Vietnam's First Half of 2009 Update
| Vietnam's economy grew at 3.9% in the
first half of 2009, the lowest level in a decade, but is on course to
meet the government's full-year target, officials said to Vietnam News.
They warned, though, that high inflation could return.
Government officials
said second-quarter growth was 4.5% and estimated the economy would
expand in the next 6 month at 5.9%. Export update: Vietnam News reported the government' announcement that Vietnam raised its expected rice export volume this year by 17% to a record 7 million tonnes in a move to shore up revenues due to falling prices. The government planned to ship 1 million to 2 million tonnes more so that the higher volume could offset the price decline. Viet Nam also earned US$245 million from fruit and vegetable exports in the first seven months of the year, down slightly by 0.2% over the same period in 2008, according to the Ministry of Agriculture and Rural Development. "This slight drop in the context of the global recession is a good signal from the country’s fruit and vegetable export industry," a representative from the ministry said. In July only, the country’s fruit and vegetable export turnover was $35 million, according to the ministry. Import update: Reuters reported Vietnam's imports of steel will drop 31% this year from 2008 to 5.5 million tonnes while total steel supply is expected to grow 10%, a state-run newspaper reported on Friday. The import of steel billets in 2009 is forecast to drop 30% from last year to 1.7 million tonnes, the Communist Party-run Nhan Dan daily said. It forecast steel demand would rise around 10% to 10.7 million tonnes, while supply would reach 10.9 million tonnes, of which domestic production would contribute 5 million tonnes, plus a stock of 0.4 million tonnes carried forward from last year. Infrastructure Updates: 1. Vietnam Rail Project The Japanese and Vietnamese governments have begun discussing a plan to build an 80-km railway in central Vietnam to carry light-speed bullet trains. The Yen 300 billion project would link Danang and Hue, reported Vietnam News. The aim is to boost tourism and help narrow the income gap between major cities and the interior region. Runckel & Associates believe the economic feasibility of this project is questionable at the present time. 2. Airport Upgrade in Hue Vietnam will spend up to US$700 million to turn Phu Bai airport near the former imperial city of Hue into an international facility. By 2020 the airport will be able to handle 20 aircraft at a time and 5 million passengers annually, compared with 1.2 million passengers and 15,000 tonnes of cargo per year now. This would give Vietnam International airports in Ho Chi Minh City, Danang and in Hanoi already complete and in the planning or construction stage in Hue, Nha Trang and Haiphong (see below). 3. One more international airport in the North Cat Bi airport in northern Hai Phong city will be upgraded to be capable of accommodating Boeing 767 and A321 airplanes for international flights by 2015. Under the plan, sealed at a recent working session between the municipal economic and budget department and the airport leadership, the parking apron at the airport will be expanded to have eight assorted planes at a time. 4. Port: Shipping line to build central Vietnam port in October 2009 The state-owned Vietnam National Shipping Lines (Vinalines) announced recently to Thanh Nien news its plans to start building the first two wharves of the deep-water port at Van Phong Bay in the central province of Khanh Hoa in October of 2009. Vinalines has finished work on the sand-bar at the construction site for the start-up phase of the project, which aims to develop the international transhipment port to serve Asian trade. The start-up phase of Van Phong’s first two berths has been delayed because the shipping line changed the original design to receive up to 9,000 TEU (twenty foot equivalent unit) ships. Van Phong port was originally planned to receive 6,000-TEU ships only. Many port experts, however, suggested developing Van Phong port to facilitate up to 15,000 TEU ships. After building the first two berths, Vinalines said it will build others which are capable of handling 12,000- 15,000 TEU ships, with a long-term vision for new wharves receiving container ships of up to 18,000 TEU, the world’s largest container vessel. 5. Troubles with Roads to Port: Gridlock is an everyday obstacle at Cat Lai, southern Vietnam’s biggest container port. As Runckel & Associates have often reported, infrastructure continues to be a complicating factor in Vietnam even as the government and aid doners move to address this problem. VietNamNet reported in July 2009 troubles and a long queue of trucks stretches from the Cat Lai crossroads on Highway 25B east of Ho Chi Minh City all the way to the gates to Cat Lai port. The trucks have not moved for hours. The commute was then one day instead of one hour. Lately, this scenario has gotten much worse. Every day of delay in removing the goods from the port costs companies an additional fee of $6-12 per day per container. Some said they would be lucky if they could get two containers a day out of the port. Cai Mep is a deep water port with an area of 54 hectares and total investment capital of $240 million. The volume of goods moving through Cat Lai Port has been growing as Ho Chi Minh City authorities discourage use of Saigon Port. In the first six months of the year, though the total volume of goods going through HCMC-area ports decreased by eight to twelve percent, the volume of containers going through Cat Lai port increased by more than eight percent. Cat Lai port handles 85 percent of the total imports and exports in the southern region, and therefore delivery delays are badly affecting many businesses. |
