News / Asia

Vietnam Merchants Wait for Business, Economy to Pick Up

Vietnamese merchants in Ho Chi Minh City are waiting for business, and for the economy, to pick up, Jul. 18, 2013. (VOA - L. Hoang)
Vietnamese merchants in Ho Chi Minh City are waiting for business, and for the economy, to pick up, Jul. 18, 2013. (VOA - L. Hoang)
On a busy street here, Nguyen Lai is practically hemmed in by the raincoats and camouflage pants that fill his small clothes shop. He has too much inventory, from polo shirts to umbrellas, much of it imported from neighboring Cambodia. But it’s become much harder to sell merchandise in recent years, unlike several years ago when high sales meant he had a lot more variety in stock.

“Oh, I used to sell so much,” he says one late afternoon, taking a lit cigarette from a friend as a fan blows toward his face.

The good old days were seven years ago. Things have stagnated since then - for Lai and for the country. It was about the same time Vietnam entered what would become its worst slow-growth period in its recent history as a modern market economy.
 
A World Bank report this week said Vietnam registered 5 percent growth in the first half of 2013. That matches the rate in 2012, which marked the sixth year in a row that gross domestic product has increased by less than 7 percent. It’s the longest period of slow-growth since Vietnam took a capitalist turn with the Doi Moi reforms of the 1980s.
 
The last time Vietnam’s economy expanded this slowly, in the late 1990s, Asia was in the midst of its toughest financial crisis. Developing Asian countries now average a 7.5 percent GDP increase, according to the World Bank, compared with Vietnam’s 5 percent. That means the country will report growth that lags behind Indonesia and the Philippines in 2010-2013, something that hasn’t happened for two decades.
 
The bank report went on to warn that a major risk of the economic malaise is that Vietnamese officials might feel compelled to undertake stimulus measures. Those, in turn, could bump up consumer prices, which is a lingering fear because inflation topped out at 23 percent in August 2011. A jump now would threaten progress as Vietnam “enters the third year of relative stability,” with inflation at 6.7 percent in June, the report said.
 
Needed reforms
 
But despite its cloudy outlook, the report should have given more consideration to the government’s planned reforms of banks and state-owned enterprises, according to Pham Ngoc Bich of Saigon Securities.
 
“It does take time, anything to do with state reform, tax reform, those take time,” Bich said in an interview. “You cannot implement those reforms in a week, right?”
 
This month, the central bank is scheduled to roll out the Vietnam Asset Management Company, tasked with cleaning up loans that have gone sour. Officials say non-performing loans make up 6 percent of overall lending. But Fitch Ratings questioned how this newborn bank can handle billions of dollars in bad debts when it has just $24 million to work with.
 
The World Bank praised the asset management company, entirely state-owned, as “the most visible step” Vietnamese leaders are taking to cure the banking sector. But it said that to be successful, the new bank must accurately audit the level of non-performing loans and buy them at market value, not book value.
 
The process is part of a larger bank restructuring plan that the World Bank faulted as insufficient. It wrote in its report that “the merger of several weak banks has not necessarily created a new healthy bank and therefore their underlying problems remain unaddressed.”
 
If Vietnam is to avoid the report’s warning of prolonged slow growth, few believe it can be done without overhauling the communist country’s state-owned enterprises. The monoliths are notoriously inefficient and opaque, but the World Bank said efforts to reform them have so far been slow and fragmented.
 
Still, such reforms point to options for Vietnam, where not all of the report’s findings were dismal. The country is enjoying a trade balance that’s positive for the first time ever. Reserves that have doubled in two years, and the nation is enjoying its largest current accounts surplus. Now the priority is to tackle the commercial banks and the state-owned enterprises.
 
“Once the ball gets rolling we’ll have positive economic results in the next three to five years,” Bich said. “I’m more confident now than I was two years ago.”

You May Like

Lion Cecil's Killing Sparks 'Canned Hunting' Debate in S. Africa

Conservationists believe incident, which triggered worldwide outrage, will reshape debate about practice in which hunters are allowed to target animals bred for hunting More

US Urges Taliban to Stay With Afghan Peace Talks

Top US Afghan diplomat also meets with Pakistani, Afghan officials following news of Mullah Omar's death More

Environmentalists Issue Warning on Mekong Biodiversity

Scientists say decades of economic development, hydropower-dam construction, lax law enforcement and trafficking have taken their toll More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Astronauts Train Underwater for Deep Space Missionsi
|| 0:00:00
...    
🔇
X
George Putic
July 30, 2015 8:59 PM
Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.

VOA Blogs