by Le Hung Vong
The increasing number of members of the Japanese Business Association, sharp rise in Japanese tourist arrivals, and Japan's ODA grants to Viet Nam are signs of enhanced economic relations between the two countries, a Japanese diplomat says.
Speaking at the inauguration of the US$17 million Hisamitsu factory in Bien Hoa Industrial Park No 2 (Dong Nai Province) last week, the country's deputy consul-general in HCM City, Yakabe Yoshinori, said Japan had pledged an average ODA of $1.8 billion annually to Viet Nam in the last couple of years, including $3.7 billion last year.
An increasing number of Japanese tourists are visiting, including 480,000 last year.
Despite the global economic downturn, the Japanese Business Association in HCM City had 570 members as of last month.
"These figures prove that economic relations between the two countries have continuously developed," Yakabe said.
Prime Minister Nguyen Tan Dung's statements have also helped boost Japanese investments in Viet Nam.
During his visit to Japan last October, he promised that the Vietnamese Government would create the most favourable conditions for Japanese investors.
In a joint communique issued on the occasion, the two countries expressed the wish to double trade by 2020, Yakabe said.
According to the Ministry of Planning and Investment, in the first five months of this year, FDI pledges were just $5.33 billion, or 68.2 per cent of the amount in the same period last year.
It includes $4.12 billion in 283 new projects and $1.2 billion in 82 existing projects.
With $3.68 billion, Japan has been the largest investor, followed by the Virgin Islands, Hong Kong, and South Korea.
Binh Duong, Hai Phong, Dong Nai, HCM City, and Quang Ninh accounted for the largest investments.
Dong Nai rolls out the red carpet to all foreign investors, especially from Japan, deputy chairwoman of its People's Committee Phan Thi My Thanh told Viet Nam News at the inauguration of the Hisamitsu factory.
Brewer encroaches on farms
A new brewery has come up on a 13,000sq.m piece of agricultural land in HCM City's suburban Hoc Mon District, but construction inspectors say it has been built without permission.
Construction of the 9,000sq.m Vinaken Brewery in Ba Diem Commune was completed in February 2010 when Hoc Mon District inspectors came to the site to draw up a report and stop construction.
City authorities say the land was earlier allotted for the Ba Diem Residential Area project.
In March 2010, the city People's Committee slapped a fine of VND35 million ($1,700) on Tien Dong Co, the brewery owner, for "constructing Vinaken Brewery without a construction permit".
It was told to suspend all work at the site and apply for a construction permit from the Hoc Mon District authorities.
In case it could not get a permit, Tien Dong had to raze the construction works and return the site to its earlier condition.
In July 2011, the chairman of the municipal People's Committee, Le Hoang Quan, ordered inspectors to verify compliance.
On May 28, a spokesman for the City Inspection Bureau told Tuoi Tre (Youth) newspaper that the developer had neither got the construction permit nor dismantled the construction works as ordered by the authorities.
Tra fisheries face challenges
The tra fish industry in the Cuu Long (Mekong) Delta has been facing challenges since prices of fish products have dropped to record lows, causing losses to not only farmers but also seafood processors and exporters.
The price of the fish in An Giang, Tien Giang, Dong Thap and Vinh Long provinces and Can Tho City in the delta has slumped from VND28,000 per kilogramme in mid-April to VND22,000-23,000, even lower than the input cost.
In An Giang, the largest tra breeding area in the delta, high-quality white tra is being bought by processors for VND22,500-24,000 per kilogramme, and lower-quality tra for VND22,500-23,000.
The low prices have hit farmers very hard, forcing many of them to stop breeding the fish.
Farmers in Dong Thap, who have suffered losses of VND500 – 1,000 per kilogramme of tra, have abandoned 77 ha out of the 1,038ha of tra ponds in the province.
Due to a lack of funds, several small and medium tra processing firms have suspended operations while big ones are trying to force fish prices down, according to Le Hoang Vu, head of the province's Aqua-Culture Department.
Many farmers in An Giang had also stopped breeding tra, causing farms to shrink to 1,100ha, just half of that in 2008, Pham Thi Hoa, deputy director of the An Giang Department of Agriculture and Rural Development, told Viet Nam News.
Phan Van Tam, owner of a 1ha fish pond in Vinh Thuan Trung Commune in An Giang's Chau Phu District, said he had stopped fish farming to avoid further losses.
Breeder fish, feed, labour, electricity, water, and others cost farmers VND22,000 – 23,000, per kilogramme of tra.
"It takes a long time for us to repay the loans we got for farming tra," Tam said.
Truong Minh Giau, deputy general director of the An Giang-based Viet An Co, said farmers liked to sell the fish when it weighs 700 to 800 grammes to reduce cost, while European buyers demanded 900 – 1,000g fish.
That was the reason why foreign buyers had been hammering down the prices of Vietnamese tra products, he explained.
A recent study by the Ministry of Agriculture and Rural Development in the Cuu Long (Mekong) Delta found that tra farmers were suffering losses of VND1,000-3,000 per kilogramme of fish, and an owner of a 1ha pond could suffer losses of VND1 billion a year.
Many firms are trying to sell out their tra products, forcing prices down even further.
Giau said small- and medium-sized enterprises, which depended on bank loans, might be unable to cope with the present situation, but stronger ones who could tide over the hard times could recoup their losses in the near future when tra prices go up again. — VNS