The index of industrial production (IIP) in the first two months of this year increased by 6.2 per cent over the same period last year.

The Covid-19 epidemic had a strong negative impact on industrial production activities, said the General Statistics Office (GSO).

Due to the effects of the Covid-19 epidemic, the source of input materials imported from China for some industries was reduced compared to the time before the outbreak.

At the same time, Vietnamese exported goods, which have large consumption turnover in China, are obstructed at border gates with China.

The processing and manufacturing sector increased by 7.4 per cent, contributing 6 percentage points to the general increase.

Power production and distribution increased by 8.4 per cent, contributing 0.7 percentage points.

Water supply, waste management and treatment increased by 4.9 per cent, contributing 0.1 percentage points.

Mining and quarrying dropped by 3.7 per cent, down 0.6 percentage points in the general increase.

However, some key products of foreign direct investment (FDI) enterprises saw growth in production.

Telephone components increased by nearly 30 per cent. Mobile phones increased by 25.5 per cent, of those, smartphones increased by 3.2 per cent.

Clean coal increased by 10.3 per cent and electricity production increased by 8.6 per cent.

GSO economic experts said that the number of employees working in industrial enterprises had risen since the beginning of last month compared to January, mainly in the non-state sector with an increase of 0.6 per cent and 3.6 per cent in FDI enterprises.

This implied that enterprises were ready to recover production after the Covid-19 epidemic eased.

Half of Japanese manufacturers see supply chain disruptions from COVID-19 

Around 53 per cent of Japanese companies from the manufacturing sector start to feel the bite of supply chain disruptions caused by the ongoing COVID-19 outbreak, according to the latest survey by the Ho Chi Minh City chapters of the Japan External Trade Organization (JETRO) and the Japanese Chamber of Commerce and Industry (JCCI).

The survey, conducted between February 13 and 18, featured 426 member companies under the JCCI in Ho Chi Minh City. These included 209 companies from the manufacturing field.

Around 40 per cent of respondents said that supply chain disruptions are affecting their businesses amidst the COVID-19 outbreak. 76 per cent of surveyed participants experienced delays or disruptions in sourcing supplies and materials from China. 53 per cent of Japanese companies in the manufacturing sector and 28 per cent of Japanese non-manufacturing firms have been impacted by supply disruptions.

Specifically, Japanese firms are facing weeks of disruptions to secure input materials, which leads to a dramatic rise of material prices. At present, many firms have yet to be affected by the disruptions, but they predict that the impact will begin to be visible in March. Many firms continue their efforts to balance inventory, find alternative materials and goods supplies, seek new suppliers and change manufacturing locations.

The slowdown of manufacturing activities in Vietnam is attributable to the delayed restart of Chinese manufacturing activities, road closures, and transportation restrictions as well as restrictions on Chinese technical experts.

The impacts on the flow of goods include high transportation costs, delays in goods transport from China, and time-consuming procedures for importing goods under quarantine. These challenges have led to changes in transportation routes of materials and switching to alternative products.

When asked about the impact on their business performance in 2020, half of the respondents were unclear for now. However, about 30 per cent of Japanese firms said their businesses will be affected by COVID-19. Among them, 22 per cent of businesses said their business results will be "least affected" by the outbreak, 7 per cent of businesses expect to be "greatly affected, and 1 per cent are expected to be severely affected.

Standard Chartered commits $75 billion toward SDGs

Standard Chartered, a leading international banking group with a presence in more than 60 of the world’s most dynamic markets, today announced its business targets for supporting its clients as they transition to a low-carbon economy as part of the bank’s sustainability aspirations.

By the end of 2024, the bank commits to providing $75 billion in Sustainable Development Goal (SDG) project financing. $40 billion of this is set for infrastructure that promotes sustainable development, and $35 billion for renewables and clean technology projects.

The bank also commits to net-zero carbon emissions from its operations by 2030.

Standard Chartered will achieve net-zero emissions by only taking energy from renewable sources and continuing to pursue energy efficiency measures across its 12 million square feetof property.

According to Tracey McDermott, group head of Corporate Affairs, Brand and Marketing, in the past 18 months, the bank has made a series of commitments which are all geared towards supporting the Paris Agreement on Climate Change and the transition to a cleaner, greener, fairer economy.

“We know that the investment required cannot be provided by governments and NGOs alone, so it is critical that investors embrace the Sustainable Development Goals at pace and scale. Our unique footprint means we are well placed to help get finance to where it matters most. That is why we also have a renewed target for financing and facilitating $35 billion of clean technology and renewables, and $40 billion of sustainable infrastructure,” McDermott noted.

Standard Chartered has a broad range of sustainable finance product offerings that can be deployed to help clients pivot their business towards a more sustainable model.
Nirukt Sapru, CEO Vietnam and ASEAN and South Asia Cluster Markets, Standard Chartered Bank, said, “While Vietnam is making good progress in the implementation of SDGs, significant investments are needed. We estimate that the country requires $111.1 billion investment in SDGs by 2030, of which the private sector can contribute $45.8 billion. Leveraging our global capabilities and local insights, we will continue to act as a catalyst for the acceleration of SDGs in the country through the provision of meaningful sustainable finance.”

Standard Chartered has a broad range of sustainable finance product offerings that can be deployed to help clients pivot their business towards a more sustainable model.

In October 2018, it created the Sustainable Finance team and has since launched sustainable deposit products in London, Singapore, Hong Kong (China), and New York; plus, a €500 million ($542 million) Sustainability Bond, the proceeds of which will be used to provide finance in areas aligned with the Sustainable Development Goals – including clean energy projects, smaller business lending and microfinance loans.

FICO picks Binh Dinh for two wind farm projects

FICO Corporation's decision to invest its two wind farms in Binh Dinh province will help it avoid the grid overload issues experienced in Tra Vinh, Ninh Thuan, and Binh Thuan.

Binh Dinh Economic Zones Management Authority has approved in principle the investment planning of Nhon Hoi 1 and 2 wind farms of FICO Corporation. If the administration procedures are completed on schedule, the two wind farms are expected to start operation in September 2021.

These two wind farms are located in the area reserved for renewable energy projects of Nhon Hoi Economic Zone in Binh Dinh province.

Nhon Hoi 1 will have a capacity of 30MW and cover an area of 175 hectares with the total investment capital of VND1.32 trillion ($57.3 million). Located on an area of 201ha, the second one will have the same capacity, with the price tag of VND1.24 trillion ($53.9 million).

The project duration is 50 years, counted from the day the investors are granted the investment planning license.

In case the investor does not implement the project within 12 months or fails to meet the construction schedule approved by the authorities without acceptable reasons, the investment planning license will be withdrawn.

In 2011 the government announced a feed-in tariff of of VND1,770 (7.7 US cents) per kWh for wind energy projects, with a power purchase agreement (PPA) duration of 20 years, an attractive rate for investors.

However, experts warn that the rush to invest in wind energy to take advantage of the government's pricing incentives could lead to overloading of the national grid in a repeat of the solar scenario.

According to a report by Electricity of Vietnam (EVN), besides the nine plants that have begun commercial operations, it has also signed PPAs with 31 other plants with a total capacity of 1,645MW that are under construction.

Besides, 59 other plants with a total capacity of around 2,700MW have been added to the zoning plans for wind energy for the period leading up to 2025. More than 100 other projects have submitted applications for approval.

The proposed plants are mainly located in Bac Lieu, Ca Mau, Tra Vinh, Ninh Thuan, Binh Thuan, Quang Tri, and Phu Yen provinces.

The National Load Dispatch Centre warned that with many wind power plants going on stream this year, the national grid and transmission system could be overloaded in Tra Vinh, Ninh Thuan, and Binh Thuan.

HoREA points out deficiency in new legal framework for condotel

The Ho Chi Minh City Real Estate Association (HoREA) has lauded the Ministry of Natural Resource and Environment in bringing a measure of clarity to condotel and tourist villa regulations but pointed out that certain property types have been left out of the scope of the new framework.

Recently, the Ministry of Natural Resource and Environment (MoNRE) has issued documents guiding the handling of certificates of land use rights for tourist apartments and tourist villas (condotels). This certificate is considered much like a “red book” for condotels.

The Ho Chi Minh City Real Estate Association (HoREA), however, pointed out a “gap” in the guidelines. HoREA chairman Le Hoang Chau said that the instructions of the MoNRE depend largely on the Law on Tourism and guidelines by the Ministry of Culture, Sports and Tourism from last October – and has little mention of shoptels or boutique apartments, leaving an important emerging area unchecked.

Article 48 of the Law on Tourism also mentions eight types of tourist accommodations, including condotels and tourist villas, but not shoptels.

In addition, the Ministry of Construction has issued a new definition for condotels, describing them as “condominiums located in an apartment building complex”. However, condotels are built separately from apartment complexes.

Therefore, the HoREA suggested the MoNRE to provide further guidance on the granting of land use right certificates for shoptel. The HoREA also proposed the Ministry of Construction to complete the construction standards for apartment buildings, with a new definition for condotels.

At the same time, the HoREA also proposed calculating the areas in private and shared ownership with the investor in the way it is calculated for ordinary apartments as a basis for issuing the "red book" for condotels.

Finally, the association proposed the Ministry of Culture, Sports and Tourism to consider adding shoptels to Article 48 of the Law on Tourism to unify the management of all tourism property typest.

Newly established enterprises rise 9.1% in first two months

As many as 17,400 enterprises registered to set up in the first two months of this year, up 9.1% over the same period in 2019, according to the General Statistics Office.

These newly established enterprises registered a total investment capital of VND220 trillion (US$9.5 billion), down 11.1%, and a total number of workers of 157,500, down 3.9% over the same period last year.

The average registered capital per enterprise was VND12.6 billion (US$545,400), a decrease of 18.5% over the same period last year.

During the two-month period, 5,700 operating enterprises expanded their investment capital by a total VND421 trillion (US$18.2 billion), raising the total investment capital into the economy to VND641 trillion (US$27.7 billion) in the first two months of the year, down 26.2% over the same period last year.

In addition, 11,900 enterprises resumed their operation in the first two months of this year, up 17.1% compared to the same period in 2019.

Several areas saw increasing numbers of new enterprises including wholesale, retail, automobile and motorcycle repair, construction, and the processing and manufacturing industry.

However, in the first two months of this year, 16,200 enterprises temporarily suspended their operation, up 19.5% over the same period last year, 9,400 enterprises ceased operation to wait for dissolution procedures, down 31.4%, and 2,800 enterprises completed dissolution procedures, down 11.1%.

Vietnam’s industrial production grows 6.2% in first two months

Vietnam’s industrial production in the first two months of 2020 has expanded by an estimated 6.2%, far below the 13.7% and 9.2% recorded during the same period of 2018 and 2019, respectively, due to the major impacts of the coronavirus outbreak.

The General Statistics Office said that growth in the manufacturing sector slowed to 7.4% compared with last year’s 11.4% while power generation and distribution increased by 8.4%, down 0.9 percentage point from a year earlier.

Mining and quarrying shrank by 3.7%, compared with a decline of 3.5% in the first two months of 2019.

At a recent conference, Director of the Vietnam Industrial Agency Truong Thanh Hoai said that Vietnam’s manufacturing industry is heavily reliant on input materials and parts imported from China, Japan and the Republic of Korea, which are being affected by the coronavirus outbreak.

One of the hardest hit sectors is the electronics industry, which imported US$40 billion worth of parts in 2019.

Hoai said electronics manufacturers only have sufficient materials for production until the middle or the end of March. Garment and footwear producers are also expected to face shortages of materials in March or April.

The first two months of 2020 also saw a slowdown in the growth of retail sales and service revenue, which increased at the slowest pace in the past six years at 5.4%, with price increases excluded.

Last year’s growth figure was 9.3%, the General Statistics Office said.

Retail sales grew by 9.8%, down from the 13.3% recorded in the first two months of 2019, as consumers curtailed their shopping at public spaces to avoid the coronavirus.

Virus fears also hurt accommodation and tourism services, which rose by a respective 1.7% and 1.1% nationwide, with some provinces and cities recording sharp falls, such as Hanoi, Khanh Hoa and Lam Dong.

State budget revenue reaches over VND214 trillion during Jan-Feb

The total State budget collection in the first two months this year reached about VND214.2 trillion (over US$9.2 billion), equalling 14.2% of the yearly estimate, the General Statistics Office of Vietnam announced on February 29.

In which, domestic revenue reached VND179.8 trillion, fulfilling 14.2% of the full-year target. Revenue from crude oil was at VND8.6 trillion, equivalent to 24.3% of the year’s plan, while State budget collection from exports reached VND25.9 trillion, accounting for 12.4% of the year’s target.

Domestic revenues collected from State-owned enterprises reached VND21.3 trillion, similar to 12% of the estimate, while budget collection from foreign-invested enterprises (excluding crude oil) reached VND36.5 trillion, fulfilling 16% of the 2020 target.

Revenue from non-state trade and services taxes reached VND42 trillion, equal to 15.5% of the yearly estimate, in addition to VND 15.3 trillion collected from personal income tax, accounting for 11.9% of the year’s plan.

Total State budget expenditure during Jan-Feb period was estimated at VND145 trillion, equalling to 8.3% of the estimate. In which, recurrent expenditure reaching VND116.1 trillion dong, fulfilling 11% of the estimate.

Development and investment expenditure was at VND7.4 trillion, equalling 1.6% of the estimate, while those for interest payment reaching VND21.4 trillion, equal to 18.1% of the year’s plan.

Removing difficulties for pepper production

2019 was a difficult year for the pepper industry as domestic and export prices plummeted due to excess supply. 2020 is also anticipated to be a difficult year for pepper growers as prices continue to plunge in addition to declining productivity due to epidemic sand increasing costs for planting and harvest.

The Ministry of Agriculture and Rural Development said that the country had about 142,800 ha of pepper trees by the end of 2019, down 4,700 ha compared to the previous year. The output reached 264,000 tonnes, an increase of 1,200 tonnes compared to the previous year.

This farming area is tens of thousands of ha higher than the recommended planning. Because of the increasing price of pepper in previous years, at up to VND250,000 per kg, many local households have invested in expanding their planting areas.

The ‘overheating’ development of pepper has brought about adverse effects to growers. The Central Highlands and Southeast provinces have entered the harvest of pepper, but traders are buying pepper at very low prices, sometimes as low as VND36,000 per kg.

It is forecast that pepper prices will continue to decrease in 2020because the supply still exceeds demand. Meanwhile, production costs have increased and productivity has decreased.

Some farming areas have seen productivity falling by 10 to 20% due to unfavourable weather and harmful pests and diseases. In addition, rates for hiring labourers is getting higher at about VND200,000 day. Pepper growers seem to be sitting on a "fire" because their income is not enough to compensate costs.

According to forecasts of the authorities, the price of pepper is expected to increase slightly in 2021 when the farming area and output of pepper in the world decreases. This is considered a good signal for pepper growers and the pepper industry in general.

In order to develop the pepper industry in a sustainable and long-term manner, the farming areas of pepper should be cut to ensure the supply does not exceed demand.

However, the transition to other crops should be implemented as recommended, avoiding the mass production of one crop or excess supply which can result in losses for farmers.

In addition, it is necessary to support enterprises in the field to continue expanding markets and boosting trade promotion into large and demanding markets such as the US, the EU and Japan.

They also need to foster domestic consumption and join production linkages with farmers to increase business efficiency and ensure stable output.

Local authorities should guide people to carry out intercrop with other suitable crops to increase economic efficiency. Meanwhile, farmers are encouraged to replicate sustainable production models and reorganise production towards cooperative groups and applying advanced process of farming techniques, control pest and diseases while promoting the traceability of their products.

Transport Ministry’s proposal of over VND 447.2 trillion investment in transport infrastructure

The Ministry of Transport (MoT) is expected estimated total demand of over VND447.2 trillion (US$19.3 billion) for medium-term public infrastructure investment projects during 2021-2025.

The ministry revealed the figures on February 29, saying that a list of medium-term public investment projects for the period has been completing, which is expected to be submitted to the Prime Minister for approval before July 31 this year.

Of this total VND447.2 trillion, nearly VND27.3 trillion is for debt repayment under the State budget obligations, while VND102 trillion is for the implementation of transitional projects and the remaining capital of over VND318,000 trillion is for 192 newly-built projects, including 47 projects of Group A and 145 others under Group B.

Among the Group A projects (those with a total investment from over VND2.3 trillion), there are 11 sub-projects under the North-South Expressway project, with an estimated total length of nearly 750 km with the total investment of about VND105 trillion.

In addition, other infrastructure projects are also listed in the projected investment proposal during this period, such as the railway line improvement in Hai Van Pass area, Hanoi - Hai Phong railway route as well as Noi Bai Airport’s runway upgradation.

ADB expert hints key strategies to boost Vietnam’s greater economic growth

As Vietnam is preparing new socio-economic development plans covering 2021 through 2030, a senior expert from the Asian Development Bank (ADB) has offered some key strategies in a bid to help the country achieve its development targets in the coming years.

Donald Lambert, a specialist in charge of the private sector development under the ADB’s Southeast Asia Department, has said that with its new socio-economic development plan that will cover 2021 through 2025 and another new socio-economic development strategy covering 2021 through 2030, Vietnam is expected to establish ambitious development targets which are appropriate for a country that has achieved much over recent years. However, Vietnam will need to adopt new approaches to fund its development amidst many changes since its last five-year socio-economic development plan.

Vietnam’s per capita income has been increasing at a compound annual growth rate of over 6%, making it among the fastest growing economies in the world. It is now firmly established as a middle-income country and is one of the most attractive destinations for foreign direct investment.

This success means, however, that donors will begin to allocate grants and other forms of deeply concessional assistance to countries with more pressing needs, according to Lambert. In 2015, Vietnam was the 5th largest recipient of net official development assistance and qualified for some of the most concessional assistance from ADB and other donors. In 2017, it “graduated” from the World Bank’s concessional country classification and 18 months later from ADB’s equivalent grouping.

Lambert said that ADB and others have been trying to cushion this transition by blending grants with its lending to Vietnam to reduce net borrowing costs. Additionally, ADB in 2019 approved a new pricing policy that provides a temporary benefit to countries, like Vietnam, that are recent graduates from the most concessional assistance. Although helpful, these measures are temporary and inherently limited and will not provide the funding paradigm for Vietnam’s next socio-economic development plan.

These funding needs, moreover, are considerable. ADB has estimated that Southeast Asia will need to invest on average US$210 billion in infrastructure per year through 2030. Vietnam will require a large portion of this with the Global Infrastructure Hub estimating that Vietnam needs to invest US$110 billion between 2021 and 2025 for infrastructure and to meet the Sustainable Development Goals. Based on historical trends, this leaves a projected US$22 billion funding shortfall.

US$22 billion over five years is a big number, Lambert said, adding that it’s not insurmountable. In fact, Vietnam is in a better position than many. Whereas the Philippines, India, and other Asian countries have privately funded a large portion of their infrastructure, the private sector has historically only funded 10% of Vietnam’s. That means there is a lot of scope for Vietnam – particularly given its compelling growth story – to attract more infrastructure investment.

To make this happen, Lambert offered three key strategies that Vietnam can pursue. The first is more catalytic use of development assistance. This requires a different mindset, according to the ADB expert. Vietnam is no longer a low-income country, but it is also not ready to fund itself exclusively through private investment and domestic capital markets. A transition period is needed where Vietnam uses donors’ assistance to catalyse private investment that would not come otherwise, he suggested.

This transition period will, however, require new tools. This includes issuing counter-guarantees to ADB and other development partners so they can use their strong international credit ratings to de-risk projects. Vietnam should also prioritise development assistance to strengthen the financial sector, providing stand-by facilities or other enhancements to make it easier for state-owned enterprises tasked with key projects to access affordable financing, while allowing development partners to issue dong-linked bonds to lower the cost of capital for Vietnamese borrowers.

Using development assistance catalytically to attract private investment closely ties to the second priority: passing a strong law on public-private partnerships (PPP). The National Assembly has already considered a first draft of the bill and hopes to pass a second version in May. Consultations should focus on the key missing ingredients needed to attract international investment. For example, the law needs to better mitigate the risk that the demand for an infrastructure project falls short of projections. Vietnam already does this with feed-in-tariffs for power generation projects. The PPP law should afford similar protection to other sectors, particularly transport. This can be achieved through minimum revenue guarantees or ensuring that availability payments extend automatically beyond the current ceiling of five years.

The final strategic priority is better mobilisation of domestic capital markets, Lambert suggested. The passage of the new Securities Law in November 2019 was a good step as are recent regulatory changes that encourage companies to turn to the bond market instead of banks to fund long-term obligations. However, more is needed. According to the ADB official, private pension funds, investment funds, and insurance companies all need to mature so there’s a strong base of demand for corporate bonds.

Meanwhile, the main public pension, the Social Insurance Agency, must firstly be able to prudently manage and secondly start to invest in corporate debt. Vietnam needs to establish a domestic credit rating agency, and the government should actively market this investment opportunity to leading international rating agencies. These steps will help the corporate bond market to evolve, eventually creating opportunities for project bonds, particularly if credit enhancement mechanisms are available for these instruments.

Lambert said Vietnam’s graduation from concessional funding sources is unequivocally positive. It is a direct result of the dynamism and potential of this thriving economy. The trick now is to manage that success by evolving its strategy to fund the next five-year plan.

On the other hand, Vietnam cannot increase the share of private investment in infrastructure instantaneously, he suggested. A measured strategy that deploys development assistance catalytically, strengthens PPPs, and makes better use of domestic capital would establish the resource base for Vietnam’s next socio-economic development plan and beyond, Lambert concluded.

Portal to support SMEs in Ha Noi launched

The Small and Medium-sized Enterprises (SME) Support Centre under Ha Noi's Department of Planning and Investment has officially put into operation a portal to support businesses at hotrodoanhnghiep.hanoi.gov.vn.

The portal will introduce the Government as well as the capital city's policies and programmes to support SMEs.

The portal is an address for individuals, organisations and businesses to find useful information for business activities; seek opportunities to co-operate with partners and promote products to customers; as well as seek technical and capital support from experts and investors.

This will also be the place to receive opinions from enterprises in Ha Noi on issues that need to be solved.

At the same time, it is an online address for sharing knowledge, materials, experiences, corporate governance models as references for small and medium-sized businesses to spread among the business community in the capital city.

Businesses help each other mitigate Covid-19 hardship

Businesses are supporting one another by buying goods from each other to help mitigate the worst effects of the Covid-19 epidemic.

It has been more than 10 days since ABC bakery on Nguyen Trai Street in District 5 HCM City invented a new kind of bread from dragon fruit, huge quantities of which were going unsold due to the outbreak. Customers queue up to buy it.

Kao Sieu Luc, general director of ABC Bakery, told Thanh Nien (Youth) newspaper that his company has bought 30 tonnes of the fruit in two weeks.

It had planned on buying 100-200kg of dragon fruit a day, but, thanks to the demand, had ended up buying two tonnes instead, he said.

The bakery is next planning to make bread using watermelon and banana, and then more new products using agricultural products such as taro and durian, he added.

The price of dragon fruit has increased from VND10,000 (US$0.43) to VND40,000 but the company would still sign long-term contracts with farmers to buy their output, he said.

Nguyen Quoc Trinh, head of the Long An Province Dragon Fruit Association, said: "It will help farmers not depend on the China market like they used to."

Business groups and authorities are helping link farmers and businesses.

Besides the agricultural sector, the garment industry is also facing difficulties.

The HCM City Textile and Garment - Embroidery Association has helped companies sign contracts to supply anti-bacterial cloth masks to the city Union of Trading Cooperatives (Saigon Co.op) and the Pharmacity Drugstore chain.

Transport industry discusses solutions to reduce damages by Covid-19

As aviation companies continue to struggle because of Covid-19, other areas of transport are also being hit hard.

Minister of Transport Nguyen Van The chaired a meeting to evaluate the damage of the industry due to the epidemic on Thursday.

Director of Civil Aviation Authority of Viet Nam (CAAV) Dinh Viet Thang said the aviation industry had declined sharply since the end of January.

Vietnamese airlines have cut all flights to China, stopped 34 per cent of flights to Taiwan and 92 per cent of flights to Hong Kong as of February 26.

In South Korea, Vietnamese carriers cut their flights by 41 per cent.

Assessing the possible scenarios, the CAAV director said in the best case if the disease is controlled before April, the total market will reach 67 million visitors, down 15.4 per cent compared to last year.

If the disease is not controlled before June, carriers might have to cancel all flights to and from Korea and the total market would only be 61.2 million passengers, down 22.6 per cent compared to last year with 79.1 million.

In order to support Vietnamese airlines, the authority proposed the Ministry of Transport report to the Government for supporting aviation services.

CAAV also requested the Ministry of Transport ask Government to assign the Ministry of Finance to exempt import tax and environmental protection tax for flight fuels within three months.

In case of difficulty balancing the budget, the director asked for 50 per cent reduction of import tax and environmental protection tax on flight fuels.

It should also consider allowing businesses to extend the time for paying taxes and budget contributions, and easing entry visa policy for international guests, he asked.

The output of road freight last month decreased by 6.4 per cent, passenger volume decreased by 16.3 per cent compared to January and by 5.9 per cent over the same period last year, said Nguyen Van Huyen, Director General of the Directorate for Roads of Viet Nam.

Deputy director of the Viet Nam Maritime Administration Hoang Hong Giang, said import and export activities decreased sharply as many large markets such as China had fallen, shipping goods on sea or activities of port and warehouse businesses were also affected.

For maritime transport, cargo output decreased by 30 per cent compared to January.

Passenger volume decreased by 17.8 per cent and 3.4 per cent respectively, the deputy director reported.

“Domestic marine shipping enterprises are at risk of lacking input supply for production and business activities,” he said.

Representative of Viet Nam Railway Authority also acknowledged that the domestic railway was seriously affected because fewer passengers are travelling.

Statistics showed railway passenger output decreased by 45 per cent last month compared to January and down 47.4 per cent over the same period last year.

Realising the epidemic situation will be still complicated, the Minister of Transport asked companies to have full masks and antiseptic solution for passengers as well as drivers.

The minister requested the entire transport industry to unite to overcome the common difficulties, ensure the normal circulation of goods, and meet the production and business demands of enterprises and the whole economy in accordance with the direction of the Prime Minister.

Logistics industry problems persist: conference

The logistics industry in Viet Nam, especially HCM City, continues to face challenges like red tape and traffic congestion near border gates despite progress made in facilitating trade, Dinh Ngoc Thang, head of the city Department of Customs, told a conference yesterday.

The Government had been issuing many policies to facilitate trade by improving the business climate and businesses' competitiveness, he said, but admitted that the logistics sector faced "too many inspection procedures" and "the inspections themselves take too long, sometimes up to a week."

Besides, standard regulations had not been issued yet for some products, he said.

"International trade takes place mostly through one fourth of Viet Nam's entry points, and congestion is worsening as trade increases," he said.

Vietnamese logistics businesses lack service quality compared to their international competitors, according to Thang.

Businesses are not adequately aware of free trade agreements, new government regulations or trade laws of other countries.

Le Duy Hiep, chairman of the Viet Nam Logistics Business Association, said the cost of logistics in Viet Nam was higher than in neighbouring countries.

The customs department was carrying out a programme to relieve congestion at Cat Lai Port in HCM City, Viet Nam's biggest international port, and develop logistics, he said.

It aimed to ease procedures, reduce the time they require, and also reduce costs like storage and transportation, he said.

Around 200 import-export businesses were taking part in the programme, and more would join in future, he said.

They received numerous benefits such as getting their own area without needing to join queues, submitting fewer paper documents, having 24/7 access to professional staff, and having their own storage areas in the port and prioritised lanes for container trucks.

They could also keep track of custom progress of their goods and documents, and rate individual employees for customer service.

Thang said goods inspection needed to be revamped, the list of goods that have to be inspected should be re-examined and administrative procedures needed to be further simplified.

A comprehensive plan for IT infrastructure development to reduce customs clearance time should be looked at, and more scanners should be provided to customs officials at border gates, he said.

More favourable taxes and land lease policies could be created to help foster the logistics industry, he added.

The conference was organised by the department and the USAID Trade Facilitation Programme.

Quang Tri start work on large-scale port

Construction of My Thuy Port, valued at VND14.23 trillion (US$611 million), kicked off in the central province of Quang Tri’s Hai Lang District on Thursday.

More than VND2 trillion will come from the My Thuy International Port Joint Venture Company, while the remainder will be funded by other sources.

Covering 685 hectares in the South-East Economic Zone, the port will have 10 wharves capable of receiving ships of up to 100,000 tonnes. It is expected to significantly contribute to freight transport and economic growth in Quang Tri Province.

It will be divided into three phases with the first from now until 2025 seeing the establishment of four wharves costing nearly VND5 trillion. Another three will be constructed at the same cost during the second stage from 2026-31, and the remaining three, expected to cost more than VND4.3 trillion, will be built in the third stage from 2032-36.

The port will mainly serve the South-East Economic Zone (IZ) and industrial zones in the province, as well as cargo in transit from Laos and the northeast region of Thailand on the East-West economic corridor.

The South-East EZ has been drawing a large number of domestic and foreign investors, with capital amounting to tens of trillions of dong, according to local authorities.

Covering nearly 24,000ha, the zone spreads across 17 coastal communes and towns in Hai Lang, Trieu Phong and Gio Linh districts, driving development in the locality, central region and East-West economic corridor.

Adjustment task of the Southeastern Nghe An Economic Zone approved

Deputy Prime Minister Trinh Dinh Dung has just signed Decision No 301/QD-TTg approving the overall adjustment task of the Southeastern Nghe An Economic Zone by 2040.

The objective of planning for construction of the Southeastern Nghe An Economic Zone conforms to the national development strategy, Viet Nam's sea development strategy and Nghe An Province's development strategy.

The plan also aims to develop the economic zone into a dynamic and sustainable economic area and a tourism, service, urban, industrial, port and logistics centre.

It will also closely associate economic development with security, national defence, resilience and adaptation to climate change.

At the same time, it targets building the Southeastern Nghe An Economic Zone into a motivated economic region of the north central coastal region and Nghe An province; having synchronous and modern technical and social infrastructure systems; advanced and civilised architecture, urban areas with sustainable environment and efficient use of land.

Deregulation vital to enhancing business climate

Viet Nam needs to focus on improving business conditions to ensure deregulation really benefitted businesses, heard a conference held by the Central Institute for Economic Management (CIEM) on Thursday in Ha Noi.

CIEM Director Tran Thi Hong Minh said there were still business requirements which were unnecessary, unreasonable or unfeasible.

Minh pointed out that ministries and agencies made significant efforts to deregulate business conditions from 2017-19, with 50 per cent of prerequisites removed or simplified.

However, more needed to be done to ensure the deregulation progress really benefitted firms, Minh saids.

Head of the CIEM’s Business Climate and Competitiveness Research Department Nguyen Minh Thao said that nearly 40 documents related to removing and simplifying business conditions were issued over the past three years, demonstrating the Government’s determination to create a favourable business environment.

Looking at the results of 2017-19, Thao said the deregulation was mainly in the form of simplification while few prerequisites had been removed completely.

However, Thao said business conditions were still causing a lot of difficulties.

She said ministries had made no reports to evaluate the efficiency and impacts of these reforms.

“The focus should be more on the quality of the deregulation, rather than how many conditions are removed or simplified,” Thao said.

Head of the Legal Department under the Viet Nam Chamber of Commerce and Industry Dau Anh Tuan said the deregulation of business prerequisites had reached the Government’s goal in terms of quantity but quality remained a big problem.

Tuan said that ministries needed to evaluate the efficiency of reforms in each sector and continue to review and deregulate business prerequisites, together with the establishment of a dialogue mechanism to listen to businesses and adopt solutions to tackle their problems.

CIEM experts agreed that changing the Government’s management mindset was critical.

Businesses should be allowed to operate providing they met the conditions laid out, according to Thao.

Central region offers tourism promotions as arrivals fall due to COVID-19

The central provinces are working on new promotions to revive the tourism industry, which has been hit by the coronavirus disease (COVID-19) outbreak.

Cao Tri Dung, Chairman of the Da Nang Tourism Association, said: “The city is collaborating with Quang Nam and Thua Thien-Hue provinces to launch a promotion programme this month to pull visitors back to the central region.”

He said that hundreds of tourism agencies in the region had agreed to take part in the programme, which focuses on improving service quality and creating new tourism products.

The associations have asked local authorities to provide tax exemptions to tourism agencies to help reduce their losses.

According to the Da Nang Tourism Department, from March to May, the city will open new direct flights to Laos, Russia and India, which are considered markets with high potential.

Due to the current epidemic, the number of arrivals to Da Nang has fallen by 50 percent, mostly tourists from Asian countries.

Quang Nam province is facing challenges because the number of visitors, particularly foreigners, is expected to drop significantly.

Nguyen Van Son, Vice Chairman of the People’s Committee of Hoi An city, said: “The deep fall in tourist arrivals to Hoi An has caused losses to accommodation businesses, service providers and tourism agencies.”

Dung of the Da Nang Tourism Association said: “Although the situation is getting worse, central provinces are planning tourism promotions to attract visitors when the COVID-19 epidemic ends.”

Khanh Hoa province is focusing on the markets of Europe, Middle East, Southeast Asia and India.

Hoang Van Vinh, Chairman of the province’s Tourism Association, said “The association is working with the provincial Tourism Department to seek new markets.”

Beaches and attractions in the province have re-opened to welcome visitors after temporary closure due to the disease.

Vinh said: “The central region is a safe destination. One person in this region was infected with COVID-19, but was discharged from hospital on February 4”. /.