Economist Le Dang Doanh, a former adviser to the prime minister

[lynk2510]

HUAWEI, China's biggest maker of telecoms equipment, reversed course and accepted the recommendation of the Committee on Foreign Investment in the United States that it revoke its acquisition of assets owned by 3Leaf, an American technology company. Huawei had already bought the assets, but officials at the Pentagon asked the CFIUS, which considers the national-security implications of takeovers, for its opinion. If Huawei had persisted, the White House would have had to rule on the deal.



ALIBABA'S chief executive and chief operating officer both resigned after taking responsibility for a scandal at the Chinese e-commerce website, in which some 2,300 online dealers conned their customers. The sellers had used fake documents to set up their businesses on the site, allegedly with the help of a small number of Alibaba staff.



An experiment conducted by the Nottingham School of Economics suggested that the payment of BONUSES to workers did not encourage greater effort, and actually led to more shirking. But when penalties are introduced for slacking, worker efficiency is enhanced, reducing shirking by half.







Vietnam Takes Aim at Curbing Inflation

The Wall Street Journal 21 February 2011



Vietnam's prime minister is expected to unveil a series of measures this week aimed at curbing inflation as the government faces increasing pressure to bring greater stability to the volatile economy. State Bank of Vietnam Gov. Nguyen Van Giau confirmed the pending announcement after state media reported that Vietnam has trimmed its 2011 credit-growth target to below 20% from 23%. Prime Minister Nguyen Tan Dung has approved a proposal from Mr. Giau to cut the target to below 20%, possibly as low as 18%, online news provider VnEconomy quoted the governor as saying. Mr. Giau said the move will likely cut the total money supply by 50 trillion dong ($2.38 billion), according to the report.



Muddled policy decisions in Vietnam have confounded economists worried about the lack of a clear direction for the economy. It continues to be blighted by surging inflation due to soaring commodities prices and a series of currency devaluations, as well as a hefty trade deficit thanks to sluggish exports and sharply rising imports. The proposed policy changes to combat price pressures come as the government Monday announced plans to raise retail electricity prices by an average 15.3% on March 1—more than double last year's increase, VnEconomy said, citing Deputy Minister of Industry and Trade Hoang Quoc Vuong. The potentially inflation-stoking decision sent Vietnam stocks tumbling 4%.



Vietnam's inflation rate accelerated to 12.17% in January from 11.75% in December. Data due this week are expected to show that inflation accelerated further to 13.1%, according to Nomura. The country ran a trade deficit of $1 billion in January following a deficit of $1.294 billion the previous month. Mr. Giau, meanwhile, added that the prime minister has said Vietnam is also trying to raise its budget revenue, limit the state budget deficit to 5% of gross domestic product and cut the government's regular expenditure by 10% this year. He said all these measures will cut total money supply by an additional 60 trillion dong, VnEconomy reported. "With aggregate demand being cut down by more than 100 trillion dong, the country's trade deficit would be narrowed by $3 billion-$4 billion," Mr. Giau was quoted as saying.



The Vietnamese economy, once considered one of Asia's most promising emerging markets, has been unable to reverse a persistent trade deficit, which has undermined the dong and reduced the country's foreign-exchange reserves. In an effort to balance the trade account, the State Bank of Vietnam devalued the dong by 8.5% against the U.S. dollar on Feb. 11, the fourth devaluation in 14 months. Last week, it raised its main policy interest rate—the rate it charges commercial banks for capital—by two percentage points to 11%. Moody's Investors Service said Monday that the devaluation could be credit negative for domestic banks as it may weaken their asset quality and capital, adding that it may also raise the "liquidity management challenges" facing Vietnamese banks, and will exacerbate the country's inflation problems. The devaluation, however, may stem the slide in Vietnam's currency reserves—which stand anywhere between $10 billion and $14 billion—and could also narrow its trade deficit, the rating agncy said. "However, without consistent policies to rein in excessive demand and control inflation, the positive aspects of the devaluation are likely to prove fleeting," Moody's said.



Economist Le Dang Doanh, a former adviser to the prime minister, said it is crucial the government introduces measures to ensure macroeconomic stability, including cutting expenditure and improving its investment efficiency. "The government should cut down on the budget deficit, a

crociere da ancona
Limu Company