[ti:Vietnam Opens its Securities Companies to Foreign Investors]
[ar:Barbara Klein]
[al:Economics Report]
[by:www.21voa.com]
[00:00.00]This is the VOA Special English Economics Report.
[00:05.39]Vietnam is planning to open its markets
[00:09.23]to more foreign-owned securities companies.
[00:13.28]The plan is part of a larger effort
[00:16.73]to reduce government control of businesses
[00:20.43]and increase foreign investment.
[00:24.43]But a number of corruption cases
[00:27.38]are a concern for many Vietnamese.
[00:31.37]And rising prices could be a threat to economic growth.
[00:36.90]The Vietnamese economy has slowed
[00:41.16]after about ten years of fast growth.
[00:45.46]And debt is a problem for the country's banks.
[00:49.81]Small businesses are struggling to get loans,
[00:54.07]and some people have lost jobs.
[00:57.81]In July, the government announced plans
[01:01.62]to restructure some of the biggest state-owned groups.
[01:06.41]They include the country's biggest oil producer, PetroVietnam.
[01:13.50]But the recent arrest of banker Nguyen Duc Kien
[01:18.91]for financial crimes shocked investors.
[01:23.01]Stock prices dropped sharply immediately after his arrest.
[01:28.71]In September, officials announced a change in rules
[01:34.25]for foreign ownership of Vietnamese securities companies.
[01:39.15]Under the new rules, foreign banks,
[01:43.40]investment and insurance companies
[01:46.36]can buy up to one hundred percent of the shares
[01:50.46]in an existing securities company.
[01:54.01]Economists say the move provides support for privatization.
[02:00.16]Vuong Quan Hoang is an economist with the University of Brussels.
[02:06.86]He says the move is an important step for Vietnam.
[02:12.20]VUONG QUAN HOANG: "For foreign securities companies,
[02:16.81]I think this is going to be a good thing."
[02:19.51]But Vuong Quan Hoang says the changes
[02:22.97]will likely not be felt for another twelve months,
[02:27.53]when the economy is stronger.
[02:30.28]He says there is a lot of work to be done now.
[02:35.09]And, he adds, there could be trouble
[02:38.91]in the Vietnamese real estate market.
[02:42.25]VUONG QUAN HOANG: "There are issues
[02:43.06]with the real estate market, which is something big,
[02:46.54]and the interconnection between the real estate market,
[02:50.73]the securities market and the banking system."
[02:53.54]There are already growing signs of
[02:56.39]public dissatisfaction with the economy.
[03:00.70]Recently, a group of students protested
[03:05.00]near the offices of PetroVietnam and the gas company Petrolimex.
[03:13.13]One student says rising fuel prices hit poor people hardest.
[03:19.69]And there is growing anger over corruption.
[03:23.89](SOUND)
[03:26.18]This student says people are expected to pay bribes,
[03:29.69]providing money or gifts to officials
[03:33.18]to get the most basic services, like hospital care.
[03:38.22]Observers have welcomed the actions Vietnam has taken.
[03:43.37]But politics and the economy are linked in the country.
[03:48.37]And how well reforms will work remains unclear.
[03:53.82]And that's the VOA Special English Economics Report.
[03:59.00]I'm Barbara Klein.