Job Discussion Forums

[baygioimdi]

There are many countries around the world which are not "normal", China, Lao, Cambodia, just to name a few in the region. In addition, countries in latin america, africa generally would fit that description. In fact, I think we are talking about developing versus industrialised countries.

Furthermore, what is "normal"? Normal would probably be the norms and values of the society where one comes from. Well, I'm not from Vietnam and
of course there are many things I don't like about her people and their values. However, I don't mind going to the market and negotiating the price of a bunch of bananas, in fact I enjoy it. And so do the majority of the Vietnamese. Is it childish? Far from it, it's one of the norms in Vietnam. As my father used to say, if you don't like it here, don't let the door hit you in the arse.

I suggest one learn some Vietnamese and use the negotiating as a way to develop ones language skills.

Cheers

[just noel]

As we know now, the government further devalued the Dong a few days ago. I checked the black market rates at gold shops out of curiosity.

Yesterday I had a corporate class with adults in the late 20s and early to mid 30s.

They are very pessimistic towards the VND. They buy USD and gold every time they get paid their salary. Some are even buying Chinese RMB at the gold shops.

I asked why there were so negative towards the VND, and I noted it was the government (Central Bank) that was intentionally devaluing the Dong.

They just repeated that the Dong was "no good" and only to be used for "transactions." As a currency they have no confidence in the Dong.

I tried to play Devil's Advocate, but they wouldn't change their minds.

Part of this running away from the Dong, whether to appropriate reasons or not, is because of a strong lack of confidence.

These adults also told me repeatedly to take my VND out of my savings account and by USD, and buy something else instead of keeping it in Dong.

I believe savings rates at most banks is now 14%. Again, this is not good.

[Marmaduke]

Look, I'm a newbie, and I understand that inflation has and is having an ongoing and negative effect in much of SE Asia. This includes Australia - utility bills have increased about 50% over the past two years as the government makes their first stumbling steps into sustainable energy (wind farms, desal plants etc., all of which come in horribly over budget as per usual).

I haven't been to VN for six years, but when I was there the Aussie dollar was at 9k dong. At that rate pho cost a little over a dollar (although I had a bowl that gave me mild diarrhea in Nha Trang for 50c, nomnomnom), a ba ba ba was a dollar, dinner was ~$3, $5 if you wanted somewhere nicer or a couple of courses or a beer with it. When I mention those prices to Viet nationals over here they shake their heads and bemoan how pho is now 20k, beer is 20k, a nice dinner is 60k etc. Are these not the same prices with the current currency rate? Sometimes I think the extra zeroes on the Viet monopoly money mess with people's minds, though I can understand if you land in-country with less than $500 in your pocket how easily you can start freaking out if you think you're getting ripped off. I'm planning to land with a little more than that. If it all goes pear-shaped, then I'll run back to Australia at the end of '11 and teach ESL in a high school starting at $60K a year. If you think that sounds good, then imagine you're paying $150/wk for a decent room in a share house, $10 for lunch, $20 for a nice cooked breakfast and a coffee.

It's all relative.

[haller_79]

[Insubordination]

Seconded. $150 might get you a carspace in Bondi. Not many high school ESL jobs here either. Am feeling the pinch.

[sigmoid]

This is from today's Financial Times.

http://blogs.ft.com/beyond-brics/2011/02/21/vietnam-inflation-still-looms/

Vietnam: inflation still looms
February 21, 2011 10:24 am by Ben Bland

Some key points:

- Vietnam�s main stock market index suffered its biggest intra-day fall in 15 months on Monday

- The benchmark VN-Index fell 4 percent to 483.68 points as traders fretted over the government�s decision to increase electricity prices by a record 15 percent this year

- Many businesses think that the price increase is needed to boost the "coffers" of Electricity of Vietnam, the ailing state power monopoly that has warned of serious energy shortages this year

- The government has also hinted that it may increase fuel prices

- some "wheeler-dealer petrol station owners" have started closing early in order to hoard fuel now to sell once the price has gone up

- Vietnam�s difficulties are unique. The problem is less inflows of hot money than expansionary monetary policy, a large trade deficit and a chronic lack of confidence in the currency, the dong.

- On Monday, Moody�s warned that the latest devaluation was �negative� for V - ietnamese banks� credit ratings �as it is likely to weaken their asset quality and capital and increase their liquidity management challenges.�

- The ratings agency warned that companies borrowing in dollars but generating cashflow in dong would face a squeeze of the sort faced by their Thai and Indonesia peers during the 1997-1998 Asian Financial Crisis.

- This type of currency mismatch was one of the critical issues for Thai and Indonesian banks during the Asian financial crisis of 1997-98 and a major driver of high non-performing loans (NPLs) in those countries at the time.

- on Monday the dong traded at a mid-point of 22,100 to the dollar in the widely-used black market, 7 percent below the official rate.

As one landlord told beyondbrics: �I demand that people pay in dollars or dollar-equivalent amounts as no-one trusts the dong.�

[sigmoid]

This article tries to put a more positive spin on the VN economic situation, but ultimately isn't very convincing.


Why Vietnam's outlook isn't all doom and gloom

Michel Tosto, the director of institutional sales and brokerage at VietCapital Securities, talks about Vietnam's GDP, FX reserves and the overall confidence in the Vietnamese dong

http://www.financeasia.com/News/248961,why-vietnams-outlook-isnt-all-doom-and-gloom.aspx

Some excerpts:

[spycatcher reincarnated]

Largely agree with him, but note:

he has a huge vested interest in keeping the VND stable so anything he says must be taken with a truck load of salt. His compay's NAV was just negatively adjusted because of the VND devaluation and he can't afford for this to happen again.

Thought he would have played up the amount of gold in the country a bit more than he did. This is estimated at 1,000 tons (50 billion usd, I think). It is not usual to add gold reserves in to foreign currency reserves, but in Vietnam it seems like a valid argument to me.

Believe Vietnam has the highest usd interest rates in the world so a lot (no idea how much) of the $8 billion in remittances is just gathering interest in Vietnam and could flee the country when interest rates here are less attractive.

Fundamentals don't look too bad, the real issue is that Vietnamese are destroying their own currency as they have no faith in it. The government needs to somehow convince them it is a good currency.

[Charvo]

The fact that the deposit interest rate is so high shows me that there is actually a lack of dollars in the system. Banks want dollars to lend because people are probably speculating like crazy and buying commodities to store in their houses like the Chinese are doing.

[Snaff]

[Mattingly]

[Charvo]

If there are more power outages than last year, than Vietnam is headed for a world of hurt especially when air conditioners are running full blast. I work in a school in which they have to run the diesel generators when the power cuts off. Considering diesel got jacked up in price, that is a huge cost to the school. Are they going to raise tuition? I doubt it with the economy teetering on the edge. I think teacher salaries are going to be impacted.

[sigmoid]

Vietnam government justifies power, petrol hikes

Deputy standing Prime Minister Nguyen Sinh Hung said Thursday that the price hike in electricity and petrol is necessary while the finance minister maintained that a 62% increase in power rates is needed for the electricity sector to have profits.


http://english.vietnamnet.vn/en/politics/5242/vietnam-government-justifies-power--petrol-hikes.html

[snollygoster]

I have saved some dong and brought it with me when I left Vietnam.
It hangs in my WC next to the toilet paper in case the former runs out.
At least, being plastic, it IS reusable.

[Kornan DeKobb]