Vietnam is always good at maintaining relationship with foreign countries. As for example the economic relations of Vietnam with the United States are improving. But the country of course had to face many challenges regarding this. In December 2001 the Vietnam and United States reached a landmark bilateral agreement. And this has boosted Vietnam’s exports to the United States. But it is also true that disagreement over textile and also catfish exports are blocking full execution of the agreement.
There are some barriers to intellectual property and trade and that’s also within the horizon of bilateral discussions. Vietnam’s economic relation with China is of extreme importance and that’s because of china’s speedy economic control. In the year 2004 Vietnam imported more numbers of products from China than from other nation. But in November 2004, the Association of Southeast Asian Nations i.e. ASEAN and China announced plans to set up the world’s largest free-trade area by the year 2010. Vietnam is always a member of Southeast Asian Nations i.e. ASEAN. In the year 2006 Vietnam became a member of the World Trade Organization.
From late 1970s till the 1990s, Vietnam has been seen as a member of the Comecon. After that it has become heavily dependent on trade with the Soviet Union and its allies. Because of the dissolution of the Comecon and of course the loss of its traditional trading partners, there was a force for Vietnam for liberalize trade. The country has to devalue its exchange rate to increase exports, and start a policy of international and regional capitalization.
Exports expanded importantly throughout the 1990s. The growth was as much as twenty percent to thirty percent in some years. In 1999, exports accounted for forty percent. That was an impressive performance in a retrieving Asia. Because of the membership with World Trade Organization, Vietnam was free from textile quotas ordained worldwide as part of the Multi fiber Arrangement.
Foreign Financial Aid to Vietnam
To Vietnam there are three objectives of the World Bank’s assistance program of foreign aid. These can be mentioned as to enhance equitable and sustainable development, to support Vietnam’s transition to a market economy and to promote good governance.
From the year 1993 through 2004, the country received assurances of 29 billion U.S. dollar of Official Development Assistance i.e. ODA. Out of this about 14 billion U.S. dollar i.e. 49 percent has been paid out. In the year 2004 international donors pledged ODA of 2.25 billion U.S. dollar. Out of this amount 1.65 billion U.S. Dollar was disbursed. Three donors explained 80 percent of disbursements in the year 2004. These were the World Bank, Japan and the Asian Development Bank. Vietnam hopes to receive 14 billion-15 billion U.S. dollar of Official Development Assistance during the period 2006–10.
In the year 1981, offshore oil exploration literally ended which happened with the assistance of Italian, West German and Canadian companies. Reportedly aid from china close to 300 U.S. dollar in 1977 and 1978 but in 1979 the aid dropped to zero. Vietnamese recovery in coal production was deeply affected by the loss of ethnic Chinese workers.
In 1979, Japan set aside its Official Development Assistance funds. This was a mixture of low-interest loans and grants. The amount of low interest loans was 135 million U.S. dollar.
At this situation watching Vietnam’s occupation of Cambodia, Sweden went on to supply any substantial amount of economic help. Social Commission for Asia and the Pacific and the United Nations Economic helped for development of the Mekong River.
In 1986 Vietnam’s current account shortage with major industrial countries was some 221 million U.S. dollar. the year 1978 and 1979 has seen the conflicts with china and Cambodia and it has definitely proved costly in terms of enduring economic ties with neighboring Asian and Western countries. Due to this factor Hanoi was pushed to rely on Soviet-bloc assistance to a great extent
From the year 1993 through 2004, the country received assurances of 29 billion U.S. dollar of Official Development Assistance i.e. ODA. Out of this about 14 billion U.S. dollar i.e. 49 percent has been paid out. In the year 2004 international donors pledged ODA of 2.25 billion U.S. dollar. Out of this amount 1.65 billion U.S. Dollar was disbursed. Three donors explained 80 percent of disbursements in the year 2004. These were the World Bank, Japan and the Asian Development Bank. Vietnam hopes to receive 14 billion-15 billion U.S. dollar of Official Development Assistance during the period 2006–10.
In the year 1981, offshore oil exploration literally ended which happened with the assistance of Italian, West German and Canadian companies. Reportedly aid from china close to 300 U.S. dollar in 1977 and 1978 but in 1979 the aid dropped to zero. Vietnamese recovery in coal production was deeply affected by the loss of ethnic Chinese workers.
In 1979, Japan set aside its Official Development Assistance funds. This was a mixture of low-interest loans and grants. The amount of low interest loans was 135 million U.S. dollar.
At this situation watching Vietnam’s occupation of Cambodia, Sweden went on to supply any substantial amount of economic help. Social Commission for Asia and the Pacific and the United Nations Economic helped for development of the Mekong River.
In 1986 Vietnam’s current account shortage with major industrial countries was some 221 million U.S. dollar. the year 1978 and 1979 has seen the conflicts with china and Cambodia and it has definitely proved costly in terms of enduring economic ties with neighboring Asian and Western countries. Due to this factor Hanoi was pushed to rely on Soviet-bloc assistance to a great extent
Foreign Investment Incentives at Vietnam
In December 1987, first law on foreign investment was passed in Vietnam. But in the year 1996 this law was replaced after being amended twice. The main objective of this law is to encourage foreign investment, sets out procedures for foreign investors and also guarantees the ownership of invested capital. Some of the areas are there in which investment is promoted and in January 1998 the rule was adopted. These areas are:
Agricultural, Fishery and Forestry Sectors
Processing of forestry, agricultural and fishery products for the purpose of export.
Manufacture of spare parts, equipment and agricultural machinery.
Technology of preservation of post- harvest agricultural products, food and also application of bio- technology and biological measures in fishery, agriculture and forestry.
Production of materials for insecticides which are of high strength and also safe for domestic animals, humans and environment.
Projects that effectively use the natural resources available and utilize a high number of workers as well.
Industrial Sectors
Development of the petro-chemical industry.
Exploitation, exploration and down-stream processing of minerals.
Production of high-quality special metals, billet, alloy, steel, non-ferrous metals, and sponge iron for industry.
Manufacture of spare parts for motorbike and automobile manufacture.
Production of fibre and silk of various kinds, special fabrics used in industry and some textile products for export.
Production of high quality materials for garments and also footwear for the purpose of export.
Manufacture of equipment, building of ships and spare parts for fishing boats and cargo ships.
Manufacture of high voltage devices.
Production of medicines and some materials.
Manufacture of machinery, manufacture of technologically-advanced diesel engines and spare parts for hydraulics, engines and compressing machines.
Manufacture of apparatus for the treatment of waste water.
Manufacture of mechanical equipment.
Production of basic pure chemicals, specialized chemicals and dyes are also included.
Agricultural, Fishery and Forestry Sectors
Processing of forestry, agricultural and fishery products for the purpose of export.
Manufacture of spare parts, equipment and agricultural machinery.
Technology of preservation of post- harvest agricultural products, food and also application of bio- technology and biological measures in fishery, agriculture and forestry.
Production of materials for insecticides which are of high strength and also safe for domestic animals, humans and environment.
Projects that effectively use the natural resources available and utilize a high number of workers as well.
Industrial Sectors
Development of the petro-chemical industry.
Exploitation, exploration and down-stream processing of minerals.
Production of high-quality special metals, billet, alloy, steel, non-ferrous metals, and sponge iron for industry.
Manufacture of spare parts for motorbike and automobile manufacture.
Production of fibre and silk of various kinds, special fabrics used in industry and some textile products for export.
Production of high quality materials for garments and also footwear for the purpose of export.
Manufacture of equipment, building of ships and spare parts for fishing boats and cargo ships.
Manufacture of high voltage devices.
Production of medicines and some materials.
Manufacture of machinery, manufacture of technologically-advanced diesel engines and spare parts for hydraulics, engines and compressing machines.
Manufacture of apparatus for the treatment of waste water.
Manufacture of mechanical equipment.
Production of basic pure chemicals, specialized chemicals and dyes are also included.
Industrial Growth in Vietnam
The rubber sector of Vietnam has been increasing about fifteen percent in a year. The total output of which is around 300,000 tons of dried up latex. During the year 2001 to 2010 there is a plan of investing about hundred million U.S. dollar in expanding eleven latex plants. One of the driving forces of economy has been mentioned as construction and this is growing at the rate of fifteen percent in a year. This construction sector comprises of about 3,500 companies. In this list 270 foreign invested enterprises are there that worth not less than 3.5 U.S. dollar.
Vietnam is the place where you get a large-scale wood processing industry. It has a nation-wide association of 760 state-managed wood processing units. All total 200 local enterprises are there along with nearly 1200 small scale productions and 53 joint ventures. In the year 2001 the equipment and metal work machinery was 45 U.S. dollar out of which ninety percent was imported.
The state-dominated industrial division is still noted by low productivity and inefficiency and has also slowed the growth of the private sector. The low level of development, shortages of capital, energy and transport, obsolete plants and machinery, raw materials, and a command-style economic system are regarded as the main reason behind it. Some of the Vietnam’s assets include good skill levels, low wages and a motivated work force.
In Vietnam six thousand state-owned enterprises i.e. SOEs are there and Government is the owner of those. In 1997 Vietnam government selected 88 conglomerates and organized 2000 SOEs there. In February 2003, the first auction of a SOE i.e. state-owned enterprise took place. As a result of which the sale of the Hai Phong Agricultural Mechanical Engineering Company was possible. The determined selling price was $300,000 to a private Vietnamese company. The Australian government financed the whole auction.
Vietnam is the place where you get a large-scale wood processing industry. It has a nation-wide association of 760 state-managed wood processing units. All total 200 local enterprises are there along with nearly 1200 small scale productions and 53 joint ventures. In the year 2001 the equipment and metal work machinery was 45 U.S. dollar out of which ninety percent was imported.
The state-dominated industrial division is still noted by low productivity and inefficiency and has also slowed the growth of the private sector. The low level of development, shortages of capital, energy and transport, obsolete plants and machinery, raw materials, and a command-style economic system are regarded as the main reason behind it. Some of the Vietnam’s assets include good skill levels, low wages and a motivated work force.
In Vietnam six thousand state-owned enterprises i.e. SOEs are there and Government is the owner of those. In 1997 Vietnam government selected 88 conglomerates and organized 2000 SOEs there. In February 2003, the first auction of a SOE i.e. state-owned enterprise took place. As a result of which the sale of the Hai Phong Agricultural Mechanical Engineering Company was possible. The determined selling price was $300,000 to a private Vietnamese company. The Australian government financed the whole auction.
Banking and Finance in Vietnam
In July 2000 Vietnam’s first stock exchange was established. By the year 2005, the number of companies that are on exchange list had reached twenty eight. The total market capitalization was 270 million U.S. dollar. Vietnam opened an over-the-counter exchange in March 2005. This was known as the Hanoi Securities Trading Center. The main purpose of the second exchange is to hasten the process of equity i.e. partial privatization of state-owned enterprises. These exchanges are very small. Officials have decided that by the year 2010 they will expand their mixed market capitalization to ten percent of GDP i.e. gross domestic product.
Vietnam’s prime minister declared that the foreign share ownership limit would arise from 30% to 49 % in September 2005. Some of the banks in Vietnam suffer from low public confidence and also managerial and regulatory weakness. Some other problems were there such as non-compliance with the Basel capital standards, high levels of non-performing loans, and the absence of international auditing.
From the year 1992 Vietnam’s banking system has comprised of a mixture of joint-stock, foreign banks, state-owned and joint-venture. In Vietnam the state-owned commercial banks predominate. They always suffer from high levels of non-performing loans. Most of the loans are to state-owned enterprises.
In September 2005 Vietnam determined to make equal all five state-owned banks. In addition to this Vietnam also plans to promote the transparency of its financial system. This was done by setting up a credit-rating agency and also performance standards for joint-stock banks.
In Vietnam three hundred to four hundred automated teller machines i.e. ATMs have been installed. At about 350,000 debit cards are in circulation. Since April 2008, U.S. dollar was equivalent to about 15,984 Vietnamese dong or D.
Vietnam’s prime minister declared that the foreign share ownership limit would arise from 30% to 49 % in September 2005. Some of the banks in Vietnam suffer from low public confidence and also managerial and regulatory weakness. Some other problems were there such as non-compliance with the Basel capital standards, high levels of non-performing loans, and the absence of international auditing.
From the year 1992 Vietnam’s banking system has comprised of a mixture of joint-stock, foreign banks, state-owned and joint-venture. In Vietnam the state-owned commercial banks predominate. They always suffer from high levels of non-performing loans. Most of the loans are to state-owned enterprises.
In September 2005 Vietnam determined to make equal all five state-owned banks. In addition to this Vietnam also plans to promote the transparency of its financial system. This was done by setting up a credit-rating agency and also performance standards for joint-stock banks.
In Vietnam three hundred to four hundred automated teller machines i.e. ATMs have been installed. At about 350,000 debit cards are in circulation. Since April 2008, U.S. dollar was equivalent to about 15,984 Vietnamese dong or D.
Doing business in Vietnam
Vietnam belongs to the ASEAN i.e. Association of Southeast Asian Nations group of countries. This offers strong trading chances for New Zealand exporters. There was a recent agreement according to which the ASEAN- New Zealand-Australia free trade area opens doorways for New Zealand businesses to Southeast Asia which include Vietnam as well.
In this section, a country brief with highlighted business opportunities and economic overview can be found along with the market research for New Zealand companies making business in Vietnam. In late 1980s Vietnam began its market reforms and since then the country has not seen regress in any aspect. The poverty has been halved while the growth rates have been among the highest in Asia. But still the country stays one of the poorest in the region despite of its tremendous development and awesome infrastructure.
The wood products and dairy are New Zealand’s main exports to Vietnam. Ho Chi Minh City is known as the Vietnam’s largest city. In Vietnam this place is the most important economic centre. It accounts for 20% of the country’s GDP i.e. gross domestic product.
Hanoi is the capital of the Vietnam. For the past two decades the place has been passing an industrial boom. In Vietnam substantial steps have been taken to contour customs procedures. It has been reported that Hanoi is less bureaucratic than Ho Chi Minh City.
Import duties reach from 0 percent to 150 percent. Labeling regulations are there for all imported goods where regulations continue to be developed. In Vietnam for all imports you need to have a Certificate of Origin.
In Vietnam a value added tax i.e. VAT applies to goods and also some services for use in production or else in business or consumption. The usual rates are 5 percent for encouraged essential services and goods while the rate is 10 percent to most goods and services. Exports are usually zero rated.
In this section, a country brief with highlighted business opportunities and economic overview can be found along with the market research for New Zealand companies making business in Vietnam. In late 1980s Vietnam began its market reforms and since then the country has not seen regress in any aspect. The poverty has been halved while the growth rates have been among the highest in Asia. But still the country stays one of the poorest in the region despite of its tremendous development and awesome infrastructure.
The wood products and dairy are New Zealand’s main exports to Vietnam. Ho Chi Minh City is known as the Vietnam’s largest city. In Vietnam this place is the most important economic centre. It accounts for 20% of the country’s GDP i.e. gross domestic product.
Hanoi is the capital of the Vietnam. For the past two decades the place has been passing an industrial boom. In Vietnam substantial steps have been taken to contour customs procedures. It has been reported that Hanoi is less bureaucratic than Ho Chi Minh City.
Import duties reach from 0 percent to 150 percent. Labeling regulations are there for all imported goods where regulations continue to be developed. In Vietnam for all imports you need to have a Certificate of Origin.
In Vietnam a value added tax i.e. VAT applies to goods and also some services for use in production or else in business or consumption. The usual rates are 5 percent for encouraged essential services and goods while the rate is 10 percent to most goods and services. Exports are usually zero rated.
Vietnam and India - Commerce Tie
Indian and Vietnam have always hold activities to encourage the bilateral comprehensive cooperation in culture, economy and education. It has been continuing since their diplomatic relations set up. This strategical relation is continuously fortifying and strongly growing till now. The Maulana Abul Kalam Azad Institute and the University of Humanities and Social Sciences of Asian Studies of Kolkata co-organized an international conference. The theme of this conference was “Relations between India and the Association of Southeast Asian Nations i.e. ASEAN - A Strategic Commitment or Regional Integration”. The Indian consulate general was the sponsor of this event.
Maulana Abul Kalam Azad which is an independent institute held the conference rather a series of conferences under the “India – ASEAN research programme”. This conference aimed at assessing regional research actions turning around the relationships between Southeast Asian nations and India. The programme is anticipated to help regional research institutes that accomplish researches on political, economic, social and cultural issues between Southeast Asian countries and India. A series of conferences have been planned in Maulana Abul Kalam institute in Southeast Asian countries.
Representatives from Vietnam, India, Thailand, Singapore, and Cambodia also took part in the conference. In this conference some useful speeches were delivered. The speeches were on many respects of the relationship between Southeast Asian nations and India, particularly Vietnam. There is no as such border between India and Asian countries of Vietnam, still the two countries always share their religion, culture and economy. In 1972 the two countries set up their diplomatic relations.
Maulana Abul Kalam Azad which is an independent institute held the conference rather a series of conferences under the “India – ASEAN research programme”. This conference aimed at assessing regional research actions turning around the relationships between Southeast Asian nations and India. The programme is anticipated to help regional research institutes that accomplish researches on political, economic, social and cultural issues between Southeast Asian countries and India. A series of conferences have been planned in Maulana Abul Kalam institute in Southeast Asian countries.
Representatives from Vietnam, India, Thailand, Singapore, and Cambodia also took part in the conference. In this conference some useful speeches were delivered. The speeches were on many respects of the relationship between Southeast Asian nations and India, particularly Vietnam. There is no as such border between India and Asian countries of Vietnam, still the two countries always share their religion, culture and economy. In 1972 the two countries set up their diplomatic relations.
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