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Vesuve
Joined: 18 Dec 2004
Posts: 28
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 Posted: Tue Dec 28, 2010 8:28 am Post subject: Vinashin, VN Economy, and Teaching |
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The news is getting about the Vinashin and the arrest of the managers for mismanagement. Vietnam's credit rating by Moody's has been downgraded, and there is the natural speculation that follows:
Is the Vinashin situation a sign of things to come? Inflation is over 12%, and the currency has been weakening.
Will this affect teaching opportunities? Some claim the house of cards is not stable. Below, an article for some perspective.
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Vinashin May �Jeopardize� Vietnam Debt, Moody�s Says
December 27, 2010
More From Businessweek
By Bloomberg News
Dec. 24 (Bloomberg) -- Vietnam and its state-backed companies will face greater difficulties borrowing money after reports Vietnam Shipbuilding Industry Group defaulted on a loan, according to Moody�s Investors Service.
Vinashin, as the shipbuilder is known, failed to meet an extended deadline to make a $60 million loan payment to foreign creditors yesterday, the Financial Times reported, citing unidentified people familiar with the situation. Vinashin Chairman Nguyen Ngoc Su declined to comment when contacted on his cell phone by Bloomberg News today.
�The implication of the Vinashin default is that it might not be company-specific after all,� Alan Greene, a Moody�s senior credit officer, said in a phone interview from Singapore. �The question now is why, seemingly for the sake of $60 million, has Vietnam jeopardized access to credit markets?�
Vietnam�s debt rating was cut by Standard & Poor�s yesterday by one rung to BB-, three levels below investment- grade, putting it on par with Bangladesh and Mongolia. The downgrade followed a similar move by Moody�s earlier this month, adding to pressure on a government striving to tackle inflation of 11.75 percent, a 22-month high, and a weakening currency. |
Link: http://www.businessweek.com/news/2010-12-27/vinashin-may-jeopardize-vietnam-debt-moody-s-says.html
Worth noting that this article is 3 months old. But obviously, relevant.
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Friday, September 24, 2010
Vinashin: State Capitalism Undone in Vietnam?
Vietnam has received much attention in recent years as a China mini-me. Their most obvious shared characteristic is being among the last few communist states (we too have the Lao People's Democratic Republic in ASEAN). One must remember, though, that these two states didn't get along well for a very long time over Vietnam invading Chinese client state Cambodia during its Khmer Rouge years. And, among ASEAN members, Vietnam most strenuously contests dominion over the South China Sea islands with China. So there's not much love lost here.
In this day and age, I don't suppose there is anything exceptional about states wanting to retake the commanding heights given the outward success many observe in China: "See? The Chinese Communist Party can have its cake and eat it too!" In recent years, Vietnam has been trumpeted as the world's second fastest growing economy after the PRC. However, recent reports suggest Vietnamese state capitalism is more brittle than the Chinese variety. In fact, the largest state-owned enterprise in Vietnam, shipbuilder Vinashin, is on the brink. Plied plentiful cheap credit by national banks, it is now coming undone. From the Wall Street Journal:
About a third of Vietnam's economy, however, is controlled by state-owned companies�part of a policy to ensure that key industries such as oil, mining and shipbuilding stay under Vietnamese control. Now the dangers of that strategy are becoming clearer amid a deepening financial scandal at Vietnam Shipbuilding Industry Group, or Vinashin, that is raising questions among investors about how much longer the country can afford to pump up its state enterprises.
In recent weeks, Prime Minister Nguyen Tan Dung has removed two successive bosses at Vinashin after its debts ballooned to over $4.7 billion, pushing the company, one of Vietnam's largest, to the edge of bankruptcy. Former chairman Pham Thanh Binh was arrested in August for allegedly falsifying the shipbuilder's financial statements and breaking other laws; his replacement, Tran Quang Vu, was arrested later that month, pending an investigation into his activities running the company's shipyards.
Neither Mr. Binh nor Mr. Vu could be reached for comment. Legal analysts say that under Vietnam's legal system, they might not be assigned a lawyer until their cases reach court. Three other executives, a former financial controller and two subsidiary managers�none of whom could be reached for comment�are also being detained. In an interview with local media prior to his arrest, Mr. Vu said he was "dizzy" at the speed with which Vinashin unraveled.
Vinashin's fundamental problem, according to internal government documents viewed by The Wall Street Journal, is that it expanded too aggressively in its bid to become a major global shipbuilder. Lax oversight and a pervading disregard for financial regulations added to the crisis, the documents said. Some independent analysts say the company's strong political connections also prevented the scale of the problems at Vinashin from emerging until the company was on the brink of disaster.
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Link: http://ipezone.blogspot.com/2010/09/vinashin-state-capitalism-undone-in.html |
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fladude
Joined: 02 Feb 2009
Posts: 432
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| Posted: Tue Dec 28, 2010 8:27 pm Post subject: |
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| I'm of the opinion that most Asia including China is due for a credit contraction. There has been WAY too much money thrown into these economies. The price of real estate is an obvious example of what I'm talking about. As we saw in the USA, when the price of real estate goes beyond what people can realistically pay for it, then the price will go down. Since current prices are built with leverage, there will be de-leveraging. Which translates into defaults on loans, which means that banks will go out of business. I doubt that the world governments will bail the banks out a second time in such a short period...... |
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TimkinMS
Joined: 18 Oct 2005
Posts: 86
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| Posted: Wed Dec 29, 2010 3:17 pm Post subject: |
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| fladude wrote: |
| I'm of the opinion that most Asia including China is due for a credit contraction. There has been WAY too much money thrown into these economies. |
Definitely.
And how much of this shoddy, and outright fraudulent lending has taken place that we don't even know about. Not much transparency. There isn't a lot of transparency in the US, but there is much less here in Asia.
How deep does this Vinashin cancer go?
We can only speculate.
Because people can only speculate, locals here go into "dollar-mode" and they have further lost their faith in banks here in Vietnam.
As for inflation, if you have noticed, the price of my can of Hanoi beer has gone up, as well as my beloved Mi Xao Ga. These prices have gone up for everyone and not just me, the "foreigner." Mi Xao Ga went up from 30K to 35K and two months later (now) it's 40,000 dong for Mi Xao Ga.
Sure, a lot of places sell this fried noodle with chicken dish for 30K, but my point is: the working, regular folk, are the ones feeling this higher prices. As always.
Vietnam was at first immune from the US and Western global meltdown and subsequent slowdown. But now the same symptoms are emerging in Vietnam.
The question is, how much will it hurt? Maybe a little; maybe a lot.
The EFL market in Saigon has appeared to stall out and even decline for adults. The children's market is there will always be there, but many long-term teaches claim their hours are down.
Sure Tet is coming as Tet always does arrive.
But the overall EFL market is anyone's guess. There will always be students paying and therefore demand. But how many will there be?
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The price of real estate is an obvious example of what I'm talking about. As we saw in the USA, when the price of real estate goes beyond what people can realistically pay for it, then the price will go down. Since current prices are built with leverage, there will be de-leveraging. Which translates into defaults on loans, which means that banks will go out of business. I doubt that the world governments will bail the banks out a second time in such a short period...... |
Yes IMO, the price of real estate in certain areas (many areas) of the city limits and burbs of Saigon and Hanoi are highly over-valued.
When this will correct itself? De-leveraging will be factor, but many can actually put down LOTS of cash to buy a house. The money is rolling in from....dubious sources....
But Vietnam has been rated above a "3rd world nation" now and certain aid is ending. At the same time (now) Moody's downgraded Vietnam investment grade status, which means foreign investment should decline. |
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1st Sgt Welsh
Joined: 13 Dec 2010
Posts: 946
Location: Bandar Seri Begawan, Brunei
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| Posted: Thu Dec 30, 2010 12:56 pm Post subject: |
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| TimkinMS wrote: |
Vietnam was at first immune from the US and Western global meltdown and subsequent slowdown. But now the same symptoms are emerging in Vietnam.
The question is, how much will it hurt? Maybe a little; maybe a lot.
The EFL market in Saigon has appeared to stall out and even decline for adults. The children's market is there will always be there, but many long-term teaches claim their hours are down.
Sure Tet is coming as Tet always does arrive.
But the overall EFL market is anyone's guess. There will always be students paying and therefore demand. But how many will there be?
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Couldn't agree more and I am actually a little bit concerned about this. I think schools specialising in General English programmes will be mostly OK. Indeed, a hard economy may even help as there will be more incentive for people to improve their qualifications (which includes their English skills) so they can be competitive in either getting a job or even, if things start getting really bad, keeping their existing jobs.
The schools that are known for their Academic English/IELTS classes will probably be the hardest hit and this will not be because of the expense of their lessons. If the economic crisis really starts to bite here, fewer families will be in a postion to financially support their children whilst they are studying at an English speaking university abroad. Picking up the tab for your child to spend three years or more studying as an international student is a huge outlay and the vast majority of Vietnamese families would never be able to even consider it. If the crisis starts to hit here in earnest this already small minority will shrink even further and, instead of their children going overseas, more and more of them will just have to get their degrees in Vietnam. The motivation to learn Academic English therefore drops and so do class sizes.
Of course, there is not much we can do about any of this and we will just have to see what happens and hope for the best  |
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deadlift
Joined: 08 Jun 2010
Posts: 267
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| Posted: Thu Dec 30, 2010 1:15 pm Post subject: |
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| If the crisis starts to hit here in earnest this already small minority will shrink even further and, instead of their children going overseas, more and more of them will just have to get their degrees in Vietnam. |
If it does work this way, it could well be good news for the "international" universities in town. Teachers could just end up going from teaching IELTS to teaching in IELTS-esque academic programs. |
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sigmoid
Joined: 21 Jan 2003
Posts: 1276
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| Posted: Thu Dec 30, 2010 2:35 pm Post subject: |
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The situation is reminiscent of the 1997 Asian Financial Crisis that started in Thailand under similar conditions: high FDI, massive real estate speculation, big trade deficit, downward pressure on the currency, a flow of soft loans...
Just as then, a repeat crisis could have an effect on the entire Southeast Asian region, so anybody thinking of teaching in the area should put their plans on hold and come up with a Plan B. Current teachers should also consider how they will react to a sudden slowdown (or worse) of the economy. |
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Vesuve
Joined: 18 Dec 2004
Posts: 28
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| Posted: Fri Dec 31, 2010 2:31 am Post subject: |
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| 1st Sgt Welsh wrote: |
| Couldn't agree more and I am actually a little bit concerned about this. I think schools specialising in General English programmes will be mostly OK. Indeed, a hard economy may even help as there will be more incentive for people to improve their qualifications (which includes their English skills) so they can be competitive in either getting a job or even, if things start getting really bad, keeping their existing jobs. |
Ss will continue to study, as a whole. Minor peaks and valleys at times, but English is valued, as well as education.
Hanoi and HCMC are two different breeds of cat in some regards. The money flowing into Hanoi is usually steady, being the capital, with a bloated bureaucracy, aid organizations, investment programs, and other things, I won't mention. Lot of fat bureaucrats, with monopoly money to spend, and in particular, on their childrens' education be it GE or IELTS study abroad programs.
Saigon, more business oriented, obviously. Dips happen, but usually don't last long.
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The schools that are known for their Academic English/IELTS classes will probably be the hardest hit and this will not be because of the expense of their lessons. If the economic crisis really starts to bite here, fewer families will be in a postion to financially support their children whilst they are studying at an English speaking university abroad. Picking up the tab for your child to spend three years or more studying as an international student is a huge outlay and the vast majority of Vietnamese families would never be able to even consider it. If the crisis starts to hit here in earnest this already small minority will shrink even further and, instead of their children going overseas, more and more of them will just have to get their degrees in Vietnam. The motivation to learn Academic English therefore drops and so do class sizes.
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Interesting times now, in the world.
I've been getting reports from Saigon that the adult GE market has been shrinking and that some of the larger language factories have a lot less Adult GE available (but of course plenty of kids and YL).
Any validity to the adult GE shrinkage?
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Of course, there is not much we can do about any of this and we will just have to see what happens and hope for the best |
People can hope all they want. It's human nature. There are also some goom & doomers that waddle in their pessimistic outlook.
Both, usually stay, and continue doing the same thing. And, this is fine. |
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Vesuve
Joined: 18 Dec 2004
Posts: 28
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| Posted: Fri Dec 31, 2010 2:38 am Post subject: |
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| sigmoid wrote: |
| The situation is reminiscent of the 1997 Asian Financial Crisis that started in Thailand under similar conditions: high FDI, massive real estate speculation, big trade deficit, downward pressure on the currency, a flow of soft loans... |
As I stated above, interesting time, Sigmoid. Hard to assess a house of cards when we're not allowed to look and see what the hand dealt actually is.
Right now there is this little "happy" campaign in the newspapers. Everything is rosy. Vinashin will rise and regain its "pride" and "proud tradition" because Vinashin just borrowed millions of dollars to pay its employees. Borrowing massive amounts of money just to meet the payroll. What about the next pay day coming?
Gotta love the media here.
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Just as then, a repeat crisis could have an effect on the entire Southeast Asian region, so anybody thinking of teaching in the area should put their plans on hold and come up with a Plan B. Current teachers should also consider how they will react to a sudden slowdown (or worse) of the economy. |
Yes, gotta have a plan-b. Gotta have enough in the bank for the plane ticket. Bus, will work also.
Last year, I was basically kicked out of VN twice, and in between paying extortionate prices for 3-month extensions. When the third kick-out date arrived, I left for a longer spell and quit my classes mid-term. School complained about this. Confused?
I learned a lesson: I always have to have enough bones in the bank or under the mattress to leave and re-settle.
Of course, I cam back. 
Happy New Year. |
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1st Sgt Welsh
Joined: 13 Dec 2010
Posts: 946
Location: Bandar Seri Begawan, Brunei
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| Posted: Fri Dec 31, 2010 1:25 pm Post subject: |
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| Vesuve wrote: |
I've been getting reports from Saigon that the adult GE market has been shrinking and that some of the larger language factories have a lot less Adult GE available (but of course plenty of kids and YL).
Any validity to the adult GE shrinkage? |
Some interesting comments guys. Vesuve, unfortunately there is a lot of validity to it. Both in terms of adult GE clases and IELTS. At this time of year it is only natural to expect things to wind down a bit for Tet, but I think there's more to it than that. We will see what happens in the next few months, but I suspect that in 2011 we will see a much tighter adult market in Saigon than what we experienced in 2010.
| Vesuve wrote: |
People can hope all they want. It's human nature. There are also some goom & doomers that waddle in their pessimistic outlook. |
True. I don't think we are even close to reaching the stage where we can justify shouting "abandon ship" and discouraging other potential teachers from trying their luck in Vietnam. Hopefully this will not happen later either, but you never know. However, one of the great things about being a single EFL teacher are the wordwide opportunities that are out there. If this country doesn't work for me, I'll move to another one  Of course, if you have a family here it's totally different so hopefully things will be OK. |
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Mattingly
Joined: 03 Jul 2008
Posts: 249
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| Posted: Sat Jan 01, 2011 2:16 am Post subject: |
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| 1st Sgt Welsh wrote: |
Some interesting comments guys. Vesuve, unfortunately there is a lot of validity to it. Both in terms of adult GE clases and IELTS. At this time of year it is only natural to expect things to wind down a bit for Tet, but I think there's more to it than that. We will see what happens in the next few months, but I suspect that in 2011 we will see a much tighter adult market in Saigon than what we experienced in 2010. |
On this thread and from hearing the chatter, it seems that hours are down in Saigon. Yes, this time of year does slow down.
But are some of the bigger chains providing less hours with adult classes?
I'm noting the bigger chains, because it's easy to observe them, then get info on the many smaller schools.
Since about 2008 I've got the impression that there were many teachers competing for a limited number of teaching jobs. The economic probs in the west caused younger folk to come and try teaching. Many don't stay longer than 1 year. They do leave. But there are always new ones to replace them.
Honestly, the wages in Saigon are not very good. They have stalled out. |
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The Mad Hatter
Joined: 16 May 2010
Posts: 165
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| Posted: Sat Jan 01, 2011 1:45 pm Post subject: |
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I second that, wages have stalled out in HCMC. I just applied for a job at a formidable "international" chain high school . Despite my having the work permit, which cost a lot of money years ago, I was told it did not satisfy the requirements for making the top wage the same as a work permit qualifies one for. This I would have to resubmit all documentation, which the labor board has taken last time. I told them I didnt have this documentation ( because I submitted it already) but obviously have the work permit. It has the name of another school.
So the wage was only 20 and hour which after taxes is 18 an hr , that was the same I made at that school five years ago. Its a joke. If I didnt have the work permit I would only make 13 after taxes. The top rate if you wait while they take forever to help you get the wp doubtless a difficult task is 25 which after taxes is like half in purchasing power of five years ago. |
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deadlift
Joined: 08 Jun 2010
Posts: 267
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| Posted: Sun Jan 02, 2011 6:49 am Post subject: |
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| If they're offering $20 an hour I wonder how "formidable" this school is (though I'm not quite sure what exactly you mean by that). Some of the higher-end language mills have wages approaching that. |
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