VIETNAM BUSINESS NEWS DECEMBER 26

HCMC expects to welcome over 32 million local tourists next year

VIETNAM BUSINESS NEWS DECEMBER 26

If Covid-19 is controlled and the tourism sector makes a good recovery, HCMC expects to welcome some 32.7 million domestic tourists in 2021.

According to the municipal Department of Tourism, more than 1.3 million foreign tourists have visited the city this year, plunging 84.8% over last year, while domestic arrivals have plummeted 54.2% to 15 million. The city’s revenue from tourism has reached VND84 trillion, down 40% against 2019, Tuoi Tre Online newspaper reported.

As Covid-19 continues to show complicated developments, the HCMC Department of Tourism has worked out three scenarios for 2021.

In the best scenario, Vietnam will reopen international flights early next year and the number of foreign tourists will reach 8.6 million. The city’s tourism revenue is expected to be VND140 trillion, equivalent to the pre-pandemic figure.

In case Vietnam can resume some international air routes to certain safe countries, the city will serve some six million international visitors and 22.9 million locals and generate VND97.7 trillion in tourism revenue.

In the last scenario, wherein the world has yet to bring the pandemic under control and international flights are still suspended, HCMC will have no foreign guests, while the number of domestic tourists is expected to be 10 million. Its tourism revenue will reach VND33.4 trillion.

The HCMC Department of Tourism has urged local travel firms to accelerate the digitization process and enhance the interaction with customers to be prepared to serve tourists when the international tourism segment is resumed.

The department is coming up with a plan to build a smart interactive tourism map for the city, applying technologies of the fourth industrial revolution for tourism promotion.

The department will also continue coordinating with the municipal Department of Culture and Sports and consulting firms to finalize a project to promote local tourism products and services on LED screens in areas crowded with tourists, along key streets and at the city’s gateways.

Raft of developments far behind schedule

The approval of the proposed merger of districts 2, 9, and Thu Duc in Ho Chi Minh City is hoped to open doors for local economic growth, in the real estate sector in particular. However, weaknesses in infrastructure and long-delayed property projects remain the biggest obstacles to success.

Tran Quang Lam, director of Ho Chi Minh City Department of Transport, said that the future Thu Duc City would demand about VND300 trillion ($13 billion) to upgrade transport infrastructure. Of this, roads are forecast to occupy about VND135 trillion ($5.87 billion), railways and buses will need more than VND140 trillion ($6.08 billion), and waterways will require about VND24 trillion ($1.04 billion).

In the 2021-2030 period, four big projects for the city will be carried out, including Ring Road No.2 from Phu Huu Bridge to Pham Van Dong street, and An Phu intersection. Moreover, some public-private partnership schemes related to the city will be soon carried out such as the Ho Chi Minh City-Thu Dau Mot-Chon Thanh superhighway, Ring Road No.3, and National Highway No.13.

Nevertheless, many of these same ventures are already behind schedule. Even National Highway No.13, which initially had an extension approved exactly 20 years ago, has seen no actual expansion work carried out since. Ring roads are also in the quagmire. The area in question consists of three ring roads at a total proposed length of 356km. Of this, Ring Road No.2 is responsible for traffic divergence, and ring roads 3 and 4 take obligation for area links.

However, to date, Ring Road No.2 has been put into operation with only 55km, while 14km are currently under construction. Ring Road No.3 has only seen 16km of its proposed 90km being completed, and Ring Road No.4 is still under preparation.

A representative of Ho Chi Minh City Department of Transport said that the first and the second phases of Ring Road No.2 have yet to be approved in terms of investment direction.

Infrastructure congestion in Thu Duc also occurs – particularly, the relocation of the Truong Tho Port complex is causing part of the inadequacy. In rush hours, the area is submerged in traffic jams with thousands of vehicles circulating daily, according to data provided by the Department of Transport.

“To resolve the breakdown, Ho Chi Minh City People’s Committee has directed relocation of the port but the timeline to carry it out extends into 2022 because it depends on the investment progress of Long Binh Port,” said Bui Hoa An, deputy director at the department.

With prominent advantages in position and development policies, a raft of major real estate developers like Vingroup, Novaland, Dai Quang Minh, Hung Thinh, and Tien Phuoc have flocked to the eastern part of Ho Chi Minh City for project deployment.

Along with this, projects have sprung up along National Highway No.13 in the southern province of Binh Duong like Opal Skyline and Opal Central Park.

Meanwhile the prices of housing projects in the east of Ho Chi Minh City fetches from VND40-180 million ($1,750-$7,800) per square metre, while that of land plot projects ranges from VND40-200 million ($1,750-$8,700) per sq.m. Completed houses cost at least VND9 billion ($391,300) per unit, even skyrocketing to VND100 billion ($4.34 million) per villa.

In Binh Duong, some projects now in the development pipeline in Thuan An city are expected to witness 40-60 per cent price jump compared to a year ago. Most projects along National Highway No.13 have prices hovering around VND30-45 million ($1,300-$2,000) per sq.m and could increase further once the project on upgrading the highway gets underway.

According to Ngo Quang Phuc, CEO of Phu Dong Group, National Highway No.13’s expansion not only helps boost real estate prices, but is also fuelling economic exchanges between Ho Chi Minh City and Binh Duong. “Once travel between both locations is facilitated, more people would move to the city’s satellite areas, helping to heat up the real estate market there,” Phuc insisted.

For the future, Thu Duc City to meet the expectations of both Ho Chi Minh City’s leaders and people, architect and planning expert Ngo Viet Nam Son stressed the importance of strong planning work for the area. “Sustainable development and environmental factors must be put at top priority to stop traffic overload or flooding. Only then will people find Thu Duc to be a truly liveable city,” Son said.

Son also underlined the need to have in place regional connectivity not only with areas in the proposed new Thu Duc City, but also with other neighbourhoods. “Thu Duc City shall be the core zone linking Long Thanh International Airport in Dong Nai, Cai Mep Port in Ba Ria-Vung Tau, and Binh Duong. This will help facilitate transport significantly,” Son explained.

“Meanwhile, people can save on their living costs when they work in Ho Chi Minh City, but settle for a life in Long Thanh or Binh Duong where the housing price is much lower than that of Ho Chi Minh City.”

Seafood exports to top $12 billion by 2025: VASEP

The Viet Nam Association of Seafood Producers and Exporters said it plans several measures to help its members further penetrate the global supply chain and enable the fisheries sector to reach its export target of US$12 billion in 2025, 40 per cent higher than this year.

It held its sixth congress in HCM City on Wednesday to review its 2015-20 activities and make plans for 2020-25, and speaking at the event, Truong Dinh Hoe, its general secretary, said despite difficulties due to unfavourable weather, trade barriers such as anti-dumping taxes on shrimp and tra fish in the US and the EU’s ‘yellow card’ for illegal, unreported and unregulated fishing, and others, Viet Nam’s seafood exports increased by 2.5 per cent on average in the last five years and it now ranks in the top three in the world with China and Norway.

The COVID-19 pandemic reduced exports significantly in the first half of this year, but they have recovered since July. The export this year is estimated to reach $8.58 billion, equal the figure of last year.

Trade deals such as the EU-Viet Nam FTA, CPTPP and others ​​with major markets such as Korea, Japan, and ASEAN have helped Vietnamese seafood products become competitive in those markets, he said.

During the last five years the association worked with the Government to advocate sound policies, created business opportunities for its members through exhibitions and trade promotions and diversified the operation of its product committees, he said.

Talking about the new term, he said, “The association will work to achieve the export target of $12 billion by 2025, increase to 300 members from the current 160 and increase connectivity among them.”

The shrimp committee would work to reduce production cost, improve product competitiveness, enable traceability, and enhance processing to add value to the products.

Viet Nam’s shrimp exports are expected to exceed one million tonnes by 2025, helping it surpass India to become the world’s largest exporter, he said.

The association also plans to work to promote consumption of shrimp and other seafood in the domestic market, he said.

The marine product committee would seek to increase export to markets with which Viet Nam has FTAs, and the association is striving to get rid of the EC’s yellow card as soon as possible and diversify raw material sources, he said.

With this five-year strategic vision, the association wants to make the seafood sector to improve profitability and value addition for the industry, and promote the Vietnamese seafood brand globally, he added.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh hailed the association’s contribution to the country’s economic development over the last year.

“The agri-forestry-fishery sector is one the country’s key economic sectors with its exports estimated to reach $41.2 billion this year. Of this, seafood accounted for $8.5 billion.

“The 14 FTAs the country has signed will open the door wide for the sector to boost exports.”

But the sector also faces shortcomings and challenges like small scale of production, erratic raw material supply and trade barriers, he warned.

He urged the sector to focus on resolving these issues, getting the EC to lift its yellow card soon and increasing the processing rate to add value to its products.

Vietnamese seafood is exported to over 160 markets around the world, with the US, Japan, EU, China, Korea, and ASEAN being the largest.

VASEP received the Emulation Flag from the Ministries of Agriculture and Rural Development and Industry and Trade for its achievements over past years.

The congress elected a 31-member executive board and re-elected Ngo Van Ich as the association chairman for the 2020-25 term. 

Hanoi travel agencies join hand to overcome Covid-19 pandemic

Six travel companies in Hanoi have opened a center for in-house tourism skill training.

Facing the manpower crisis in the tourism sector caused by the Covid-19 pandemic, six travel agencies of Hanoi have cooperated to open a center for in-house training, aiming at providing practical tourism skills for staff and students specializing in tourism.

The Covid-19 pandemic has been wreaking havoc on the tourism sector and tour-operators. Travel agents have to lay off workers; or the staff themselves have to change to another employment.

Given the situation, tourism workers need to be retrained for equipping themselves with new job skills, knowledge and adaptability to suit themselves to the new situation. 

Mindful of this, six travel companies in Hanoi, including VietSense Travel, MyTravel, Ascend Travel, AZA Travel, Anh Duong Tour and Asia Land Travel have joined hand to found the Practical Travel Training Center (Prato).

The center offers a range of training courses, with the aim of providing practical tourism skills for trainees who are staffs of travel agencies, tourism students or people interested in the sector. 

The teachers of the center are the CEOs of travel companies themselves, who have broad and practical travel experiences to guide the trainees to improve their professional skills.

According to Mr. Nguyen Van Tai, VietSense Tourism’s director and founder of the project, Prato's training classes focus on practical skills on tourism management, tour building, coordinating transportation and accommodation bookings as well as tourism English.

"Each tour operator has its own strengths and secrets in tourism management.  It takes years of work to accumulate such know-how. We are now willing to share this knowledge with everyone who is interested, so that tourism has much better employees and tourism companies can endure this difficult period," he said.  

Vietnam urged to diversify energy resources: VBF 2020

Foreign business associations expect the Vietnamese government to further focus on the development of nuclear power.

Many foreign investment business associations suggested that Vietnam should consider diversifying energy resources to power economic development, at the Vietnam Business Forum 2020 (VBF) taking place on December 22 in Hanoi.

Looking ahead to 2021, Mr. David John Whitehead, Vice President of the Australian Chamber of Commerce Vietnam (Auscham) expected that, by mid-2021, the business performance would make strong progress as international markets would open up and trading activities to be restored. Due to the increase in power demand associated with economic growth, ensuring power supply through rapid development of power generation and electricity grid has become an urgent issue.  

Sharing this opinion, a representative from the Japanese Chamber of Commerce & Industry in Vietnam (JCCI) also suggested that the government should consider diversifying energy sources taking into account the unique conditions of Vietnam, as well as environmental aspects. 

According to the JCCI, stable policy regime is an important factor for foreign investors to easily map out their medium and long-term investment plans, especially for renewable energy.  

The JCCI proposed the government to consider maintaining and expanding a more appropriate feed-in-tariff mechanism, completing a more bankable electricity purchase contract; speeding up and simplifying procedures for adding projects to the Power Development Plan (PDP); granting incentives to companies, factories and industrial zones introducing renewable energies; and the further relaxation of regulations on the introduction of off-grid power sources. 

The JCCI recommended that the government needs to accelerate the completion of energy infrastructure based on the Gas Industry Master Plan (issued in 2017). 

In term of nuclear power, the representative of the Indian Business Chamber in Vietnam (IBC) emphasized that Vietnam is expected not to reconsider nuclear power but that the effective use of nuclear technology for civilian purposes should be taken into account, as nuclear power is an extremely low-cost green energy source that no other power generation option can provide. Nuclear power development can also be seen as a strategic movement by the country to maintain the security of its energy-generating investments in the region.  

On the sidelines of the forum, Mr. Hong Sun, Vice Chairman of the Korean Business Association in Vietnam also agreed with the IBC’s opinion. 

Noting Vietnam has been focusing on renewable energy in recent time, according to the VBF Infrastructure Working Group, renewable energy has met a part of Vietnam’s needs. More electricity is needed to fuel the country’s fast-growing economy. If not from coal, it will have to come from gas or nuclear fuel. These projects can cost between U$5 – 50 billion.

The VBF Infrastructure Working Group said that in order to attract these sorts of flows, these projects should be viewed separately from other smaller infrastructure projects. 

In terms of policy, the VBF Power and Energy Working Group said that a favorable and legal environment should be built up to attract private investment in clean energy production and efficient energy use, removing the generation burden from EVN and sharing it with many power consumers and power producers in a distributed generation model.

The group suggested that such favorable legal framework would lead to reduced greenhouse gas emissions and air pollution and the other costs relative to a coal-focused energy plan and in alignment with Vietnam’s Nationally Determined Contributions commitments.

Vietnam’s asset and wealth management set for promising prospects

With further support from the State Securities Commission of Vietnam, the asset and wealth management is expected to continue its strong growth in the future.

With further support of the State Securities Commission of Vietnam (SSC) to restructure the asset and wealth management (AWM) industry in 2020, the sector is set to continue its strong growth in the future, following a 20% expansion rate in 2019, according to PwC Vietnam.

Currently, the market size for the AWM industry in Vietnam is relatively modest, noted PwC Vietnam, referring to a report from the SSC that there are currently 47 fund companies in operation.

In 2019, however, the AWM in Vietnam recorded a strong growth of 20% year-on-year to US$13.4 billion.

“Asset and wealth management firms can channel capital and target investment opportunities to lift economies out of recession. It is important to understand the power the industry has in influencing the future,“ said Olwyn Alexander, PwC Global Asset & Wealth Management Leader

“A better future for everyone; investors, shareholders and the economy as a whole. The world we leave for future generations matters. The industry can act now to realize beneficial change,” he noted.

“While financial return will always be important, increasingly investors are deciding that social return is just as important. What we’re seeing is asset and wealth management firms that deliver standout returns on both the social and financial fronts will be the clear winners over the coming decade — magnets for investment and able to sustain superior returns for shareholders and partners,” noted Mr. Alexander.

A report from PwC suggested the global AWM industry is controlling more than US$110 trillion (more than 20 times the US federal budget), as such, the power the asset and wealth management industry has in shaping the future is unparalleled.

With global assets under management projected to grow by up to 5.6% per annum to US$147.4 trillion by 2025, it can shape a future which is better for investors, shareholders, the economy and the wider society, stated the report titled “‘Asset and Wealth Management Revolution: The Power to Shape the Future’.”

In this context, the AWM industry can be a powerful engine of recovery and a force for good for Vietnam in a world facing uncertainty and upheaval.  

The report argues that the more wealth we can create as a society, the more we can save and the more that will be available to invest. And as people live longer, the asset and wealth management industry can contribute to the resolution of escalating pension gaps and retirement poverty. Saving cash on deposit is no longer tenable in a world of ultra-low interest rates and fixed income yields, forcing savers to look for higher yielding, attractive options. 

According to the report, assets under management in infrastructure funds are expected to double by 2025. Further opportunities for asset and wealth management firms to provide for the future include making up for the growing shortfall in available infrastructure investment, especially from governments. Within developed markets, there are considerable openings to refurbish roads, airports, hospitals and other such opportunities while accelerating developments in areas such as 5G and renewable energy. As a result, we expect assets under management in infrastructure funds to double by 2025. 

Increasingly, investors are putting the environmental and social profile of AWM firms on a level playing field with financial return. A growing number of investors expect asset and wealth management firms to make ESG issues integral to their investment strategies. This shift is already having a revolutionary impact on product design, fund allocation and performance objectives. 

PwC’s analysis shows that ESG-aligned funds cumulatively outperformed their traditional counterparts by 9% from 2010 to 2019.  Research also shows that diverse companies, in which more than 30% of leaders are women, are, on average, 15% more profitable than those that are not diverse, and businesses that score highly on sustainability tend to outperform those that do not. 

 A few tech fixes here or a nod to investors’ ESG demands there will not be enough to survive and thrive in an industry where the front-runners are already embracing these changes and seizing the opportunities.

Vietnam credit growth hits 10.14% as of December 21

The banking system has been providing support for 590,000 customers, mainly in forms of debt restructuring or freezing and waiving debt payment with outstanding loans worth over VND1,000 trillion (US$43.31 billion).

Vietnam’s credit growth as of December 21 is estimated at 10.14% against the end of last year and up 11.62% year-on-year.

Vice Governor of the State Bank of Vietnam (SBV) Dao Minh Tu revealed the data at central bank’s press briefing held today [December 24]. Last year, Vietnam's credit growth reached 13%, while the SBV set a target of 14% growth rate for this year.

Meanwhile, as of December 18, the growth rate of M2, which measures money supply that covers cash in circulation and all deposits, increased 12.83% against the end of 2019 and 14.62% year-on-year, noted Mr. Tu.

Since the beginning of the year, the SBV has cut its interest rate caps four times, the moves which have encouraged commercial banks to provide loans at lower interest rates, with the latest made on September 30 by slashing 0.5 percentage points to the refinancing interest rate, discount interest rate, overnight lending rate, and interest via open market operations (OMO). 

Accordingly, the refinancing interest rate is lowered from 4.5% per annum to 4%, rediscount rate from 3% to 2.5%, overnight interest rate from 5.5% to 5% and interest rate via OMO from 3% to 2.5%. 

The SBV also lowered the interest rate cap to 4% annually from 4.25% for deposits with maturities of one month to less than six months.

Credit institutions have so far restructured debt payment schedule for 270,000 customers affected by the pandemic with total outstanding loans worth VND355 trillion (US$15.37 billion), while the banking system has been quick in providing support for 590,000 customers, mainly in forms of debt restructuring or freezing and waiving debt payment with outstanding loans worth over VND1,000 trillion (US$43.31 billion).

Loans with preferential interest rates of 0.5-2.5% lower compared to the pre-Covid-19 period have also been offered to 390,000 customers worth VND2,300 trillion (US$99.6 billion) since January 23.

According to the SBV, the bad debt ratio as of late October exceeded 2%, but “this is inevitable given the severe economic impacts from the Covid-19 and customers’ debt repayment capabilities greatly affected as a result,” noted Mr. Tu.  

Singapore’s deflation eases in November

Singapore’s deflation eased in November, with both core and headline inflation at -0.1 percent year-on-year, compared to -0.2 percent in October, according to the Department of Statistics (Singstat) consumer price index (CPI) figures on December 23.

November’s slower rate of decline was due to smaller falls in the costs of services, and electricity and gas, as well as higher food inflation.

Private transport and accommodation inflation - part of the headline measure but excluded from core inflation - stayed unchanged from the month before, at -1.3 percent and 0.3 percent respectively.

Services inflation was -0.2 percent, less steep than October's -0.5 percent figure, due mainly due to a smaller decline in outpatient services fees and an increase in the costs of recreational and cultural services.

The cost of electricity and gas fell 6.8 percent, slowing from October's 7.2 percent fall, as targeted utilities rebates ceased in October 2020.

Meanwhile, the cost of retail and other goods fell more sharply, with inflation at -2.0 percent in November, steepening from -1.6 percent in October.

In Singstat's release, food, household durables and services, and communication were the only three categories with positive inflation year on year in November.

In a joint statement, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) maintained an unchanged inflation outlook from the previous two months, with core and headline inflation ranging from -0.5 percent to zero percent in 2020. Core inflation for 2021 is expected at 0-1 percent, while headline inflation if forecast at -0.5 percent-0.5 percent./.

Over 519.3 million USD mobilised through G-bond auction

More than 12 trillion VND (519.3 million USD) was mobilised for the State Treasury through a Government bond auction at the Hanoi Stock Exchange (HNX) on December 23.

As much as 9 trillion VND worth of bonds were offered, including 10-year, 15-year, 20-year and 30-yaer bonds.

The Treasury raised 3 trillion VND worth of 10-year bonds with an annual yield rate of 2.28 percent, down 0.04 percent from the previous session on December 16.

Those with a 15-year term attracted 4 trillion VND at annual interest rate of 2.5 percent, falling 0.04 percent from the previous auction on December 16.

Meanwhile, bonds with maturity of 20 years were purchased at total value of 1 trillion VND, and an interest rate of 2.89 percent per year, a fall of 0.04 percent as compared to the auction on December 16.

Bonds with 30-year term were sold at 613.5 billion VND, and an annual yield rate of 3.14 percent, declining 0.01 percent from the previous session.

Some 3.5 trillion VND was mobilised from 10-year and 15-year bonds at the sub-session auction.

According to the HNX, the Treasury has mobilised over 323.9 trillion VND from G-bond auction at the bourse from the outset of the year./.

Vietnam, Ukraine need measures to boost trade: Ambassador

Measures are needed to propel economic and trade ties between Vietnam and Ukraine, said Vietnamese Ambassador to Ukraine Nguyen Hong Thach at a meeting with the Ukrainian Chamber of Commerce and Industry (UCCI) on December 23.

These measures were the key topic of the sides’ discussion. They agreed to hold virtual conferences and workshops to connect Vietnamese and Ukrainian businesses, while working closely in the organisation of the 15th meeting of their countries’ intergovernmental committee on economy, trade, science and technology expected to take place in 2021.

UCCI President Gennandiy Chyzhykov said Ukraine is strengthening its relations with East Asia, with ASEAN being among key areas and Vietnam an important partner of Ukraine in the bloc.

 

Noting that Ukraine is a traditional friendly partner of Vietnam, Thach said their cooperation have been sustained from the past to present.

Both officials discussed a series of initiatives to bolster the bilateral collaboration in tourism, ore mining, renewable energy, science, defence industry, and services, among other areas.

Thach suggested it is potential for the countries’ enterprises to cooperate in opening Vietnamese restaurant chains in Ukraine, while Vietnam-Ukraine high-tech agriculture joint ventures can take advantage of Ukraine’s soil and Vietnam’s labour sources./.

Quang Ninh maintains GRDP growth of over 10 percent

The northeastern province of Quang Ninh’s gross regional domestic product (GRDP) has been estimated at 10.05 percent in 2020 despite the adverse impact of COVID-19.

The province’s State budget collection is projected at 49.3 trillion VND (2.13 billion USD), surpassing the year’s target by 9.4 percent and up nearly 7 percent compared to the same period of 2019.

Budget collection from export-import activities surged by 29 percent against the estimates, while domestic collection fulfilled the set target with 37 trillion VND, rising 7 percent.

Secretary of the provincial Party Committee and Chairman of the People’s Council Nguyen Xuan Ky said the province will spare no efforts in carrying out the dual targets of protecting people’s lives and boosting socio-economic development in the coming year, especially keeping its GRDP growth in the double digits.

The province has set a goal to have modern industry and service sectors and become one of the region’s comprehensive and dynamic development hubs by 2025./.

Thailand rice exports likely to fall 12 percent in 2020

Thailand’s rice export volume is estimated to reach 5.7 million tonnes in 2020 with revenue of about 3.8 billion USD, down 12 percent year on year, according to Thai Rice Exporters Association (TREA) Honorary President Chookiat Ophaswongse.

He explained that Thai rice export has faced many obstacles throughout the year, including higher price when compared to competitors.

The TREA held that the situation has been aggravated by the increased baht price, along with the shortage of containers for transporting rice.

Chookiat Ophaswongse said that it would be the first time that Thai exports would be lower than that of Vietnam, which is expected to export a total of 6 million tonnes.

In recent years, Thailand has lost its position of world top rice exporters to India and Vietnam. The Southeast Asian nation produces over 20 million tonnes of rice each year, a half of which is exported.

In 2019, Thailand exported 7.58 million tonnes of rice, earning 131 billion baht (4.13 billion USD), down 32 percent in volume and 25 percent in value year-on-year. Earlier this month, Chookiat Ophaswongse predicted that Thailand’s total rice export volume this year would reach 5.8 million tonnes in 2020 and 7 million tonnes in 2021./.

Mekong Delta seeks to enter global value chains

The Cửu Long (Mekong) Delta needs to develop value-added agricultural products to enter global value chains, officials have said.

Amid deep global integration, trade links are a driving force for economic development, Lê Quốc Phong, Secretary of the Party Committee of Đồng Tháp Province, said.

With an open economy, Vietnamese-made goods will face strong competition from foreign-made goods.

Phong spoke at the Mekong Connect - CEO Forum held in Đồng Tháp Province earlier this week.

Lê Minh Hoan, Deputy Minister of Agriculture and Rural Development, pointed out that application of science and technology advances in agricultural production are needed to create more value-added products.

Enterprises are encouraged to co-operate with State agencies in science and technology research so they can produce quality products, Hoan said.

In the agro-aqua-forestry sector, exports hit more than US$40 billion this year, he said. 

Nguyễn Minh Hải, deputy chairman of the European Chamber of Commerce in Việt Nam (EuroCham), said there are 39 Vietnamese Geographical Indications (GIs) in the EU, including Bạc Liêu salt and Vĩnh Kim star apples from the Mekong Delta region, providing an adequate framework for further promotion of imports of quality products.

The EU maintains some of the highest sanitary, phytosanitary, origin tracing, and sustainable standards in the world.

Hải highlighted the importance of raising local standards and developing new value-added products which can compete internationally, particularly in the EU market with its population of 450 million.

The EU-Việt Nam Free Trade Agreement (EVFTA), which came into effect in August this year, has paved the way for increased trade between the EU and Việt Nam.

The elimination of tariffs under the EVFTA is expected to benefit key export industries, including agricultural products, but technical barriers to trade are expected to be raised, imposing challenges for Mekong Delta products and services to penetrate the EU market.

Mary Tarnowka, executive director of AmCham Vietnam in HCM City and Đà Nẵng, said many AmCham member companies like Cargill, Coca-Cola, Suntory Pepsi and Pharmacity already have extensive operations in the Mekong region.

Agricultural products from the Mekong region, like shrimp, catfish, dragon fruit and mango, are now exported throughout the US.

The Mekong region has the potential to attract considerably more investment and sustainable growth. It has some of the richest natural renewable energy resources in the world, such as solar and wind. 

AmCham member companies are eager to partner in renewable energy development in the Mekong region – from supply of solar panels and wind turbines to project development and energy generation.

Vũ Tiến Lộc, chairman of the Việt Nam Chamber of Commerce and Industry (VCCI), said localities in the Mekong Delta need to invest in sustainable agro-economic development, as well as infrastructure to improve connectivity in the region and HCM City economic hub.

The fifth Mekong Connect - CEO Forum attracted 700 enterprises, Government leaders, and domestic and foreign experts who have concerns and interests related to the Mekong Delta.

The forum was organised by the ABCD Mekong regional network including Cần Thơ City and provinces of An Giang, Bến Tre, and Đồng Tháp, in co-ordination with the Business Association Of High Quality Vietnamese Products and the Leading Business Club. 

Thailand revises down growth outlook for 2021

The Bank of Thailand (BoT) has reduced the country's GDP growth outlook for next year from 3.6 percent to 3.2 percent, mainly due to an anticipated delay in tourism recovery.

The reduction of 0.4 percentage points in the country’s GDP growth forecast was attributed to the impact of a prolonged outbreak abroad and a new outbreak in Thailand which is likely to delay a recovery in tourism, said Titanun Mallikamas, assistant governor of the monetary policy group.

The central bank forecasts foreign tourist arrivals in 2021 to reach 5.5 million, a decline from an earlier projection of 9 million.

Although there has been progress in COVID-19 vaccine development, vaccine distribution is expected to be limited, he said.

The BoT predicts vaccination coverage in advanced economies to be at 30 percent of the population in the second quarter of 2021, with the coverage ratio in key countries for Thai tourism at 30 percent in the third quarter.

Under this scenario, Thailand is expected to re-open to foreign travellers from the second half of 2021, with arrivals gaining in the final quarter, said Titanun.

Two scenarios were envisioned for re-opening to foreign tourists, dependent on vaccine development.

A 14-day quarantine period for foreigners with a special tourist visa is the first scenario, while the other forgoes a quarantine period for mandatory vaccination and infection test certificates, he said.

The number of foreign tourist arrivals is expected to continue increasing in 2022, in line with vaccine development and herd immunity, he said. Under this scenario, vaccination and quarantine are not required.

For 2020, the BoT upgraded its GDP contraction forecast for Thailand to 6.6 percent from 7.8 percent following improved signs of an economic recovery in the third and fourth quarters, particularly exports and domestic consumption.

Full-year merchandise exports are projected to contract by 7.4 percent, up from 8.2 percent, while private consumption is forecast to shrink by 1.4 percent instead of 3.5 percent./.

Agriculture sector urged to earn 44 billion USD from exports next year

Prime Minister Nguyen Xuan Phuc has asked the agriculture sector to strive for the target of 44 billion USD from exports in 2021.

During a teleconference on December 24 to review the Ministry of Agriculture and Rural Development’s performance in 2020 and set tasks for 2021, PM Phuc affirmed that agriculture, farmers and rural development continued to be an important mainstay of the economy despite difficulties this year.

According to the government leader, the country’s two-way trade reached nearly 541 billion USD this year, of which over 41 billion USD was from the agriculture sector.

He hailed the sector for fulfilling four important goals assigned by the Party and State, including achieving a growth rate of over 2.65 percent, record export revenue of 41.2 billion USD, a trade surplus of 10.4 billion USD, and five groups of products gaining more than 3 billion USD in export revenues.

Regarding the processing industry in agriculture, he said 68 farm produce processing plants have been built over the past five years, including 20 establishments constructed in 2020. Targets in new rural development have also been surpassed.

The PM also praised the agriculture sector for making efforts in flood and drought prevention and control, helping to mitigate losses of humans and property.

Apart from risks related to extreme weather conditions, he said there are a lot of opportunities offered by 14 new-generation free trade agreements, including the European Union-Vietnam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).

For 2021, the PM required the sector to spare no efforts to achieve a growth rate of around 3 percent, increase the value of agro-forestry-fisheries production by over 3 percent and raise forest coverage to 42 percent, plant 1 billion trees in urban, remote and rural areas, establish 2,000 new agriculture cooperatives to raise the total number to about 20,000, 16,500 of them operate effectively.

He asked the Ministry of Planning and Investment to allocate mid-term capital for the sector for the 2021-2025 period, including stepping up the adoption of digital technology for production and consumption as well as attracting more enterprises to agriculture, especially foreign-invested firms.

Localities and producers were required to supply high-quality products with good designs and food safety to the domestic market, ensure the supply of pork at reasonable prices for the upcoming Lunar New Year festival.

So far, 62 percent of communes nationwide were recognised as new-style rural areas, up 8 percent from 2019. Up to 173 district-level units gained the status, or 61 higher than last year. The provinces of Nam Dinh, Dong Nai and Hung Yen completed new-style rural building and nine other cities and provinces are completing procedures to fulfill the task.

Some 859 million trees were prepared for afforestation, while 220,000 ha of new forests have been planted this year, achieving the set target, heard the conference./.

Singapore's manufacturing output surges in November

The Singapore Economic Development Board announced on December 24 that the country's manufacturing output increased 17.9 percent year on year in November, compared to a revised 0.8 percent decline in October.

Excluding biomedical manufacturing, the output grew 14 percent in November from a year ago.

On a seasonally adjusted month-on-month basis, the country’s manufacturing output increased 7.2 percent in November. Excluding biomedical manufacturing, it grew 6 percent.

As for the performance of different clusters, the electronics cluster's output soared 34.9 percent year on year in November, compared to a revised 1.1 percent decrease in October.

The biomedical manufacturing cluster saw its output surge 40.6 percent in November, compared to a revised 10.7 percent increase in October. In a breakdown, pharmaceutical output jumped 50.8 percent, and medical technology output grew 22.7 percent.

The precision engineering cluster's output grew 7.3 percent year on year in November, while that of the transport engineering cluster decreased 29.5 percent, of the chemicals cluster grew 10.1 percent, and of the general manufacturing cluster contracted 13.3 percent.

Singapore's economy in the third quarter of 2020 declined 5.8 percent over the same period in 2019, lower than the 7 percent decrease as previously forecast, thanks to better industrial output than expected in September. In the first nine months of this year, Singapore's economy fell 6.5 percent year on year./.

Credit growth forecast to hit 11 percent by year-end

The banking industry's credit is projected to have expanded 11 percent for the year by the end of December, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu revealed at a press conference on December 24.

As of December 21, the credit growth stood at 10.14 percent, Tu said.

The SBV managed growth this year in accordance with the absorption level of the economy and with a focus on production - business, consumption, and prioritised sectors under the Government's guidelines. As such, it made a significant contribution to the country’s post-pandemic economic recovery.

Credit institutions have implemented several loan programmes with preferential interest rates. Due to weakened credit demand resulting from the negative impact of COVID-19, credit expanded less than in the previous years.

To date, these institutions have restructured the repayment terms for about 200,000 customers affected by the pandemic, with the value of outstanding loans moving close to 355 trillion VND (15.35 billion USD). Interest rate exemptions and reductions were applied for nearly 590,000 customers, with outstanding loans exceeding 1 quadrillion VND.

The total fees that banks cut or reduced for customers are projected to amount to more than 1 trillion VND by the end of this year.

The SBV has so far adjusted annual interest rates three times, for a total of 1.5-2 percent. The lending rate as of the end of November was brought down by 1 percent per annum on average compared to the end of 2019.

Director of the SBV’s Payment Department Pham Tien Dung said cashless payments have surged.

By the end of October 2020, the number of payment transactions via mobile phones surpassed 918.8 million worth 9.6 quadrillion in total, increasing 123.9 percent in volume and 125.4 percent in value from the same period last year. Nearly 374 million transactions worth more than 22.2 quadrillion VND were done through the Internet, up 8.3 percent in volume and 25.5 percent in value year-on-year.

The bad debt ratio, meanwhile, exceeded 2 percent. The number was inevitable and reflected the great efforts made by the banking sector given the COVID-19-plagued economy and customers’ weakened ability to repay debts.  

At the press conference, the SBV released its plan for next year, which included continuing managing monetary policy to ensure a stable market and cutting costs to reduce lending interest rates. Credit will be extended, with lending capital focusing on prioritised sectors and production-business and tightened for risk-latent areas./.

Mekong Delta seeks to enter global value chains

The Mekong Delta needs to develop value-added agricultural products to enter global value chains, officials have said.

Amid deep global integration, trade links are a driving force for economic development, said Le Quoc Phong, Secretary of the Party Committee of Dong Thap province.

With an open economy, Vietnamese-made goods will face strong competition from foreign-made goods.

Phong spoke at the Mekong Connect - CEO Forum held in Dong Thap province earlier this week.

Le Minh Hoan, Deputy Minister of Agriculture and Rural Development, pointed out that application of scientific and technological advances in agricultural production are needed to create more value-added products.

Enterprises are encouraged to co-operate with State agencies in science and technology research so they can produce quality products, Hoan said.

In the agro-aqua-forestry sector, exports hit more than 40 billion USD this year, he said.

Nguyen Minh Hai, Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham), said there are 39 Vietnamese Geographical Indications (GIs) in the EU, including Bac Lieu salt and Vinh Kim star apples from the Mekong Delta region, providing an adequate framework for further promotion of imports of quality products.

The EU maintains some of the highest sanitary, phytosanitary, origin tracing, and sustainable standards in the world.

Hai highlighted the importance of raising local standards and developing new value-added products which can compete internationally, particularly in the EU market with its population of 450 million.

The EU-Vietnam Free Trade Agreement (EVFTA), which came into effect in August this year, has paved the way for increased trade between the EU and Vietnam.

The elimination of tariffs under the EVFTA is expected to benefit key export industries, including agricultural products, but technical barriers to trade are expected to be raised, imposing challenges for Mekong Delta products and services to penetrate the EU market.

Mary Tarnowka, executive director of AmCham Vietnam in HCM City and Da Nang, said many AmCham member companies like Cargill, Coca-Cola, Suntory Pepsi and Pharmacity already have extensive operations in the Mekong region.

Agricultural products from the Mekong region, like shrimp, catfish, dragon fruit and mango, are now exported throughout the US.

The Mekong region has the potential to attract considerably more investment and sustainable growth. It has some of the richest natural renewable energy resources in the world, such as solar and wind.

AmCham member companies are eager to partner in renewable energy development in the Mekong region – from supply of solar panels and wind turbines to project development and energy generation.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said localities in the Mekong Delta need to invest in sustainable agro-economic development, as well as infrastructure to improve connectivity in the region and HCM City economic hub.

The fifth Mekong Connect - CEO Forum attracted 700 enterprises, Government leaders, and domestic and foreign experts who have concerns and interests related to the Mekong Delta.

The forum was organised by the ABCD Mekong regional network including Can Tho city and provinces of An Giang, Ben Tre, and Dong Thap, in co-ordination with the Business Association of High Quality Vietnamese Products and the Leading Business Club./.

Indonesia further revises down 2020 growth forecast

Indonesia has continued revising its economic growth forecast for this year to a contraction of between 2.2 and 1.7 percent amid an increase of COVID-19 infections and tightened restrictions.

The figures were lowered from the September estimate of between minus 1.7 percent and minus 0.6 percent, driven by shrunken household spending that makes up more than half of the country’s GDP.

Finance Minister Sri Mulyani Indrawati told an online press meeting on December 21 that household consumption is predicted to decline by 2.6 - 3.6 percent due to the mounting COVID-19 cases in December, which has triggered tightened anti-pandemic measures.

With the newly imposed restrictions, the largest Southeast Asian economy is projected to contract by 2.9 - 0.9 percent in the fourth quarter compared to the same period last year, despite signs of recovery in November.

Indonesia’s GDP fell 5.3 percent and 3.5 percent in Q2 and Q3 year-on-year, respectively, officially pushing this country to the first downturn since the 1998 Asian financial crisis.

Recently, the Asian Development Bank and the World Bank also further downgraded their growth forecasts for Indonesia this year to a contraction of 2.2 percent, compared to their respective previous estimates of minus 1 percent and minus 1.6 percent./.

Customs sector targets 13.6 bln USD for State budget next year

A finance ministry official on December 24 asked the customs sector to exert every effort to surpass the target of 315 trillion VND (13.6 billion USD) in State budget collection in 2021.

Deputy Minister of Finance Vu Thi Mai told a teleconference reviewing the sector’s performance in 2020 and launching tasks for next year that customs agencies need to have good management, boost post-customs clearance inspections and examinations to prevent losses, and step up tax arrears recovery in line with legal regulations.

They also need to press ahead with administrative reforms, customs modernisation, and trade facilitation to cut down the time and cost for customs clearance, as requested by the Government, she said, and must perform better in combating smuggling and trade fraud.

In particular, Mai added, the sector has to take stronger action regarding high-risk commodities like gasoline, minerals, goods subject to high tariffs, polluting products, imported alcohol and cigarettes, and goods temporarily imported for re-export.

The customs sector has faced an array of challenges in efforts to reach the targets set for this year. Measures to contain COVID-19 around the world, such as border shutdowns, the suspension of commercial flights, quarantining, and lockdowns, have negatively affected trade and disrupted global supply chains, posing considerable challenges to many countries, including Vietnam.

Facing that fact, the General Department of Vietnam Customs has reportedly introduced solutions to further facilitate trade and prevent losses in budget collection.

General Director of the authority Nguyen Van Can said that as of December 15, his agency had handled procedures for exports and imports totalling 515.27 billion USD, up 4.5 percent year-on-year. This includes 267.22 billion USD in exports and 248.04 billion USD in imports, up 6.1 percent and 2.7 percent, respectively.

Despite the difficulties and challenges, the sector had collected over 304.33 trillion VND for the State budget as of December 21, and the full-year figure is estimated at 315 trillion VND, or 93.2 percent of the target./.

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR  

 
 

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