Car sales continue another somber month

February continued to see a sharp fall in car sales, with just 12,000 units finding buyers, dropping by half compared to January and a third year-on-year, reported the Vietnam Automobile Manufacturers Association (VAMA).

Specifically, VAMA said 12,394 items were sold in February, including 8,660 passenger cars, 3,324 commercial vehicles and 410 special-use automobiles. Notably, the fall struck both locally-assembled and completely-built-up vehicles, with the respectively month-on-month decrease of 48% and 68%.

The reason is due to the long Tet holiday and the stringent Government Decree 116/2017/ND-CP coming into force from January 1, the latter factor prompting car dealers to suspend auto imports into Vietnam.

It is predicted that the market would not recover in immediate future because traders still need time to adjust under Decree 116, which requires imported cars to be accompanied with vehicle type certificates issued by exporting countries.

Even though Honda Vietnam recently imported a large shipment of Jazz, Accord, CR-V and Civic cars from Thailand, it would take one or two more months to complete all procedures before they can be distributed in Vietnam.

Meanwhile, Toyota Vietnam and Ford Vietnam reported that it would take even more time for them to place orders with factories abroad.

Nevertheless, the consumption of cars is expected to bounce back more dramatically thanks to the zero import tax on vehicles made in ASEAN which also came into force early this year.

Ministry asks Formosa to clarify investment increase

The Ministry of Planning and Investment (MPI) has asked Formosa Ha Tinh Steel Corporation to give a clarification of its capital hike from US$11 billion to US$11.6 billion, according to news website Vietnamnet.

The Taiwanese company sought the ministry’s approval for adjusting its investment certificate in line with the capital increase, which it said was due to the increased costs of certain construction components as well as machinery. Formosa also attributed the additional investment of US$600 million to an amount of US$18 million spent on a chemical coal workshop as a new component, and an increase in the paid-in capital from US$4.5 billion to US$5 billion.

Such details provided by Formosa, however, are still unclear, so the Ministry of Planning and Investment demanded further clarification. For example, as per the steelmaker’s filing, the total capital is raised by US$600 million in terms of U.S. dollar, but the amount in Vietnam dong is reduced from VND248.2 trillion to VND245.7 trillion. The disparity is not explained in the filing.

The increased costs, as stated by Formosa, relate to existing construction components plus the chemical coal plant as a new component, so there must be appraisals from relevant bodies, according to the MPI. Specifically, such a job requires the involvement of the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Construction, the Ministry of Natural Resources and Environment, and the Ministry of Science and Technology.

MPI also urged the authority of the Ha Tinh Economic Zone – where the steel complex is located – to work with the Ministry of Science and Technology and the Ministry of Industry and Trade to identify whether the chemical coal plant is an additional component or a must-have component of the company’s steel production project. The technology and environment impact of this component should be assessed as well.

VIB wins two international digital banking awards

Vietnam International Bank (VIB) was recognized as “Digital Bank of the Year 2017” while its mobile banking app, MyVIB, won the “Best Retail Mobile Banking Experience 2017” award, making it the first Vietnamese bank to be awarded by The Asset magazine for two consecutive years.

The awards recognized VIB’s effort in pioneering the development of digital banking in Vietnam. VIB is the first local bank to allow customers to open bank accounts online.

The bank is also among the pioneers in boosting investment in digital marketing, considering it the most important factor to connect with customers in the digitalization era.

In addition, VIB is known as one of the financial institutions that recognize the importance of financial technology (fintech) for providing customers with innovative and effective services. The mobile banking app MyVIB features unique and outstanding functions such as transferring money in real-time on social media or buying air tickets easily and quickly.

Besides, the app provides customers with financial services such as paying bills, making deposits, managing credit cards, and monitoring and repaying loans.

Tran Nhat Minh, deputy CEO and chief digital officer of VIB, said the launch of the online account opening service allowed the bank to attract a large number of customers last year, accounting for 20% of VIB’s new customers. The number of people who registered for VIB’s digital services last year increased by 50% year-on-year.

The number of MyVIB downloads also went up 104% while the number of customers regularly using the app rocketed by 87% against the previous year.

With strong investment in digital banking in particular and banking services and products in general, VIB has maintained its position as one of the most innovative and customer-centric banks in Vietnam.

The two awards were assessed by a panel of experienced experts in the region, aiming to honor financial institutions and technology firms with excellence in development and application of digital technologies in Asia Pacific, including Japan and Australia. The Asset’s awards are prestigious qualifications with a transparent assessment in strict process and granted to banks and relevant institutions with outstanding achievements and contributions in the finance and banking sector in the year.

VIB was earlier named “Most Innovative Bank Vietnam 2017” by Global Banking & Review Finance.

Saigon Petro proposes cutting bio-fuel tax

Saigon Petro, a HCMC-based fuel trading firm, has proposed the Ministries of Finance and Industry-Trade cut the planned environmental protection tax on bio-fuel E5 to VND500 for each liter sold, news website Dan Tri reports.

In a proposed plan, the Ministry of Finance wants the environmental protection tax to rise to VND1,000 per liter of gasoline and VND500 per liter of diesel oil.

If the National Assembly approves the plan, the tax on A95 gasoline and E5 bio-gasoline would surge to VND4,000 and VND3,800 per liter respectively. According to Saigon Petro, the VND200 differential between A95 and E5 would be too small to encourage consumers to switch to using E5.

Saigon Petro proposed the ministries consider lowering the tax on E5 by VND500 per liter to make it possible for fuel traders to make the E5 price VND2,000-2,500 per liter lower than A95.

Dan Tri quoted a source as saying the sales volume of E5 in the year to end-February had grown markedly compared to the same period last year but accounted for around 30% of the total.

Saigon Petro data shows the sales volume of A92 was around six million cubic meters a year, or 500,000 cubic meters a month prior to 2017. Meanwhile, the amount of the bio-fuel sold represents half of the previous A92 sales figure.

Seafood, apparel stocks seen benefiting from CPTPP

Enterprises in the aquaculture, garment and textile sectors are expected to benefit from the newly signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) while agricultural and financial firms will face stronger competition.

Eleven Pacific Rim countries signed the CPTPP in Chile last week, which is the revised version of the Trans-Pacific Partnership (TPP) trade pact. The signing of the deal went on despite the U.S. withdrawal from TPP in January 2017. 

The signatories are Singapore, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Vietnam.

According to Viet Dragon Securities Company, seafood and apparel stocks such as TCM, TNG, EVE, VHC and FMC made sharp gains on the morning of last Friday, helped by the signing of the pact. The sectors benefiting the most from the high-standard trade pact include garment/textile, seafood, logistics and real estate.

For the apparel industry, Vietnam’s exports to CPTPP member economies account for 13% of the total, way below 38% to the U.S. alone. Among the 10 other members, Japan is Vietnam’s biggest importer with around US$4 billion a year. TCM and GMC are the listed apparel enterprises with strong exports to Japan.

The seafood sector has a better outlook as CPTPP countries import around US$2 billion worth of seafood from Vietnam a year, making up 23% of the nation’s total shipments. Japan alone accounts for over 15% and Vietnamese exporters of shrimp, octopus and tuna products will see a brighter future.

The real estate sector will also get a boost as huge foreign investment is expected to flow into the country. The demand for infrastructure at industrial zones, high-class apartments, resorts, golf courses and offices for lease is projected to surge.

But businesses in the agriculture, animal feed, pharmaceutical and finance sectors will be facing tougher competition, said the brokerage firm.

More agricultural, dairy, sugar and feed products from Australia and New Zealand will enter the local market. Pharmaceutical firms will have to compete with foreign players due to lower import tariffs.

Banks from Japan, Canada and Australia will be able to sell their products and services in Vietnam without having to establish branches in the country, putting pressure on domestic banks.

Last Friday, after reaching an 11-year intraday high of 1,135 points early in the morning, the VN-Index closed down less than a tenth of a percentage point. For the entire week, the index rose 2% for the fourth week in a row.

GAS was the largest contributor to the day’s loss after the Brent crude oil price fell in overnight trade for a second day. Other energy stocks also sold off, including PVD, PVS and PLX.

ODA to be prioritized for development investment

Official development assistance (ODA) and preferential foreign loans will be channeled into development investment projects only, heard a meeting on ODA and preferential loan management last week.

Speaking at the meeting, which was chaired by Prime Minister Nguyen Xuan Phuc and also attended by Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh and Deputy Prime Minister Vuong Dinh Hue, Phuc said ODA would not be used for regular expenditures.

The Government will have to tighten control on ODA project proposals, negotiations, signing and implementation.

Development investment includes investment in infrastructure, healthcare, education and technical assistance projects. 

However, some at the meeting said the line between regular expenditures and development investment remains blurry, the Government news website reports.

At the meeting, PM Phuc hailed the role of ODA in the country’s socio-economic development, especially infrastructure development.

Phuc said the management of ODA projects has been improved but there are still shortcomings. He asked ministries and agencies to improve the efficiency of ODA projects, including technical assistance ones, and cut unnecessary costs. 

The Ministry of Finance was assigned to clearly define development investment and regular expenditures.

For those ODA projects approved and agreements signed before 2018, management units are responsible for closely working with donors over cost cuts and efficiency improvement.

The PM told the Ministry of Finance to draft a prime ministerial directive on ODA and consult relevant ministries and agencies before the draft directive goes before the PM.

Long-term measures sought for sustainable cashew production

The southern province of Binh Phuoc aims to replant 25,000 hectares and conduct intensive cultivation on another 41,000 hectares of cashew by 2020.

During a working session with the Ministry of Agriculture and Rural Development (MARD), local leaders proposed the Government and the Ministry assist Binh Phuoc to realise its target.

The locality will need to invest 10 million VND (440 USD) to enhance the productivity of each hectare, and 20 million VND (880 USD) to replant each hectare of cashew trees, however, it faces financial difficulties.

Therefore, Binh Phuoc called for either non-interest loans or 3-10 year term loans for the work. It also suggested a project to train local farmers in sustainable production.

MARD Deputy Minister Le Quoc Doanh said the ministry will review the province’s proposals and develop long-term solutions to develop sustainable cashew material area.

Focus will also be put on building infrastructure, applying science-technology, production, replacing old plants, improving productivity and selecting varieties to ensure sustainable cashew development.

Doanh urged relevant bodies to propose a legal framework to support industrial crops’ development, and report to the Prime Minister for approval, with priority on cashew trees in Binh Phuoc province.

To improve productivity and product quality, the provincial People’s Committee instructed districts and townships to replace old and low-yield cashew planting areas with new varieties and use advanced science-technology in production.

Climate change adaptation measures will be applied in cashew production to minimise the impact of weather and diseases on productivity.

A favourable legal framework will also be developed to facilitate the sustainable and stable development of the cashew sector.

Large-scale cashew growing areas will be established in tandem with cashew production cooperatives, encouraging connection between farmers and investors.

The province wants international and local businesses to invest in the sector while fostering links to expand export markets, with a focus on processing to increase product value.

According to the Ministry, Vietnam has nearly 300,000 hectares of cashew plants, and each produced 704 kg on average in 2017, down 50 percent from 2016.

Research shows that old and low-yield cashew growing areas are increasing nationwide, particularly in key cashew production localities, including 50,000 hectares in Quang Tri, 10,800 hectares in Dong Nai, 2,000 hectares in Ba Ria- Vung Tau, 12,800 hectares in Binh Thuan, 3,700 hectares in Gia Lai and 700 hectares in Dak Nong.

Binh Phuoc alone has 134,170 hectares of cashew growing area, nearly half of the nation’s total coverage, producing 150,000 tonnes per year, and earning more than 500 million USD from exporting cashew nuts.

Cashew is a key industrial plant that helps the province realise its target of poverty reduction, particularly among ethnic minority groups.

Qualified people sought for State capital management committee

The newly established committee for State capital management must ensure that its staff can hit the ground running, Deputy Prime Minister Vuong Dinh Hue told a meeting in Hanoi on March 12.

Hue chaired the meeting on the drafting of a Government decree regulating the committee’s structure and duties, local news website To Quoc reported.

Chairman of the committee Nguyen Hoang Anh said personnel recruitment would be made transparent and that only talented people would be employed. The committee will set out personnel management criteria in the coming time, he noted.

The committee is responsible for directly implementing the duties assigned by the Government and the Prime Minister, so Deputy Prime Minister Hue said it is crucial to have people who can work effectively from the beginning.

Therefore, relevant ministries and agencies need to propose good candidates for the committee.

According to Deputy Minister of Finance Tran Van Hieu, 21 State business groups and corporations will be transferred to the committee. Twenty of these entities have presented preliminary reports, which put their total assets at over VND1,600,000 billion, and State equity at around VND800 trillion.

Vinachem’s loss-making projects grapple with huge interest payments

Loss-making projects under Vietnam National Chemical Group (Vinachem) are facing an enormous financial burden in 2018-2020 due mostly to huge interest payment obligations, news website Dan Tri reported.

Vinachem has recently presented its business development plans in the next three years for four poor-performing projects.

Of the 12 loss-making projects under the management of the Ministry of Industry and Trade, four belong to Vinachem, namely Ninh Binh nitrogenous fertilizer plant, Ha Bac nitrogenous fertilizer and chemicals factory, DAP-Vinachem and DAP 2-Vinachem.

At the Ha Bac project, the total loan interest it must pay towards 2020 is over VND2.3 trillion (or VND767 billion a year).

The Ninh Binh project is obliged to pay VND1.11 trillion in interest, with VND491 billion of it due this year, VND368 billion next year and VND253 billion in 2020. The respective interest amounts of the DAP 2 project in the next three years will be VND269 billion, VND275 billion and VND272 billion.

The DAP-Vinachem project will have to pay VND9 billion in interest this year and be free from the interest payment obligation as from next year. This is also the best performing project of Vinachem as it reported profit last year.

To assist these projects, Vinachem has requested the Government and ministries to approve some proposals, including loan repayments. In particular, Vinachem has proposed extending loan terms to 20 years, paying principles first and interest later, and offering interest exemptions for overdue loans.

In addition, Vinachem wants interest rates lowered, with 3% per year towards 2022. As from 2023, for loans with annual rates above 8.55%, the rates should be adjusted down to the levels applicable to State-funded investment projects.

Besides asking for assistance with loans at Vietnam Development Bank, Vinachem is looking for support to deal with loans at other commercial banks. 

Last year, the four projects reported lower losses, with Ninh Binh nitrogenous fertilizer, Ha Bac nitrogenous fertilizer and DAP 2 respectively incurring losses of VND933 billion, down by nearly VND200 billion, VND602 billion, down VND449 billion, and VND530 billion, down VND376 billion,. Meanwhile, the DAP-Vinachem recorded a profit of VND15 billion.

Vinachem said it believed these projects would be able to perform better if its proposals are approved.

State stake transfers must go through auctions

Holding public auctions will be the first and foremost option when it comes to transferring State-held shares in businesses, according to Government Decree 32/2018/ND-CP.

Decree 32, which amends Decree 91/2016/ND-CP, specifies transfers of State capital in joint stock and limited liability companies must be conducted under Term 2 in Article 39 of the law on management of State capital invested in production and business activities.

In particular, the withdrawal of State investment capital from joint stock companies which have listed or registered to trade shares on the stock market must ensure the trading price, or the floor price, is no lower than the reserve price.

Capital transfers can come in the form of public auction, competitive bidding or negotiation (not going through the stock exchange).

On the day of public auction, competitive bidding or signing of capital transfer contracts, if the trading price is below the payment price or there is no floor price as a result of no transaction, investors would pay State ownership representatives based on the price set for the form of capital transfer. The trading price must be made transparent.

At joint stock companies which have not listed or have registered to trade on the stock market but do not make transactions on the market, if the first form of capital transfer is not successful, the next can be adopted.

If companies fail to transfer all State capital, State ownership representatives can pick a suitable time to proceed with the transfer.

In addition, companies can opt for book building to transfer State capital. The use of this measure must prove that it is more efficient than public auction or competitive bidding.

Argentina talk focuses on business opportunities with Vietnam

The Vietnamese Embassy in Argentina and the Argentine Chamber of Commerce for Asia and the Pacific held a talk in Buenos Aires on March 15 on business opportunities through international and specialised trade fairs in Vietnam.

The talk was attended by representatives from Argentinean enterprises who want to intensify cooperation with Vietnamese partners.

Speaking at the event, Vietnamese Ambassador Dang Xuan Dung briefed participants on the economic development of Vietnam.

With its foreign policy of openness, multilateralisation and diversification of international relations and integration in the world economy, Vietnam has gained great achievements, with a GDP growth rate of 6.81 percent in 2017 – its highest-ever level.

Last year, the country’s total trade turnover also reached a record high, at 425 billion USD, a four-fold increase after 10 years of World Trade Organisation membership. Vietnam also entered the list of nations seeing the highest tourism growth rates for the first time when it served nearly 13 million foreign tourist arrivals, a year-on-year rise of 30 percent.

Dung said the talk offered a chance for Argentinean enterprises to access information about trade fairs which are about to be held in Vietnam, so they can seek cooperation opportunities with Vietnamese partners.

Lorena Gonzalez, a representative from the Argentine Chamber of Commerce for Asia and the Pacific, expressed her hope for more chances for Argentinean enterprises to learn about Vietnam’s business market and international trade fairs in the country.

At the event, a representative from Vietnam’s Office of Commercial Affairs in Argentina introduced Argentinean enterprises to major trade fairs held in Vietnam annually and their benefits.

The official affirmed that Vietnam’s favourable investment environment and open and more diverse market will open up opportunities for Argentina’s partners.

Two-way trade rose from around 300 million USD in 2006 to over 3 billion USD in 2016.

RoK Group wants to become PV Power’s strategic investor

Teakwang Industrial Co (Taekwang Ind) of the Republic of Korea (RoK) said it wants to become a strategic investor of PetroVietnam Power Corporation (PV Power). 

At a working session with PV Power Chairman Ho Cong Ky in Hanoi on March 13, President and CEO of Teakwang Power Holdings (TKPH) Sang Rok Kim said Taekwang Ind was one of the first RoK groups to invest in Vietnam and has operated in the country for more than 23 years. 

Established in 2008 as a subsidiary of Taekwang Ind, TKPH aims to invest in electricity projects in Vietnam, he said. 

TKPH is the main investor of the 1,200 MW Nam Dinh Build-Transfer-Operation (BOT) Thermal Power Plant which is under financial arrangement, Kim said. 

Taekwang Ind has completed assessments for and field-trips to PV Power plants, he said, noting that that the group hopes to become a strategic investor of PV Power, toward a long-term goal. 

Applauding Taekwang’s desire, Ky highlighted PV Power’s advantages such as its environmentally friendly and modern equipment and healthy financial structure. 

PV Power wants partners like Taekwang Ind, he said. 

The two sides agreed to enhance cooperation and carry forward each side’s strength, supporting each other in development.

Founded in 2007, PV Power is fully-owned by the Vietnam National Oil and Gas Group (PetroVietnam). It operates eight power companies and plants with a total capacity of 4,208.2 MW, capable of supplying about 21 billion kWh per year, or 12 percent of the country’s total power output.

The corporation earned approximately 31 trillion VND (1.36 billion USD) in revenue in 2007. Its pre-tax profit exceeded 2.5 trillion VND (110 million USD), 83 percent more than the early target.

4.5 million USD for national trade promotion

The national trade promotion programme in 2018 will support key sectors, markets and prioritise the development of brand names of some key products.

The programme with an approved budget of 103 billion VND (4.5 million USD) will implement 156 projects. It includes activities to develop markets and export products, such as organisation of exhibitions both inside and outside the country, welcoming foreign importers and providing trade information.

In addition to these, the programme will launch trade promotional activities to develop the local market, especially in rural, remote and mountainous areas.

This year’s programme has new features compared with the previous years, as it has approved 11 projects in the mid-term to help businesses build their trade promotion plans in the 2018-20 period.

After years of implementation, the national trade promotion programme has become an effective channel to develop markets. Last year, some 7,000 businesses enjoyed the programme’s activities. The total contract value and direct transactions at the programme’s events reached more than 569 million USD in foreign countries and 324 billion VND in the local market.

Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear and Handbag Association, said that after attending the national trade promotion programme for 14 years, leather shoe companies had not only procured new orders and expanded their markets but also formed an association for themselves.

According to Xuan, the total export turnover of the sector surged from 3 billion USD in 2003 to 18 billion USD in 2017, partly thanks to the programme. It is expected that the turnover this year will reach 20 billion USD.

The programme is expected to see more success, as the Government promulgated Circular 28/2018/ND-CP, stipulating some solutions to develop foreign trade.

The circular clearly defines contents, budget and support principles for the national trade promotion programme. Products and sectors which have the potential for exports will be given support through the programme. The Ministry of Industry and Trade will manage the programme.

It also stipulates that projects should suit the real demands of the business community, as well as export strategies.

Vietnamese people called to support domestic production

Ministries, sectors and localities should improve the efficiency of communications campaigns to encourage people to buy more locally-made products as a way to show their support for the domestic manufacturing industry.

At a conference on March 15 reviewing the campaign “Vietnamese prioritizes using Vietnamese products” in 2017 and launching its tasks in 2018, Tran Thanh Man, President of the Vietnam Fatherland Front affirmed the campaign received good responses from people and local businesses.

The campaign contributed to raising people’s awareness of selecting and using Vietnamese products while helping businesses to be aware of their role and responsibility in manufacturing quality products to meet demands of consumers, he said.

He asked ministries, sectors and localities to take measures to realize the State’s policy on assisting local businesses to secure dominating shares in the local market, develop the support industry, and build trademarks and distribution networks. 

The ministries, sectors and localities should carry out efficiently the local market trade promotion programme, boost the programme on developing trade infrastructure at localities, reinforce market inspections, fight counterfeits and sub-standard products, strictly implement regulations on price posting, and promptly handle violations to protect the rights of consumers and producers, he said.

In addition to communications campaigns, authorized agencies should do to encourage businesses to restructure their production towards higher productivity, optimize resources, reform technologies, build their brands and seek more markets so their products and services can become competitive, Man stressed.   

In 2018, violations on the quality of commodities, as well as smuggled, fake, and unhygienic goods will be strictly punished, while the management over market, customs, and taxation activities will be intensified to make the campaign “Vietnamese prioritizes using Vietnamese products” run more efficiently.

State agencies should take the lead in using State budget for the purchase of locally-made products, Man noted.

The Vietnam Fatherland Front, socio-politic organizations and businesses should promote their role in raising the awareness of the political system and people of all walks of life to respond to the campaign enthusiastically.

Hong Kong firms seek cooperation opportunities in Vietnam

A delegation of 70 enterprises from Hong Kong (China) will visit Vietnam to seek cooperation with Vietnamese firms next week in Ho Chi Minh City.

Those Hong Kong businesses specialise in finance, education, architecture, law, textiles, electronics components and footwear products.

The event will be organised by the Investment and Trade Promotion Centre of HCM City when the minister of commerce and economic development of Hong Kong, Edward Yau Tang-wah, visits the city.

This is a bridge to help businesses in HCM City meet and seek opportunities for business development and investment cooperation with investors from Hong Kong.

Trade exchanges between Vietnam and Hong Kong have been steadily increasing in the recent years. As of early September 2017, Vietnam is Hong Kong’s third largest trading partner in the ASEAN region, with a bilateral trade turnover of over 13 billion USD, a year-on-year increase of 12 percent. Of which, Hong Kong exported products worth 7.4 billion USD to Vietnam and imported goods worth 5.7 billion USD. 

The main trade items between the two sides include telecommunications equipment and components, semiconductors, valves and electronic tubes, knitted fabrics and knitting tools. 

Double efforts needed to improve business environment

Ministries and departments need to exert extra efforts to improve the business climate as highlighted in the Government’s Resolution 19/NQ-CP, Deputy Prime Minister Vu Duc Dam has said.

He made the statement at an international conference on sustainably improving the business environment to strengthen economic growth in Hanoi on March 15.

A notable feature of the resolution is setting goals on improving the quality of the business environment and enhancing the national competitiveness in the global rankings.

Director of the Central Institute for Economic Management (CIEM) under the Ministry of Planning and Investment Nguyen Dinh Cung said many ministries, departments and localities have actively worked to improve the business environment and extricate difficulties for enterprises.

For example, the Ministry of Industry and Trade removed 675 unnecessary business and investment conditions in 2017. The Ministry of Agriculture and Rural Development, the Ministry of Construction and the Ministry of Health are also active players.

Resolution 19 has created a strong movement to improve the business environment nationwide, Cung said, adding that most of localities have conducted dialogues with businesses to unlock their bottlenecks and encourage them to make more contributions to the local economic growth.

Besides achievements, there are some restrictions. Deputy Minister of Planning and Investment Nguyen Van Trung pointed to the slow implementation of the resolution in some departments and localities, thus failing to realise the target of narrowing the gap in business environment quality and competitiveness with other countries in the region.

Catherine Kadennyeka Masinde, a representative from the World Bank, suggested Vietnam increase accountability of organisations and individuals while implementing the resolution.

The Ministry of Planning and Investment is improving the draft Resolution 19/2018/NQ-CP with higher targets to reform the economy strongly to achieve more equal, practical and comprehensive impacts.

Vietnam moved up 14 places to rank 68th among 190 economies in the World Bank (WB)’s Doing Business 2018 report themed “Reforming to Create Jobs”.

In the previous report, Vietnam jumped nine places to rank 82nd in 190 economies.

Vietnam and Indonesia have implemented the most reforms in the past 15 years, with 39 reforms each, according to the report.

VN business climate needs reform     

Extraordinary efforts are needed to enhance the current national business environment, but Viet Nam is ready to do whatever it takes to overcome low productivity, Deputy Prime Minister Vu Duc Dam and other delegates concluded at the International Conference on Substantially Improving the Business Environment to Strengthen Economic Growth on Thursday.

The Deputy PM commemorated administrative achievements across ministries, sectors and localities in improving the business environment over the past year. He expressed high hopes for the future, stressing the importance of economic restructuring and business environment development as keys to a better Viet Nam.

Dam said that although Viet Nam’s place in the international community had improved, the country’s levels of human resource development and labour productivity were still lower than that of other countries in the region and the world.

Ousmane Dione, World Bank Country Director for Vietnam, said that it was very important for all stakeholders to share information to effectively promote business environment reform.

According to Dione, the country needs to create a dynamic business sector and a competitive economy. Therefore, feedback mechanisms and impact assessments are important to achieve such objectives.

Deputy Minister of Planning and Investment Nguyen Van Trung said that over the past four years, national efforts to improve the business environment had brought remarkable results, contributing significantly to economic growth and poverty reduction.

However, the pace of implementation was not uniform, with some sectors trailing behind, Trung added.

He urged that government policies must be implemented to help narrow the gap between Viet Nam’s business environment quality and competitiveness and those of other countries of the same development level.

Trung promised that in 2018, the government will continue to set higher, more comprehensive goals for improving the country’s business environment.

He cited the Government’s Resolution No. 19 as a way to maintain the objectives of improving the business environment, emphasising the current success in business conditions reform and specialised management, boosting labour productivity and competitiveness of the economy.

Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), acknowledged the Resolution as having remarkable results since it was promulgated on a regular basis since 2014, with numerous improvement indicators such as tax payment, electricity access, social insurance and investors’ protection.

Cung also said that some other areas had experienced little change, such as business registration, contract enforcement, corporate bankruptcy and property ownership.

Although the goal for 2017 was to reduce current unnecessary business conditions by half or one third, only a few ministries, such as the Ministry of Industry and Trade and the Ministry of Construction have achieved this goal, Cung added.

This means Viet Nam has not reached the ASEAN 4 average for business environment, despite a large number of abolished business conditions, as the number of goods subject to lengthy specialised inspection has not met ASEAN’s standard objectives, especially at local levels.

Nontheless, Cung was confident that the Government has set feasible goals with specific solutions and clear responsibilities, and he expected it to have real impacts on the business environment in Viet Nam.

Regarding international experience and suggestions for Viet Nam, Catherine Masinde, Practice Manager of the East Africa Region in the Trade and Competitiveness Global Practice of the World Bank group, mentioned four remaining issues that could hold the country back from achieving its business environment development goals.

These issues include the lack of operational goals and detailed action plans at all levels, the lack of a transparent and effective interactive system between central and local government agencies, the lack of financial incentives in the public sector and the lack of focus on feedback mechanisms and user surveys.

Yesterday’s conference was jointly organised by the Government Office and the Ministry of Planning and Investment (MPI), in cooperation with the World Bank in Viet Nam, with the support of the Australian Embassy and the US Agency for International Development in Viet Nam.

Attending the conference were more than 300 representatives from local ministries, business associations and international organisations.