Sunday, October 29, 2006

Vietnam - Firms Bend to WTO

Under the pressure of looming WTO membership, domestic corporations are rushing to meet legal obligations by purchasing copyright licences for software from foreign companies but delaying acquiring similar copyrights for domestically-made products.

The country’s second largest state-owned bank in terms of total assets, Vietcombank, recently signed an enterprise agreement with the FPT Information System, Microsoft’s authorised dealer, and Microsoft to secure perpetual licensing rights of Microsoft Office 2003 for 4,000 users. The bank will also receive updates of any new Microsoft Office version that the world’s leading software company is set to launch within the next three years.

The agreement was the first of its kind among the non-IT business community to acquire such large numbers of licensing rights for end-users. Microsoft also signed an agreement with the Ministry of Finance of Vietnam on the same issue.

Vietcombank will run a number of Microsoft technology applications in its day-to-day reporting of financial performance, and use a wide range of genuine software, which includes the operating system software for servers and clients, database, media, programming tools and office software.

“IT applications are critical for all businesses that provide banking services. Making IT investment is highly important and must be done immediately to prepare for Vietnam’s WTO accession,” said Vu Viet Ngoan, CEO of Vietcombank.

Ngoan added that through the acquisition of IT, the bank aims to gain trust from investors who will hold shares in the bank once it is equitised.

Christ Atkinson, president of Microsoft Southeast Asia, said: “I applaud Vietcombank’s efforts in taking the lead in the business community in Vietnam to sign the enterprise agreement with us, ensuring genuine software for their computer system. This demonstrates Vietcombank’s vision for long-term good business performance and benefits.”

The bank has increased its annual budget for software copyright by around 30 per cent, reaching $3 million for the year. The budget for next year will be around $4m.

“We planned the purchase a year ago under the pressure of fair play in the WTO framework and the equitisation process,” said Dao Minh Tuan, Vietcombank’s IT centre director.

“We will buy domestically made software copyrights, but not now. Maybe some time next year,” said Tuan, adding that most of the bank’s copyright purchases for software licenses were with foreign partners.

The reason behind the tardiness for domestic software copyright purchase is the lack of government policy on the use of common domestic software, as well as the definition of common software usage in the bank’s system.

“We have not laid the foundations for the purchase calculations of domestic software as we have not yet considered which software is compulsory for banking operations. Meanwhile, the copyright registration for software is still not clear enough,” said Tuan.

Lac Viet Company, which has developed a dictionary software programme that has the highest number of illegally installed versions in Vietnam has said that it will keep developing the programme whether or not local users pay the copyright.

However, the number of licences will reach tens of thousands this year once a purchase agreement is signed with the country’s fourth largest state-owned bank, Incombank.

“We are negotiating with other customers as well,” said Ha Than, Lac Viet’s director.

The Ministry of Post and Telematics has also started compiling a list of information technology products, including software, which will be given priority for purchases by the state budget. The list is planned to be released in the first quarter of next year.


As a member of the WTO, now Vietnam has to please the WTO by prioritizing US goods over local goods. Whose economy do u think such a move will benefit? Definately not Vietnam.

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