Vietnamnet global

04/09/2021 14:49 (GMT+07:00)

VIETNAM BUSINESS NEWS SEPTEMBER 4

Vietnam scores high in employee experience

A study has found that Vietnamese small and medium size enterprises (SMEs) scored an average of 92 percent in employee experience, 8 percent higher than other countries in the region.

The employee experience survey was conducted by Willis Towers Watson and SME Magazine across Vietnam, Singapore, Malaysia and Indonesia to help SMEs better understanding their employees’ perspectives.

The study found that SMEs’ employees are generally proud of their companies as they trust the vision of their leaders and understand how their work contributed to broader goals. Hence, 80 percent of respondents are willing to recommend their company as a good place to work.

At the end of last year, 38 Vietnamese SMEs were honoured at the SME Magazine’s SME100 Fast Moving Companies Awards./.

Prime Minister urges Samsung Vietnam to raise domestic content

Prime Minister Pham Minh Chinh asked Samsung to increase the ratio of domestic content in its electronic products manufactured in Vietnam during a visit to its facility in the northern province of Thai Nguyen on September 3.

He also expressed his hope that there will be Vietnamese people in senior leadership positions at its factories in Vietnam in the future.

During the visit, Prime Minister Chinh called for Samsung’s cooperation in importing vaccines and transferring their technology to produce vaccines and treatment drugs for COVID-19.

The Government leader proposed that Samsung, with its reputation and influence, uses its voice to convince the Government of the Republic of Korea and partners to sell, transfer and lend vaccines to Vietnam.

The Prime Minister said he welcomed the fact that Samsung has continued its long-term investment strategy in Vietnam and vowed to work with the company to realise the strategy successfully.

For his part, CEO of Samsung Vietnam Choi Joo Ho thanked the Vietnamese Government for supporting its production and business activities and pledged to take measures to guarantee a safe working environment.

On the same day, Prime Minister Pham Minh Chinh visited a boarding school in Dinh Hoa District, where he chaired a virtual conference with the provincial government and district authorities on socio-economic development, COVID-19 prevention and preparations for the new school year.

Localities place focus on public investment

Following the prime minister’s drastic instructions in recent weeks on 2021’s public investment disbursement, numerous ministries, agencies, and localities have built their plans and crafted measures to attempt to accomplish the yearly plan set forth.

Chairman of Ha Tinh People’s Committee Vo Trong Hai last week signed a document to accelerate public investment projects in the province, as well as establish a task force to strengthen disbursement. He emphasised that this in combination with improving the efficiency of public investment is a key political task.

“We will complete the disbursement plan on time (before January 31, 2022). The result of public investment disbursement is considered as one of the important criteria to evaluate the completion of the tasks in 2021 of relevant organisations and individuals in the province,” Hai said.

At present, some key projects with large investment capital but disbursed at a low rate in the province are in infrastructure for the comprehensive development of the central province of Ha Tinh with the investment of $19.6 million and disbursed $2 million, equivalent to 0.98 per cent; land and database management scheme capitalised at $6.8 million; the integrated initiative of dynamic cities (urban sub-project of Ky Anh town, borrowed from the World Bank) at $7.46 million in capital and $69.6 million disbursed; and hundreds of poor-performing ventures.

For behind-schedule projects like these in the Central Highlands province of Lam Dong, the local Department of Planning and Investment will propose the provincial people’s committee not to allocate capital next year. In addition to Ha Tinh and Lam Dong, the determination of carrying out the assigned schemes on schedule has been spreading and are the focus of implementation for all ministries, agencies, and localities.

The poor performance of disbursement has been blamed partly on the pandemic, which has caused challenges in transport, clearance, providing construction materials, and increased prices by up to 60 per cent over the beginning of the year.

Particularly, in July, disbursement has slowed and numerous projects have halted entirely. According to the General Statistics Office (GSO), the disbursement of the state budget investment of 19 southern cities and provinces, mostly in lock down since early July, was estimated at $509 million, capturing just over 30 per cent of total investment and down 26.6 per cent on-year.

Ho Chi Minh City was allocated $1.5 billion this year, accounting for 7.51 per cent of the country’s total. However, the pandemic dropped disbursement there in July by 67.5 per cent on-year, equivalent to 3.2 per cent of the city’s yearly plan.

An expert from Bao Viet Securities JSC said that the disbursement of public investment is often on a sharp increasing trend from the end of the second quarter in recent years. Moreover, it is also one of the most important measures to recover the economy after the crisis. “So it will sharply soar in the last months of the year,” said the expert.

In late June, the government issued Resolution No.63/NQ-CP on the major tasks to accelerate economic growth, speed up public funding, and promote sustainable exports in the closing months of 2021 and early months of 2022. The disbursement rate of public investment is expected to be at least 60 per cent of the plan by the end of the third quarter and 95-100 per cent for the full year.

GSO director-general Nguyen Thi Huong said, “The realised investment demonstrated the effectiveness of solutions to speed up disbursement of public funding, the government’s policies to support enterprises as well as measures to receive the foreign direct investment inflow was triggering a global production shift. However, the current outbreak of the pandemic may hit performance significantly.”

In some areas not as affected by the pandemic, public investment projects are being boosted to accomplish the full plan. The Ministry of Transport asked to urgently complete the dossiers of provincial approvals by December at the latest, and investors must ensure disbursement of at least 90 per cent of the plan until the end of the year as well as finalise all ventures with capital sources from 2020. The Ministry of Construction also requested to accelerate implementation and disbursement of the 2021 plan, with the goal of 100 per cent allocated capital.

To achieve the goals, the government asked relevant ministries and localities to enhance the discipline and accountability of the leaders. Besides that, the plan for different projects must be reviewed to ensure the implementation progress and ensure that funding goes to key and feasible initiatives.

In the first seven of the year, the trade deficit was at $2.41 billion, which will challenge the economic growth for the remaining months of 2021 and the year as a whole. Consumption is also being hit by complex fluctuations and mass infection across numerous provinces and cities. Thereby, until a large number of people in the country are vaccinated against COVID-19, public investment will be the driving force for economic growth, especially as other driving forces remain weak, according to the latest monthly report from Agribank Securities JSC.

The GSO calculates that if public investment disbursement increases by 1 per cent, GDP will rise by 0.058 per cent. In the period 2021-2025, if VND1 in state-budget investment is disbursed, it can help mobilise VND1.61 in non-state funding, higher than in the previous term at VND1.42. In the mid-term of 2021-2025, total projects developing is estimated at 5,000 with average investment of $9.13 million each, 2.4-fold over the previous period. Meanwhile, the public investment disbursement plan for the term is $125 billion, 40 per cent higher than the realised capital across the 2016-2020 period.

Vietnam’s investment shifting could boost economic resilience

Phyllis Papadavid, Head of Research and Advisory at Asia House, a consulting organisation based in London, the United Kingdom, in her research, pointed out that Vietnam should promote investment to revive its economy and strengthen its ability to respond to new risks despite its success in dealing with a crisis caused by the COVID-19 pandemic.

According to Papadavid - an expert in economics and financial strategy, Vietnam has been an economic success story and has shown resilience during past crises, including the current COVID-19 pandemic.

The economist cited data from the World Bank that the value of trade exchange (including goods and services) of Vietnam with foreign countries was equivalent to 209% of its gross domestic product (GDP) last year - second only to Singapore in the region. This reflected the openness and deep international integration of the Vietnamese economy.

Trade liberalisation has played an important role in Vietnam's success. Vietnam joined the World Trade Organisation (WTO) in 2007 and signed free trade agreements with countries of the Association of Southeast Asian Nations (ASEAN), the US, and the UK. Last year, Vietnam also signed the Regional Comprehensive Economic Partnership (RCEP) - the world's largest free trade agreement.

According to the expert, the openness of the economy has made Vietnam resilient during the COVID-19 pandemic. Despite production disruptions from the temporary closure of some factories due to the impact of the COVID-19 pandemic, Vietnam is one of the few countries with positive economic growth last year, showing the country's ability to withstand and recover economic growth during the crisis.

However, she said, Vietnam also faced many challenges namely the climate change risks, a decline in foreign direct investment (FDI) and exports due to the COVID-19 pandemic which has disrupted the supply chain.

The expert said that it was necessary for Vietnam to promote new policies to deal with these challenges. She also highlighted the importance of investments to build resilience to climate change and economic shocks.

According to Papadavid, given the important role of FDI in the country's economic growth, Vietnam should promote FDI attraction in response to the impact of climate change, prioritise investment in the field of agricultural technology, biotechnology, automation and information technology, which are the foundation for Vietnam's green economy.

To build resilience, she said it was essential for the country to attract FDI that promotes the spatial re-patterning of the economy through creating new economic clusters in non-coastal areas and generating employment opportunities.

The expert believed that the success of reform in the past would serve as a basis for Vietnam to confidently cope with challenges in the future.

Vietnam’s investment shifting could boost economic resilience

The economist cited data from the World Bank that the value of trade exchange (including goods and services) of Vietnam with foreign countries was equivalent to 209 percent of its gross domestic product (GDP) last year - second only to Singapore in the region. This reflected the openness and deep international integration of the Vietnamese economy.

The expert believed that the success of reform in the past would serve as a basis for Vietnam to confidently cope with challenges in the future./.

Med-tech groups open up to pandemic opportunities

Application of IT in the healthcare sector is now booming in Vietnam to serve the pandemic battle, with future prospects of development to further enhance medical tech businesses on the back of the Industry 4.0 era, and incentive policies.

The south-western province of Tay Ninh is now feeling at ease with taking COVID-19 samples and delivery of testing results thanks to the application of a new platform on managing test sample collection and returning test results.

Nguyen Tan Duc, director of Tay Ninh Department of Information and Communications, said that the application of technology is supporting the province, enabling it to have accurate data and take speedy samples.

“The testing results are available on the National Technology Centre for COVID-19 Prevention and Control. Therefore, people can get the results online, thus preventing gatherings,” he added.

People install Bluezone on their smartphones and get a health declaration QR code to receive the testing result on the app. This platform helps healthcare workers better manage and ease the pressure for them while preventing gatherings and possible mistakes like late delivery of results.

Tay Ninh piloted the platform in four wards from mid-August and decided to expand to nine districts, towns, and the city from August 18 after getting positive feedback. Together with Tay Ninh, this platform is being deployed in badly-hit southern localities such as Binh Duong, Dong Nai, Dong Thap, Can Tho, and Vinh Long. Around 26 other localities are preparing to deploy the platform.

The system is one of three (in conjunction with QR codes and health declarations) developed by the National Technology Centre for COVID-19 Prevention and Control, and being used commonly and consistently nationwide, aiming to increase efficiency. The two others are medical declaration and management of access to public places by QR code, and the COVID-19 vaccination management.

Established in June, the centre has the involvement of 20 digital technology businesses nationwide, and thousands of state staff and domestic and international IT experts. Leading technology brands involved include Bluezone developer Bkav, CMC, FPT, and Sovico as well as emerging players like Got It, STEAM for Vietnam, Kompa Group, Filum, and G-Group. In the wake of the importance of technology as an indispensable tool in the battle, the Ministry of Information and Communications (MIC) has mobilised many resources to build technology platforms to support pandemic prevention and control in the country.

Along with the aforementioned nationwide platforms, others are being utilised to support tracing those who have contact with infected cases, to monitor quarantine, and to serve leadership and management activities through data analysis. Last week, a new platform called Giup toi! (Help Me!) was launched to connect doctors with people in need of remote healthcare consultations while social distancing measures are in place. It is developed by Got It Vietnam, STEAM for Vietnam, Kompa Group, and Filum AI.

Many others have been launched like an electronic health book application, a public portal of vaccination information, a national immunisation support system, and a telehealth system have been developed as well. Besides this, technology is enabling about 4,000 health professionals to remotely screen and take care of infections in Ho Chi Minh City, Binh Duong, and Hanoi. At present, many resuscitation centres are also being put into operation in Ho Chi Minh City to provide specific treatment for COVID-19 infections.

To enable locals to better access healthcare during the pandemic, in early August, Vietnam launched a telehealth platform, connecting over 30 central hospitals with all more than 1,400 district-level hospitals, including those located in mountainous and island areas. Big tech companies are venturing further into this national effort. Viettel and Vietnam Posts and Telecommunications Group (VNPT) developed the telehealth system for hospitals and health facilities nationwide. In the IT solutions market, FPT Healthcare, VMED Group, and Isofth are also big players. Many tech startups and others are also venturing into the segment.

Industry insiders said that Industry 4.0 is now a driving force for med-tech firms in Vietnam to venture future, and advanced technologies of Industry 4.0 are now among the focuses for technology firms. Nguyen Tu Quang, CEO of Bkav, reaffirmed that AI is proving its strength and advantage in the COVID-19 fight in Vietnam and will be more effective – for example, the application of camera AI to detect illegal entry to the country, and supervising activities at quarantine areas.

According to Huy Nguyen, co-founder and CTO of KardiaChain, many regional countries like Singapore, South Korea, and Malaysia are applying blockchain in the management of COVID-19 vaccine passports. In addition in Vietnam, blockchain is being deployed at some hospitals to manage medical records.

As the prime minister defined that technology is among the spearhead pillars in the national COVID-19 fight, he has asked the Ministry of Science and Technology (MoST) to work with the MIC along with the ministries of health, and finance to work on incentive policies to encourage research and development of technology products for the pandemic issue.

Vietnamese farm produce introduced at chili fest in Italy

Vietnamese agricultural products have been introduced at the 10th Chili Pepper Festival, one of the most awaited culinary fests in a year that is taking place in Italian central city of Rieti from September 1-5.

The event drew about 150,000 Italian and foreign visitors, with more than 90 booths introducing 450 varieties of chili peppers from all over the world.

Addressing the opening of the event, Vietnamese Ambassador to Italy Nguyen Thi Bich Hue said that with tropical weather and diverse ecosystems, Vietnam is rich in spices, including many very special and popular flavours such as cinnamon, anise, pepper, cardamom, cashew and chili.

She said that Vietnam always considers farm produce as one of priorities in export activities. She noted that thank to the EU-Vietnam Free Trade Agreement (EVFTA) which became effective from August 2020, the import tax rate for agricultural products has been cut to zero percent from 10 percent in the past.

Vietnam is one of the leading exporters of a number of spices like cashew and peppercorn, which account for 80 percent and 90 percent of the world export volume, respectively, she noted, adding that Vietnamese products are becoming better in quality thanks to improved technology in all stages from production to harvesting, processing and packaging.

The ambassador held that the demand for spices is rising in the world, making them not only export products but also means of spreading cultural and traditional values.

The Vietnamese booth at the event introduced to visitors Vietnamese chili and chili products and many other products such as peppercorn, tea and coffee.

This is the third time that Vietnam has joined the festival, which has helped form partnership among 20 embassies of countries owning this special spice./.

Vietnam ready to act as a bridge between Russia and ASEAN: Minister

As an active member of the Association of Southeast Asia Nations (ASEAN) and a reliable partner of Russia, Vietnam is ready to serve as a bridge connecting Russia and the Eurasian Economic Union (EAEU) with ASEAN nations, Vietnamese Minister of Industry and Trade Nguyen Hong Dien said.

The minister made the remarks via video on September 2 at a dialogue session between Russia and ASEAN held within the framework of the Eastern Economic Forum which is currently being held in Vladivostok, Russia.

He suggested that steps be taken to implement the free trade agreement between ASEAN and the EAEU which serves as a basis for boosting cooperation between ASEAN and Russia in particular and inter-regional collaboration between ASEAN and the EAEU in general.

After nearly 55 years of establishment and development, ASEAN is increasingly asserting itself as one of the most successful regional cooperation organisations and plays an increasingly important role in regional and international relations, Dien said.

The minister said that at the special ASEAN-Russia Foreign Ministers' Meeting held on the occasion of the 30th anniversary of the establishment of ASEAN-Russia relations in July, the countries agreed on the necessity to create a new impetus in the relationship and further strengthening the strategic partnership.

Vietnam and other ASEAN countries had pledged to work closely with Russia to promote trade and investment, maintain regional supply chains, intensify cooperation between the EAEU and ASEAN, and make contributions to promote regional trade and linkages, he said.

Ivan Polyakov, Chairman of the Russia-ASEAN Business Council Ivan Polyakov, who chaired the dialogue, said ASEAN is a region with strong economic development and still has great development potential.

The President of the Chamber of Commerce and Industry of the Russian Federation, Sergey Katyrin said Russia has a lot of mechanisms and tools to cooperate with ASEAN.

Despite the COVID-19 pandemic, Russia-ASEAN trade turnover increased by 20 percent in the first six months of this year, he said, adding that with this growth rate, bilateral trade turnover is expected to return to pre-pandemic levels by the end of this year.

He also noted the cooperation in developing a green economy in the context of more natural disasters would occur in the world due to the impact of climate change.

At the dialogue, speaker Do Quoc Viet - a member of the Vietnam Entrepreneurs Association in Russia - said that transport infrastructure and logistics activities always play an important role in economic cooperation and development between the two countries.

He cited a lack of containers and congestion at seaports as reasons for an increase in transportation fees for the route from Vietnam to Vladivostok. It has increased from 1,000 USD per container in October last year to 10,000 USD. The shipping time has also risen, sometimes up to 2-3 months.

Viet suggested that Russia build a larger port which is corresponding with the transport capacity from ports in Southeast Asia to solve the problem.

The most important issue on the agenda between Russia and ASEAN as well as the between the EAEU and ASEAN is to fully tap the potential of the two sides, Ivan Polyakov, the Chairman of the Russia-ASEAN Business Council, told Vietnam News Agency correspondents in Moscow after the dialogue.

Polyakov said he hoped that Vietnam and other ASEAN member countries are increasingly interested in strengthening cooperation with Russia in the widest range, not only in business, trade, or investment but also in culture and tourism and mutual understanding./.

Ventilator makers ramp up affordable development

The continuing task of trying to shut down COVID-19 outbreaks and save lives has brought to the forefront the critical need for ventilators to provide treatment for patients.

Paul Verhulst, managing director of Medtronic Indochina told VIR that through Vietnam’s current difficulties, elective procedures have been put on hold while ventilator demand has increased significantly. “Medtronic recognises the acute need for ventilators as life-saving devices in the management of COVID-19 infections and has been working since early 2020 to meet this increased global demand,” Verhulst explained. “Ventilator manufacturing is a complex process that relies on a skilled workforce, a global supply chain, and a rigorous regulatory regime to ensure patient safety,” he added.

In its ventilator manufacturing facility in Ireland, Medtronic has increased the number of employees dedicated to manufacturing – including transferring staff from other Medtronic sites to support ramp up activities. Medtronic has also introduced new shift patterns to bring the plant to 24/7 operation.

In an open-licence initiative, Medtronic has published design specifications for its PB560 ventilator publicly, providing manufacturers around the world the ability to rapidly accelerate production. The design specifications have thus far been downloaded over 225,000 times.

“We are committed to getting more ventilators into the market and to the right locations worldwide, to help the doctors and patients battling COVID-19, including here in Vietnam,” said Verhulst.

Meanwhile, Tran Ngoc Phuc, the Vietnamese founder of medical equipment maker Metran Co., has teamed up with Vietnamese partners to transfer technology to produce ventilators here. Metran Vietnam Co., Ltd, a subsidiary of Metran, is operating a factory in Vietnam-Singapore Industrial Park II in the southern province of Binh Duong to make artificial ventilators.

According to Phuc, the company has developed a slimmed-down ventilator that is more affordable than conventional models. He hoped that producing simple and low-cost devices in large quantities will help save countless lives.

Since the outbreak of the pandemic last year, Van Thinh Phat Holding Group and Van Lang University have signed a contract with Metran to provide finance for manufacturing 2,000 ventilators. As a result, Metran ventilators have been mass-produced to save the lives of many patients.

Meanwhile, Vingroup has jumped on the bandwagon by producing the Vsmart VFS-510 invasive ventilator. Specifically, Vingroup has flexibly altered its business and production strategies to prioritise ventilator manufacturing from March 2020, leveraging inherent industrial and technological strengths as well as advanced production lines from its subsidiaries and research institutes.

Vsmart ventilators have been put into mass production and have been approved by the Vietnamese Ministry of Health as meeting all criteria for quality, safety, and operability.

Nguyen Tu Quang, CEO of local technology corporation BKAV, also announced that the company has successfully produced high-flow nasal oxygen therapy devices for COVID-19 treatment. It took BKAV nearly a year to research and develop both the simple and advanced versions of the devices. “More people have contacted the Delta variant in Vietnam. Thus, we have taken quick action to ensure the supply of ventilators,” he said.

Hua Phu Doan, vice president and secretary-general of the Ho Chi Minh City Medical Equipment Association told VIR, “Ho Chi Minh City has developed more field hospitals amidst the spike in coronavirus patients. Each hospital has about 500 beds equipped with ventilators. As of present, companies have supplied ventilators in a timely manner to support the city and neighbouring provinces like Binh Duong and Dong Nai in developing field hospitals.”

Doan added that the majority of ventilators are imported. “We hope that custom procedures will be relaxed to facilitate the import of ventilators into Vietnam. This will help treat critically ill patients and help them recover faster,” he added.

Ventilators are vital medical equipment in COVID-19 treatment so a ventilator coordination group was established on August 2 to facilitate treatment. The group will review and keep track of the number and types of ventilators available at hospitals nationwide as well as the hospitals’ ventilator demands. It is also engaged in distribution of the ventilators and nasal oxygen devices for COVID-19 patients as well as training medical staff on taking care of the machines.

Likewise, Medtronic has been hosting virtual webinar series led by medical experts on mechanical ventilators. The series has attracted nearly 10,000 frontline doctors in Vietnam to participate, learn, and share their experiences and best practices. Medtronic has also hosted dozens of virtual physician forums and medical education programmes to help physicians of various specialities navigate the challenges of the pandemic.

“It is important to recognise that Vietnam will continue to grow and, in fact, it is one of the fastest-growing markets for Medtronic in Asia-Pacific. We are committed to serving our partners and patients here,” Verhulst said.

Online trade promotion – key to overcome COVID-19 crisis

Hundreds of online trade promotion events have been organised effectively, helping settle stagnant situation in the field and overcome difficulties brought about by the COVID-19, which has broke out in the global scale, disrupting supply chains and affecting export activities.

In the current context, online trade promotion is considered the key to help businesses overcome the COVID-19 crisis and complete the ecosystem of trade promotion using digital technology.

According to Vu Ba Phu, Director of the Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, amid the global COVID-19 pandemic, Vietnam has been among first countries to accelerate trade promotion on digital platforms as well as online trade exchange activities in an effective manner.

The efforts have assisted businesses to considerably remove obstacles in markets because traditional trade promotion activities are unable to be organised amid COVID-10, he said.

Phu held that speeding up digital transformation in trade promotion, along with the combination of direct and online activities has helped Vietnamese firms connect both domestic and foreign customers in a safe manner, thus ensuring businesses’ operations and contributing to increasing import-export activities of the country as well as the growth of the industry and trade sector in particular.

Right from the beginning of the COVID-19 outbreak, the Ministry of Industry and Trade has promptly applied IT applications and social networks to set up regular connection channels among domestic exporters, trade associations, trade promotion agencies, Vietnamese trade offices and representative offices abroad, and foreign importers and partners.

Thanks to the regular and continuous information connectivity, a huge amount of information on import-export goods from domestic firms has been provided to foreign partners.

The Vietrade has become the pioneer in applying online and hybrid trade promotion models in Vietnam. The agency has shared its experience to other agencies and businesses across the country.

Hundreds of online trade promotion events have been held, generating certain outcomes. This has proved that the renovated method is suitable to the current real situation amid complicated developments of the pandemic, and can replace traditional trade promotion method, helping Vietnam catch up with the global economic trend, according to Phu.

The Vietrade director underlined that online and hybrid trade promotion models are an optimal solution enabling businesses to approach markets, and a key for them to overcome the “COVID storm”. The activities will become an indispensable part of the trade promotion ecosystem using new technology, which will be a great help for enterprises, he added./.

Talks held to find foothold for Vietnamese goods in Russia

Despite Russia opening its doors for goods from Vietnam, a lack of information and transportation costs have caused local firms to face challenges in accessing the potential market.

This information was revealed on September 2 during an online workshop that attracted the participation of over 200 enterprises and representatives from various Vietnamese and Russian trade co-operation organisations.

During the event, Vietnamese businesses introduced their potential products and expressed their wishes to strengthen co-operation and investment alongside Russian partners in numerous fields such as agricultural production, food processing, beverage, household appliances, and seafood.

They also hoped to learn more and access information regarding trends of consumption within the Russian market.

Regina Budarina, vice president of the Vietnam-Russia Friendship Association, said that numerous Vietnamese products including farm produce, food, and beverages have the chance and the potential to enter the Eastern European nation.

Recent times has seen some items even strengthen their position, proving these products are of high quality and are particularly favoured by Russian consumers, thereby attracting greater interest from wholesalers and retailers.

In addition, some of the most popular items among Russian people like fresh fruits, vegetables, coffee, and nuts, can be viewed as Vietnam’s strong points. However, the majority of supermarket shelves in the market lack Vietnamese brands.

To penetrate this market, Budarina suggested that Vietnamese exporters should promote market research regardless of the fact that their initial investment costs may be high.

Vietnamese enterprises should therefore organise seminars and exhibitions aimed at bringing Vietnamese brands closer to the Russian market, said Budarina.

On the other hand, as a way of reducing transportation costs, local enterprises must also consider transporting goods by rail through China, and additional Vietnam-Russia trade offices need to be established to support small and medium enterprises.

The Vietnam Trade Office in Russia also noted that to clear a path into Russian retail chains, apart from high-quality and eye-catching products, local enterprises need to stock up goods and supply enough items to these retail stores.

Given the complicated developments of the COVID-19 pandemic, the office will continue to promote trade activities and connect Russian and Vietnamese businesses.

A number of seminars will be held with the aim of creating greater opportunities for Vietnamese goods to find a foothold within the Russian market.

Vietnam’s investment shifting could boost economic resilience

Vietnam should promote investment to revive its economy and strengthen its ability to respond to new risks despite its success in dealing with a crisis caused by the COVID-19 pandemic.

According to Phyllis Papadavid, Head of Research and Advisory at Asia House, a consulting organisation based in London, the United Kingdom, Vietnam has been an economic success story and has shown resilience during past crises, including the current COVID-19 pandemic.

The expert believed that the success of reform in the past would serve as a basis for Vietnam to confidently cope with challenges in the future.

Vietnam moves to accelerate administrative reform in 2021-2030

Vietnamese Deputy Prime Minister Pham Binh Minh on September 2 signed Directive No.23/CT-TTg on boosting the Master Programme on State Administration Reform for 2021-2030 to meet future national development needs in the digital age and increasingly growing international integration.

The direction states that administrative reform is one of the country’s key policies during the doi moi and national development, and one of the breakthrough solutions contributing to national socio-economic development.

The administrative reform has produced positive results over the past years. However, the work is frequently sluggish and ineffective, falling short of national development requirements in the new era.

Accordingly, the directive tasked ministries, agencies, and cities and provinces to further boost administrative reform to better serve people and businesses.

Ministers, heads of ministerial-level agencies, government agencies, and chairmen of provincial and municipal People’s Committees directly under central government must direct the implementation of the master programme on administrative reform and take responsibility for results.

They were also directed to further simplify business conditions, accelerate the completion of administrative settlements, and ensure healthy competition in the recruitment of state personnel.

As of last November, more than 1,000 administrative procedures have been axed or simplified through administrative reforms. As many as 3,893 of 6,191 business conditions and 6,776 of 9,926 goods categories subject to specialised inspection have been cut. These reductions have saved about 18 million working days per year or over VND6.3 trillion ($273.9 million) a year for the society, people, and businesses.

Ports see increase in goods handling despite COVID

Thanks to the adoption of drastic COVID-19 prevention measures at ports, the volume of goods that passed through ports in the first eight months of the year increased by 18 per cent year-on-year to 16.8 million TEUs, the Viet Nam Maritime Administration said.

They comprised exports of 5.4 million TEUs, up 16 per cent, and imports of 5.5 million TEUs.

With 3.2 million TEU, the Cai Mep - Thi Vai Port Cluster in Ba Ria-Vung Tau Province accounted two thirds of the imports and exports in the south and 100 per cent of shipments from and to the US.

Amid the COVID-19 outbreak in many southern provinces and cities, port authorities have been adopting many preventive measures like keeping its employees on site and testing them all every three days.

Nguyen Xuan Ky, general director of the Tan Cang - Cai Mep International Terminal Company Limited, said thanks to the strict implementation of prevention and control measures, some COVID cases were detected in time and immediately isolated.

But after more than two months the model has also revealed certain limitations, he said.

The cost for the "three on-site" model and the periodic COVID-19 test fee for more than 350 company employees, up to more than VND1 billion ($44,000) a week, are causing many difficulties for businesses, Ky said.

Keeping the workers at the port and not allowing them to go home for a long time also adversely affects their psyche, directly affecting productivity and safety, he added.

His company has called on the province People's Committee to allow the adoption of other solutions such as allowing local employees living in areas with little or no COVID cases to go home.

Controversies arise as realtors feel left out amid health crisis

The economic downturn has affected almost all industries, including real estate. However, the State Bank of Vietnam and other financial institutions are still keeping a tight rein on this capital-intensive sector.

Given the economic disruptions stemming from the outbreak, Vietnamese regulators and banks have ramped up their assistance and delivered a number of relief measures to offset pandemic-related setbacks for affected customers.

Major banks have continued to reduce lending interest rates and added preferential interest rate packages to support people and businesses feeling the brunt of the pandemic. The local government has rolled out tax incentives in preferential schemes to enhance competitiveness for local producers.

However, the relief measures are not applied to securities loans and real estate business loans, as they are of “a risky nature”, according to the State Bank of Vietnam (SBV).

Nguyen Huong, CEO of Dai Phuc Land, said that the prolonged pandemic has directly affected real estate businesses, and caused a severe decrease in revenues and profits, leading to the inability to ensure the payment of due date loans.

“Banks have simultaneously rolled out a series of preferential interest rate packages to support affected businesses and individuals. However, the application of preferential interest rate policy excluding loans to securities and real estate is not fair,” Huong said.

Real estate loans accounted for a large proportion of the credit structure of banks and also brought significant profits for the banks.

“Real estate is also a key sector contributing to economic growth, affecting more than 200 related industries. Therefore, there is no reason why real estate loans are not on the list of those entitled to the newly-announced interest rate support policy,” she stated. “Banks should have solutions to temporarily freeze, reschedule, and lower interest rates in the short term for current loan packages, especially for developers who are currently in their project development.”

On the same boat, Nguyen Hoang, director of Research and Development at DKRA Vietnam, said that applying the preferential interest rate policy excluding loans to securities and real estate is creating unfairness for the real estate market.

According to DKRA Vietnam, around 70 per cent of real estate brokerages are encountering obstacles. Many brokers find it hard to maintain their current jobs. To survive the pandemic, many real estate brokerage businesses had to cut staff, reduce salaries, and many even had to halt operations.

Moreover, 50 per cent of real estate brokerages surveyed by DKRA have reported revenues decreasing by nearly 90 per cent compared to pre-pandemic levels. Only 10 per cent of surveyed real estate brokerages reported stable revenues, consisting of mostly large-scale companies.

According to Hoang, if there is no support from extension, debt reduction, or loan interest, the real estate sector will become stuck in the mud.

“Besides interest rates reduction, real estate businesses need other tax assistances such as corporate income tax and personal income tax, to name two,” he said.

David Jackson, general director of real estate firm Colliers Vietnam, told VIR that with the current situation, lending is also not very effective due to low transaction volume. “Buyers have limited travel to carry out procedures such as notarisation, signing papers, and viewing land. Besides that, the sky-high prices of raw materials and the suspension of construction works also make it difficult to complete projects. In the market at this time, supply and demand both decrease,” said Jackson.

“Prime Minister Pham Minh Chinh also asked the SBV to manage capital flows into real estate, ensuring to serve the needs of the people. The SBV will strictly control credit for potential risk sectors such as real estate, stock, build-operate-transfer (BOT) projects, and so on, and strengthen risk management for life loans and consumer credit,” he explained.

Earlier in August, the Ho Chi Minh City Real Estate Association had proposed some suggestions to the SBV and commercial banks in a bid to support businesses and homebuyers.

“The association suggested that commercial banks consider reducing loan interest by about 2 per cent per year on existing and new loans to support the business community,” said chairman of the association Le Hoang Chau.

During this market turbulence, many commercial banks have provided a number of relief measures and lowered their interest rates to help customers ride out the bumps.

BIDV, Vietcombank, MB, Viet Capital Bank, SeABank, Shinhan Bank, and several more have promptly implemented interest exemptions, reductions, and debt extensions for customers affected by the pandemic.

MB has slashed its interest rates by 0.5-1.5 per cent, depending on specific customer groups and the extent to which customers are affected by the pandemic.

Pham Nhu Anh, member of the Board of Management and head of the Corporate and Investment Banking Division at MB told VIR, “We roughly estimate that in the last five months of this year, we will reduce interest rates by 0.5-1.5 per cent, which is around $50 million for customers affected by the health crisis. The preferential loan packages are applied for both existing and new groups of customers, particularly for prioritised ones.”

HDBank and BIDV also announced to reduce interest rates for nearly 18,000 customers with an average reduction of 1 per cent for three customer groups affected by the outbreak, particularly for manufacturing and agricultural sectors.

Viet Capital Bank is one of several domestic lenders providing preferential interest rates programmes for construction companies facing financial hardship due to increasing construction material prices.

“Viet Capital Bank sets aside a support package of up to $34.8 million, the loan interest rate from 7.5 per cent per year (lower than average rates), and reducing guarantee fees by 55 per cent,” a representative from Viet Capital Bank said.

According to VietinBank, the vulnerable industries which are hit hard by the pandemic and should be given priority are textiles and garments, footwear, pharmaceuticals, medical supplies, rice, agricultural businesses, essential consumer goods, retailers, and aquatic products. The bank did not mention property as a part of the prioritised group.

Likewise, Vietcombank noted its interest rate reduction will not be applied to securities loans, real estate business loans, or mortgage loans.

In April, the SBV issued Official Dispatch No.3029/NHNN-TTGSNH to credit institutions and foreign bank branches, instructing them to implement strict control over the quality of credit in sectors with potential risks such as real estate and securities. In particular, high-risk credit areas include investments in corporate bonds, securities credit, real estate, BOT projects, and consumer loans.

Nathan Vu, founder of local asset management Art Investor, says real estate is a capital-intensive industry, while recent statistics compiled by the Vietnam Real Estate Association pointed out that it makes up for around 7.62 per cent of domestic GDP.

“The manufacturing industry plays the stellar role in the country’s advancement and in GDP growth, followed by agro-forestry-fisheries. If real estate, while accounting for a smaller proportion of GDP, enjoys the larger benefits of financial support packages, this will spur financial fragility and potentially create an asset bubble,” Vu said.

Banks are now well-positioned to manage risks, particularly those associated with the real estate industry.

“They might be afraid of a downturn similar to that experienced in 2008, and they are now bracing for repeated worrying signs. So it is reasonable for banks to adjust their policy framework and be extra cautious of a sharp increase in real estate’s leverage,” he added.

Nguyen Duc Hoang, senior analyst at Bao Viet Securities said, “Credit balance for real estate loans is already high. Within a limited resource, if banks focus on property, many other fragile sectors have to shut their doors, and this will not create much value in terms of sustainable development.”

“It’s hard to discriminate between property’s legitimate consumers and speculators. So, the SBV is completely fair and square for strict control over property-related lending activities at the moment, and much-needed capital should be channelled into the most vulnerable sectors instead,” Hoang said.

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