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BUSINESS IN BRIEF 27/7   2009-07-27 - VietNamNet/TN, VNA

Foreign debt at 29.8 percent GDP in 2008

Vietnam’s foreign debt stood at 29.8 percent of its gross domestic product in 2008, down from 32.5 percent in 2007, according to the latest finance ministry figures.

Of the US$21.8 billion taken in loans last year, the government borrowed $18.9 billion while the remaining $2.9 billion went to businesses, the ministry said.

Almost 42 percent of the loans were yen-denominated as Japan was the biggest lender, with loans worth $6.77 billion. Loans denominated in Special Drawing Rights, an International

Monetary Fund-managed asset based on a basket of international currencies, accounted for 27.4 percent. Dollar and euro loans stood at 16.6 percent and 10.68 percent respectively.

Vietnam had to pay $424 million in interest and loan fees last year.

The country’s medium-and longterm foreign debt would rise to $27 billion in the next four years, 65 percent more than the 2005-2008 amount, as the government seeks to fund state projects, the government said in a statement last April.

Cambodian, Vietnamese airline begins operations

Vietnamese Deputy Prime Minister Truong Vinh Trong and the Cambodian Prime Minister Hun Sen cut the ribbon launching the new Cambodian national airline, Cambodia Angkor Air (CAA), a joint venture between Vietnam and Cambodia , at Pochentong international airport in Phnom Penh , on July 27.

CAA is a joint venture between the Cambodian National Aviation Agency and the Vietnam Airlines Corporation.

At present, CAA has two ATR-72-500 aircraft that service domestic flights from Phnom Penh to Sihanoukville and Siem Reap.

It plans to expand its operations to other regional countries, including Vietnam and Thailand , with A-320 and A-321 aircraft.

Before, Cambodia’s national airline called “Royal Cambodge Airlines” (RCA) was established in 1994, but had to close in 2001 due to making huge losses and using planes that did not meet the International Civil Aviation Organisation’s standards (ICAO).

Rubber set to bounce back as demand rises

The domestic rubber industry, the fourth largest in the world, expects to have higher export sales this year because of rising prices and demand, the Vietnam Rubber Association has said.

Rubber prices have jumped to 1,560-1,600 USD a tonne, up from a low of 1,280 USD in January sparked by the global downturn.

Average export prices climbed to 3,000 USD a tonne in July of last year, but began to slide for the remainder of the year.

Rubber cultivation is expected to cover 640,000 ha this year, bringing an estimated 680,000 tonnes of natural rubber and total export turnover of 1 billion USD, according to the Ministry of Agriculture and Rural Development.

Vietnam exports rubber to 61 countries.
In the first six months of the year, rubber export volume reached 240,000 tonnes, at an average price of 1,456 USD a tonne, which brought in export revenue of 349 million USD.

However, because of the drop in prices, export turnover dropped by 43 percent compared to the first half of last year.

Rubber exports to Europe and Japan fell by 31.3 percent and 35.5 percent, respectively, but rose in those to Malaysia and China .

China remains the biggest importer of natural rubber, representing nearly 70 percent of Vietnam ’s rubber exports in the first half of the year.

Although the export volume to China rose 7 percent compared to last year, prices dropped nearly 60 percent.

The demand from Chinese tyre manufacturers, however, remains stable.

In addition, crude oil prices have gone up as the global economy recovers, causing an increase in the price of synthetic rubber and higher demand for natural rubber.

The Vietnamese Government aims to increase its rubber tree acreage to 1 million ha, with dried latex output of some 1.2 million tonnes by 2020, and invest in the processing industry to increase production efficiency.

Shrimp exports show recovery sign

Shrimp exports increased sharply recently after a several month decline which started in early 2009, according to the Vietnam Association of Seafood Exporters and Processors.

In June, the country exported 19,000 tonnes of shrimp, earning 148,000 million USD. Those figures increased 13.5 percent in volume and 3.9 percent in value compared with the same period of last year.

The increase in volume pushed the total export volume of shrimp up by 1.8 percent to 72,288 tonnes in the first half of this year compared with the same period of last year, the association said.

However, the value of the total exports in the first six months of 2009 fell slightly by 4.7 percent to 589.2 million in that same time period.

VASEP expected the situation for Vietnamese seafood exporters to be brighter in coming months due to a resumption of demand for seafood in the EU and the US , key export markets for Vietnamese shrimp.

Shrimp exports to the EU in June increased sharply by 65 percent in volume to 3,728 tonnes and 48.6 percent in value to 24.4 million USD.

After three months of decline in shrimp exports from Vietnam to the US due to the global economic crisis, exports to that market picked up in April and experienced a double-digit growth rate by the end of June.

In the first six months of the year, Vietnam exported 15,191 tonnes of shrimp to the US , earning 147.3 million USD, an increase of 18.3 percent in volume and 2.1 percent in value over the same period of last year.

China has become a key market for Vietnamese shrimp with volume exported there increasing at a high rate from early this year till now.

Vietnam’s exports to Brasil up 5.72 pct

Despite Brasil’s import being reduced under the influence of the global financial crisis, Vietnam ’s exports to the country in the first half of 2009 topped 80 million USD, a year-on-year increase of 5.72 percent.

Vietnam ’s main export staples to the Latin American country are footwear, fibre, printers, rubber, bags and bicycle tyres, according to Brasil’s Ministry for Development, Industry and Trade.

Brasil’s exports, mainly of corn, by-products made of soybean oil, beef, chicken and chicken by-products, wood powder, timber, cigarette materials, cotton, soybean oil and cowhide, to Vietnam shrank by 14.4 percent to nearly 172 million USD.

Bilateral trade between Vietnam and Brasil in the first six months of this year slid by 8.9 percent to close to 252 million USD compared to the corresponding period of 2008.

In 2008, the two-way trade hit nearly 534.6 million USD, a year-on-year rise of 65.3 percent from 2007.

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