Local companies at an online conference Friday urged the government to ease bank loan restrictions and mull solutions to the lingering power shortage that has crippled some Vietnamese businesses.

Officials from the Ministry of Industry and Trade and company leaders from Hanoi and Ho Chi Minh City conferred via internet on how to boost exports in the second half of the year.

All business representatives complained that lending restrictions and high interest rates had caused a capital shortfall.

Most feared that the year-end target of accumulating US$61.2 billion in export turnover might not be met.

The government has restricted dollar loans to certain industries to narrow the trade deficit and slow inflation.

The State Bank of Vietnam (SBV) raised borrowing costs for the third time this year last month and tightened credit controls to rein in an inflation rate of 26.8 percent in June.

Nguyen Huu Dung, vice chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP), criticized the lending restrictions for only limiting the sale and lending of dollars to companies importing and producing essential products like fuel, paper, steel and coal.

“Why are exporters restricted to borrowing foreign currencies when we are the main force bringing foreign currency into the country?” Dung said at the conference.

He asked SBV to relax lending restrictions on exporters.

Nguyen Chien Thang, chairman of the HCMC Fine Arts and Wood Product Processing Association, said orders for domestic furniture were just two-thirds as high as they were over the same period last year because businesses could not afford the rising costs of production due to capital shortages and high interest rates.

Speaking at the conference, Deputy Minister of Industry and Trade Bui Xuan Khu said his ministry would ask the government to ease lending restrictions on exporters.

The ministry would also dispatch personnel to meet with businesses monthly to resolve problems, Khu said.

Lights out

Several business leaders at the meeting agreed that the country’s efforts to boost export turnover would all be for naught if chronic power outages were not curbed immediately.

Nguyen Duc Thuan, chairman of the Vietnam Leather and Footwear Association, said some industrial parks were experiencing power losses without notice four times a month on average.

Such outages were hindering production, he said.

The outages have been nationwide over the last several months, making many industries incur losses.

VASEP’s chairman Nguyen Huu Dung said the unstable power supply had hit fisheries particularly hard over the past three months.

Blackouts occurred at some fish processing facilities some 10 times per day, he said, leaving fish to die in large numbers without the electricity needed to cool their tanks.

Some Pangasius processors have had to reduce their output to 50percent of capacity due to the power shortages, he added.

Nguyen Chien Thang from the HCMC Fine Arts and Wood Product Processing Association said many furniture plants were experiencing the same problem.

Speaking at the conference, officials from the state monopoly power supplier Electricity of Vietnam (EVN) attributed the power shortage to the fact that technical problems at several power plants had left EVN short of around 2,600-2,700 megawatts.

A nationwide drought has also affected reservoirs needed for hydropower, EVN said.

The supplier said it had summoned the leaders of local electric companies to castigate them for the frequent power outages.

But Nguyen Thi Hong, HCMC’s vice mayor, said merely reprimanding the electric companies would not be enough of a deterrent to solve the problem.

She suggested EVN follow the example of the State Bank of Vietnam, which had recently fired two bank directors for flouting central bank loan regulations.

Deputy Minister Khu agreed with Hong, asking EVN to penalize those accountable for the frequent and unexpected power cuts.

He too instructed EVN and the National Load Dispatch Center to be in close touch to tackle the problem.

June export turnover was estimated around $6.2 billion, a 49.1 percent increase from the same period last year.

The export turnover during the first half of this year hit $30.6 billion, up 35.8 percent year-on-year.

Source: Thanhniennews