About 600 small- and medium enterprises (SMEs) will be supported to apply an occupational health and hygiene management system as part of a programme on vocational education, employment and workplace safety.

The national target programme on vocational education, employment and workplace safety for the 2016-2020 period has been recently approved by Prime Minister Nguyen Xuan Phuc with an investment of more than 14 trillion VND (617 million USD).

It includes three projects – Innovating and improving vocational education quality; Developing labour and employment markets; and Enhancing workplace safety and hygiene.

The overall objectives of the programme are to assist the development of vocational education; foster the growth of the labour market; improve effectiveness in connecting workforce supply and demand; and create jobs and promote manpower export and workplace safety and hygiene,

It will also enhance sustainable employment and increase productivity by improving working conditions and wages and preventing work-related accidents.

The programme targets to provide facilities and equipment for about 30 special schools qualified for offering maritime professional training and training for ethnic minority people or people with disabilities. Training for around 100 key professionals will be developed according to a decision issued by the Ministry of Labour, Invalids and Social Affairs.

About 8,800 labourers will be provided courses in languages and vocational skills with an aim of sending 6,200 of them abroad as contract guest workers.

The programme will also offer consultations on employment policies and vocational education for visitors to career service centres across the country.

Seeds fair opens in HCM City

The fifth seeds exhibition opened today in HCM City with over 350 booths set up by business groups, research institutes, schools, farms, co-operatives and businesses from around the country.

It has seven areas for showcasing agricultural materials, farm machinery and equipment, ornamental fish, bonsai, VietGap fruits and vegetables, seeds, aquaculture and livestock brood stock, and the city’s agricultural achievements.

Trần Tấn Quý, deputy director of the city Department of Agriculture and Rural Development and head of the event organisation board, said the fair is organised to showcase high-quality and high-yield seeds and animal and seafood brood stock.

It is also aimed at creating an opportunity for localities, businesses, and co-operatives to meet, compare notes, and explore business opportunities in agricultural production and trading and promote Vietnamese agricultural brands, he said.

Through the event the city hopes to enhance investment and trade promotion in the agricultural sector, helping make the city a leader in the production and supply of high-quality seeds and animal and seafood varieties to other cities and provinces.

Speaking at the opening ceremony, Lê Thanh Liêm, deputy chairman of the city People’s Committee, hailed the achievements of scientists and businesses in creating new seeds and animal brood stock and urged them to develop more production models and seeds and brood stock suitable for local conditions.

Several seminars, conferences and orchid and bonsai competitions will be held on the sidelines of the event.

The expo, organised by the department at the Biotechnology Centre in District 12, will run until June 26.

19 new lines start supplying power to south

The Southern Power Corporation of the Electricity of Việt Nam (EVN SPC) has begun using 19 110kV power lines, built at a cost of VNĐ2.63 billion (US$115.8 million), this year.

The corporation has now started building 26 power projects.

Nguyễn Phước Đức, deputy director of SPC, said the new electricity lines have helped meet the power requirements for economic development in 21 southern localities. They have ensured electricity supply during this year’s dry season in key economic regions such as Bình Dương, Tây Ninh, Bà Rịa-Vũng Tàu, Bình Phước and Long An provinces.

As of June 20, the corporation had repaired 613 power lines at a cost of VNĐ501.1 billion ($22.1 million). Of this, work on 262 lines is complete.

Investments in building and repairing power lines have helped improve the quality of the national grid, ensuring stable supply and reducing the loss of electricity.

In the future, in accordance with the prime minister’s instruction (at a conference on development of Việt Nam’s shrimp sector), the SPC will invest VNĐ5 trillion ($220.05 million) to improve power supply in shrimp-farming areas.

The SPC is also planning a 220kV power line to Phú Quốc Island. Its construction is expected to begin this December.

The fourth and last turbine of the Trung Sơn hydropower plant, in the central province of Thanh Hóa, began generating electricity for the national grid on Tuesday, nearly two months after the launch of its third turbine, the Electricity of Việt Nam group said.

The plant, located in Quan Hóa District’s Trung Sơn Commune, is Việt Nam’s first hydropower project funded by the World Bank.

Trung Sơn Hydropower Co. Ltd., a subsidiary of the EVN Power Generation Corporation 2, has invested in the project.

The factory has four turbines with a combined capacity of 260MW. Once fully operational, the plant is expected to supply around one billion kWh of power to the national grid every year, as well as help reduce floods in areas downstream the Mã River.

The project is expected to contribute to the local socio-economic development, with minimal environmental and social impact.

The construction of the plant began in November 2012.

Vietjet and Safran ink SFCO2 agreement

Vietjet and Safran signed the SFCO2 agreement for a fuel efficiency solution on Wednesday during the Paris Airshow 2017 in France.
The SFCO2 service contract spans five years, starting in 2017, and covers the entire fleet of the HCM City-based airline. It will help Vietjet improve its operational efficiency by reducing fuel consumption and CO2 emissions.
The agreement provides for operational recommendations, along with a special SFCO2 web application that enables Vietjet to track its progress and potential savings, the airline said in its statement.
The SFCO2 solution combines the expertise of Safran Aircraft Engines, one of the world’s leading aero-engine manufacturers, with the long-standing experience of Safran Electronics and Defense in flight data analysis.
By analysing both operational and maintenance aspects, Safran’s SFCO2 service develops procedures and recommendations to address airlines’ need for greater fuel efficiency, which can reduce Vietjet’s fuel consumption by up to 5 per cent. Accordingly, the fuel expense saved yearly is expected to be to the tune of tens of millions of US dollars.
 “As an important element of the Vietjet fuel efficiency programme, Safran’s SFCO2 service will enable us to meet our fuel consumption efficiency objectives, so that we can combine economics with an environmentally friendly performance,” Vietjet vice president Đinh Việt Phương said.

Sungroup to launch luxury resort in Hạ Long Bay

Sungroup plans to open its luxury resort complex Sun Premier Village Hạ Long Bay at Wyndham Legend Halong Hotel in the Northern Province of Quảng Ninh on July 1.

The developer expects the project to stimulate tourism in the Northern Province.

Carrying the luxury resort brand name, Sun Premier Village Ha Long Bay with resort villas and shophouses is among the first beach-view resort of international standards in the northern region and is guaranteed to make profits.

Sungroup offers buyers many attractive financial support programmes, such as a preferential interest rate loan of 9 per cent within 15 years. Additionally, buyers who register to buy villas at the opening ceremony of the project will enjoy incentives of up to 5 per cent off the selling price, excluding VAT.

When buying resort villas, investors will be entitled to a special interest rate of zero per cent for loans of up to 70 per cent of the selling price.

Villa owners will be issued long-term ownership certificates, in addition to enjoying 225 night-stays free of charge at their properties, which can be exchanged with any hotel or resort developed by the Sun Group across Việt Nam. These include InterContinental Danang Sun Peninsula Resort, Premier Village Danang Resort, Novotel Danang Premier Han River and JW Marriott Phu Quoc Emerald Bay Resort & Spa.

They also have the opportunities to become members of the SOL Club for Sun Group’s investors, which will allow them to use golf courses and recreational parks built by the developer.

Customers who own a shophouse will have two attractive financing options, which are zero per cent interest rate subsidy for a loan of up to 70 per cent of the value. It will come with a grace period of up to 12 months or they can get a discount of up to 3 per cent on the shophouse at the time of signing sale contracts.

Shophouse buyers who make the payment earlier than the schedule will be entitled to a preferential rate of up to 10 per cent per year. Customers who pay up to 95 per cent before 30th July will receive a payment voucher equivalent to 5 per cent of the shophouse value.

Designed by Australia’s renowned Dark Horse Architect and landscape experts from Hong Kong-based landscape design company, AEDAS, each villa includes a secluded space surrounded by lush tropical gardens. Sun Premier Village Ha Long Bay offers beach villas, ocean villas, garden villas and lake villas in a simple but delicate architectural style.

Sun Premier Village Resort Hạ Long Bay is located right next to the Sun World Halong Complex, which according to Dương Thùy Dung, Director of Research and Consulting, CBRE Việt Nam, "will help real estate investors increase their value.”

Thai companies launch marketing blitz in Hanoi

Thai companies have launched a 4-day in-store demo marketing blitz running June 22-25 at Fivimart supermarkets citywide in Hanoi, according to a report by the Vietnam News Agency.

Few marketing tools show off a product under more favourable conditions than in-store product demos such as these, said representatives of the Thai embassy who helped organize the event.

Shoppers are already in stores, ready to try and primed to buy. Some studies have shown that in-store product samples have been credited with boosting wine sales over 300%, lipstick and mascara sales over 500%, and frozen pizza sales by 600%.

Korean firms seek cooperation opportunities in Soc Trang

Firms from the Republic of Korea (RoK) have worked with authorities from the Mekong Delta province of Soc Trang to seek cooperation opportunities in construction and health care.

At a working session on June 22 with the DAE HIEN construction group and Gumi GangDong hospital and other businesses, Vice Chairman of the provincial People’s Committee Ngo Hung said Soc Trang is calling for investment in important health projects such as the ear, nose, and throat hospital and the nursing and rehabilitation hospital.

He noted that all communes and towns in Soc Trang have medical stations. The province has three public hospitals and one private hospital with nearly 1,000 beds. 

Soc Trang also appeals for foreign investment in building public service facilities like supermarkets, trade centres and markets.

The Korean firms expressed their wish to cooperate with the Mekong Delta province and said they are willing to provide equipment for construction, health care, industry, wind power, and environmental pollution treatment.

Hung welcomed the cooperation from the Korean businesses and revealed that his province needs investment in 72 projects on infrastructure, trade centres and wind power. 

Event promoting Thai products kicks off in Hanoi

An event to promote Thai products was officially launched in 10 locations of Fivimart supermarket chain in Hanoi on June 22.

The event is co-organised by the International Trade Promotion of Thailand’s Ministry of Commerce, the Office of Commercial Affairs of the Thai Embassy in Hanoi, and the Vietnam National Trade Fair and Advertising Company (Vinexad).

According to the Thai Embassy, along with exhibitions and trade fairs, trade promotion activities for Thai products have been implemented in Vietnam’s market over the years. 

This event aims to bolster cooperation and trade between the two nations. It is being held in 10 Fivimart stores in Hanoi at Chuong Duong Do, Dai La, Hoang Quoc Viet, Truong Dinh, My Dinh, Nhat Tan, Ly Thai To, Vo Thi Sau, Truc Khe and Xuan Dieu. 

Besides, Thailand’s traditional dances, cuisine and fruit cutting art were introduced in Fivimart Chuong Duong Do on the opening day. They will come to three other locations of Fivimart on the next days.

The event runs until June 25.

EU starts inspecting Vietnamese seafood

An inspection team of the European Union (EU) has arrived in Vietnam to begin checking local seafood safety and quality management between June 20 and 29.

According to the inspection plan and questionnaire sent by the Directorate-General Health and Food Safety of the European Commission, the EU delegation will inspect all production stages from fishing boats, fishing ports, and wholesale markets to cold storage and processing facilities.

Data of the National Agro-Forestry-Fisheries Quality Assurance Department shows that hundreds of local enterprises have met food hygiene standards and are thus qualified to ship products to the EU.

Early this year, the Vietnam Tra Fish Association predicted that tra fish exports to the EU would keep falling. However, the Vietnam Association of Seafood Exporters and Producers (VASEP) said that export to the EU has bounced back after a period of falling from 2011. Specifically, tra fish shipments to the EU in the first four months of this year rose by a staggering 89.5%.

Even in markets where Vietnam’s tra fish exports had tumbled last year due to defaming news reports – such as in Spain and the Netherlands – shipments there had made a sharp turnaround this year. Tra fish exports to these two markets grew 11-fold and 2.3-fold in January-April.

The sharp increase is attributed to efforts by enterprises to introduce high-quality products to these markets. Moreover, demand in Belgium and Germany has also picked up because enterprises have offered high-end tra fish products, instead of simply tra fish fillets.

Other countries in the region have imported a large amount of squid and octopus from Vietnam. According to VASEP, in the first quarter of this year, the export value of these products rose nearly 80% over the same period last year, with the Netherlands, France and Italy being the leading buyers.

In recent years, the EU is among the three biggest importers of Vietnamese seafood with over US$1 billion in revenue, accounting for 20% of the industry’s total exports.

State budget revenue will stay at 21% of GDP

The State budget revenue as a proportion of gross domestic product (GDP) in the 2016-2020 period will still hover around 20-21%, according to an action program just issued by the Government to implement Resolution 07-NQ/TW of the Politburo.

In its action program, the Government said the total budget revenue in the 2016-2020 period is some 65% higher than in the 2011-2015 period. Domestic revenue should account for 84-85% of the total, while crude oil and foreign trade taxes will make up the balance.

As such, the State budget revenue as a percentage of GDP in the next five years is unchanged from the preceding five-year period. The 13th National Assembly’s Financial and Budgetary Committee said in a report that revenues from taxes and fees in the 2011-2015 period were 20-21%.

The Government’s action program also puts budget spending in the 2016-2020 period at 24-25% of GDP. That means a budget deficit of 4-5% of GDP.

The budget spending layout for the next years sets investment at 25-26% of GDP, while regular spending will be harnessed at below 64%.

The Government in its action program also gives the target of gradually cutting overspending to no more than 3.5% of GDP by 2020. Public debt is to be controlled at no more than 65% of GDP in the period, while the Government debt is targeted at less than 55% of GDP, and the country’s external debt at less than 50% of GDP.

Meanwhile, the report of the Financial and Budgetary Committee said budget deficit was 4.4% of GDP in 2011, but it rose to 5.4% in 2012 and 6.6% in 2013, before ebbing slightly to 5.64% in 2014. In 2015, it rose again to 6.11%.

The report showed that public debt is on the rise and has approached the permissible upper limit, while the Government debt has exceeded the ceiling, at 50.3% of GDP in 2015. At the same time, the Government still owned many sums payable from the State budget, especially for social security programs.

PM to chair Vietnam Private Sector Forum next month

Prime Minister Nguyen Xuan Phuc will chair the second Vietnam Private Sector Forum (VPSF) set for late July in Hanoi, where the CEO Confidence Index (CEO.CI) as a tool to measure the private sector’s confidence as well as the business trend will be released.

VPSF deputy general secretary Pham Thi Ngoc Thuy said the Government leader will preside over the meeting and lead the dialogue with entrepreneurs. Some 1,000 business executives and officials will converge at the forum.

Thuy said a survey is being conducted from June 5 to 30 to compile the CEO.CI, which helps gauge the confidence of CEOs in the sustainable development of their companies and domestic economy and business trends of enterprises.

The index, compiled with technical support from the Asian Development Bank, is a valuable reference to public-private dialogues at VPSF, while proposals and aspirations of private businesses will be presented in the White Book due to be published in late August.

Truong Gia Binh, chairman of FPT Group and chief advisor to VPSF, said that Vietnamese private enterprises are facing many difficulties and challenges.

The forum will focus on three key sectors: agriculture, tourism and information technology. Trade facilitation, a basic factor with significant impact on the economic growth, will also be discussed at the forum.

Saigon Food supplies 50 dishes per day to 7-Eleven

Saigon Food JSC supplies half of 100 dishes offered daily by the first 7-Eleven convenience store in Vietnam.

The store inaugurated recently at the Saigon Trade Center building in District 1, HCMC offers a range of Vietnamese food including banh mi thit (Vietnamese sandwich with cold cuts), braised pork, braised fish, summer rolls, sweet soup and fruits.

Le Thi Thanh Lam, deputy general director of Saigon Food, said 7-Eleven has set strict requirements for food supplied by the company.

The company has to ensure the taste and safety of dishes by using vegetables meeting VietGap standards and rice from Japan, as well as quality ingredients. The time between taking orders and delivering products is less than 10 hours and food can be used within 48 hours.

Saigon Food has changed its supply and distribution management systems to meet the requirements.

The company has also learned experience from a Japanese supplier of 7-Eleven although 7-Eleven experts have come to Saigon Food’s processing plant to instruct how to operate production lines.

Saigon Food has exported high-quality foodstuffs to Japan for years, so it knows Japanese quality standards.

Saigon Food’s products may be supplied to other 7-Eleven stores in Vietnam in the future because Seven System Vietnam, the master franchisee of the 7-Eleven convenience store chain in Vietnam, plans to open 20 stores nationwide this year and increase the figure to 100 in the next three years.

Seven System Vietnam general director Vu Thanh Tu said 7-Eleven will serve Vietnamese customers with a deep understanding of local culture and people.

Saigon Food will supply its products to not only 7-Eleven but also many other partners, Lam added.

GDP growth target of 6.7% poses tough tradeoffs

Vietnam will face tough tradeoffs and challenges to obtain this year’s gross domestic product (GDP) growth target of 6.7%, according to recent macroeconomic reports.

According to a report jointly conducted by Marketintello and Development and Policies Research Center (DEPOCEN), the country’s economic growth rate this year is estimated at 6.1%.

However, the growth rate may be higher thanks to an improvement in State budget disbursement and a favorable global market for Vietnam’s exports.

Inflation rate for the whole year is estimated at 2.9%. The mild inflation is attributed to lower prices of fresh food and fuels.

The Government has plans to pump one million more tons of oil to spur GDP growth. However, this move is considered risky and challenging, as the oil production cost is high compared to the selling price.

Citing data from the Ministry of Planning and Investment, the report shows that the production cost of a barrel of crude oil in Vietnam ranges from US$30 to US$70. According to a report of HCMC Securities Corporation (HSC), the break-even point for a barrel of oil extracted by Vietnam Oil and Gas Group (PVN) is US$50.

Therefore, the current global oil price of less than US$50 per barrel poses a great challenge to the plan for tapping more oil this year.

Meanwhile, the Vietnam Institute for Economic and Policy Research (VEPR) forecast that this year’s GDP growth would reach 6.37%, a level deemed as suitable to “natural conditions” of the economy.

To obtain GDP growth of 6.7%, the Government has to ensure that all sectors achieve their assigned growth targets.

According to VEPR, the dependence on the targeted performances of economic sectors may force the Government to back off from tough reform measures.

VEPR reasoned that assigning targets without creating motivation and favorable conditions will not bring about as good results as expected. Therefore, VEPR said Vietnam will have to barter medium-term sustainable growth for short-term rapid growth.

VEPR said that the Government would either have to employ a certain form of the command economy with gradually-declining efficiency, or the economy will return to the slow growth tempo when the Government relinquishes this approach.

FDI still the driving force of Vietnam’s economy

Vietnam’s gross domestic product (GDP) growth is expected to reach 6.5% in 2017 after a slowdown to 6.2% in 2016, largely owing to inflows of foreign direct investment (FDI), heard a seminar in HCMC on June 20.

The Institute of Chartered Accountants in England and Wales (ICAEW), when launching ICAEW Economic Insight Q2 2017: South East Asia Q2 Report in HCMC on June 20, said strong FDI inflows are the driving force of economic growth. In 2016, FDI approvals in Vietnam increased by 9% to US$24.2 billion.

Despite the strong FDI inflows, Vietnam has failed to fully tap the FDI sector’s potential, said a local economist at the event.

Tran Dinh Thien, director of the Vietnam Institute of Economics, said the country’s strategies for attracting FDI have many shortcomings. In particular, the policies focus on offering incentives to FDI businesses but cannot take advantage of FDI. Besides, the connectivity between domestic and FDI enterprises is still weak.

Local companies have not been able to get involved in the supply chains of multinational corporations, which manifests the weak connectivity between the FDI sector and domestic enterprises, according to Thien.

“Let’s take the case of Intel and Samsung. Local content in these corporations’ products is just 3% and 8% respectively. Vietnamese employees working for FDI enterprises mainly do simple work with low salary and have high risk of losing their jobs due to automation,” Thien said.

According to the ICAEW report, Vietnam’s economy still has many problems, including huge trade deficit and huge public debt and external debt that are equivalent to 64.7% and 53.6% of GDP respectively. Moreover, the Government’s current measures to reduce budget deficit such as reducing spending and increasing taxes can slow down GDP growth.

According to Moody’s Investors Service, Vietnam’s banking system was in short of nearly US$10 billion in capital as of late 2016, resulting in more risks in the context of high bad debts.

The report is prepared by Oxford Economics at the order of ICAEW, a member of Chartered Accountants Worldwide, to provide its 145,000 members with updates on the region’s economic situation. The quarterly report evaluates the economies of South East Asian countries such as Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

At the Economic Insight Q2 launch event in HCMC on June 20, Trinh Dinh Thien also gave a brief overview of the domestic economic sector, especially the establishment of new enterprises.

Thien said the number of startups in 2016 reached a record high of 110,000, but the GDP growth rate of the first quarter of 2017 was just 5.1%, far below the growth rates of the corresponding quarters in two preceding years.

Thien explained that only 98,000 of 110,000 newly-established enterprises were put into operation and most of them were too small to have significant impact on economic development.

Thien said the Government policies for startups should focus on quality instead of quantity and encourage enterprises to create more creative products.

Vietnam tea exports continue to look bleak for 2017

Global sales from tea exports continued a downward trajectory for the fifth consecutive year in 2016, dropping an average of 9.5% annually from US$7.2 billion to US$6.5 billion, according to recently released statistics from the world fact book.

Among continents, Asian countries accounted for the highest dollar value of exported tea sales during 2016 with shipments valued at US$4.3 billion or roughly two-thirds of the global total.

African countries followed with market share of 15.1%, trailed by the EU at 14.9%, North America at 2.5%, Latin America excluding Mexico and the Caribbean at 1.7%, and Oceania nations including Australia at 0.2%.

The top five exporting countries were China at US$1.5 billion (22.8% of total global tea exports); Sri Lanka at US$1.3 billion (19.2%); Kenya at US$680.6 million (10.4%); India at US$661.7 million (10.1%); and the United Arab Emirates at US$287.9 million (4.4%).

Vietnam ranked as the 12th largest tea exporting country with total export sales of US$104.1 million (1.6% of total global tea exports) just slightly behind Japan in 11th with US$108.9 million of total export sales.

Among the top 15 tea exporting countries, the fastest-growing tea exporters since 2012 were: Japan (up 69.1%), United Arab Emirates (up 61.9%), the United States (up 46.9%) and China (up 42.5%).

Those countries in the top 15 that posted the largest declines in their exported tea sales were led by: Vietnam (down 53.7%), Kenya (down 43.5%), United Kingdom (down 30%), Indonesia (down 27.8%) and Sri Lanka (down 10.8%).

The Vietnam Tea Association has forecast that tea export sales for 2017 will regain some of the 53.7% of lost sales over the past five years and increase 10% year-on-year from the figures for 2016.

Unfortunately, said Nguyen Huu Tai, president of the Association, though sales have been up in the first five months of 2017 consistent with the forecast, the average sales price of tea is down 3.8% against last year’s same period to just US$1,452 per ton.

This means that the earnings just aren’t there for tea farmers and processors and the export picture for the year remains bleak.

Roughly three quarters of tea exports out of Vietnam consist of black tea, which are lower grade teas that most often end up in blends or tea bags.

The solution, said Mr Tai, is for the Vietnamese tea segment to process higher quality teas that will command both higher sales prices per ton and bottom line earnings.

Mr Tai, suggests the segment turn to Shan Tuyet and lotus tea products.

Recently, he noted the tea industry in the provinces of Ha Giang and Yen Bai have begun exporting products produced from these types of tea on a pilot basis. If all goes well they could become the standard bearer for the segment in future years.

Vietnam-US address key pork trade issues

Following the recent visit by Vietnam Prime Minister Nguyen Xuan Phuc to the US and meetings with President Trump, plans have been unveiled to enhance political, diplomatic, economic and trade relations on many fronts.

Included in the topics were two key trade access issues for US pork exports to the Southeast Asian country involving the use of veterinary drugs and those pertaining to entrails and internal organs.

Regarding veterinary drugs, Vietnam will not issue a circular, as previously announced, implementing a zero-tolerance policy on residues for multiple veterinary drug, many of which are used in US pork production.

Instead, Vietnam agreed to follow US food safety standards and abide by the maximum residue limits (MRLs) set by the UN Codex Alimentarius Commission.

An MRL as defined by the UN Commission is the highest concentration of a chemical residue that is permitted or accepted in a food (in this case pork) and is based on good agricultural and chemical use practices.

The Vietnam government agreed that it would continue to allow imports of pork and beef from US producers that meet with UN Codex MRLs, which aligns the two countries policies related to food safety concerns.

Additionally, it was agreed that the two countries would continue to work to seek an agreement to resolve issues that currently prevent the import of pork white offal (the brains, teats, marrow, testicles, feet, head, tripe, caul and sweetbreads) from the US into Vietnam commerce.

Businesses need to take initiative in exploiting FTA tax incentives

Statistics by the Export Import Department under the Ministry of Industry and Trade show that only 35 percent of Vietnam’s export commodities are making the most of tax incentives from free trade agreements (FTAs) which the country has participated in.

That means over 60 percent of the remaining of commodities are imposed Most Favorite Nation (MFN) tariff much higher than the rate of 0-5 percent in FTAs.
Deputy head of the department Tran Thanh Hai said that one of reasons making businesses yet to get the best out of FTA preferential treatments is that they have not been fully aware of origin regulations. Therefore, they have been unable to get preferential certificate of origin (C/O).
At a recent conference, Mr. Dang Thai Hien, deputy head of the Supervision and Management Division under the HCMC Customs Department said that the country now has only 500 cases predefining harmonized system codes, five predefining customs values and no case predefining export import goods origin.
These numbers are lower than countries in the region, causing a big disadvantage for Vietnam’s trade because if goods code, value and origin are predefined, customs declarers will be proactive to calculate the amount of tax they need to pay while doing customs clearance procedures. The predefining will make customs procedures transparent and unified nationwide and prevent negative issues in the customs sector.
Vietnam has so far signed 12 FTAs with 56 nations and economies in the world, positively taken part in negotiation of Regional Comprehensive Economic Partnership (RCEP) and entered ASEAN Economic Community. Besides, the country has wrapped up negotiation of four FTAs.
Experts said that with the increasing FTA participation, Vietnam has become one among three nations in the region with deep, wide and quick integration which is showed through drastic implementation of policies to open the market’s door.
That creates a condition for Vietnam to promote available advantages, improve the market’s competitiveness and contribute in the country’s overall reform process.
Still the volume of goods taking advantage of FTA tax incentives has been low. Explaining this, experts said that businesses have been indifferent and afraid of applying new ways of doing.
A HCMC leader said that at the end of April, a ministry held a big workshop on integration matters with prestigious lecturers. Still there were less than 20 attendees comprising experts, agency representatives but no business.
FTAs have seemed to draw the attention of state agencies, he said.

According to calculations, the full implementation of FTAs will reduce trade costs to 14.3 percent; save one and half a day of customs clearance time for import items, a reduction of 47 percent compared to current time; and slash nearly two days for export items, dropping 91 percent.
Studies by the World Trade Organization show that implementing FTAs, developing nations will raise export volume of new products to 20 percent. Underdeveloped countries will see the goods export increase 36 percent.

Vietnam wants to cooperate with nations to develop energy

Vietnam wants to intensify cooperation with nations in the world to develop energy industry sustainably to contribute in environmental protection and climate change adaption, said Minister of Industry and Trade Tran Tuan Anh yesterday.

He made the statement at a conference on the debut of Vietnam Energy Partnership Group with the attendance of the EU’s delegation in Hanoi yesterday.
Minister Tran Tuan Anh said that Vietnam’s energy demand quickly increased approximating 11.5 percent a year in the phase of 2001-2010 to meet industrialization, modernization and socioeconomic development demand.
The number slightly reduced during the phase of 2011-2013 but has increased back since early 2014 till now.
Vietnam’s electricity consumption grew 13 percent a year on average in the phase of 2006-2010 and 11 percent from 2011-2016.
According to Vietnam’s national energy development strategy, by 2020 the country will reach 100-110 million tons of oil equivalent (TOE) of primary energy supply and about 310-320 million TOE by 2050.
The adjusted national electricity development plan in the phase of 2011-2020 sets a target of meeting domestic electricity demand. Gross domestic product growth rate will approximate 7 percent a year in the phase of 2016-2030.
Electricity plants’ capacity in the country is expected to total 60,000MW by 2020 and 129,500MW by 2030.

NA approves special site clearance mechanism for Long Thanh International Airport

With decisive majority, the National Assembly (NA) has passed the resolution on dividing Long Thanh International Airport’s resettlement and site clearance compensation into different component projects.

At the June 19 meeting, the National Assembly Standing Committee said that the Long Thanh International Airport project has been seriously considered by the government for a very long time. Also, when giving the in-principle agreement to implement the project, the NA carefully considered many aspects and was clear on the necessity of the component projects.

The overload of Tan Son Nhat International Airport and the increasing demand for air transportation lead to the urgency to build Long Thanh International Airport.

As site clearance is time-consuming and may hold a lot of obstacles, potentially increasing costs if the site clearance period is extended, the NA Standing Committee proposed to divide resettlement and site clearance compensation into different component projects in order to ensure the project stays on schedule and to cut expenses.

Shortage of fund for site clearance

Numerous NA deputies requested the government to clarify the funds used for resettlement and site clearance compensation.

The NA Standing Committee said that based on the obtained information and the latest updated prices from the Dong Nai People’s Committee, the total estimated cost for site clearance, including the construction of resettlement and cemetery areas, is about VND23 trillion ($1 billion).

Currently, the government provides the Long Thanh project with VND5 trillion ($220 million) for the medium- and long-term plans on site clearance. However, this amount accounts for only 21.7 per cent of the actual funds necessary.

After resettlement and site clearance compensation are allowed to be divided into component projects, the government will direct related agencies to conduct a feasibility study report for each smaller projects as well as a detailed site clearance plan in order to calculate the exact amount of investment needed. This will be a foundation for the prime minister to direct related agencies to carefully prepare the needed capital and report to the NA for consideration.

The resolution on dividing resettlement and site clearance compensation into component projects stipulated that the total land area for the Long Thanh International Airport project was 5,000 hectares, including the acreage for resettlement and cemetery areas, as well as other auxiliary construction.

In accordance with the documents that will be submitted to the 2017 annual shareholders’ meeting at the end of June, Airports Corporation of Vietnam (ACV), the developer of Long Thanh International Airport, will deploy six projects on upgrading aviation infrastructure nationwide with the total investment of about VND6.050 trillion ($266.2 million).

Among these six projects, the project on expanding the 21-hectare airfield and two passenger terminals of Tan Son Nhat International Airport will receive the largest investment sum of about VND2 trillion ($88 million).

In 2017, ACV targets to handle 91 million passengers and 1.182 million tonnes of cargo. These figures are 13 and 5 per cent higher than last year’s target. It is expected that total revenues generated will be VND13.293 trillion ($584.9 million), pre-tax profit will be VND3.669 trillion ($161.4 million), and the dividend payout ratio will be 9 per cent.

One of ACV’s core missions in 2017 is to restructure the company and negotiate with its strategic shareholder Aeroports de Paris (ADV). Previously, in March 2017, according to newspaper Nikkei Asia Review, the Vietnamese government has given permission for ACV to sell 20 per cent of its stakes to ADP. Thus, the Ministry of Transport’s stake in ACV decreased to 75 per cent from the previous 95.4 per cent.