Vietnam

Vietnam's inflation posted another double-digit rise ahead of the Lunar New Year, adding pressure on authorities to raise interest rates to slow the nation's growth and curb pressure on its currency, The Wall Street Journal reported. The nation has struggled to deal with several economic stresses, fueling concerns about the government's ability to manage fiscal policy as the trade deficit balloons and the Vietnamese dong remains persistently weak, bucking a trend across the region.

Vietnam's nearly-bankrupt shipbuilder Vinashin yesterday said that it will be allowed to take out interest-free loans, in another concession after it reportedly defaulted on a debt to international lenders, Agence France-Presse reported, according to Dow Jones Daily Bankruptcy Review today. Vinashin said Prime Minister Nguyen Tan Dung had authorized companies, workers, and former employees of Vinashin group to borrow money at zero percent interest from the state-owned Development Bank of Vietnam.

State-owned shipbuilder Vinashin's default on a $600 million loan late last week is just the latest crisis challenging Communist-run Vietnam's ability to get its economy under control after years of pell-mell growth and spiraling inflation, the Wall Street Journal reported today. Last week's default by shipbuilder Vinashin could be a make-or-break moment for Vietnam, say some analysts. Above, a ship is worked on at Vinashin's Nam Trieu shipyard in Hai Phong.

Creditors of Vietnam Shipbuilding Industry Group, better known as Vinashin, are seeking a commitment from the government that it will not let the state-run shipbuilder fail, Dow Jones Daily Bankruptcy Review reported today. Vinashin is seeking a standstill agreement on a $600 million international loan arranged by Credit Suisse in 2007 as a $60 million principal repayment was due Monday.

Vietnam's beleaguered state-run shipbuilding company does not have enough money to make a $60 million loan payment next week, and has asked foreign creditors for more time to pay, state-run media reported Tuesday. Nguyen Ngoc Su, chair of the Vietnam Shipbuilding Industry Group, is quoted in the online newspaper VietnamNet as saying that he informed creditors on Dec. 10 that it will be impossible for the company to make the first repayment of principal due Dec. 20 on a $600 million loan from a group of creditors led by Credit Suisse.

Vietnam's legislature has rejected a lawmaker's rare call to investigate senior government leaders in a scandal involving a state-run shipbuilder that resulted in billions of dollars of debt, state media reported Friday. The National Assembly, dominated by lawmakers from the ruling Communist Party, has long been considered a rubber stamp and has never called for an investigation of the government, but has recently become increasingly vocal about the government's performance.

Vietnam will restructure Vinashin, its top shipbuilder, cutting its non-core businesses after the firm was found to be nearly bankrupt, a ruling party commission said, Reuters reported. The case of Vinashin, which followed a pilot scheme to reform state-run businesses, has raised concern over the effectiveness of the reforms, economists have said. The ruling Communist Party found Vinashin Chairman Pham Thanh Binh, who also heads the party chapter at the firm, "irresponsible in the mobilisation, management and use of the state capital, pushing Vinashin to the brink of bankruptcy".

Two Australian Qantas executives have been held in Vietnam and the former boss of joint venture Jetstar Pacific arrested over losses at the budget carrier, The Australian reported. Qantas executives Daniela Marsilli and Tristan Freeman have not been formally charged but were forced to spend Christmas in Vietnam and are still prevented from leaving the country. The two are part of a team seconded to modernise Jetstar Pacific, 27 per cent owned by Qantas.

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, The Wall Street Journal reported. 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.

According to a recent study conducted by Asian Banker Research, Malaysia is listed fourth in the Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors can expect to recover more than 80 cents in the dollar of assets they are owed, the Malaysian national news agency reported. The findings of the study released today said Singapore and Japan were Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors could expect to recover more than 90 cents in the dollar. Taiwan came third with a similar rate of recovery with Malaysia.