light trading Wednesday, essentially sitting on its floor
versus the U.S. currency for the third consecutive day.
Players said they expect the dong will stay pinned around its floor,
which is determined by where the central bank sets its daily 'guiding
rate,' for the foreseeable future.
Late Wednesday, the dong was quoted at 11,650 to the U.S. dollar, even
with Tuesday.
The State Bank of Vietnam set its guiding rate against the dollar
Wednesday at 11,100 dong, down one dong from Tuesday. The bottom of the
local currency's permissible 5.0% daily trading band was 11,655 dong to
the U.S. unit.
Having engineered a 4% depreciation of the dong in the last nine days,
since it widened the trading band to 5% from 1%, the State Bank isn't
likely to take any other such dramatic steps in the near future, or at
least in the first half of the year, said Choi Sung-ho, assistant
general manager at Shinhan Bank in Ho Chi Minh City.
He and other traders see the central bank setting the guiding rate
about one or two dong higher each day, thus acknowledging market
pressures but not caving into them.
'The common feeling now is for a steady increase in the dollar,' said
a trader at an Asian bank.
He sees the dong drifting down to 11,670 to the dollar in a week and
to 11,690 by the end of March.
Tuesday, Mar 11, 1997
Indonesia businessmen should make market breakthroughs in Vietnam
Jakarta (ANTARA) - The Vietnamese open market policy
and that country's large population should be used by Indonesian
business circles to conduct trade and investment breakthroughs in
that country's market, an MP said here on Monday.
In a report about the visit to Vietnam of an Interparliamentary
Cooperation Body (BKSAP) team, the team's spokesman Hari Sabarno
told a plenary session of the Indonesian Parliament that Vietnam had
adopted the open market economy despite its communist ideology and
Marxism-Leninism leanings.
The report also noted about the growing friendly bilateral
relations between the two countries.
The growing friendly relations was obvious at many meetings of
the BKSAP team with Vietnamese officials who said that Indonesia was
a true friend and brother of Vietnam.
But despite the very cordial relations there remains still one
problem which so far has not been solved, that is the establishment
of the continental shelf limit between the two countries.
The BKSAP delegation proposed that this problem should be solved
immediately in accordance with the agreement between President
Soeharto and Vietnamese Prime Minister Vo Van Kiet.
Tuesday, Mar 11, 1997
U.S. Hails Agreement With Vietnam On Repayment Of Debts
WASHINGTON (DJ) -- Vietnam's recent agreement to repay the U.S. debts accrued
a generation ago will hasten normal economic relations between the two
countries,
the U.S. State Department said Tuesday.
During negotiations last week in Hanoi, Vietnam agreed to repay debts
incurred by its enemy, the former South Vietnam.
The agreement was initialed by negotiators and is now subject to review by
the two governments.
The U.S. asked Vietnam to take responsibility for about $145 million in
debts, although the actual sum to be repaid by Vietnam is expected to be much
smaller.
'What's significant about it is that it helps propel us down the road to
normalization of our economic relationships,' State Department spokesman
Nicholas Burns said. 'There's significant American commercial interest in
Vietnam, and we want to make sure that we do everything we can to normalize
our relationship with that country,' he said.</p>
He said the debt involved four U.S. Agency for International Development
loans and two food aid loans.</p>
Three of the four AID loans were made in 1960 and 1961, essentially to
develop physical infrastructure projects in Saigon.</p>
The outstanding military debt owed by South Vietnam to the U.S. wasn't under
consideration for repayment.
Tuesday, Mar 11, 1997
Asian Dev. Bank Pledges $1.5 Bln To Vietnam 1997-2000
Hanoi (DJ) -- The Asian Development Bank (ADB) expects to make concessional
loans to Vietnam of $1.50 billion in the 1997-2000 period, the bank's officials
announced Wednesday.
Since resuming lending to Vietnam late in 1993, the Bank already has
approved loans worth $1.00 billion to the nation, said Rajat Nag, the ADB's
program manager for Indochina and Thailand.
Vietnam is the ADB's top recipient of concessional loans, Nag told a
press conference.
Tuesday, Mar 11, 1997
U.S.'S Rubin Says He Will Visit Vietnam In Early April
WASHINGTON (DJ) -- Treasury Secretary Robert Rubin will visit Vietnam in early
April to review what he characterized Tuesday in broad-brush terms a range
of economic issues.
'I'm going to Vietnam in early April,' Rubin told reporters after
testifying before the House Budget Committee, adding that he will visit
the Southeast Asian nation after the April 5-6 meeting of finance ministers
from the 18-nation Asia Pacific Economic Cooperation (APEC) forum in the
Philippines.
Rubin has previously met with Vietnamese finance and economic officials in
Washington. And he noted that 'we will be going there to continue our
discussions with respect to the Vietnam economy.'</p>
The secretary, who would be the highest-ranking U.S. economic policy maker
to visit Vietnam in the post-war period, didn't elaborate on exact details
of the trip, which come amid movement on further normalization of relations
between the U.S. and Vietnam.</p>
Rubin, indeed, noted his visit follows last week's accord over rescheduling
of $145 million in Vietnamese debts to the U.S., which is the latest
development in ongoing contacts between the two governments aimed utlimately
at opening up export credit guarantees and other trade preferences.</p>
The U.S. and Vietnam have signed last week an agreement covering the
rescheduling of pre-war U.S. aid to Vietnam under terms reached in December
1993 with the Paris Club of creditor governments, according to U.S.
officials.</p>
As for Rubin's itinerary, some consideration has been given to stops in both
Hanoi and Ho Chi Minh City, according to administration officials. Various
other Asian stops are also possible besides Vietnam and the Philippines,
although details weren't yet available.