Thread: Resources for The Dong. No sence all your "EGGS" in one Basket....

Vietnam's ICT ready for stronger development in 2007
08:24' 20/02/2007 (GMT+7)
Vietnam's information communication and technology (ICT) sector is predicted to "take off" in 2007, the first year of the country's WTO membership, according to experts.

VietNamNet Bridge

Year 2007 will witness a strong growth of post and telecoms services, together with a high development rate in information technology (IT) sector, said Bui Thien Minh, Deputy General Director of the Vietnam Post and Telecommunication Group (VNPT).

Total broad-band Internet subscribers this year are likely to reach 1 million compared to 300,000 in 2006. Mobile phone service is expected to see a boom of 6 million new users, he added.

IT hardware production will have positive changes as the area is becoming more attractive to foreign investors, Director of Post and Telematics Ministry's IT Industry Department Nguyen Anh Tuan forecasts.

The target of US $ 6-7 billion for 2010 is not too high since the Intel Vietnam chip assembly and testing plant, which will be operational in 2009, will be able to contribute 5 billion USD to the IT sector, he confirmed.

Year 2007 also sees the development of the software market as well as software processing for export, which begins with contracts from American and Japanese companies, according to General Director of Microsoft Vietnam Christophe Desriac.

David Knapp, General Director of Motorola Vietnam meanwhile said the impacts brought by the country's accession to the WTO will help increase the market's demand and make the whole economy continue developing, thus creating opportunities for ICT development.

However, there are more to do to attract more foreign investment in the post-WTO period and to maintain a stable development in the next phase.

Domestic firms should become more familiar with international regulations and business practices concerning the export of post and telecoms services, Minister of Post and Telematics Do Trung Ta said.

They should also improve their services' quality and human resource's management, the Minister added.

In 2006, the country posted a record 10 million new telephone subscribers, marking a year-on-year increase of 188% , which brought the total number of telephones in Vietnam to 25.8 million.

The software industry, which includes 720 developers with 25,000 employees, generated US $350 million in revenue last year, up 3% year-on-year, in which exports accounted for US $70 million.

The ICT sector lured US $2 billion of foreign direct investment and about US $500 million of Official Development Assistance (ODA) in 2006.

(Source: VNA)

http://siteresources.worldbank.org/I...DA-Vietnam.pdf

Vietnam: a promised land

21:44' 21/02/2007 (GMT+7)

VietNamNet Bridge – According to an economics and market analysis about Asia-Pacific, WTO entry facilitates FDI and portfolio flows. Citigroup economist Renee Chen explains why.

Vietnam's economy maintained above 8% growth in 2006, led by robust domestic investment and strong momentum in manufacturing production and exports, while retail sales and service sectors also posted solid growth.

Unfavorable weather and epidemics slowed agricultural expansion.

WTO entry should accelerate FDI and facilitate export expansion while public infrastructure investment will also likely pick up, helping to sustain strong growth.

Inflation eased to 6.6% year-on-year in December, the lowest since April 2004, with both food and non-food price gains easing. Pricing pressures remain from an increase in the public sector minimum wage and a planned reduction in subsidies for electricity and other administered commodities, but stabilising oil prices, slowing credit growth and lower import tariffs should keep inflation in check.

The State Bank of Vietnam widened the interbank trading band of the VND to +/-0.5% from +/-0.25% in early January. Official caution should limit the scope for significant VND appreciation in the near term, but the move reinforces a trend toward more VND flexibility. Short rates edged up on stronger cash demand, but State Bank sterilisation and ample VND deposits pushed rates off highs. We expect stabilising interest rates.

Buoyant non-oil revenue growth from the private sector and reduced subsidies should help contain the budget deficit, but the impact of the increased minimum wage and stabilising oil prices limiting revenue from crude oil exports deserve close monitoring.

The external position is likely to strengthen on strong FDI and portfolio inflows despite a widening trade deficit. Exports continued a robust pace while imports accelerated in 2006. FDI soared 31.7% to a record $10.2bil in 2006, and foreign reserves showed a sizable increase.

While the trade deficit might widen modestly on stabilising oil prices and higher import demand offsetting the effect of post WTO removal of US textile quotas, the external position will likely strengthen on strong FDI and portfolio inflows.

Other developments, Vietnam officially joined the WTO and was accorded permanent normal trading relations (PNTR) by the US, stock market capitalisation increased 20 fold year on year to $14bil (22.7% of GDP) at the end of 2006, exceeding the 2003 official target for 10-15% of GDP by 2010. The State Securities Commission expects market capitalisation to rise to 30-40% of GDP by 2010.

(Source: VIR)

VietNamNet - Vietnam: a promised land

Understanding inflation in Vietnam
21:48' 21/02/2007 (GMT+7)
VietNamNet Bridge – The ups and downs of inflation can be a confusing situation for many, however, Patrizia Tumbarello, the International Monetary Fund's Vietnam desk officer, attempts to interpret the effects inflation has on the country's economic environment.

A remarkable feature of Vietnam's emergence in the global economy has been its transition to a lower inflation environment since the introduction of reforms under doi moi. Inflation fell from 453% in 1986 to single digits during the second half of the 1990s, as the government adopted prudent macroeconomic policies along with far-reaching reforms to liberalise domestic prices and open up Vietnam's economy to international trade and investment.

After remaining in single digits during the late-1990s, inflation began an upward trend that accelerated in 2004. The average rate of inflation rose to 7.7% in 2004 and peaked at 8.3% in 2005, before easing somewhat in 2006. Despite its recent decrease, headline inflation has remained higher than in other emerging markets (EMs) in the region.

The 12-month rate of inflation has stood at 6.6% as of December 2006, compared to less than 5%, on average, in the ASEAN-4 (Indonesia, Malaysia, Philippines and Thailand). The figure is also significantly lower rate in China.

Moreover, core inflation (proxied by the non-food component of the consumer price index (CPI) net of fuel and fuel-related items) has remained on an upward path.

These developments suggest that, in contrast to 2004-05, when the primary causes of inflation appeared to be food-supply and oil-price shocks, inflation was more broad-based in 2006.

The unfavourable impact of inflation on poverty and growth are well-known. Inflation is essentially a regressive tax that hits the poor the hardest. High and uncertain rates of inflation can also discourage private investment and hurt a country's export competitiveness by leading to increases in production costs.

What is special about inflation in Vietnam, and should it be a cause for concern? Although Vietnam has recorded an impressive economic performance over the last few years and, following its recent WTO accession, is poised to be the next tiger in Asia, it is still a low-income country.

Therefore, any simple comparison with the more "mature" EMs in the region is not straight forward. In fact, it is conceivable that Vietnam's somewhat higher rate of inflation may be a benign manifestation of the structural changes underway in a rapidly developing economy.

One possible interpretation along the above lines is that Vietnam's inflation may be a side-effect of an adjustment of relative prices of the sort that would be appropriate when large productivity gains in tradable sectors trigger wage increases, which spill over into the rest of the economy. Economists call this type of adjustment the Balassa-Samuelson effect. If this is the case, inflation can be viewed as a temporary effect of a move towards a new market equilibrium and, as such, it should be no cause for concern.

While Vietnam has experienced gains in productivity in the tradable goods sector, there is no evidence of a medium-term trend increase in the relative price of non-traded goods compared to traded goods. One possible way to explain this is by arguing that the spill-over of tradable sector wage increases to other sectors is likely to be attenuated in an economy in which a big part of the labour force is still underemployed in agriculture, and is willing to move to the non-agricultural sector at prevailing wages.

Price liberalisation is another important factor that could have influenced inflation dynamics in recent years. The prices of several important commodities were liberalised to a great extent during 2002-04.

However, key prices and tariffs, including those for electricity, water, petroleum products, air tickets, and telecom charges continue to be set by the government, and some of the prices for other key inputs remain subject to legal ceilings or administratively set price ranges.

Indeed, the largest increases in inflation occurred well after the bulk of price liberalisation took place, during a period in which the administrative controls on some prices were tightened. Thus, while price liberalisation is likely to have had some effects on inflation, it is difficult to argue that it has been a dominant factor.

The IMF staff's empirical analysis suggests that an overheating of the economy probably played a considerable role in the recent inflation episode. The 2005 inflation spike coincided with an increase of the output gap, which is measured by the difference between actual output and estimated potential output and is widely used as an indicator of excess demand.

The staffs econometric work also shows that Vietnam's inflation has an inertia component higher than in the other countries in the region. This suggests that once inflationary expectations are entrenched, it is more difficult to control inflation. The higher inertia may be rooted in the public's memory of high inflation that lasted until the early 1990s.

What factors could affect demand pressures? Recent empirical work points to the growth of monetary and credit aggregates as potentially important factors. While previous empirical studies found little evidence of a robust link between monetary growth and inflation in Vietnam, this could be due to the rapid structural transformation of the economy during the early phases of doi moi and the associated increases in private saving and money demand.

However, the correlation between money and inflation seems to have become positive and strong beginning in 2002. The growth of credit to the economy appears to be even more highly correlated with inflation during this recent period.

During 2006, in particular, the substantial reduction in the rate of growth of credit to the economy from the levels reached in 2004-2005 is likely to have contributed to the easing of inflation. Of course, these findings need to be viewed with caution, as a high correlation is not proof of the cause.

The exchange rate is another factor affecting inflation dynamics. The authorities have pursued a policy of a de facto peg of the dong to the US dollar in recent years.

As a result, the exchange rate has been an important anchor of stability and has helped contain increases in import prices, especially during periods in which the US dollar was stable or strengthened relative to other major currencies.

Indeed, the nominal effective appreciation of the dong during 2000-2001 is likely to have played an important role in reducing inflation to negative levels during that period. Similarly, the nominal effective depreciation of the dong during 2006 is likely to have slowed the moderation of inflationary pressures.

External developments bode well for a continuing moderation of inflation in 2007, provided that the authorities pursue a prudent mix of macroeconomic policies. International oil prices have declined significantly in recent months, and domestic gasoline prices have already been reduced by about 15% from the peak levels reached in August 2006.

Average oil prices are now projected to fall or, at worst, stabilise in 2007. Non-fuel commodity prices are also projected to ease in 2007, after having increased by double-digit rates over the past three years.

These developments provide a favorable environment for a further decline of inflation from the rate reached in late-2006, if the authorities exercise adequate restraint in their conduct of monetary and fiscal policies.

The State Bank's monetary programme for 2007 is encouraging in this regard as it envisages a further deceleration of credit growth to 20% by end-2007. Vietnam's WTO accession can be expected to lead to decreases in import tariffs, and an opening up of previously protected industries.

Increasing foreign competition, together with the falling prices of commodity imports, should help offset the inflationary effects of the recent increase in electricity prices and planned increases in other key administered prices.

However, there are also some upside risks. Continuing large increases in the minimum wage could spur inflation, especially if they are accompanied by a significant easing of fiscal policy. In addition, the pursuit of the State Bank's monetary policy objectives could be frustrated by difficulties in dealing with the ongoing surge in capital inflows.

However, the authorities are mindful of these challenges. In particular, the recent widening of the trading band of the dong versus the US dollar clearly signals the authorities' intention to move toward greater exchange rate flexibility, which would be an important step towards the establishment of monetary policy geared to providing an anchor for inflation and inflation expectations.

I just hope the Dinar RV's soon so I can purchase truck loads of dong!

Originally Posted by screwball

I just hope the Dinar RV's soon so I can purchase truck loads of dong!

The dong has moved too. But you got some time for the Dong. Shouldn't be much longer. Rolclub is also trying to get more for the info on the Rial. It is looking as they dont care if they go to War with the US. I hope Not. War is Not Good. But the Dogs at the Top decide that.

Hi,

Does anyone know if you you can buy the Dong from any of the banks in the U.K. If not are there any sellers in the U.K.

GO TO WWW.NAMMONEY.COM I GOT MINE NEXT DAY. THEY ARE GREAT

Originally Posted by abbey56

Hi,

Does anyone know if you you can buy the Dong from any of the banks in the U.K. If not are there any sellers in the U.K.

As DannyDinar said below, use Nam Money. This is actually Ali at DinarTrade. Now he has Agents set up over in the UK for both as I remember. His Toll-Free # is published on his website.

Originally Posted by DANNYDINAR

GO TO WWW.NAMMONEY.COM I GOT MINE NEXT DAY. THEY ARE GREAT

Same as Above DannyDinar, plus this is who Rolclub Supports Only for both. Now members can order from who and where ever they choose.

NamMoney - Vietnam Currency