How much gold kept among Vietnamese people?

VietNamNet Bridge – Newly released information that Vietnam has imported 1000 tons of gold in the last 20 years has stirred up the public. Experts now try to guest how many tons of gold are being kept among Vietnamese people and what Vietnam should do to use the huge capital in the most effective way.

The information about the 1000 tons of gold imported in the last 20 years was released by Le Duc Thuy, former Governor of the State Bank of Vietnam, now Chair of the National Finance Supervision Council. The head of the council did not confirm the existence of 1000 tons of gold among the public, but he said: “I am sure that a large volume of gold is being kept in people’s homes”.

Thuy commented that Vietnam should not make a hasty move to prohibit the transactions in gold. The prohibition can only put gold out of the official circulation, while the gold will still exist in the society. Meanwhile, gold should be seen as an important source of capital, and if gold cannot be put into official circulation, it will be “sitting idle”, not making profit, or will be traded on the black market. i.e out of the control of the management agencies. Thuy believes that it would be better to attract the huge capital (gold) into banks instead of prohibiting transactions in the gold.

While the national economy needs more and more capital from different sources for its development and investment, gold trading floors have been shut down and the gold prices have been continuously climbing to new highs. One week ago the State Bank issued a legal document to scale down the activities of mobilizing capital in gold and lending gold.

However, a senior official of the State Bank of Vietnam has denied the fact that 1000 tons of gold is now lying under people’s pillows. “To date, no one can say for sure how much gold is being kept among people,” he said.

The figure cited by the former Governor of the State Bank is sourced from the World Gold Council and the figure does not include the illegal imports and the import volume through other unofficial channels that the organization still cannot reckon up.

Meanwhile, the general director of a famous gold trading company guesses that people are only keeping 200 tons of gold because when the world’s gold prices were higher than the domestic prices, a substantial volume of gold was illegally exported,. However, he stressed that 200 tons of gold would also be a large volume of capital, worth $10 billion and the capital should be put into business rather than sitting idle.

Meanwhile, VnExpress newspaper quoted a director of a big bank in Hanoi as saying that the management agency needs to consider the specific characteristics of the market in Vietnam. In other countries, gold is considered as a type of good and not a tool of payment. Therefore, the volume of gold kept among people is not very big. Meanwhile, in Vietnam, gold is not only used as a kind of good (jewelry products), but also as a kind of asset (people store gold instead of cash)

If the management agency tries to weed out gold from the official channel, even though people still want to keep gold as their assets, this is really a kind of the management agency’s “voluntarism” which wastes a large amount of capital.

“It will be not the right time to weed out gold from the official channel until gold is no longer favored by people,” he said.

Meanwhile, the central bank, while trying to protect its view that it is necessary to prohibit transactions in gold, said that the massive mobilization and lending in gold have been making the dollarization in the national economy more serious and encouraging speculation.

Governor of the State Bank of Vietnam once declared that in case the market has gold in excess, the central bank may spend money to purchase gold to increase gold reserves.

Vietnamese enterprises should work as small fry to grow up: expert

VietNamNet Bridge – What should Vietnam do to be able to create Vietnamese products with globally recognized brands? This question was raised by VietNamNet to Tran Quang Hung, Secretary General of the Vietnam Electronics Association.

Why do Vietnamese enterprises decide to have their products outsourced to China?

In general, regular components are imported from China which can provide products at low prices. As for specific components which require high quality, Vietnamese enterprises have to use the products from Taiwan, Japan and South Korea.
I think that in the age of global integration, the origin of products is not the most important factor. The quality and the price are more important.
Apple, for example, also has its products outsourced to China. The country is now considered the factory of the world. Previously, Samsung also made its products in China, and it has just moved to Vietnam.
The key factor is that Vietnamese enterprises should take wise steps and they should know what they need and where they should import components from. It is like being a clever housewife, you knows how to choose the best food at the market.
It always happens that Vietnamese customers refuse to pay high prices for the products made in China. What would you say about that?
Enterprises should understand that no matter where they have their products outsourced to, they must have good designs and they must master the technologies.
We go to China to hire Chinese enterprises to work for us, and not everything provided by Chinese enterprises will be used by us.
However, if Vietnamese enterprises cannot make any components of products, and the only thing they have in the products is the brand name, will Vietnamese brands be able to become famous in the world market?
The story about Dell, a very famous brand in the US, is a typical example. The manufacturer does not have factories, or even depots. If necessary, it has others to do the design for it, has its productionoutsourced to others sand then sticks on its own label to sell.
Hard drives are made in Thailand, CPU by Intel, chips in Thailand, while computers are assembled in China. Who says the computers are not the products of Dell, a US brand?
I once told CMS and FPT Elead that the most important thing for them now is to design a model which can “win the hearts and minds” of customers with high quality and low prices. Acer buys CPU from Intel, Dell also buys CPU from Intel and so does HP. Why can’t Vietnamese CMS and FPT Elead do that?
It is now the age of knowledge-based economy. The companies, that can be good at choosing components and can launch the products which satisfy customers, will be the winners.
As you said, Vietnamese enterprises are now also outsourcing to China, like foreign enterprises. But why cannot Vietnamese brands become famous, whlie some of them have even disappeared from the market?
The business success depends on the management of enterprises. Many Vietnamese enterprises try to simply sell as many products as possible, while they do not pay much attention to developping high quality products.
As you may know, Nokia 1202 is dirt cheap, selling at 400,000 dong. However, it still  defeats all other brands in the low-cost market segment. The product is very durable.
Then, Vietnamese enterprises, please don’t try to do 3Gs. Just focus on low-cost products priced at 300,000-400,000. If your products are durable, you will cement your firm position on the market. But if users have to throw your products away after one month of using, you will not survive.
In order to develop a brand, enterprises have to spend a lot of time and money. However, it seems that Vietnamese brands have not beenaround for a time long enough to conquer customers’ hearts. When you have a brand, you need to develop and protect it. You cannot just “live from hand to mouth” .
But what will happen if all phases of the production process rely on foreign producers?
I think that we need to change our viewpoint on the issue. The strategies on electronics and supporting industries development put forward by the Ministry of Post and Communication and Ministry of Industry and Trade prove to be infeasible. No one and no country in the world can make all components necessary for assembling the whole machine.
The big names like Sony and Panasonic only focus on research and design, or they only make very special products, while they have their products outsourced to the countries where the labour cost is cheap.
So, what should Vietnam do to develop Vietnamese brands in the world market in the globalization period?
I think that there are three ways to develop brands and build a base for future development of Vietnamese brands
First, we should invest in designing. And not say we cannot do that. Two Vietnamese engineers once won the first prize in the competition to design specialized IC in Japan.
Second, we need to develop supporting industries, but we should not try to do everything. We have to focus on specific products.
Third, Vietnam should join the global chain.

Vietnam contributes $10 million to ASEAN infrastructure fund

VietNamNet Bridge – Vietnamese Finance Deputy Minister Tran Xuan Ha told the 17^th APEC Finance Ministerial Meeting in Kyoto, Japan, that Vietnam would contribute $10 million to the ASEAN infrastructural fund.

The Finance Ministers who partiicpate in the APEC Finance Ministerial Meeting in Kyoto, Japan
Finance Ministers of the Association of Southeast Asian Nations or ASEAN on November 5 discussed the establishment of the ASEAN Infrastructure Fund (AIF). Accordingly, the fund will raise capital in the form of shares from member governments in three stages and by issuing bonds.

The Asian Development Bank (ADB) and Malaysia committed to contribute $300 million, Indonesia $120 million, Laos and Cambodia $100,000 each, Thailand, the Philippines and Singapore pledged to contribute at least $15 million to the fund.

ASEAN Finance Ministers also considered reporting on the development of the indicators for the ASEAN bond market and organizing the Investment Promotion Conference of ASEAN Finance Ministers on November 30 in Kuala Lumpur, Malaysia.

Locally assembled cars drive a tough road ahead

VietNamNet Bridge – In principle, it is now the high car sale season. However, analysts do not think that the demand would be high, because the dollar is still very expensive. Meanwhile, the Ministry of Finance (MOF) is planning to slash import tariffs on car imports under the mode of complete built units (CBU).

Tariff cuts planned

MOF has put forward the tentative import tariffs to be applied to cars commencing from early 2011, while it is consulting with the Vietnam Automobile Manufacturers’ Association (VAMA) on the issue.

MOF plans to reduce the import tax rate on less-than-9-seat cars (group 8703) from 83 percent currently to 70 percent applied to the imports from ASEAN countries. Meanwhile, the imports from other regions will still remain at 83 percent in 2011.

As for 4WD models, which now have the tariff of 83 percent as per ASEAN commitments, the tariff has been proposed to reduce to 70 percent. The imports from other regions would be lowered to 73 percent from 2011 from the current level of 77 percent.

As for the cars with the cylinder capacity of 2500 cc and higher, the inner-ASEAN import tariff from 2011 would be 70 percent instead of the current tax rate of 83 percent. Meanwhile, the tax rate on the imports from other regions would be 77 percent.

Regarding passenger-carrying vehicles with more than 10 seats, including buses, the proposed tax rate is 70 percent (lower than the current rate of 83 percent).

In general, the tentative import tariffs MOF plans to apply on cars from 2011, come in line with the commitments Vietnam has signed before with international partners. Meanwhile, MOF does not have the same plan for trucks: it intends to slash the tariffs more sharply than the committed levels.

Analysts have said that the tariff reduction from 83 percent to 70 percent will surely affect the market, because not only import tariff will decrease by 13 percent, but luxury tax, VAT and ownership registration tax will also decrease. For example, a car valued at $20,000, will be sold at $20,000 + $16,600 (83 percent in import tax) + $18,300 (50 percent in luxury tax) + $4,490 (10 percent in VAT) = $59,390. Besides, buyers will also have to pay the ownership registration tax of 12 percent if they are in Hanoi or HCM City.

Meanwhile, if the import tariff reduces to 70 percent as expected, the price of the car would be $56,100 only, or $3,000 lower than the previous level.

Buy right now or wait?

“Buy right now or wait?” is the question many people have raised for themselves in the context of possible tariff reduction and dollar price fluctuations.

As the dollar price keeps increasing, buyers would have to pay additional money of up to tens million dong, when they buy cars. Therefore, if they do not buy cars right now, they will have to pay higher for the same cars in the future.

However, as the tariffs are expected to decrease, it would be more profitable to buy cars in the future, when the tariffs are lower and the sale prices become cheaper.

Miss Earth contestants visit HCM City’s largest rubbish dump

VietNamNet Bridge – Twenty beauties from the USA, the Czech Republic, the Netherlands, Singapore, etc. and host Vietnam spent their entire morning to see how rubbish is treated at the $100 million Da Phuoc garbage dump in HCM City on November 8.

Maricelle Rani Wong from Singapore said she was surprised to see such as big waste treatment site. As the second-year student at the National University of Singapore, Wong has visited several rubbish dumps in Singapore but they are much smaller than the one in HCM City.

Other contestants and Miss Earth 2009 showed their interests in the introduction of Kevin Moore, general director of the Vietnam Waste Solutions, the investor of Da Phuoc rubbish dump, about the waste treatment process.

During the trip, the contestant from South Africa consistently took notes in her small notebook while the contestant from Guatemala raised many questions about the treatment process.

After the field trip, contestants met with local women.

Tonight, November 9, 20 out of nearly 90 contestants will perform their talents in the Talent Show at the Diamond Palace in HCM City.

Some photos of Miss Earth contestants at the Da Phuoc dumping site in HCM City:

Miss Earth 2009 talks with Kevin Moore.

PV

Businessmen, please support culture development, but don’t interfere

VietNamNet Bridge – Nowadays, more and more Vietnamese businessmen show their corporate social responsibility (CSR) by funding cultural works or financing constructions of pagodas. However, in many cases, their crude interference ruins the cultural value.

In the interview given to VietNamNet’s Vietnam Economic Forum (VEF), Associate Professor Dr Nguyen Van Huy, Member of the National Council for Cultural Heritage, stressed that businessmen can fund the cultural development, but they should not make thoughtlessly interfere inthe wider context of cultural matters

Could you please tell us what other countries in the world think about the corporate social responsibility in culture development?

In developed countries, businesses and businessmen always pay closeattention to the development of cultural heritages. They believe that culture is the foundation which helps them develop and prosper. Therefore, when they succeed, they think they have to express their gratitude towards customers and the society. At the same time, funding cultural activities is also an effective way of doing marketing for businesses.

Starting business as a railway transport company, nowadays Meitetsu has become a prosperous economic group, operating in many fields. The owners of Meitetsu, who are now millionaires and billionaires, believe that they need to express their gratefulness to the people, who use their railway services, by spending money to build a miniature museum of the world. This is a huge project covering an area of hundreds of hectares.

There are many investment funds and the culture supporters named after famous businessmen, such as Rockerfeller Foundation, Ford Foundation, or Toyota Foundation. The funds reserve big budgets for developing and preserving culture

You have talked about developed countries. What would you say about Vietnamese businessmen and their stories on funding culture development?

Vietnamese businesses have been playing a very important role in the development of the country. They have been accumulating big capital, while many businessmen have become very rich, somethingthey could not imagine just 10 or 15 years ago.

However, it seems that Vietnamese businessmen still do not think that they need to make contribution to the culture development.

In fact, many businesses implemented their corporate social responsibility by funding the repairing pagodas. In some cases, as they did, they made thoughtlessly interfered with the integral part of the work and thus ruined it altogether

For example, a businessman agreed to spend money to recover Tam Van citadel in Dien Bien. The citadel was made of soil, but the businessman then asked to build the citadel in bricks. As the result, the citadel ended up resembling Great Wall. I have to say that this is a kind of rude interference in the work of culturists.

In other countries, businessmen fund cultural projects, but they never intervene in the works of culturists.

Besides, businessmen also spend money to help flood-stricken people, fund art performances or sports events (football tournament, tennis or golf tournaments). But they rarely fund cultural activities, which is understandable: businessmen cannot see their benefit in funding cultural activities. They still do not understand that funding cultural activities is a good way to polish their images.

Some people say that Vietnamese cultural products are very poor and unattractive. Do you agree with the comment?

Making and trading cultural products is the weak point of Vietnamese businesses. Most businesses still hesitate to make investment in the field, partially because they do not have good ideas to develop their business.

Meanwhile, other countries have been very good at this. In China, for example, there are many enterprises specializing in making specimens of antiques which appeared in different dynasties in the country. The products have high quality and they have been selling very well, bringing large profits to the enterprises.

What should we do to settle the problem?

If you go to museums and heritage sites in Vietnam, you will see that there are only generic souvenirs available, the kind of products that you can find everywhere else. Museums and heritage sites do not have specific products of their own. Therefore, the products are uninspiring and unattractive to tourists.

What needs to be done now is for businesses to spend money to create new designs with high quality. However, then a new problem will arise with new designs being copied by other producers. Therefore, producers have no motivation to create anything new or innovative.