VIETNAM BUSINESS NEWS
Rice exports enjoy opportunities for breakthrough in 2021
High hopes are pinned on Vietnam’s rice exports in 2021 when major export markets such as the Philippines and Africa continue to sign contracts to buy rice from Vietnam, while many others have great demand for fragrant rice and sticky rice – which are advantageous staples of Vietnamese enterprises.
The bilateral and multilateral free trade agreements between Vietnam and other countries such as the EU-Vietnam and the UK-Vietnam FTAs with preferential tariffs would create favourable conditions for Vietnamese rice to compete with that from rival countries, the Vietnam Food Association said.
According to the Vietnamese Trade Counsellor in the UK Nguyen Canh Cuong, rice shipments to the country this year will sharply rise against 2020. He added more UK firms will purchase Vietnamese rice under the UK-Vietnam FTA, creating a chance for Vietnamese rice to expand its market share in the UK this year.
In 2019, rice exports from Vietnam to the UK had a leap forward with a turnover growth of 376 percent. That meant the UK has great potential as a rice export market for Vietnam.
In order to tap into the advantages under FTAs, rice export giants such as Intimex JSC, Loc Troi Group, VRICE Co, Trung An High Technology Agriculture JSC are planning to seek new customers in markets where Vietnam had signed FTAs, especially in the UK.
The Ministry of Industry and Trade said it would provide rice export firms with information about the market demand situation in a timely manner while implementing trade promotion activities to help Vietnamese rice exporters better access customers.
Detailed information about the regulations and barriers under these FTAs’ commitments will be also offered by the ministry so that businesses can improve their understanding and draw up suitable business plans.
As part of its efforts to facilitate Vietnam's rice exports, the VAF has built up online sales channel and participated in online trade seminars to develop the rice industry.
It suggested rice exporters focus on high quality products with good export results, ensuring food hygiene and safety to be able to enter fastidious markets such as Europe, America and Canada.
Experts have said that if Vietnam wants to maintain rice export growth in 2021 it needs to focus on building a complete rice value chain and controlling quality in production, processing, and distribution.
According to the Ministry of Agriculture and Rural Development, Vietnam’s rice output totalled 42.8 million tonnes in 2020, down about 0.2 percent because of the shrinkage of some 192,000 hectares in farming areas. However, the productivity rose 50kg per hectare from a year earlier.
The areas of high-grade rice varieties have expanded to 74 percent, compared to 50 percent in 2015, as a result of the country’s efforts in improving the value of the Vietnamese rice.
Thanks to that, the shipments of high-grade rice made up more than 85 percent of the total, resulting in the growth of average rice price from 440 USD per tonne in 2019 to 496 USD per tonne in 2020.
The country exported 6.15 tonnes of rice for 3.07 billion USD last year, down 3.5 percent in volume but up 9.3 percent in value year-on-year.
The Philippines was Vietnam's leading rice importer, making up 34 percent of the total. Rice exports to this market in 2020 reached 2.22 million tonnes and 1.06 billion USD, up 4 percent in volume and 19.3 percent in value compared to 2019.
Other outlets with significant export growth in 2020 were Indonesia, (nearly triple 2019's figure) and China, up 93 percent year-on-year.
VFA Vice Chairman Do Ha Nam described 2020 as a successful year for Vietnam’s rice exports, which he attributed to increasing demand in many countries and the improved competitiveness of Vietnamese rice around the world.
Amid the difficulties posed by the ongoing COVID-19 pandemic, rice exporters quickly made appropriate adjustments and actively sought new markets while fully tapping into the advantages brought about by FTAs.
The EU-Vietnam FTA had created a major opportunity for Vietnamese rice to enter European markets and then make inroads into other choosy markets, Nam said./.
Online trade promotion helps businesses adapt to COVID-19
The spread of COVID-19 around the world created difficulties for businesses in promoting their products and seeking new customers but many were prompted to change trade promotion strategies and adapt.
Bui Thi Thanh An, Vice Director of the Trade Promotion Agency at the Ministry of Industry and Trade, said nearly 50 national-level trade promotion programmes were cancelled or postponed last year due to the pandemic.
This had a major effect on export activities and the economy in general, she said.
To address the situation, the agency has sped up the introduction of information technology (IT) and changed how trade promotion activities are held.
Since March when COVID-19 spread globally, the agency has changed all trade promotion activities to online. More than 500 international online trade conferences have now been organised, along with more than 1 million online trade exchanges.
These events helped connect more than 2,000 businesses with foreign partners in different markets, An said.
The agency has also coordinated with foreign customers based in Vietnam, such as AEON and Central Group, to organise special “weeks” featuring Vietnamese products, through which many goods have been selected for sale in foreign-owned supermarket chains around Vietnam and then headed to foreign markets.
It has also made use of social networks and Vietnamese trade offices abroad to support businesses seeking markets, An added. Such efforts contributed to maintaining export growth and speeding up economic recovery, while helping enterprises remain updated on market developments, trends, and demand, she added.
Though online trade promotions have become more common since the pandemic broke out and were initially considered just a temporary solution, experts and enterprises agree that they will now become a key part of the trade promotion ecosystem.
Vietnam’s economy is heavily reliant upon exports, so the country must adapt to sudden disruptions to international trade. Taking advantage of IT platforms to seek trade opportunities is considered the most feasible option at this time.
Zacharie Blondeau, Sourcing Director at Source of Asia, said business-to-business (B2B) is the most effective method of connection, but in certain contexts, such as pandemics and travel restrictions, businesses should actively connect online.
An underlined that even after COVID-19 is fully brought under control, online trade promotions will continue to be organised.
The Trade Promotion Agency is developing digital technology-based platforms to create a new promotion ecosystem comprising of online trade fairs and exhibitions and online databases and origin tracing, creating the conditions necessary for enterprises to access trade promotion programmes at the lowest cost and with the greatest efficiency.
She advised businesses to regularly participate in online and direct trade exchanges, conferences, and workshops, while actively digitalising their operations by improving websites and joining large and reputable e-commerce platforms.
Online shops see robust business amid a global pandemic
While various businesses reported losses and difficulties, online shops have had a solid development in 2020.
According to Vietnam's e-Commerce and Digital Economy Agency under the Ministry of Industry and Trade, the growth rate of the local e-commerce sector in 2020 was 18% and valued at USD11.8bn. It accounted for 5.5% of the country's retail goods and consumer service revenue.
Nguyen Chanh Trung, a shop owner on Lazada, said he started his online business after working for five years in the construction sector. His shop was opened on the first days of the Covid-19 outbreak in Vietnam and gained unexpected profits.
"I learned everything from scratch and tested out new ideas. I also attended training classes offered by Lazada to optimise the business and take care of the customers," he said. "Online trading minimise staff and rental costs. After a year, staff numbers fell from 20 to 10 and revenue increased by 10%."
Even though Trung had a website to introduce his products before, his business was mostly offline and badly affected by Covid-19.
Another online seller also saw great profits from selling face masks and handwash.
The number of sellers on Lazada doubled in 2020. LazMall, a trade site based on Lazada saw both customers and orders double on normal days and triple during festivals. Another e-commerce platform Tiki said in March and April 2020, the number of orders on the platform increased by 15% compared to the two busiest months in 2019. Sometimes, there were 4,000 orders placed per minute.
Vietnamese sellers also went to international e-commerce platform to sell their products overseas like Amazon or Alibaba. Over USD1m worth of products were sold via Amazon in 2020, triple the total amount sold in 2019.
Dang Hoang Hai, head of Vietnam's e-Commerce and Digital Economy Agency said Covid-19 actually gave a strong boost to online businesses, forcing many firms and individual sellers to go online. Decision 645 issued by the government about the e-commerce development plan for 2021-2025 also helped speed up the transition.
Estimations from Google, Temasek and Bain and Company showed that Vietnam's e-commerce market would be worth USD52bn and stand among the three biggest markets in ASEAN in 2025 if the growth rate stays at 29% a year.
Tran Toan Thang from the National Centre for Socio-Economic Information and Forecast said the e-commerce market would have developed strongly with or without the pandemic. However, Covid-19 has been a strong boost to the local market.
"Some product sales increased by 300% online. Because of the pandemic, shopping online has become a habit now," he said.
HCM City Real Estate Association optimistic about 2021
HCM City Real Estate Association (HoREA) is optimistic that the real estate market in 2021 will see strong recovery and provide a large amount of accommodation for the city in the next 5-10 years.
One of the main development areas is the newly-established Thu Duc City which has the highest number of real estate projects in HCM City. It will attract various kinds of real estate projects. Cu Chi, Hoc Mon, Binh Chanh and Nha Be districts will all be upgraded and urbanised.
Both the number of farmers and farming lands in these districts will be reduced by 3-31%. Can Gio District was planned to become a seaside and eco-friendly town with the mangrove forest which is a part of Can Gio Biosphere Reserve.
According to the HoREA, HCM City has been allowed to convert 26,000ha of agricultural land in several outskirts districts into industrial and commercial lands. The government also issued many support policies to help real estate investors operate and complete procedures more smoothly.
Le Hoang Chau, chairman of HoREA, confirmed that Resolution 148 which took effect on January 1, 2021, the 2020 Investment Law and the adjusted 2020 Construction Law have helped make the policies and regulations clearer and more suitable.
"In 2021, the government will issue more detailed regulations and directives about the Investment Law and adjusted Construction Law to speed up the renovation of dilapidated apartment buildings and apartments for low-income people. This will help boost the real estate market in 2021 and the following years," he said.
Quick action required to attract high-quality FDI
The US-China trade war and the COVID-19 pandemic have provided Vietnam with an opportunity to attract foreign investment (FDI) as global capital flows tend to shift to safe havens. This is also a time when our country needs to drastically change our thoughts and actions in the selection of FDI partners and projects to move more towards high-quality capital flows as directed in Politburo Resolution No. 50. These factors make FDI attraction become a focal point of the "COVID year" in 2020 and will continue to do so in the years to come.
Vietnam is open to investors
At a seminar held between Vietnam’s chief representatives abroad for the 2020-2023 term and the Committee for the Management of State Capital at Enterprises, Deputy Minister of Foreign Affairs Bui Thanh Son said that Vietnam is now a bright spot in investment attraction and more than 126 large corporations shifting their investments are now looking to invest in Vietnam.
Meanwhile, Director of the Foreign Investment Agency under the Ministry of Planning and Investment Do Nhat Hoang revealed that although investment activities were interrupted due to the impact of the pandemic, the Ministry of Planning and Investment (MPI) and senior leaders of large corporations around the world still maintained discussions about investment cooperation opportunities through many channels. In particular, a number of online seminars were held at the operation centre of the MPI to connect with destinations across the world so that large corporations can find out more investment information regarding Vietnam. Through this activity, many large corporations started negotiations to bring investment projects into Vietnam with registered capital of billions of US dollars.
According to the United Nations Conference on Trade and Development (UNCTAD) global investment in 2020 declined by 40%, but FDI inflows into Vietnam saw a much lower rate than other countries in the world and the region, especially in disbursed capital. Export and import turnover of FDI enterprises also decreased slightly compared to the same period in 2019.
“Despite the many difficulties that arose due to the COVID-19 pandemic, FDI enterprises have still maintained relatively good production and business activity levels. This is a positive signal, demonstrating the confidence of foreign investors in the investment environment in Vietnam and also proving that Vietnam is still seeking further FDI,” Hoang emphasised.
In 2020, not only manufacturers, but also supply companies shifted investment to Vietnam, as well as providers of logistics and warehouses services and others doing likewise. Big manufacturers are considered "queen bees" coming to Vietnam to build a hive, bringing along "worker bees" - suppliers and supporting manufacturers, and creating a new ecosystem and supply chain in Vietnam.
This trend is happening in the electronics industry, as the story of Samsung has shown and is now also evident in the story of animal feed, e-commerce, consumption, and auto parts industries.
Acting fast to seize opportunities
Dr Nguyen Dinh Cung, a member of the Economic Advisory Group to the Prime Minister, expressed his concerns about FDI attraction in Vietnam. According to the expert, opportunities for Vietnam in terms of the shifting of global investment capital flows is great, but the "eagle" itself will not come if we take no action.
“I have just had the opportunity to work in Quang Ninh and Hai Phong, a region with a lot of potential in terms of its land and synchronous infrastructure, thanks to its seaport system and airport linked with Hung Yen ,creating a large industrial park capable of attracting the world's leading technology enterprises. If there is a policy of regional linkage, these localities can create further intrinsic attractiveness to lure "eagles" to turn Vietnam into an important global production location. If these localities still compete in the attraction of FDI as before, they will only scatter and reduce Vietnam's attraction in the eyes of foreign investors,” Cung said.
To seize the opportunity, it is advisable to take quick action and change the methods of attracting investment. First of all, the concept of "high quality investment" must be clearly defined to set screening criteria and formulate suitable policies for each industry and region in order to actively attract investors. To do this, it is necessary to have a new approach tailored to specific projects and investors, not applying a general policy to all projects.
Meanwhile, investors pouring capital into Vietnam can enjoy outstanding incentives but must also meet set conditions and be a reputable and socially responsible investor.
Referring to the concept of "preparing the nest to welcome the eagles", used recently to regarding the attraction of high-quality FDI in Vietnam, Prof. Nguyen Mai, President of the Vietnam Association of Foreign Invested Enterprises (VAFIE) said that there were “eagles” but so far only Asian and a few European or American eagles. This is the time for Vietnam to proactively direct the flow of FDI and prepare conditions to attract high-tech and pervasive projects to meet the needs of the country’s new development period.
In the context of a decline in global investment activities due to the impact of the COVID-19 pandemic, although Vietnam has many advantages and has emerged as a bright spot in investment attraction, FDI inflows have not yet strongly recovered. This is the time for Vietnam to improve its investment and business environment to stand ready to welcome big waves of FDI.
Shrimp exports set target of US$ 4.4 billion in 2021
Despite the complicated developments of the Covid-19 epidemic, shrimp was still a commodity that brought high economic value in 2020, with export turnover of US$3.7 billion, an increase of 11% over the same period in 2019. It is expected that in 2021, shrimp exports can increase by 15% compared to 2020, the export turnover would reach over US$ 4.4 billion.
In order to achieve the goal, businesses should focus on promoting deep processing and increasing added value, while at the same time proactively seizing opportunities from changes in the market due to the impact of Covid-19 translation.
High growth forecast
Looking through the whole year 2020, shrimp exports achieved very encouraging results.
According to Tran Cong Thang - Director of Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), compared to rival countries in 2020, Vietnam had an advantage due to better control over the Covid-19 epidemic. The main consuming markets such as the US, the European Union (EU), and China gave priority to buying shrimp from Vietnam.
While major shrimp producing countries such as India, Ecuador, and Thailand, etc. all suffer from the negative impacts of the Covid-19 pandemic, such as stagnated production and transport of goods, the decrease in shrimp prices is leading to a decrease in shrimp production.
In addition, the proactive market rotation, taking advantage of the opportunities created by the changes in the market caused by the Covid-19 pandemic, diversifying products suitable for each market segment, has helped businesses in the industry to not only maintain but also increase export turnover. Therefore, the shrimp export turnover reached US$3.7 billion, up 11% compared to 2019. Shrimp have been exported to 135 markets through 508 export enterprises.
The major markets that kept positive growth rates were: the US, with an increase of 33%; the EU (6.1%); the Republic of Korea (ROK) (3.3%), and the UK (20.1%).
In addition, to achieve the good growth in export turnover, the domestic supply also plays a significant role.
In the first months of 2020, shrimp production faced difficulties due to Covid-19 epidemic accompanied by saltwater intrusion in key farming areas, leading to a decrease in brackish water shrimp production, especially black tiger shrimp.
By the end of 2020, brackish water shrimp production had recovered, with the disease under control. The export of brackish water shrimp has been restored; the disease on farmed shrimp is also under control, helping brackish shrimp production grow well, ensuring a sustainable supply for export.
According to the General Department of Fisheries, in 2020, the production of black tiger shrimp reached 267,700 tons, an increase of 1%, and white leg shrimp reached 632,300 tons, up 8.5% over the same period.
In Ca Mau Province, the first months of 2020, many seafood importers have suspended, postponed or canceled deliveries, making seafood export difficult. However, the Government, ministries, central branches, and provincial People's Committee have promptly implemented many support measures to ensure stable production and business conditions.
At the same time, the EVFTA took effect to create more favorable conditions for businesses to export to EU countries (by 2020, seafood export turnover to the EU reached about US$100 million, accounting for 9.7% of the province’s export turnover, up more than 400% over the same period in 2019).
Experts say that, if the farming and processing stage is well ensured, Vietnam's shrimp export growth milestones will be achieved in 2021. The introduction of Covid-19 vaccine together with the advantages from FTAs being utilised by businesses will be the driving force for shrimp export activities in 2021.
These forecasts are grounded, as from the beginning of 2021, eight cargo containers, with more than 160 tons of shrimp, owned by Minh Phu Seafood Corp. (at Song Hau Industrial Park, Chau Thanh District, Hau Giang Province), have been exported to potential markets of Vietnam, namely the EU, the US and Japan. This shipment is a good signal for the export shrimp industry in 2021.
Taking advantage of opportunities
According to experts in the fisheries sector, in 2021, Vietnam's the good control of Covid-19 epidemic and joining bilateral trade agreements with other countries will create favourable conditions for exporters.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), world shrimp demand will continue to increase, especially in the context of the Covid-19 pandemic, while the demand for processed seafood eaten at home will increase sharply. VASEP forecasts that shrimp exports can reach an export turnover of US$ 4 to 4.4 billion in 2021.
However, in order to continue good export growth, it is necessary to have specific solutions:
Firstly, it is necessary to organise the production management and management of suitable cultured shrimp breeds, control diseases well and ensure the quality of seed supplied, avoid production risks to stabilise supply, increase high quality products.
Second, it is necessary to ensure the supply of raw materials with sufficient quantity and quality, especially in the farming stage by applying new science and technology.
Third, it is necessary to make good use of market expansion opportunities through increasing supply capacity to compensate for production shortages because other supplying countries are being negatively affected by the Covid-19 epidemic that affecting production and export supply chain; it is necessary to increase competitiveness and market share in big and strategic markets such as the EU, the US, Japan, South Korea, and the UK. It is necessary to improve the quality of export products, take advantage of tariff advantages for pure Vietnamese origin of farmed shrimp products in the new generation of free trade agreements (FTAs).
In order to effectively implement the above solutions, according to IPSARD's Director Tran Cong Thang, it is necessary to improve the processing capacity of enterprises, focus on technology investment, intensive processing, to meet the needs of importing countries.
The enterprise should develop deeply processed products and value added products to serve a wide range of customers and market segments. Enterprises and farmers need to prepare well the conditions and stocking according to the 2021 seasonal calendar.
It is necessary to attach importance to disease prevention and control, control impurities, chemical and antibiotic residues in shrimp products to ensure disease safety and food safety. In addition, it is necessary to strengthen links between units participating in the production chain in order to improve quality, ensure traceability, and continue to increase the proportion of value-added goods in exporting.
It is necessary to replicate effective models and production chains while maintaining and developing the "output" market. It is also necessary to participate in trade promotion programs to promote seafood products, including processed shrimp, seek new markets and toward sustainable export.
Experience in implementing FTAs
Despite violent pandemic and geopolitical upheavals, 2020 marked an important milestone in Vietnam’s international economic integration.
Motivation for growth
In addition to the effectiveness of the EU-Vietnam Free Trade Agreement (EVFTA) since August 1, 2020, the Regional Comprehensive Economic Partnership (RCEP) agreement was signed under the framework of the 37th ASEAN Summit, helping to create a market with 2.2 billion consumers, accounting for about 30% of the world’s population and a total GDP of approximately VND26.2 billion (about 30% of the global GDP). This is a happy ending after eight years of intense negotiations, even without the participation of India.
By the end of November 2020, Vietnam had been negotiating 16 free trade agreements (FTAs) that cover almost all continents including nearly 60 economies, with total GDP accounting for about 90% of world GDP, as well as 14 agreements set to come into force.
The signed FTAs also contribute to creating optimism in the business community, consolidating business confidence as well as promising a bright economic outlook.
“Despite a difficult year for international trade in 2020, our survey shows that Vietnam's quick and effective response to the global pandemic has proved its efficiency. Leaders of European enterprises feel more positive about their businesses as well as Vietnam's trade and investment environment,” said Chairman of the European Chamber of Commerce (EuroCham) in Vietnam Nicolas Audier at the ceremony to announce the Business Climate Index (BCI) in the fourth quarter of 2020.
Caring for orchard in the wait to pick fruit
Prime Minister Nguyen Xuan Phuc expressed his delight at the effectiveness of the EVFTA but also reminded that results gained from FTAs have yet to match the potential and raised many big bottlenecks that must be removed. It is the necessity to improve communication efficiency about international economic integration and FTAs in particular, to remove invisible barriers for businesses, and to change the mindset of doing business in a more proactive manner to meet the requirement of FTAs, among other tasks.
Indeed, if you compare FTAs to an orchard, the gardeners must invest both capital and effort in the orchard every day before they can enjoy the fruit from this garden. And almost no single enterprise can do this alone; the process requires cooperation and linkage.
According to General Director of Garment 10 Corporation Than Duc Viet, Garment 10 produces 18 million shirts and 1.5 million suits each year, so it needs 30 million meters of shirt fabric and 5 million meters of suit fabric. However, the company has to import 60-70% of materials from China to serve its production because raw materials produced in Vietnam are more expensive than imports from China while the speed of development of models and production time is also longer.
It means that the company cannot benefit from EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) because it does not meet requirements on origin of products.
“The policy of promoting multilateral relations through Vietnam's participation in a series of FTAs is absolutely correct, but it will only bring into full play when Vietnam can successfully solve challenges regarding labour conditions, environmental protection and social responsibility,” said Dr. Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy.
Responding to barriers
Although the dispute settlement mechanism will be more complete because both the CPTPP and the EU-Vietnam Investment Protection Agreement (EVIPA) have provisions to improve the transparency of the proceedings, Vo Tri Thanh warns that once tariff barriers are no longer an effective tool for protection, importing countries tend to use non-tariff measures (anti-dumping, anti-countervailing and trade remedies measures) to protect their own domestic manufacturing industry.
As an experienced lawyer in handling international economic disputes, Dinh Anh Tuyet, an arbitrator from the Vietnam International Arbitration Centre (VIAC) said that: “It is important to note that signed FTAs are not only a "sweet fruit", but also a "bitter fruit" for Vietnamese enterprises because if businesses do not comply with the standards stated in the FTA, the partners will apply new handling measures, and even lawyers like us do not know what the measures are, because they all appear for the first time in the agreements.”
The implication that the lawyer wants to talk about is that Vietnamese enterprises need to have the right attitude and actively respond to the risks of commercial disputes. It is also the choice that proves the correctness that shrimp exporting enterprises have applied from 2004 to present.
The preparation is sometimes very simple things such as maintaining detailed traceability records, accounting records, and production records in order to request timely support from the State and lawyers to protect their interests when there are violations under trade and investment agreements or when there are signs of trade fraud and tax evasion.
The cooperation with associations and importers and the coordination with investigating bodies when under investigation are also obvious recommendations but are sometimes neglected by enterprises. Besides FTAs, institutional reform and efforts from each enterprise are also key forces for long-term development.
A historical milestone in this Spring
The year 2020, with so many difficulties and challenges, has passed. Vietnam has shone once again! The world showed admiration and the people were excited and believed in.
The COVID-19 pandemic has cast a shadow across the globe. Millions of people have died, and the world economy has declined dramatically. Although the pandemic has been quite well controlled, our economy with large openness and deep integration could not avoid difficulties. Natural disasters, storms and floods raged in the Central region; and droughts and salt water intrusion in the Mekong Delta, etc.
In that very special context, under the sound leadership of the Party, the management and administration of the State, the entire political system and the entire people joined in a drastic, synchronous and persistent manner to comprehensively fulfil almost all set targets and tasks. The year 2020 is still considered the most successful year in the whole tenure, having gained remarkable achievements. Vietnam is considered a bright spot for disease prevention and control and socio-economic development. People’s living conditions are constantly being improved; and national defence, security, social order, and safety have been maintained. The work of Party building and rectification as well as the fight against negative activities, corruption and wastefulness has been drastically directed, achieving many positive results. Foreign affairs have been carried out effectively, contributing to consolidating and enhancing the position of Vietnam in the international arena.
The Party Congresses at all levels were a success, creating a premise for the successful 13th National Party Congress.
In difficulties, the tradition of patriotism, solidarity and mutual care of the people has been promoted, and the superiority of the socialist regime has been confirmed.
The New Year has come with intertwined opportunities and challenges. The situation of the world, the region and the East Sea (South China Sea) is still complicated and unpredictable, while our country is still facing numerous difficulties and challenges in socio-economic development and adaption to climate change, as well as ensuring national defence and security.
Along with the achievements obtained in the past year, the gift to celebrate the Spring has a very important meaning to decide the direction and development of the country in the next five years, with a vision to 10 years and 20 years from now is the Resolution of the 13th National Party Congress. In his speech at the year-end virtual conference of the Government, Party General Secretary and State President Nguyen Phu Trong affirmed that the entire political system needs to be proactive, actively grasp and well implement the Resolution of the 13th National Party Congress and resolutions of the Party Central Committee, the National Assembly and the Government right from the beginning of the year, with specific programmes and working plans that are in line with reality and have high feasibility, with the general spirit of being more proactive, active, and creative in order to achieve higher overall results than in the previous years and the previous tenure.
This spring, the success of the 13th National Party Congress marked another historic milestone on the path of national construction!
Long Thanh Airport expected to promote regional socio-economic development
The Long Thanh International Airport Project is a key project in the country's transport infrastructure network approved by the National Assembly at the Resolution No. 94/2015/QH13 dated June 25, 2015 on the investment policy of the project and the Decision No. 1777/QD-TTg of the Prime Minister dated November 11, 2020 on approving the first construction phase of the Long Thanh International Airport Project with the total investment of US$4,664 billion.
The airport target is to reach 4F level as assigned by the International Civil Aviation Organization (ICAO) with the capacity of 100 million passengers and six million tons of cargo per year.
The first items in the first phase of Long Thanh International Airport Project officially began construction on January 5. It is expected to create a hitch to promote socio-economic development not only in Dong Nai Province but also in the Southeastern region and the whole country after coming into operation.
Since the National Assembly approved the investment policy for the project, there have been more changes in people's lives so far in the context of urbanization development in Binh Son Commune as well as in Long Thanh District.
Particularly, people whose land was acquired or affected by the project have received acceptable compensation to do their own business, to change jobs from agriculture sector to other careers.
If the agricultural land price around the airport project was only about VND1 billion (US$43,000) per hectare in advance the National Assembly’s approval, the price has increased by 10-15 percent following the approval. The compensation price from the State for people whose land was acquired to build the airport is about VND400 million (US$17,000) per hectare.
Mr. Vo Dinh Viet, a resident living in Long Thanh Town, has received VND21.4 billion (US$926,000) for 4.4 hectares of rubber trees affected by the project. After receiving the compensation, his family used the money to pay loans which they had got before for building a 3-star hotel and restaurant in the town’s center since 2016 and to continue to invest into land.
The project implementation also opens up opportunities to develop the finance and services industry for Dong Nai Province and attract large-scale banks to open their branches and transaction offices in the locality, thereby helping Dong Nai Province as well as the Southeastern region develop high-quality human resources.
Nearly US$1 billion has been disbursed in compensation for 5,000 hectares of land reclaimed for construction of the airport. So far, the project- affected people have been resettled, bought land and built houses. This has created more jobs in the fields of banking industry, land brokerage services and construction materials.
According to the leaders of the People's Committee of Dong Nai Province, since the Long Thanh International Airport Project has not been started works yet, many domestic and foreign investors want to seek investment opportunities in the promising area.
When the airport comes into operation with a smoothly connected traffic infrastructure system, it is expected to certainly stimulate investment attraction and technology development in the Southeastern region. Currently, local economists are expected the approach and transfer of the latest and most modern technologies as well as machinery and equipment from the world's leading technology corporations for construction of the project.
Once the airport comes into operation along with a smoothly connected traffic infrastructure system, it is expected to certainly stimulate investment attraction and technology development in the Southeastern region.
Deputy Secretary of the Provincial Party Committee cum Chairman of the People's Committee of Dong Nai Province Mr. Cao Tien Dung informed that in the development plan for the upcoming years, Dong Nai Province has defined the construction of Long Thanh Airport Project as a motivation for socio-economic development.
According to the plan, the local authorities and private sectors will focus on certain investments to determinedly build an airport city, which is expected to create a great opportunity to develop the high technology, create a driving force for the province to boost the development of high-tech parks and head to export.
Dong Nai Province will focus on the development plan of socio-economic and traffic infrastructure to fuel industry and services development in districts near the airport.
Besides, the province will also re-plan agricultural development in remote districts, determine areas appropriate for fruit trees or vegetables and domestic animal breeding to invest in road and electricity infrastructure.
On the other hand, Dong Nai Province has just approved an Israeli-style high-tech agricultural development program. Experts from this Middle Eastern country will accompany local farmers to build and widen hi-tech models.
As for Ho Chi Minh City, once the Long Thanh airport comes into operation, it will contribute to reducing the overloading at Tan Son Nhat International Airport as well as traffic jams around the airport.
In order to make this plan soon come true, it is necessary to early build an overhead urban railway system connecting the two airports, strengthen investment into transport network systems, speed up building key projects through the airport such as Ben Luc - Long Thanh Expressway, Ring Road 3 and Cat Lai Bridge to reduce traffic pressure through the inner of Ho Chi Minh City, notably Cat Lai port area, National Highway No.1 through Binh Chanh District, National Highway No.22 running through districts of Hoc Mon and Cu Chi.