Vietnam International Political Economy

Vietnam foreign direct investment (FDI) is estimated to drop between $2.5 billion and $9 billion in 2009 according to Reuters.

However, Phan Huu Thang of the Foreign Investment Agency estimates that Vietnam foreign direct investment (FDI) could drop as much as $20-25 billion in 2009.

Further estimates by the World Bank suggest FDI in Vietnam will only total $4.5 billion this year compared to the reported $64 billion last year only adding to the confusion over exact FDI number and estimates.

The US is on track to be the leading foreign direct investor in Vietnam according to AFP.

In Q1 of 2009 foreign direct Vietnam investment accounted for as much as $6 billion of which 64 percent accounted for US investment in Vietnam.

Chinese chemical maker SP Chemicals has decided to renege on its $1.5 billion Vietnam investment according to Reuters.

The key driver of the move to not invest in Vietnam is poor economic conditions as a result of the current global recession.

More specifically SP Chemicals sights the Chinese government’s stimulus plan as a deterrent considering the China State Council has stated that it would speed up the construction of major ethylene projects which directly compete with SP Chemicals Vietnam investment plans. [Read more →]

The Vietnamese government has announced it will raise $1.2 billion in dong bonds in order to pay for infrastructure projects according to Reuters.

The move by the Vietnam government is designed to help spur the Vietnam economy as the global recession continues to impact growth targets is one of the faster growing emerging economies in Southeast Asia.

Vietnam economic growth has slowed to its lowest level is a decade. [Read more →]

Foreign investment in Vietnam declined as much as 72 percent as of April according to AP.

The sharp declined in Vietnam investment is due to the negative impact of the global recession and is hurting the Vietnam tourism industry as well.

Foreign investment in Vietnam hit a record $64 billion in 2008 but is now down to $6.4 billion according to the Vietnam government’s General Statistics Office. [Read more →]

Canada based Talisman Energy plans to invest in Vietnam $1.1 billion according to Reuters.

The Vietnam investment aims to develop two offshore oilfields estimated to produce as much as 35,000 barrels of oil per day out of Vietnam’s offshore block 15-2/01.

The Talisman Energy investment in Vietnam is through a join venture with Petrovietnam. [Read more →]

Inflation in the Vietnam economy continues to decline as the Vietnam consumer price index slowed to 9.2 percent in April according to AP.

Prime Minister Nguyen Tan Dung expects the Vietnam economy to see inflation fall to 6 percent by the end of 2009 in addition to a decline in growth to 6.2 percent as the global recession takes hold.

Despite the impact to growth, the consumer price index is reaching more acceptable levels for an emerging economy as it is down form its high of 23 percent in 2008. [Read more →]

Despite the Vietnam government forecast of 6.5 percent growth for the Vietnam economy the International Monetary Fund (IMF) has downgraded its growth forecast to 4.75 percent in the wake of the global economic crisis according to AFP.

Key drivers of the Vietnam economic growth revision include deflationary pressures of food and energy cost along with weak domestic and outside demand.

To further the blow, the World Bank also downgraded it growth forecast for the Vietnam economy earlier this month as well. [Read more →]

Canada’s Vancouver-based Methanex has announced possible plans to invest in Vietnam $1 billion according to Reuters.

The Vietnam investment will go towards a new methanol plant located in southern Vietnam province of Ba Ria Vung Tau and will act as the countries southern oil and gas hub. [Read more →]

The Vietnamese government announced it will spend $17 billion in 2009 in order to stimulate the Vietnam economy in the wake of the global economic crisis according to Bloomberg.

While a portion of the spending plan is part of the over all budget for the Vietnam economy, the amount is 23 percent higher as the Vietnam government struggles to maintain jobs in the Vietnam economy is expected to decline this year.

Infrastructure, social security and exports are key areas where the Vietnam government will inject significant portions of the spending budget. [Read more →]

Vietnam trade of oil will decline by 3 million toms in order to ensure Vietnam’s national crude oil reserve according to Xinhua.

The announcement by Vietnam Oil and Gas Corporation ( PetroVietnam) on Vietnam trade also stated that it would allocate a larger percentage of its crude oil output to Dung Quat a domestic refinery.

While the Vietnam trade move does hint of protectionist intentions, Vietnam currently imports as much as 13 million tons of refined oil a year in order to meet domestic demand. [Read more →]

Vietnam investment in foreign countries has hit $4.4 billion according to Xinhua.

Vietnam starting investing back in 1988 and Vietnam investment has hit 257 projects worth almost $3 billion in other Asian countries alone according to the Vietnam government’s Ministry of Planning and Investment. [Read more →]

Europe’s largest bank, HSBC Holdings, has announced it will further invest in Vietnam according to Reuters.

The Vietnamese investment by HSBC includes plans to open eight new branches in addition to the two existing HSBC branches located in Ho Chi Minh City and Hanoi.

The move by HSBC to continue its investment in Vietnam comes after HSBC won an early license to set up a wholly foreign-owned subsidiary in Vietnam. [Read more →]

The Vietnam government has announced a $6 billion plan to stimulate the Vietnam economy according to AP.

The Vietnam government will spend the money on infrastructure projects including schools and hospitals as well as go towards job training.

The original amount of the proposed Vietnam government stimulus plan was $1 billion.
Now however that the global economic crisis has taken hold the concern is that more stimulus is needed in order to boost production and spur consumption in order to realistically hit Vietnam’s economic revised growth target for 2009 of 6 to 6.5 percent. [Read more →]

Vietnam Technological & Commercial Joint-Stock Bank and Dak Lak People’s Committee and Thai Hoa Joint Stock Co open at Coffee exchange to boost Vietnam’s trade of coffee according to Bloomberg.

The move is designed to capitalize on the $2 billion industry by cutting pricing discrepancies and help boost the Vietnamese economy.

Vietnam is the second largest coffee grower to Brazil and has exported $1.8 billion worth of coffee thus far this year. [Read more →]

The Vietnamese government lowered gas prices by 8 percent in an effort to align its prices with world oil prices and help the Vietnam economy according to AP.

The gas price cut by the Vietnam government is the tenth cut since July when oil prices hit $150 a barrel.

While Vietnam exports as much as 16 million tons of oil each year it still has no refining capability so it must import all of its gasoline leaving the Vietnam economy at the mercy of imports. [Read more →]

The International Monetary Fund (IMF) has revised its expectations for Vietnam’s economic growth for next year down to 5 percent according to AP.

The news is a blow to the Vietnam economy as growth for last year was a healthy 8.5 percent.

Key drivers of the IMF announcement regarding slower growth in the Vietnam economy include weakness in the corporate and banking sectors, an increasingly large current account deficit and the overall impact of the global economic crisis.

The Vietnam economy has grown at least 7 percent year over year for the last decade. [Read more →]

The Vietnamese government announced it will inject $1 billion into the Vietnam economy according to Reuters.

The plan is to have the money go towards stimulating Vietnam investment and personal consumption yet no specifics were announced by Vietnamese government on how exactly the money would be spent in order to stimulate the Vietnam economy. [Read more →]

The State Bank of Vietnam (SBV), Vietnam’s central bank, cut its prime interest rate by 1 basis point in order to help stimulate the Vietnam economy according to AFP.

The cut represents Vietnam’s fourth interest rate cut since October and marks a significant change in policy from the Vietnam government’s previous policy of controlling double digit inflation.

The Vietnamese economic news comes as the world’s economies continue to struggle as the global economic crisis takes hold. [Read more →]

The Vietnam trade deficit rose to $16.9 billion in the first 11 months of 2008 according to AP.

While the number is in line with the Vietnamese government’s goal to keep the Vietnam trade deficit for all of 2008 held to $19 billion, it is still significantly higher than the 2007 Vietnam trade deficit number of $14.1 billion.

A large contributor to the over all Vietnam trade number includes a sharp 38.4 percent rise in Vietnamese imports from a year ago. [Read more →]

Formosa Plastics, of the Taiwanese conglomerate Formosa Plastics Group (FPG), has announced it will invest in Vietnam $15 billion to build a large scale petrochemical complex according to Reuters.

The Vietnam investment project has already won approval by the Vietnam government and will be located in central Vietnam. An official launch date was not announced. [Read more →]

The Vietnamese government has announced that it will cut gasoline prices by 7.1 percent in order to align with the world price of oil and to help the Vietnamese economy according to Reuters.

The Vietnamese economic news is welcome considering that the Vietnam economy has witnessed double digit inflation for almost over a year.

Unlike free markets of the West, in which fuel prices are reflected within week of any change in the price of oil, the Vietnam government ultimately controls the price of gasoline in Vietnam via the Ministry of Finance and the Industry and Trade Ministry. [Read more →]

The inflation rate for the Vietnam economy slowed to 26.7 percent in October according to AP.

Despite extremely high inflation rate, the Vietnamese economy has seen its consumer price index (CPI) fall two consecutive months in a row.

The news continues to point towards global deflation rather than inflation as many are concerned about the massive inflows of money supply in the wake of the current global economic crisis. [Read more →]

The Russian and Vietnamese government signed a Vietnam trade deal for oil and gas at a recent accord in Moscow according to ABC.

The Vietnamese trade agreement is expected to boost trade between the two nations by $10 billion.

In addition, the two nations singed an agreement to develop energy fields off the coast of Vietnam. [Read more →]

The State Bank of Vietnam (SBV) cut interest rates to 13 percent in order to help the Vietnam economy get through the possible global downturn according to Xinhua News.

Although the interest rate cut move is inline with other emerging markets it also poses a risky proposition for the Vietnamese government as double digit inflation continues put additional pressure on the Vietnam economy.

Currently, Vietnam trade is witnessing downward trends in exports such as rice, seafood, rubber, pepper and coffee. [Read more →]

The Vietnamese government revised growth expectations to 7 percent down from 8.5 percent according to AP.

The revision by the Vietnam government comes as the global financial crisis continues to manifest in emerging markets.

The Vietnamese government is still fighting double digit inflation so a slower Vietnam economy should help quell further inflationary pressure. [Read more →]

Australia’s ANZ bank plans to invest in Vietnam by opening a local branch n Hanoi according to AFP.

The Vietnam investment news comes as the Vietnam government and State Bank of Vietnam (SBV) have granted permission to the Australian bank to set up a wholly owned subsidiary after 99 years of communist rule.

A key driver of the announcement is foreign bank criticism of the Vietnamese government that Vietnam’s World Trade Organization (WTO) pledged open its banking sector has moved too slowly. [Read more →]

The Vietnam economy grew 6.5 percent in the first nine months of this year according to AFP.

While Vietnam econimoc growth is less than the Vietnemese government’s original target of 8.5 percent, it is in line with revised expectations considering Vietnam inflation as high as 27.9 percent.

Additonal Vietnam econimic news includes Vietnam foreign direct investment (FDI) of $57.1 billion dollars for the year thus far. [Read more →]

Vietnam inflation for the month of August rose 28.32 percent year over year and continues to strain the Vietnamese economy according to Daily Times.

The Vietnam inflation increase is the 10th consecutive monthly period of double digit inflation and will likely spur unrest unless the Vietnam government acts fast to quell its impact on the Vietnamese economy.

The challenge is for the Vietnamese government to balance annual growth target that competes with that of China yet maintains reasonable consumer price levels. [Read more →]

Tata Steel, India’s biggest steel maker, has announce a deal to invest in Vietnam $5 billion according to Hindustan Times.

The Vietnam investment is signed as a joint venture with Vietnam Steel Corporation and is expected to produce 4.5 million tons of steel and will be located in the Vung Ang Economic Zone in Ha Tinh province.

The Tate Steel joint venture investment in Vietnam is made up of a 65/30/5 percent split between Tata, Vietnam Steel and Vietnam Cement respectively. [Read more →]