Vietnam’s land transparency – opaque

Vietnam has a legal system on land-related issues but its land transparency is said to be the lowest in the world.

Speaking at a workshop on the Estate Registration Law, Nguyen Thuy Hien, a senior official of the Ministry of Justice, said the real estate market is developing rapidly but the state can’t control market fluctuations so this market always has latent instabilities.

“Black” deals make the real estate market less transparent. According to foreign surveys of 15 countries in Asia-Pacific and 56 countries on all continents, Vietnam receives the lowest number points for transparency of the real estate market.

Hien said the reason is real estate registration in Vietnam is stipulated in various documents and regulations on estate registration are changed very often.

In Vietnam, one plot of land can have many kinds of certificates: land use right certificates based on the Land Law 1987, 1993, 2003, house ownership certificates under Decree 60, etc.

According to experts, the biggest problem in granting land use right certificates is how to determine which are the legitimate of plots of land, as many have been transferred several times.

Information about houses and land is archived at two different state agencies and it causes difficulties for individuals and organisations in searching for real estate information. In the central province of Thua Thien-Hue, land information is managed by two agencies, the Information Centre and Land Use Right Registration Office, which are under the provincial People’s Committee.

Specialists proposed the gathering of land information in one place to help citizens and organisations find real estate information.



source: http://english.vietnamnet.vn/biz/2008/03/775562/

Vietnam emerges as a promising market

Vietnam has great potential for achieving a high economic growth, but needs to curb inflation and maintain sustainable development in an effective way, said Paul Sarbanes, former chairman of the US Senate Committee on Banking, Housing and Urban Affairs and co-author of Sarbanes-Oxley Act.

Mr Paul made the remarks at the ninth Asian Banker Summit 2008 held in Hanoi on March 17-18. “It’s really a difficult question when you want continued economic growth and at the same time you want to have inflation under control,” he said.

Sarbanes–Oxley Act also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly known as SOx or Sarbox is a US federal law enacted in July 2002 in response to a number of major corporate and accounting scandals.

The Act established a new quasi-public agency, the Public Company Accounting Oversight Board (PCAOB), which is charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies.

Balancing the two requires very careful adjustments on how you move ahead.

The US economist said that apart from tightening the monetary policy, it is essential to implement comprehensive measures with a focus on raising the quality of human resources, management capacity and the transparency of the financial system.

Mr Paul’s view was shared by David Eldon, chairman of the Asian Banker Summit Advisory Council, who said that it takes time for the economy to adapt to new changes in the integration process.

Mr David, who is also chairman of the Dubai International Financial Centre Authority and former president of HSBC, said that there were many ways of dealing with inflation, but “using interest rates as the first line of defence will slow down economic growth.“

According to him, many foreign investors have recently seen the Vietnamese market, especially the financial and banking sector as a new emerging and promising market in the region.

The Asian Banker Summit provided a good chance for international businesses to gain a better understanding of the Vietnamese market and its financial and banking system. It also helped local banks access and cooperate with international financial organisations.

Speaking on the fringe of the summit, Emmanuel Daniel, Managing Director and Editor-in-Chief of The Asian Banker, said that with advantages in human resources, rapid development and WTO commitments, Vietnam is becoming a potential market and will achieve a high economic growth in the future.

However, he said the country is now facing certain challenges, including “an unclear message“ to foreign investors and lax security services. He expressed his belief that Vietnam will overcome these difficulties as Vietnamese people are industrious, dynamic and intelligent and the Government always supports domestic and foreign businesses.


source: http://english.vietnamnet.vn/biz/2008/03/774486/

Why don’t exporters diversify payment currencies?

Vietnamese companies have been heavily criticised for attaching themselves to the dollar in making payments for export deals, due to which they have been suffering when the dollar devaluates. In response, the companies said that it is not easy to change the custom of using dollars in making payments overnight.

Rooted habit

According to the Forex Management Department under the State Bank of Vietnam, payments for up to 90% of export turnover is being made in dollars.

Meanwhile, in 2007, the dollar lost 9.9% of its value against the euro, and in the first 2.5 months of 2008, the dollar devaluated by 6.6% against the euro, which brought about big losses for Vietnamese exporters.

A question has been raised about why Vietnamese exporters do not diversify the currencies used in making payments in order to minimise risks caused by the dollar’s devaluation.

A representative of a farm produce export company said that his company always exports products to the EU and should have used the euro as the payment currency. However, for many years, his company and the payment bank (a Vietnamese bank) both wanted to use the US dollar in making payment, and this has become a habit.

“100% of Vietnam’s robusta coffee is being traded in US dollars, and it is very difficult to persuade importers to use the euro instead of the dollar, including the EU importers,” said Tran Tuyen Huan, Director of ACC, specialising in farm produce.

Huan added that exporters set Vietnam’s robusta coffee prices based on London forward market prices, which, for the last tens of years, have been making transactions in US dollars.

According to Nguyen Thanh Duoc, Head of the Export Division under Dau Tieng Rubber Company, the rubber export prices are set based on the rubber prices in the Singapore or Tokyo market. Though the two markets use Singaporean dollars and Japanese yen, Vietnamese rubber exporters still convert the prices to US dollars when selling to foreign buyers.

“Both the Vietnamese sellers and foreign buyers have got used to using dollars in making payments. It is not so easy to persuade them to change the habit,” Duoc said.

There is another factor which makes it difficult to change the habit of using the dollar in payment is that most of importers (with representative offices in HCM City) are now compiling trade contracts in US dollars (100% for coffee exports and at least 50% for rubber).
Diversifying payment currencies? Not so easy

The State Bank of Vietnam many times has urged exporters to persuade their partners to diversify the currencies used in payment. For example, Japanese yen can be used in trading with Japanese partners, while the euro can be used while exporting products to the EU.

However, according to Truong Dinh Hoe, Secretary General of the Vietnam Association of Exporters and Producers (VASEP), EU partners will not accept paying euro to import seafood products from Vietnam.

They would be unwise to accept making payment in euro, as the dollar devaluation will help them earn money, Hoe said.

For example, a kilogramme of filet tra sent to the EU has the export price of $2.8. As the dollar is devaluating against the euro, importers will have to pay a sum of money equal to $3.6/kg if they pay in euro.

An exporter has pointed out that it is the fault of the State Bank in exporters’ habit of using the US dollar as the only payment currency. He said that for many years, the central bank has been pursuing a weak VND policy in order to encourage exports, while it has not been paying any special attention to the VND/euro or VND/JY exchange rates.



source: http://english.vietnamnet.vn/biz/2008/03/773842/