Showing posts with label CLMV. Show all posts
Showing posts with label CLMV. Show all posts

Monday, September 03, 2012

Banking in CLMV: Things to know before making an investment

3/09/2012
SCB Economic Intelligence Center
Bangkok Post

As business opportunities open wider ahead of the launch of the Asean Economic Community (AEC) in 2015, the four less-developed economies, often referred to as CLMV (Cambodia, Laos, Myanmar and Vietnam) are among the most attractive for Thai investors.

At the onset of the journey for Thai companies looking to extend or relocate production to these neighbouring countries, awareness of the local financial services environment is critical to making the right business decision. Three important issues need to be explored: What is the landscape of CLMV banking industry? How convenient are fund transfers and foreign exchange? What kinds of services can Thai banks provide for investors in CLMV markets?

First, banking access in the CLMV markets is rather limited, which reflects the predominantly cash-based environment. Banking facilities are limited both in scale and in scope, even though the numbers of commercial banks are comparable to those in Thailand and Malaysia. There are fewer than four physical branches per 100,000 adults in CLMV, compared with 11 in Thailand, Malaysia and Singapore.

Friday, January 20, 2012

Cambodia stands out among CLMV [... for Thai investments]

January 20, 2012
The Nation

Among Cambodia, Laos, Burma and Vietnam, widely abbreviated as CLMV, Cambodia is the most outstanding investment destination for Thai companies thanks to the country's free-trade policy and abundant natural resources, according to the Trade Negotiations Department.

Srirat Rastapana, director-general of the department, said that though Cambodia was the last to join Asean in 2009, its trade policy is the most liberalised among the four countries under the government’s policy to draw foreign investment and reduce poverty.

Thursday, December 01, 2011

ASEAN is already polarized with a 2-speed ASEAN since the days CLMV came into the picture

Asean should be careful what it wishes for

November 28, 2011
Kavi Chongkittavorn
The Nation

The East Asia Summit in Bali ended two weeks ago but the political ripples continue. The long-term implications will be with the region for decades to come. Kudos to Asean and the chair for its success in bringing the US and China for discussions on its own turf. Deep down, the grouping hopes they will balance each other out at the Asean-led forum. Will they?

A frequently asked question is whether Asean has the long-term capacity to handle the world's two most powerful players according to its own simple set of rules and norms, mainly the non-interference principle and non-use of force. Asean can be very confident and at times forgets that the US and China have their own norms. At this juncture, these dialogue partners are presenting themselves, one way or another, as regional and international norm setters. It was only from 2003 onward that they began to acknowledge the existing practices in the region, especially those established by Asean in the past four decades, but nobody can be certain of the sustainability of this trend if there is a full-blown US-China rivalry.

Wednesday, November 30, 2011

ASEAN gap remains stark

Tuesday, 29 November 2011
May Kunmakara
The Phnom Penh Post

A shortage of financing would exacerbate the gap in development between Cambodia, Laos, Myanmar and Vietnam (CLMV) and the six more economically mature ASEAN member states, Prime Minister Hun Sen said yesterday.

“In spite of the endless efforts and inspiration on accelerating the development of the CLVM countries, the fundamental challenge of our cooperation is financing,” the prem-ier said during his opening remarks at a conference on CLVM countries.

He said foreign direct investment, market integration and overseas development aid played a important role in the development process.

Tuesday, November 29, 2011

Hun Xen admits to capital shortage

Capital shortage thwarts development pace in CLMV: Cambodia PM

PHNOM PENH, Nov. 28 (Xinhua) -- Capital shortage is the key challenge for Cambodia, Laos, Myanmar and Vietnam (CLMV) to develop and narrow development gap with the six old ASEAN member states, Cambodia's Prime Minister Hun Sen said Monday.

"Despite the CLMV countries' tireless efforts and desires to accelerate the development, the key challenge of our cooperation is the lack of financing," he said at the opening of the Regional Conference on CLMV countries and the ASEAN Economic Community 2015-bridging the Development Divide.

"Therefore, foreign direct investment, the integration of markets, trades, and investments as well as official development aid play very important roles in the initiative of our cooperation, " he said.

Thursday, July 28, 2011

The Lower Mekong Initiative Going Strong

Multinational effort fosters integrated cooperation and capacity building among Cambodia, Laos, Thailand, and Vietnam.

07-27-2011
Voice of America
Editorials
"We support your efforts to build a stronger foundation for prosperity and progress." -- U.S. Secretary of State Hillary Clinton
In late July, U.S. Secretary of State Hillary Clinton and the Foreign Ministers and senior representatives of Cambodia, Laos, Thailand, and Vietnam met in Bali, Indonesia for the 4th Lower Mekong Initiative Ministerial Meeting. The meeting highlighted the growing cooperation among the United States and the countries of the Lower Mekong River basin in key areas of common concern, such as education, environment, public health, and infrastructure.

The Lower Mekong Initiative, or LMI, is a multinational effort initiated by Secretary of State Clinton in 2009 to foster integrated cooperation and capacity building among Cambodia, Laos, Thailand, and Vietnam.

"We began this initiative two years ago to give rise to more frequent and effective cooperation among the Lower Mekong countries and the United States," said Secretary of State Clinton. "We saw many opportunities for effective partnership on issues that impact the people of the region: health, education, infrastructure, environmental protection, water quality, and so much else. And we thought there was value in taking an integrated approach, because all of these issues are connected. If water sources are polluted, health declines; if children are unhealthy, they struggle to learn; if education systems are weak, it affects the success of public health and environmental campaigns. So the initiative reflects the reality of this interconnection," she said.

Tuesday, July 26, 2011

Economic integration of SE Asia DICTATORSHIPS

Vietnam, Cambodia, Laos, Myanmar seeking further economic integration

July 26, 2011
Xinhua

A seminar was held here on Monday among senior officials and delegates from Cambodia, Laos, Myanmar and Vietnam who shared their experience in devising and implementing international economic integration policies to serve their countries' sustainable development.

According to Vietnam News Agency (VNA), participants agreed that their countries should promote cooperation in the sub-regional, regional and inter-regional frameworks to make the best use of opportunities and minimize challenges from international economic integration.

Vietnamese Deputy Foreign Minister Doan Xuan Hung suggested the four countries continue to actively take part in international economic integration and closely coordinate to contribute to building the ASEAN community.

Tuesday, July 12, 2011

Column: Asia’s engine of growth

Tuesday, Jul 12, 2011
Amitendu Palit
The Financial Express

Asian connectivity has assumed a whole new meaning with high-speed rail linking people and places not only within the countries, but also across countries.

China had begun the process a few years ago by laying out the design of an ambitious rail road network. Now South Korea has also followed suit. New rail links within, and from these countries, are being complemented by upcoming networks across Southeast Asia.

A key project plans to link China to upper Southeast Asia by connecting the former to the CLMV group of countries in the region—Cambodia, Laos, Myanmar and Vietnam—along with Thailand. The specifics of the project include rail corridors from Kunming in China’s western province of Yunnan to Vientiane in Laos, which would produce further connections to Bangkok in Thailand, Phnom Penh in Cambodia, and Ho Chi Minh City and Hanoi in Vietnam. The link will eventually extend right up to the tip of South China Sea and connect Kuala Lumpur and Singapore. This remarkable pan-Asian rail network bridging Northeast and Southeast Asia is expected to be ready by 2020.

Thursday, November 18, 2010

ASEAN idiotic dictators feel the urge to cooperate ... to better oppress their people?

The Four Idiot Amigos Bandidos
Prime Ministers, from left, Thein Sein of Myanmar, Nguyen Tan Dung of Vietnam, Hun Sen of Cambodia, and Bouasone Bouphavanh of Laos, shake hands during an opening ceremony of the 5th Cambodia, Laos, Myanmar and Vietnam summit in the Cambodia's Peace Palace in Phnom Penh on Tuesday. (Photo: AP)
Asean's Poorer Nations Find Need to Cooperate

Kong Sothanarith, VOA Khmer
Phnom Penh Wednesday, 17 November 2010
“We hope that our four countries will strengthen economic cooperation under a principle of equality, for mutual interest, and without mutual interference, to boost growth and reduce gaps of progress.”
The leaders of Burma, Cambodia, Laos and Vietnam met in Phnom Penh on Tuesday, vowing closer ties for economic growth in an integrated Asean economy.

This was the fifth summit between the countries, Asean's least developed.

“We hope that our four countries will strengthen economic cooperation under a principle of equality, for mutual interest, and without mutual interference, to boost growth and reduce gaps of progress,” Vietnamese Prime Minister Nguyen Tan Dung said following meetings Tuesday.

Laotian Prime Minister Bouason Bouphavanh said the four countries, known collectively as CLMV, could play a major role in the integration of Asean.



“The linking of railway networks, human resources, green power and recyclable power are still crucial priorities in the cooperation of the CLMV,” he said.

Prime Minister Hun Sen said the four nations needed to attract regional development partners, as well as cooperating with institutions like the Asian Development Bank, the Institute of Research for Asean and Southeast Asia and others.

The four countries need to consolidate cooperation to boost trade and investment, facilitate commerce and create markets along respective borders, he said.

Burmese Prime Minister Thein Sein said greater links between the countries would not only encourage businesses and tourism, but would also bring their citizens closer together.

Cambodia is hosting three summits over Tuesday and Wednesday: the CMLV, the Cambodia-Laos-Vietnam, and the Ayeyawady-Chao Praya-Mekong Economic Cooperation Strategy.

On Tuesday, leaders signed an agreement to form preferential policies and to develop the triangle of 10 provinces connecting Cambodia, Laos and Vietnam. Cambodia signed an air agreement with Laos. Burma, also called Myanmar, was congratulated on elections held earlier this month.

Wednesday, November 17, 2010

Economic dependence subjugates policy

From left: Burma’s Prime Minister Thein Sein, Vietnam’s Prime Minister Nguyen Tan Dung, Cambodia’s Prime Minister Hun Sen, Laos’ Prime Minister Bouasone Bouphavanh and Asean Secretary-General Surin Pitsuwan link arms during the 5th Cambodia-Laos-Myanmar-Vietnam (CLMV) summit, at the Council of Ministers in Phnom Penh yesterday.
17/11/2010
By Thitinan Pongsudhirak
The Bangkok Post

In one short week over two long decades, Burma has returned to a window of potential political transition not seen since its last elections in 1990 were hijacked by the military.

This time, the orchestrated polls on Nov 7 have overwhelmingly sent military-backed representatives of the Union Solidarity and Development Party to parliament.

On election day, renewed fighting between the Burmese army and ethnic minority groups flared up along the Thai-Burmese border.

Less than a week later, the iconic leader of Burma's opposition, Aung San Suu Kyi, was freed from house arrest where she had been confined for 15 of the last 21 years.

The implications from these momentous times in Burma are immense for Thailand, Southeast Asia and beyond.


The contrast between the responses to the election results from the West and Burma's near-abroad was conspicuous. China and India's comments were muted. Both Asian giants have vested interests in Burma's economic development, having courted and competed for the ruling generals in Naypyidaw for strategic assets and natural resources.

As Southeast Asia's main regional organisation, the Association of Southeast Asian Nations's receptive reaction was a foregone conclusion. The elections were the culmination of Asean's longstanding policy of "constructive engagement" and its now-proven rationale for accepting the generals' Burma back in 1997. Notwithstanding dissenting voices from Indonesia and the Philippines, Asean will now want to tick the electoral box on Burma's democratic checklist and move on.

As the country most directly affected by events in Burma, Thailand also revealed its hand well before the elections. Prime Minister Abhisit Vejjajiva's initial reaction to the polls was to stick to the stated time-frame of the military-sponsored constitution of a three-month period before power is transferred to the elected government.

Although his predecessor and mentor, former prime minister Chuan Leekpai, made a point of not setting foot on Burma's soil in the late 1990s when the State Peace and Development Council was ensconced in power, Mr Abhisit not only visited Naypyidaw but came home with a multi-billion-dollar port development deal.

The Democrat Party-led government leader did not even visit Burma then, but his successor a decade later has now reversed course. Thailand's relative emphasis on human rights and democracy as its foreign policy underpinnings have gone out the window. But if pragmatism and material interests are to dictate Thailand's Burma policy, they should be rethought.

Thailand needs to come up with a longer-term energy outlook and a forward-looking immigration policy.

The port deal at Dawei (Tavoy) should be seen as part of a broader package of Thailand's growing energy dependence on Burma. More than 70% of Thai electricity generation derives from natural gas, and nearly half of that portion is imported from Burma's gas pipelines, with the rest made up of coal, hydro and petroleum sources. Renewable energy sources such as wind and solar are negligible. Nuclear power would be a viable alternative, as Vietnam's imminent construction of two nuclear power plants attests.

But for Thailand, nuclear power will need broad-based public discussions and hearings to promote trust and confidence and allay civil society concerns. Nuclear power is thus many years in the distance _ if it ever materialises.

Thailand, in short, is beset by energy insecurity. On a per-capita basis, Thailand's electricity consumption is in the range of the developed economies in the Organisation for Economic Cooperation and Development (OECD). And its foreseeable energy future is reliant on natural gas. Until it can tap into reserves in unexplored areas in the Gulf of Thailand, particularly the overlapping claims with Cambodia, Thailand's gas dependence on Burma will grow.

In turn, such dependence will constrain Thai foreign policy vis-a-vis Burma.

The fluid and precarious post-election interplay in Burma should prompt Thai leaders to start thinking about longer-term energy security.

Another serious challenge will be the demographics of economic growth. More than two million migrant workers from Burma are reportedly resident in Thailand, without corresponding rights to education and health care. Many of these migrant workers, now in their second generation, are unlikely to return to Burma even if peace and stability are restored.

A long-term comprehensive immigration policy, as opposed to the current ad hoc registration, could provide them with residency rights with access to proper education and health care. They now form the backbone of the back-breaking work in service industries, particularly construction, processed food and fisheries. If they continue to be excluded from the system and preyed on by Thai authorities for extortionist gains, they may become a source of social problems and crime in the years to come, owing to a lack of access to education and career mobility. The Thai economy can no longer thrive without these essential workers.

The more immediate demographic challenge will take place along the Thai-Burmese border.

Mr Abhisit's crass and myopic three-month reference for Burma's power transfer does not conduce to the logistical and humanitarian preparations that should be put in place.

The armed conflicts between the Burmese army and the ethnic minorities may well go on indefinitely. Largely unrepresented in parliament both at the national and regional levels following the polls, the major ethnic groups, such as the Karen and the Shan, are unwilling to lay down arms and be absorbed into the border guard forces controlled by the Burmese armies.

The growing spectre of civil war should lead Thai policy-makers and military commanders to start thinking about longer-term refugee sanctuaries along the border. It is not sustainable to receive the displaced ethnic refugees one day and repatriate them the next.

International relief agencies should be allowed and encouraged to share the burden. A longer-term refugee policy and accommodation, which has been a trademark in Thailand's foreign dealings in the past, should be formulated immediately.

The drugs production and trafficking associated with minority groups' war-financing will also need to be checked and deterred.

Burma after elections stands at a precipice. It could turn out well over a long transition, or very badly in relatively short order. The risks of continued military rule fronted by a bogus electoral regime on the one hand clashing with a pent-up and long-suffering opposition bent on going for "too much, too soon" will grow.

Thailand needs to be better prepared by providing safe havens along the border, relying less on Burma's natural gas and accommodating Burmese and Burmese minority workers who are contributing to the Thai economy for the long haul.
------------------------------
The writer is Director of the Institute of Security and International Studies, Faculty of Political Science, Chulalongkorn University.

Monday, November 15, 2010

Dung visits Cambodia to deliver Hanoi's marching order to Xen

Vietnam's prime minister arrives in Cambodia

Nov 15, 2010
DPA

Phnom Penh - Vietnamese Prime Minister Nguyen Tan Dung arrived in Cambodia Monday for meetings with other regional leaders.

Phnom Penh is hosting the CLV (Cambodia-Laos-Vietnam) summit Tuesday as well as the CLMV summit, which includes Myanmar, Foreign Affairs Ministry spokesman Koy Kuong said.

He said the prime ministers of Laos and Myanmar would attend, and that Thai Premier Abhisit Vejjajiva was expected Wednesday in Phnom Penh for a separate meeting with the CLMV countries.


'The three summits will review progress and set out the future direction in all priority areas of cooperation with a view to further advance this framework of cooperation with sustainable development and prosperity,' he said.

Koy Kuong also said Cambodian Prime Minister Hun Sen and Abhisit would meet Wednesday.

The two countries have had a testy relationship over the past two years, which worsened after Cambodia appointed Thailand's fugitive former premier Thaksin Shinawatra to advisory positions last year.

Thaksin, who has been convicted of abuse of power in Thailand, quit those advisory roles in August, a step that saw relations start to thaw.

On the subject of Myanmar, Koy Kuong said Phnom Penh welcomed the release of pro-democracy icon Aung San Suu Kyi over the weekend.

But he would not be drawn on whether Phnom Penh echoed her call for a more inclusive political structure in Myanmar, saying that was 'an internal affair.'

'It is up to the law and order of Myanmar,' he said. 'Anyway, we appreciate Myanmar has just had a general election, which is the fifth stage of the roadmap to democracy and development.'

Friday, November 12, 2010

Cambodia: The confluent of Southeast Asia dictators

Southeast Asia dictators (from left to right): Sone, Sein, Dung and Xen
Myanmar PM to attend regional summits in Cambodia

November 12, 2010
Xinhua

Myanmar Prime Minister U Thein Sein will attend the 5th CLMV (Cambodia, Laos, Myanmar, Vietnam) Summit and the 4th ACMECS ( Ayeyawaddy-Chaophraya-Mekong Economic Cooperation Strategy) Summit to be held in Cambodia's capital of Phnom Penh, an official announcement from Nay Pyi Taw said Friday without specifying the date of his attendance .

Thein Sein is invited by his Cambodian counterpart Hun Sen for the attendance.

CLMV are the lesser-developed countries of the Association of Southeast Asian Nations (ASEAN). Myanmar, along with Laos, joined the regional grouping in July 1997.


Aimed at strengthening friendship among CLMV countries, uplifting good neighboring spirit, ensuring cooperation among member countries, holding culture exchange, enhancing cultural preservation and boosting tourism sector through cultural cooperation, ministers of culture and fine arts of CLMV held a roundtable in Myanmar's new capital of Nay Pyi Taw in January this year, vowing to maintain cultural connectivity among CLMV member countries in a Nay Pyi Taw Declaration-2010.

The declaration called for preservation of cultural heritage in the member countries, prevention against illegal trading of cultural heritage through borders, establishment of sister cities among the member countries and promotion of tourism industry.

Meanwhile, in November 2003, four countries -- Cambodia, Laos, Myanmar and Thailand held their first ACMECS summit in Myanmar's ancient city of Bagan, laying down ACMECS program which provides for cooperation in five main strategic areas of agriculture, industry, trade and investment, transport, tourist and human resources development.

Vietnam joined the ACMECS in 2004.

In May 2007, ACMECS foreign ministers met in Myanmar's Mandalay, pledging to work for greater competitiveness, narrower economic disparity and promoting socio-economic development in the subregion.

Calling for realization of their 2003 Bagan Declaration efficiently and effectively, the foreign ministers also expressed their desire to strengthen the aims and objectives of the declaration and work for attaining prosperity in the subregion through enhanced solidarity, mutual respect, goods neighborliness and active cooperation among the member countries.

Monday, November 08, 2010

Cambodia to host a series of regional summit meetings [-incl. 2 attended by SE Asia's dictators]

November 08, 2010
Xinhua

Cambodia will host a series of summit meetings next week for regional leaders, according to a statement released Monday by Ministry of Foreign Affairs and International Cooperation.

The statement said Cambodia will host the 6th Cambodia-Laos- Vietnam (CLV) Summit, the 5th Cambodia-Laos, Myanmar-Vietnam (CLMV) Summit and the 4th Ayeyawady-Chao Praya-Mekong Economic Cooperation Strategy (ACMECS) Summit on November 16-17, 2010 in Phnom Penh.

The summits will be attended by Prime Ministers and Foreign Ministers of CLMV and ACMECS countries which include Cambodia, Laos, Myanmar, Vietnam and Thailand.


Secretary General of the Association of Southeast Asian Nations (ASEAN) will also participate in the event.

According to the statement, the prime ministers and ASEAN Secretary General will be received in a Royal Audience by His Majesty King Norodom Sihamoni in the Royal Palace.

All the summits will be chaired by Cambodian Prime Minister Hun Sen who is also the host of the event.

The summits will review the progress and set out the future direction for CLV, CLMV and ACMECS in all priority areas of cooperation, with a view to further advance these frameworks of cooperation for sustainable development and prosperity in this sub-region.

Friday, October 01, 2010

See all the dictatorships in SE Asia in one single swoop

SE Asia's dictators: Laos' Bouasone Bouphavanh, Burma's Thein Sien, Vietnam's Nguyen Tan Dung and Cambodia's Hun Xen

Vietnam, Cambodia, Laos and Myanmar, to be promoted as one destination

Friday, 1 October 2010
eTravel Blackboard

Yesterday at ITE 2010 in Ho Chi Minh City, Tran Chien Thang, Vice Minister, the Ministry of Culture, Sports and Tourism of the Socialist Republic of Vietnam, [second from right] Dr. Thong Khon, Minister, the Ministry of Tourism of the Kingdom of Cambodia, [far right] Somphong Mongkhonvilay, Minister, Chairman of Lao National Tourism Administration of the Lao People’s Democratic Republic [second from left] and Aye Myint Kyu, Vice Minister, the Ministry of Hotels and Tourism of the Union of Myanmar [far left] jointly announced an important new agreement that will mean the four countries will promote themselves together.

The agreement includes Cambodia, Laos, Myanmar and Viet Nam becoming promoted as one single tourism destination in the region, with the Ministers announcing that their NTO’s will accelerate sharing information and experiences in tourism planning, product development and tourism investment promotion; hosting of tourism investment forums in each of the four countries; working together to participate in international tourism events held in the four countries, training and human resources development and travel facilitation measures for tourists, including the possibilities for tourist transportation, tour packaging, joint organization of caravan tours and opening of direct air linkages among cultural heritage sites in order to further increase the incoming tourists to the four countries.

Youth exchanges, as well as sister cities’ and cultural heritages cooperation are included, to enhance what is described as mutual understanding and nurturing appreciation for the cultural values, customs and traditions.

Public – Private partnerships also get a mention to assist in tourism development, especially in the fields of infrastructure investment, the improvement of quality tourism products and services, tourism marketing and promotion for the sustainability of tourism development in each country.

With the four countries implementing the program and the strap line “Four Countries – One Destination” the Ministers also expressed their concern and intend addressing poverty alleviation and priorities should be given to human resource development and formulation of tourism standards or criteria.

The Ministers all agreed that they will meet biennially to assess progress and discuss future activity and when questioned by e-Travel Blackboard, confirmed that there were no plans to include formal representation in Australia.

In addition, the Ministers confirmed that there were no plans to lift visa requirements for Australian travelers, but that they believed they had made the process as easy as possible by allowing visas on arrival.

A Special Report by John Alwyn-Jones on location from ITE 2010, Ho Chi Minh City, Vietnam.

Monday, August 30, 2010

Meeting of economic ministers of the communist and dictatorial regimes of SE Asia

CLMV economic ministers meet

August, 30 2010

VNS

DA NANG — Economic ministers from Cambodia, Laos, Myanmar and Viet Nam (CLMV) held their first talk last Saturday to discuss measures to narrow the development gaps between the four countries and other ASEAN member nations.

The meeting was held within the scope of the 42nd ASEAN Economic Ministers' Meeting, which took place in Da Nang last week.

Ministers proposed closer co-ordination in five major areas:

– Building and implementing projects under the 2nd Initiative for ASEAN Integration Work Plan framework;

– Building priority projects under sub-regional co-operation frameworks;

– Enhancing co-operation with regional and international institutions such as the Asian Development Bank, the Economic Research Institute for ASEAN and East Asia and ASEAN's dialogue partners;

– Furthering co-operation in Free Trade Agreements and other negotiations for the benefit of each country as well as the whole group; and

– Studying proposals to establish the CLMV Development Fund, as mentioned by Cambodian Prime Minister Hun Sen, to attract more assistance from dialogue partners for narrowing developing gaps.

Ministers urged the four countries to have more trade facilitation and promotion programmes, reaffirmed the importance of investment incentives and encouraged the establishment of special economic and export processing zones along CLMV borders.

They emphasised the vital role of vocational training and public administration capacity-building programmes.

They said policy co-ordination among the countries should be one of the main themes of CLMV economic co-operation.

Ministers agreed that the CLMV economic ministers' meetings would be convened twice a year.

ASEAN Secretary General Surin Pitsuwan said development gaps remained a fundamental issue that ASEAN nations needed to correct, as the bloc headed to the establishment of an economic community by 2015.

Sunday, August 23, 2009

Vietnam Successfully Maintains Its Investment Appeal

22/08/2009
Writer: WITTAYA SUPATANAKUL
Bangkok Post


For the past decade, Vietnam has been one of the most attractive countries for investment, with its fast-growing economy, large and inexpensive workforce, abundant resources and raw materials, as well as privileges for investors. Despite drawbacks such as lack of infrastructure, the determined government has managed to lure large investors with generous tax benefits and other incentives.

However, in light of a domestic economic crisis in 2007 and the current global slowdown, many wonder whether Vietnam can still work its magic.

The Pho crisis: The mid-2007 shock, named after the national cuisine, was caused by various factors such as high inflation and the trade deficit, a weak currency and exchange-rate speculation, and rising savings interest rates. Its stock market index fell by 68%, from 1,170 to 370 points, while property prices plummeted by 30-50%.

However, with centralised authority under the one-party system and sound decisions by policymakers, Vietnam bounced back impressively. The exchange rate stabilised and interest rates came down to a reasonable 7% for savings and 10.5% for loans from 18-21% earlier.

Increased import taxes on luxury products, such as cars (from 60% to 83%), cut inflation from 23% to 10.27% in just one year. Although slow, property and stocks have been recovering, with the index rising from 370 points in March 2007 to 458 in July this year.

The Hamburger crisis: Not long after suffering its home-brewed crisis, Vietnam was hit hard by the global economic downturn that originated in the United States. The "Hamburger crisis", however, seems to have caused less damage in Vietnam, even though it derives 70% of its GDP (similar to Thailand) from exports. While the Thai economy contracted by 7.1% in the first quarter, Vietnam's grew by 3.9% and the government targets 5% for the year.

The Hanoi government is working to alleviate the impact of the crisis. While countries such as Thailand and Taiwan are handing out cash and coupons to consumers to spur spending, Vietnam instead exempted personal income tax for the first six months of 2009, which cost it US$382.7 million.

For the business sector, the government offered industrial SMEs a subsidy of 4% on loan interest to buy raw materials and for working capital for 2009, and subsidised loans to build assets will be extended until 2011. It cut corporate income taxes for SMEs to 30%.

Also helping business has been the managed float of the dong. Each day the central bank sets a rate that commercial banks can adjust up or down by 5%. The bank has lowered the rate by 1-5 dong a day, allowing it to direct the rate to some degree. As result, the dong has weakened 6% against the dollar this year, compared with a 2% gain for the baht.

Investment benefits in Vietnam: The Vietnamese market is a large one, with 86 million people in the country and 3.2 overseas Vietnamese who last year sent US$8 billion back to their relatives at home. Its large workforce of 46.5 million is another significant draw. Hard working and fast learning, Vietnamese workers are considered quality human resources at relatively low wages. Depending on the location, the minimum wages can be $53, $60, or $67 for a 48-hour work week, plus 17% of wages paid to the government for social welfare.

Most importantly, it also offers outstanding tax benefits for foreign entrepreneurs. Public and private companies all pay profit tax of 25%, but the businesses with promotional privileges may pay only 10-20% for up to 15 years. In addition, the entrepreneurs may receive full tax exemption for two to four years, starting from the first year of profit, and another 50% exemption for the next four to nine years.

Investments in undeveloped areas may be exempted from land-lease fees for 11 years, while large projects and certain encouraged businesses, including high-tech, health care and education, may directly request special privileges on case by case basis. Some foreign companies, such as Taiwan's Formosa Group and the chipmaker Intel, are receiving a tax exemption of 10 years and a low tax rate of 10% for 50 years.

Vietnam seems to have many drawbacks when compared to Thailand. Its lack of infrastructure and supporting domestic industries can increase costs, while laws are often unclear and unreliable due to frequent changes. Businesses also have trouble finding skilled middle and top managers, and face high land and office lease expenses.

However, even with these disadvantages, Vietnam and its incentives have proven irresistible and have secured some large foreign investments. Formosa, for example, is investing in a US$7.9-billion steel smelting plant in the northern province of Ha Tinh, and plans a petrochemical factory that will be worth US$12.4 billion and create 9,000 jobs.

Prospective investors: In general, investors with large projects or businesses encouraged by the government should seriously consider Vietnam. As Thailand is largely discouraging foreign investment in its property sector and China has stopped attracting more SMEs, investors from these two sectors may also find Vietnam a more welcoming place.

Some businesses in labour-intensive industries, such as textiles and apparel, have already moved their production bases from Thailand to Vietnam to enjoy lower costs, while various Thai products, ranging from Red Bull energy drinks to Tiffy flu medicine, have successfully penetrated the Vietnamese market and seem to have a future there as well.

Vietnamese consumers perceive Thai products as having good quality at affordable prices, so Thai producers should not have trouble finding distributors, although they do need a systematic and continuous marketing plan.For more details, investors should consult the Board of Investment or the Thai Business Association of Vietnam at http://www.tbavietnam.org.

Wittaya Supatanakul is a retired general manager of the Vietnam office of Bangkok Bank Plc, where he spent more than 10 years. He and is currently an adviser to the BoI's CLMV (Cambodia/Laos/Myanmar/Vietnam) projects and an eminent speaker at investment forums regarding Vietnam.

Wednesday, January 28, 2009

Japan pilots Mekong development plan

January 28, 2009
By Hiroshi Yamazaki UPI Correspondent

Tokyo, Japan — Japan is looking toward five countries along the Mekong River as potential partners and investment opportunities amid the shifting economic and political dynamics of the region and the world. Japanese Foreign Minister Hirobumi Nakasone visited Cambodia and Laos earlier this month to deliver development assistance and strengthen ties with these two countries.

In Cambodia Nakasone handed over Japan-made demining machines, used to locate and destroy anti-personnel landmines, and offered assistance to fight infectious diseases and renovate irrigation facilities. In Laos, he offered financial aid of 1.2 billion yen (US$13.5 million) for clearing unexploded landmines and helping flood disaster victims.

It was former Prime Minister Shinzo Abe who decided to prioritize the Mekong region for Japanese assistance for three years starting in 2007. This will be the final year of that program.

In addition to Laos and Cambodia, the other three countries are Myanmar, Vietnam and Thailand.

Apart from Thailand, these countries are less developed and politically less democratic than the other members of the Association for Southeast Asian Nations, to which they all belong.

Cambodia, Laos, Myanmar and Vietnam, though showing high annual growth rates ranging from 8 to 13 percent, remain the least developed among ASEAN states in terms of per capita gross domestic product. Top of the four, Vietnam's US$836 per capita GDP is roughly half that of the Philippines, according to ASEAN statistics.

Vietnam tops the four in other indexes as well: annual GDP is US$71 billion, more than five times higher than the second, Myanmar; Vietnam’s total trade volume of US$110 billion was ten times higher than Myanmar's.

It is therefore not surprising that many Japanese firms favor Vietnam, after China and India, as their preferred destination for foreign direct investment. They cite low costs and good quality labor as the main attractions for investors in Vietnam.

Politically the Mekong countries have little in common. Vietnam is ruled by the Communist Party and Laos by its peculiar brand of socialism, while Myanmar is dominated by the military junta. Thailand and Cambodia have different degrees of democracy, both under the titular reign of kings.

The five countries each have their own national language and ethnicity as well.

At a seminar held last week in Tokyo, Toshihiro Kudo, senior researcher at the Institute of Developing Economies, described three “economic corridors,” cutting east/west and north/south across the Mekong area that includes Cambodia, Laos, Myanmar, Vietnam and Thailand, as well as Malaysia and Singapore.

Kudo said he expects commercial traffic to increase through these corridors. But countries without significant industrial bases, such as Cambodia, Laos and Myanmar, are concerned that business passing through their borders may not benefit them. Kudo has suggested promoting border trading posts and manufacturing bases to exploit the economic disparities and social diversity between these nations.

Masayuki Takashima, director of Asian Logistics Inc., has reported a not-so-seamless road network connecting the main cities in the region, however. In the 1,400-kilometer stretch through Hanoi and Vietnam into Bangkok, Thailand, his investigative team had to deal with six customs checkpoints.

"Any additional transportation time would become a logistic burden on business," he said.

In the longer term ASEAN should consider a joint infrastructure development scheme involving not only roads and rails but also communications, electricity, and water and sewage systems, advised Shinji Asanuma, visiting professor at Hitotsubashi University in Tokyo.

According to Asanuma, “soft power” approaches are also necessary among these diverse regimes. To reach their full cooperative potential, they need to share a long-term vision and common standards – a tall order given the present divisions.

Cambodia, Laos, Myanmar, Vietnam and Thailand do have one thing in common with each other and with many Japanese – Buddhism. Compared to other ASEAN nations, whose predominant cultures include Christianity in the Philippines and Islam in Indonesia and Malaysia, the five Mekong region nations are traditionally oriented toward Buddhism.

In addition, many senior Japanese citizens are sentimentally connected to this region based on their experiences in World War II, when the Japanese army operated in the region under the national slogan of building a "Greater East Asia Co-prosperity Sphere” aimed at supplanting European colonial powers. During the war this came to be seen as a euphemism for Japan’s military expansion.

Contemporary calls for East Asian integration fall under the growing shadow of influence from China, which is rigidly ruled by the Communist Party. Japan is attempting to demonstrate a different model of success based on democratic principles and less authoritarian rule.

The ASEAN nations have acknowledged that Japanese money, technology and markets contributed significantly to the economic success of the "Asian Tigers" through the 1990s. In similar fashion, Japan's involvement in Cambodia, Laos, Myanmar and Vietnam could help their economies and lay the foundation for a more closely integrated East Asia.

Wednesday, November 05, 2008

4 southeast Asian countries' SOM opens in Hanoi

HANOI, Nov. 4 (Xinhua) -- The Senior Officials Meeting (SOM) of Cambodia, Laos, Myanmar and Vietnam (CLMV) opened in Hanoi on Tuesday, Vietnam News Agency reported.

The meeting aims at preparation for the CLMV Ministers Meeting and the fourth CLMV Summit, scheduled to take place in Hanoi from Nov. 6 to Nov. 7.

Participants reviewed the CLMV cooperation and discussed orientation for cooperation among the four countries in the future.

They also agreed on priority fields of cooperation within the CLMV framework and updated the list of CLMV projects that were approved at the SOM CLMV in Hanoi in August 2007.

The meeting also reached agreement on the agenda of the CLMV Ministers Meeting and the fourth CLMV Summit.

Wednesday, November 21, 2007

Southeast Asian Pact Exposes Rifts

November 21, 2007
By WAYNE ARNOLD
The New York Times (USA)


SINGAPORE, Nov. 20 — Southeast Asian leaders signed a charter here on Tuesday that was drafted as a watershed document to bind the region together in a European-style economic community, but the pact has instead exposed the sharp divisions over one of its members, Myanmar.

The Asean charter establishes the group as a legal entity, creating permanent representation for members at its secretariat in Jakarta, Indonesia, and committing heads of state to meetings twice a year. It includes a blueprint for economic reforms intended to create a European-style trading bloc by 2015, with free movement of goods, services, investment and skilled labor. The document also sets timelines for the elimination of nontariff barriers and other trade restrictions.

But the president of the Philippines has warned that her country may not ratify the document if Myanmar does not institute democratic changes and release the long-detained opposition leader Daw Aung San Suu Kyi.

The blueprint also falls short of establishing the customs union many businesses in the region have been hoping for. And it includes a provision that allows members to opt out of economic commitments if other members agree.

The charter they ended up with is very diluted, to a point where it doesn’t make any new ground,” said Thitinan Pongsudhirak, director of the Institute of Security and International Studies in Bangkok. “What we have is the codification of existing norms.”

It is increasingly clear that Myanmar is a liability to regional status. On Monday, the United States trade representative, Susan C. Schwab, warned that the situation in Myanmar was holding up progress toward a free trade agreement between the United States and Asean. And President Gloria Macapagal Arroyo of the Philippines warned that unless Myanmar committed itself to democratic reforms and released Mrs. Aung San Suu Kyi, her country’s Congress was unlikely to ratify the charter, essentially vetoing it.

Pointing to Asean’s track record of lofty targets and pedestrian achievements, economists and analysts have voiced skepticism about the group’s ability to follow Europe’s lead given the widely divergent levels of economic development among its 10 members — with rich Singapore at one end of the spectrum and impoverished Laos at the other.

The disparities are still quite big,” said Chua Hak Bin, an economist at Citigroup in Singapore. “Don’t even talk about a single currency. It’s so far away.”

The squabbling over Myanmar only underscored the disparate levels of political maturity and development that exist between Asean’s older and newer members.

Asean’s newer members, poor and ruled by autocratic governmentsCambodia, Laos and Vietnamempathize with Myanmar’s ruling junta and oppose efforts to press it to tolerate political dissent. Analysts said these countries feared that any stronger action by Asean on Myanmar might set an unwelcome precedent.

These three nations helped Myanmar block plans by Singapore to have the United Nations special envoy to Myanmar, Ibrahim Gambari, deliver a briefing on Wednesday to a meeting that includes leaders from Asean, China, Japan, South Korea and India. (Mr. Gambari instead held private talks with Asean leaders late Tuesday, although China’s prime minister, Wen Jiabao, reportedly declined to meet with him.)

But Asean’s original members, more developed and relatively more democratic — Singapore, Malaysia, Indonesia and the Philippines among them — now see Myanmar as a diplomatic embarrassment that needs to be handled through careful pressure and persuasion. All of Asean’s members agree that sanctions like those imposed by the United States and Europe would serve only to isolate Myanmar further and reduce what little leverage they have over the junta.

The charter resolves to create an Asean human rights body but has no provisions for enforcing compliance with any human rights standard.

“They’re more into rhetoric than real action,” said Sinapan Samydorai, president of the Think Center, a nongovernmental organization in Singapore. “They can talk about human rights, but they can’t enforce it.”

Saturday, November 17, 2007

Special fund proposed to help the 4 less-developed ASEAN members - Cambodia, Laos, Myanmar and Vietnam - to catch up with neighbors

Closing the gap

Special fund proposed to help four less-developed Asean members

Weekend • November 17, 2007
Lee U-Wen
u-wen@mediacorp.com.sg
MediaCorp (Singapore)


A SPECIAL fund has been proposed to help the four less-developed countries in the Association of South-east Asian Nations — Vietnam, Myanmar, Laos and Cambodia — close the gap on its neighbours.

"The four particular members are in a state of economic development less than the rest. In order to redress that, we propose a fund to be established," said former Malaysian Deputy Prime Minister Tun Musa Hitam, who now heads the Asean Eminent Persons Group (EPG).

Speaking at the opening of the Asean Business and Investment Summit at the Suntec Convention Centre on Friday, Mr Musa said his idea had been accepted by the EPG and put forward to Asean leaders for consideration. While he did not disclose the details of the proposal, he said he was hopeful that it would be adopted.

A similar fund to help bridge the development gap within the 10-member grouping was also mooted this August by former Thai Foreign Minister Surin Pitsuwan. However, such a fund was deemed unnecessary by Singapore's Ministry of Foreign Affairs, which said there were already existing mechanisms within Asean to help close development gaps.

At the two-hour dialogue yesterday, Mr Musa said the Asean Charter — to be signed next Tuesday — was a reflection of the region's achievements and growth over the last 40 years. The charter, formulated by the EPG, sets out Asean's goals to achieve economic integration and help the region stay relevant with the rest of the world. Mr Musa said that for Asean to become even more cohesive in the long term, it could not rely solely on governments to be the driving force.

"The governments can only facilitate; it is the people and the private sector that have to lead and be brave enough and produce results," he said.

Mr Musa said he tried to introduce a clause to suspend or expel countries that don't fulfil their individual commitments. However, his wish for such a deterrent measure is unlikely to be included in the charter, contents of which have been leaked online. Penalties will instead come in the form of the withdrawal of benefits, with a new dispute settlement mechanism being used to enforce discipline, said Singapore's Trade and Industry Minister Lim Hng Kiang earlier this week.

Looking ahead, Asean Secretary-General Ong Keng Yong said nationalism would always be a challenge for the region but each country would do well to identify its own competitive edge and use that to drive Asean forward collectively. "We are successful because we are inter-governmental. All of us have a say and we don't lose our national identity," he said.

Still, he admitted that the world was "less than perfect" and that Asean had its fair share of problems, such as last year's military coup in Thailand and the deadly crackdown by Myanmar's military government on pro-democracy protesters in September this year.