Cuba workshop on Vietnam’s engagement in Pacific super deals

Major economic deals will assist Vietnam’s modernisation and industrialisation, heard a workshop themed “Vietnam and super agreements in the Pacific Rim” held in Havana, Cuba on June 26.

Researchers from the Cuba Centre for International Economic Research sketched out the geopolitical and economic significance as well as position and benefit of each state joining the agreements, namely the Trans-Pacific Partnership (TPP), the Free Trade Area for the Asia Pacific (FTAAP) and the Regional Comprehensive Economic Partnership (RCEP).

Dr. Ruvisley Gonzalez from Cuba’s Centre for International Political Research said that Vietnam’s engagement in the three super deals is part of the country’s intensive global integration serving its national modernisation and industrialisation, with priority on spaces for the strengthening and diversification of investment and trade.

At the same time, he also pointed out internal and external advantages and challenges that Vietnam has faced when joining the ambitious agreements in the Pacific Rim that is considered the driving force of the world economy in the 21st century, he said.

As the keynote speaker of the event, Assistant Prof. Dr. Cu Chi Loi, head of the Vietnam Institute of American Studies under the Vietnam Academy of Social Sciences, focused on analysing Vietnam’s process of joining the TPP, as well as the Vietnam-US relations and possible effects stemming from the TPP. 

He also evaluated the current status of the TPP after the US’s withdrawal.

Speaking on the sidelines of the event, Loi affirmed that the workshop create a chance for Vietnam and Cuba to share experience and deepen mutual understanding.

Meanwhile, Dr. Ruvisley Gonzalez hailed the Vietnam’s reform experience and its significance to Cuba’s update of socio-economic model. He also stressed that the two sides hold abundant opportunities to lift up their economic ties to match the sound traditional political relations.

Forum seeks to unleash potential for sustainable economic growth

The Party Central Committee’s Economic Commission and the Australian Embassy held the Vietnam Economic Forum 2017 in Hanoi on June 27 under the theme “Unleashing the potential for sustainable economic growth”.

Chairman of the Economic Commission Nguyen Van Binh said Vietnam has made great strides in economic growth since the Doi moi (reform) process began in 1986. It has recorded an average annual growth rate of 6.4 percent since 2000, and reduced the poverty rate to under 3 percent from about 50 percent in the early 90s.

Up to 65 percent of Vietnam’s exports are products of the manufacturing and processing industries, but a majority of them are made by the FDI sector. Domestic enterprises mainly export such goods as textile-apparel, leather-footwear and agricultural products with modest added value. 

“That means an important contribution to Vietnam’s current growth rate comes from external resources, instead of the economy’s internal strength,” he noted.

Binh stressed that it’s high time to review the sustainability of the comparative advantages that Vietnam has usually mentioned such as an abundant and low-cost workforce while the golden population structure is forecast to exist for only another 10 years and the competition from other countries with lower production costs is increasing.

Briefing about the six-month economic situation, Deputy Minister of Planning and Investment Dang Huy Dong said the macro-economy remained stable with controlled inflation and the six-month average consumer price index rising about 4.2 percent year on year.

The GDP growth rate in the year’s first half could reach 5.5 – 5.7 percent, approximating the rate targeted by the Government, he noted, adding that the Government’s resolve to attain a growth rate of 6.7 percent this year is completely sound and reasonable.

“Although this task is very difficult, it is realisable if we are determined to implement all the set solutions,” Dong said, adding that once overcoming the difficulties and achieving the target, there will be a driving force and confidence to realise bigger aspirations in the long term.

A representative of the World Bank (WB) in Vietnam said Vietnam’s economy is stable while inflation is under control and the business climate and exchange rate remain steady. The country has also recorded credit and export growth, improved balance of payments and good liquidity.

The WB predicted Vietnam’s economic growth rate at some 6.3 percent in 2017, suggesting the country focus on carrying out trade supporting measures and free trade agreements to create better growth momentum.

At the forum, participants pointed out bottlenecks in the economy and proposed medium- and long-term solutions. They discussed the position of Vietnam’s economy in the global economic competition and the country’s untapped internal resources and economic restructuring.

The event saw the presence of Australian Ambassador to Vietnam Craig Chittick, representatives of central and local agencies, international organisations, businesses and research institutes, along with domestic and foreign experts.

Economic forum opens as attendees call for fairer globalization

Vietnam Economic Forum 2017 opened in Hanoi today (June 27) as participants called for a fairer distribution of the benefits from globalization.

Under the theme of promoting inclusive and sustainable economic growth for all the population, the opening day of the forum attracted hundreds of attendees from across the country, including government heads and ministry officials, business leaders and experts.

Nguyen Van Binh, head of the Party Central Committee Commission for Economic Affairs said that the economy of the country is beginning to show positive signs of economic growth from globalization with the GDP per capita having pushed into the low middle-income ranks.

However, he cautioned, the economy is also facing certain challenges and risks as the benefits are not being shared inclusively by all the population, with tens of millions having received practically no benefit whatsoever.

The major challenges facing the Vietnam government today require it to take effective measures to improve national governance to achieve a fairer distribution of the benefits from globalization for all the population, thereby ensuring sustainable and balanced development, Mr Binh said.

economic forum opens as attendees call for fairer globalization hinh 1 During the opening ceremony, Craig Chittick, Australian Ambassador to Vietnam, also said that globalization and technology have expanded wealth in the country— while simultaneously widening the wealth gap among the population.

An upturn in the national economy or an increase in the GDP per capita does not solve all problems.

Fragility is everywhere. Population growth, rapid urbanization, food insecurity, water scarcity, and above all climate change are all challenges facing the Southeast Asian country.

That is why it is important to urge reforms in all sectors and find solutions to make globalization fairer, he added.

Various discussions on the global economy, scientific and technological research and development, of the national economic prospects will be held during the forum.

In addition, a string of contracts and agreements covering some wide-ranging sectors are expected to be announced during the event that will help expand international cooperation and collaboration.

Pepper export revenue loses spice due to oversupply

Vietnam's pepper shipments are forecast to reach around 101,000 tons for the first six months of 2017, up 13% on-year, but revenue is likely to fall 13%, according to Vietnam Pepper Association (VPA)'s chairman Do Ha Nam.

“When supply exceeds demand, importers try to pull prices down. Vietnam, which provides some 60% of the global pepper output, will be heavily affected,” Nam told VnEconomy.

In the peak harvest season, farmers need to sell large volumes of pepper to cover expenses, causing prices to fall. Local farmers are stuck in a dilemma: the more pepper they sell, the sharper prices decline.

Domestic pepper prices have been falling throughout May and June, so the VPA is urging local farmers to hang on to their stocks and wait for prices to recover.

“If farmers can hold on for the next 1-2 months, prices will rise again,” Nam said.

The VPA has attributed falling prices to a 15% increase in pepper output in for this crop and the 20,000 tons of Cambodian pepper Vietnam has shipped in.

However, the greatest problem facing the sector is the expanding pepper plantations.

If the plantations continue to expand at their current rate, pepper prices will suffer as supply exceeds demand in the future.

To reduce these risks, the VPA has advised farmers to stop growing pepper in unsuitable soil and switch to alternative crops to provide an additional income.

Despite these warnings, farmers are continuing to expand their pepper plantations.

The reason is that a hectare of pepper can earn farmers at least VND240 million (US$10,600), while the same area of coffee will make them only VND100-150 million.

In addition to this, Vietnam’s pepper industry also faces food hygiene and safety concerns in foreign markets.

For example, in order to export 40,000 tons of pepper to the European Union, Vietnamese firms need to import 22,000 tons of clean pepper from Cambodia, Malaysia or Indonesia to process and export.

Similarly, in order to ship the product to Japan, local companies must import raw pepper to process first.

This is because in the past, Vietnamese pepper has been found to contain excessive chemical residue.

To address the issue, Vietnamese and foreign firms are working with farmers to clean up the plantations.

According to experts, organic pepper is slowly catching on, which may mean lower productivity but should ensure higher prices in a more stable market.

Vietnam urged to increase labor productivity for sustainable growth

Vietnam needs to increase its labor productivity and competitiveness in order to make an economic breakthrough, Professor Jay Rosengard, a public policy lecturer at the Harvard Kennedy School, has suggested.

Vietnam’s annual GDP growth per capita has surpassed US$1,000 since 2008 to make Vietnam a lower-middle-income country, Professor Rosengard said, adding that this milestone opened the possibility of Vietnam soon becoming a high-income country. In an interview with Vietnamese media, Professor Rosengard noted Vietnam can achieve even higher GDP growth with its economic potential.

“I think there are three areas to make Vietnam probably better. The first is investment in hard infrastructure. The second is investment in soft infrastructure, and the third is investment in wet infrastructure. 

Hard infrastructure we’re talking about is the basic infrastructure a country needs to enable the private sector to grow," Rosengard elaborated. 

’Business as usual’ won’t drive growth: official     

Key advantages that have driven national growth will not last much longer, and policy breakthroughs are needed to unleash the nation’s ‘inner potential,’ a senior Party official said on Tuesday.

Nguyen Van Binh, member of the Party Central Committee’s Commission for Economic Affairs, told the Viet Nam Economic Forum 2017 held in Ha Noi that the nation’s exports were largely dependent on the foreign direct investment sector, while local companies were mainly exporting products and produce with little added value.

 “This means the growth still comes significantly from external forces,” Binh said, adding that competitive advantages such as cheap labour would not last forever, especially with increasing competition from countries with lower production costs.

“Viet Nam has reaches an economic development level which requires policy breakthroughs to become a higher-income country,” he said.

Statistics compiled by the Organisation for Economic Co-operation and Development (OECD) show that only 13 out of 113 middle-income countries in the 1960s managed to escape the middle-income trap and become high-income countries.

“What are the choices for Viet Nam? What should we do to escape the middle-income trap and make Viet Nam a new tiger of Asia?” Binh asked.

Jay Rosengard, a lecturer in public policy at the Harvard Kennedy School, felt Viet Nam needed to focus on three things to gain higher growth before its population aged: investing in an infrastructure system to boost the private economic sector, improving public governance and creating a transparent and stable environment for long-term investment, and developing human resources.

Deputy Minister of Planning and Investment Dang Huy Dong said at the forum that in the first half of this year, the macroeconomic situation remained stable.

GDP growth was initially estimated at 5.5-5.7 per cent in the first half of the year and was on track to reach the Government’s target.

Dong said that the 6.7 per cent economic growth targeted for the year was a difficult task, but achievable with determination and effort. The pressure to achieve the target would be high in the second half of the year, he added

Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Programe, said that a growth rate of 6.2-6.5 per cent for 2017 would be more reasonable. 

He said efforts to clean up the banking system and speed up privatisation of State-owned enterprises should go along with improving the efficiency of public investments.

Nguyen Hong Son, deputy director of Viet Nam National University, Ha Noi, felt the Government should strive for 6.7 per cent growth, but not at all costs.

Growth must be based on macroeconomic stability, he said, adding that Viet Nam must consolidate confidence of the private economic sector.

Economist Can Van Luc said that Viet Nam should not exploit more crude oil to fulfill its GDP growth target, but promote consumption and tourism while improving the domestic business climate.

According to Truong Van Phuoc from the National Financial Supervisory Commission, it was important that the growth model is renovated and productivity improved to achieve sustainable growth in 2018-20 period.

Nguyen Dinh Cung, Director of the Central Institute for Economic Management, said that the Vietnamese economy had the potential of reaching 8-9 per cent growth rates.

He said such high growth rates could be achieved by improving the efficiency of SOEs which had $300 billion in assets; and boosting the private economic sector, which has $200 billion in assets.

Speeding up disbursement of FDI and cutting costs for businesses would also speed up growth, he said.

”If the Government issues appropriate policies, the economic growth could potentially reach 8-9 per cent rather than struggling at 6-7 per cent at the moment,” Cung said.

Interest rates for different term deposits are likely to decline by 0.5–1 percent over 2016 thanks to positive signals from the stock and property markets, macro-economic indexes, the Government’s attention to businesses and banks’ strategies for attracting new clients, lawyer Bui Quang Tin with the Business Administration Faculty of the Banking University of HCM City said at the forum.

However, he also said that there will be more challenges to stabilising interest rates on deposits in the remaining months of 2017, compared to 2016, as inflation and interest rates are expected to increase because the US Federal Reserve is projected to make at least three interest rate hikes this year.

Also, bad debts haven’t been fully settled, creating a big barrier to the lowering of interest rates, Tin said, adding it will exert bigger pressure on deposit rate hikes.

In the first quarter of 2017, deposit rates for different terms rose by several dozen basis points at some small and medium-sized banks. However, as a whole, deposit rates have not changed much from the beginning of the year.

Interest rates for deposits of less than six months were kept below the ceiling rate of 5.5 per cent per annum, mostly between 4.3–5.5 per cent. The rates were about 5.3–7 percent for deposits of  six to under 12 months, and 6.5–8 per cent per annum for 12 months upwards.

Meanwhile, lending rates were relatively stable. In prioritised areas, the rates ranged between 6–7 per cent per annum for short term loans and 9–10 per cent for medium and long term loans. The corresponding rates were 6.8–9 per cent and 9.3–11 per cent for loans in normal production and business areas.

The recent increase in deposit rates at some banks was attributed to their need to increase capital and meet capital adequacy-ratio requirements.

The shortage of liquidity, high inter-bank interest rates which have hampered some banks’ access to capital sources in the inter-bank market, and better credit growth are also reasons behind banks’ move to attract more deposits, the forum heard.

However, the pressure to increase deposit rates only applied to some banks, with major banks facing no liquidity shortage. The State Bank of Viet Nam still has room to regulate the market and ensure low interest rates to support growth.

To stabilise lending rates, Tin suggested that the banking system should step up settlement of bad debts and restructuring of credit institutions. The difference between interest rates for loans and deposits in USD and VND should also be kept at reasonable levels, he added. 

Vietnam promotes financial services in China

An event to promote Vietnam’s financial services was recently held in Nanning city in China’s southwestern province of Guangxi, gathering nearly 100 representatives from China, Vietnam and Thailand.

Speaking at the event, Vietnamese Consul General in Nanning Pham Thanh Binh said China has been the largest trade partner of Vietnam for the past 13 years.

The Vietnamese government will create favourable policies in product processing, a strength of Chinese enterprises, noted Nguyen Quang Vinh, an official of the Investment Promotion Centre, under the Foreign Investment Agency.

During the event, Thai Consul General in Nanning Chairat Porntipwarawet pledged that Thailand will create strong trade balance in transport, goods distribution, finance and banking for China and other ASEAN members.

Suntory PepsiCo Vietnam opens fifth beverages plant

Suntory PepsiCo Vietnam Beverages (SPVB) has held an opening ceremony for its new beverage plant at the Dien Nam - Dien Ngoc Industrial Zone in central Quang Nam province's Dien Ban town.

This is its fifth plant in Vietnam, joining those in Ho Chi Minh City, Bac Ninh province, Can Tho city, and Dong Nai province.

The new plant has a maximum capacity of 850 million liters per year and ten production lines. Five production lines are in operation, with a capacity of 300 million liters per year, while the remainder will go into operation in the plant’s second phase.

The Quang Nam plant is of the same scale as others belonging to Suntory Holdings Limited (Japan) and PepsiCo, Inc. (US). It is located on 14 ha with investment of $56 million and its products are expected to meet domestic and export demand.

PepsiCo officially entered Vietnam in 1994. By 2004, SPVB had penetrated into and expanded its production and business in Quang Nam through the merger and acquisition of a plant in Dien Ban to develop more markets and meet the needs of people in Vietnam.

SPVB is a strategic alliance between PepsiCo Inc. and Suntory Holdings Limited, officially formed in April 2013 and increasingly asserting its leading position in the domestic food and beverages (F&B) market. Suntory holds 51 per cent and PepsiCo 49 per cent.

Founded in 1899, Suntory is a major multinational beverage company with 337 subsidiaries and around 42,000 employees in Japan, the US, Europe, and Asia-Pacific.

PepsiCo is a global F&B leader with net revenue of more than $65 billion and a product portfolio that includes 22 brands generating more than $1 billion each in annual retail sales. 

Garment 10 outsourcing for Uniqlo and Aeon

The Garment 10 Corporation is planning to provide outsourced work for Japanese clothing apparel company Uniqlo and retail giant Aeon, Mr. Than Duc Viet, Deputy CEO of Garment 10, was quoted by local media as saying.

The agreements are included in the corporation’s business development strategy for 2017 and the next decade. Garment 10 and Uniqlo are beginning the first steps of this plan and the company has also met with Aeon’s partners to send products to its supermarket network in Japan.

“We have experience working with Aeon so this agreement will be easier,” Ms. Hoang Huong Giang, Head of the Market No.2 Department at Garment 10, told the Dau Tu online newspaper. “We will produce garment products with private labels for Aeon.” 

Mr. Nishitoghe Yasuo, CEO of Aeon Vietnam, told a conference held by the Ministry of Industry and Trade that many Vietnamese enterprises are exporting products such as tra fish, fruit, garments, food, and household appliances to Aeon supermarkets.

Aeon imported $200 million worth of Vietnamese goods to its supermarket network last year, mainly garments and food. It is expected the volume will continue to increase in the years to come.

Garment 10’s export turnover to Japan accounted for more than 12 per cent of its total in recent years, up 15-20 per cent.

Vietnam’s textile and garment export turnover reached $28.5 billion in 2016, up 5.4 per cent against 2015 and the lowest rate since 2010.

Key markets for Vietnam’s major imports declined: the US by 4.5 per cent and the EU 3 per cent, while only Japan increased more than 1 per cent.

Japan is one of the key markets for Vietnam’s textile and garment sector, with export turnover of $2.9 billion in 2016, up 4.2 per cent against 2015.

Sofitel Legend Metropole Hanoi names new GM

Sofitel Legend Metropole Hanoi announced on June 27 the appointment of a veteran of the hospitality industry, Mr. William J. Haandrikman, to lead the hotel and its 650 staff as General Manager and he will he also serve as Area General Manager of AccorHotels North Vietnam.

“Vietnam is one of the fastest growing markets in Asia,” said Mr. Haandrikman. “I look forward to immersing myself in all that Hanoi has to offer and to continue building on Metropole’s reputation as one of the top hotels in Asia.”

Mr. Haandrikman was previously General Manager of Thailand’s Sofitel Bangkok Sukhumvit. He relocated to Hanoi in June and has 25 years of experience in the hospitality industry, having started with AccorHotels in 1992.

Since joining the French hotel chain, Mr. Haandrikman has held senior management positions in Amsterdam, Brussels, New York, and Moscow, as well as with the Sofitel brand in The Hague, Paris, Vienna, Shanghai and, most recently, Bangkok.

During his assignment in Bangkok, he served as the Cluster General Manager for two AccorHotels properties, including the 345-room Sofitel Bangkok Sukhumvit, which under his leadership was positioned as one of the leading five-star properties in Thailand. The Dutch national also oversaw the opening and managed the prestigious Sofitel Vienna Stephansdom in Austria and the well-known Sofitel Paris Defense in France.

Mr. Haandrikman is a graduate of Glion University, Hotel School in the Netherlands, the ESSEC Executive Management Program and the Executive Management Program at Cornell University in the US.

Dong Nai attracts 640 million USD in FDI in first half

The southern province of Dong Nai has lured 640 million USD in foreign direct investment (FDI) in the first six months of the year, reaching 64 percent of its yearly plan, said the provincial Department of Planning and Investment.

The sum came from 37 new and 51 existing projects. According to the department, all the projects are in high technology, supporting industry and are environmentally friendly. They are in line with the province’s policy to prioritise hi-tech projects.

Most of the projects in Dong Nai in the period were from the Republic of Korea (RoK), Japan, Singapore, Germany and the British Virgin Islands.

Notably, Pou Phong Vietnam Ltd. invested in a 55 million USD project, while Powerknit Vietnam Ltd. launched a 60 million USD project, both coming from the British Virgin Islands. Chang Hae Vietnam company and Long Thai Tu fabric company from the RoK added 20 million USD and 50 million USD to their ongoing project in the province.

Dong Nai is home to 1,703 projects with total investment of nearly 31 billion USD, including 1,286 valid projects worth 26.1 billion USD and 417 revoked projects worth 4.8 billion USD.

The FDI projects’ investors are from 45 countries and territories, mostly the RoK, Taiwan (China) and Japan.

Multiple power generators online soon

The Vietnam Electricity Group (EVN) will commission at least five more power generators with a combined capacity of 1,075 MW in the second half of the year to increase supply for the national grid.

These generators belong to Song Bung 2 and extended Thac Mo hydropower plants, and Thai Binh and Vinh Tan 4 thermal power plants, according to EVN.

EVN is also focusing on other generators at Vinh Tan 4, extended Duyen Hai 3 thermal power plants, and extended Da Nhiem hydropower plant, among others, which will come on stream next year.

The State utility is striving to complete 238 projects installing 110-500 kV power transmission lines so as to guarantee sufficient and uninterruptible power supply for Hanoi, the Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Danang City, and the southern part of the country, EVN explained.

EVN has operated five extra generators at Trung Son hydropower and Thai Binh thermal power plants to provide an extra 560 MW for the national grid.

The national electricity system has come under considerable pressure as the demand for electricity has been surging sharply this year as hot weather has triggered the higher-than-normal use of air-conditioners.

Therefore, EVN has made use of all available power sources including coal, gas turbine, and hydropower stations to meet the power demand,  which has leapt 12% compared to the same period last year.

The capacity of the power supply system briefly soared to 31,800 MW this month, well above the first-quarter peak of around 27,066 MW.

To secure electricity supply for the southern region, EVN said, it is speeding up work on Vinh Tan 4 and extended Duyen Hai 3 thermal power plants, extended Thac Mo and Da Nhim hydropower plants, and multiple thermal power projects at Quang Trach and Tan Phuoc power centers.

EVN has disbursed VND49 trillion of VND55 trillion (US$2.4 billion) earmarked for power development projects in the first half, 40.13% of its full-year plan.

EAEU-Vietnam Free Trade Area and opportunities discussed in Russia

A roundtable discussion on “The Free Trade Area between the Eurasian Economic Union (EAEU) and Vietnam: New Opportunities for Business” took place in Moscow on June 27, inspired by the upcoming visit of President Tran Dai Quang to Russia.

The event was organised by the Russian Chamber of Commerce, the Workshop for Eurasian Ideas Fund and the NGO “Business People”.

It was attended by more than 100 diplomats, policymakers, economists, analysts and experts in the field of Eurasian economic integration and representatives from authorities and commercial companies from Vietnam and Russia.

The roundtable discussed economic cooperation between Vietnam and Russia as well as Vietnam and the EAEU. Delegates proposed ways to solve problems, including new bilateral cooperation models, which can help bring up Vietnam-Russia trade to 10 billion USD by 2020. 

Nearly 5,000 tariff lines to go down to zero under Vietnam-EAEU FTA

In his opening remarks, Chairman of the expert council of the Workshop for Eurasian Ideas Grigory Trofimchuk said taking place ahead the of President Quang’s visit, the event has political significance and drives the development of cooperation between the two countries.

Chairman of the Vietnamese Association in Russia Do Xuan Hoang outlined several barriers to bilateral investment, particularly in terms of tariff and administrative systems, but he believed these issues will be soon solved. 

During the event, attendees said that Vietnam plays an important role in Russia’s “Look East” policy and in improving the economies of the EAEU and Russia. They expected Vietnam will act as a bridge for Russia to make inroads into Southeast Asia and Pacific Asia markets.

Rice exports forecast to grow in H2

Rice exports are forecast to further flourish in the second half of 2017, helped by increasing demand.

As of mid-June, rice exports had reached over 2.9 million tons, up more than 27% compared to the same period last year.

Vietnam has the strongest rice export growth rate among the top five rice exporting countries in the world. The U.S. posted rice export growth of 25.54%, Thailand 13.57% and India 3.57%, but Pakistan saw a 33.44% decline in rice outbound sales.

Data of the Vietnam Food Association (VFA) showed that as of late May 2017, its members had shipped a total of nearly 2.3 million tons, up 9.71% year-on-year and the total FOB value of the volume was nearly US$975 million, up 11.29%.

According to VFA, rice exports will further grow in the rest of the year, supported by government-to-government contracts.

Huynh The Nang, chairman of VFA and general director of Vietnam Southern Food Corporation (Vinafood 2), said since last month, Vietnam had secured contracts to export about 880,000 tons of rice to markets under G2G deals.

There is a high possibility that Vietnam can win a tender to export 250,000 tons of rice to the Philippines early next month, Nang said, as Thailand’s current rice inventory is around 160,000 tons, only enough for domestic demand, and moreover, Thai rice prices are higher than Vietnam’s.

The Mekong Delta, Nang said, is expected to have three million tons of rice for export after the summer-fall crop. Last year the nation exported a total of 6.3-6.4 million tons of rice.

The brighter rice export outlook has bolstered domestic rice prices in recent times. Fresh IR 50404 rice is now sold for VND5,000-5,200 per kilo, up VND500-600 against two weeks ago, while IR 50404 material rice has edged up from VND6,700-6,800 per kilo toVND7,200-7,300.

Deputy PM: Streamline clearance procedure

Deputy Prime Minister Vuong Dinh Hue June 26  told ministries to focus on improving processes, procedures and mechanisms for cargo inspection and allow the private sector to invest in inspection equipment.

Currently, many ministries want to conduct inspections with a lot of money spent on inspection equipment, Hue said at a working session on trade facilitation and logistics development with the World Bank (WB) June 26 .

According to WB specialists, Vietnam is facing challenges as goods transport has grown faster than the pace of infrastructure development, causing huge backlogs.

Ousmane Dione, WB country director for Vietnam, said the nation should build four pillars, namely developing a legal framework for trade facilitation, improving the efficiency of infrastructure for trade exchanges and the quality of connectivity, developing a competitive logistics industry, and strengthening interdisciplinary coordination and cooperation with the private sector.

Expressway construction alone is not enough. If border gates or ports face a backlog of cargo, well-developed infrastructure could become useless. Therefore, to facilitate foreign trade, it is necessary to improve domestic connectivity and logistics, said Sebastian Eckardt, a senior economist of the WB in Vietnam.

According to Eckardt, pre-clearance paperwork accounts for up to 76% of the total time for imports, with goods loading time making up one-third. Meanwhile, 72% of administrative measures and procedures are provided by the ministries of trade, agriculture and health, so if these ministries streamline their procedures, the competitiveness of the nation could be much improved.

Calculations by the WB show 60% of goods went through the green channel with 10 million customs forms in 2016, an indication that Vietnamese enterprises followed regulations well. However, they were subject to 346 legal documents.

Goods imports via the yellow channel made up 34.8%, a higher ratio than other countries, as specialized inspections were not reduced as per a Government resolution designed to improve the business environment and the nation’s competitiveness. Meanwhile, the red channel accounted for 5.3%.

In the green channel, goods are free from physical inspection. The yellow channel applies to goods with low duties or goods imported for export processing while the red channel is used for commodities requiring permits and subject to high tariffs.

According to the WB, the Government and ministries should review all procedures and regulations on environmental protection and work hygiene.

The WB suggested the Government mobilize capital from the private sector for transport infrastructure projects and raise the capacity of infrastructure operation with the participation of private firms. As per data of the Ministry of Industry and Trade, the nation needs around US$24 billion for the projects in the 2016-2020 period but the State budget can provide just US$8 billion.

Dau Giay Wholesale Market puts into service

Dau Giay Agro-Products & Foodstuff Wholesale Market was officially inaugurated and put into operation in Dong Nai province this morning. 

The market located in Dau Giay T-junction, Xuan Thanh commune, Thong Nhat district; in intersection of Dau Giay- Ho Chi Minh City, Phan Thiet, Dau Giay- Long Thanh- Trung Luong Expressway, North–South Railway Line and Long Thanh International Airport, covers an area of 55 hectares with total investment capital of VND 1.4 trillion.
It is considered the biggest market about farm products of the province. .

The market that borders Ho Chi Minh City, Binh Duong, Ba Ria- Vung Tau, Binh Duong, Lam Dong and Binh Thuan with more than 60 the big industrial clusters, is a advantageous place for transporting and distributing agricultural products from the localities, especially Dong Nai.

Speaking at the inauguration ceremony, Deputy Chairman of People’s Committee of Dong Nai province Mr. Vo Van Chanh said that the Dau Giay Wholesale Market will provide safe fresh, dry and frozen agricultural products in line with VietGap and Global Gap standards for the locality and neighboring provinces and cities.

The customer could easily track the origins of the products. 

After putting into the operation, the market is expected to contribute strengthening multi-way connection, raise effectiveness of transportation, distribution and business trade of the typical agricultural products of the southeastern region and neighboring provinces and cities. 

Dau Giay Wholesale Market is opened every day and night.

Hanoi moves to tackle widening trade deficit

The capital city of Hanoi has carried out trade promotion plans targeting both traditional and new foreign markets in order to tackle its widening trade deficit, which exceeded the national average in the first five months of this year.

Statistics show that during the January-May period, Hanoi’s export turnover reached 4.73 billion USD, up 12.2 percent over the same period last year, mainly driven by local enterprises. 

Meanwhile, its import value stood at 11.67 billion USD, resulting in a trade deficit of nearly 7 billion USD, compared with the national average of 2.7 billion USD. More than half of the figure was contributed by Hanoi-based centrally-run businesses. 

The city’s major imports include equipment, machines and materials for projects or production chain installation. In many cases, import items were declared by firms based in Hanoi but transported to other localities.  

To reduce the trade deficit, Hanoi will cut exports of raw materials and increase exports of high value-added products while developing the supporting industry to join the global value chain. 

Trade promotion will focus on handicrafts, agricultural products and garments-textiles.

Meanwhile, the city will create favourable conditions for foreign importers and support local businesses in international integration through workshops that provide them with information about markets, preferential policies and benefits generated by Vietnam’s free trade agreements, said Nguyen Thanh Hai, Deputy Director of the municipal Department of Industry and Trade. 

Hanoi is also working on several large and modern logistics centres to serve exporters. 

Economists have also suggested establishing technical barriers regarding product quality and safety to curb imports of low quality products.

Ensuring sustainable lobster production

Phu Yen province has re-zoned lobster production areas to prevent disease and pollution and ensure sustainable growth.

Phu Yen has been involved in lobster production for more than 20 years. There are more than 3,000 households in the province who harvest an average of 750 tons of lobsters annually. 

Song Cau township is the province’s largest lobster production area,with nearly 2,600 households raising lobsters in 16,000 cages. 

Luong Cong Tuan, Vice Chairman of the Song Cau township People’s Committee, said, “Song Cau township has asked the provincial administration to make a detail plan based on the master plan approved by the provincial People’s Committee. Xuan Dai Bay has been recognized as a national scenic spot, so lobster production planning needs to be done carefully. We also need a budget for the plan.”

Phu Yen province intends to protect the environment and aquatic resources to ensure sustainable lobster production, increase its added value, and develop the sector into a key export earner. 

By 2020, the province hopes to maintain the current yield, apply more advanced technology, and train farmers in commercial production and processing. 

Phu Yen province has asked the Ministry of Agriculture and Rural Development and the Ministry of Natural Resources and Environment to support lobster production. 

Mr. Nguyen Tu Cuong, Head of the Committee for Sustainable Aquatic Development of the Vietnam Fisheries Association, said, “Farmers have mastered cage-building and production skills. They know how to raise and protect aquatic species against climate change and environmental threats.”

Farmers have been taught to reduce the density of lobsters in a cage, expand the gap between cages, control aquatic diseases, and protect the environment.      

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET