David James
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Best of luck to the Friend Vietnam from India, God bless you
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We still have $$$$ to buy more Su-30 from RussiaVietnam Has No Plans to Seek IMF Loan to Resolve Bad Debt
Vietnam has no intention to borrow from the International Monetary Fund to resolve bad debt at the country’s lenders, a central bank official said after a parliamentary committee report cited the option this week.
“Vietnam has no reason to seek loans from the IMF” given that the country’s macroeconomic situation is stable, Deputy Governor Le Minh Hung said in comments posted on the government’s website late yesterday. The State Bank of Vietnam hasn’t discussed loans with the IMF, he said.
A Sept. 4 National Assembly economic committee report suggested Vietnam should consider seeking IMF aid to restructure its banks, saying the country risks “prolonged stagnation” if it doesn’t fix its bad debt woes soon, Bloomberg News reported earlier this week. The financial system needs an injection of 250 trillion dong ($12 billion) to 300 trillion dong, according to the 298-page document that included recommendations to address economic threats.
Vietnamese officials and Alfred Schipke, the IMF’s newly appointed mission chief to Vietnam, met this week during a courtesy visit, Hung said. Both the IMF and the government felt Vietnam’s macroeconomic situation has taken positive steps toward stability, Hung said.
“We are not so desperate yet that we would need an imminent rescue loan from the IMF,” Nguyen Duc Kien, deputy head of the committee that published the report, said by phone Sept. 6. “This is just one of the recommendations to the government in case it’s needed.”
Policy Recommendations
Apart from the suggestion for Vietnam to seek an IMF loan to restructure the banking system, which was mentioned in pages 178 and 181 of the report in a section on policy recommendations, the National Assembly committee’s compilation also recommended other funding sources such as selling government bonds with three- to five-year maturities, trimming state spending and drawing funds or investments from foreign companies.
Both the IMF and the Vietnamese government assessed that the country’s macroeconomic situation has improved, especially in terms of its trade balance and current-account balance, Hung said. The balance of payments is in surplus, foreign exchange reserves are rising, and market confidence has strengthened, he said. IMF lending is meant for countries that have temporary difficulties in their balance of payments, he said.
Tycoon’s Arrest
Prime Minister Nguyen Tan Dung’s government is trying to regain confidence in Vietnam after the arrest of a banking tycoon last month highlighted the frailty of a financial system hobbled by Southeast Asia’s highest bad debt levels. Growth slowed to 4.4 percent in the first half of this year from 8.5 percent in 2007 as lending stagnated, damping state revenue and crimping the country’s ability to rescue banks.
Vietnam’s government needs to solve its banking woes before the situation worsens, Gareth Leather, an economist at Capital Economics Ltd. in London, said earlier this week. “Credit has been one of the main drivers of the economy and you’re not going to see growth return to 7 percent to 8 percent so long as banks are stuck with this problem.”
Non-performing loans climbed to 4.47 percent of total lending as of May 31, from 3.07 percent at the end of 2011, according to central bank data. State Bank of Vietnam Governor Nguyen Van Binh said in April that the level of non-performing loans at some lenders may be “much higher” than reported figures, with Mizuho Corporate Bank Ltd. estimating as much as 20 percent of debts may be bad.
Foreign Funding
The central bank should set up a company to buy bad debt using foreign funding, the parliamentary panel said in this week’s report, which was funded by the United Nations Development Programme. Cross-ownership of banks are at “alarming levels” and lending based on relationships have led to rising non-performing loans and need to be promptly dealt with, according to the report.
The central bank hasn’t officially been presented with the report by the National Assembly and the recommendations are “just the committee’s view” for now, Nghiem Xuan Thanh, chief administrator at the bank, said Sept. 6.
Vietnam had recognized the risks and unveiled plans to prevent a collapse of its banking system months ago. The country said in March it would buy bad debt from lenders as the nation sought to overhaul the industry and cut bad-debt ratios at state-owned banks to below 3 percent by 2015.
The central bank has also said it’s ready to force mergers among weak lenders, and Dung has ordered the monetary authority to “solve” a shortage of funds after the credit crunch forced thousands of companies out of business.
Nguyen Duc Kien, who helped found Asia Commercial Bank, Vietnam’s fourth-biggest lender by market value, was arrested in August, and the central bank said police were investigating violations at three companies managed by Kien after he allegedly “conducted business illegally.” That was followed by the arrest of former Chief Executive Officer Ly Xuan Hai by the police for alleged economic mismanagement.
Vietnam’s stocks plunged, dragging the benchmark index into in a bear market on Aug. 27 on concern the arrests may signal further instability in the nation’s financial system.
Vietnam Has No Plans to Seek IMF Loan to Resolve Bad Debt - Bloomberg
It's a map of China's North and South Dynasties when VN does not exist.
440AD
560AD
a big project.(VOV) - Vietnam should early complete the feasibility study into the North-South high-speed railway construction project and submit it to the National Assembly for approval in 2013.
a big project.
why so expensive?it's about 3 times of CRH.
Hanoi to haiphong highway EX - 5Because it will be Japan made technology. As far as I know, unlike Japan, China is reluctantly providing loans and transfering technology to Vietnam. Though VN has asked and encouraged China many times to invest in infrastructure projects.
haha.....Do you know if China has offered any high-speed railways to Vietnam, including providing loans and technology?