Vietsovpetro surpasses production targets in two months

Bach Ho oil and gas field has been exploited since 1986. (Photo: petrovietnam.petrotimes.vn)

The Russia - Vietnam oil and gas exploration joint venture, Vietsovpetro, reported an oil and gas production output of 609,700 tonnes in the first two months of the year, exceeding its target by 6.7 percent. 

Output at the joint venture’s Lot 09-3/12 in the new Ca Tam field from the outset of the year was estimated at 23,400 tonnes, or 115.9 percent of the set plan.

To date, Vietsovpetro put five wells into operation, namely Lot 09-1 of 1227/BK-14 well and wells 2Х, 3Х, 4Х/СTC-1 and 101/ CTC-1 Lot 09-3/12.

The Ca Ngu Vang field was safely operated with an exploiting output of 259,970 barrels with 250,000 barrels exported.

In the two-month period, Vietsovpetro earned 291.7 million USD in revenue, equal to 111.3 percent of its plan, and paid 118.8 million USD to the State budget, or 110.7 percent of its plan.

The profit of the Vietnamese side was 21.5 million USD (110.1% of the plan) and the Russian side, 20.7 million USD (110.1% of the plan).

Eximbank picks new board chair

Luong Thi Cam Tu has been appointed chairwoman of the board of Eximbank 

Vietnam Export Import Bank (Eximbank) announced on March 22 that it has replaced Le Minh Quoc as chairman of the board with Luong Thi Cam Tu.   

Quoc will leave his post and hand over responsibilities to Tu within five days, on March 22, the local media reported.

Tu had been general director of Nam A Bank for some years, before becoming a board member of Eximbank in 2018.

Quoc has been chairman of Eximbank since the end of 2015. After leaving his post as chairman, Quoc will continue to serve as a board member of Eximbank.

Saigon Industry’s divestment and land transfer under probe

The front of CNS’s headquarters in District 4 – PHOTO: CNS

The Ministry of Public Security has asked the State-owned Saigon Industry Corporation (CNS) for relevant documents as it investigates the corporation’s divestment from two firms and its transfers of land in districts 3 and Binh Thanh, which allegedly caused heavy losses for the State, the local media reported.

In early 2017, the corporation had reportedly transferred its 51% stake in Saigon Electronics and Industrial Services Joint Stock Company (Sagel) for nearly VND21 billion (US$0.9 million). Meanwhile, Sagel was the owner of many land lots in prime locations in HCMC, including one at 119 Pho Quang Street in Phu Nhuan District, worth more than VND3 trillion.

Similarly, CNS has also divested from Telecommunication Industry Electronics Joint Stock Company (TIE), which holds many land lots in the city center.

In addition, CNS used the rights to exploit land lots in districts 3 and Binh Thanh as its capital contribution to Hoa Mai Trading & Service Co., Ltd, in late 2015. These land lots were valued at some VND60 billion, while the market price was over VND200 million per square meter at the time. Thus, CNS’ land transfers could have caused losses of trillions of Vietnamese dong.

Early this year, the HCMC government decided to suspend the transfer of some land lots owned by CNS and to launch an investigation into the firm’s management, production and business activities and use of State capital from 2015 to 2018.

Meanwhile, CNS General Director Chu Tien Dung argued that it is baseless to suggest its divestment from Sagel and TIE had caused losses of trillions for the State.

Dung claimed the divestment was conducted in line with the directions of the Government and the HCMC government, following all necessary procedures, including hiring an independent consulting firm to appraise the value of Sagel and TIE, drawing up divestment plans and submitting them to HCMC’s competent agencies for approval and putting up for auction its stakes in the two firms.

The land lots of Sagel, TIE and Hoa Mai are all State assets. These firms have to annually pay rent for the land to the city, but they have yet to get the city’s approval to change the land use purpose, Dung added.

Meanwhile, Hoa Mai Trading & Service Co., Ltd, announced it had put on hold its investment in a land lot at 181 Dien Bien Phu Street in Binh Thanh District and another at 200 Vo Van Tan Street in District 3 from January 8. The company has returned the two land lots to the HCMC government.

After three years, the city has yet to set the rent for the two land lots, seriously affecting Hoa Mai’s investment and business development strategies, it said.

Vietnam’s mango exports increase

Vietnam earned 193.2 million USD from exporting mangos and mango products in 2018, up 24 percent year-on-year and making up 5 percent of the country’s total vegetable and fruit export revenue, according to the Ministry of Industry and Trade. 

The value increased from 46 million USD in 2015, 68 million USD in 2016 and 156 million USD in 2017, the ministry reported. 

China was Vietnam’s major mango importer, accounting for more than 84.6 percent of total mango export value. 

The southern region boasts the largest area of mangos, with more than 80,000ha. 

Dong Thap province alone has more than 9,200 ha. Last year, the locality shipped some 2,500 tonnes of mango, including 1,550 tonnes to China and 850 tonnes to Japan. 

The mango price is expected to drop in March and April which mark the main mango season in countries like Vietnam, Cambodia, Thailand, the Philippines, India and Pakistan, experts said. 

In recent years, Vietnamese farmers have applied new technologies to produce mangos throughout the year.

Quang Tri to launch major port projects

My Thuy port in design (Photo: baodautu.vn)

The construction of two key port projects worth more than 14.8 trillion VND (636.4 million USD) is scheduled to begin in the central coastal province of Quang Tri this year.

The Nam Cua Viet specialised seaport will be built on 19 ha within the 120ha Cua Viet port in Trieu Phong district in May. Funded by the CFG Quang Tri Co. Ltd, the project is set to cost 640 billion VND (27.52 million USD).

It consists of two phases. The first phase, lasting until 2020, is expected to construct two wharves serving ships weighing 3,000 – 5,000 DWT and capable of handling 0.2 – 0.5 million tonnes of throughput per year. The second phase will kick off after 2020, building another two wharves for boats of similar or bigger sizes compared to those in the first phase, with annual throughput capacity of 1 – 1.4 million tonnes.

In September, the construction of the 685ha My Thuy port is scheduled to begin in the East – South Quang Tri Economic Zone in Hai An commune, Hai Lang district. The three-phase project, costing in excess of 14.2 trillion VND (611.2 million USD), will build 10 wharves, each capable of handling 100,000 DWT vessels.

The area aims at providing port services for the economic zone, local industrial parks, and goods in transit from Laos and norteastern Thailand on the East-West economic corridor.

Vietnam labour productivity remains low 

Vietnam has failed to improve labour productivity over the last 10 years according to experts at the conference on enhancing national competitiveness on March 21.

Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research (VEPR), said Vietnam had failed to transform labourers into skilled workers in the past 10 years.

According to Thanh, labour productivity in Vietnam is much lower than in other ASEAN countries, let alone Singapore or China. Cheap and unskilled labour currently still accounts for the majority of the workforce, including in rural areas. Vietnam is still struggling to develop skilled workers for other sectors.

"Lack of investment, working environment and the low technology usage in Vietnam are an issue. It explains why we are still in the group of low-income countries in ASEAN and Asia," Thanh said.

Vu Tien Loc, chairman of Vietnam Chamber of Commerce and Industry (VCCI), said Vietnamese labour productivity in 2007 was estimated at USD10,232, accounting for 7.2% of the Singapore's, 18.4% of Malaysia's, and 36.2% of Thailand's.

Japanese Ambassador Kunio Umeda said Vietnam's economy was experiencing rapid growth in recent years and attracted a lot of foreign investment. This was an opportunity to solve several problems, including low labour productivity.

Experts from VEPR said the labour productivity in the state-owned firms was the highest in Vietnam. "It's because state-owned firms enjoy huge incentives in terms of capital, technology and market monopoly," Thanh said.

Many private firms do not have the capacity to make huge investments in infrastructure, technology and have trouble finding markets. Meanwhile, they use an enormous number of workers compared to state-owned firms.

"Many factors affect each other and pull down the labour productivity," Thanh said. "This problem needs a long-term solution and patience. We should implement measures from expanding the market for certain products, help the private sector expand, and improve the training of skilled labourers."

VinFa and DKSH link up

Vingroup’s VinFa Company and market service development group DKSH sign a strategic partnership co-operation agreement at a ceremony on Wednesday in Ha Noi. — Photo courtesy of Vingroup

Vingroup’s VinFa Company signed a co-operation deal with market service development group DKSH on Wednesday in Ha Noi.

"With the vision of becoming an international pharmaceutical enterprise of Việt Nam to serve the needs of Vietnamese people, VinFa and DKSH want to bring to the community products and comprehensive healthcare solutions with highest quality and the most standard services,” said Vingroup Vice Chairman and CEO Nguyen Viet Quang.

The move aims to meet healthcare needs in Việt Nam following international standards, contribute to bringing Vietnamese medicine to the world and other important logistic services.

DKSH head Corporate Affairs & Strategic Investments and member of Executive Board Stephen Ferraby said that DKSH wanted to work together with Vingroup to meet the growing demand for healthcare and consumer goods in Viet Nam, one of the most dynamic markets of Asia.

The two sides will co-operate in importing pharmaceutical products to supply to the local market. VinFa and DKSH will also bring advanced drugs from high-tech pharmaceutical manufacturers to manufacture in the market of Viet Nam. At the same time, through the existing network - VinFa and DKSH also aim to export domestic medicines, especially traditional medicines.

DKSH will transfer production process and technology and support staff training for VinFa to ensure the company’s system meets international standards.

In addition, DKSH is currently a partner of Vingroup in retailing consumer goods. Therefore, the co-operation between VinFa and DKSH will open more opportunities to provide other support services to Vingroup companies. 

Ho Chi Minh City – a bridge to Europe

Scene at the event

Experts talked about the role of Ho Chi Minh City as a bridge connecting to European markets during a ceremony to launch the Whitebook Briefing 2019 on March 20.

Co-Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Nicolas Audier said European firms will expand business in Vietnam this year with HCM City as the most favourable destination.

The National Assembly also passed a resolution on piloting special mechanisms and policies for the city’s development, he added. 

EuroCham will create opportunities for the two sides’ enterprises to develop sustainable cooperative relations in multiple arenas such as technology transfer and business skills.

The chamber will continue working with the local departments and sectors like customs and taxation to expand operations and better support businesses in the coming time.

Additionally, EuroCham will promote its role of connecting European firms to join the city’s development programmes such as smart city and transport.

Andreas Abbing, Vice President and Commercial Plant Manager of HCMC Plant of Bosch Vietnam, hailed the support of Vietnam and particularly HCM City in activities to reform policies, especially in promoting the training of human resources.

The signing of the EU-Vietnam Free Trade Agreement (EVFTA) will create favourable conditions for the two sides’ businesses, he said.

Bosch is a long-standing investor in Vietnam and will continue expanding investment in the Southeast Asian country in the time ahead, he added.

Vice Chairman of the municipal People’s Committee Le Thanh Liem said the EVFTA has opened up both opportunities and challenges for the two sides.

HCM City highly appreciated the investment and trade activities of foreign businesses, including those from the EU, he said.

The Whitebook Briefing 2019 is an important document for businesses to update information and seize opportunities to enhance cooperation, thus promoting the city’s growth in potential fields, he added. 

Climate change adaptation experience shared in Da Nang

Chairman of the Vietnam Cooperative Alliance Nguyen Ngoc Bao (standing) addresses the meeting 

Members of the Asian Farmers’ Group for Cooperation (AFGC) shared new production models that are adapted to the effects of climate change during its 19th annual conference held in the central city of Da Nang from March 20-21. 

Head of the National Cooperative Union of India Ved Prakash Setia said the Indian government issued a seven-point strategy in a bid to double farmers’ incomes by 2020. 

He cited the zero budget national farming model in the southern state of Andhra Pradesh as an example, saying that it uses cow pats and urine to enrich soil in cultivation, instead of harmful chemical fertilisers and pesticides.

Head of the Cooperative Federation of Thailand Poramate Intarachumnum said Thailand has been hard hit by the impacts of climate change, such as flooding and drought, causing it to launch an action plan to mitigate green house emissions and produce technology to create artificial rains. 

Former Thai Prime Minister Thaksin Shinawatra launched the “One Town, One Product” (OTOP)  programme to support products that are produced and sold in localities, which is now underway in over 7,000 Thai villages, he said, adding that OTOP products were worth 4.88 million USD in 2017. 

Vice Executive Chairman of the Republic of Korea’s National Agricultural Cooperative Federation (NACF) Lee Jea-sik said NACF has set up a disaster response fund; provided free agricultural materials, pesticides, and seedlings for re-cultivation; as well as encouraged the purchase of crop insurance and the switch to crops adapted to subtropical climate. 

Head of the Vietnam Cooperative Alliance’s Department of International Cooperation, Pham Thi Hong Yen, said the alliance has adopted measures to deal with climate change challenges such as ensuring food and water resource security, sustainably protecting and developing forests, enhancing biodiversity preservation, and improving inter-sectoral coordination in the effort. 

She forecast that the winter-spring and summer-autumn rice crop, and coffee and cassava output will decrease by 2050. In particular, a majority of the Red River Delta and the Mekong Delta will be underwater due to rising sea levels, thus hurting aquaculture. 

Huge potential for Vietnam, Laos to collaborate in cooperative economy

Representatives of the National Economic Research Institute of Laos and the Vietnam Cooperative Alliance pose for a photo at the meeting in Hanoi on March 21 

Vietnam and Laos would combine forces in cooperative economy, heard a meeting in Hanoi on March 21 between President of the Vietnam Cooperative Alliance (VCA) Nguyen Ngoc Bao and head of the National Economic Research Institute of Laos Bouasone Bouphavanh.

The Lao guest said that he was impressed by the rapid changes in Vietnam, particularly in cooperative economy development.

He expressed his hope that Laos will branch out its cooperative system based on Vietnam’s experience.

Meanwhile, Bao expected that bilateral collaboration in the cooperative economy will make significant contributions to bolstering the development of the sector in the future.

He said that in the past few years, the Vietnamese Party and Government have outlined various policies and programmes to facilitate the development of the cooperative system in the context of the socialist-oriented market economy.

According to VCA Vice President Nguyen Van Thinh, Vietnam is now home to more than 22,000 agricultural cooperatives, 3,500 higher than the amount recorded in 2013. Many establishments have enjoyed effective operations, and each earned an average 264 million VND (11,400 USD) per year with the income of workers estimated at 40 million VND (1,730 USD) per person per year.

Most of the cooperatives see joining a value chain as an important factor for their sustainable development, Thinh said, adding that they have applied advanced technologies into production, and enhanced trade promotion in both domestic and foreign markets.

The same day, Bouasone Bouphavanh and the Lao working delegation visited several new cooperative models in northern Vinh Phuc province. 

Taiwanese firms invest 30 million USD in Binh Phuoc’s industrial park

Scene at the signing ceremony between DDK Vietnam and Minh Hung Sikico Industry JSC (Photo: tuoitre.vn)

Three Taiwanese-funded enterprises on March 21 signed deals to invest a total of 30 million USD at the Minh Hung Sikico industrial park in the southern province of Binh Phuoc.

The capital will be channeled into several textiles-fabric dyeing projects spanning 5 ha of the 655 ha park.

Also at the signing ceremony, the Taiwanese-based industrial investment limited company DDK Vietnam and Minh Hung Sikico Industry JSC inked a cooperation agreement on promoting investment in the park.

Speaking at the event, the industrial park’s Deputy General Director Phan Tan Hoang said it will prioritise attracting investments in electroplating, textiles-fabric dyeing, and agricultural mechanics.

Investors are required to meet wastewater standards in line with national regulations and give priority to using the local workforce, he added.

Chairwoman of the provincial People’s Committee Huynh Thi Hang expected that cooperation from all sides would thrive in the future. 

Local authorities will create the best conditions possible for investors to operate, she stated.

Built at a cost of over 3.39 trillion VND (145.77 million USD), Minh Hung Sikico is among 13 local parks which together have hosted 19 companies whose registered capital amounts to some 500 million USD. 

Vietnam attends int'l coffee, tea expo in Singapore

As many as 250 businesses from 28 countries and territories worldwide, including Vietnam, are participating in the International Coffee & Tea Industry Expo 2019 which opened in Singapore on March 21.

The exposition features four display areas of tea and coffee products; cakes and desserts; foodstuff; and restaurants to increase attractiveness and create more investment cooperation opportunities for businesses.

Vietnamese Ambassador to Singapore Tao Thi Thanh Huong said the event will help promote exports of Vietnamese goods to the market, contributing to the balance of the bilateral trade.

It also supports domestic firms, especially those operating in the fields of manufacturing and processing farm produce.

Vietnam is the second biggest coffee producer in the world. Vietnamese coffee has been sold in 80 countries and territories.

The expo will run until March 23.

Vingroup’s subsidiary works with Swiss partner in pharmacy

At the signing ceremony (Photo: nhandan.com.vn)

Conglomerate Vingroup’s pharmaceutical company VinFa on March 21 signed a memorandum of understanding on strategic cooperation with Switzerland-based DKSH, a market expansion services provider.

The two companies will cooperate in importing pharmaceutical products and producing modern medicines in Vietnam. They will also look to the export of Vietnamese traditional medicine. 

DKSH will transfer technology to VinFa and help it train human resources in line with standards set by the Vietnamese Ministry of Health and the international community.

Following the success of the Vinmec Medical System, Vingroup has established VinFa Joint Stock Company and equipped it with advanced technologies. 

VinFa focuses on the production of good-quality Vietnamese and Western medicines, health food, vaccines and medical equipment of international standards.

In addition to exploiting the country’s precious herbal resources, VinFa plans to promote cooperation with prestigious pharmaceutical producers in the US, Europe and Australia. The aim is to receive consultancy, technology and technical expertise as well as facilitate the import of raw materials and products.

The group said the operation and quality-control process at VinFa will have three core criteria: best-quality products, highly skilled and dedicated staff and striving towards professionalism.

Seminar discusses labour productivity-competitiveness ties

The Vietnam Chamber of Commerce and Industry (VCCI) held a seminar in Hanoi on March 21 to seek to increase labour productivity to enhance national competitiveness.

VCCI Chairman Vu Tien Loc pointed out that Vietnam’s labour productivity, despite growth in recent years, is still below that of many countries in the region and in the world, particularly within ASEAN. 

The shortcoming has been a barrier to the country’s target to have a fast and sustainable growth and improve economic competitiveness, he noted.

Echoing Loc’s view, Nguyen Duc Thanh, Director of the Vietnam Institute for Economic Policy and Research under the Vietnam National University-Hanoi, said Vietnam’s labour yield grew less than three times over the past 25 years.

According to him, the productivity of the workforces in Vietnam’s key sectors of industry and construction has long been unchanged, hindering overall economic growth. Enterprises are yet to give proper priority to technology update in support of their employees and create better working environment for them.

Participating experts suggested a need to improve the quality of vocational training following the application of advanced technologies in production.  Incentives are also necessary to encourage organisations and businesses to engage in researching and applying new technologies, they added.

Participants agreed that tackling the issue requires concerted efforts among macroeconomic management agencies and businesses. They said increasing labour productivity will shorten the development gap with other nations and time to have prosperity.

125th China Import and Export Fair introduced in HCM City

Farmers havest dragon fruit - Illustrative image (Source: sggpnews.org)

The Vietnam Chamber of Commerce and Industry – Ho Chi Minh City Branch (VCCI-HCM), in collaboration with the China Foreign Trade Center, held a conference on March 20 to introduce the 125th China Import and Export Fair (Canton Fair) and a business exchange between Vietnamese and Chinese enterprises.

Canton Fair is the largest trade fair, with more than 25,000 exhibitors and about 200,000 buyers expected to attend.

The fair is divided into three phases. Phase 1 from April 15-19 will show electrical and electronic products, vehicles, building materials and industrial products, while Phase 2 from April 23-27 will show labour-intensive products such as groceries, ornaments, toys, gifts, and furniture. Stationery, clothing, footwear, bags, and human food and medicine will be exhibited in Phase 3 from May 1-5.

According to the VCCI-HCM, China remains Vietnam’s largest trade partner, and the latter surpasses Malaysia to become the biggest trade partner of the former in the Association of Southeast Asian Nations (ASEAN).

Last year, two-way trade exceeded 106 billion USD, up 14 percent year-on-year, of which 41 billion USD came from Vietnam’s exports, up 16 percent.

The structure of Vietnam’s exports to China has positively changed towards gradually increasing the proportion of manufactured products and agro-forestry-aquatic products and decreasing the proportion of raw materials, fuels and minerals.

Vietnam attends international coffee, tea expo in Singapore

Vietnam is the second biggest coffee producer in the world. Vietnamese coffee has been sold in 80 countries and territories. 

As many as 250 businesses from 28 countries and territories worldwide, including Vietnam, are participating in the International Coffee & Tea Industry Expo 2019 which opened in Singapore on March 21.

The exposition features four display areas of tea and coffee products; cakes and desserts; foodstuff; and restaurants to increase attractiveness and create more investment cooperation opportunities for businesses.

Vietnamese Ambassador to Singapore Tao Thi Thanh Huong said the event will help promote exports of Vietnamese goods to the market, contributing to the balance of the bilateral trade.

It also supports domestic firms, especially those operating in the fields of manufacturing and processing farm produce, she added.

At the opening ceremony, the Restaurant Association of Vietnam (RAV) and its partners from Singapore, Malaysia, Indonesia, the Philippines and Cambodia signed a cooperation agreement to establish the ASEAN Restaurant Association Alliance. 

The signatories pledged to promote the quality of products and services, ensure environmental protection, and boost cooperation exchanges, according to Chu Hong Minh, a representative from the RAV.

Luong Van Tu, Chairman of the Vietnam Coffee-Cocoa Association, said Vietnam is the second biggest coffee producer in the world. Vietnamese coffee has been sold in 80 countries and territories. 

The expo will run until March 23.

Meeting finds ways to remove difficulties for Japanese food firms

Takimoto Koji, chief representative of JETRO in HCM City, speaks at the meeting 

The import-export procedures and specialised inspections have been reformed in a positive way, making it easier for foreign businesses, including those from Japan, to invest in Vietnam.

This was the comment of Japanese firms at a food meeting held by the Japan External Trade Organisation (JETRO) in Ho Chi Minh City on March 20.

Nakagawa, lawyer at JETRO, said many difficult issues raised by Japanese enterprises at the annual event have been reviewed and addressed by Vietnamese ministries and relevant departments to offer more benefits for businesses.

For example, businesses are now able to make their product announcement and take responsibility for their published information, thus saving time and cost.

Takimoto Koji, chief representative of JETRO in HCM City, hailed the efforts of Vietnamese management agencies in administrative reforms and business environment improvement through listening to businesses’ opinions and removing their difficulties, as well as adjusting legal regulations in a more beneficial way for them.

Participants also hoped Vietnamese ministries and departments to further improve the efficiency of policy enforcement and ensure equality for businesses while investing in Vietnam.

In return, JETRO recommended Japanese business community regularly update and fully comply with Vietnam’s legal documents and regulations to ensure long-term benefits in the two countries’ economic cooperation.

Vietnam to waive import tariffs for environment-friendly auto parts

Vietnam has unveiled plans to offer import tariff incentives for parts used to assemble environment-friendly cars.

The Ministry of Finance proposes import tariff incentives for parts used to assemble environment-friendly cars. Photo by Shutterstock/Matej Kastelic

The Ministry of Finance is drafting a decree which will add electric cars to the list of incentive tax beneficiaries.

Current, auto parts for fuel-efficient cars can be imported tax-free but not environment-friendly cars, and hence the need for the decree, the ministry said.

"The decree will encourage the development of the local car industry."

There are no Vietnamese businesses manufacturing or assembling environment-friendly vehicles, which the ministry defines as electric, hybrid, biofuel-only, and compressed natural gas cars.

There are 358 businesses in the auto industry but Vietnam imports over 90 percent of auto parts. Most cars sold in the country are foreign brands imported or assembled locally.

“Doi Moi 4.0” needed to sustain high quality growth: report

Vietnam should make a strategic shift towards a more productivity and innovation-based economy while making the most of the ongoing demographic dividend to sustain high quality growth over the next decade.

To avoid middle-income traps, experts contend that Vietnam will have to maintain a growth rate in the range of 7-7.5 per cent for the 2021-30 period, higher than the average rate of 6.3 per cent of the last ten years.

This is among the major suggestions cited from a joint report between the World Bank and the Vietnam Academy of Social Sciences featuring the new economic model to help Vietnam achieve high-quality growth for the 2021-30 period.

The report, which is being prepared with support from the Australian Government, highlights the new economic model that focuses on around three breakthroughs, including innovation and entrepreneurship, human capital, and modern institutions.

“This report will help begin an exciting new chapter in Vietnam’s economic growth story,” said Craig Chittick, Australian Ambassador to Vietnam. “A chapter that embraces innovation, promotes bold reform, and helps Vietnam achieve its ambitious development goals.”

To avoid the middle-income traps, experts contend that Vietnam will have to maintain a growth rate in the range of 7-7.5 per cent for the 2021-30 period, higher than the average rate of 6.3 per cent of the last ten years.

The report indicates that the labor-intensive, export-led growth model Vietnam pursued during 2011 – 2020 has increasingly become obsolete against the context of Industrial Revolution 4.0, maturing global value chains, premature deindustrialization, and rising role of services.

“We are living in the era of disruptive technologies that presents both challenges as well as opportunities – I would like to call it ‘Doi Moi (renewal) 4.0’,” said Ousmane Dione, Country Director for the World Bank (WB) in Vietnam.

To mitigate these risks and seize the opportunities, Vietnam needs to accelerate reforms that boost productivity and innovation as key drivers of growth in the coming decade including steps to remove bottlenecks for private sector investment, enhance public sector institutions and invest in 21st century skills of the workforce, added Dione.

Addressing a workshop themed “Vietnam Economic Growth Model for 2021-30, with a vision to 2045” held in Hanoi on March 20, Dione delighted that since “Doi Moi” took place in the late 1980s, Vietnam has reaped remarkable economic growth while the economy has expanded at an average of nearly 7 percent annually.

However, he noted that Vietnam’s journey to become a high-income economy has only just begun. “In this new journey, what has been working in the past 30 years may not necessarily work in the future.” 

Whilst the impacts of initial institutional and structural reforms seem to have reached their limit, adjustments and changes to the growth model are urgently needed if Vietnam aspires to become a successful upper middle-income country by 2030 and a high-income country by 2045.

Dione highlighted two factors that are key for Vietnam’s future successes, regardless of the growth model that it will adopt.

The first one is quality. Preliminary simulations indicate that Vietnam needs to move to a productivity-led growth, with substantial increase in the average growth rate of productivity, an achievement that has been attained by only a few countries to date.

But, raising productivity would require substantial improvement in all quality aspects of growth. These include efficient resource allocation, improved quality of human capital, improved quality investment in infrastructure and service delivery, as well as innovation, making them all conducive for improved productivity,  the WB country director said.

He voiced his belief that Vietnam can still enjoy significant gains from technology transfers and adoption, and firms should be placed at center in the innovation agenda. Having a business environment conducive to firm innovation would work better for Vietnam now than common supply-driven measures such as increased spending for R&D or focus on invention activities.

Implementation is the second factor. Vietnam’s development challenges today are far more complex than the past 30 years.

A part of the complexity results from the fact that development issues are increasingly becoming multi-sectoral. Poverty reduction does not only require improved economic livelihood but also improved basic services and human capital development.

“Addressing these complex issues requires a strong leadership and determination. It also requires effective and sophisticated governance system that ensures smooth coordination both horizontally across government ministries and vertically between different levels of the government.” 

He called for continued strong institutional reforms that help to tackle the fundamental weaknesses relating to how the government provides services to businesses while citizens would be key to successful implementation of the strategies.

Deputy Prime Minister Vuong Dinh Hue said that economic efficiency should be measured via labor productivity and the nation’s economic competitiveness, based on the increasing number of input factors, improved workforce productivity, and the enhanced application of scientific and technological advances for the purpose of boosting innovation.

Gaming event attracts hot names

Gamers and streamers at the event. 

 The OTA Network, a network of game content creators, and Facebook Gaming organised a Facebook community event recently in Ha Noi, attracting nearly 200 of the hottest names in the gaming streamer and creator community in Viet Nam.

The event attracted the likes of Viruss, TrauTV and Quang Cuon. Streamers at the event had opportunities to discuss with new features and policies for the Vietnamese market with senior representatives of Facebook Gaming.

A global representative of Facebook Gaming shared at the event that livestreaming and watching other people playing games was a phenomenon that has exploded worldwide.

Tran Quoc Toan, representative from the OTA Network, the unit implementing the Facebook Gaming programme in Viet Nam, said the country was leading Southeast Asia in terms of the number of fans of e-sports with 15 million people last year and was expected to reach 26 million fans by the end of this year.

This year would be a challenging year, full of opportunities for Facebook Gaming in Viet Nam, said Toan.

“A series of community activities and contests will be organised and our team will be here to listen to you,” he added. 

DGW achieves solid growth

DGW staff at work. The company reported a growth of 29 per cent in revenues in the first two months of 2019. 

 Digiworld Corporation has reported business results for the first two months of 2019 with revenues jumping by 29 per cent year-on-year to VND839 billion (US$368 million).

Profit after tax was up by nearly 33 per cent to VND16.8 billion ($737,000).

In the laptop and tablets segment, its revenues were up 43 per cent at VND321 billion ($14 million).

Mobile phones sales rose by 17 per cent to VND345 billion ($15 million).

Office equipment saw sales of VND140 billion ($6.1 million), a 24 per cent increase.

Consumer goods sales were up 2.2 times at VND33 billion ($1.4 million) as DGW restructured its product portfolio, sales policies and distribution channels.

At the end of last year it signed a deal with Nestle to expand the market for medical nutrition products.

This was a driver of growth in 2019, the company said.

Digiworld targets profit after tax of VND137 billion ($6 million) on revenues of VND7.15 trillion ($314 million) this year, respectively 25 per cent and 20 per cent up.

The company, established in 1997, is the authorised distributor of more than 30 global technology brands and has a distribution network of 16,000 outlets. 

VietinBank to divest from Saigonbank in Q2

Customers in a Saigonbank office. VietinBank will divest from Saigonbank in the second quarter of 2019. — Photo Saigonbank

 State-owned Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) will put more than 15.1 million shares of Saigon Bank for Industry and Trade (Saigonbank) up for auction in the second quarter of this year.

With the starting price of VND20,100 (US$0.86) per share, VietinBank expects to earn nearly VND304 billion ($13.09 million) from the sale.

The shares are equal to 4.91 per cent of Saigonbank’s charter capital.

The move is a part of VietinBank’s plan to restructure its portfolio as approved by the State Bank of Viet Nam (SBV).

In 2016, VietinBank offloaded nearly 17 million shares of Saigonbank, or 5.48 per cent of the bank’s charter capital, at a starting price of VND10,800 ($0.46) apiece.

Saigonbank was among the banks that saw their ratio of non-performing loans (NPLs) decrease dramatically in the final months of 2019 thanks to its high provision of VND287 billion. The bank’s NPLs in the fourth quarter dropped by nearly 66 per cent against the previous quarter, which helped its NPLs stand at VND301 billion by the end of 2018. The result helped reduce the bad debt ratio at Saigonbank from 2.98 per cent at the end of 2017 to 2.2 per cent at the end of 2018.

Saigonbank’s representatives attributed the success to the bank’s focus on debt handling under a scheme to restructure credit institutions in the 2016-20 period approved by the SBV.

However, the increase in provisioning also caused the bank’s after-tax profit to decline by 24 per cent to VND42 billion in 2018. 

VinaCapital rolls out VinaCapital Insights Balanced Fund

VinaCapital Fund Management Joint Stock Company (VCFM), one of the most experienced asset management companies in Vietnam, on March 20 announced the establishment of its fourth open-ended fund - the VinaCapital Insights Balanced Fund (VIBF).

The move aims to diversify VinaCapital’s open-ended products, which have served as an effective investment channel for individual and organisational investors thanks to its good security and liquidity.

The VIBF offers a balance in the investment of bonds, treasury bills, fixed income assets, large-cap stocks and other valuable papers and records.

The VIBF launched its fund certificate initial public offering the same day, and the fund certificates are available for sale until April 15.

VCFM General Director Nguyen Thi Thai Thuan said the VCFM has been working to develop its products to fit the demands of investors. She described the VIBF as an efficient financial tool to help investors gain stable income and increase their assets.

The VCFM was founded in 2012 as a subsidiary of VinaCapital Group and operated under the name of VinaWealth Fund Management Company until July 2017. VCFM provides investment management and investment advisory services for both domestic and international investors.

The VCFM is fully owned by VinaCapital Group, one of Vietnam’s most experienced asset management and real estate development companies, with nearly 2 billion USD in assets under management in Vietnam. VinaCapital has more than 15 years of experience in Vietnam, and currently manage funds across multiple asset classes, including public and private equity, fixed income, real estate, venture capital and managed accounts.