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HCM City shoots for higher FDI totals
HCM City authorities are seeking more foreign direct investment as the FDI flow into the city in the first five months of 2010 was meagre compared to last year.
According to figures from the city's Department of Planning and Investment (DPI), in the first five months of this year, HCM City licensed 144 FDI projects capitalised at US$824 million, less than 10 per cent of the total FDI flow of $8.4 billion targeted for 2010.
In May of this year, the city granted licences for 32 FDI projects with a total investment of $380 million, down by 50 per cent compared with the same period last year.
The critical situation in the city includes the Northwest Cu Chi, the Sai Gon Hi-tech Park in District 9, and the new Thu Thiem Urban Zone in District 2. The Korean investor has withdrawn from the Lotte Mart project, to be located in Thu Thiem Area, after several months of analysis on the project.
However, the HCM City Export Processing Zone Authority (HEPZA), welcomed three new tenants in May, a 50 per cent increase over the previous month. HEPZA officials said there were positive signs of a recovery of FDI at its member industrial parks and EPZs.
According to economist Dinh The Hien, it is too early to say that HCM City will not be able to reach the FDI goal of $8.4 billion for 2010, because the first half of the year was a time of economic recovery, not only in Viet Nam but in other countries.
The Deputy Director of the DPI, Lu Thanh Phong, said in the second half of the year the city authority would put up for auction a number of projects situated on prime locations in which investors would be chosen.
The department is also awaiting approval for projects in the sectors of processing, logistics, and IT and communications, which will be given priority by the city authority.
Frozen property market
The land-price fever which has faced the Ha Noi property market since late 2009 seems to have had no impact on the property market in HCM City, leaving many developers trapped with unfinished real estate projects.
HCM City-based property trading floors have been stagnant since the beginning of the year, with some floors having no sales in an entire month.
Nguyen Minh Suong, Director of Dai Nam Real Estate Company in District 2, said the HCM City property market had faced challenges, including difficult access to bank loans.
A similar situation faced developers of property projects in District 7. The developer of a VND5 trillion ($263 million) project located close to Phu My Hung Urban Area said he could sign contracts to sell only 50 of hundreds of apartments that went up for sale six months ago.
Huynh Van Lap, Director of Hung Thinh Property Trading Floor, said developers of many projects had deposited their products for sale at his floor at reasonable prices, but most of them had remained unsold. "Sometimes we receive some guests who look for a home. No one comes to buy our apartments as an investment," he said.
The city's property market has encountered several bottlenecks.
Tran Minh Hoang, Chairman of the management board of Vinaland Property Company, said corporate income taxes and capital were two major causes which had greatly affected the stagnant property market in HCM City.
"Under a critical situation, corporate income taxes are a true concern for investors in the property market," he said.
Hoang said most capital for property projects came from bank loans.
But it was by no means easy for customers to get access to bank loans, even though they had to accept high interest rates.
He added that the HCM City property market offered a narrow opportunity for customers who needed apartments, but not for those who were seeking properties as an investment.
"Without speculators, it's very difficult for developers to make a property market active and bustling," said Hoang.
Halt to export labour
Many Vietnamese labourers were not pleased when hearing that the Department of Overseas Labour Management (Under the Ministry of Labour, Invalids and Social Affairs) had asked the Air Labour Services Import-Export JSC (Alimexco) to stop recruiting local labourers to work in Canada.
An official from the department was quoted by the Vietnam Economic Times newspaper as saying that he was amazed when being informed of Alimexco's notice to recruit 1,000 Vietnamese labourers for the Canadian market.
In a recruitment notice signed by Alimexco's Director Tran Quoc Than on May 17, the recruiter said these guest labourers would be sent to Canada for farmwork and would earn $1,100 a month, excluding bonuses and overtime pay.
The notice stipulates that labourers will sign a three-year labour contract to be renewed every year.
It also requires labourers to pay $9,500 each for visa fees, air tickets, labour permits and management fees.
Just one day after Alimexco's notice was released, the Ha Tinh Investment and Import-Export JSC, in coordination with Alimexco, signed a notice to recruit 1,000 labourers for Canada with similar conditions required by the recruiment notice issued by Alimexco.
The only difference between the two recruitment notices is the labour management fees. Le Van Dong, director of the Ha Tinh company, required each labourer to pay fees of up to $17,500, nearly double the fees required by Alimexco.
But it will not be an easy task to send them to Canada.
Tong Hoai Nam, Head of the Overseas Labour Management Department's Labour Market Division, said the division had not received any inquiry for assessment of labour supply orders like this one.
Any recruitment notice issued without labour supply order assessment could be recognised as "outside of the process" and be subject to administrative punishment.
The Ha Noi-based Labour Export and Training Co-operation Company (LETCO) has been fined VND25 million ($1,315) for sending local labourers to Libya without labour supply assessment, the Department has said.
Nguyen Ngoc Quynh, Head of the Overseas Labour Management, said the way Alimexco and the Ha Tinh Investment had recruited labourers for the Canadian market was a violation of labour supply principles.
Many local suppliers have found it difficult to get access to Canada. They must prove to the Canadian authorities that they will return home shortly after their labour contracts expire.
The most difficult condition is the IELTS 5.5 to 6.0 English standard which is considered out of reach for most guest labourer applicants to Canada. According to the Vietnam Economic Times, no visa has been granted to Vietnamese labourers for nearly one year.
Le Hung Vong
vietnamnews
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