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Firms told to brace for financial storm
Local businesses must draw lessons from the current financial crisis in the US and work out plans to curb any indirect effect on the Vietnamese economy, speakers at a seminar in Ho Chi Minh City said on Oct. 9.
“Businesses should take a close look at their own situation and work out various scenarios,” said Nguyen Quang A, director of the Institute of Development Studies .
Despite the global financial crisis sparked by the US banking collapse, local companies are still in a position to increase profits, even in hard times.
However, Nguyen Thanh Tu Anh, deputy head of research for the US-based Fulbright programme in Vietnam , advised companies to prepare for difficult times ahead.
Tran Si Chuong, chairman of the property, investment consulting and engineering group ABBO, said companies should keep track of the latest information about the financial situation around the world.
He said companies should not be expanding now and instead should try to find “a hiding place to survive and cope with the storm”.
Participants at the seminar, held by Doanh Nhan Sai Gon (Sai Gon Business People), agreed that the country’s banking system should step up inspection of its credit operations in the wake of the banking collapse in the US and the “greed” that had enveloped many of the major players involved.
Vietnam ’s banking system, which also offers securities and real estate loans, albeit at a lower level, should draw lessons from the US crisis, they said.
The US banking crisis’ impact on the global financial system would lead to a reduction in Vietnamese exports, an important ingredient in the country’s GDP growth, speakers predicted.
Foreign direct investment could also fall, and disbursement for foreign-invested projects could be slow. Capital sources of investment funds would be drained as well, he said.
The volume of remittances from overseas Vietnamese will possibly fall because of the recession in the US and its impact on other economies.
A fall in exports and drop in foreign investment could lead to higher unemployment, several experts said.
VNA
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