Vietnam and the US have reached an agreement on illegal logging and timber trade that will avoid hefty tariffs on Vietnamese timber exports, according to the Vietnamese Ministry of Agriculture and Rural Development (MARD).

The deal was inked by MARD Minister Le Minh Hoan and US Trade Representative Katherine Tai on October 1.

In October 2020, the US Trade Representative (USTR) launched an investigation into Vietnam's timber exports under Section 301 of the 1974 Trade Act.

The agreement addresses US concerns in the Vietnam Timber Section 301 investigation.

Ambassador Tai determined that the Agreement provides a satisfactory resolution of the matter subject to investigation and that no trade action is warranted at this time, the USTR said.

The agreement will contribute to improving the prestige of Vietnam’s timber sector and creating a foundation for the country’s sustainable forestry development. It also demonstrates Vietnam’s responsibility in building, issuing and implementing legal regulations, ensuring the legal timber origin in line with relevant regulations of international treaties to which Vietnam is a member.

The US side spoke highly of the agreement, saying "Vietnam will provide a model – both for the Indo-Pacific region and globally – for comprehensive enforcement against illegal timber."

Currently, the US is the biggest market for Vietnamese wood products, representing an estimated 7.4 billion USD last year, about half of the country’s total. In the first eight months of this year the number stood at 6.4 billion USD, up 58.8 percent year-on-year./.

Government chief affirms determination to spur economic growth

Prime Minister Pham Minh Chinh affirmed the Government’s determination to take stronger measures as a means of creating fresh momentum for economic growth during a regular cabinet meeting held on October 2 in Hanoi.

PM Chinh also underlined the necessity of accelerating the disbursement of public investments in order to spur economic growth ahead in the remaining months of the year.

With these efforts, the Government anticipates that it can create a new premise for the opening months of 2022, thereby bringing the nation back to the new normal soon, the PM said.

The cabinet leader has therefore requested that various ministries, agencies, and localities focus on building a strategy based around economic recovery and development in the new normal from October 1, with another strategy running alongside this on pandemic containment.

He urged ministries and agencies to flexibly combine fiscal policies with monetary policies, better control inflation, ensure major economic balances, accelerate the disbursement of public investment and ODA loans, whilst ensuring the circulation of goods and movement of people. In addition, they should also work harder to remove the “illegal, unreported and unregulated” (IUU) fishing “yellow card” and optimise opportunities presented by free trade agreements (FTAs).

The PM also ordered the removal of roadblocks to projects to increase IT applications and digitalisation, thereby ensuring social welfare and improving the efficiency of the communication work in order to create social consensus.

Although the pandemic has been basically brought under control in recent time, particularly amid declines in infections and fatalities in Ho Chi Minh City and its adjacent localities, vigilance must be maintained while recovering socio-economic activities in line with the set roadmap, PM Chinh said.

The PM underlined the necessity of combatting negative phenomena, including corruption and group interests in the fight against the pandemic, stating that the procurement of medical equipment must be transparent and strive to avoid losses.

He acknowledged the numerous economic achievements recorded in September and the first nine months of this year, with GDP seeing an annual rise of 1.42%, and FDI surging by 4.4% to reach 22.15% between January and September.

He also pointed to limitations and difficulties, including GDP in the third quarter falling sharply by 6.17%, a drop in domestic collection and a low disbursement rate of 47.38%.

Also at the meeting, the PM held an online working session with authorities in 63 central-run cities and provinces across the country, as well as 705 districts, towns, and cities on the prevention and control of COVID-19.

Participants also discussed building temporary instructions to safely and flexibly adapt to and control the potential spread of COVID-19.

Regarding crowds of migrants leaving Ho Chi Minh City and the southern province of Binh Duong for their hometowns, the PM called on them not to move freely as a means of helping to halt pandemic spread in the south of the nation.

Relevant localities should encourage labourers to remain in cities where they are working to get vaccinated and continue engaging in socio-economic activities as a means of stabilising their lives, he added.

Three foreign corporations eye investment in IP projects in Quang Ninh

Thai Amata Corporation along with Japanese Marubeni Corporation, and South Korean GS Group have proposed developing two industrial parks (IPs) in the northern province of Quang Ninh.

Amata Corporation and its partners sent a report to the provincial authorities, presenting their plans to develop the IP projects in the hi-tech urban complex in the province’s Quang Yen Coastal Economic Zone, reported VnExpress.

Marubeni proposed building a 724-hectare IP, while GS suggested developing a 676-hectare facility. These two IPs would offer sufficient healthcare, education and training services to workers in the parks as well as residents in the neighborhood.

The provincial government requested Amata to support Marubeni and GS in facilitating research to build the facilities with a proper land fund. The northern province wants Marubeni and GS to study the projects in the Song Khoai Industrial Zone developed by Amata, as the available land fund in the zone remains large.

According to the province, the Quang Yen Coastal Economic Zone is home to many industrial zones but the occupancy rate is modest and lower than expected. Meanwhile, the province developed an adequate amount of infrastructure facilities and offered investment incentives.

This economic zone will have its zoning plan and land fund reviewed to attract more investors, said the province’s officials.

Amata Corporation is implementing several projects in Quang Ninh, including the 714-hectare Song Khoai industrial zone in Quang Yen. The project requires over VND3.5 trillion and was scheduled for construction in the 2018-2026 period. Besides, Amata proposed studying the investment in the Amata Ha Long smart city project, which will cover 1,720 hectares of land in the province’s Uong Bi City and Quang Yen Town.

Regulations on e-commerce involving foreign traders supplemented

The Government has issued Decree No 85/2021/ND-CP amending and supplementing several articles of Decree No 52/2013/ND-CP on e-commerce involving foreign traders.

Accordingly, foreign traders and entities operating websites to provide e-commerce services with Vietnamese domains and language, and having over 100,000 transactions from Viet Nam each year, must register e-commerce activities in line with regulations, establish representative offices or appoint authorised representatives in the country.

Their representative offices or authorised representatives must work with Viet Nam’s State management agencies to prevent transactions of goods and services that violate the nation’s laws.

According to a study conducted by iPrice Group and SimilarWeb, the top 50 shopping sites’ web visits in Viet Nam's Map of E-commerce in the first six months reached more than 1.3 billion, the highest ever level and up by 10 per cent from the first quarter. 

Plenty of room to boost Vietnamese coffee exports to Nordic market

There are bright prospects ahead for Vietnamese coffee exports to the Nordic market, particularly as tariffs on coffee beans have been slashed to 0% under the provisions of the EU-Vietnam Free Trade Agreement (EVFTA), according to the Vietnamese Trade Office in Sweden.

The analysis of the International Trade Center (ITC) also revealed that although Nordic countries typically import Arabica coffee, there remains plenty of room for the nation’s unroasted and decaffeinated coffee beans, as well as specialty and organic coffee, to penetrate the demanding market.

However, local firms have faced a number of difficulties over recent times when it comes to exporting coffee to the Nordic market due to the region tending to import high-quality coffee, mostly Arabica coffee and paying special attention to sustainable production.

Furthermore, there are also challenges in terms of geographical distance, along with the stringent standards set by other European countries and small orders.

Vietnamese enterprises have therefore been advised to comply with market regulations, manage the use of banned substances, tighten control over all stages of the supply chain, and devise appropriate product marketing strategies, as well as developing brands for coffee products.

Moreover, local firms have been recommended to invest in designing websites and using other social media network such as LinkedIn, Skype, and Facebook, to introduce their products and stay in contact with buyers.

Domestic flights resume from October 1

Domestic flights began to officially resume on October 1 under a four-phase plan outlined by the Ministry of Transport, which is applied in localities with relaxed COVID-19 prevention and control measures.

In the first phase, to be carried within 10 days, airlines would resume air routes with a flight frequency not exceeding half that in the first 10 days of April, the time before the fourth coronavirus wave broke out in Vietnam. Seats on the planes must be distanced as well.

In the second phase, to last for no more than 10 days, the frequency would be increased to not exceed 70 percent. No seat distancing is required.

The third phase would see the flight frequency return to the level as seen in the first 10 days of April (but not exceeding it), with no seat distancing required.

The final phase would see airlines resume activities as normal.

Air routes that had only one flight a day even pre-pandemic can resume operations as normal in the first and second phases, with seat distancing required.

Passengers must follow the “5K message”, make health declaration, and present a negative COVID-19 test result issued within 72 hours before departure.

However, the passengers who got the first shot three weeks ago, or those who were fully vaccinated or recovered from the disease within six months are exempt from COVID-19 testing.

The Ministry of Transport requested airlines to offer hand sanitisers to passengers, ask them to wear masks during the flight, and disinfect high-contact surfaces of planes such as door handles and seats after each flight./.

Viet Nam ranks 73rd for digital quality of life, e-security improves

Viet Nam’s e-security index improved by 54 per cent since last year but its internet became less affordable, the 2021 Digital Quality of Life Index (DQL) conducted by cybersecurity company Surfshark showed.

The third annual report has placed Viet Nam 73rd among 110 countries, down 19 places compared to the previous year.

Covering 90 per cent of the global population, the study evaluates countries based on five fundamental digital wellbeing pillars. Viet Nam shows its best results in internet affordability (ranking 51st), but lags behind with internet quality (86th), e-government (75th), e-security (71st), and e-infrastructure (67th).

Vietnamese people have to work one minute 45 seconds to afford the cheapest mobile internet and two minutes 53 seconds to access the cheapest broadband internet. Despite a 62 per cent year-on-year decrease, the country still has quite affordable internet access compared to the global average (10 minutes for 1GB of mobile internet).

E-security is also a bright spot in Viet Nam’s performance picture as the country’s index improved by 54 per cent since last year thanks to the improvement of data protection laws. However, the country still remains on the lower end of the list, coming in 71st place worldwide, due to a decline in cybersecurity.

In the all-around picture, six out of 10 countries with the highest scores are located in Europe, with Denmark topping the list for the second year in a row and is closely followed by South Korea.

Non-state sector becomes main driver of HCM City’s foreign trade in nine months

HCM City's Cat Lai Port.

Non-state sector became the main driver of Ho Chi Minh City’s foreign trade during the first nine months of this year, with its exports and imports increasing 3.5 percent and 39.7 percent, respectively, according to the municipal statistics office.

The country’s southern economic hub saw foreign trade growing 9.7 percent year-on-year from January to September, with exports and imports experiencing opposite trends due to impacts of the worst-ever COVID-19 resurgence, which hit the city since May.

In September, exports totalled 2.37 billion USD, a 5.7 percent decrease month on month. Of the figure, the public sector contributed 93.4 million USD, down 4.9 percent month on month; the non-state sector, 816.3 million USD, up 13.7 percent; and the foreign-invested sector, 1.25 billion USD, down 14.9 percent.

In the first three quarters of the year, the city shipped abroad 31.5 billion USD worth of goods and services, a year-on-year drop of 3.4 percent. Of the total, the state-owned sector contributed 1.53 billion USD, down 15.2 percent year on year; the non-state sector, 8.43 billion USD, up 3.5 percent; and the foreign-invested sector, 18.6 billion USD, down 6.5 percent.

The agriculture sector generated close to 2.9 billion USD from exports during the period, up 8.5 percent year on year and accounting for 10.5 percent of the total shipments. The industrial sector’s exports, meanwhile, fell 13.9 percent to 19.2 billion USD, representing some 70 percent of the total.

China remained HCM City’s largest buyer in nine months, importing 6.65 billion USD worth of goods and services, down 15.9 percent year on year. It was followed by the US, Japan and the EU.

The city spent over 4.1 billion USD on imports last month, down 8 percent month on month. The nine-month figure, however, spurred 21.3 percent year on year to 44.3 billion USD, with imports of the non-state sector surging 39.7 percent to 19.1 billion USD and that of the foreign-invested sector rising 12.2 percent to 18.8 billion USD./.

Viet Nam’s digital banking adoption catches up with developed markets

The adoption of digital banking in Asia-Pacific (APAC) emerging markets, especially Viet Nam, has caught up with that in developed markets.

This information was released in the McKinsey report on the digital banking behaviours of 20,000 urban banking consumers across 15 APAC markets, including Viet Nam.

This change in behaviour has brought the financial services industry to a new level of maturity, opening up new opportunities for banks and nonbanks alike. The window for seizing opportunities will narrow quickly as consumers give serious consideration to innovative propositions from digital banks.

The report identified the gap between customers' interest in digital banking vs their actual actions, how banks can better capture opportunities from this gap, and the core technologies that can support banks in doing so.

It revealed that the increase in active digital bank users is arguably higher in Viet Nam compared with APAC's emerging markets and some APAC developed markets.

Between 2017 and 2021, 88 per cent of APAC consumers in emerging markets actively use digital banks, a 33 percentage points increase. In Viet Nam, the numbers rose by 41 percentage points to 82 per cent in 2021.

At the same time, fintech and e-wallet penetration reached 56 per cent in 2021 for Viet Nam, a hike of 40 percentage points from 2017. This penetration level is even higher than the average of APAC emerging markets (at 54 per cent) and developed markets (43 per cent).

Large majority (73 per cent) of Vietnamese consumers are multi-channel banking users. This means they use a combination of digital banks and physical branches.

Despite the change in consumer behaviours, banks are not doing enough to capture digital sales, due to limited digital offerings and a lack of meaningful engagements with digital users, the report says.

Accordingly, three strategic moves banks can consider in closing this gap include rethinking the role of branches. Banks need to strengthen branches' omnichannel delivery – measuring both financial goals and customer’s satisfaction – ensuring that branch-based human interactions go beyond functional convenience to outperform empathy and understanding.

They should transform their business model to digital-first, or integrated omnichannel engagement centred on agile deployment on artificial intelligence (AI) and machine learning capabilities. Banks need to deliver value propositions that are intelligent (automating key decisions and recommending actions), personalised (based on an understanding of customers behaviours), and omnichannel (embed digital banking capabilities within partner ecosystems)

Bank should play a role of digital attacker (digital-only banks using a cloud-native, low-cost platform) or an omnichannel incumbent to stay competitive. In doing so, banks must differentiate their digital value proposition from existing offerings, focus on gaining access to large customer ecosystem to scale fast, and capture transactions and balances as primary bank.

Banks in emerging markets are already leading digital innovation but the market is getting crowded and competitive. To stay relevant, banks should think about building (or acquire) AI and machine learning capabilities in three areas sales and service, operations and IT and develop the right structure as well as hire or reskill the right talent.

Vietnam Pavilion inaugurated at Expo 2020 Dubai

The Vietnam Pavilion at the Expo 2020 Dubai was inaugurated at a ceremony held on October 1 at the event’s venue in Dubai, the United Arab Emirates (UAE).

Spanning an area of 850 sq.m, the pavilion impresses with 800 conical hats hang at the front area, and miniatures of 18 artworks created by renowned Vietnamese contemporary artists.

Themed ‘Distilling the Past, Shaping the Future”, it comprises exhibition zones introducing different sides of Vietnam to international friends.

Addressing the event, Deputy Minister of Culture, Sports and Tourism Ta Quang Dong said the Vietnam Pavilion at the Expo 2020 Dubai demonstrates the Vietnamese Government’s solid commitment and efforts in promoting the country’s images and upholding cultural values and creativity of Vietnamese people.

Visitors can experience Vietnam’s destinations via virtual reality and explore ‘Make-in-Vietnam’ products such as Dragon satellites, sneakers made from discarded coffee grounds and plastic bottles, and ST25 rice variety.

With a history of 170 years, the World Expo is among the world’s oldest and largest events, only after the Olympic Games and FIFA World Cup. It has provided a platform to showcase the greatest innovations that have shaped the world today. Expo 2020 will continue that tradition with the latest technology from around the globe.

Expo 2020 Dubai will last from October 1, 2021 to March 31, 2022, attracting more than 190 countries and international organisations. It is expected to welcome 25 million visitors./.

Vietnamese firms advised to brace for trade remedies in ASEAN

The Trade Remedies Authorities of Vietnam has recommended domestic enterprises to prepare legal knowledge and resources to deal with potential lawsuits from export markets, particularly in the Association of Southeast Asian Nations (ASEAN).

ASEAN is currently one of the markets that investigate and apply the most trade remedies against Vietnamese exports.

According to the Authorities, as of 2020, the Philippines, Indonesia, Malaysia, and Thailand had investigated 13, 11, 10, and 8 trade remedy cases involved Vietnamese products, respectively.

Parts of bilateral turnover between Vietnam and these nations affected by trade remedy lawsuits initiated or reviewed in 2020 alone were about 2 million USD, 5.73 million USD, 82 million USD, and 550 million USD, respectively.

In addition to the increase in the number, the nature of new trade remedy cases against Vietnamese exports has also become more diverse and complex than in the past. Currently, the range of products is not only limited to such base metals as iron and steel but also expanded to many others including ceramic tiles, plastic, and cigarette paper.

Due to the protectionism trend in some markets as well as the influence of the world economic situation, which still faces many difficulties, it is forecast that in the coming period, the number of trade remedy investigation cases against both Vietnamese imports and exports will increase. This will lead to new challenges and hurdles for domestic industries.

The trade remedies authorities said it will continue working with relevant units to help boost businesses’ capacity, conduct early warning activities, and intensify State management in the field./.

Kien Giang posts 2 percent rise in nine-month export earnings

The Mekong Delta province of Kien Giang earned over 526 million USD in export value in the first nine months of 2021, meeting over 70 percent of the year’s plan and posting a year-on-year rise of nearly 2 percent, according to the provincial Department of Industry and Trade.

Accordingly, shipments of rice raked in 181.28 million USD, seafood 172.76 million USD, leather footwear 84.25 million USD and others 78.2 million USD.

The province’s trade via Ha Tien and Giang Thanh international border gates was valued at over 90 million USD in the period, of which exports expanded nearly 10 percent compared to the same period last year to 55.11 million USD.

Despite difficulties brought by the ongoing pandemic, the province aims to post export turnover of more than 203 million USD in the fourth quarter so as to bring the total to 730 million USD for the whole year, up 7 percent compared to the previous year.

To realise the target, relevant agencies are asked to keep a close watch on the situation at home and abroad, with a focus on markets of countries that have brought COVID-19 under control and high demand for goods at the end of the year, especially major celebrations.

It will also continue helping local firms roll out COVID-19 preventive measures and vaccination for workers, and send outstanding products to international trade fairs./.

Banks’ profits forecast to decline by 19 percent in Q3

Profits of the banking industry in the third quarter of 2021 would decrease by 19 percent compared to the previous quarter due to slowing credit growth and increasing provision expenses, Yuanta Securities Vietnam estimated.

In a report on Q3 2021 profits of the banking industry, Yuanta said it was not too surprising about the decline as the credit growth of the whole industry had slowed down due to the impact of the pandemic.

The State Bank of Vietnam (SBV)’s data showed by the end of last month, credit growth of the entire banking industry was 7.4 percent, of which the rise in the third quarter of 2021 was driven primarily by loans to pandemic affected borrowers and corporate bonds.

Accordingly, Yuanta analysts forecast net interest income in Q3 2021 of banks will decrease by 2 percent compared to the previous quarter and net interest margin (NIM) will be under the same trend as banks had to cut interest rates to support customers affected by the pandemic.

Besides, the company also predicted provision expenses of banks in the third quarter this year would increase by 20 percent compared to the previous quarter, especially at banks with relatively low loan loss reserve (LLR) ratio. However, it noted declining asset quality is inevitable in the context of the ongoing pandemic and the implementation of social distancing.

According to Yuanta, Circular 14/2021/TT-NHNN issued by the SBV allowed banks to extend the debt restructuring period to June 30, 2022 instead of the original plan of December 31, 2021. Therefore, bad debts, which have been made public, may still be at a low level, but it will be better if banks make provisions now to limit the possibility of asset quality deterioration in the future.

However, the analysts expected credit growth would recover in the fourth quarter of 2021 when the economy reopens.

In fact, the credit growth in July and August was more positive than that in June with respective rising rates of 0.69 percent and 1.13 percent.

The demand for credit is expected to increase strongly in the last months of the year, similar to what happened in the fourth quarter of 2020. The SBV has so far also increased credit growth limit for many commercial banks.

Nguyen Tuan Anh, Director of the SBV’s Credit Department of Economic Sectors, also affirmed banks haven’t tightened lending, but created favourable conditions for firms to access bank loans.

Anh said the credit growth target this year was at 12 percent, but if necessary, the rate could be adjusted to create favourable conditions for firms.

"We expect the central bank will continually loosen monetary policy at least until the end of this year, which will help improve banks’ NIM slightly in the fourth quarter of 2021 when credit demand increase again. In addition, banks’ fee income is also expected to increase since the third quarter of 2021 and the source will be the main driver to help boost banks’ profits in the fourth quarter," said the Yuanta analysts.

The expected loose monetary policy would help cut the lending interest rates next months, the analysts forecast./.

Preferential financial sources help SMEs recover from COVID-19: Experts

Representatives from associations, commercial banks, international organisations and businesses gathered at a virtual conference in Hanoi on September 30 to discuss preferential financial sources to aid small- and medium-sized enterprises (SMEs)' recovery amid the COVID-19 pandemic.

The event was co-organised by the Vietnam Chamber of Commerce and Industry (VCCI), the Enterprise Development Agency under the Ministry of Planning and Investment, and the US Agency for International Development (USAID)’s Linkages for Small and Medium Enterprises (LinkSME) project.

According to a survey conducted by the VCCI showed that the current biggest concerns of SMEs are difficulties caused by the narrowing of markets, capital and credit depletion due to high production costs, and the burden of COVID-19 testing and ensuring the lives of workers when implementing pandemic-prevention requirements.

In response, the Government and competent agencies have conducted a series of solutions and supporting policies to help firms overcome such obstacles.

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has coordinated with the SME Development Fund to offer businesses a number of loans with preferential interest rates.

In addition, the USAID LinkSME project with the participation of many commercial banks have created more information channels to facilitate firms in accessing different resources.

Daniel Fitzpatrick, Director of USAID LinkSME, said recent positive news in Hanoi on the authorities’ determination to push back the pandemic heighten the hope for a brighter future.

Phan Le Ha, a financial expert of USAID LinkSME, said developing the ability to access finance will open up many opportunities for businesses to approach financial sources, helping them maintain production and business activities even in the most difficult times.

In 2021, USAID LinkSME launched many training programmes to assist firms in improving their financial management capacity. These programmes worked with banks to build a team of experts offering direct support for businesses regarding loan document preparation or loan restructuring during the current difficult period. They also ran activities and events involving financial sources so that businesses could access more information from credit funds./.

USAID-funded project betters Vietnam’s innovation, startup ecosystem

The Ministry of Planning and Investment (MPI) and the US Agency for International Development (USAID) on October 1 launched the Vietnam Workforce for an Innovation and Start-up Ecosystem (WISE) project.

The two-year USAID-funded project is expected to support the nation’s strategy on the fourth industrial revolution to advance continued economic transformation.

MPI Deputy Minister Tran Duy Dong said that Vietnam's innovation ecosystem has passed the stage of quantitative development, and now entered a critical stage requiring in-depth investment to be able to form high-quality innovative start-ups.

To that end, the development of human resources is identified as one of the most important foundations. However, Vietnam's high-quality human resources in the fields of information technology, computer engineering and automation have not yet met the needs of the market, Dong noted.

Ann Marie Yastishock, Mission Director for USAID/Vietnam, stated that USAID WISE showcases the US Government’s commitment to partnering with Vietnam along its economic transformation, and will help advance this strategy, which centres on mastering and integrating new advanced technologies, spurring innovation, and accelerating the growth of the digital economy.

USAID WISE will therefore support scalable, market-driven, and sustainable models in which to prepare the nation’s workers for Industry 4.0 via partnerships with the private sector. The project will build basic digital literacy, provide Industry 4.0 career pathways information to make smart talent investments, offer information and communication technologies, upskilling and reskilling for lifelong learning, and explore innovative financing mechanisms for relevant skills acquisition.

The project will also support Vietnam's efforts to emphasise Industry 4.0 skills development opportunities to all demographics by devoting a special focus on women and vulnerable groups in order to help narrow the country’s digital divide. This priority is consistent with the USAID Digital Strategy and will deliver a long-term impact in the nation through an information and communication technology sector that features leaders, coders, designers, and technicians that advance the use and development of Industry 4.0 as it takes root across the Vietnamese economy./.

Vietnam offers attractive opportunity for Australian AgTech innovators: report

With the right blend of focus, support and adaptability, Vietnam should represent an attractive growth opportunity for Australia's AgTech innovators, according to director at Beanstalk Agtech and Global Program Lead for GRAFT Vietnam Challenge 2021 Justin Ahmed.

He made the remark on September 30 at the launch of a report entitled “Accelerating AgTech: Australia’s opportunity in Vietnam” by Asialink Business Centre under the University of Melbourne and Beanstalk AgTech food and agriculture innovation agency.

The report, part of the Australia-Vietnam Enhanced Economic Engagement Grant (AVEG) pilot programme funded by the Department of Foreign Affairs and Trade (DFAT), identifies four key areas where Australian innovators can help Vietnam's agricultural sector overcome challenges, which are sustainability, climate resilience, productivity, and food quality and safety.

As agriculture has been a cornerstone of the Australia-Vietnam relationship, the report aimed to give specific analysis about the agricultural environments of the two countries, laying the foundation for collaboration to drive innovation, address shared challenges, support rural economies and enhance competitiveness.

Robert Law, Director of Research & Insights of Asialink Business, said Vietnam’s agriculture sector is rapidly transforming and poised for further growth.

One out of every three workers in Vietnam engages in the agricultural sector. The country’s agricultural sector generates more than 56 billion USD per year through the export of rice, coffee and seafood, he said. However, the sector faces many shared challenges with Australia such as balancing cost and output with environmental impacts.

Smart agriculture technologies can offer alternates for traditional labour and water-intensive production methods in both countries, he said, adding that Australia and Vietnam can share expertise and boost AgTech opportunities.

According to Ahmed, to remain competitive, it was necessary for Vietnam to invest in more efficient, high-quality and sustainable production./.

Hanoi sees September CPI down 0.6 percent over previous month

Hanoi's consumer price index (CPI) in September decreased by 0.6 percent compared to the previous month and increased by 2 percent over the same period last year, according to the city's Department of Statistics.

Eight out of 11 commodity groups in the price basket posted price decreases month-on-month, with biggest reduction in the education group (3.27 percent) because a number of schools reduced tuition fees for the 2021-2022 school year in order to alleviate difficulties caused by the COVID-19 pandemic.

Prices of housing, electricity, water, fuel and construction materials decreased by 1.71 percent as the city implemented a reduction in electricity prices to support customers affected by the COVID-19 pandemic.

Three commodity groups, namely culture, entertainment and tourism; food and catering services; medicine and health services, saw their prices go up slightly compared to the previous month.

The average CPI in the first 9 months of 2021 of the capital city increased by 1.54 percent compared to the same period in 2020. Commodity groups with high price increases were transport (7.71 percent); housing, electricity, water, fuel and construction materials (up 3.47 percent) and education (2.1 percent).

Three commodity groups saw price decreases, which were culture, entertainment and tourism (down 2.76 percent); post and telecoms (down 1.06 percent) and restaurant and catering services (down 0.09 percent). /.

Official: Vietnam could achieve trade balance this year

Vietnam could achieve trade balance, or even a trade surplus this year, deputy head of the Ministry of Industry and Trade’s Agency of Foreign Trade Tran Thanh Hai told a regular press conference of the ministry in Hanoi on September 30.

In September, the country earned 27 billion USD from exports, down 0.8 percent month-on-month and 0.6 percent year-on-year. It was also the second consecutive month that exports declined from the same period last year.

However, the nine-month figure still showed an 18.8 percent increase year on year to an estimated 240.5 billion USD.

Meanwhile, import was estimated at 26.5 billion USD in September, down 3.1 percent monthly, but the nine-month figure hiked by 30.5 percent annually to 242.65 billion USD.

Given such situation, Vietnam ran a trade surplus of 500 million USD in September and a deficit of 2.13 billion USD in nine months of this year.

According to Hai, the current trade deficit is not a cause for concern, considering that trade deficit dropped to 100 million USD in August after topping 2 billion USD in July, and September saw the return of trade surplus. 

Vietnam’s exports are in favourable conditions thanks to opportunities from free trade agreements and rising market demand during year’s end, especially for goods of the country’s strength. Therefore, if there is no major change in the pandemic situation, export activities in southern localities are expected to regain speed in the last quarter of the year, helping balance trade, and even bring a trade surplus, he said./.  

MPI proposes solutions to support economic recovery and development

There will be eight groups of tasks and solutions to support economic recovery and development, with a particular focus on maintaining macroeconomic stability, controlling inflation, supporting businesses, and stimulating consumption demand.

During a consultation conference on the economic recovery and development programme for the 2022 to 2023 period, Deputy Minister of Planning and Investment Tran Quoc Phuong said that since 2020, major partners of Vietnam and other countries in the region have provided large-scale support packages to help achieve a relatively high growth rate for the 2021 to 2023 period.

Countries largely focus on implementing fiscal policies aimed at prioritising infrastructure investment, reducing cost pressure for businesses, supporting local labourers, and boosting the development of the green economy, digital economy, and digital transformation.

Loose monetary policy primarily aims to reduce borrowing costs and increase access to loans of small and medium enterprises, along with business households.

Deputy Minister Phuong said that international organisations such as the Asian Development Bank (ADB), the World Bank (WB), the International Monetary Fund (IMF), and the UN Conference on Trade and Development (UNCTAD) has come up with many solutions to support economic recovery.

This is along with development in the ASEAN region, as well as in the nation, with policies that are properly implemented according to each stage of the pandemic, in line with the supervision ability of the State-run sector, and the characteristics of the economy.

Sustainable recovery therefore depends on ensuring financial stability and balancing risks between increasing public debt and private sector debt relating the size and duration of financial support policies, the Deputy Minister said, while underlining the necessity of implementing fiscal policies in a flexible manner. This should be done whilst supporting the health system, households, businesses, and economic recovery until the pandemic is fully brought under control on a global scale.

The economic recovery and development program for the 2022 to 2023 period aims to create a foundation to boost economic growth in this timeframe whilst the the COVID-19 pandemic is gradually brought under control. This will serve to ensure macroeconomic stability, control inflation, be consistent with long-term goals, orientations, and visions toward achieving the target of average annual economic growth of 6.5% and 7%/ in the 2021 to 2025 period.

As a means of meeting this target, Deputy Minister Phuong highlighted eight groups of tasks and solutions for economic support. Firstly, it is essential to contain the COVID-19 pandemic and improve the capacity of the local health system, especially grassroots and preventive medicine.

Secondly is to maintain macroeconomic stability to ensure large balances and control inflation.

Thirdly it can be considered imperative to improve institutions, administrative reform, administrative procedures, and the local investment and business environment.

In addition, it is crucial to restore and develop the local tourism industry whilst stimulating domestic consumption demand.

Furthermore, business recovery must be supported in a number of prioritised industries and fields with credit support solutions. Moreover, the restoration and mobilisation of resources for development investment is important, along with promoting foreign investment attraction and removing difficulties and obstacles for FDI enterprises.

This is along with developing regions and urban areas, whilst removing institutions to develop large cities nationwide.

Finally, a key task is to develop the labour market and labour force, improve the quality of human resources to meet the requirements of Industry 4.0, whilst simultaneously strengthening the connection between labour supply and demand, and supporting a sustainable career transition for workers.

The Ministry of Planning and Investment is responsible for monitoring the implementation of solutions and reporting the results to the Government at regular meetings in held June and December of both 2022 and 2023.

Wood and forestry exports surge over nine-month period

Vietnamese timber and forestry exports during the nine months of the year surged by 31.9% to US$11.97 billion, with these products enjoying a trade surplus of US$9.699 billion, a rise of 45%, according to the Ministry of Agriculture and Rural Development.

Of the figure, the country raked in US$11.14 billion from exporting timber and wood products, representing an increase of 30.9%, while forestry exports reached US$832 million, an annual boost 46.4% compared to the same period from last year.

However, wood and forest exports in September endured a decline of 8.2% to US$821 million compared to the previous month

The nation's major export markets for timber and forestry products include the United States, Japan, China, the EU, and the Republic of Korea, all of which combine to account for over 90% of the total export value.

Furthermore, the import value of timber and wood products during the nine-month period is estimated at stand at over US$2,275 billion, representing a rise of 30% against the same period last year.

The main import markets of these products include China, the US, Cameroon, Thailand, and Chile, accounting for roughly 55% of the total import value in the reviewed period.

Vietnam offers attractive opportunity for Australian AgTech innovators: report

With the right blend of focus, support and adaptability, Vietnam should represent an attractive growth opportunity for Australia's AgTech innovators, according to director at Beanstalk Agtech and Global Program Lead for GRAFT Vietnam Challenge 2021 Justin Ahmed.

He made the remark on September 30 at the launch of a report entitled “Accelerating AgTech: Australia’s opportunity in Vietnam” by Asialink Business Centre under the University of Melbourne and Beanstalk AgTech food and agriculture innovation agency.

The report, part of the Australia-Vietnam Enhanced Economic Engagement Grant (AVEG) pilot programme funded by the Department of Foreign Affairs and Trade (DFAT), identifies four key areas where Australian innovators can help Vietnam's agricultural sector overcome challenges, which are sustainability, climate resilience, productivity, and food quality and safety.

As agriculture has been a cornerstone of the Australia-Vietnam relationship, the report aimed to give specific analysis about the agricultural environments of the two countries, laying the foundation for collaboration to drive innovation, address shared challenges, support rural economies and enhance competitiveness.

Robert Law,  Director of Research & Insights of Asialink Business, said Vietnam’s agriculture sector is rapidly transforming and poised for further growth.

One out of every three workers in Vietnam engages in the agricultural sector. The country’s agricultural sector generates more than US$56 billion per year through the export of rice, coffee and seafood, he said. However, the sector faces many shared challenges with Australia such as balancing cost and output with environmental impacts.

Smart agriculture technologies can offer alternates for traditional labour and water-intensive production methods in both countries, he said, adding that Australia and Vietnam can share expertise and boost AgTech opportunities.

According to Ahmed, to remain competitive, it was necessary for Vietnam to invest in more efficient, high-quality and sustainable production.

US funds to promote IT workforce development in Viet Nam

Viet Nam needs advanced training and retraining for human resources to meet the demand of the economy in the digital era, and adapting to the post-COVID-19 "new normal", said Nguyen Duy Dong, deputy minister of Ministry of Planning and Investment (MPI).

Dong told an online conference on high-quality human resources, held by the ministry and the United States Agency for International Development (USAID) yesterday, that: “Technological advances are to improve labour productivity, efficiency and enhance the new competitive advantage of the economy.”

He said the country ranked 44th out of 132 countries and economies in the world in the list of Global Innovation Index (GII) in 2021 published by the World Intellectual Property Organization (WIPO), saying: “In the complicated developments of the COVID-19 pandemic with unpredictable impacts, that Viet Nam remains in the top 50 leading countries is a huge effort.”

Seeing the demand for workforce, USAID has funded an initiative worth US$2 million that would support Viet Nam’s National Fourth Industrial Revolution Strategy to advance continued economic transformation in two years as a project called Vietnam Workforce for an Innovation and Start-up Ecosystem (WISE).

Launching the project at the online conference, Vietnam Mission Director Ann Marie Yastishock of USAID said: “After decades as one of the world’s fastest-growing economies, Viet Nam’s industry and services sectors are entering a new phase of growth propelled by the brainpower of an expanding young workforce.”

She said the Fourth Industrial Revolution (4IR) was creating immense opportunities and challenges for upskilling and reskilling the workforce to take advantage of new technologies, adding COVID-19 has accelerated the movement to digital businesses and transformation, making it even more imperative to retool workers for the digital economy and the new normal.

Also taking part in the conference, Vu Duy Thuc, Co-Founder and CEO OhmniLabs, a leading service robotics developer focused on improving people's quality of life in Silicon Valley, said: “Viet Nam has about 400,000 engineers including 10 per cent that need to learn AI and only 4,000 could do it."

Thuc said: “Viet Nam can become one of the AI ​​centres, if we have 100,000 AI engineers, that will generate US$100 billion. We will create AI technologies that are used in many different fields.”

However, he also noted: “The opportunity is only in two or three years, then countries with AI policies will go very far,” adding: “If Viet Nam is not taking advantage at this time, we will go backwards and lose out to competitors of China and India.”

Thuc also mentioned his VietAI Firm, aiming to put Viet Nam on the world AI map, connecting the local AI community to the world.

Training more than 600 AI engineers in Viet Nam, Thuc said the firm would offer free courses for the community.

Meanwhile, Tran Trung Hieu, Founder and CEO of TopCV, a human resource firm, said the pandemic created a remote trend that international firms recruit high-quality Vietnamese personnel to work from Viet Nam, but he added: “There are many technology graduates, but the number of students who are really suitable for the job is low.”

In this case, Ann Marie Yastishock said: “WISE showcases the US Government’s commitment to partnering with Viet Nam along with its economic transformation, and will help advance this strategy, which centres on mastering and integrating new advanced technologies, spurring innovation, and accelerating the growth of the digital economy.”

She said WISE would support scalable, market-driven, and sustainable models to prepare Viet Nam’s workers for 4IR via partnerships with the private sector, adding the project would build basic digital literacy, provide 4IR career pathways information to make smart talent investments, provide information and communication technologies, upskilling/reskilling for lifelong learning, and explore innovative financing mechanisms for 4IR skills acquisition.

According to the project, it will build the capacity for the MPI’s National Innovation Center (NIC) as the key local partner for WISE and associated government agencies in human resource development to enable them to work effectively on upskilling and reskilling the workforce for innovation.

As Ann Marie Yastishock considered opportunities have not been equally accessible yet as most jobs in new technologies and technical fields were based in the main metropolitan areas, and women make up only about less than 10 per cent of IT workforce, WISE will support Viet Nam’s efforts to emphasise 4IR skills development opportunities to all demographics by devoting special focus on women and vulnerable groups to help narrow the country’s digital divide.

WISE said the priority was consistent with the USAID Digital Strategy and would deliver long-term impacts in Viet Nam through an information and communication technology sector that features leaders, coders, designers, and technicians that advance the use and development of 4IR as it takes root across Viet Nam’s economy. 

September retail sales rise 6.5% thanks to renewed business activities

Total retail sales of goods and services in September increased by 6.5% compared to the previous month thanks to the control of the COVID-19 pandemic and the resumption of business activities in many localities, according to the Ministry of Industry and Trade (MoIT).

However, total retail sales of goods and services in September still fell by 28.4% over the same period last year.

The MoIT said that the complicated and prolonged COVID-19 pandemic in many localities nationwide, particularly in big provinces and cities such as Hanoi, Ho Chi Minh City, Da Nang, Binh Duong, Dong Nai, and Khanh Hoa has restricted transportation, trading, services, entertainment activities and others.

Revenue from tourism and catering services all dropped sharply while people tightened their spending with the main focus being on essential goods and foods for daily life.

Therefore, total retail sales of goods and services reached over VND3.3 trillion in the first nine months of 2021, down 7.1% compared to the same period last year.

Retail sales of goods was estimated at over VND2.7 trillion during the nine-month period, accounting for 82.54% of total retail sales of goods and services and down 3.38% over the same period last year.

Meanwhile, revenue from accommodation and catering services in the first nine months of this year decreased by 22.14% over the corresponding period last year, the revenue of travelling services plunged by 63.95% and revenue from other services fell by 19.37% over the same period in 2020.

Green connection promoted towards safe tourism

Amidst the complicated and prolonged COVID-19 pandemic, the tourism sector must find a way to adapt to the current situation, in which safety is identified as a mandatory criterion for all tourism activities.

Green connection towards creating safe products is the most appropriate method in gradually restoring tourism in the new normal.

After four consecutive outbreaks of the pandemic, the tourism sector fell into a crisis when all activities of receiving guests were paralysed. As a result, many businesses were forced to stop their operation. However, in addition to the recent acceleration of vaccination, the resumption of intra-provincial tourism activities in some localities where the pandemic is basically under control and the implementation of policies on stimulating and resuming travel activities issued by the Ministry of Culture, Sports and Tourism have brought many positive signals for the recovery of tourism sector. However, the problem is how to open the tourism market to meet visitors’ demands while ensuring the safety amidst the pandemic. In order to seek solutions, the Hanoi Travel Association (VISTA Hanoi), in collaboration with VGreen Sustainable Tourism Club, held a webinar themed “Chien Dich Xanh - Xanh VISTA Hanoi” (Green Campaign - Green VISTA Hanoi). According to the President of the VISTA Hanoi, Phung Quang Thang, it is crucial to identify domestic tourism as the driving force. Safety can only be controlled if the “green connection” – the safe connection between visitors and employees in the tourism industry – is established between destinations and services in the supply chain of services for visitors.

To do this, tourism products must meet five “green” criteria including: green passports, green businesses, green corridors, green destinations, and green services. In addition to the requirements of full vaccination, certificates of recovery from the epidemic and negative test certificates for travellers, the units should work together to develop tourism products according to self-contained services and tours with the close supervision of tour operators on the basis of planning the operation of safe tours for each type.

It is essential to make a specific change in providing services, from the transportation, accommodation, restaurants, and destinations. For example, in the transportation, the means of transportation, routes, attractions and waypoints must be fixed. In addition, the contactless check-in and check-out activities and the arrangement of rooms in groups and families with similar epidemiological factors should be applied to control the pandemic more easily. The specialised rooms for isolation should be also prepared. At restaurants, dining areas for groups or families, should be set up to minimise on buffets. The tightness and openness of the spaces and the capacity of green connection should be calculated carefully to arrange the number of tourists, ensuring a safe distance. VISTA’s leader also emphasised that the travel service providers should prepare for possible situations and plans to handle them. The travel companies also need to discuss and inform visitors of testing-related issues such as the number of tests, time of testing and incurred medical expenses right on the contracts. The insurers should consider the application of travel insurance on COVID-19 for tourists so that tourism sector can operate more confidently.

According to experts, in order to organise safe tourism programmes in a new normal, the localities need to announce the lists of safe tourism service providers and enhance their close linkages to limit barriers during the process of moving and connecting destinations. Bui Van Manh, Director of Ninh Binh Provincial Department of Tourism, said it is essential connect green zones to ensure safety for tourism activities. The leading units such as the Vietnam National Administration of Tourism and the Vietnam Tourism Association should uphold their coordination role in developing specific criteria on green products, restaurants, and accommodation. On that basic, green tours among the localities will be conducted. The connection should also be piloted in selected localities first.

The Vietnam Tourism Association has developed a "national programme to restore domestic tourism to overcome the consequences of the fourth outbreak of COVID-19 pandemic”. Themed “Green connection for Vietnam’s tourism”, the programme featured safe criteria for all working positions in the sypply chain of services to guests; an appropriate framework for the organisation of tourism activities; guidelines for travel associations and enterprises to flexibly apply them to the actual situation, bringing confidence to visitors. Many businesses have also planned to deploy tourism products that meet the safety criteria during the epidemic season such as Hanoitourist with caravan tours to the Duong Lam ancient village, Hoa Lu ancient capital in Ninh Binh and southeastern and southwestern regions as well as Vietfoot Travel with cycling tours that are suitable for people of many ages.

Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes  

VIETNAM BUSINESS NEWS OCTOBER 2

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