High mobility and recovery to boost Vietnam economy
Viet Nam’s economy is bouncing back fast after COVID-19 thanks to its high rate of mobility, according to Canada-based data visualisation agency Visual Capitalist.
With high mobility and high recovery as social distancing orders have been eased since mid-April, the country is seen to be regaining its momentum and kick-starting economic activities.
According to Visual Capitalist, high rates of recovery lead to the removal of restrictions, allowing people to go back to work.
As of Monday afternoon, Việt Nam earned a recovery rate of 85 per cent with 328 confirmed cases including 279 patients given the all-clear. Its mobility rate tops the world at slightly under 20 per cent, meaning people can now go to the office and travel quite freely within the country in a “new normal”.
New Zealand is ranked first in Visual Capitalist’s chart for its swift and efficient responses which curtail the total tally of infection and bring a 98 per cent recovery rate.
The US, the world’s worst-hit country by COVID-19, is classified as low mobility and low recovery for reporting over 1.7 million cases. Some states, however, have shown expectations to gradually lift restrictions on social and business activities which may lead to the second wave of infections, according to Visual Capitalist.
As of Sunday, Việt Nam racked up its 45th consecutive day without community spread of the coronavirus, with only a few reported cases as the country is bringing home Vietnamese overseas on a limited number of specially-arranged repatriation flights.
The country received some 340 citizens returning from Singapore on Sunday.
Gov't sets up Steering Committee on economic census in 2021
Prime Minister Nguyen Xuan Phuc has signed a decision on establishment of a central steering committee on economic census in 2021, which will be led by Minister of Planning and Investment Nguyen Chi Dung.
The 18-member committee is responsible for developing a plan for national-scale economic census, collecting basic information on production and business activities, and conducting comprehensive assessment on the status of the national socio-economic development.
Specifically, the census aims to collect information about production and business units, non income-generating administration agencies, non-governmental organizations and individual production and business establishments, among others.
It is expected to provide a comprehensive assessment of the country's socio-economic development situation and trends and will serve as a basis for building socio-economic development plans and policies for the Party and State.
The investigation will focus on gathering information to identify surveyed units, labor and income, production and business costs, tax payment and budget contributions, scientific research and technological development (R&D), innovation, energy consumption, technology application, financial access, and others./.
Central steering committee for economic census established
A central steering committee for the economic census in 2021 will be established under Decision No. 752/QD-TTg signed by the Prime Minister on June 3.
The 18-member committee is headed by Minister of Planning and Investment Nguyen Chi Dung.
It is tasked with putting forth a plan on national economic census in the year, organising a pilot census and implementing the national one.
The minister will issue a decision on the establishment of a working group in charge of assisting the steering committee.
The decision takes effect since the signing date./.
Kien Giang rice farmers switch to guava for better income
Many farmers in Kiên Giang Province’s Tân Hiệp District have begun to earn steady incomes after turning unproductive rice fields into guava orchards.
Trần Thị Bé Thùy of Tân Hiệp Town, one of first to do so, has been earning VNĐ200 million (US$8,600) a year from her 4,000sq.m orchard for the last four years.
She intercrops pennywort and lemongrass with the guava and grows water lily in the orchard’s irrigation ditches.
She harvests around 100kg of guava daily since she uses advanced techniques to ensure the fruits grow year round, she said.
“My family earns an income every day, our lives are comfortable and better than before.”
Under an agricultural restructuring plan, the Cửu Long (Mekong) Delta district has encouraged rice farmers with unproductive fields to switch to other, high-value crops in recent years, and many have chosen to grow guava since it is easy to grow and has steady demand.
The district has 173ha under fruits, including 53ha of guava, according to its Bureau of Agriculture and Rural Development.
Bùi Quốc Duy, the head of the bureau, said rice is the agricultural district’s main crop, but the price of the grain has been volatile in recent years.
Guava requires less tending and has few diseases, he said.
It takes eight months for guava seedlings to start fruiting. Farmers only need to fertilise the plant once every two or three months.
When fruits appear, farmers cover them with plastic bags to protect them from pests.
The guavas grown in the district are clean since farmers do not use pesticides. As a result, the fruits are very popular with consumers, and farmers say they cannot meet the market demand.
They are sold in the province and around the delta.
Traders buy the guavas at VNĐ10,000-25,000 per kilogramme depending on when they are harvested.
Duy said the district has large areas affected by alum, which are suitable for growing the fruit.
Local authorities encourage farmers to develop the garden – pond – animal pen model to use their land efficiently and earn high incomes.
Visitors to Ha Long Bay sharply increase
The number of tourists to Ha Long Bay has considerably increased after the Covid-19 pandemic.
According to the management board of Ha Long Bay, following the province’s decision to offer free tickets to Ha Long Bay from May 14, the bay has seen more tourists.Ha Long Bay welcomed 3,000-4,000 travellers per day between Monday and Friday, while the figure reached up to 20,000 daily at the weekend.
Pham Dinh Huynh, deputy head of the bay management board, said at present, visitors only have to pay the boat rental which has also been discounted to just VND1,000-150,000 (USD4.34-6.52) per person or VND1.5-2 million for the whole boat.
The province’s tourism stimulus programme has proved goods results. Most of the local hotels and restaurants have been full.
Nguyen Ngoc Minh, a tourist boat owner, said that all tourist boats in Ha Long have basically resumed their operation as normal thanks to the visitor increase with three or four trips per day.
Visitors to Ha Long Bay, Yen Tu tourist site and Quang Ninh Square from May 14 and June 1 enjoyed free tickets. The priority will be also applied on holidays Vietnamese Family Day (June 28), Vietnam Tourism Day (July 9) and War Invalids and Martyrs Day (July 27), August Revolution (19/8), National Day (2/9), Vietnamese Women’s Day (20/10) and Vietnamese People's Army Day (22/12).
However, the free tickets are not applicable to those staying overnight in the bay.
Aviation industry optimistic with growing passengers
Vietnamese airlines have resumed nearly full capacity on domestic routes and are ready for international routes once the virus outbreak is curbed.
Many airlines are ready to resume international routes. Vo Huy Cuong, vice head of the Civil Aviation Administration of Vietnam, agreed that Vietnam has to be ready to reach out to the world once the control and quarantine measures are lifted.
"The aviation industry will return to normal but there is still a way to go," he said.
Cuong said they would create the most favourable conditions for the airlines. They are also researching plans to help airlines increase the number of domestic flights and open new routes.
"Vietnam Airlines and Bamboo Airways have proposed new domestic routes. On some routes, the number of flights already accounted for 80% of the Tet Holiday peak. Many airlines have recovered. However, because of Covid-19 the number of international passengers was less than 50% of the 2019's," he said.
The management boards at Noi Bai and Tan Son Nhat airports face several problems like the infrastructure, landing and taking-off hour problems. Half of the fleets of Bamboo Airways, Vietjet Air and Vietnam Airlines are still grounded. Cuong said the infrastructure would be greatly improved after the outbreak.
At the conference about Vietnam aviation industry and economic recovery, Nguyen Van Dung, head of Binh Dinh Province Department of Tourism was optimistic that Vietnam would recover very quickly. For the aviation industry, the three most important factors are management work, flight route restructuring and promotional programmes.
"What should we focus on now? What is the most urgent among the three factors?" Dung said.
Economist Tran Du Lich said once the aviation industry recovers, it will help boost the tourism industry including hotels and restaurants and the economy in localities.
Ninh Thuan, Khanh Hoa provinces work to promote tourism after COVID-19
The People’s Committee of the south-central province of Ninh Thuan launched its ‘Vietnamese people travel Vietnam’ programme on May 29 with the aim of reviving the local tourism sector after COVID-19.
A total of 35 local accommodation establishments, restaurants, tour operators and travel businesses have registered with the programme, pledging to offer discounts ranging from 10% to 30% on the price of their services from May 29 to December 31, 2020.
Students and children aged under 12 years will enjoy free entrance to the Research Centre for Cham Culture in Phan Rang – Thap Cham city, and the Du Long film studio in Thuan Bac district.
On the occasion, the local authorities inaugurated the province's smart tourism portal, which is designed to advertise the land and people of Ninh Thuan as well as update information on the tourist products and services of local travel businesses to visitors at home and abroad.
Also yesterday, Khanh Hoa provincial People’s Committee held a stimulating domestic tourism programme in Hanoi to promote the locality’s tourism potential to Hanoi city dwellers.
The event attracted the participation of more than 40 Khanh Hoa-based travel businesses, offering discounts of up to 50% on their services and products.
With an estimated population of 8 million and high travel demand, Hanoi is seen as a key potential market for other cities and provinces in terms of their own tourism markets.
MM Mega Market Vietnam teams up with Saigon Professional Chefs’ Guild
MM Mega Market Vietnam officially signed with Saigon Professional Chefs’ Guild (SPC) to work together with the common goal of bringing benefits to consumers in term of cuisine knowledge.
The two sides have committed long-term collaboration in sharing expertise, experiences, and recipes with consumers, especially customers in the food services business (HORECA) and the company (MM)’s staff. MM will also introduce safe materials that it is distributing to ensure food safety for customers with every meal as well as to support the guild during social activities, annual events, training courses, and more.
In 2019, MM had sponsored Vietnam’s chef team competing in the Culinaire Malaysia cuisine championship and had brought home two trophies, eight gold medals, one silver, and eight bronze.
“Before this co-operation between MM and Saigon Professional Chefs' Guild (SPC), we have worked together on several projects and international competitions, and SPC highly appreciates MM’s ability to provide quality and safe food to consumers, especially its variety choice of ingredients for chefs. This helps us to have more chance to develop new and better meals as well as to train the members of SPC easier and more efficiently,” said Pham Son Vuong, president of SPC at the signing ceremony.
MM has invested and developed food product platforms to ensure good quality control
As a food supplier to almost one million professional customers including hotels, restaurants, and canteens in Vietnam, Thai-backed MM has invested and developed food product platforms to ensure good quality control from farm to fork.
The company is operating four platforms currently, including a vegetables platform in Dalat city supplying more than 12,000 tonnes of VietGAP-certified products annually, a fish platform in Can Tho city in the Mekong Delta providing 2,000 tonnes of fish per year, the pork platform in Dong Nai province (more than 3,000 tonnes a year), and the Ben Tre fruit platform that supplies more than 2,400 tonnes of fresh and safe fruit a year.
MM aims to expand with one more food service and two depots this year and develop food product platforms such as poultry in the south and pork in the north in the near future to have in place a close and complete safe food provision chain aligning with international standards.
Vietnam Report names most reputable developers
Vietnam Report has ranked the top property developers in the market in terms of reputation, based on financial capacity released in the latest financial reports.
Other criteria in naming the groups involved media products from each company, and survey results from experts in the real estate market, as well as residents who are actually living in the projects of the candidates.
The real estate market in Vietnam experienced both highs and lows in 2019. The overall situation was still at low supply and high demand, especially in major cities like Hanoi and Ho Chi Minh City.
The absorption rate of property products last year was at 70 per cent compared to the 60 per cent of 2018, with some major locations achieving 80 per cent.
The supply to the market was reported at more than 107,000 units, only more than 60 per cent compared to this in 2018.
Of those, more than 72,800 units were sold last year, occupying 64.7 per cent compared to the previous 12 months.
According to Vietnam Report, the tightened procedures on project approvals and implementation, as well as tightened credit sources for the real estate sector, were the main reasons for the low supply.
Also last year, nearly 600 businesses were closed down within the sector. Many small-sized and startup enterprises were disbanded due to lack of investment capital and facing difficulties in capital approach.
Vietnam Report also stated that nearly 53 per cent of real estate businesses assessed that the investment environment in 2019 was slightly worse than in 2018.
Vietnam seeks to attract relocated investment in wake of coronavirus
As global companies look to relocate their manufacturing facilities after the coronavirus pandemic, the Prime Minister has decided to set up a special working group to formulate a plan to attract this important source of capital.
The head of government also asked localities in key economic regions to strive to become magnets for major foreign corporations and receive re-directed regional and global flows of investment so as to translate the challenges presented by the coronavirus into opportunities.
According to the Ministry of Planning and Investment, foreign firms in the fields of IT and high technology, electronics and e-commerce, consumer goods and retail sales and logistics are seeking to relocate their investments.
Multinational companies are speeding up the process of diversifying their investment destinations, relocating their manufacturing bases, expanding their business and implementing new projects, and Vietnam has been earmarked as a safe potential destination for such a shift.
But the opportunity is not only for Vietnam as other countries in the region are also working aggressively to attract high-quality investment during this relocation. If Vietnam acts slowly, it will miss out on the opportunity. The advantages of a safe investment climate, cheap labour and tax incentives are not enough now to attract foreign investors. In this new period, Vietnam must introduce more competitive policies so as to attract major multinational companies, which possess advanced technologies and are also environmentally friendly.
The establishment of the special working group on attracting FDI is a shift in the approach to of seizing on such opportunities. Instead of waiting for foreign investors to visit Vietnam and learn about the business environment, the working group will proactively make plans to see what foreign investors need for their investment so that Vietnam can take appropriate actions to bring the benefits to both sides.
In other words, the working group’s task is to proactively look for high-quality capital and attract world-class firms in order to change Vietnam’s economic structure and assist the country with its scientific and technological development in the future.
After more than 30 years of economic liberalisation, integration and business environment reform, Vietnam has become an attractive destination for foreign investors, with FDI playing a significant role in Vietnam’s socio-economic development. However, there are still many problems in relation to foreign investment activities in Vietnam. Therefore, this is a turning point for Vietnam to begin attracting a new generation of foreign investment.
If Vietnam wants to attract large firms to set up their manufacturing bases in Vietnam in the upcoming economic migration, Vietnam needs to create a transparent business environment and construct good infrastructure so that it is fully prepared to receive new projects when investors decide to pour their capital into the country.
Creating new growth engines for the economy
The free trade agreement between Vietnam and the European Union (EVFTA) will open up extensive potential, a new marketspace and high interactivity for the Vietnamese economy.
During its ongoing ninth session, the 14th National Assembly (NA) will press the button to ratify the EVFTA, creating new momentum for comprehensive and sustainable development and an expectation to facilitate the country’s deeper integration into the world economy via appropriate solutions.
A report on how the deal will affect Vietnam, presented by a Government representative at the NA, showed that in terms of growth, the EVFTA is expected to increase the country’s GDP by an annual average of 2.18-3.25% (in the first five years of implementation), 4.57-5.30% (in the next five years) and 7.07-7.72% (in the five years after that). Regarding exports, the EU is now one of the major trading partners of Vietnam, with the economic structure between the two being complementary rather than directly competitive. Given that fact, the EVFTA will surely see a big push on exports after coming into force. The commitment to reduce or eliminate tariff barriers for goods into the EU is a great advantage for Vietnamese businesses to tap into this US$18 trillion market. As calculated, the agreement will help Vietnam’s export turnover to the EU expand by 42.7% by 2025 and 44.37% by 2030 compared to a no-deal scenario.
During the first-phase sittings of the ninth session, NA deputies profoundly analysed the significance, impacts and contributions of the EVFTA to Vietnam’s sustainable development across an array of immediate, middle-term and long-term aspects. They also commented on a number of issues in building and perfecting legal institutions, identifying new motivations associated with renewing the growth model, improving the investment and business environment to attract foreign investment, promoting the business community’s linkages to create a closed supply chain and together improve competitiveness. The EVFTA not only brings opportunities and challenges regarding economic terms, but also features pressure across the spheres of politics, culture, social security and external relations, including the risk of falling behind and a middle income trap.
To prepare for such a large playground, the Government has drafted an action plan so that after the NA’s EVFTA approval, ministries and sectors will get down to carrying out their assigned tasks. The EVFTA features strict regulations and rules on investment procedures, customs, trade facilitation, technical standards, quarantine measures, intellectual property, and sustainable development. The full observance of these provisions requires reforms of the legal system. However, in fact, a series of international institutions to which Vietnam is a signatory have unveiled limitations in turning opportunities into reality, which mainly stems from delays at the stage of finalising legal institutions. As noted by a NA deputy, nearly two years ago, the NA approved the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the expectation that Vietnamese goods would flow steadily into the CPTPP member nations. However, Vietnam’s exports to the market has have increased by only 7.2% thus far, which means that the country has not yet benefited much from the CPTPP.
The EVFTA facilitates Vietnamese goods’ entry into the EU market, but it also sets many higher standards than those committed in the CPTPP. Deputies Hoang Van Cuong (Hanoi) and Vu Tien Loc (Thai Binh) suggested that, in the immediate future, the Government should identify the strongest products to be exported to the EU market, thence assessing their ability to meet the EU’s requirements and technical standards, as well as implementing measures to help those goods satisfy EU standards. In the long term, the Government needs to drastically reform economic institutions, while strengthening the publicity, transparency and validity of policy and law systems to fully implement international commitments and create a healthy business environment with fair competition. Administrative reforms should be accelerated in all fields, especially those directly related to EVFTA commitments on investment, construction, land, tax and customs. Moreover, attention should be paid to completing economic restructuring associated with renewing the growth model towards improving quality and efficiency, in addition to effectively exploiting complementary and mutually supporting factors in terms of the labour force, capital, natural resources and science and technology.
Internalisation of technology, technology transfer and high-quality industrial human resources must be Vietnam’s labour advantages in the future. However, at present, the majority of small and medium-sized enterprises (SMEs) in Vietnam (accounting for nearly 98% of the total number of businesses) have low competitiveness with limited financial resources, technological capabilities and labour productivity. To support enterprises, many NA deputies recommended that the Government should synchronously develop all types of markets and strongly develop export markets; perfect the management mechanism and implement new import and export management tools in line with requirements; and continue to bolster communication to raise firms’ awareness of the regulations and commitments in the EVFTA. Ministries and sectors should proactively study and apply appropriate measures to support and protect the legitimate interests of domestic manufacturing industries above competition from foreign goods, otherwise, most Vietnamese businesses will face great challenges in participating in and taking advantage of the opportunities presented by the EVFTA.
Disbursement of investment capital from State budget rises sharply in May
Approximately VND31.1 trillion (US$1.33 billion) in investment capital sourced from the State budget was disbursed in May 2020, an increase of 17.5% over the same period in 2019, according to the General Statistics Office.
In the January-May period, total investment capital from the State budget was estimated at VND116.3 trillion (US$4.99 billion), equivalent to 24.9% of the year’s target and up 15.6% over the same period last year.
The disbursement rate of investment capital from the State budget in May and in the first five months of this year reached the highest levels in the 2016-2020 period.
The investment capital has soared sharply in the context that the COVID-19 pandemic has been well under control while investment in basic construction has returned to normal and the progress of major construction projects is being accelerated.
In new normalcy, Hanoi seeks to lure more investment
The upcoming investment promotion event shows the city’s determination to be the pioneer among localities in pushing for economic recovery after Covid-19.
The Hanoi Party Committee has announced the city will host an annual investment promotion conference at the Vietnam National Convention Center on June 27.
The organization of the conference right after Hanoi’s early containment of the Covid-19 pandemic would send a strong message on the capital city’s efforts in particular, and of Vietnam in general, to lure investment from domestic and abroad businesses.
More than ever, Hanoi remains a safe and stable investment destination for investors, stressed the municipal Party Committee.
The investment promotion conference, themed “Hanoi 2020 – Investment and Development Cooperation”, shows the city’s determination to be the pioneer among Vietnam’s cities/provinces in recovering and developing the economy in the post-pandemic period.
According to the committee, the process would boost Hanoi’s administrative reform and enhance the city’s business and investment environment towards the ultimate goal of achieving high economic growth.
In 2020, Hanoi targets an economic expansion rate at 1.3 times higher than the national average.
The Hanoi Party Committee requested the municipal People’s Committee to strictly comply with current regulations on approving new FDI projects, focusing on those with modern technologies and environmentally-friendliness, and in line with the city’s vision for sustainable development, national and social security.
Chairman of the Hanoi People’s Committee Nguyen Duc Chung on May 9 said at the event, the city will issue investment certificates for some 100 projects. Among them, domestic investors are expected invest nearly VND330 trillion (US$14.28 billion), including 26 social housing projects worth VND72 trillion (US$3.11 billion) for low-income buyers.
Chung also revealed Hanoi would issue investment certificates for foreign-invested projects worth US$3.5 billion, and the city would continue to call for investment in IT, logistics and e-commerce.
FDI commitments to Hanoi in the year to May 19 increased 6.1% against the previous month to US$1.04 billion. From the start of this year, the capital city has approved 255 new projects worth US$327 million and allowed other 63 to pump an additional US$378 million in the five-month period. Foreign investors also contributed US$340 million in capital to other 468 projects.
Specific criteria needed for Vietnam to attract FDI into priority areas
The Hanoitimes - The quality of state management and administrative procedures are the top concerns of the business community, not only the progress of cutting red tape, said an expert.
In addition to removing obsolete administrative procedures, Vietnam should issue specific sets of criteria to ensure greater efficiency in attracting foreign direct investment (FDI) into priority areas, according to Nguyen Anh Duong, head of the Macroeconomic Policy Department under the Central Institute for Economic Management (CIEM).
“Low quality of institutional framework, digital infrastructure and productivity are three bottlenecks hindering Vietnam’s development in the post-Covid-19 period,” Duong said at a conference on June 1.
Regarding this issue, economist Vo Tri Thanh, CIEM’s former vice director, said the Covid-19 pandemic has triggered the trend of politicization of economic activities, which was best demonstrated by the US – China tensions and protectionism.
Thanh said in a world of growing uncertainties, countries like Vietnam should adopt flexible policies and act fast to grasp a new wave of investment capital as foreign investors are looking to diversify their global value chains away from China.
“It is not a coincidence that Prime Minister Nguyen Xuan Phuc has set up a task force to promote investments in the country,” Thanh added.
“Instead of waiting for others to come, we have to be active in approaching potential investors and addresses bottlenecks in attracting FDI,” Thanh asserted.
Thanh, however, noted that while Vietnam is pursuing higher quality FDI, it is essential to continue to support the private sector, saying this would help make a strong and independent economy.
Dau Anh Tuan, director of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI), said the initial success in tackling Covid-19 proved the country’s stable business environment and efficient state governance.
Tuan noted as the EU – Vietnam Free Trade Agreement (EVFTA), the EU’s only second trade agreement to date in the Southeast Asian region, is set to come into play, Vietnam is holding major advantages to attract investors compared to regional peers.
However, as the Covid-19 pandemic is transforming the world, Vietnam has to move fast, he stated.
“Vietnam should shift its focus from addressing business concerns to creating a favorable environment for growth,” Tuan added.
Improving the quality of state management and smoothing administrative procedures are highly demanded by the business community, not only the progress of cutting red tape, Tuan continued.
Disbursement of FDI in Vietnam in May is estimated at US$1.55 billion, the highest monthly figure since February, a report of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has shown.
The data indicates a positive sign that foreign investors are accelerating their projects’ progress as the Covid-19 pandemic has been initially contained in Vietnam.
Overall, disbursement of FDI projects in Vietnam totaled US$6.7 billion in the first five months of 2020, representing a decline of 8.2% year-on-year.
Meanwhile, FDI approvals in the January – May period fell 17% year-on-year to US$13.9 billion. The figure, however, is higher than that of the same five-month period from 2016 to 2018, posting increases of 37.6%, 14.8% and 40.4% compared to the corresponding period of 2016, 2017 and 2018, respectively.
Vietnam invests 180 million USD overseas in five months
Vietnamese enterprises injected over 180 million USD into 18 foreign markets in the first five months of this year, equivalent to 98.7 percent of the same period last year.
During the period, 162 million USD was pumped into 60 new projects, nearly double that of last year’s period, thanks to a 91.5 million USD overseas project from Germany’s Vonfram Masan Co., that received an investment licence in May.
Meanwhile, 19 million USD was added to 11 underway projects, down 77.8 percent year-on-year, reported the Foreign Investment Agency under the Ministry of Planning and Investment.
Germany drew the highest amount of capital with four projects worth 93 million USD, accounting for 51.3 percent of the total. The US came next with 22 million or 12 percent./.
India-ASEAN connectivity scrutinised
Speakers from India, Vietnam, Thailand, Malaysia and Laos discussed trade and geopolitical connectivity between Indian and ASEAN at a recent video conference, during which they said that the two sides have stayed closed in numerous fields.
Scholars from ASEAN all affirmed that India is a good friend and close partner. Parties involved, they suggested, should work together to consolidate bilateral relations and foster people-to-people diplomacy.
Faisal Ahmed, an Associate Professor of international business at FORE School of Management in New Delhi, evaluated that ASEAN is a region which is progressive in economy and rich in culture and holds important geopolitical significance.
Merchandise trade between India and ASEAN reached 97 billion USD during 2018-2019 and their service trade was valued at 45 billion USD.
At the conference, scholars also appreciated Vietnam’s achievements in the fight against the COVID-19 pandemic, with few patients and no fatality.
Le Van Toan, Founding Director of the India Research Centre under the Ho Chi Minh National Academy of Politics, said that Vietnam has made responsible contributions to global issues.
Amid the COVID-19 outbreaks, Vietnam has not only shared disease prevention experience with other countries but also provided medical equipment and supplies for many nations, including India.
He suggested studying cultural traditions which have formed the Vietnam-India relations over the past years./.
Vietnamese fabrics exempted from Indonesia’s new import tariffs
Made-in-Vietnam fabrics have been exempted from new import tariffs of Indonesia, which have been imposed on some textile products from May 2020 until November 2022.
Aside from Vietnam, other countries and territories exempted from the safeguard measures include the Republic of Korea and Hong Kong for the imports of synthetic yarn and curtains, as well as India also for fabrics, according to the Indonesian Finance Ministry.
In 2019, the Indonesian government imposed temporary additional duties on imports of textiles and textile products up to 67.7 percent.
The fresh move is a safeguard measure to protect the domestic upstream industry from a recent surge in imports and encourage the use of domestic market products.
Previously, Moody’s Investors Service warned that the US-China trade tensions could lead to an influx of Chinese yarn, fabrics, and garments into Indonesia. It said, potentially disrupting the so far stable levels of demand and supply in Indonesia.
Moody’s explained that tariffs imposed by the US on Chinese textile exports are at 25 percent versus the 10-15 percent that Indonesia has implemented./.
Foreign e-commerce firms required to set up representative office in Indonesia
The Indonesian Ministry of Trade has issued a decree requiring foreign e-commerce firms to set up a representative office in the Southeast Asian country.
The new decree will be effective in six months from the date of issuance on May 13.
The policy will be applicable to the operators that have transactions with more than 1,000 consumers and/or have sent more than 1,000 packages to consumers in one year period.
Last year, President Joko Widodo signed a governmental regulation concerning trade via electronic systems or e-commerce platforms.
According to the regulation, foreign business operators who actively bid and conduct electronic trading to consumers domiciled in Indonesian jurisdiction who meet certain criteria, for example, the number of transactions, transaction value, number of shipping packages, and the number of traffic or accessors, are considered to meet physical presence in Indonesia.
Foreign e-commerce firms are required to have, include, or convey the identity of a clear legal subject and meet the provisions of the laws and regulations in export and import as well as information and electronic transactions.
In addition, in conducting transactions, these business actors are obliged to assist government programmes, among others, prioritising trade in goods and domestic products.
They are also required to use Indonesian high-level domain names (.id) for Electronic Systems in the form of internet sites and store data and information related to financial transactions for a minimum period of 10 years./.
Rice exports to EU anticipated to make breakthroughs through EVFTA
The impending European Union-Vietnam Free Trade Agreement (EVFTA) is projected to act as a boost for export turnover and enhance the competitiveness of Vietnamese rice in the EU market, according to Pham Thai Binh, General Director of Trung An High-tech Agriculture Joint Stock Company.
Despite the recent outbreak of the novel coronavirus pandemic having a significant impact on exports in general, the rice industry in particular, the demand for rice consumption in European countries is predicted to increase since it is considered as an essential food item, Binh observed.
Indeed, he attributed the recent increasing demand in the company’s rice orders from countries such as Australia, Germany, and France, to the large number of overseas Vietnamese currently living in these nations.
Binh noted that Vietnamese rice exports to the EU market are subject to high taxes of up to 45%, with some EU countries even moving to impose import duties of up to 100%. It is therefore anticipated that when the EVFTA comes into force it will serve to help Vietnamese rice products enjoy a greater competitive advantage in comparison to the Cambodian rice, an item that is currently exempt from import tax in the EU market.
If the EVFTA is subsequently ratified by the Vietnamese National Assembly as expected, the trade deal is poised to come into effect in August, with the tax rate imposed on rice set to be immediately slashed to 0%. This dramatic tax cut is predicted to greatly bolster rice exports to the EU market in the near future, Binh added.
According to the executive, the EU is a highly demanding market when it comes to food hygiene and safety. Therefore, items that contain residue of pesticides or banned substances will find it very difficult to enter this market.
To make inroads into the market, Binh said local firms must obtain GlobalG.A.P certificates and swiftly move to adapt their organic farming methods in order to develop production chains that come up to international standards.
Trung An company is currently exporting its products to the EU and has subsequently met the stringent requirements set by EU importers. The firm can now immediately accelerate its exports to the European market once the trade pact comes into force.
To seize upon the benefits brought about by the EVFTA, Binh suggested that the Ministry of Industry and Trade (MoIT) organise training courses for businesses to gain a better understanding of the details of the trade pact.
Similarly, the Ministry of Agriculture and Rural Development should organise training courses to help farmers gain insights into new farming methods which will serve to meet standards set by EU importers and ultimately allow Vietnamese rice to gain entry into the EU market.
According to the Vietnam Food Association, despite the rice export quota to the EU standing at only 80,000 tonnes, Vietnamese rice exported to this market is generally of high quality. Therefore, the status of local rice will be elevated within the international market upon gaining entry into the EU.
Vietnam’s audiobook and podcast platform Voiz FM secures seed funding from 500 Startups
Voiz FM announced that it successfully raised an undisclosed seed amount from 500 Startups Vietnam. The audiobook and podcast platform has seen doubled growth in its user base in recent months, following a surge in demand as customers turn to audio media during the coronavirus quarantine.
Voiz FM was launched in late 2019 by a group of three Vietnamese co-founders to capitalise on opportunities in the emerging audio media space. According to Deloitte, the global audiobook and podcasting markets are set to grow to $3.5 and $1.1 billion in 2020, respectively. It demonstrates impressive annual growths of 25 and 30 per cent, compared to that of the broader global media and entertainment sector at 4 per cent.
Voiz FM started off with audiobooks. In contrast to a number of other Vietnam-based platforms making “easy money” from online piracy, Voiz FM has taken a long-term approach and attained copyrights for 100 per cent of its published content. In only six months, it has acquired exclusive publishing rights for more than 1,000 best-selling titles, partnering with top-tier publishers in Vietnam including First News, Kim Dong, and Tre Publishers, among others.
According to Binh Tran, general partner of 500 Startups Vietnam, the venture capitalist is bullish on the market opportunities as well as the team’s dedication to customers.
Voiz FM will spend the new funding on product development and market expansion. “Our product roadmap includes the launch of a recommendation algorithm in early July and an AI Voice functionality, which will allow users to choose their prefered voices for all titles, in October this year,” said Thai Tran, co-founder and CEO of Voiz FM. These developments are expected to further enhance its user experience and improve production productivity. The team also plans to expand to other Southeast Asian markets in the near future.
Domestic market fully tapped to rescue businesses
As exports are facing difficulties due to the COVID-19 pandemic, the domestic market of nearly 100 million people is seen as huge potential to rescue local businesses.
Vietnam has contained the COVID-19 epidemic and is rebooting its economy. Economists say it is an opportunity for Vietnamese businesses to promote production and trade.
The garment and textile industry is among the hardest hit sectors from COVID-19. Its export value declined 20% in April compared to the previous month, prompting its four-month export value to fall 6.6% to about US$10 billion.
To address the situation, many businesses have focused more on the domestic market.
“We notice a good sign that customers prefer our products, especislly newly introduced office fashion lines," said Bui Duc Thang, Marketing Chief of the Garments 10 Company. "Revenue has gradually increased and our business has fairly returned to normal.”
To reboot production and trade, garment makers have redefined their product lines and markets and set up links among manufacturers and distributors. They have upgraded and expanded production infrastructure and service facilities to meet consumer needs.
“During the pandemic, we refurbished our convenient stores and food shops in the inner city to better serve customers. We’ll continue to repair our stores and build 100 more from now to the end of this year,” Nguyen Tien Vuong, Deputy General Director of Hanoi Hapro Group, told VOV.
The total retail sales of consumer goods and revenue of consumer services in the first 4 months declined 4.3% from last year. But retail sales of consumer goods increased slightly from last year.
Bach Kim Ngan, Director of Ngan Giang Company, noted that the domestic market is a firm mainstay for Vietnamese businesses, adding that “Since the Government eased social distancing and businesses resumed normal operation, we have prepared a plan to reintegrate into the market, produce qualified products and work with distribution systems, supermarkets and retail shops to popularize the products nationwide.”
“At the same time, promotion programs will be increased to stimulate consumers. We focus on the domestic market because it is very potential,” said Ngan.
Industrial production index up 11.2 percent in May
Vietnam’s index of industrial production (IIP) in May rose by 11.2 percent over the previous month but decreased by 3.1 percent year on year, according to the General Statistics Office (GSO).
The growth of the May IIP was a positive signal during Vietnam’s fight against the COVID-19 pandemic and restoring development of the economy, the GSO said. At present, the pandemic is under control nationwide.
Of the figure, industrial production decreased by 13 percent in the mining industry; 2.4 percent in the processing and manufacturing sector; 2 percent in the electricity production and distribution industry; and 2.3 percent in the water supply and waste treatment sector.
The GSO also said the IIP in the first five months of this year increased by 1 percent over the same period last year. However, this figure was much lower than the growth of 9.5 percent in the first five months of 2019.
During the first five months, the index surged by 2.2 percent in the processing and manufacturing industry year on year, lower than the growth rate of 10.9 percent in the first five months of 2019 compared to the same period of 2018.
The index increased by 2.6 percent in the electricity production and distribution industry and 2.9 percent in the water supply and waste treatment sector. However, the index of the mining industry dropped by 8.1 percent year on year.
The GSO reported that due to the complicated development of COVID-19, the supply chain of raw materials for production has been interrupted, thereby seriously affecting the domestic industrial production.
Some industries saw a strong decrease in IIP during the first five months, including support services for mining (36.5 percent); repair, maintenance and installation of machinery and equipment (16.4 percent); motor vehicle production (16.3 percent); auto and motorcycle production (15.6 percent); and beverage production (14.6 percent).
Meanwhile, some other industries gained IIP growth in the first five months compared to the same period of last year. They included the manufacture of medicines, pharmaceutical chemicals and medicinal materials (25.9 percent); production of coke and refined petroleum products (12.9 percent); pulp and paper products (9.3 percent); and production of chemical products (9.1 percent)./.
Coteccons denies allegations by Kusto
Coteccons has rejected the recent allegations made in a press release by its major shareholder Singapore-based Kusto, which announced in the release that it will convene an extraordinary general meeting (EGM) on July 13 seeking to replace the board of Coteccons.
Construction company Coteccons on June 3 said that it had received information about the EGM and the false allegations against the board of directors from Kusto.
Kusto had earlier requested that an EGM be organized on October 15, 2019, to displace Nguyen Ba Duong and Nguyen Sy Cong as chairman and general director of Coteccons, respectively, but the board of directors rejected the request, said a representative of Coteccons.
Based on the same allegations, Kusto had repeatedly requested an EGM on April 23, the representative noted, adding that this time, Kusto issued a press release on June 2 and asked the Vietnam Securities Depository Center for the Coteccons shareholder list to organize an EGM on July 13.
Meanwhile, an annual general meeting is set to take place in late June, according to Coteccons.
The Coteccons side affirmed that the allegations made in Kusto’s press release about its unsuccessful attempts to dialogue with the Coteccons board of directors and resolve issues internally were baseless.
Such unfounded allegations have negatively affected the price of the Coteccons stock under the code CTD and its production activities, remarked Coteccons.
The conflict of interest mentioned in Kusto’s press release was related to Ricons Construction Investment JSC.
According to Kusto, Ricons, in addition to being Coteccons’ sub-contractor, is the firm’s opponent. The after-tax profit of Ricons was equivalent to 11% of that of Coteccons in 2015, but this figure surged to 51% in 2019. Some members of the Coteccons board of directors and management board hold similar positions at Ricons.
Responding to this, Coteccons said that with the scale of revenue amounting to some US$2 billion and securing several projects valued at up to VND7 trillion, Coteccons surely has thousands of subcontractors and suppliers.
“Ricons, Unicons or any other unit is only one of Coteccons’ subcontractors. The firm has detailed agreements with all of its subcontractors and suppliers. Aside from this, Coteccons has established the Expense and Contract Control Department to monitor contracts signed with partners, in line with the firm’s regulations,” noted Coteccons.
The representative of Coteccons also said that since late 2019, the firm has not signed any agreement with Ricons.
Stringent credit standards will not affect lending: SBV
The strict credit standards of credit institutions will not affect their credit support for businesses and individuals affected by the Covid-19 pandemic, deputy governor of the State Bank of Vietnam (SBV) Dao Minh Tu said at a press conference on June 2.
Responding to concerns that the refusal by credit institutions to lower credit standards would make it hard for businesses and individuals to access credit packages, Tu noted that lowering credit standards meant reduced credit safety for credit institutions and the country’s banking and financial system. Therefore, these institutions have to comply with safety regulations.
“Credit support for businesses and credit safety must always happen in parallel,” Tu said.
SBV has taken a number of measures to support businesses affected by the Covid-19 pandemic including debt rescheduling. From January to May, SBV lowered interest rates and interest rate ceilings twice for prioritized sectors.
As of May 20, capital mobilization increased 1.85%, while credit grew 1.32% compared to late 2019.