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Asian Business Club takes a look at the Vietnamese economy
Peter Nordhues
On July 15, members and friends of the Asian Business Club (ABC)
gathered at Woodlands Resort to attend a report on the economic situation in
Vietnam. The speaker for the evening was ABC chairman Helmut Buchberger.
In the many years that he has been visiting the country, Helmut has gained
the impression that the new generation has overcome the cruelty of the wars
that have plagued the nation for decades.
 Helmut
Buchberger (right) speaks about the economical situation in Vietnam, as club
secretary David Schmitter looks on. (Photo: Michael Breeger)
Helmut said in advance that with his lecture, he was not trying to lure away
any people from Thailand, but merely attempting to describe the economic
conditions in Vietnam - which are anything but paradisical. Amongst other
things, the people there are struggling with a seemingly out of control
inflation rate.
Problems aside, Vietnam has been experiencing a real economical miracle over
the past decade. Following the example of its neighbour China – ‘the big
dragon’ - Vietnam has already been tabbed as the ‘little dragon’ and in
January of last year the country became a member of the World Trade
Organization.
Vietnam’s laws on investment officially grant foreign investors the same
rights as Vietnamese ones and provide an open gate for entrepreneurs from
overseas. Private and foreign banks can be found in countless numbers.
Also, to establish a foreign company, no Vietnamese shareholders are
required and a work permit is issued upon the formation of an enterprise.
Wages are about half of those in Thailand. Corruption in Vietnam has
distinctly decreased over the past few years. Even poverty has been reduced
substantially.
It is still a fact that foreigners cannot actually own land, though Vietnam
offers an attractive solution. Foreigners are allowed to lease land over a
period of 50 years. During this time, they may also take a mortgage on that
particular piece of land.
In addition, Vietnam has signed a double taxation agreement with many
countries. Tax advantages comprise many different fields, including exports.
Before taking the plunge and establishing a business there, however, Helmut
strongly advises investors to take legal advice from experts.
To find out more about ABC, click on www.asian-business-club.org.
Free transit services by bus, rail
launched to help low-income earners
A new government-sponsored package containing six measures
designed to assist the low-income public, including both free bus and train
fares for six months, was launched last Friday.
Acting State Railway of Thailand (SRT) governor Thawil Samnakhon said he
expected the free rides, which are now being offered on third-class and
non-air-conditioned trains, would increase the daily passenger volume by between
15-20 per cent. Assessment of traffic routes that are most heavily used by
travelers will be conducted so that the SRT can increase its services to cope
with passenger demand, he said.
The SRT is expected to lose about Bt250 million in revenue, Thawil said, but the
government will help pay for the losses.
Meanwhile, Pinet Puapattanakul, director of the state-run Bangkok Mass Transit
Authority (BMTA), said his agency had already prepared 800 buses to serve the
increased volume of Bangkok passengers.
Altogether six measures were implemented last Friday, except the reduction of
excise tax on fuel, which began July 25. The measures are aimed at boosting the
Thai economy, which has become sluggish due to soaring oil prices, and also to
assist the poor and low-income wage earners.
The measures concerned are cuts in excise taxes on fuel, postponing an increase
in prices for liquefied petroleum gas used by private householders, and the free
use of tap water by households using less than 50 cubic metres per month. The
government will absorb all the costs involved.
The other measures are the free use of electricity of less than 80 units per
month by households, with the government shouldering the expense, while for
households using less than 150 units per month the government will pay half the
bill. Free travel on 800 ordinary buses operated by BMTA on 73 routes within
Bangkok and its outlying areas, and free travel on third class railway
carriages.
Prime Minister Samak Sundaravej has said the measures will cost the government
about Bt46 billion (US$1.4 billion) in total. (TNA)
FTI says government promotion of E85 car muddies investment waters
Piangjai Kaewsuwan, chairwoman of the FTI Automotive Industry Group, says
the Thai government’s position regarding energy saving campaigns to promote
the use of E85 cars could pose obstacles to future production and investment
for the automotive industry in the country.
“Presently, manufacturers plan to produce some 680,000 eco-car units
annually in Thailand. But some of them are now thinking of moving their
production bases to other countries already because of the uncertain policy
of the government,” she said.
The government has decided to reduce the excise tax for E85 cars to 20 per
cent, which is close to the 17 per cent imposed on eco-cars, a situation
that will affect both the production and sales strategies of manufacturers
in Thailand.
If the government wants to promote E85 car production, Piangjai said, it
should map out a clear policy and allow producers to develop cars over a
period of at lease three to four years and not try to solve problems
immediately like it is doing now.
She added that the government should also encourage the production of E10
and E20 cars before promoting the production of E85 vehicles.
The government is currently going all out to encourage more motorists to
switch to using E85, a blend of 85 per cent ethanol and 15 per cent
gasoline. (TNA)
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