Business Beat: World Bank, ADB see bright future for VN
Both the World Bank and the Asian Development Bank ADB issued optimistic forecasts for Viet Nam last week. While the World Bank said real GDP was expected to grow by around 7 per cent in 2003, the ADB said anticipated that GDP would grow by 6.9 per cent in 2003 and 7.1 per cent in 2004, a slightly higher rate than in 2002.Klaus Rohland, the World Bank’s Viet Nam director, said, "Although the worst fears related to the war in Iraq did not materialise, there is still uncertainty about the economic implications of SARS. However, Viet Nam has fundamental strengths that should enable the country to withstand these short-term shocks, and keep its growth and poverty reduction efforts on track."
Both institutions said at worse, SARS could shave 0.4-0.5 percentage points off GDP growth this year. ADB’s forecast was based on strong domestic demand while the World Bank was more impressed with the country’s export performance, which registered a whopping 43 per cent growth in the first quarter. That’s why the World Bank suggested Viet Nam speed up the process of joining the World Trade Organisation to ease trade restrictions such as US textile quotas.
ADB, however, warned that higher growth would be accompanied by several concerns, including an increasing trade deficit, expected to climb to 3 per cent of GDP this year and 5 per cent by 2004. The bank was also concerned that the fiscal deficit might be higher this year – at around 5 per cent of GDP – while inflation was forecast to reach 5 per cent in 2003.
Tourism fights back
After the World Health Organisation declared that Viet Nam had contained SARS, tourism businesses here are doing their best to sell their SARS-free image, although aware that tourists won’t come back in droves overnight. The Viet Nam Tourism Authority was planning to invite journalists from major markets to visit the country and report on the real situation here. Some even advocated buying advertising time on major channels to spread the SARS-free message or hiring professional public relations companies to do the job.
Travel companies tried to make use of the Internet to lure tourists back by updating information and providing links to health organisation sites. Some devised marketing gimmicks based on lowered prices and better deals. Vietnam Airlines has already cut domestic airfares for some types of passengers and was thinking of cutting international airfares for some routes. A majority of tourist companies turned to the domestic market to make up for the loss of revenues from international guests.
Airport bus leads the way
The opening of a normal bus route became news last week, namely because it will transfer passengers from the heart of downtown HCM City to Tan Son Nhat Airport. The airport had been off-limits to all kinds of public transport for a long time, forcing passengers to take airport taxis unless they had company cars to pick them up. Previous efforts by other taxi companies to break up this monopoly ended in failure.
The chance came when the Government decided to merge the Civil Aviation Department into the Ministry of Transportation. Then Ha Noi’s Noi Bai Airport allowed buses into the airport in July 2002. The Sai Gon Passenger Car Company quietly made preparations by sending staff into the airport to take notes of passenger volumes, the rush hours and off-peak hours. After negotiations with Tan Son Nhat Airport authorities, the company was allowed to introduce a bus service, taking passengers from the airport to the city’s major hotels in District 1 and the Chinatown area in District 5.
In itself, it’s an unremarkable operation, but has significant implications in abolishing corporate monopoly, bringing efficiency and benefits to customers and creating a normal business environment.
Tiles are no smash hit
Dong Tam Tile Company thought it was doing everybody a favour but officials at Viet Nam Football Federation VFF didn’t think so. The company printed a photo of the chief coach of the national football team during the Tiger Cup 2002 on its ornamental ceramic tiles and sold them to local fans, announcing that the proceeds would be donated to a fund for poor children.
Unhappy VFF officials asked Dong Tam to stop the promotion, arguing that neither Dong Tam nor coach, Henrique Calisto, were entitled to use his image as the former national coach without VFF consent. They held that VFF holds the commercial rights to the position of chief coach even after the contract has expired, citing the 1996 precedent in 1996 when another former national coach, Karl Weigang, accepted an advertising contract with Mercedes-Benz but had to cancel the deal because of VFF’s protests.
However, Dong Tam said it had done nothing wrong because its tile states clearly that Calisto was the national coach during the 2002 Tiger Cup, not now. Dong Tam also argued that they would have been wrong to use Calisto’s image during the Tiger Cup, but were entitled to print his photo as a souvenir for fans now with Calisto’s consent, because his contract has expired. and finally, Dong Tam said the campaign was for charity rather than commercial purposes. So far, both sides have limited themselves to talks and no legal action has been taken. It should, however, be noted that it was Dong Tam who paved the way for Calisto to become national chief coach in 2002.
VNS
