Vietnam should focus on strategic business plan

Vietnam will officially join in ASEAN economic community on December 31, issued experts at a forum entitled “Vietnam is preparing for joining in ASEAN economic community” on November 26.

Accordingly, ASEAN has become the third-largest labor force in the world and one of the world's fastest-growing markets with its 650 million people and total Gross domestic product (GDP) amounted to about US$ 3.000 billion. The economic growth rate of ASEAN is predicted to be the same as China.

Vietnam will join in ASEAN economic community which will also impact both positively and negatively to its product activities and consume of enterprises.

Representative of United Nations Industrial Development Organization Viet Nam Patrick Gilabert stressed: “Compared to ASEAN member countries, the Vietnamese economy is too weak”.

Besides, growth rate of GDP between countries in the region also has much impact to Vietnam as Vietnam joins in ASEAN economic community. Currently, GDP growth rate of Vietnam in average reaches seven percent. In order to improve Vietnam’s economic growth rate, the country’s enterprises need to change business thoughts and directions for approaching market.

The country’s Government needs to limit small business to focus on strategic business activities.

AEC: opportunity for financial institutions to increase share

The financial integration of the ASEAN Economic Community (AEC) will help Vietnamese companies in the banking, insurance and securities sectors to increase their market share and involve deeper into regional markets, said a Finance Ministry official.

Addressing a workshop on AEC: opportunities and challenges for Vietnam’s financial market held in Hanoi on November 27, Le Thi Thuy Van from the Institute of Financial Strategy and Policy under the Ministry of Finance said t he removal of barriers and differences between countries in the AEC will create a fair playing field for local and foreign companies and attract more foreign capital to meet domestic demand on capital.

The involvement of foreign investors in the management of banking, insurance and securities enterprises is an important factor to quickly improve the administration level, said Van.

The presence of foreign investors in Vietnam’s financial market will open up opportunities for improving quality and diversifying financial services, she said, adding that the free flow of capital in the AEC will also have positive impacts on the extensive and deep development of financial systems.

Fulfilling commitments when the AEC takes effect will pose a lot of challenges for Vietnam’s financial market because the county’s financial market infrastructure and size is relatively small and incompetent in comparison with regional countries.

Pham Tuan Anh, Deputy Head of the Department of International Cooperation, said the first step is to complete institutions to carry out commitments in ASEAN in all fields on finance like accounting, securities, insurance and others.

Van shared the participation of big financial institutions and companies in the market will increase competition in the local market and Vietnam will also have to control the flow of capital in and out of the country.

The increase of capital flow will cause concerns for the bubble of asset value, she said, adding the free flow of capital will increase the risk of sudden capital withdrawal, especially at a large scale that will be a source of instability for the financial market, Van said.

The AEC includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam with a population of more than 600 million people and a combined GDP of more than 2 trillion USD.

Workshop looks at obstacles to import-export

Difficulties facing domestic and foreign enterprises in implementing the latest customs legal documents were discussed at a recent workshop in Ho Chi Minh City.

Trade associations and domestic and foreign-invested enterprises in the city and the southern provinces of Binh Duong and Dong Nai are concerned over the regulations on giving codes for exported and imported goods, according to Director of the Vietnam Chamber of Commerce and Industry (VCCI) – Ho Chi Minh City branch Vo Tan Thanh.

The recently-issued Circular No. 23/2015/TT-BKHCN on the import of used machinery, equipment and technological lines, which will become effective in July 1, 2016, also worries the business circle.

Evaluation conducted by the Vietnam Trade Facilitation Alliance (VTFA) showed that many legal documents related to customs procedures and the aforementioned circular are not in line with the Trade Facilitation Agreement under the World Trade Organisation (WTO) or the Trans-Pacific Partnership (TPP).

Director of the American Chamber of Commerce in Vietnam (AmCham) Herb Cochan suggested that Vietnam accelerate the reform of customs legal framework while revising the irrelevant ones in line with international rules and practices.

The workshop was organised by the Vietnam Chamber of Commerce and Industry (VCCI), the VFTA, the AmCham and the United States Agency for International Development (USAID).

Vietnam attends Vientiane Expo 2015 in Laos

Vietnamese enterprises are displaying handicraft items, food and technologies at the Vientiane Expo 2015, which kicked off in Vientiane, Laos on November 28.

During the event, information on Vietnam’s land and people, culture and tourism destinations were introduced at the fair through the screening of videos produced by the Ministries of Culture, Sports and Tourisms, and Foreign Affairs.

According to Lao Minister of Industry and Trade Khemmani Pholsena, the fair attracted 400 businesses from Laos and other ASEAN member countries exhibiting their products over 600 booths, with commodities such as food, farm products, handicrafts, consumer goods and electronics.

It gives a good chance for enterprises from the ten regional nations to seek and set up partnership, as well as promote their products, she said.

Laos’ prominent achievements in socio-economic developments over the last four decades and its products of strength were introduced at the event, the minister added.

Number of new enterprises surges 28.1 percent in 11 months

More than 86,800 new enterprises were registered in 11 months ending in November, a 28.1 percent year-on-year increase, according to the General Statistics Office of Vietnam.

The new enterprises registered total capital of 538.7 trillion VND (23.9 billion USD), hiking up 37.7 percent compared to the same time last year. In addition, operational enterprises pumped an additional 742 trillion VND (33 billion USD) into their activities in the period.

As a result, more than 1.3 million jobs were created, up 32.9 percent against the same period in 2014.

November saw the establishment of over 9,300 enterprises with total registered capital of 52.6 trillion VND (2.3 billion USD), posing a 19.9 percent increase in number and 35.5 percent rise in capital from October.

The Office also reported that 18,646 enterprises resumed their operation in 11 months, 31.2 percent higher than last year’s figure, said to be spurred by economic recovery and Government’s efforts to improve business climate and support firms to overcome difficulties.

Meanwhile, some 62,713 companies were dissolved or suspended operation during January- November, up 21.4 percent from last year. The figure for November was 4,768 firms.

The low-cost carrier Jetstar Asia official launched its direct air route linking Singapore and Da Nang, central Vietnam, as its first flight with 180 passengers landed in Da Nang Airport on late November 27.

One hour late, a return flight took off from Da Nang to Singapore.

The airline operates three flights a week on Tuesday, Friday and Sunday, using 180-seat Airbus A320 aircraft on the new route.

General Director of Jetstar Asia Barathan Pasupathi, who was also present on the flight, said the route is expected to attract travel agencies, tour operators and entrepreneurs, who usually travel to Singapore for tourism, shopping and working purposes.

Jetstar Asia is the first low-cost airline has launched a route connecting Da Nang and Singapore, Pasupathi stressed, adding that his firm opens nine indirect air routes to Singapore’s Changi Airport.

Deputy Director of Da Nang city Department of Culture, Sports and Tourism Tran Chi Cuong said the opening of the Da Nang-Singapore flight service will facilitate tourism development between Vietnam and Singapore.

Da Nang is an attractive destination for foreign tourists, Cuong said, adding the city hopes to welcome 4.6 million visitors in 2015, including 1.25 million foreigners.

EU, Vietnam move towards free trade agreement

The Euro Presse Image (EPi) on November 27 ran a story saying the European Union (EU) and Vietnam are moving towards a free trade agreement after more than two years of negotiations.

The EU-Vietnam Free Trade Agreement (EVFTA) will lift almost all tariff barriers and open the door for European businesses to make inroads in the Vietnamese market, the article said, adding that the trade pact covers various fields from goods, services and investment to government procurement.

European Commissioner for Trade Cecilia Malmstrom was quoted as saying the EVFTA is a balanced agreement which will push trade with one of the most dynamic economies in Asia and enable EU enterprises to penetrate into the 90-million-strong market.

The EVFTA will boost the high-quality investment capital flow from the union and other partners into Vietnam, the article said, anticipating that Vietnam is likely to become a centre to connect EU trade and investment activities in ASEAN.

This is expected to boost Vietnam’s economic restructuring and change its growth model in a positive direction, the article added.

The completion of the EVFTA will help Vietnam integrate globally as a market economy, it said.

The article commented that the EVFTA is the first trade deal that the EU has signed with a developing country, demonstrating the mutual trust and common goal of sustainable development.

The EU is the sixth largest foreign investor in Vietnam. In 2013, European businesses poured over 500 million EUR in Vietnam. Over the past decade, bilateral trade increased by 200 percent to reach 28 billion EUR at present.

Vietnam is the fourth biggest trade partner of the union in the ASEAN.

Necessary technical and legal procedures are being completed to submit the EVFTA to the European Parliament. The pact is expected to take effect in late 2017 or early 2018.

Debt of state-owned firms rising but within safe ratio

While a recent government report showed that total debts of the 93 biggest state-owned enterprises (SOEs) in 2014 increased 8 per cent compared to 2013, a representative from the Government said the figure was still within the safe ratio.

Speaking at a press conference held after the regular government meeting last week, government spokesman Nguyen Van Nen, said the enterprises' debt, currently at VND 1.5 trillion (US$68 billion), was 1.41 times higher than their equity.

He added that this still within a safe debt-to-equity ratio of less than 3.

He said the companies still managed to make all their payments on deadline.

Responding to concerns over the fact that sustainability of Viet Nam's public debt could be threatened if the enterprises fail to operate effectively, Nen assured that the Vietnamese Government had been applying strict discipline when guaranteeing SOEs' loans.

Currently, the Government is guaranteeing about 63 per cent of SOE's foreign debt.

Nen said the government guaranteed SOEs' foreign loans as they were tasked with major projects, and local resources still fell short of the funding demand.

Moreover, Nen said, with the government's guarantee, the businesses' debt servicing costs would be lower than when they took out loans on their own.

"The fact that the Government has been guaranteeing these business loans to conduct major investment projects play an important role at times when domestic capital is not sufficient for the demand of investment and development," Nen said.

"Enterprises must be responsible for using the loans effectively and taking the risks as well as all duties required by the law when mobilising, managing the loans and paying debts in time," Nen said.

SOEs' debts guaranteed by the government accounted for 19 percent of the country's public debt, and was equivalent to 11.4 percent of gross domestic product, he said.

Viet Nam's public debt is expected to reach 61.3 percent of gross domestic product at the end of December, while foreign debt is set to hit 41.5 percent.

TPP, AEC seek increased growth in farming exports

Exports of Vietnamese agricultural, forestry and fishery products would be aided by the Trans Pacific Partnership (TPP) agreement and the enactment of the ASEAN Economic Community (AEC).

According to experts speaking at a seminar on the impact of free trade agreements on Viet Nam's agricultural sector, the TPP would bring advantages in abolishing import tariff barriers for agricultural, forestry and fishery products. Further, the agreements would expand exports by applying Sanitary and Phytosanitary Measures (SPS) for trading local farming, forestry and seafood products, Nguyen Thuy Linh from the Ministry of Agriculture and Rural Development's International Cooperation Department said at the November 27 seminar held by the Department of Processing for Agro, Forestry, Fisheries Products and Salt Production and the Institute for Policy and Strategy of Agricultural and Rural Development in Ha Noi.

Also, trade barriers are to be eliminated when TPP allows certification and self electronic-certification.

Linh said all enterprises among the 12 TPP member countries have the right of self-certification and must assume responsibility in assuring quality standards and that brand regulations are met.

If companies are found to commit violations, they will be barred from further trading. Therefore, enterprises must build trust in the business community and improve their quality standards and brands.

For trade of farming products between Viet Nam and ASEAN countries, Dang Kim Khoi from the Institute on Policy and Strategy of Agricultural and Rural Development said Viet Nam has had trade surpluses in farming exports with ASEAN countries. Many key export farming products have been shipped to AEC member countries, including rice, seafood, rubber, coffee, vegetable, fruits, wood and wooden products, and cashews.

Vietnamese rice has accounted for a large market share in large markets in the ASEAN region, including 77 per cent of the Philippines' market and 30 per cent of Malaysia's market.

For coffee exports, Viet Nam has made up 67 per cent of the Philippines' market and 73 per cent of Thailand's market.

Meanwhile, Vietnamese pepper has accounted for 45 per cent of the Singaporean market.

According to the institute, Malaysia, a TPP member, would, in the future, have more demands for rubber from Viet Nam so they might exploit advantages from TPP agreements for exporting to the US.

However, Khoi said Viet Nam would face many challenges in importing wooden materials from ASEAN countries, because most of the material had not been properly identified according to its origins. That would open opportunities for Viet Nam's enterprises in increasing imports of wooden material from Malaysia, a TPP member country.

Khoi noted that local enterprises and producers in the agricultural sector should improve their knowledge about integration and its impact on the domestic agricultural sector.

Further, Viet Nam should build standard systems meeting requirements from member countries of TPP, AEC and other free trade agreements to reduce poor quality imports.

The nation should also enhance trade and investment promotional activities between investors of TPP countries and Viet Nam to seek cooperation and set up global value chains for key Vietnamese farming products.

Viet Nam needs to promote the restructuring of its agricultural sector to increase its competitive ability, expand export markets and gain growth in production and business, Linh said.

Legislation needed to protect consumer's borrowing rights

Consumer loans are expected to grow rapidly in Viet Nam, which means a legal framework is required to protect consumers and monitor the operations of credit institutions, experts said.

It should be ensured that credit institutions followed international practices and operated as per the country's situation, they said.

Bui Quoc Dung, director of the monetary policy department under the State Bank of Vietnam, said the management of consumer loans should aim at protecting borrowers, while promoting the market's healthy development by providing loan packages appropriate to consumer demands.

He said that consumer loans were expected to grow rapidly in the future, with an increasing number of credit institutions and financial companies providing this service.

Experts said Viet Nam, with a population of more than 90 million, was a potential market for the consumer credit sector.

Promoting consumer loans was considered an effective measure to limit informal credit that comes with exorbitant interest rates, offering opportunities to low-income earners to access financial services, stimulating purchasing power and contributing to economic growth.

Still, the interest rate is a matter of concern in consumer credit.

Lawyer Truong Thanh Duc from Banking, Securities, Investment Law Firm, said the interest rates of consumer loans remained high.

However, economist Le Xuan Nghia said high-risk loans often had high interest rates, adding that consumer loans were completely different from informal credit.

The statistics of credit institutions revealed that as of September 2015, the interest rates of consumer loans ranged between 20 per cent and 35 per cent per year, higher than normal loan interest rates.

Experts said the legal framework for consumer loans has to be improved to ensure healthy competition between providers through lowering interest rates and harmonising of benefits for both consumers and creditors.

Consumer loans have been increasing in Viet Nam in recent years, accounting for about 8.02 per cent of the total outstanding loans in the first nine months of this year, up from 5.4 per cent at the end of 2013.

The monetary policy department's statistics showed that consumer loans in the first nine months of this year jumped 31.49 per cent, when compared with the end of 2014.

Banks urged to use latest IT

Domestic commercial banks need to give top investment priority to information technology if they want to develop better retail banking strategies, according to independent market watchdogs.

Analysts said that most commercial banks in the country have implemented strategies to develop retail banking but they need to create an adequate technological infrastructure to reduce risks.

Senior banking expert Dr. Can Van Luc said by 2020 most commercial banks would still distribute their products and services through branches and transaction offices.

"To ensure the effectiveness of these facilities, the banks should restructure and allocate them in a more proper way," Luc told Dau Tu Chung Khoan newspaper.

"Strong technology development has encouraged people to use modern devices such as mobile phones, the internet and social websites to access financial and banking services. So, investing in information technology is necessary for the banks to develop retail banking activities," he said.

Luc said that banks should outline digital banking strategies and they must also apply digital technology to the current business model and develop measures to improve the value of services.

He advised lenders to be aware of the importance of managing risks as well as protecting customers' private information. Risk management capability at banks was still low, he said.

Tran Cong Quynh Lan, vice general director of Vietinbank, said the retail banking market had many different segments so the banks should invest in technology to diversify products and services to meet customer demand.

The country's deeper global integration and the participation of more overseas banks in Viet Nam require that domestic commercial banks use modern technology to improve their competitiveness.

The CEO of Infobip Pham Gia Dan said domestic banks needed to diversify distribution channels in order to expand retail banking services.

"To do this, modernising technology infrastructure is necessary. Customers would be easier to get access to financial and banking services thanks to the latest software," Dan said.

However, banks' technological capability was not uniform and as a result customers can encounter risks.

According to a report from the World Bank, only 31 per cent of the country's population of more than 90 million have bank accounts, nearly half of the world's average rate.

As such, the Vietnamese retail banking market has great potential with many opportunities to develop.

To tap the market, banks must place customer experience as a top priority in order to ensure the long-term development of the retail banking sector, experts said.

SCG receives three ASEAN Awards

SCG has been awarded with three of four prestigious awards from ASEAN Communications Program 2015: “ASEAN’s Admired Brand”, “ASEAN’s Excellent Enterprise & Business Man” and “ASEAN’s Quality Products and Services”.

The program, which is supported by government and non-government organizations in Vietnam and other countries in the region, aims to honor, encourage and promote the community of enterprises and individuals who have contributed to the common prosperity, promoted economic, society and relations of friendship amongst ASEAN.

With strict selection criteria and expanded coverage to large community of businessmen and enterprises in the region, ASEAN Communications Program 2015 is a prestigious certification for the effort of enterprises and businessmen on different fields.

"With a clear vision of becoming an ASEAN sustainable business leader, SCG is committed to be a good corporate citizen by always putting many efforts in improves the lives of communities as well as promoting regional economic growth," said Mr. Nopporn Keeratibunharn, Sales & Marketing Director of SCG Cement - Building Materials in Vietnam.

ASEAN Communications Program 2015 honors enterprises through 4 categories including: “ASEAN’s Excellent Enterprise & Business Man”, “ASEAN’s Admired Brand”, “ASEAN’s Quality Products and Services” and “ASEAN’s Favorite Destination”.

This program is supported and supervised by Ministry of Industry and Trade, Vietnam; Ministry of Commerce Cambodia; Ministry of Commerce Thailand, Ministry of Industry and Commerce, Laos; Asian Network for Quality (ANQ), Singapore Quality Institute (SQI), The Standards & Quality Association of Thailand (SQAT), Vietnam Quality Association of Ho Chi Minh City (VQAH), Institute for Quality Assessment & Development (IQAD) and Ho Chi Minh City Union of Friendship Organization (HUFO).

Plastics & Rubber Viet Nam in March

The 6th International Plastics and Rubber, Technologies and Materials Exhibition and Conference for Viet Nam (Plastics & Rubber Viet Nam 2016) will take place from March 1 to 3 at Saigon Exhibition and Conference Centre (SECC) in HCM City.

The event will include a comprehensive display of global technologies and equipment, production materials, semi-finished products, technical parts, and services for the industry.

The 2016 edition will see international group participations from Austria, China, Czech Republic, Germany, Italy, Korea, Singapore and the UK.

Last year, the event attracted 152 exhibitors from 19 countries and regions, and 7,000 trade visitors from Viet Nam and the surrounding region.

This year, it will be incorporated with the 11th International Processing and Packaging Exhibition and Conference for Viet Nam, to provide a full marketplace for industry leaders.

The plastic manufacturing industry is one of the fastest-growing industries in Viet Nam, sustaining average annual growth of 20-25 per cent.

According to the Viet Nam Plastic Association, the country's export turnover of plastic products reached US$4.2 billion in the first six months of 2015, up 10.3 per cent year on year.

Fishery mergers

Recently the fisheries sector has seen an increasing number of mergers and acquisitions though business is not great.

Minh Phu Seafood Joint Stock Company (MPC), for instance, saw net revenues and gross profit slide in the first nine months by 23 per cent and 47 per cent year-on-year and inventories shot up by 26 per cent to nearly VND5.64 trillion ($250.67 million).

Yet, the company increased its stakes in Minh Phu Hau Giang Port Company to 50 per cent. In July it also signed a deal with the Gemadept Logistics Company for the VND670 billion ($33,778) Mekong Logistics Company.

Hung Vuong SeaFood Joint Stock Company saw net profit decrease by 81.2 per cent to VND64.4 billion ($28.62 million) despite a healthy rise in sales due to a sharp increase in costs.

The company only expects to achieve 20.1 per cent of the pre-tax profit target for the year.

But, seemingly unworried, HVG increased its stakes in many companies like Viet Thang Feed Joint Stock Company, Sao Ta Food Joint Stock Company, and An Giang Fisheries Import and Export Company. It now owns respectively 90 per cent, 53.5 per cent, and 79.5 per cent of these companies.

Analysts explained the trend by saying that the companies wanted to expand their areas of operation and to create a closed value chain to increase profits for shareholders.

They appreciated the M&A deals of the fishery companies, considering them to be active actions, but they have also expressed their concerns about a possibility of big financial risks.

Indeed, to realise its M&A plans HVG has had to increase its short-term loans from VND5.44 trillion early this year to VND11.08 trillion in late September, thus making its financial costs to rise to VND350 billion.

Because of this, the fishery companies are suggested to carefully think before deciding investments into the other sectors.

High-tech agricultural development in the central highlands

The fertile soil of the central highlands region is suitable for multiple crops. Provinces in the region are now developing high-tech agriculture to improve people’s living standard and build new rural areas.

Lam Dong has taken the lead in developing high-tech agriculture, which has resulted in the region’s highest economic growth rate over the last 5 years.

High-tech agriculture contributes one third of the province’s production value and has led to an agricultural growth rate of 8.5%, twice the national level.

President of the Vietnam Fatherland Front Nguyen Thien Nhan said, “Lam Dong’s success in agricultural development has been the result of a new growth model, which comprises the application of scientific advances in production, new breeds, and modern tending techniques, watering systems, and greenhouses. Businesses and farmers have cooperated to establish new cooperative models.”

Thanks to the application of scientific advances Dak Nong province’s agricultural production value has grown from US$2,000 to US$3,500 per hectare over the last 5 years.

This has increased the local per capita income to US$1,700 a year. The province has targeted high-tech agriculture as one of 3 development breakthroughs for the coming years.

Kon Tum province has been restructuring its economy, particularly in agriculture, to make the most of available resources to boost economic growth and protect the environment. It is also prioritizing forestry and aquaculture development.

With abundant fertile land Dak Lak and Gia Lai province have prioritized the processing of agro-forestry products, particularly coffee.

Truong Phuoc Anh, Director of the Gia Lai provincial Department of Agriculture and Rural Development, said, “Awareness-raising activities have been carried out to encourage businesses and farmers in agricultural restructuring towards achieving sustainable growth and building new rural areas.”

Cash crops is a priority in a project to develop the central highlands until 2030. The region is now formulating incentives to encourage farmers, particularly ethnic minorities to apply scientific advances in their production.  

Logistics upgrade a must to integrate

International logistics co-operation is essential for Vietnam, especially in the context of global integration and ASEAN Economic Community (AEC), delegates heard at an international logistics conference held in HCM City on November 29.

"According to the World Bank's Logistics Performance Index, Vietnamese logistics ranks fourth in ASEAN and 48th in the world. The infrastructure index has improved in recent years," said Nguyen Nhat, deputy minister of the Ministry of Transport, at the conference.

"ASEAN logistics co-operation began in 2011, and this relationship should deepen in upcoming years so that we can take advantage of the AEC," he said.

To prepare for a more robust and competitive trade environment, the Government has been developing infrastructure for transport and logistics, including 18 national highways linked with ASEAN and a railway system connecting Laos and Cambodia. Local waterways between Thailand and Cambodia have also been improved.

"However, limited legal framework, poor human resources and weak connections among different means of transport, especially railway and sea, and unprofessional and small companies are all challenges for the logistics industry in Vietnam," he said.

To improve the situation, Nhat suggested that in the future Vietnam should deploy an infrastructure network for multi-modal transport, build an entrepot system at international ports, establish big multi-modal transport corporations and strengthen administrative reform to promote commodities circulation.

Speaking at the conference, Alvin Chua, chairman of the ASEAN Federation of Forwarders Association (AFFA), presented an ASEAN master plan for achieving overall ASEAN Connectivity through enhanced physical infrastructure development (physical connectivity); effective institutions, mechanisms and processes (institutional connectivity); and empowered people (people-to-people connectivity).

"ASEAN governments must also address non-tariff barriers to facilitate intra-ASEAN trade and investment along with harmonising standards and achieving conformity of assessment procedures," he said.

In the future, the ASEAN master plan will need to upgrade existing infrastructure, build new infrastructure and logistics facilities and harmonise the regulatory framework as well as nurture an innovative culture.

"Vietnam must pro-actively participate in acceleration of AEC 2015 Integration into the ASEAN Economy," Stanley Lim, chairman of the Singapore Logistics Association, said.

He suggested that ASEAN governments must concentrate on four key pillars: a single market, as trade barriers among nations fall to a minimum; a competitive economic region, fostering a culture of fair competition; equitable economic development by assisting the growth of SMEs, the backbone of ASEAN's economy; and deep integration into the global economy by deleting trade barriers.

"ASEAN logistics will support trade with efficient movement of goods with professionally skilled labour by efficient cross-border of goods through trade facilitation; a single window for speedy customs clearance; human resource development through training in competence logistics skill sets; and connectivity with multi-modal transport," he added.

According to the ministry of Industry and Trade's master plan for logistics, by 2020, the industry will contribute 10% to GDP at a growth of 25% each year and by 2030 the figure will be 15% and 35%, respectively.

"The master plan targets to reduce logistics costs by 0.5 – 1% of GDP every year, equivalent to $1-3 billion, with investment in logistics to grow by 25-30% annually and create jobs for 4-5% of the population," said Tran Chi Dung, deputy director of the Vietnam Logistics Institute.

The conference was organised by the Vietnam Logistics Association with participation of ASEAN top logistics experts from 10 nations, government officials and 150 local companies involved in import, export, logistics, forwarding, transport, airlines, ships, sea ports, insurance and consultancy.

PM wants US$3 billion in unpaid taxes collected by year-end

Prime Minister Nguyen Tan Dung on November 27 ordered local governments and state agencies to collect VND70 trillion (US$3.06 billion) in back taxes by the end of the year amid budget concerns.

The order came as the government is expected to fall short of its revenue target by at least VND31.3 trillion (US$1.36 billion), due to a sharp decline in crude oil prices.

In the past few months, government agencies often publicly slammed local businesses for failing to pay taxes, blaming them for the state budget's problems.

Since July, tax offices around the country have released the names of their top tax defaulters, mostly businesses, to shame them into making payments.

Figures released by the General Department of Taxation this week showed that the name-and-shame policy has helped fetch about 17.9% of VND11.72 trillion (US$512.76 million) owed by 563 top defaulters.

At a press conference on the same day, government spokesman Nguyen Van Nen addressed concerns about its recent report that showed total ddeebts of 93 biggest state-owned enterprises (SOEs) expanded 8% to VND1,567 trillion (US$68.43 billion) last year.

Nen said the companies' debts were 1.41 times higher than their equity, so they were still within the safe debt-to-equity ratio of 3.

The businesses have almost never missed their payment deadlines, he said.

The spokesman also assured that the Vietnamese government has been applying strict discipline when guaranteeing SOEs' loans.

There have been concerns that, with the government guaranteeing about 63.5% of SOEs' foreign debts, the sustainability of Vietnam's public debt could be threatened if the businesses fail to operate effectively.

Nen said the government guarantee SOEs' foreign loans as they are tasked with major projects, but local resources still fall short of the funding demand.

Moreover, Nen said, with the government's guarantee, the businesses' debt servicing costs are lower than when they take out loans on their own.

SOEs' debts guaranteed by the government accounted for 19% of the country's public debt, and was equivalent to 11.4% of gross domestic product, he said.

Vietnam's public debt is expected to reach 61.3% of gross domestic product at the end of December, while foreign debt is set to hit at 41.5%.

Vietnam auto imports nearly double in 2015

The ports of Vietnam saw auto imports surge 82.8% in volume and 91% in value on-year for the eleven months January-November of 2015, according to the latest figures of the General Statistics Office (GSO).

For the period, a total of 112,000 cars, light duty trucks and other automotive vehicles valued at US$2.579 billion arrived dockside, with the vast majority coming from China, the Republic of Korea, Thailand, India and Japan.

The GSO said Vietnam ports could see auto imports rise even more over coming months with the arrival of the ASEAN Economic Community (AEC) and the rising middle class in the country changing consumer purchasing habits.

The AEC has brought about the elimination of tariffs for the 10 ASEAN nations plus the six countries – China, the Republic of Korea, Japan, India, Australia and New Zealand – which form the Regional Comprehensive Economic Partnership (RCEP).

Based on the release of the figures by the GSO, the Vietnam Automobile Manufacturers’ Association (VAMA) in turn revised its forecast for auto exports for calendar year 2015 to 210,000, an all-time record high, nearly double last year’s figure.

Will the AEC help Vietnam’s GNP expand?

The formation of the ASEAN Economic Community (AEC) at the end of this year could create massive motivation for the Vietnamese domestic economy as measured by the gross national product (GNP), say experts.

There has been much fanfare, particularly in the Vietnamese media, about prospects for the gross domestic product (GDP) but that is in reality a ruse they say as the GDP includes revenues of FDI companies.

The profits earned by FDI companies will eventually flow back to the foreign owners of those companies. The real measure of success of the Vietnamese economy over the long run is how well domestic businesses fare as measured by the GNP post AEC.

At a recent conference in Hanoi discussing the domestic economy’s viability following AEC formation, Nguyen Duy Loi from the Institute of World Economics and Politics suggested that the AEC formation will ultimately be very positive.

“It’s good because it forces businesses to become competitive,” said Loi.

“Domestic businesses will have to get serious about accelerating reforms, innovate and learn how to compete with their counterparts from other countries in the region or go by the wayside.”

Loi said the Vietnam private sector will most likely lose the domestic market in the short term to foreigners but they are resilient and will rebound over the long term and find their niche in both the domestic and regional marketplaces.

“The negative impact of the AEC on the nation’s businesses is likely to be immediate,” said Loi, with many domestic business failures next year.

Citing a recent survey conducted by the Central Institute for Economic Management (CIEM), Loi said the impact of the AEC is already being felt throughout the nation’s economy.

Out of 2,571 businesses surveyed, 25% of them faced critical working capital shortages, 22% are already experiencing declines in the backlog of sales orders and another 17% report feeling the competitive pressure mounting.

The AEC ascending pressures are only going to heighten for businesses in the private sector come the beginning of the year when the AEC really starts revving up and comes into full force.

He also acknowledged that in the short term, the AEC would spur more foreign businesses to move production of some goods to Vietnam to take advantage of lower labour costs.

However, he said there will also be many success stories for domestic businesses as the AEC’s creation brings about more opportunity for the more talented and entrepreneurial to expand abroad by making it easier to ship goods within the bloc.

As well, he said the new rules create more standardization of customs procedures, which will greatly benefit the nation’s businesses access foreign markets within the AEC free trade zone.

The AEC will also result in more cross-border movement of services and investment, leading to the expansion of financial products and services in the region. It could also further consolidate Vietnam’s position as a financial hub.

“Most importantly, the AEC is good for the consumer,” said Ho Tan Tuyen from Duy Tan University in Danang as it forces the nonperforming businesses out of the market leaving only those businesses that provide quality services.

Nguyen Van Minh from the Foreign Trade University said far too many businesses have been lackadaisical about preparing for the launch of the AEC and had they been more proactive they would be in a much better position.

“According to statistics from the Kenan Institute Asia,” Minh said just 18% of businesses paid attention to developments of the AEC as they unfolded over the past few years.

More strikingly, he said only a mere 13% of them paid attention to raising competitiveness through building brand names, developing their work forces or by creating alliances with regional businesses.

The bottom line consensus was pretty much that the AEC formation is going to hurt Vietnam’s GNP in the short term, be a tremendous boon for the consumer and the long term prospects are tilted heavily in favour of success.

KPMG congratulates inaugural winners of ASEAN Corporate Governance Awards

On November 14, a number of publicly-listed companies from Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, were honoured at the first ASEAN Corporate Governance Conference and Awards (ACGCA), held in Manila Philippines.

Award winners were selected based on the application of the ASEAN Corporate Governance Scorecard, which in turn was based on international best practices in corporate governance, including rights of shareholders, equitable treatment, role of stakeholders and disclosure and transparency.  

The three companies recognised for having the best corporate governance frameworks in Vietnam were Vietnam Dairy Products Joint Stock Company (Vinamilk), Ho Chi Minh City Securities Corporation (HSC) and PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo).

“KPMG congratulates all of the winners recognised at the inaugural ACGCA, in particular the Vietnam winners Vinamilk, HSC and PVFCCo, all of which KPMG has worked with on governance and risk issues,” said Warrick Cleine, chairman and CEO of KPMG in Vietnam and Cambodia.

“Raising awareness on the importance of good corporate governance, and implementing appropriate policies and processes, are important for all stakeholders including investors, employees, suppliers and customers and all capital market participants.  KPMG is very proud of supporting good governance and we want to congratulate the management at all three companies for leading the way on this important issue,” Cleine added.

KPMG’s commitment to good corporate governance was highlighted earlier this year when KPMG and Australia’s leading educational institution RMIT teamed together to launch the KPMG-RMIT Centre for Governance.

KPMG, a global network of professional firms providing Audit, Tax and Advisory services, operate in over 155countries and have more than 155,000 professionals working in member firms around the world.

Microsoft and Code.org team up to bring ‘Minecraft’ to Hour of Code

Tech giant Microsoft Corporation, Mojang AB, and Code.org recently unveiled a “Minecraft” coding tutorial for students and educators, created especially for the third-annual Hour of Code, a campaign to broaden global participation in computer science, held during Computer Science Education Week, Dec. 7–13.

The new tutorial, now available at code.org/mc, introduces players to basic coding within the fun and popular “Minecraft” environment.

Created by “Minecraft” game designers together with Code.org, the tutorial features Steve and Alex from “Minecraft” and “Minecraft”-inspired challenges that is familiar to its more than 100 million players around the world.

“A core part of our mission to empower every person on the planet is equipping youth with computational thinking and problem-solving skills to succeed in an increasingly digital world,” said Satya Nadella, chief executive officer, Microsoft. “With ‘Minecraft’ and Code.org, we aim to spark creativity in the next generation of innovators in a way that is natural, collaborative and fun.”

Designed for ages 6 and up, the “Minecraft” tutorial introduces players to basic coding skills, encouraging them to navigate, mine, craft and explore in a 2-D “Minecraft” world by plugging together blocks to complete all actions and generate computer code.

Players are offered a set of 14 challenges, including free play time, to explore coding concepts they’ve learned through the tutorial.

“Minecraft’ is a special game that girls and boys alike often can’t be pried away from,” said Code.org CEO and co-founder Hadi Partovi.

“Microsoft continues to be Code.org’s most generous donor and one of the largest supporters of the worldwide movement to give every student the opportunity to learn computer science. This year’s ‘Minecraft’ tutorial will empower millions of learners around the world to explore how a game they love actually works and will inspire them to impact the world by creating their own technology or apps,” Partovi added.

To date, more than 100 million students across 180 countries and 40 languages have participated in the Hour of Code, including one in three students in US schools.

This year, the campaign expects to exceed 100,000 events during December 7−13 and to continue introducing more girls and underrepresented students of colour to this foundational 21st century field.

In support of Code.org and the global Hour of Code campaign, Microsoft will also lead thousands of Hour of Code events in more than 50 countries around the world.

These events will take place at Microsoft stores, offices and innovation centres as well as facilities of Microsoft’s Youth Spark nonprofit partners and schools.

They will be led by over 7,000 Microsoft Student Partners, Most Valuable Professionals (MVPs) and employee volunteers. In addition, Microsoft is gifting Windows Store credit to every educator who organises an Hour of Code event worldwide.

Code.org® is a non-profit dedicated to expanding access to computer science, and increasing participation by women and underrepresented students of colour. Its vision is that every student in every school should have the opportunity to learn computer science.

Mojang is a game development studio based in Sweden, best known for developing “Minecraft.” In 2014, Mojang joined Microsoft Studios to continue work on “Minecraft” and bring their vision, creative energy and innovative mindset to the development of future games.

VietJet Air offers big prizes to passengers

Thousands of gifts, including a grand prize, which is 2-billion-VND premium Dragon City apartment, will be up for grabs for customers flying with low-cost carrier VietJet Air from December 1, 2015 – January 5, 2016.

The offer is part of the carrier’s biggest promotional programme in the year, which was freshly launched on November 30.

The “Fly into an amazing fairy tale with Vietjet” promotional programme plans gifts ranging from smart phones and vouchers for international return tickets to holidays in opulent five-star resorts in central cities of Nha Trang and Da Nang.

Meeting and taking photos with fairy tale characters are also scheduled during the programme. Other gifts will be also presented at domestic and foreign airports.

Special tickets are available from 12:00 to 14:00 every day on website www.vietjetair.com (or compatible with smart phones at www.m.vietjetair.com ) and via www.facebook.com/vietjetvietnam .

Payment can be made with Visa, Mastercard, JCB, American Express and ATM cards that have been registered with Internet Banking service.

Vietjet Air operates about 190 flights a day on 35 domestic and international routes, including those to Singapore, the Republic of Korea, Taiwan, China, Thailand and Myanmar.

The carrier is increasing its presence in both domestic and foreign markets to serve the demands of the customers.

Vietnam Medi Pharm Expo 2015 for December 2-4

One hundred and fifty enterprises from 16 countries will attend the 22nd Vietnam Medical, Hospital & Pharmaceutical Exhibition (Vietnam Medi Pharm Expo 2015) in Hanoi from December 2-4 at the Hanoi International Centre for Exhibition (ICE), 91 Tran Hung Dao Street, Hoan Kiem district.

The exhibition will provide opportunities for visitors to meet with major medical suppliers from the US, Germany, Greece, South Korea, Japan, and elsewhere, pharmaceutical exhibitors from India, Pakistan, and Bangladesh, famous optical and dental manufacturers from South Korea, Taiwan, and Singapore, and suppliers of food supplements, cosmetics, and aesthetic equipment from Japan, Singapore, and Thailand.

“This is the first time we have taken part in the exhibition and we intend to return to the next one,” a representative from The Paul Gerhardt Diakonie (PGD) in Berlin, Germany, said. “We hope to introduce the ‘PGD’ brand name to Vietnamese customers.”

PGD is an international high-standard medical healthcare provider specializing in life-threatening or complicated chronic diseases such as cancer, chirurgic surgical operations, and prosthetics. “We are also ready for medical cooperation between Vietnamese and German clinics, when Vietnamese medical professors choose to organize additional expert healthcare for seriously ill patients,” she added.

Products displayed at the exhibition will include pharmaceuticals, food supplements, manufacturing and packaging machinery, medical and laboratory products, healthcare and treatment services, cosmetics, beauty-care and aesthetic products, dental equipment and materials, and ophthalmologic and optical products.

Vietnam is emerging as an attractive destination for pharmaceutical investors as the market has huge demand for medical equipment and demand will increase in the coming years, according to insiders. A recent report from the Ho Chi Minh City Medical Equipment Association showed that sales revenue of Vietnamese medical equipment is estimated at $800 million per year and could reach $1.2 billion in 2016. The growth in the country’s medical equipment industry as a whole is quite high, estimated at 18 per cent in the 2012-2017 period.

Ninety per cent of medical equipment used in Vietnam is imported from the US, Japan, and Germany. Under the Ministry of Health’s vision to 2018, domestic medical equipment will account for 60 per cent of the market. Insiders, however, said that local manufactures are providing simple products such as beds, bedside cabinets, cotton, bandages, gauze, and needles. Complicated equipment such as x-rays, ultrasound and electrocardiogram equipment are imported or produced by foreign companies.

The TPP will also boost growth in Vietnam’s pharmaceutical sector by some 20 per cent per year from now to 2017, with pharmaceutical spending per capita of about $200 per year, according to Mr. Nguyen Thanh Binh, General Director of the Hanoi CPC1 Pharmaceutical JSC (CPC1 Hanoi). Tariffs on pharmaceuticals imported into Vietnam will be cut from 2.5 per cent to 0 per cent when the TPP comes into effect. Vietnamese people generally have a preference for foreign pharmaceuticals, creating great opportunities for foreign pharmaceutical manufacturers to win more customers, according insiders.

With support from the Ministry of Health and the Ministry of Industry and Trade, Vietnam Medi Pharm Expo 2015 is expected to be a bridge for medical and pharmaceutical companies to reach potential customers.

The exhibition is expected to welcome about 12,000 visitors, including specialists, manufacturers, traders, organizations, doctors, and dentists, among others.

Haiphong inaugurates VIP Greenport

VIP Greenport has been launched in the northern port city of HaiPhong as the result of effective cooperation between the Vietnam Container Shipping Stock Company(VICONSHIP) and foreign partners to develop port services towards building a green port model in the future.

The 400 m long port has a total investment capital of VND1,400 billion spanning on an area of 20 hectares capable of receiving cargo vessels of up to 30,000 DWT.

After entering operation, the project is expected become a modern container port equipped with internationally advanced management software tomeet the customer demand thus helpingimprove the cargo loading capacity of HaiPhong port and realize the goal of building a green port model successfully.

VIP Greenport is considered an exemplary model for Vietnam small and medium-sized enterprises (SMEs) when the nation joins the Trans Pacific Partnership (TPP) Agreement.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR