Gazprom to construct gas-to-power project in Quang Tri     

Russia’s Gazprom International hopes that in 2018, the central province of Quang Tri will continue to create favourable conditions for a gas-to-power project.

This project, the company said, will contribute to the socio-economic development of the province.

Kovtun Andray, head of Gazprom International’s representative office in Viet Nam, revealed this at a recent meeting with the provincial People’s Committee (PPC).

He also expressed gratefulness to the province for supporting and creating favourable conditions for Gazprom International to carry out the project of exploiting and operating the gas-to-power plant in the southeast Quang Tri Economic Zone.

Nguyen Quan Chinh, PPC’s vice-chairman, highly appreciated that Gazprom International had proceeded with the steps and determination to implement the gas-to-power project in Quang Tri. The provincial leader also urged Gazprom to continue to have good and effective coordination in promoting the project to ensure progress and quality.

At the same time, the province will co-operate with the company to push up relevant ministries and sectors to bring gas to the mainland as soon as possible, Chinh said.

Last year, the two sides had signed a memorandum of understanding (MoU) on co-operating to implement a project to build a gas treatment plant from Bao Vang field and a gas-to-power project in the southeast Quang Tri Economic Zone. The province has also made great efforts by organising workshops with the participation of Viet Nam National Oil and Gas Group (PetroVietnam) and other related organisations to promote the implementation of this significant project. 

Fuel price hike strains firms

Businesses are trying to keep the prices of consumer goods down despite recent fuel price hikes.

The price of E5 RON 92 petrol was increased on January 19 by VND429 to VND18,672 (82.3 US cent) per litre, and experts said this hike just before Tet would have a knock-on impact on the prices of many goods.

Since the prices of electricity and fuel make up around 5 per cent of the production cost of a number of essential goods, the fuel price rise would cause the prices of other goods to increase by 3-4 per cent.

According to the Ministry of Industry and Trade’s Department of Domestic Market, the prices of essential goods for Tet such as pork, fruits and vegetables can rise by 15-20 per cent, while the prices of confectionary, wine and beer and other beverage are expected to see smaller increases.

Since global fuel prices have shown no signs of falling, relevant agencies should consider measures like lowering tax and discount rates for oil distributors to keep fuel prices steady in the domestic market, a ministry spokesman said.

Trade expert Vu Dinh Phu said the best solution is to not hike fuel prices, with authorities using price stabilisation funds to keep fuel prices steady.

Many businesses said the recent fuel price hike has not yet affected the prices of essential goods since they had stocked large volumes for Tet.

But the prices of some other essential goods like fruits, vegetable, fish and meat could now rise by 10-15 per cent in wholesale markets, they said.

Businesses take measures to keep prices stable

Some businesses said they would settle for lower profits since they had promised customers they would not raise prices for Tet.

A spokesman from Big C said the supermarket is committed to keeping the prices of some 11,300 kinds of goods unchanged until the last day of this lunar year. Thus, the prices of these goods would not be hiked even if fuel prices affect their prices in the market, he said.

While saying the cost of raw materials, electricity and others affect the prices of its products, the Sai Gon Food JSC also promised it would not hike prices during Tet.

Most retailers stockpiled goods a month ahead of the festival, and as a result many shopping centres and malls will continue with their promotion campaigns until Tet.

Prices of frozen goods including pork, beef, fish, chicken have remained unchanged and experts said a week before Tet their prices at supermarkets could be VND10,000-20,000 per kilogramme cheaper than in traditional markets.

But the prices of these goods could rise after Tet due to the higher transport costs.

At a recent seminar, Nguyen Tien Thoa, general secretary of the Viet Nam Association for Prices Assessment, said the prices of goods are expected to remain steady in 2018, but a number of public services such as electricity, water and education and healthcare could become dearer.

Therefore, oil firms should only raise fuel prices at “appropriate” points of time, he said.

“Firms should not announce a fuel price hike before Tet when power demand is on the rise.”

In the long term, measures should be taken to reduce costs for businesses, including by reducing taxes and fees, he said.

Relevant agencies should consider initiatives to lower interest rates on bank loans, he added. 

Border trade decree opens new doors to region     

In a newly issued decree, the Government has made a clear effort to boost inland border-trade quotas and the overall trading situation for Vietnamese residents living in the border areas next to Viet Nam, China, Laos and Cambodia.

Data from the General Department of Viet Nam Customs states that in 2017, Viet Nam’s trade turnover with Laos was above US$890 million, while the turnover with Cambodia was $3.7 billion, and with China, a staggering $71.9 billion.

With the Decree No 14 coming into effect on January 23, trading activities performed by border residents and licensed traders are expected to be significantly improved.

Most importantly, the decree stipulates that goods traded and exchanged by border residents for direct consumption are not subject to medical quarantine, such as animals, plants and aquatic products, unless the competent State body warns of an epidemic or contagious disease.

Therefore, goods consumed by border residents are not subject to inspection and control in terms of food quality and safety, except for emergencies requiring immediate quarantine, when they must comply with international treaties.

The decree stipulates that Vietnamese traders, including enterprises, co-operatives, business households and individuals with Vietnamese business registrations are allowed to buy, sell and trade goods along the border and via border checkpoints.

Businesses with foreign-direct-investment capital, companies and branches of foreign companies in Viet Nam are also allowed to purchase and exchange goods across the border in accordance with national Law on Foreign Investment Management and any international treaties to which Viet Nam is a member.

Border residents, defined as Vietnamese citizens with permanent residence in border areas, are now exempt from customs duties on goods valued at not more than VND2 million (US$89) per person per day, and on no more than four days a month.

The value of duty-free quotas in excess of the above limits is subject to import tax and other taxes and charges (if any) in accordance with Vietnamese law.

In addition, Decree 14 also contains new administrative reforms, including the abolition of the Border Trade Steering Committee.

Traders engaged in the purchase, sale or exchange of goods across borders shall have to fully pay taxes, charges and fees according to the provisions of law.

The decree also states that goods traded or exchanged across borders are entitled to preferential value-added tax refunds, according to the provisions of law.

Vu Ba Phu, director of the Viet Nam Trade Promotion Agency and head of the 2017 National Trade Promotion Programme, said at a conference early this week that the Ministry of Industry and Trade considered goods produced by border residents and bordering countries (Laos, Cambodia and China) as serving multilateral trade ties.

Vietnamese trade associations and trade promotion organisations encourage border traders to access and expand markets in bordering countries, said Phu.

He said he hoped that by bringing domestically produced goods to rural, mountainous and border areas, the ministry could boost trade and create distribution channels for essential products.

In 2017, the ministry co-ordinated with other ministries and localities to organise trade-promotion programmes in border and mountain areas, including the Viet Nam-China International Trade Fair.

Late last year, the World Bank published its global Doing Business 2018 report. Accordingly, Viet Nam’s time and cost of cross-border trade were classed as having changed positively.

As a result, the country now ranks fourth in South-east Asia behind Singapore, Thailand, and Malaysia in terms of cross-border trading. 

Microfinance lenders urge improvements in governance for lending     

 Improvements in corporate governance and risk management are believed to support microfinance institutions in Viet Nam in catering to the financial needs of micro-enterprises and low-income groups.

Dozens of board members and senior executives of Vietnamese microfinance institutions gathered in Can Tho on January 1 for a two-day workshop to address the common challenges they faced and develop an action plan for improvements.

Globally, regulators and investors have been supporting company efforts to demonstrate better governance, such as having a robust board, accountable senior management, effective internal control and risk management practices.

“IFC (International Finance Corporation) believes supporting Vietnamese microfinance institutions in strengthening their corporate governance practices will boost their capacity to provide better financial services and expand lending,” said Kyle Kelhofer, IFC Country Manager for Viet Nam, Cambodia and Laos.

“This will ensure sustainable growth for the institutions and benefit their key clients – millions of micro-entrepreneurs, primarily women, and low-income households, contributing to poverty reduction in the country,” Kyle said.

According to IFC studies, only one in five adults in Viet Nam have access to formal financial services, while only 8 per cent of them have savings in formal institutions.

Mircofinance lenders play a critical role in providing financial services to the low-income population, serving an estimated 10 million people, many of whom are women and the poor.

“Viet Nam’s microfinance sector is evolving with many small, non-profit operators hoping to transition into bigger, commercial-oriented entities,” said Nguyen Thi Tuyet Mai, managing director of Viet Nam Microfinance Working Group.

“Implementing corporate governance reforms to enhance efficiency, transparency and risk management will be paramount to their successful transitions,” Mai said.

The workshop was conducted by IFC, a member of the World Bank Group, in partnership with Citi Foundation and Viet Nam Microfinance Working Group.

This initiative was part of IFC’s Viet Nam Microfinance Programme – supported by the State Secretariat for Economic Affairs of Switzerland – with the aim of strengthening industry capacity and transparency as well as boosting microfinance institutions’ ability to increase sustainable and responsible financial access.

Sacombank, UnionPay ink deal for QR code payment     

Sacombank and UnionPay International have signed a deal for world-wide QR code payment on Sacombank UnionPay credit cards.

With this, Sacombank becomes the first lender in Viet Nam to enable QR Code payment using UnionPay cards.

From next month, Sacombank UnionPay credit cardholders can use their mobile devices to scan their QR codes in many foreign countries.

Holders of UnionPay cards issued by other banks can also make payments at merchants accepting QR code payments.

Besides, Sacombank and UnionPay International will offer new services such as: UnionPay online payment (UPOP) and 3D secure authentication when making online payments.

Last year, Sacombank’s card operations won several awards including for bank with most effective merchant network, development of new technology, leading bank in implementing contactless payment technology, and QR code payment technology.

SeABank offers preferential loans to firms     

The Southeast Asia Joint Stock Commercial Bank (SeABank) will provide preferential loans to enterprises worth VND1.5 trillion (US$65.9 million) until March 31.

Accordingly, SeABank will apply lending rates from 7.5 per cent a year in three months and from 8 per cent a year in six months for short-term loans in Vietnamese dong.

The bank will also give out short-term loans in US dollar with an annual interest rate of 3 per cent in six months.

The programme aims to provide enterprises with short-term loans to supplement working capital for production and business activities.

Based on the financial needs of customers, SeABank will appraise loans, apply preferential interest rates and advise businesses to improve their capital use efficiency.

In addition to this programme, SeABank has implemented many other incentives for corporate customers, such as Smart and VIP Account.

Scholarships for poor students

SeABank also supports the tuition fee of 20 poor children in 14 provinces and cities across the country by awarding a monthly scholarship of VND1 million to every child until they finish 12th grade.

The students belong to the cities of Hai Phong, HCM City, Nha Trang and Can Tho, and provinces of Binh Duong, Thai Nguyen, An Giang, Hai Duong, Kien Giang, Vinh Phuc, Quang Ninh, Tien Giang, Dak Lak and Quang Ngai.

Through this programme, SeA aims to help the children to continue schooling without worrying about the tuition fee, reducing the burden on their families.

From this year, SeABank has been celebrating its EduDay on January 29 to award scholarships to poor children.

SeABank will continue to seek and support more cases of poor children so that they are able to continue their education and later build a better life for themselves and their families. 

Blockchain to change world real estate market     

Blockchain technology can bring revolutionary changes to the real estate sector in many aspects of the world market, including Viet Nam, according to Savills Vietnam’s press release.

Blockchain is the secure ledger system behind the Bitcoin cryptocurrency and it is the technology that has been credited with the power to reinvent the property sector.

Blockchain technology is notoriously complicated. In simplest terms, it is a shared record of transactions. Anyone can hold a copy of the ledger and anyone can read it. Changes ripple through all versions of the blockchain held worldwide. A locking method is employed to prevent any tampering by one party — making it secure.

Troy Griffiths, deputy managing director, Savills Vietnam, believes “blockchain has the capacity to revolutionise land transfers”.

If the technology were to be implemented for land-registry purposes, it would have several possible benefits. The automatic processing of contracts would mean that costs are reduced. There would be increased security as identity records are tamperproof and deal times are reduced, as a deal can be an entirely digital experience.

Blockchain puts real estate on a new footing. If it has the potential to increase liquidity and reduce costs, some significant barriers for investors are removed. If unitisation of direct property holdings can be achieved and/or if income streams derived from direct property holding can be split, it also decreases the ‘lumpiness’ of real-estate investment; the barriers between real-world holdings and synthetic derivatives start to break down, making investment liquid, transparent and instantly tradeable. However, it may be some time before this can be achieved, as further safeguards would need to be in place.

Griffiths noted in his recent regional review during Viet Nam Quarterly Market Report Q4/2017, that “blockchain is coming, but there is yet to be any major breakthrough”.

Griffiths is also optimistic about blockchain application, particularly in Viet Nam. “So far, Viet Nam has been slow on the uptake of this new technology but that will change very quickly. We have a large population of dynamic, aggressive and smart young people and a big start-up culture. I think we are in a wonderful position to take advantage of the new digital age.”

Land registries around the world are interested in it because they suspect that blockchain could enable the ‘almost instant’ transfer of property ownership in a secure way.

One of the world’s oldest land registries, HM Land Registry in the United Kingdom, called it a “highly ambitious objective” that would require the most “far-reaching transformation in their 150-year history”. Earlier this year, HM Land Registry announced plans to create a virtual ‘digital street’ to test the new technology. 

Singaporean venture fund invests in bus ticket booking start-up vexere.com     

Singapore-headquartered Spiral Ventures recently announced that it has invested in Vexere Joint Stock Company, which operated VeXeRe.com, the largest bus ticket and car booking platform in Viet Nam.

In an announcement on its website, Dao Viet Thang, finance and operation director of Vexere, said: “VeXeRe.com is pleased to receive an investment from a professional fund like Spiral Ventures, so we might continue our momentum and assure breakthrough growth in 2018.”

The financial term of the agreement has not been disclosed, as agreed by the related parties, Thang said.

VeXeRe.com was founded in July 2013 and has reported an annual growth rate of 300 per cent, to become the largest bus ticket booking platform in Viet Nam with two million visitors per month.

VeXeRe.com also pioneered in developing bus management systems among more than 300 bus operators, which helped these operators save more than 40 per cent of management costs.

The company said that the fund from Spiral Ventures would be used to invest in developing apps for passengers, drivers and operators, similar to the model of Uber/Grab, but for mid- and long-distance bus routes.

Focus would still be placed on bus ticket bookings, with a targeted growth rate of 500 per cent in 2018, before expanding to railway, airline ticket bookings and other markets in the region.

Spiral Ventures, formerly known as IMJ Investment Partners, was founded in 2012 by IMJ Corporation, a major digital marketing company, as an independent venture capital subsidiary in Japan.

After IMJ was acquired by Culture Convenience Club (CCC) in 2013, Spiral Ventures continued its investment activities independently, and eventually relocated to Singapore to change its strategy and start a venture capital fund for the Southeast Asia market.

Cong Ly kicks off two more wind power projects

After the success of the first and the second phases of Bac Lieu wind power plant, Super Wind Energy Cong Ly Bac Lieu JSC continued to kick-off two more wind power projects with a total investment capital amount of nearly VND10 trillion ($440.37 million).

Notably, on January 30, Cong Ly organised the ground-breaking ceremonies of the Bac Lieu wind farm phase III—approximately VND8.3 trillion ($365.5 million)—and the Soc Trang wind power project phase I, worth VND1.68 trillion ($73.98 million).

Notably, phase III of the Bac Lieu wind power project covers an area of 6,250 hectares at Vinh Trach Dong commune of Bac Lieu city and has a capacity of 142MW. The construction of the project is expected to be finished within 36 months.

The Soc Trang wind power project is located at Lai Hoa commune of Vinh Chau town and has a total capacity of 98MW with total investment capital of VND5.39 trillion ($237.4 million). The construction of the project will be implemented in three phases. Accordingly the first phase will have 30MW in capacity, the second phase 30MW, and the third phase 38MW. The construction of the first phase is expected to be finished within 36 months. It is expected to generate 257 million kWh per year to connect with the national power grid.

Previously, on January 17, 2016, Cong Ly started the full operation of the 99MW Bac Lieu wind farm, the construction of which started in 2010, has an area of 1,300ha and total investment capital of VND5.2 trillion ($233 million).

Since the first wind turbine was connected to the national grid in May 2013, the farm has produced 130 million KWh, earning a revenue of VND150 billion ($6.7 million) and paying VND15 billion ($672,000) in tax.

Along with the above projects, Cong Ly has started the construction of phase I of Khai Long-Ca Mau tourism zone wind farm in the southernmost province of Ca Mau. The construction of the project was kicked off on January 16, 2016.

To be built on a total of 2,165ha of land and sea surface area, the 100MW wind farm is scheduled for completion in 2018. It will be connected to the national grid and will sell power to state-run Electricity of Vietnam (EVN). The plant’s total investment value is about VND6.5 trillion ($291.5 million).

In July 2016, Prime Minister Nguyen Xuan Phuc authorised Cong Ly to sell electricity to EVN from its Khai Long-Ca Mau wind farm for 9.8 UScents per kWh, not including value added tax.

The figure is equivalent to the feed-in-tariff at its Bac Lieu wind power, which is much higher than the 7.8 UScents fixed by the government under Decision No.37/2011/QD-TTg dated June 29, 2011 on the mechanism supporting the development of wind power projects in Vietnam.

Previously, Cong Ly’s general director To Hoai Dan told VIR the reason for its call for a higher feed-in-tariff than what was then provided by the government is that the project is located on the coastline, thus the company incurs extra charges on constructing the foundations of the wind turbines. The company also used the most advanced turbines, which pushed up the investment cost.

Tran Anh reports consecutive net loss in third quarter

On the verge of a merger with Mobile World Investment Corporation (MWG), Tran Anh Digital World JSC (Tran Anh) revealed a consecutive net loss of VND55 billion ($2.42 million) in its financial statement for the first nine month of the financial year ending on March 31, 2018. 

Accordingly, Tran Anh reported a plunge in business results in the third quarter of the financial year. Notably, Tran Anh only earned VND642 billion ($28.2 million) in net revenue from sales and services, down 35 per cent on-year.

The accumulated net revenue during the three quarters decreased by 16 per cent to VND2.46 trillion and the accumulated net loss reached VND55 billion ($2.42 million).

Previously, the firm revealed a net loss of VND11.8 billion ($519,672), exceeding the net loss stated in its unaudited financial statement by VND4.8 billion ($211,392).

Apparently, there was a notable discrepancy between Tran Anh Digital’s 2017 audited and unaudited financial statements that highlighted a larger net loss right before the merger with MWG.

As of the end of the third quarter of this financial year, the firm had total assets of VND1.22 trillion ($53.7 million), up just VND40 billion ($1.76 million) against the earlier financial statement. Meanwhile, the firm shouldered a debt of VND1 trillion ($44.03 million).

The board of directors at Tran Anh pointed out that the recently leaked information on the merger negatively influenced customer behaviour and shrunk the company’s revenue.

Tran Anh is a Hanoi-based enterprise which trades in and provides maintenance services for computers, electronics, household appliances, and telecommunications equipment in Vietnam.

FMCG forecasted to grow fast durng Lunar New Year festivities

The increasing demand for consumer goods and evolving distribution systems enable the fast moving consumer goods (FMCG) to become the fastest-growing segment in Vietnam.

fmcg forecasted to grow fast durng lunar new year festivities

With increasing income and a newfound hunger for better living quality, Vietnamese consumers are shopping more and more. They are no longer considered as the highest savers anymore, as they are ready to spend much on consumption, tourism, and household appliance goods.

According to a survey produced by Nielsen, after essential living expenses, Vietnamese consumers are ready to spend on tourism, shopping, new hi-tech gadgets, and other entertainment services. The high growth potential of the economy and increasing consumption demand are expected to boost FMCG at the end of 2017 and in the first month of 2018.

The results of Nielsen’s Market Pulse research showed that FMCG grew by 5 per cent in the second quarter of 2017 in Vietnam, and 5.8 per cent in the third quarter. This figure was forecasted at 6-7 per cent in the fourth quarter. Additionally, an increasing number of super markets and grocery stores are spurring the growth of the FMCG segment in the country.

In 2017, the market saw heated competition between supermarket and mini mart chains, with the 1,000 stores of Vinmart and Vinmart+ (VinGroup), 259 stores of Circle K, 11 stores of 7-Eleven in Ho Chi Minh city were duking it out for supremacy.

According to the General Statistics Office, in 2017, the total retail market hit $130 billion, up 10.9 per cent on-year, including the large contribution of the FMCG sector.

A survey by Kantar Worldpanel Vietnam shows that non-food items maintained their growth momentum, especially personal care products. Beverage items are back in the first place in growth, while milk and milk products increased lightly in rural areas.

On the occasion of the Lunar New Year, Vietnam’s FMCG segment expects a sharp boost. In addition to food items such as confectioneries and household products (washing liquid, washing-up liquid, soap, shampoo, shower gel), Kantar Worldpanel Vietnam forecasts beverage items to see remarkable demand. In 2017, Vietnam consumed around 4 billion litres of beer, 40 per cent of which came from Sabeco.

The Lunar New Year is usually the peak demand for beer during the year, and this year is forecasted to follow traditions.

Grab and Samsung sign MOU to drive digital inclusion in Southeast Asia

Grab and Samsung will work together on a wide range of initiatives to bring the benefits of technology, such as enhanced customer experience and improved income opportunities, to millions of consumers and Grab driver-partners across Southeast Asia.

Grab is the market leader in ride-hailing services in Southeast Asia, an industry that is one of the fastest growing Internet services sectors and is expected to be a $25-billion market by 2022 in this region.

As part of the wide-ranging strategic collaboration, Grab and Samsung will develop customised solutions for the ride-hailing industry, including micro-financing schemes for Grab’s over 2.3 million driver-partners, improved customer booking, and in-car experience, and new mobility solutions.

The two companies will also work together to expand into Southeast Asia’s fragmented mobile payments ecosystem and provide a mobile payments solution that will serve the needs of consumers in Southeast Asia.

Anthony Tan, Group CEO and Co-founder of Grab, said, “Southeast Asia is home to the world’s fastest growing emerging markets, yet many in the smaller towns and cities do not have easy access to the growing digital economy. Mobile technology can bridge the infrastructural divide and make economic growth more inclusive."

"Samsung is one of the world’s most innovative technology companies, and we are thrilled to partner with them to empower more people in Southeast Asia to improve their livelihoods and provide more digital services for everyone on the Grab platform,” he added.

The strategic collaboration will be rolled out in phases across all countries in Southeast Asia where Grab operates. More than 2.3 million Grab driver-partners in the region will have access to a micro-financing programme focused on giving them access to robust mobile technology, which will reduce the cost of purchasing a smart phone and also lower on-going maintenance costs with superior software and security features.

To make Grab’s services more accessible to commuters and customers in Southeast Asia, Grab will introduce more GrabKiosks and GrabBooths in busy consumer hubs, such as shopping malls, hotels, and airports. These will feature Samsung devices with the Grab app pre-installed, allowing individuals and concierge services to book a Grab ride for themselves or others, even when they do not have data connectivity.

The devices at GrabKiosks and GrabBooths will be rolled out in Vietnam and Singapore in the first quarter of 2018 and other countries in Southeast Asia later in the year.

In addition, Grab and its content partners will pilot in-car multimedia services in Singapore, installing Samsung tablets inside cars for customers to view infotainment content, if they choose to, during the ride. This will be piloted throughout Southeast Asia this year.

Viet Dragon Securities raises chartered capital to VND910 billion

Viet Dragon Securities JSC announced that it has increased its charter capital to VND910 billion ($40.3 million) on the occasion of its 10-year anniversary.

viet dragon securities raises chartered capital to vnd910 billion

The move helps the securities firm raise its equity capital to over VND1 trillion ($44.2 million). Nguyen Hieu, general director at Viet Dragon Securities, said that the corporation is taking measures to improve customer service to meet market demand. The firm will continue its efforts to train skilled human resources, raise capital to strengthen its financial capabilities, as well as increase investment in technology for improved performance and efficiency.

“The capital increase helps the firm to accelerate its business plan, which will contribute to business development in the coming time,” he added.

The firm reported positive business results in 2017 with VND366 billion ($16.1 million) of revenue. Pre-tax profit reached VND138 billion ($6.09 million), exceeding the year’s target by 38.34 per cent and up 125 per cent against 2016.

Revenue from proprietary trading accounted for 41.96 per cent, an increase of 32.48 per cent against 2016. Meanwhile, investment banking and brokerage made up 27.36 and 23.78 per cent of total revenue, up 98.36 and 77.45 per cent year-on-year, respectively.

In 2018, the firm aims to increase charter capital to VND1 trillion ($44.2 million) with stock dividend payment after the annual general meeting in April. Pre-tax profit hit VND180 billion ($7.9 million), an increase of 30 per cent year-on-year.

The rise of Vietnam’s App economy

There remains much to be done to take full advantage of trends in the evolving app economy to ensure it develops into a solid contribution to Vietnam’s Gross Domestic Product (GDP), according to a recent report by the Progressive Policy Institute (PPI).

Vietnam has made great strides in the adoption of new technologies by expanding the digital and app economies.

The app economy has evolved far beyond the social media and games found in app marketplaces. Today, every industry benefits from enterprise or consumer-facing mobile software components. As such, the app economy is a firm impetus for industry 4.0.

Chief economic strategist at the Progressive Policy Institute (PPI) Dr Michael Mandel said, “When Apple introduced the iPhone in 2007 that initiated a profound and transformative new economic innovation. While central bankers and national leaders struggled with a deep financial crisis and stagnation, the fervent demand for iPhones and the wave of smartphones that followed, was a rare force for growth.”

Vietnam fosters a nascent tech sector, which includes mobile app development, and the country is home to a diverse app economy, encompassing several domains of industry. Digital technologies have emerged as an important export and a catalyst for growth in the Vietnamese economy, with high-tech products contributing 28.7% to Vietnam’s GDP in 2013.

According to the World Bank (WB), Vietnam exported US$38.7 billion worth of high-tech products in 2015, a near tenfold rise on the figures in 2010. Come 2020, it is estimated that high-tech products and applications will account for 45% of Vietnam’s GDP.

Over the past decade, Vietnam has taken important steps to realise technological innovation in its digital economy. The Strategy for Science and Technology Development for 2011-2020 prioritizes the development of information and communications technology; including computing platforms for PCs, tablets, and mobile devices, a range of biotechnologies, novel materials, and in machine manufacturing and automation.

In addition, the strategy calls for greater investment in research and development and incentivises technological upgrades in the private sector.

However, more can be done to improve the regulatory framework governing high-tech enterprises in Vietnam. The draft Law on Cybersecurity required foreign providers of telecommunications and Internet services to apply for operator licenses, establish a representative office in Vietnam, and host on a server that stores Vietnamese users’ data in the territory of Vietnam.

According to the paper published by PPI, “these regulations raise the cost of doing business in Vietnam — stifling foreign investment and slowing growth as businesses gravitate to more attractive opportunities. In particular, the expansion of the export-oriented app economy will slow if it becomes more difficult for data to cross the Vietnamese border.”

As high-tech industry sees a rapid expansion, a shortfall in the supply of necessarily skilled workers has emerged. According to the online employment agency VietnamWorks, between 2012 and 2015, the number of jobs in the IT sector increased by an average of 47% each year, while the number of employees grew by only 8%. The app economy is particularly starved for skilled workers with computer science training.

Projections suggest that Vietnam could face an annual labour shortage of 78,000 in the IT sector and lack one million IT workers by 2020.

Since coming to market in 2007, the iPhone, by allowing third-party applications, has led to the development of a global app economy which has in turn supplied an important source of jobs and economic growth for Vietnam. PPI estimates that the number of people employed in Vietnam’s app economy stood at 42,500 as of December 2017. 

This includes core app economy jobs, indirect app economy jobs, and a conservative estimate of spill over jobs. App economy jobs span sectors across the economy, ranging from technology to finance and beyond.

There has been great progress in Vietnam as item braces the challenge of developing a digital economy to meet the global demand for high-tech products.

As part of its efforts, the Strategy for Science and Technology Development for 2011-2020 focuses on the development of information and communications technology, recommending the design of new operating systems for devices.

However, in the environment of the fourth industrial revolution more steps can and should be taken to facilitate the next generation of app development, such as ensuring a looser regulatory framework and enabling the workforce with digital skills to close the skills gap.

Vietnam's real estate agents offer huge Lunar New Year bonus

Nguyen Vu Cao, board chairman of Hanoi-based property firm Van Khang Phat, said his firm is expected to award its best manager a car worth VND3 billion (US$130,000) as a Lunar New Year bonus.

Meanwhile, best supervisors and sales staff of the company will be awarded tours valued at VND30-80 million (US$1,320-3,520) each for the Lunar New Year, known as Tet in Vietnam, which will fall in less than a fortnight.

Other employees will receive a month's salary, he said, adding the bonus this Tet is higher than that of last year.

Pham Thanh Hung, CEO of Cen Group, said that his firm will spend tens of billions of Vietnamese dong worth of the firm’s shares on bonuses for employees. Hung did not reveal the specific value of the bonus, but said its the same as last year.

Last Tet, Cen Group awarded 11 best employees cars worth VND1 billion each.

CT group announced to offer Tet bonuses worth billions of Vietnamese dong to its best employees, while Hai Phat Land said it will pay bonuses worth 1-5 months of wages.

Explaining the reason for the high bonus, leader of a real estate agent in Hanoi said it is the way for real estate companies to keep talented employees amid labor shortages in the sector.

The General Statistics Office announced last month that the average income in 2017 reached US$2,385, up 7.7% from the previous year.

In Vietnam, bonuses are agreed between employers and their workers, but businesses are encouraged by the government to reward employees based on performance.

Market records more property sales in January

More sales were recorded in the domestic property market in January as compared to figures in December 2017.

According to the Ministry of Construction’s Housing and Property Market Management Department, the capital city reported 1,650 transactions, an increase of 13.8% and the southern metropolis Ho Chi Minh City had 1,900, a rise of 8.6% over December’s figures.

In Hanoi, many housing projects have been completed and offered with attractive trade promotion programmes. The offerings are in the high- and mid-end segments and are located in convenient places. There are many kinds of area and payment methods can be flexible, the department said.

Some projects had many sales in January, including Season Avenue, Ha Dong; An Binh City-Bac Tu Liem; Sunshine Riverside Tay Ho and Romance Plaza, Ha Dong.

Average offered price of an apartment in January rose 0.14% against the December price, of which, the price surged 0.17% for high-end apartments, 0.05% for mid-end apartments and 0.56% for affordable apartments.

Price of house on land had an increase of 0.24% compared with December.

Liquidity on the HCM City property market also increased in January. High- and mid-end apartment segments reported many sales.

Customers paid attention to apartments having one or two bedrooms and price at about VND1 billion (US$44,000) per unit, but the supply was low.

Projects reporting many transactions included New City Thu Thiem, District 2; Saigon Intela-Binh Chanh District; and Melosa Garden, District 9.

Average selling price increased 0.24% for apartments and 0.81% for house and land.

The price declined 0.05% for high-end apartments, but rose 0.33% for mid-end apartments and 0.5% for affordable apartments.

The department said that by January 20, the value of the property inventory stood at VND25 trillion, a drop of 19% from the previous month.

The value of property inventory in January was VND5.27 trillion in Hanoi, VND19 billion lower than the value in December.

In HCM City, the property inventory was VND4.62 trillion, a fall of VND47 billion.

The department also had a report on development of resort property, the hot spot on the property market.

In the report, the Ministry of Construction appraised 71 "condotel" and "officetel" projects that have been built nationwide since 2015. 

Meanwhile, provincial and municipal authorities have given licences to develop many more projects.

However, many difficulties have arisen over investment, construction, trading and management of operation for those projects, the department said.

Therefore, the ministry has proposed that the Prime Minister direct ministries to solve them.