VIETNAM'S ECONOMIC GROWTH SLOWS
HO CHI MINH CITY, Vietnam -- After a decade of reform in Vietnam, and great expectations, we are beginning to
see a slowdown in Vietnam's economic growth. Asia's economic downturn is taking its tolls on Vietnam, where attention
and investments return to local markets in the region. Foreign investment, particularly from Asian companies, as well as
regional export requirements significantly accounted for Vietnam's fast-paced development.
Now the Asian markets' demand for exports from Vietnam are expected to further weaken -- due to local economic
pressures and the rising dong, making pricing less competitive from Vietnam. Foreign investment is declining;
consumer sales are down (sales of electronic consumer goods fell 40% vs. last year), and there is hesitance among
consumer products companies to develop their businesses in Vietnam due to many of the same issues that have
plagued the country since the doi moi -- including enormously bureaucratic procedures and policies strongly
in favor of state-owned enterprises, despite years of rhetoric that things were going to change. That's not to say that
Vietnam doesn't hold promise for companies currently operating there, nor to say it isn't a good market in the coming
years.... in fact, Proctor & Gamble has been in Vietnam since 1995 and continues to invest heavily in that market,
with plans to add another US$50 - 70 million in local efforts.
But according to one of PANGAEA's associates in the country, Nguyen Xuan Oanh, chief architect of the doi moi economic
reforms and economic advisor to both governments of Vietnam, 'the ruling Communist party is allergic to reform.' "Communism
equals socialism equals control," he said.
Nevertheless, the long-term prospects for Vietnam are still promising, and the fundamentals are still evident. Despite a
downturn in productivity, industrial production year on year grew 13.1% in 1997 (though this is lower than last year).
The speed of change in Vietnam's earlier years may have created unrealistic expectations. While there has been a slowdown,
and there are certainly many obstacles that must be overcome, Vietnam still moves forward.
[Related Article; Related Books]
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S. KOREA ACCEPTS IMF ASSISTANCE
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THAILAND COMMITTED TO FINANCIAL RECOVERY
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SEOUL, S. Korea -- To ease S. Korea's financial crisis, the government of S. Korea agreed to an (International
Monetary Fund) IMF-led rescue package of US$57 billion, just two weeks before their presidential election (on Dec. 18).
As the world's 11th biggest economy, the global impact of a crisis and it's recovery are enormous. In exchange for this
support, the government agreed to substantial changes in policy, including changes that allow foreign investors to take
bigger stakes in domestic firms and local industry. Because of the pending election, the head of the IMF, Managing
Director Michel Camdessus, talked with presidential candidates to declare their backing for the IMF reform program.
Reader's Comments
(Source: YOUR LINK HERE)
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BANGKOK, Thailand -- 56 of Thailand's 58 finance companies will be shut down by the government's Financial
Restructuring Authority in compliance with an IMF agreement, in return for a US$17.2 billion rescue package of emergency
bailout loans. It is expected that nearly 20,000 employees will be laid off throughout the industry.
The only two firms judged sound enough to reopen are Kiatnakin Finance and Securities and Bangkok Investment.
Both will be allowed to resume operations and have 90 days to comply with rehabilitation plans.
The government is committed to recovery. Finance Minister, Tarrin Nimmanahaeminda, was quoted saying, "The sooner the
financial system is restored to health, the quicker the economy will recover, making sustainable growth certain in the future."
(Source: YOUR LINK HERE)
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CANADA'S ECONOMIC OUTLOOK IS STRONG
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H.J. HEINZ EXPANDING RUSSIAN BUSINESS
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OTTAWA, Canada -- Canadian industries are operating at near record capacity (at 86.2% of capacity in the third
quarter of 1997), according to government officials. Canada's rosy economic outlook can be attributed to high foreign demand,
strong business spending on plant and equipment, low interest rates yielding increased consumer spending. In fact, the leading
US automobile makers -- GM, Ford and Chrysler -- note a 12.2% increase in their Canadian sales.
(Source: YOUR LINK HERE)
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MOSCOW, Russia -- H. J. Heinz has plans to build a ketchup and sauce factory in Moscow by the Year 2000,
using locally produced ingredients and raw materials. They will invest around US$20 million. Heinz already produces baby
food in Russia, which maintains a 17% market share. They began making cereal in Russia one and a half years ago, also using
local ingredients.
(Source: YOUR LINK HERE)
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BEER GROWTH IN EMERGING MARKETS
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WOOLWORTH SELLS MEXICAN OUTLETS
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World -- Beer companies that are not selling in emerging markets are missing this decade's biggest growth opportunity.
"Emerging markets account for all of the growth being seen globally," according to British investment banker Robert Fleming.
Some of the leading factors that make the emerging markets of Asia, Latin America, Africa and eastern Europe so attractive for the
beer industry include: young demographics, rising disposable incomes and market liberalization. Emphasis on exports is evident
among the world's largest brewers. Heineken NV, the world's second largest, and South African Breweries Ltd.
(SAB), the fourth largest, now export 80% and 34% of their beer, respectively. In fact, SAB's Castle brand is one of the
fastest growing brands in the global market, with an average 17% increase in sales between 1990 - 1996.
(Source: YOUR LINK HERE)
[PANGAEA specializes in consumer
marketing insights and integrates the full spectrum of business
intelligence into thoughtful market launch strategies for its clients.]
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America -- US company, F.W. Woolworth Corp., completes its divestiture from the general merchandising business
in North America with their recent sale of Woolworth Mexicana, S.A. de C.V. early this month. Their current strategy is to
focus on athletic and specialty retailing and are converting at least 130 of its former U.S. general merchandise locations to Foot
Locker and Champs Sports athletic outlets.
Woolworth Corporation operates more than 7,100 retail stores in 12 countries throughout North America, Europe, Australia and Asia.
(Source: YOUR LINK HERE)
NOTE: Reprints, downloads or copies of this issue are available for US$5.00 per copy,
payable on the honor system to PANGAEA.
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