Local Press highlight 28th April 2008
How to ensure food security
Food security in Viet Nam is ensured because it still has enough rice for export, said Professor Vo Tong Xuan from An Giang University.
Xuan claims that advanced technology and new, high-output strains of rice can be used to boost the average harvest from five to six tonnes a hectare annually on the nation’s four-million-plus hectares of rice farmland.
He said Viet Nam could further increase its rice harvest by aiming for three crops a year instead of the present two. However, he admitted that recently, in the Cuu Long (Mekong) Delta, a third season had been limited by insects, such as brown hopper, and disease.
"If these problems can be sorted out, rice output of the region will go up," he said. "When world rice productivity rises again, we can drop this third season."
The Ministry of Agriculture and Rural Development (MARD) is trying to ensure food security by limiting rice farming areas to the present four million hectares and lifting production from 36 to 40 million tonnes a year.
However, the rapid rate of taking over farmland for urban development and industrial zones has become a further threat to food security.
"Out of a total of four million hectares of land, 300,000ha is being lost each year. This is a serious issue for Viet Nam’s agriculture in general as well as for rice exports in particular," said Andrew Speedy, the Food and Agriculture Organisation (FAO) representative in Viet Nam.
Besides the steady reduction in farmland, bad weather and disease are complicating the situation. In the North, the long, severe cold spell at the beginning of the year seriously affected the winter-spring rice season and could possibly lead to famine in some provinces, such as Bac Giang and Thanh Hoa.
Despite improvements in rice strains, in the northern provinces, output still depends largely on the weather. This is why the Government has stopped rice exports until the end of June – to stabilise production and help control inflation.
Rice export controversy
Some say that temporarily halting rice exports will lead to a drop in domestic prices and reduce benefits to farmers. The export ban is a way to save rice in case the winter-spring season in the North fails.
"The ban will ensure rice supplies for Viet Nam, especially in the North. Moreover (because of world prices), local enterprises are buying rice from farmers at the high price of VND4,200-4,300 per kg, which is benefiting farmers," said Tran Quang Khoi, head of MARD’s Food Plant Cultivation Department.
Le Van Ngoan, a farmer from Vinh Hanh Commune in Chau Thanh District in the southern province of An Giang, seems to be proof that stopping rice exports doesn’t affect farmers’ profits.
On 11ha of rice farm, Ngoan’s family has harvested more than 70 tonnes of rice a year. Compared to last year, prices have doubled.
This year, the world is expected to experience a large rice shortfall, making it a good time for Viet Nam to push up the rice price.
And the world rice price will continue to rise in the next few years, predicts Viet Nam Food Association chairman Truong Thanh Phong.
"Therefore farmers and food exporters should not worry about the Government’s rice export ban," he said, adding that the later exporters signed contracts with their customers, the more benefits they would gain.
"But only when our farmers have bumper crops and the national reserve increases will the Government allow more exports."
"As the second biggest rice exporter, Viet Nam’s rice export ban has helped push up global rice prices," said FAO’s Andrew Speedy.
"It is not good way to reduce the domestic price, so FAO and other agencies think applying an export tax would be more effective than export restriction. On the whole, we discourage Viet Nam from restricting rice exports just because it has a plentiful supply," he said.
Speedy also said that to ensure food security, it was time for Viet Nam to come to terms with the declining farming area.
"The Prime Minister has issued a general directive to stop this trend. It is necessary to have regulations firmly stating that farmland is not for industrial building," he said. (VNS 26.4)
Forum paves the way to develop Central provinces
Policy makers and relevant authorities have pledged to support the Central region’s socio-economic development by creating an open and flexible business environment for local companies.
Companies in the Central region will enjoy favourable conditions to access diversified capital sources from banks, investment funds, and other enterprises as well as people’s savings to further their business, according to participants at the Central Region Economic Forum that wrapped up in Da Nang yesterday.
Companies in the region were encouraged to expand co-operative ties with northern, southern, and overseas-based companies.
Many participants noted that now is the best time for companies in the area to expand their cooperation and to think big in terms of their own development, given recent pledges of practical support from both local and central authorities in a wide variety of domains.
Central provinces need long-term business strategies based on co-operation with enterprises in other parts of the country and in neighbouring countries such as Laos, Thailand and Myanmar, said Dr. Le Dang Doanh, a senior economist.
The event, which opened on April 24, was jointly organised by the Ministry of Planning and Investment (MPI) and the newspaper Tuoi Tre (Youth) in Da Nang City.
It was attended by nearly 500 delegates from Da Nang City’s People’s Committee, the investment ministry, and the Viet Nam Chamber of Commerce and Industry, as well as various departments, agencies, research institutes and companies in the region and other parts of the country.
Most of the participants agreed that the development of companies in the central and Central Highlands regions contributed significantly to development at not only a local scale but also a national one, as the national economy integrates globally.
Leaders from central provinces will pledge more job training centres and upgrade current ones to boost the quality of labour sources for local companies.
Policies encouraging the establishment of small and medium-sized companies using local resources are in the works.
On their part, local companies are determined to intensify investment activities and improve their trade and production efficacy to create more jobs for the local population.
In particular, local companies planned to overcome past shortcomings and improve their competitiveness by extending co-operation with other neighboring companies in the same industry with regards to trade and investment promotion and trademark popularisation.
The central provinces have attracted 631 foreign-invested projects, worth US$10 billion, accounting for only 11.7 per cent of the nation’s total. In spite of numerous seaports, commodities handled there represented only 13 per cent of the northern provinces’ total and 6 per cent of the southern provinces’.
Central provinces lacked high-grade training establishments that can meet demand for high-quality managers and technologically savvy workers, said Prof Bui Van Ga, director of Da Nang University.
Ga suggested that training centres and companies co-operate under the model where companies fund schools while schools organise training programmes to meet companies’ requirements.
A synthesis of the internal strengths of various Central provinces, sectors and businesses would create a force to be reckoned with, according to Phan Huu Thang, director of the MPI’s Foreign Investment Department. (VNS 27.4)
Foreign investors favour real estate
Foreign direct investment in real estate projects reached US$4.6 billion in the first quarter of the year, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).
The figure represented nearly 90 per cent of total foreign direct investment (FDI) in the period of $5.4 billion, and it nearly equalled FDI in real estate projects for all of last year (about $5 billion). This year, the FIA expects to see total investment in the real estate sector of about $20 billion.
"Though there have been fluctuations in the economy, FDI is still pouring strongly into the market," said Cu Chi Loi of the Viet Nam Economics Institute. "This shows that foreign investors have recognised investment opportunities here with a long-term view. The country is still short of office space and serviced apartments, so investment in those areas is growing."
Do Thi Hong Xoan, a Viet Nam National Administration of Tourism official, noted that a significant proportion of FDI in real estate development was also in hotel and resort projects.
The US’s Good Choice Group is developing a $1.3 billion hotel and entertainment complex in the southern province of Ba Ria-Vung Tau, while Singapore’s Cattigara One Ltd has received a licence to build a $102 million resort in the central province of Thua Thien-Hue.
Commercial developments were also strong, she said, pointing to VinaCapital’s $200 million trade complex and the $930 million financial centre of Malaysia’s Beriaya Leisure.
Nguyen Dang Son, deputy director of the Institute for Urban Research and Infrastructure Development, said the concentration of investment in serviced apartments, hotels and resorts was due to the increase in the number of international companies with executives and employees in Viet Nam, as well as the growing number of tourists.
"While the high-end segments are getting hotter and hotter, segments that serve low-income people haven’t attracted the interests of companies," said Son. "High demand versus limited supply makes it very difficult for these people to afford housing."
As much as 80 per cent of the population can’t afford to buy housing, according to figures released at a meeting in Ha Noi last week to discuss the development of the property market held by The Manager magazine.
Loi noted, however, that strong real estate development would also help encourage related support industries, including building materials, interior decoration and household appliances.
"Although, from a different angle, that’s also a factor pushing up the price of materials, which has contributed to the high inflation over the past few months," Loi said.
Nguyen Quang, a representative from the UN Human Settlements Programme, said property prices have skyrocketed as a result of speculation and the lack of transparency in the Government’s granting of land-use rights.
"The Government should auction projects, instead of enterprises proposing projects and asking for a land grant," Quang said.
He suggested the imposition of higher taxes on speculators’ capital gains, revenues from which could be dedicated to infrastructure and low-end housing.
"Once investing, you must look to profits," said Dang Hung Vo former deputy minister of natural resources and environment. "The Government should encourage enterprises to invest in low-end segments with financial support and land use charge exemptions and reductions."
The Ministry of Construction said it was devising a plan for public housing development which it expected to submit to the Government in the third quarter of this year.
The plan would include the establishment of a public housing corporation that would operate in provinces and cities nationwide, with finances coming from the State budget, private investment and public housing funds. The Government planned to build 500,000 public housing units between now and 2012, said the ministry. (VNS 27.4)
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