Viet Nam’s economy to grow at 8.2 percent in 2008, says WB
The World Bank (WB) has launched the Global Economic Prospects 2008 (GEP 2008), saying that Viet Nam’s economy will grow at 8.2 percent in 2008 and 8.3 percent in 2009.
The WB report, released on January 9, said that resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1 percent in 2008, while high-income countries are predicted to grow by a modest 2.2 percent.
GDP in East Asia and the Pacific is expected to grow at 9.7 % in 2008 and 9.6 % by 2009, the WB said, adding that the effects from the turmoil in the world’s financial centres may be small in most economies in the region.
The WB also said that developing countries, including Viet Nam, should enhance their ability to absorb technologies to ensure further economic growth in the future.
VNECONOMY 11.01

Property boom lures foreign investors
Foreign investors are expected to flock to HCM City this year to grab a share of its booming property market, considered to be one of the hottest in Asia.
The city’s real estate market attracted US$2.5 billion from foreign investors last year and the figure will be much higher in 2008, experts estimate.
Phan Huu Thang, director of the Foreign Investment Agency, said investors were wrapping up paperwork for a series of projects worth $50 billion around the country.
Many of the projects were in the property and financial sectors and based in major cities like Ha Noi and HCM City, he said.
In a new trend, many of them would directly participate in land and housing transactions, he said. For many years, these have been dominated by domestic companies, with the foreigners involved only in a consulting or marketing role.
Nguyen Dang Son, deputy director of the Urban Research and Infrastructure Development Institute, agreed with Thang, saying many foreign investors were eyeing huge real estate investments.
Domestic investors would now have to adjust their strategies if they did not want to be left out of the action, he warned.
Hot market
Many experts said since demand for property continued to be much higher than supply, particularly Ha Noi and HCM City, prices would remain on an uptrend.
For instance, despite being nearly Tet, many people are still hunting for apartments though it is generally a period when they hoard money to spend during the festival. But few property companies have anything to offer them.
An official from the Housing Trading Joint Stock Company (Novahomes) in HCM City said he got many customers daily asking about new housing projects, a demand his company could not meet.
"The number of units in old projects like Hung Vuong, Him Lam, and Nam Khanh too is very limited," he said.
The owner of a real estate company in Ha Noi too said it was becoming very hard to cater to customers’ demand for housing.
Many companies were trying to buy apartments for their employees from major builders like Viet Nam Construction and Import and Export Joint Stock Corporation, or Vinaconex, and the Ha Noi Housing Development and Investment Company (HUD) but in vain, he said.
At the end of last year, HUD and the Hop Phu Investment Development Company built the Viet Hung new urban area in Long Bien District with 100 apartments costing VND6–10 million per sq.m. Most of the units were snapped up on the first day.
Tai Tam Colliers Company is selling land plots in an alley in Hai Ba Trung District at VND25–35 million/sq.m. Around 40 per cent were bought in the first week, a company executive said.
Nguyen Ngoc Tien, head of the Phuc Duc Real Estate Company’s market research office in HCM Ciy, said the prices of most apartments had gone up in the two last months by up to VND2 million/sq.m.
Apartment prices in District 2 and South Sai Gon had risen even more sharply, going up by VND3–4 million, he added.
Apartments in Hoang Anh Gia Lai’s Project 3 are now being sold at VND23-25 million/sq.m. against just VND20 million two months ago. In the Him Lam and Nam Khanh projects, they cost VND15-16 million compared to VND12–13 million.
In Ha Noi, analysts said that prices of land and housing were rising day by day, particularly in new zones like Van Quan, Van Khe, Van Phu, Mo Lao, and An Khanh.
Bui Tien Thang, deputy general director of Sacomreal, said the government’s framework prices had increased by 10 to 60 per cent in 2008. This would increase the cost of obtaining certificates of land use rights and the compensation the property companies would have to pay for the land, he said.
Building materials prices, particularly steel prices, too had risen sharply, adding to the cost, he explained.
VNS 12.01

Forging ahead
Viet Nam has achieved great things in terms of economic development since joining the World Trade Organisation.
Deputy Prime Minister Pham Gia Khiem made the remark at a conference entitled Viet Nam Trade and Investment Forum One Year as an Official Member of WTO in the capital yesterday.
"Among the most outstanding was Viet Nam’s robust growth in foreign direct investment and exports," Khiem said.
WTO membership had created the right conditions for market expansion and further investment, while encouraging healthy competition, he said.
Investor confidence
WTO accession had boosted investor confidence in Viet Nam because the country has been forced to meet international standards, said Walter Blocker, vice chairman of the Asia Pacific Council of American Chambers and CEO of GANNON Viet Nam.
"Law and order for trade and investment are more predictable and comparable to other developed and developing nations," said Blocker. "In essence, the platform for commercial risk is safer."
Viet Nam attracted more than US$20 billion in FDI, double the previous year’s figure, while export turnover reached $50 billion, up 21.5 per cent on 2006 - accounted for 68 per cent of the country’s GDP.
"In fact, FDI is higher in Viet Nam than India," added Blocker.
Despite Viet Nam’s drive to become an industrialised nation, Nguyen Bich Dat, Deputy Minister of Planning and Investment, said projects that were harmful to the environment would be rejected. He added that IT projects would be given priority.
Meanwhile, greater transparency had encouraged private investment, said Pham Chi Lan, a senior economist.
"For the first time, the proportion of investment coming from the private sector was bigger than that of the State in 2007. That really is a very good sign," he said.
Challenges on the horizon
"With regard to future development, it is important that the Vietnamese government continues on its path of economic reform," said Henry Birr, vice president of international affairs, METRO Group.
However, former trade minister Truong Dinh Tuyen said administrative reform in the provinces had proceeded too slowly.
"Implementing WTO commitments must be carried out more strenuously and firmly. Provinces should take into account their own particular needs and not just try to apply a national master plan," Tuyen said.
Meanwhile, Ngo Quang Xuan, chief representative at the WTO, said the country’s legal system should be reviewed in order to ensure it meets WTO commitments and international standards.
Blocker added that infrastructure in Viet Nam fell well below what was needed.
"There is an infrastructure gap. There is a real need for more private and public investment in its physical and social infrastructure in order to support rapid growth," said Blocker.
Delegates also pointed out that education and training in Viet Nam needed to be improved.
"[If that doesn’t happen] you will not be able to compete with other regional countries," said Steve Parker, head of the Star-Viet Nam project.
VNS 12.01