Vietnam Urges Lenders to Tighten Credit

Vietnam's central bank said it is encouraging lenders to tighten credit for some borrowers in one of the first signs Asian economies are readying to rein in stimulus spending if the world economy continues to recover.

Like the U.S., China, Vietnam and other Asian nations have flooded their economies with cash over the past six months to avoid a deep recession. But as evidence mounts that the worst stage of the downturn is ending, many economists are advising governments to start curtailing credit lest some sectors overheat and trigger serious inflation problems in 2010 or beyond.

Economists are particularly concerned about Vietnam, a favorite of foreign investors in Asia that has experienced serious trouble with asset bubbles in the recent past, including a period when inflation soared to 28% in mid-2008. Although inflation is now below 4%, many analysts worry the government has gone too far to stimulate growth by subsidizing hefty bank lending programs that are feeding more money into the economy. Real estate and stock prices already have started to climb rapidly.

On Wednesday, State Bank of Vietnam Governor Nguyen Van Giau appeared to confirm those fears by saying the central bank wants local credit institutions to tighten lending to real estate and stock investors, as well as to consumers. He said lenders should focus instead on extending loans to small- and medium-sized enterprises to boost their production, and to major state-owned projects. Further details on the potential tightening, which appeared in a statement published in the central bank's Thoi Bao Ngan Hang newspaper, were not available.

"I think the key reason behind the central bank's comment is that it wants Vietnam to avoid high inflation," said Nguyen Duy Hung, chief executive of Saigon Securities Inc., a Ho Chi Minh City-based securities company.

Since the beginning of the global economic crisis, Vietnamese state banks have poured at least $19 billion in loans into the economy, equivalent to about one-fifth of the country's annual gross domestic product, as part of a broader stimulus program aimed at expanding credit for state enterprises and exporters. Partly as a result of the stimulus efforts, total outstanding loans in Vietnam's banking system at the end of June were 17% higher than at the end of 2008, and 17.5% more than a year earlier, the government said this month.

Unfortunately, economists say, it's hard for the government to police borrowers to know exactly how they are using the stimulus money. Many analysts suspect that large sums are leaking into activities the government doesn't want to stimulate, with borrowers taking money to speculate in stocks or real estate rather than investing in new productive capacity, though proving they are doing so is difficult. Since March, Vietnam's benchmark stock index is up more than 70%.

"I think it's the right decision" to begin reining in credit to some parts of the economy to make sure the money is used wisely, says Vu Thanh Tu Anh, an economist with the Fulbright Economics Teaching Program in Ho Chi Minh City. It may difficult to do so, he said, unless policymakers take more concrete steps such as putting a cap on loan growth or raising interest rates. Asian governments remain wary of taking those kinds of steps because they are still uncertain about the outlook, despite recent signs of economic recovery.

Either way, the pressure to wind down some stimulus packages is growing. In a report released Wednesday, HSBC economists warned that "money's too loose in Asia" and raised the specter of new asset bubbles, especially in real estate. Although Asian countries generally aren't tightening credit yet, "it won't be long, I suspect" before they start doing so on a more widespread basis, says Tim Condon, an economist at ING in Singapore.

Wall Street Journal

Vietnam flood toll hits 28: officials

HANOI (AFP) — The death toll from flooding and landslides in mountainous northern Vietnam has risen to at least 28, authorities have said.

Most of the deaths were in Bac Kan and Lai Chau provinces, said the National Flood and Storm Control Committee, updating its previous figure of at least 22 deaths since heavy rains began on Friday.

Thanh Nien newspaper quoted Trieu Kiem Vang, a farmer in Bac Kan's Khen Len hamlet, as saying his two sons, their wives and two granddaughters were buried in a landslide.

There were also deaths in Cao Bang, Son La, Lao Cai and Ha Giang provinces, the flood committee said, listing three people as missing.

The storms destroyed nine bridges, flooded hundreds of houses and about 600 hectares (1,480 acres) of cropland, authorities said.

Security forces are assisting in the aid and rescue effort, state television reported.

Vietnam's flood and storm season generally starts in July and lasts until November.

Last year at least 550 people died in disasters triggered by bad weather, the national statistics office said earlier.

Copyright © 2009 AFP. All rights reserved.

Vietnam's Sacombank H1 gross profit jumps 20 pct

HANOI, July 8 (Reuters) - Vietnam's Sacombank STB.HM, 10 percent owned by Australia's ANZ (ANZ.AX), said its first-half gross profit reached 905 billion dong ($51 million), up 20 percent from a year earlier, thanks to strong lending.

Sacombank, the country's sixth-largest lender by assets, said in a statement on Wednesday that its loans totalled 47.64 trillion dong at the end of June, up 36 percent from the end of last year.

The Ho Chi Minh City-based lender said its bad debt fell to 0.71 percent of loans last month from 0.76 percent in April.

Sacombank's credit growth in the first half was nearly double that in the entire Vietnamese banking system, which the central bank estimated at 17.01 percent. [ID:nHAN357450]

The lender's total assets reached 82.76 trillion dong at the end of June, 21 percent higher than at the end of 2008.

The World Bank's International Finance Corp, Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam.

Sacombank has forecast that its gross profit would rise 47 percent this year to 1.6 trillion dong after a fall in 2008. [ID:nHAN369575].

Sacombank shares closed up 0.85 percent at 35,300 dong. ($1=17,760 dong)

Vietnam Aims to Achieve 2009 Growth of More Than 5%

July 8 (Bloomberg) -- Vietnam will boost production and exports in an effort to exceed the government’s 5 percent economic growth forecast this year, Prime Minister Nguyen Tan Dung said in a statement on the government’s Web site.

The economy has avoided a recession and is “in a growing trend,” Dung said in the statement posted late yesterday. Gross domestic product expanded 4.5 percent in the second quarter from a year earlier after gaining 3.1 percent the previous three months, the government said last week.

Dung said in April Vietnam plans stimulus measures that the government values at about $8 billion to bolster growth. Ministries and companies have to use the packages more effectively in the second half to help the country meet its targets, he said in yesterday’s statement.

Vietnam will try to prevent inflation from accelerating to more than 8 percent at the end of this year, government office chief Nguyen Xuan Phuc said in another statement, also posted on the government’s Web site late yesterday.

The nation’s banking system lent a combined 372.3 trillion dong ($21 billion) to businesses as part of the government’s loan-subsidy program as of July 2, the central bank reported July 3. Vietnam posted credit growth of 17 percent in the six months ended June compared with the end of last year, the central bank said yesterday.

Vietnam sniffer dogs search for flood victims

PAC NAM, Vietnam (Reuters) - Vietnamese soldiers and police used sniffer dogs on Tuesday to search for victims of floods in the north of the country which killed at least 34 people.

Flash floods and landslides from heavy rain on Friday night hit eight northern mountainous provinces in one of Vietnam's most impoverished areas, with Bac Kan province topping the casualty list with 13 deaths.

Flooding and heavy rain late last week in neighbouring southern China forced 550,000 people to evacuate their homes and killed at least 15, Xinhua news agency reported.

The government said on Tuesday nearly 800 houses in seven provinces had been destroyed or submerged, while floods had damaged rice and corn crops, irrigation systems and roads.

Vietnam is often struck by floods and storms between July and October. The disaster area is far from Vietnam's main rice and coffee growing regions.

© Thomson Reuters 2009 All rights reserved

Danger Signs Seen in Vietnam Stimulus

HANOI -- Vietnam boasts one of the developing world's most resilient economies this year, but economists fear the success masks serious problems, as loose state-directed lending risks pushing Vietnam into a new speculative bubble.

Those concerns were highlighted Tuesday, when Fitch Ratings downgraded Vietnam's local currency rating, citing "a steady deterioration in the country's fiscal position" and a banking system that's "vulnerable to potential systemic stress" as the government floods the economy with credit.

Similar worries affect the U.S. and China, which are under pressure to prepare to pull in the reins of government stimulus. But the fears are especially pronounced in Vietnam, one of the most-closely watched emerging economies and an increasingly important magnet for foreign direct investment. Much of its economy is dominated by state enterprises that have a history of making ill-advised investments outside their core businesses, which have contributed to past speculative behavior and bouts of overheating.

Since the onset of the global economic crisis, state banks have poured at least $19 billion in loans into the economy, equivalent to about one-fifth of the country's annual gross domestic product, according to the government. The money is a key plank of a stimulus program in which the state provides interest-rate subsidies to banks so they can make more loans to help state enterprises and exporters.

The measures appear to be paying off in the short term, with the International Monetary Fund forecasting growth of 3.3% this year, while neighbors such as Thailand and Malaysia face steep contractions.

On Wednesday, the government said GDP expanded 3.9% in the first half of the year compared with a year earlier, with growth accelerating to 4.5% in the second quarter from 3.1% during the first quarter. Vietnam's economy expanded 6.2% in 2008 and 8.5% in 2007.

Stock market prices are also sharply higher, with Vietnam's benchmark index up 86% since the beginning of March. Residential property prices are climbing in many parts of Hanoi, the capital, and Ho Chi Minh City, the center of commerce and home to the stock exchange, economists say.

Providing lots of credit is "a good strategy. Our stimulus measures force banks to lend productively," says Le Xuan Nghia, vice chairman of the National Financial Supervisory Commission, one of the country's main financial regulators.

But with so much money being funneled into the economy, many people on the street fear a return of inflation, which accelerated to 28% in mid-2008 before easing to 5.6% in May.

Many Vietnamese are responding by investing whatever cash they can scrape together as fears about inflation revive. In the dust-choked eastern suburbs of Hanoi, for instance, a property boom is in full swing. A series of state and privately owned companies are erecting an arc of satellite towns in the area to ease congestion in old Hanoi, where cars and delivery trucks struggle to squeeze past swarms of motor-scooters and bicycles.

Nguyen Thi Huyen, a broker for the Van Khe New Urban City project, says she is putting together 10 or more deals a month at the development, up from just two or three this time last year. Some units have changed hands five times or more and prices have risen six-fold since the project was launched at the peak of Vietnam's boom in 2007, she says.

Buyers are "worrying about inflation and want to invest their money somewhere safe," Ms. Huyen says, lighting a candle at a shrine in her office where several piles of facsimile $100 bills are stacked up for good luck.

Some economists in Vietnam fear the country's politicians are so enmeshed in their growth-oriented five-year economic plans that they won't be willing to turn off the stimulus tap until inflation has already reared its head again. In April, the government extended by two years a lending-stimulus program that pays four percentage points of interest on any loans by Vietnamese banks to the business sector, encouraging banks to lend more aggressively.

"They are trying to turn back the clock to 2006 and 2007, when the name of the game was exporting as much as possible to profligate Americans. But Americans might not resume spending again in the same way, and we could end up with a serious inflation problem again," says an economist with close knowledge of government thinking.

While the "government's been successful at stabilizing the economy" in recent months, officials "also need to consider the longer-term risks, such as excess liquidity in the banking system and its potential to spark inflation," says Tran Le Khanh, chief investment officer at Prudential Vietnam Fund Management, Prudential PLC's Vietnam fund business.

The World Bank cautioned the Vietnamese government in report last month that state-directed lending could be hampering overhauls at state enterprises, and Vietnam might instead want to focus on helping people who have lost their jobs in the downturn. "It might be good to pause and reflect whether sustaining economic activity should remain the single priority," the World Bank said.

Other analysts worry the lending spree could escalate bad debt problems in the banking sector. Officially, nonperforming loans stand at 2.6%, up from 2.2% at the end of last year. But Vietnam doesn't calculate bad-debt rates according to international standards. Fitch Ratings recently estimated the real figure may have been as high as 13% of total loans at the end of 2008. In its ratings downgrade Tuesday, it said the country's loan-subsidy program "is almost certain to make matters worse."

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

Vietcombank H1 gross profit $138 mln -newspaper

* Vietcombank H1 gross profit is 75 pct of annual target

* H1 loans up 14 pct versus end-2008

* Bad debt down to 4.1 pct of loans (Adds details)

HANOI, July 1 (Reuters) - First-half gross profit at Vietcombank VCB.HM, Vietnam's largest partly private lender by assets, reached 2.45 trillion dong ($138 million), 75 percent of its annual target, a state-run newspaper reported on Wednesday.

The assets of the lender, which made its domestic share debut on Tuesday, reached 222 trillion dong as of June 30, practically unchanged from 221.95 trillion at the end of 2008, Chairman Nguyen Hoa Binh was quoted by the Securities Investment magazine as saying.

Binh said loans totalled 129 trillion dong at the end of June, up 14 percent from the end of 2008, and profit from lending made up 70 percent of the bank's first half gross profit, he told the Planning and Investment Ministry-run magazine.

Shares in Vietcombank closed up 0.8 percent at 60,500 dong ($3.4) on Wednesday. The stock jumped by the maximum 20 percent allowed on its debut, but the small size of its listing limited the impact on the main index, which ended lower. [ID:nSP466389]

The Ho Chi Minh Stock Exchange index .VNI fell further on Wednesday, losing 4.08 percent. However, the index has still risen 36 percent this year.

Vietcombank's credit growth in the first six months was below the 17 percent in Vietnam's banking sector as a whole, according to central bank reports.

Binh said the lender had cut bad debt to 4.1 percent of loans from 4.6 percent at the end of 2008, and its capital adequacy ratio stood at 9 percent, above the 8 percent rate considered safe by the central bank.

About 3 percent of loans in Vietnam's banking sector are bad, a rate higher than last year, Wednesday's state-run media quoted Le Xuan Nghia, vice-chairman of the National Financial Supervisory Committee, as saying. ($1=17,800 dong) (Reporting by Ho Binh Minh; Editing by Alan Raybould)

Questing for gear in hopping Ho Chi Minh City

HO CHI MINH CITY, Vietnam--Last December, I visited Ho Chi Minh City and discovered that while Wi-Fi was ubiquitous and the Internet was fast, it was incredibly hard to get across town.

Seven months later, the traffic here is still terrible. This time, however, I found that if you are in the right place, dealing with traffic isn't necessary at all.

The right place is District 1. Other than being the center of tourism with lots of hotels, famous landmarks, restaurants, and bars, D1 is also the site where you can get pretty much anything you need, especially when it comes to technology and digital entertainment. And it's all within a short walking distance.

I actually heard about this area during my last trip here. Jasper Waale, owner of Skeye, a GPS- and GSM-based tracking company operating in Vietnam and Laos--and an avid listener of the Inside CNET Labs podcast--insisted I check it out. I took a rain check till now.

We met at Cafe Centro, a trendy yet casual coffeehouse located in the middle of D1's most bustling section. According to Jasper, this is a popular place for ex-pats to hang out for both fun and business. It offers reasonably priced refreshments and, of course, free Wi-Fi.

(By the way, there are lots of cafes in Ho Chi Minh City, and pretty much all of them offer free Wi-Fi. My other favorite is Cafe Da on Alexandre De Rhodes Street. Also in D1: the best ice milk coffee and smoothies I've ever had. If you go there, make sure you try the "Dong Tim" fruit shake. It's so good, it has my name on it!)

"You'll find me at Centro at least a couple of times a week," Jasper said. Then, in a slightly show-offy manner, he pulled out his brand-new-looking Nikon D300 camera.

"I just got a good deal on this one. I traded in my D80 and got about 80 percent of new value to put toward this new one. You'll have to come see this place," he said.

I was intrigued, partially because next to his D300, my 4-year-old D80 looked somewhat pathetic. I've considered upgrading my camera for a while, but anticipating the whole hassle of selling my D80 on eBay or Craigslist has stopped me.

He then took me to Thuong Xa Tax, a mini shopping mall that's just a five-minute walk from the cafe. "Mini" here, by the way, is according to American standards; this is actually one of the bigger trading centers here in Vietnam, and it is indeed very large.

As in most shopping malls here, you can find pretty much everything, but we walked straight to the Vinh Hung Camera shop. The owner, Hung, a friendly 40-something man, greeted Jasper like an old friend. He then took a quick look at my D80 and said, "I'll give you $600 for this one, body and lens." Now that's a very good deal, as mine is rather scratched up and dirty since I regularly carry it around in open air. It also comes with a low-end non-VR Nikkor DX 18-135mm lens. On eBay, the best I could get is probably $500 (minus all the fees).

Asked how he could evaluate the camera so quickly and what would happen if it turned out to be bad later, Hung said he generally only needs a minute with a camera to know how much it's worth. "I've been doing this so long. I can tell if there's something wrong with the body via the shutter sound," he said. "The lens, I can just see."

Hung also revealed that his business was going well because digital SLRs are getting more popular and that so far he has been able to fulfill all customer requests, whether for new purchases or exchanges. "We have a good connection, so the most you have to wait for a rare model is just a few days," he said.

I wouldn't have to wait at all since he had a brand new D300 in stock, reasonably priced at almost $1,500. What I didn't have was $900 in cash. The shop accepts Visa, but I would have to pay another 3 percent. That, plus the incredible fees Bank of America charges me for using the card abroad, would end up making it not such a good deal. So I decided to let Jasper stick with the lead in the camera competition, and he seemed very happy about it.

On the way out of the Tax mall, we stumbled upon an interesting shop selling bootleg movies. Now this is nothing new to me. However, unlike the modest-looking bootleg stores in Hanoi, this one is quite upscale. First, it takes a good amount of money to have a booth in this shopping mall, and second, the shop employs uniformed women to tend to your every movie need.

The shop has virtually any movie title you can think of, including those still out in theaters and not yet released on disc. They come in stacks organized by genres. I spotted a DVD of "Angels and Demons," which I didn't have time to see in a theater before the trip. And, no, I didn't buy it.

Cuc, one of the women in uniform, told me her job is selling and she has no idea about the legality or illegality of these movies. "All I know they are 15,000 dong (about 90 cents) per DVD and 40,000 dong (about $2.25) per Blu-ray. Anything else you will need to talk to my manager," she smiled. She wasn't so happy when I wanted to take her photo, though.

"These movies' quality really sucks, even the supposedly high-def ones," Jasper said. "If you want true high-def movies, you have to come with me here."

We got out of Tax and after a 10-minute walk, we arrived at Paster Street. This street runs from D1 to District 3 (Quan 3). However, the D1 part is where it's at. There are a lot of electronics and computer stores--the two Jasper wanted to show me are Minigame and Halo.

These two stores focus on console games and offer virtually any title. Most of these games, of course, are not original copies but bootleg versions. To play these games, the consoles themselves need to be hacked, and the shop takes care of that too.

Jasper said he once mistakenly upgraded his Wii's firmware and re-locked his console. He brought it back to Halo, and 400,000 dong later, his Wii was unlocked again. The process involved removing and reordering a memory chip. It's much like the work on the iPhone 3G that I mentioned last year.

The most popular service these two stores offer is games on thumbdrives. The shop will modify a console to make it accept game stored on portable USB drives. After that, you can just bring your thumbdrive over and buy a game for the common price of 10,000 dong (56 cents) per game, regardless of how big (in megabytes) the game is. So now, instead of having to store DVDs or game cartridges, you just have to have a big external hard drive.

Apart from games, true high-def movies in Matroska format (also known as MKV) are also on sale here for the same price: 10,000 dong per movie. You will need a computer to play these movies--or a portable media player such as the WD TV.

Though not a console gamer, I felt excited about what you can get here and how much you can get it for. Legalities aside, in a way, these stores offer much better service than GameStop or any other retailer or repair store I've run into in the U.S.

After a couple of hours hanging out with Jasper, my perspective on Ho Chi Minh City completely changed. Traumatized by its traffic, I used to compare this city of some 12 million people to Los Angeles. Now, it seems somewhat like Manhattan, where you can get virtually anywhere on foot.

What I found most interesting, however, are those people like Denmark-native Jasper--foreigners who weren't born in Vietnam and don't speak the local language very well, if at all, yet who can relate to the place better than a lot of Vietnamese including myself.

Jasper made up his mind about the place long ago. "You are not allowed to have a dull moment here," he said. "If you are bored, it's your fault. This is the most exciting place in the world."

Vietnamese American returns to homeland to help disabled

HO CHI MINH CITY, Vietnam — Some wounds never heal.

At age 15 in 1968, Do Van Du lost a leg and part of an arm while serving as a combat interpreter for the U.S. Special Forces near the Cambodian border. He moved to the United States in 1971 and became a successful software engineer and systems analyst. Then, seven years ago, Du returned to his homeland to help found a college-level program run by Catholic Relief Services to train disabled young people to be software engineers and tech workers — a first for Vietnam.

"People with disabilities don't have a voice in Vietnam," said the veteran, whose fashionable black slacks and sports coat fail to disguise a perpetual sadness in his eyes.

You are basically thrown away. You are not 'normal.' You can't work. You are a leech on society," the former Bay Area resident said before walking with a slight limp into a classroom full of eager students on crutches and in wheelchairs. "In Asia, because of the belief in reincarnation, people think you have done something in a prior life and now you are paying for it."

Grim evidence of the harsh treatment of Vietnam's disabled citizens is easy to find among the students in Du's program.

Duong Anh My was peppered by rocks because his leg was deformed.

When Ha Mau Xuyen applied for work at a telecom company, her field of study, she knew as soon as human resources representatives saw her crippled leg the job interview had effectively
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ended. "I knew by their look they rejected me," said the 27-year-old polio victim.

Tay Duong Thi Ngoc Hoa is confined to a wheelchair in a country in which access to buildings, buses and schools for the disabled is rarely provided. "I had nothing to hope for," the 25-year-old said, her thin legs dangling from her wheelchair.

An estimated 5.6 million people of Vietnam's 90 million citizens are disabled, according to the government, though the World Health Organization places that figure at nearly 9 million. Vietnam has its own version of the Americans with Disabilities Act, but enforcement is rare. "There is no penal code to punish those who violate it," Du said.

For a small number of disabled young people enrolled in the tech training programs Du founded in Hanoi and Ho Chi Minh City, that is changing.

"IT allows them to connect to the outside world in a way they haven't before," said Andrew Wells-Dang, deputy country director for Catholic Relief Services. "It also demonstrates that people with disabilities can do all kinds of jobs, including high-tech ones."

In all, 175 students have received tech training over the past two years, including 75 as software engineers who earn international software engineering certificates. The others get six months' training in business process outsourcing — which includes image processing, data entry and general office IT work that companies outsource to countries like Vietnam.

Du's Information Technology Training Center, which receives funding from the U.S. Agency for International Development, just expanded to Ho Chi Minh City, where more than 50 students are now attending daily classes at Van Lang University. They have been provided with brand-new PCs. Subsidized housing is available to those who need it. The program, which has a budget of about $200,000 a year, is free to the students.

"Some of these people had never touched a mouse before," said Du, who has also started a for-profit company, Hanoi-based PWD Soft, which employees engineers with disabilities.

Many in the program suffer from the continuing consequences from the war with the United States, even though the conflict ended more than 30 years ago. Some struggle with injuries from stepping on land mines. Others have ailments linked to Agent Orange, the highly toxic defoliant used by the U.S. military, said Van Lang University Chancellor Nguyen Dung. Some have been afflicted with illnesses, such as polio, that no longer threaten those in the West.

All too often, Vietnamese with disabilities are confined to home or work in low-skill jobs, such as making toothpicks or chopsticks. Some spend their lives begging.

"The IT industry is one of the few professional fields in Vietnam that are well-suited for people with disabilities," Chancellor Nguyen said. "They may have trouble getting around, but their minds are fine for IT."

The training, though, involves more than learning the intricacies of programming languages like C++ and Java. The students look after each other — pushing wheelchairs, carrying one another's crutches, helping to ease fellow students into a taxi. For some, it's the first time in their lives they feel accepted.

"It's not a class anymore. It's a family," said 30-year-old Nguyen Thi Xuan Thao, who is learning outsourcing tech skills.

Du said the program is modeled after one he attended in Seattle in 1987, dubbed Resources Center for the Handicapped. Sponsors included Boeing Computer Services, Microsoft and IBM. "There was probably nothing like that anywhere except in the U.S.," he recalled.

Du went on to enjoy a successful career as an engineer, pulling down a six-figure salary. He lived in Oakland during the late 1990s when he was an IT consultant for health-care services company McKesson in San Francisco.

Now 56, Du is a man haunted by the events that reshaped his life four decades ago. He was recruited to help the Americans because of his strong English-speaking abilities. "I was a kid," Du said. "The U.S. had child soldiers."

While on patrol one day in Loc Ninh, his unit found itself surrounded. The soldiers called in artillery support. The shells, though, landed on the Americans, killing a lieutenant.

"It blew up my left arm and right leg. It was very difficult for a kid at that age to go through that. I had three choices — kill myself, start begging, or not select one or two," Du grimly jokes.

Du, who moves stiffly and remains self-conscious of his artificial limbs after all these years, is a hero in the eyes of the students. He embodies all they hope for — independence.

"We've learned how to believe in ourselves," said Nguyen Thi Xuan Thao, whose left arm and leg were partially paralyzed after she contracted meningitis as a child.

"I have a heart and a mind just like everybody else," she said. "The only thing that is different about me is the way I walk."

Mercury News

Vietnam Growth Probably Accelerated in Second Quarter

June 30 (Bloomberg) -- Vietnam, the first country in Asia to release second-quarter growth numbers, will probably say its economic expansion accelerated in the period, foreshadowing likely recoveries in the rest of the region.

The economy grew 3.9 percent in the first half from a year earlier, according to the Ministry of Planning & Investment. That implies second-quarter growth of 4.5 percent, from 3.1 percent in the first three months, according to Australia & New Zealand Banking Group. The General Statistics Office, which compiles official economic data, is expected to release gross domestic product figures this week.

Vietnam’s economy is benefiting from an increase in construction as a government loan subsidy program spur credit growth. Other economies in the region, including Japan and Singapore, are forecast to report better second-quarter figures as some $2.2 trillion in stimulus worldwide help stabilize overseas sales for companies from Japan’s Nissan Motor Co. to South Korea’s Kia Motors Corp.

“The worst has likely passed for Vietnam as well as the rest of the region,” said Paul Gruenwald, chief economist for Asia at ANZ in Singapore. “The focus now should be on assessing the strength of the recovery and how long it will take to return to potential growth. A full recovery requires a resumption of foreign demand.”

OECD Forecast

The Organization for Economic Cooperation and Development on June 24 raised its forecast for its 30 member nations for the first time in two years as the global recession shows signs of abating. The International Monetary Fund last week boosted its outlook for Australia for this year and next.

Japan’s economy will expand at an annual 2.3 percent pace in the second quarter, according to a Bloomberg News survey, after contracting a record 14.2 percent in the first. South Korea’s finance ministry last week forecast GDP will increase almost 2 percent in the second quarter from the previous three months, when it expanded 0.1 percent.

The MSCI Asia Pacific Index of the region’s stocks climbed 47 percent since March 9, when it fell to the lowest in more than five years, as the outlook for corporate earnings improved. Vietnam’s benchmark VN Index has gained 60 percent this quarter. It lost 2.6 percent today.

Worst Over

“Most countries have passed the depths of the crisis and those with strong domestic growth drivers will benefit more and recover faster,” said Alvin Liew, an economist at Standard Chartered Bank in Singapore. “The economy is well supported by pro-growth government policies.”

Vietnam, Indonesia, China and India, where growth remained positive amid the global slowdown, are examples of economies that have shown more resilience than other export-dependent nations because of domestic consumption, Liew said.

“The pickup in growth in the second quarter in Vietnam was domestic based” helped by the fuels, transport and garment industries, said Gruenwald of ANZ. “Output from the state sector seems to be growing faster than the rest of the economy as well. GDP growth should rise during the rest of 2009 as the fiscal stimulus plan continues.”

Vietnam’s government is aiming for 5 percent growth this year, down from a previous target of 6.5 percent. The economy grew 6.2 percent last year, the least since 1999.

Slowest Growth

Growth in the first quarter was the slowest pace on record as overseas companies trimmed investment plans and manufacturing weakened amid the worst global recession since the Great Depression. Pledges of foreign investment into Vietnam and planned capital increases for existing projects fell 77 percent in the first half from a year earlier.

Fitch Ratings downgraded Vietnam’s long-term, local- currency credit rating today by one grade to BB-, citing a “steady deterioration” in the country’s finances. The nation relies too much on oil-related revenue and an economic recovery won’t stop the fiscal deficit from ballooning, Fitch said.

The State Bank of Vietnam said yesterday it will keep interest rates unchanged this year to support economic growth. It is also focused on keeping consumer price gains under control after the National Assembly this month set an inflation ceiling of 10 percent for 2009.

Credit Suisse Group AG last week raised its growth forecast for Vietnam, predicting the economy will expand 4 percent this year, from an earlier estimate of 2 percent.

“Poor foreign direct investment and exports will weigh on fixed investment this year, but we are revising up our 2009 GDP forecast on signs of early global demand stabilization,” said Joseph Lau, a Hong Kong-based economist at Credit Suisse Group AG. Last quarter, the economy “probably hit its low point, but growth recovery will likely be relatively moderate.”