Vietnam in the bank
vietnam
Qj
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WHAT'S NewS Issue 7 July 1996
13
We've had the premises in Ho Chi Minh City for a number of
months and the appointment of Lai Chong Tuck as
representative was official back in April, but we only
received the licence in the second week of June.
Yet, Lai had already packed his
bags and relocated to a market
he has been working since
1990. 'We've been marketing
Vietnam since then,' he
confirms. 'But let me give you
a bit of background. After the
Americans withdrew in 1975,
Vietnam was supported
economically by both the
^Phinese and the former
Comecon countries. This
continued until the Vietnamese
invaded Cambodia in order to
stop the Khmer Rouge and the
killing fields. But that also
resulted in a withdrawal of
Chinese aid. Then the Berlin
Wall feil and Vietnam could no
Every aspect of a bank's
operation is under increased
scrutiny.'Ourexternal auditors,
Ernst Young, always had to
submit their report to the
Central Bankannually-that's
^iormal. But since the Barings
Pffair.it has issued a statement
requiring a strong.ongoing
internal audit and this could
mean we, as internal auditors,
may be given a reporting
requirement in the future. For
the moment, the Central Bank
has placed great emphasis on
monitoring derivatives trading.
We have to continuously ensure
that the systems and
procedures we have in place,for
example on risk management,
are adequate for what we're
doing.'
longer look to the former
Soviet Union for support. Then
their own centrally-planned
economy failed. That is it in a
nutshell. Given this backdrop,
you could say Vietnam was
obliged to introducé the open
door policy that is now in
place.'
The open-door policy is,
according to Lai, still in an
experimental phase. But the
country is interesting for
Rabobank partly because of its
intensely agri-based economy.
'This is a country of 70
million, of whom around 80
percent still live in rural areas
and are involved in
agriculture,' he says. 'At
present, agriculture accounts
for around 35 percent of total
GDP, followed by heavy
industry. In the years we've
been active there, we have
build a base. We have
successfully developed off
shore trade finance, although
that is still predominantly in
the field of LC confirmation
and discounting. But we're
also busy working on LC
financing activities.'
Another area where Lai sees
real potential is in agri-project
finance. 'This is a poor
country, the people are poor.
This means meat consumption
is very low. It is expensive
because it is produced on
individual farms and not using
modern industrial farming
methods. So we envisage a lot
of foreign investment will be
going into that area. In fact,
we're already involved in a
poultry project in Ho Chi
RABOBANK VIETNAM
REPRESENTATIVE
OFFICE
nr.8 Nguijen Hue Street
District One
Ho Chi Mihn City
Vietnam
Minh. The Vietnamese
government has estimated
investment requirements of
something like USD 1 billion
per year over the next few
years. So agri-project finance is
a very interesting sector for
us.'
Over the years, Rabobank has
built up sound relationships,
not only with state-owned
banks, but also with
enterprises. 'We have
two years. Now into its third
year, this program means we're
involved in four northern
provinces.' Asked how useful
this kind of activity is, Lai is
enthusiastic. 'This is an
emerging market,' he says. 'As
I told you, the people are very
poor. Even in normal bank-to-
bank dealing, we find there's a
lot of education involved, a lot
of holding people's hands,
helping them along. Tm
convinced that you will
achieve greater success if you
go in prepared to both help
people and, of course, make
money - more so than if you
simply go in with a hit and run
attitude. I really believe that.'
Is there anything else he wants
to teil the network? 'My
Lai Chong Tuck
developed a reputation for
providing assistance,' confirms
Lai, 'and not only in finance
and other banking products.
The Rabobank Foundation has
done a lot of aid work in
Vietnam. In conjunction with
the World Bank, the
foundation people began work
with the state-owned Bank for
Agriculture in 1992 to set up
cooperatives in the North. It
was a two-year contract. It
was so successful that it has
been extended for a further
secretary's name,' he laughs.
'That's important because we
really see the Ho Chi Mihn
operation as a marketing tooi
for the whole network. We're
not only looking at trade and
agri-project finance here, but
also at the opportunities
offered by export credit
programs. We're here to work
for the whole network. Oh,
yes, if I'm out of the office,
you'11 get Pham Thi Ho Van on
the line; she's our secretary -
call us.'
VIETNAM
Inmiddels is een licentie ontvangen voor de vestiging in Ho Chi Minh City. Lai Chong Tuck, afkomstig van kantoor Singapore, is
sinds april dit jaar onze officiële vertegenwoordiger. Hij zal de vanuit Singapore opgebouwde basis in dit sterk agri-gerichte land
verder gaan uitbouwen. Op dit moment vindt de productie nog voornamelijk plaats op kleine individuele boerderijen. De Vietnamese overheid
schat de jaarlijkse investeringen in deze sector de komende tijd op USD 1 miljard. Agri-projectfinanciering biedt hier dus grote kansen.
