ACE Allowed to Operate Life Insurance in Vietnam
Vietnam's Ministry of Finance (MoF) yesterday approved the ACE INA's plan to establish a wholly foreign owned life insurance company in Vietnam, which is expected to have a license by mid-this year.
ACE INA will immediately begin its plans for operation in Vietnam, its officials confirmed.
If licensed, ACE will become the second US life insurance company operating in Vietnam's booming insurance market after the AIA Vietnam, said ACE INA President & Chief Executive Officer, Evan Greenberg.
"Vietnam is a country with a bright and prosperous future, given the size of its population and industrious nature of its people," he said.
"Our Vietnam operation is a milestone in our long-term strategy to build a life insurance presence in Asia," Greenberg said.
ACE's proposed initial capital at $10 million, which would be doubled within five years to its expand operations. The US life insurer has maintained a representative office in Vietnam since 1996 and formally submitted its application to establish a life insurance company in August 2002.
Over the past eight years, ACE has operated in Vietnam as a reinsurer, providing the domestic insurance industry with a reinsurance capacity of more than $5 million through its Vietnam rep office. The office has also undertaken numerous activities in support of Vietnam in the areas of education, safety, culture, economy, and business.
Vietnam is now one of the fastest growing life insurance markets in Asia with gross premiums last year reaching VND7.636 trillion ($486.4 million), up 17% on-year.
Market shares of major players in life insurance market as at the end of 2004 were Bao Viet 40.07%, Prudential Vietnam 40.02%, Manulife 11.68%, AIA 5.56% and Bao Minh CMG 2.67%.
ACE INA is the US-based division of the ACE Group of Companies, which provides insurance and reinsurance for a diverse group of clients in 50 countries around the world. The company's gross premiums reached $14.6 billion in 2003.
The Vietnamese government has so far allowed three US insurers to enter the market: American International Group, or AIG, which has a life insurance license, and AON Inchibrok and Marsh Inc., which has an insurance brokerage license.
Vietnam has 26 insurance firms, including one re-insurer, five life insurers, six insurance brokers and 14 non-life insurers. Thirteen of the 25 are foreign-invested. They offer around 500 insurance products. There are also around 30 representative offices of foreign insurers in the local market.
Under the government's recent strategy for the domestic insurance market by 2010, the industry would account for 2.5% of the gross domestic product (GDP) by 2005 and 4.2% by 2010, compared with nearly 2% in 2004, 1.8% in 2003 and 1.3% in 2002
Vietnam's insurance market ranks fifth in Southeast Asia, after Malaysia, Indonesia, Singapore and Thailand. (Labor Feb 2 p3, VNS Feb 2 p15)
IT Giants Cooperate to Develop ISVs in Vietnam
Global IT industry leaders Oracle, Sun and AMD, have announced a common initiative for the community of independent software vendors (ISV) in Vietnam.
Already implemented in other ASEAN countries like Indonesia, Malaysia, the Philippines, Singapore and Thailand, Oracle, Sun and AMD have committed to invest around $30 million in products and services of ISVs in ASEAN in the fiscal year of 2005.
This common initiative will link Oracle, Sun, AMD and local ISVs to ensure a stricter integration process in hardware and software distributions, while developing solutions using Oracle technology on Sun's products with AMD Opteron microprocessors.
The initiative aims to bring about comprehensive, cost-cutting and easy-to-use solutions to customers.
"Most ISVs in Vietnam have not standardized the development of their applications, and this is where the ISV ASEAN initiative is designed to help them develop an effective and safe technology foundation," said Ho Thanh Tung, General Director of Oracle Vietnam.
"Involving in this program, local ISVs will receive strong assistance from leading global software and hardware firms," he said. (VietNamNet Feb 1)
USDA Aid Totaling $4Mln for Vietnamese Farmers
The US Department of Agriculture (USDA) has provided Counterpart International (CPI) with US$4 million worth of commodities to implement a three-year program in central Vietnam.
The ship transporting 12,500 tons of soybean meal and 7,600 tons of wheat arrived at Ho Chi Minh City port on Saturday, says a statement issued by the US consulate general last year.
The proceeds from the sale of the USDA-donated commodities will be used by CPI, an American non-governmental organization, to assist many people, including from ethnic groups, in the central highlands or mountainous areas.
Assistance will include training in crop diversification, distribution of seedlings, and the provision of loans.
Up to 3,000 households will receive food packages to compensate them for a loss of income while they undertake training courses offered by CPI, which has been operating in Vietnam since 1996. (Vietnam Agriculture Jan 31 p2)
Japan Overtakes US as Biggest Importer of Vietnam Fish
Japan overtook the US as the biggest importer of Vietnamese fish products in 2004, accounting for 31.4% of the total, according to the Ministry of Fisheries.
Vietnamese Deputy Minister Nguyen Ngoc Hong said that Vietnam's fish exports to Japan jumped by one-third in the first 11 months of last year, totaling 106,000 tons valued at $680 million.
This compared well with exports to the US in the same period, at 79,200 tons worth $522 million, or only 24% of Vietnam's total fish exports. "In the three previous years, the US was the biggest importer of Vietnam's fish," Hong said.
The deputy minister cited dumping cases lodged by American farmers against Vietnamese catfish and shrimp products as the key reason behind the falling value of fish exports stateside. After the anti-dumping case against shrimp products from Vietnam and five other countries, many competitors have managed to penetrate the Japanese market to minimize the negative impact.
However, Vietnamese exporters have been more successful in grasping opportunities there, which proves that "Vietnamese traders are capable of diversifying markets and that Vietnam's fish products have earned a prestige in this top market," Hong said.
Vietnam's fish exports to the European Union (EU) also soared strongly, amounting to $215 million worth last year, or 9.9% of Vietnam's fish exports compared to only 5.9% in the previous year, according to Hong.
As for the breakdown of exported products, shrimp grew by 17.2% in value, accounting for 52% of the total, followed by fish at 22.8%, and squid and octopus at 6.7%. In all, the country earned $2.4 billion worth of exported fish products, or a year-on-year growth of 8.9% The target for this year is $2.6 billion.
It is ironic that after the anti-dumping case against Vietnam's tra and basa fish, which are two catfish varieties, local exporters managed to spur exports of the two fish by 55% in output and 54% in value, Hong said, hinting at the initial success of Vietnam's shrimp penetrating overseas markets. (Saigon Times Daily Feb 1 p2)
A-group Investors Cry Foul on Complicated Procedures
Enterprises have called for the simplification of procedures for A-group project approval, blaming complicated measures for missed investment opportunities.
According to the current regulations, which became effective in 1997, the A-group projects with total investment capital of VND300 billion ($19.1 million) and upward must get government approval. However, the investors think that the threshold for government permission should be raised to VND500 billion ($31.85 million).
Mai Kieu Lien, Director General of Vietnam Dairy Products Joint Stock Company (Vinamilk) said that the company had missed some investment opportunities as it could not get approval on time.
Ms Lien has cited several provisions in the existing regulations that she called "inappropriate" to the current situation.
Firstly, the exchange rates of the Vietnam dong (VND) against the greenback have changed so much since 1997. The VND300 billion projects were considered large scaled at that time.
Meanwhile, the financial capability of enterprises has improved, meaning the number of VND300 billion projects is way up, meaning more time to examine all the proposed projects.
Vinamilk is lobbying for the adjustment of the regulations as the company is planning several projects worth more than VND300 billion. If the proposal is accepted, the company wants permission from local authorities only, reducing time for project implementation.
Tardiness in project approval takes investment opportunities away, considered a disadvantage for Vietnamese enterprises in the context of global integration. (VietNamNet Feb 2)
Vietnam's Tourism to Flourish with Regional Visa Exemption
The agreement to waive visas for intra-ASEAN travel by the end of this year would mean a boom in tourism for Vietnam, said leaders of Vietnam's tourism companies.
The visa exemption pledged recently by tourism ministers of ten members of the Association of Southeast Asian Nations would be a major benefit for Vietnamese tourism, said Nguyen Van Cuong, Research and Development manager of the Ho Chi Minh City-based Viettravel Company.
He added the positive change would help save time and money for tourists and travel companies. Earlier, an outbound tourist had to wait about ten days for visas, costing US $15-20.
When the exemptions come into effect by the end of 2005, Cambodia and Laos will be the two most common destinations for Vietnamese tourists.
In addition, visa exemption will help boost the MICE (Meeting, Incentive, Conference, and Exhibition) business tourism programs.
However, travel companies also warned that Vietnam still must work to overcome some obstacles.
Travel costs on entering Vietnam are still higher than places like Thailand, Indonesia, Malaysia, and Singapore, while services remain substandard, they said.
Other issues Vietnam must overcome are persistent hawkers, pickpockets, and bag snatching, said Fiditourist R & D manager Nguyen Duc Hy.
Vietnam served nearly 301,100 international tourists in the first month of this year, up 4.4% over the same month last year despite the recurrence of the bird flu, according to the government's official statistics.
The country's five largest tourism markets are China, Japan, South Korea, Taiwan and the US.
Vietnam aims to receive 3.2 million foreign visitors and earn total tourism revenues of VND30 trillion ($1.91 billion) this year, up 14% and 15%, respectively, against last year. (Young People Online Jan 30)
Party Leader Welcomes Overseas Vietnamese on Homeland Visit
General Secretary of the Communist Party of Vietnam Nong Duc Manh on February 1 met with 59 representatives of overseas Vietnamese from 21 countries and territories worldwide who have returned to their homeland to celebrate the traditional Lunar New Year Festival (Tet), which falls on February 8-11.
Manh expressed his pleasure to see overseas Vietnamese (also called Viet Kieu) make progress in their daily life and business, while trying to maintain the Vietnamese cultural identity, promote mutual assistance in the community and pay attention to the young generations.
The leader praised the overseas community's warm sentiments toward the homeland and their contributions to national construction and defense. He said he was pleased at the success of many overseas Vietnamese investors and businesspeople in Vietnam, and the contributions made by overseas Vietnamese cultural activists and artists to the country.
He informed the overseas Vietnamese about Vietnam's socio-economic development in 2004 and the orientation for national development this year.
He said Vietnam now has many opportunities for further development, which require all Vietnamese at home and abroad to try their best to fulfill their duty. He said he hoped that all Vietnamese, wherever they live, should contribute to the tradition of unity in national construction and defense and join efforts in building an independent country with the goals of a rich people, a strong country, and a fair, democratic and civilized society.
Earlier this week, Prime Minister Phan Van Khai also called on the overseas Vietnamese community to further help the country in the current fight against poverty and backwardness during a get-together with the participation of 600 expatriate Vietnamese, including former vice president of the fallen Saigon regime Nguyen Cao Ky.
There are now more than 2.7 million Viet Kieu living in 90 countries and territories around the world. The number of Viet Kieu in the US is the highest, at 1.3 million, followed by France with 300,000, Australia with 250,000 and Canada with 180,000.
Remittances by Viet Kieu to Vietnam have consistently increased in recent years from $35 million in 1991 to $3.2 billion in 2004. They have also invested millions of US dollars in businesses in Vietnam to date.
Last year, more than 467,400 overseas Vietnamese visited the homeland, up 19.2% on-year, according to the government's official statistics. (Liberated Saigon Feb 2 p1, Young People Feb 2 p1, Labor Feb 2 p1, Youth Feb 2 p1)