By Nguyen Ngoc Son,
Ambassador Socialist Republic of
Vietnam, Berne, Switzerland
Vietnam’s economy will continue to grow fast in 2008 and investments will bring returns of 20 percent this year, Citigroup forecast. Despite the slowdown of the U.S. economy, experts are still upbeat about Vietnam and China, which will be among the fastest growing economies in the world. Vietnam will have a GDP growth rate of 8.1 per cent in 2008, lower than the rate forecast earlier by international organizations, still much higher than the average growth of 5.0 percent in Asia.
Vietnam will see strong growth in infrastructure, tourism, information technology and agriculture. The country is expected to receive about US$7 billion in infrastructure developments this year. “What is also amazing is that there is tremendous amount of opportunity in the agricultural sector,” said Faisal Ameen, Managing Director and country head of Citigroup.
A country is considered to be fantastic to get a 2 percent or 3 percent growth in agriculture, but Vietnam actually sees 6 percent-7 percent growth. “It is currently the world’s largest exporter of coffee cashews, and second largest exporter of coffee, rice and peppercorn. So it is a huge producer of commodities, and as the global population increases and the agricultural land size decreases, commodity prices are going to rise,” he said.
Vietnam continues to be an attractive destination for foreign investors thanks to its low cost, which is relatively lower than China. Vietnam can attract foreign direct investment (FDI) at least US$15 billion this year according Citigroup forecast.
Vietnam will invest more than VND1,370 trillion (around US$85.6 billion) to develop its public infrastructure projects by 2010, said the Ministry of Planning and Investment (MPI). Of the sum, VND960 trillion will be poured into electricity, paper, cement, coal, chemicals and engineering that serve the development of agriculture, shipbuilding and transport network. Over VND310 trillion will be injected in the social sector and the remaining capital will be channelled into security and national defence projects.
Meanwhile, industrial parks and economic zones will be offered priority in capital supply for infrastructure construction. The total capital for these works, which accounts for over 62 percent of the ministry’s budget for public investment between 2006 and 2010, will be mobilized from the State budget and Official Development Assistance (ODA). It will also come from businesses’ investment and government bonds issued at home and abroad.
According to the MPI, Vietnam used roughly VND680 trillion to develop its public in infrastructure works in 2001-2005 period, with focus on helping communities in remote areas upgrade infrastructure and public facilities. According to VinaCapital Infrastructure Fund, the Southeast Asian country needs about US$140 billion to develop its infrastructure networks from now till 2020 in a bid to become an industrialized nation. (VNA)
Vietnamese companies in the Mekong Delta region are busy with contracts to build a series of ships from 12,500 tonnes to 20,000 tonnes, aiming to tap the region’s huge potential advantages, said the Vietnam Trade Review. Director of Hau Giang Ship Building Co. Vo Thanh Phong said his company is building a 50,000-tonne quay to construct a 20,000-tonne vessel late this year without giving any further details.
Construction of the first 12,500-ton vessel will be started early this year in a contract to make a series of four, said Director of Vinashin Ca Mau Construction & Installation Co. Doan Chi Trung. His company is building Ca Mau Shipyard on an area of 12,000 square meters. Can Tho ship-building factory is now also busy with building 10 barges, weight ranging from 650 tonnes to 1,700 tonnes and a seagoing ship of 6,800 tonnes, said the magazine published by the Ministry of Industry and Trade.
Mekong Delta is an ideal destination to boost heavy industrial operations, local analysts said, adding that DP World Vietnam Company is investing US$250 million to build a container seaport here to receive 50,000 DWT ships.
PetroVietnam has proposed to the government of Vietnam to give further detail guidelines on biofuel projects, which will allow the state-owned oil monopoly group to produce more renewable energy for the national fast-growing economy. The government should request the Ministry of Science and Technology issue national common standards for ethanol gasoline, bio-diesel and compulsory environmental norms relating to production, storage, distribution and usage of biofuels, said a PetroVietnam official.
PetroVietnam is now conducting several biofuel projects, including Bio-ethanol Phu My and Bio-ethanol Tay Son, which are slated for operation by 2010 with a combined capacity of 225 million liters per annum. The company is also implementing an ethanol project in northern Ha Tay province with an annual capacity of 100,000 tonnes.
The Institute of Oil and Gas will carry out a research on ethanol-blended gasoline in the near future. By 2015, Vietnam will turn out 250,000 tonnes of ethanol and vegetable oil to fuel 1 percent of the national gasoline demand
Courtesy- Swiss-Asian Chamber of Commerce