Business Beat
Viet Nam is launching a salary reform for Government employees that might cost the budget VND7 trillion US$457 million, or 5.8 per cent of the State expenditure in 2002. But the budget itself for next year does not have any provision for this. According to the Ministry of Finance, the salary difference will come from savings in other budgeted expenditure and an increase in budget revenue.Besides, although the increase represents a significant percentage of the existing salary structure, it does not really mean much for the salary earner. According to a survey, salaries only account for one-third to one-sixth of the income of the employees, with moonlighting, running household businesses, or investment in other businesses accounting for the rest. Others resort to "bonuses". The inevitable trend? Poor performance in their jobs and greater devotion to the other means of income.
Teachers and health workers justify private classes and clinics, blaming low salaries. However, it is not inconceivable they will find ways to push their students and patients to their private operations. It is also noteworthy that any radical salary reform is bogged down by the sheer number of people receiving payments from the State – about 7 million. While the number of civil servants is just over 200,000, this huge number is because Viet Nam did not have a retirement payment scheme until 1995 when social security funds took over payments for retirees.
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The boom in building private schools in recent years might soon end in a bust; higher tuition fees than public schools mean this academic year, most secondary schools could only enrol between six and 40 students each.
A five-year-old school had planned to enrol 280 sixth-graders and 320 10th-graders but ended up with a mere seven in all. The management had to close down one of the school’s two premises and opened four more classes at the other. Other schools in the same situation are thinking of closing shop because tuition fees collected do not even cover rents.
School managers are blaming the situation on a lack of consistent education policy. Responding to the call of "socialising" education – which ostensibly means opening the sector to private players – investors poured money and expertise into opening schools. But at the same time, the Government continued to pour funds into public schools to build more classrooms, reserving them for the so-called semi-public classes. Students in these classes have to pay tuition fees, which are however lower than private schools’. It’s no wonder therefore that parents prefer to send their children to public or semi-public classes.
To prevent public schools from opening too many semi-public classes and abusing State money, education authorities ruled that the number of students in such classes should not exceed 20 per cent of the school’s total enrolment. But it seems the rule is observed more in the breach because the revenue helps them pay teachers more.
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Occupancy rates at downtown HCM City hotels have soared in the past few weeks, reaching a dizzy 91 per cent at Saigontourist-owned hotels. Despite a 20 per cent hike in room rates, it is now impossible to get a room at these hotels until after the new year holidays. International guest arrivals have increased 20 per cent over last year.
Instability and terrorist threats elsewhere in Asia have made Viet Nam a safe haven for tourists, especially those seeking to avoid cold weather elsewhere at this time of the year. A series of international seminars and conferences in HCM City did not come exactly as dampeners.
And, as far as the travel agent-hotels relations go, the boot is now firmly on the other foot. Gone is the time when hotels had to curry favour with the operators to get guests. The agents are now begging the hotels to accommodate their clients.
This sanguine state also owes a lot to the marketing efforts of the Viet Nam National Administration of Tourism and co-ordination among tourist offices throughout the country. They have learned to work together and offer better-planned routes. However, one hopes this does not give rise to complacency and brings to a halt efforts to improve service.
VNS
