Vietnam has recorded tangible changes in agro-forestry-fishery exports thanks to preferential tariffs in trade with member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after five years the trade pact took effect.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the country’s export of agro-forestry-aquatic products to CPTPP member nations has consistently increased in recent years, hitting 2.9 billion in 2022 from 2.2 billion in 2019.

The CPTPP is the second-fastest-growing seafood export market for Vietnam, following China. It accounted for 25% of Vietnam's seafood exports in 2018 and nearly 27% in 2023. The most robust growth in exports is observed in Canada, Chile, Peru, Singapore, Malaysia, and Australia.

For the Japanese market, Vietnam has boosted its export of various agricultural products in recent times, including fruits and vegetables. The Southeast Asian nation has emerged as the 12th largest supplier of fruits and nuts to Japan.

The agreement has also made it easier for Vietnam's agricultural products to access the Australian market. Notably, Vietnamese shrimp products dominate this market with a share of over 70%, nearly doubling from the figure recorded before the agreement was inked.

In addition to traditional markets, Chile is also a potential one for Vietnam’s agricultural exports. According to the Ministry of Industry and Trade, products prioritised as exports to Chile include pepper, cashew nuts, tea, coffee, honey, seafood, and wood products.

The UK officially signed an agreement to join the CPTPP in July last year, creating more opportunities for Vietnam's agricultural sector to diversify its markets and increase its competitive advantage.

Insiders said that to effectively capitalise on the opportunities brought by the pact, producers and exporters of agro-forestry-aquatic products need to pay special attention to standards, consumer trends, and product designs; and improve production processes and comply with labour and environmental standards as outlined in the trade deal, and meet specific requirements of each market.

Furthermore, concerning Latin American markets such as Mexico, Chile, and Peru, Vietnamese businesses currently lack information about consumer preferences and demands, so the export turnover to these markets remains limited.

Vietnamese authorities and trade offices in these countries should provide more support to businesses in trade promotion activities, they said.

Vietnamese Gov’t to pour money into offshore wind exploration

Resolving the challenges of gas and offshore wind projects is critical to achieving the goals of the Power Development Plan VIII (PDP8) and ensuring energy security to support economic and social development.

 The Ministry of Industry and Trade, along with relevant agencies, has been tasked with developing a pilot initiative to use the state budget for the exploration, study, and selection of investors for offshore wind power projects.

The directive was given by Deputy Prime Minister Tran Hong Ha during the conclusion of a meeting this week to address challenges for offshore wind and gas projects.

According to the Power Development Plan (PDP8), offshore wind power is expected to reach approximately 6,000 MW by 2030, with the potential for further growth based on technological advances and reasonable electricity prices and transmission costs. However, as of now, no projects have been officially approved or assigned to investors.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan pointed out that offshore wind projects are facing challenges, in particular the lack of unified regulations for allocating sea areas for organizations and individuals using extra-budgetary funds for exploration, surveys, and measurements.

These projects also face difficulties in allocating sea areas to foreign investors, conducting tenders and selecting investors, and managing conflicts with marine exploitation activities to ensure national security.

To address these challenges and expedite the implementation of offshore wind projects, Deputy Prime Minister Tran Hong Ha has instructed the Ministry of Industry and Trade to work with other relevant ministries and agencies to formulate a pilot plan to be funded by the state budget for the exploration, investigation, and survey of offshore wind projects. The plan should also include the approval of project directions and the selection of investors.

Ha also agreed to establish an interdisciplinary working group, led by the Ministry of Industry and Trade, and including representatives from the Ministries of Natural Resources and Environment, National Defense, Public Security, Planning and Investment, Agriculture and Rural Development, and Transport.

This working group aims to resolve legal issues and make recommendations, with immediate consideration being given to appointing state-owned enterprises such as EVN and PVN to conduct studies, surveys, and assessments of offshore wind potential.

Furthermore, according to Deputy Minister of Planning and Investment Do Thanh Trung, the investment procedures for gas and offshore wind projects need to be implemented simultaneously with the completion of regulations to ensure the timeline and goals of the development plan.

According to the PDP8, over 30,420 MW of thermal power needs to be invested by 2030, of which 75% is LNG power (22,824 MW). However, there are barriers, such as the lack of a legal framework for negotiating Power Purchase Agreements (PPAs) with long-term commitment to purchase output, and the pricing mechanism for gas-to-electricity conversion in LNG power projects.

In reality, a gas power project typically takes 7-8 years from the investment preparation phase (contractor selection, preparation and approval of feasibility studies, or negotiation of power purchase agreements) to completion. Similarly, for offshore wind projects, the implementation timeframe is around 6-8 years from the survey phase. Therefore, investing and deploying projects to meet the pre-2030 operational deadlines pose a significant challenge.

Minister of Industry and Trade Nguyen Hong Dien emphasized the need to establish new mechanisms and policies, not just pilot programs, as “investing in gas and offshore wind projects is a new field with unclear regulations”.

Deputy Prime Minister Tran Hong Ha concluded the meeting by stating that solving the challenges of gas and offshore wind projects is crucial for achieving the goals of PDP8 and ensuring energy security to support economic and social development, as well as attracting investments.

He therefore instructed the relevant ministries to review the entire investment procedure for gas and offshore wind projects and propose solutions to shorten the implementation time for these energy sources.

Fruit, vegetable exports expected to flourish in 2024

Fruit and vegetable exports are predicted to set a new record in 2024, possibly exceeding the US$6-billion turnover goal and even approaching the $7-billion milestone.
 
Insiders said many opportunities are opening up for the sector as the Ministry of Agriculture and Rural Development (MARD) is implementing numerous activities to promote its development.

Despite numerous challenges, the sector still surpassed the targets set for 2023.

According to statistics from the General Department of Customs, Vietnam’s fruit and vegetable export turnover hit an estimated $5.6 billion last year, surging by 66 percent year-on-year. Surpassing dragon fruit, durian recorded the highest export value.

The largest importers of Vietnamese fruits and vegetables include China, the US, the Republic of Korea, Japan, Thailand, the Netherlands, Taiwan (China), Australia, the United Arab Emirates (UAE), and Russia.

China remained the biggest import market for Vietnam, with the import turnover reaching $3.7 billion in the year, up nearly 250 percent in value and 65 percent in market share compared to 2022.

Ngo Tuong Vy, General Director of Chanh Thu Fruit Export Group JSC said that the company’s revenue in 2023 doubled compared to the previous year thanks to the rise in durian exports, which accounted for 80 percent of the total revenue.

This year, the MARD will accelerate negotiations for the official export of Vietnamese fresh chilies and coconuts to the Chinese market. With the possibility of Vietnam's frozen durians also being allowed to be exported to China, the export turnover of fruits and vegetables in 2024 is forecast to increase significantly.

It is anticipated that four more products will be officially exported to China, namely medicinal herbs, coconuts, frozen fruits, and watermelons, said Deputy Minister of Agriculture and Rural Development Phung Duc Tien.

According to Nguyen Khac Tien, Chairman of the Board of Directors of Ameii Vietnam JSC, market surveys show that Chinese consumers are favoring processed durian products, which is an advantage for Vietnam in producing more value-added products from durian.

Tien added that this market still holds great potential and opportunities for the export of Vietnamese fruits and vegetables.

Meanwhile, General Secretary of the Vietnam Vegetable and Fruit Association (VINAFRUIT) Dang Phuc Nguyen said Vietnam’s watermelon exports could double, reaching $100 million this year when China’s protocol allowing the import of fresh watermelons from Vietnam takes effect.

Experts advised vegetable and fruit exporters to strictly abide by requirements and regulations on food safety, traceability, growing area code confirmation, and packaging stated in the signed protocols.

Vietnam has dogged determination to develop semiconductor

According to many observers' forecasts, the global semiconductor industry will recover strongly in 2024 and it is projected to achieve US$1,000 billion by 2030. Vietnam has a dogged determination to develop this industry.
 
The Southeast Asian nation meets the necessary conditions and factors to develop the semiconductor industry as it has a stable political system, favorable geographical location, and increasingly developing digital infrastructure. Moreover, the country has abundant human resources with high determination in developing this industry. Highly valuing Vietnam's potential, President and CEO of the US Semiconductor Industry Association (SIA) John Neuffer said that Vietnam is owning incredible opportunities to be able to leave a mark in the the global semiconductor supply chain.

However, in a talk with reporters at a press brief, Mr. Vu Quoc Huy, Director of the National Innovation Center (NIC) under the Ministry of Planning and Investment, analyzed that the semiconductor industry is posing many challenges for businesses and governments of countries, of which Vietnam is no exception. First, it’s worth mentioning that investment cost is high as building a chip foundry can cost up to $50 billion. Furthermore, the increasing complexity of semiconductor technology requires large investments in research and development to avoid falling behind.

In addition, the competition in this field amongst countries such as China, the United States and Europe is quite severe. These countries have announced investment plans for their chip sector ranging from $50 billion-$150 billion. Last but not least, the requirement for high-quality human resources in the industry is also especially great, while the skills and qualifications of Vietnam's human resources are not enough to meet the needs of businesses.

Because the country has many things to do for the industry’s development, Minister of Planning and Investment Nguyen Chi Dung repeatedly emphasized the significance of the improvement of the industry workforce’s quality with the construction of a project to develop high-quality human resources by 2030 with the aim to have 50,000 human resources in the semiconductor industry to satisfy the human resource needs of domestic semiconductor enterprises and exporting labor to other developed markets.

However, this dogged determination to develop the industry can only be successful with the cooperation of the Ministry of Planning and Investment, the Ministry of Science and Technology, the Ministry of Education and Training, the Ministry of Information and Communications, Vietnam's leading universities such as Hanoi University of Science and Technology, Hanoi National University, Ho Chi Minh City National University plus companies in high-tech parks, industrial parks and economic zones in the provinces and cities and the business community.

Industrial production rises in 60 provinces, falls in 3

The IIP for January 2024 compared to the same period last year increased in 60 localities and decreased in three localities nationwide, as reported by the GSO on the morning of January 29.

According to the national statistical agency, the IIP for January grew by 18.3 percent compared to the same period last year but decreased by 4.4 percent compared to the previous month. Specifically, the manufacturing and processing sector increased by 19.3 percent compared to the same period last year, contributing the most to the overall growth (15.1 percentage points); electricity production and distribution surged by 21.6 percent, contributing 1.9 percentage points; water supply, management of waste, and wastewater treatment increased by 5.7 percent, contributing 0.1 percentage point; the mining sector edged up by 7.3 percent, contributing 1.2 percentage points.

Throughout the month, the nation witnessed a notable surge in business activities, with the establishment of 13,500 new businesses, up 24.8 percent compared to the same period last year. Additionally, almost 13,800 enterprises resumed their operations. The combined total of newly established and reactivated businesses in January 2024 reached over 27,300, marking a 5.5 percent uptick from the corresponding period in the previous year.

However, in January, 43,900 businesses registered temporary suspensions for a specified timeframe, while 7,798 companies ceased operations pending dissolution procedures, and 2,165 enterprises successfully completed dissolution procedures. Consequently, the overall number of businesses exiting the market amounted to 53,900, indicating an increase of 22.8 percent compared to the same period last year.

Khanh Hoa to use public funds for CCSEP Nha Trang after WB withdraws capital

Khanh Hoa Province planned to use its public funds for Coastal Cities Sustainable Environment Project (CCSEP), Nha Trang City sub-project after the World Bank didn’t agree to continue sponsoring.

The Office of the People's Committee of the South-Central Province of Khanh Hoa has just announced information related to component 2 of the project.

Accordingly, regarding component 2 of the CCSEP Nha Trang project, the World Bank has disagreed with the continued use of ODA loans for the implementation of the remaining items.

Under the negotiation and signing of the loan agreement between the province’s government and the World Bank, the capital source to implement component 2 of the CCSEP project is not non-refundable aid but is re-borrowed by the provincial People's Committee. The province must repay the principal plus interest to the sponsor upon the agreement.

Based on the proposal of the Party Committee of the provincial People's Committee, the Standing Committee of the Khanh Hoa provincial Party Committee met and arrived at an agreement that the province will use the provincial budget to replace ODA loans for the next implementation of the remaining part of project component 2. At the same time, the project will also continue to apply the resettlement compensation policy framework according to World Bank regulations.

The People's Committee will submit its proposal of using capital from the provincial budget for the component 2 implementation to the provincial People's Council. Based on the opinions of the provincial People's Council, the People's Committee will complete procedures to submit to ministries and agencies for appraisal and the Prime Minister for approval of adjustments to project investment policies including adjustments of counterpart funds and extending project implementation time.

If the proposal is approved, the items under component 2 are expected to resume construction in the third quarter of 2024 and completed by the end of December 2025.

Khanh Hoa Provincial People's Committee Office said that the People's Committee will continue to direct investors and related parties to speed up implementation progress for early completion of the remaining items to synchronously complete the infrastructure in the northern region of Nha Trang City.

CCSEP Nha Trang has an investment of over US$72 million. Of US$72 million, nearly $61 million is borrowed from the World Bank and more than $11 million from local counterpart capital.

However, the World Bank has issued a written decision not to continue funding two contracts under component 2 of the CCSEP Nha Trang project on March 17 as the bank said that these items have problems with site clearance and resettlement, leading to slow progress.

Traffic facilities upgrades offer smoother flow in Southern key economic zone

The core in the Southern key economic zone – accommodates a large number of migrants coming for learning and working purposes. Each Tet holiday, traffic congestion is the infamous scene at every city exit, causing exhaustion to people coming back to their hometown.

However, the traffic flows this year are much smoother after the operation of the two important expressways to Can Tho City and to Vinh Hao (Binh Thuan Province).

When My Thuan 2 Bridge and the My Thuan – Can Tho Expressway opened on January 24, 2023, the traffic pressure on National Highway No.1A reduced by half. As a result, since the middle of the 12th lunar month, there has been no serious traffic jam at the exits of HCMC even though groups after groups of migrating worker families are going back to their hometown.

Mr. Thanh from Hong Dan District of Bac Lieu Province is a worker in Thuan An Industrial Park in Binh Duong Province shared that this is the 5th year his family has used a scooter for the trip back home. Yet it now takes him only 6 hours instead of 10 hours formerly because the number of vehicles on National Highway No.1A as well as traffic accidents drops dramatically thanks to the operation of the expressway from HCMC to Can Tho City.

Other helpful routes also contribute to effectively reducing the traffic load for national highways. One such example is Tan An Ring Road in Long An Province, coming into operation at the end of last December to link Tan An City – Chau Thanh District – Tan Tru District – Thu Thua District and partially shouldering the traffic burden of National Highway No.1A and No.62.

Another useful element to eliminate traffic congestion is the traffic police force and relevant functional teams. For instance, Ben Luc Bridge – the used-to-be hot spot of traffic jam – is now clear thanks to better rearrangement of street vendors and food stands, strict punishments of road encroachment, and timely traffic regulating – both online and on-site – to minor routes.

Rach Mieu Bridge is also infamous for congestion every national holiday, becoming a nightmare to local residents from Ben Tre Province and Tra Vinh Province. To improve the situation, the traffic police force in Tien Giang Province and Ben Tre Province have collaborated to regulate traffic flows. When there is a potential jam, the traffic direction with fewer vehicles is directed to prioritize the opposite direction, while the BOT toll plaza is asked to stop working temporarily for the flow to move faster. Ferries are also mobilized for eligible groups of road users.

Moving northwards from HCMC, the two expressways of Phan Thiet – Dau Giay and Vinh Hao – Phan Thiet were open to the public in April and May, 2023 respectively, greatly reducing travelling time to the provinces of Binh Thuan and Ninh Thuan and providing more comfort moving experience. This has encouraged migrating people to come back to their hometown more frequently.

According to the Transport Department of Binh Thuan Province, the two above expressways, which is 160km long in total, has 7 intersections, so local people and goods trucks can exit from them to travel to their destinations conveniently and cost-effectively. In addition, to ensure traffic safety, this department regularly checks the routes to handle arisen problems immediately.

As to the sites undergoing repair or upgrade, related contractors have been asked to complete their work by January 31, 2024 or at least clean up the construction site temporarily for the high travel demands on these routes at Tet.

Finally, the project to expand and upgrade Prenn Pass in Da Lat City of Lam Dong Province began in February 2023. When finished, the route here will have 4 lanes on a road width of 14.5m and safer curves.

Major Nguyen Huynh Quoc Trung – Head of the Traffic and Order Police (under the Public Security Division of Da Lat City) shared that all of his force is taking turn to guard the traffic safety on the route. They also work with related units to set up street signs and instruction or warning boards. They have conducted a survey for the installation of a camera system to monitor the traffic status here and handle traffic law violations.

On the 2024 New Year Day, Prenn Pass route was temporarily open and proved to considerably reduce the traffic load on Mimosa Pass route. It takes 20-25 minutes to travel through the latter as there is a mixture of trucks, private cars, and coaches. Choosing the former halves the time as the road is wider while trucks are not allowed here.

The People’s Committee of Lam Dong Province stated that the whole Prenn Pass route will formally operate by the Lunar New Year to accommodate people reuniting with their family in their hometown as well as tourists coming to Da Lat City to appreciate flowers.

MoT to accelerate new transportation projects in 2024

The Ministry of Transport urged relevant units to speed up many new projects under the action program of implementing Resolution No.01 of the Government on key missions and solutions for socio-economic development and the State budget in 2024. 

Regarding road projects, the Ministry of Transport (MoT) will promptly approve investment projects, designs and quotations to start works following the medium-term plan in the period 2021 – 2025, especially the sections of Ho Chi Minh Highway, namely Chu Market – Trung Son T-junction, Bien Hoa Canal – Vung Tau, Long Thanh – Thu Thiem, Soi – Ben Nhat – Go Quao – Vinh Thuan and so on.

Besides, the Ministry of Transport shall closely collaborate with host agencies and localities to soon start works on key inter-regional projects comprising expressways of Hoa Binh – Moc Chau, Ninh Binh – Hai Phong, Gia Nghia – Chon Thanh, Ho Chi Minh City – Chon Thanh.

In addition, the MoT will soon submit to authorized agencies the investment policy of the North-South high-speed railway project for approval and rapidly push up the investment progress of other key railway projects namely Ha Noi – Lao Cai – Hai Phong, Ho Chi Minh City – Can Tho.

In 2024, the Ministry of Transport shall focus on controlling overloaded vehicles to prevent violations; monitoring and strictly handling violations on unregistered vehicles at stations, disguised ones or violations on speed limit.

On the other hand, the ministry is studying to open more domestic and international air routes and implement solutions to limit delays and cancellations at Noi Bai and Tan Son Nhat International Airports.

Dong Nai greenlights eco-tourism project in nature reserve

Authorities of Dong Nai Province have approved a VND1-trillion eco-tourism project within the Dong Nai Culture and Nature Reserve.

The project envisions 51 eco-tourism locations offering relaxation, entertainment, and outdoor activities. Private investment will cover VND971 billion of the project’s cost, with the remaining amount sourced from the provincial budget.

Planned locations within the project include Bau Hao, Battlefield D, Tri An Lake and its islands, and Safari, where visitors could engage in various recreational activities such as water sports, forest cycling, camping, and wildlife observation.

According to Nguyen Hoang Bao, director of the Dong Nai Culture and Nature Reserve, the project will establish a legal framework for preserving natural resources and promoting tourism within the reserve, thereby contributing to the province’s overall tourism development.

The 100,000-hectare Dong Nai Culture and Nature Reserve boasts diverse natural and cultural resources, including stunning natural landscapes and rich cultural and historical heritage.

In 2012, Tri An-Dong Nai Inland Water Conservation Area was designated as a World Biosphere Reserve, joining the ranks of Cat Tien National Park and Ramsar Bau Sau.

Completion date for HCMC Beltway 2 section rescheduled to 2026
 
The construction of a section of the HCMC Beltway No. 2, stretching from Pham Van Dong Avenue to Go Dua intersection, could not be completed as scheduled for last year, so it has been rescheduled to 2026.

The 2.7-kilometer section has been developed under the build and transfer (BT) format at a total cost of over VND2.7 trillion.

Work on the section began in late 2017, but the project has been put on hold since mid-2020 due to site clearance hindrances.

According to a report from the HCMC Department of Transport, the project is just 44% complete in terms of construction and installation.

HCMC Beltway No. 2 has a total length of 64 kilometers, but around 50 kilometers of it has been opened to traffic. The remaining 14 kilometers, distributed across four different sections, remains half-done.

Banks containing threats of bad debt

The credit quality of BaoViet Bank has receded as the bank’s non-performing loans (NPL) climbed to almost $70 million by the end of 2023, showing a near 50 per cent jump compared to the start of the year.
 
Correspondingly, the NPL ratio over outstanding balances surged from 3.34 per cent early in the year to 4 per cent.

The bank has deducted $45.2 million to replenish its provisioning fund, thereby cushioning its pre-tax profit for 2023 to around $3.8 million, almost equal to the 2022 figure.

Meanwhile, the total NPL volume at Saigon Bank came to $17.04 million for 2023, nearly equal to the sum 12 months prior.

However, group 5 debts, which face being lost, accounted for 57 per cent of the total, reaching $9.78 million.

The bad debt ratio had slid slightly from 2.12 per cent at the start of 2023 to 2.03 per cent by the year-end.

By the end of the third quarter last year, Vietcombank, VietinBank, and BIDV were among the five listed banks with the lowest NPL ratios.
At BAC A BANK, the total bad debt volume had spiked 78 per cent compared to early year, reaching $38.6 million. Subprime and dubious (group 3 and group 4) debts all quadrupled compared to the start of 2023, pushing the NPL ratio over outstanding balances from 0.55 per cent to 0.92 per cent. The bank has one of the lowest bad debt ratios in the system.

Total bad debt volume at PGBank touched $38.2 million by the end of last year, surging 22 per cent compared to the start of 2023, in which subprime debts tripled, and dubious debts doubled, meanwhile group 5 debts diminished during the period.

Consequently, the bank’s bad debt ratio over outstanding balances remained unchanged compared to early year at 2.56 per cent.

The debt quality at tech-driven TPBank had retreated by the end of 2023, with the bank reporting $177.2 million in bad debt volume, nearly triple compared to early year.

The bad debt ratio then rose from 0.84 per cent to 2.05 per cent during the period.

Nguyen Thanh Tung, CEO of Vietcombank, revealed that by the end of last December, the bank’s debt quality had kept to the set target, with an NLP ratio of 0.97 per cent.

According to Vietcombank’s third-quarter 2023 financial report, its bad debt ratio had risen from 0.68 per cent by late 2022 to 1.21 per cent by the end of last year.

Another major state lender, VietinBank, saw a sharp drop in its bad debt volume in the fourth quarter of last year. The bank’s NPL ratio fell to just 1.12 per cent of total outstanding balances, compared to 1.37 per cent by the end of the third quarter of 2023 and 1.24 per cent in 2022.

Tran Binh Minh, VietinBank chairman, has stated that tackling bad debts is a crucial step in the banks’ restructuring process, especially as bad debts tend to soar when firms face myriad difficulties as they do today.

VietinBank has augmented its loan loss reserve, leaving the bank’s pre-tax profit after provisioning deduction to around $950 million, fulfilling the set target for 2023.

By the end of the third quarter last year, Vietcombank, VietinBank, and BIDV were among the five listed banks with the lowest NPL ratios.

Euro parliament steps up Vietnam’s IPA ratification

The European Union will urge many member states to boost the ratification of the EU-Vietnam Investment Protection Agreement in order to further facilitate investment flows.

Bernd Lange, chairman of the European Parliament’s Committee on International Trade, last week had a meeting with trade ministers of EU member states, urging these nations to soon adopt the EU-Vietnam Investment Protection Agreement (EVIPA).

“The ratification is too slow, making it difficult to increase the investment ties between both sides,” Lange told VIR in an interview during his working trip to Hanoi more than a week ago. “So far, 17 nations have passed the deal. We have held such a meeting every six months to review ratification.”

The EVIPA was approved in February 2020 and then ratified by the Vietnamese National Assembly in June of the same year. The agreement will enter into force when it is ratified by all EU member states. It includes protective clauses and dispute resolution mechanisms similar to those found in bilateral investment protection agreements between EU member states and non-EU countries.

“It would be unacceptable if the ratification process takes a long time. However, reality has shown that the ratification process of the similar agreements between the EU with Canada and Central America also took a very long time, at six and 11 years respectively, because of various reasons,” Lange said.

Julien Guerrier, Ambassador and Head of the European Delegation to Vietnam, said, “For some member states, the endorsement is more complicated as it involves wide consultations with parliamentary bodies at regional levels. Relevant services on the EU side have been trying their best to accelerate this process.”

It is also reported that barriers behind the slow ratification also include complicated procedures within these countries’ parliaments, such as those of Germany, France, Belgium, and the Netherlands, with some parties not supporting trade liberalisation as they want to protect domestic production.

For example, in Belgium, the agreement must be ratified by the nation’s six states independently. Germany and the Netherlands, meanwhile, already have bilateral investment protection agreements with Vietnam that currently remain valid, making it more complex to approve it.

“The EU hopes the EVIPA will boost investment in Vietnam, which is one of Asia’s fastest-growing economies and is also a gateway to the wider East Asia region. Vietnam is therefore a promising market, and relative to the size of its economy, it has attracted a very high rate of foreign investment,” said a statement from the European Parliament.

In many high-level talks with both EU leaders and many EU member states that have yet to ratify the deal, the leaders of the Vietnamese government and the Ministry of Foreign Affairs (MoFA) have highlighted the big need for the agreement to be passed as soon as possible.

During an official visit to Hungary over a week ago by Vietnam’s Prime Minister Pham Minh Chinh, Hungary’s PM Viktor Orban pledged to urge fellow EU nations to endorse the EVIPA during his country’s presidency of the EU Council in the second half of 2024. Also, while paying an official visit to Romania last week, PM Chinh also asked this nation to urge EU countries to soon adopt it. Hungary and Romania were among the first nations to approve the agreement.

During an official visit to Vietnam by Dutch Prime Minister Mark Rutte last November, PM Chinh suggested that the Netherlands soon ratify the agreement, and encourage Dutch firms to invest more in Vietnam in high technology, seaports, and strategic infrastructure.

PM Rutte agreed to speed up the ratification, spoke highly of Vietnam’s efforts to promote sustainable fisheries development, and pledged to work with other EU members to support Vietnam in the field.

MoFA Minister Bui Thanh Son said that the EVIPA aims to protect investors and financing in both Vietnam and the EU markets and ensures that they will be accorded fair treatment. “Vietnam wants to woo more EU investment, and it will serve as a protector of investors’ rights and benefits, in addition to our improved business climate,” Son said.

However, Lange also told VIR that currently investment from the EU keeps increasing even without the EVIPA, and thanks to the EU-Vietnam Free Trade Agreement.

“Full ratification will serve as a big impetus for the investment ties. However, what is also essential is that Vietnam must improve its business and investment climate, especially when it comes to administrative procedures, management, and licensing projects,” Lang said. “For example, currently many cumbersome and complicated procedures are making it difficult for EU wind and solar power plants to be licensed.”

Once taking effect, the EVIPA will “have many positive impacts” on Vietnam’s investment and business environment, according to the Vietnamese Ministry of Planning and Investment (MPI). Its study indicated that the agreement will “pressurise Vietnam to boost its economic renewal, with a more favourable business and investment climate to be created for EU investors and businesses”. Besides that, Vietnam will also be able to balance its investment attraction and protection of national interests and sustainable development.

Investment from the EU will be facilitated as the EVIPA will allow a rise in the bloc’s investment liberalisation into Vietnam, especially in a wide range of sectors such as finance, distribution, transportation, and telecommunications.

Data from the MPI indicates that the EU has a total stock of investment of about $28.3 billion, with around 2,450 projects.

Total trade between Vietnam and the EU is estimated to hit $59.1 billion last year, with the country’s export and import turnover of $44.1 billion and $15 billion, respectively.

Modelled on the EU-Singapore Investment Protection Agreement, the EVIPA will replace the 20 existing bilateral investment agreements between Vietnam and 21 EU member states. The agreement includes a new investment court system, comprising an investment tribunal and appeal tribunal to resolve disputes between EU investors and Vietnamese authorities (and vice versa).

The system aims to offer a high level of protection for EU investors in Vietnam, ensuring that they are not targeted by abusive treatment disadvantaging them relative to Vietnamese operators, and that their assets are not expropriated without adequate compensation. At the same time, the agreement confirms the right of governments to “achieve legitimate policy objectives, such as the protection of public health, safety, environment or public morals”.

The EU-Vietnam Free Trade Agreement (EVFTA) and the EVIPA were initially negotiated as a single text, but in 2018 the EU and Vietnam decided to split them, following the approach chosen for the trade and investment agreements with Singapore. The EVFTA covers exclusive EU competences, and can therefore be ratified by the EU alone, without involving the member states.

The EVIPA covers non-direct (portfolio) investment and investor-state dispute settlement mechanisms: these are shared competences, on which the EU shares decision-making powers with member states, meaning that the agreement must also be ratified by them. The two texts were signed by the EU and Vietnam in Hanoi in 2019. In 2020, the European Parliament gave its consent to both agreements, followed by the Vietnamese National Assembly in June of that year.

China and Vietnam to cooperate more in agriculture

A delegation from the Ministry of Agriculture and Rural Development travelled to China for negotiations in early January, to promote closer cooperation on agricultural matters, including boosting exports.

"Vietnam and China are currently completing legal reviews for three memoranda on the export of naturally harvested aquatic products, along with farmed crocodile and monkey exports," said Tran Thanh Nam, Deputy Minister of Agriculture and Rural Development.

Both sides have also agreed on bilateral cooperation in various fields, including collaborations in green agriculture technology, emission reductions, and organic crops.

Moreover, the Plant Protection Department is coordinating with the General Administration of Customs of China to finalise prompt market access for fruit products such as pomelo, orange, tangerine, coconut, and frozen durian.

Other items such as traditional medicines, meat, and poultry are also facilitated for import by China.

According to the General Department of Customs, Vietnam's exports to China reached $61.2 billion last year, up 6.4 per cent compared to 2022. Among these, 12 export groups achieved turnovers of over $1 billion each.

The export turnover of agricultural products reached $27.14 billion, up to 18.8 per cent on year. Livestock products, aquatic products, and salt accounted for $515 million, $8.98 billion, and $5.9 million, respectively.

The growth in exports to China shone as a bright spot in Vietnam's overall export performance, especially considering the decline in exports to most major markets.

China is expected to remain a major market for Vietnam’s agricultural goods for more years to come due to its geographical proximity, convenient trade infrastructure, and understanding of consumer tastes.

Various sectors in midst of digital boom

Professionals in IT have a profound impact on various industries, including pharmaceuticals, banking, and finance. A survey of over 2,200 IT professionals during September-October 2023 by leading site ITviec, several interesting findings have emerged regarding the highest monthly salaries and other issues.

Pharmaceuticals, banking, and financial services emerged as the top three, with figures of VND47.9 million ($2,020), VND40.5 million ($1,705), and VND38.6 million ($1,625), respectively.

Vietnam's economic landscape is currently undergoing a period of revitalisation, driven by encouraging economic indicators and strong growth potential. After a modest deceleration to 3.7 per cent in the first half of 2022, the World Bank foresees a resurgence, with projected growth rates of 4.7 per cent, 5.5 per cent, and 6 per cent in 2023, 2024, and 2025, respectively.

This growth is supported by proactive fiscal policies that aim to stimulate short-term demand, eliminate obstacles to public investment, and tackle infrastructure limitations.

The appeal of Vietnam to international investors is clearly demonstrated in the latest data from Vietnam Briefing, a source for doing business in Vietnam.

According to their findings, the financial, banking, and insurance sector successfully enticed seven new projects, amounting to an impressive $1.53 billion in Newly Registered Capital (NRC) between February and July 2023. This sector secured the second spot on the NRC list, highlighting its appeal to foreign investors.

Amid Vietnam's fast-paced digital transformation, influx of foreign investments, and thriving sectors, IT professionals have a golden chance to make significant contributions and enjoy the advantages of the country's economic growth.
The financial landscape of Vietnam is undergoing a transformation due to the exponential expansion of digital financial services adoption, as emphasised in the e-Conomy SEA 2023 report. According to projections, there is a significant growth anticipated in the gross transaction value of digital payments.

It is estimated to increase by 19 per cent from 2022 to 2023, with the value reaching $126 billion in 2023 and an impressive $290 billion by 2030.

In this era of digital transformation, certain industries like digital lending and payment services are becoming increasingly important, facilitating trillions of online transactions and catering to the needs of millions of consumers.

Predictions from industry experts, such as Ha Nguyen, a research manager at SSI Securities Corp, suggest strong credit growth of 12 per cent to 14 per cent from 2024 to 2026.

The impressive growth in Vietnam's economy is set to help the government achieve its ambitious annual GDP growth target of around 6.5 per cent, according to an S&P Global, September 2023 report. This highlights the crucial importance of the banking sector in shaping Vietnam's economic path.

The pharmaceutical sector is experiencing significant growth, with a revenue of $5.9 billion in 2021 and projections pointing towards a potential value of $16 billion by 2026.

According to data from IBM, these projections are optimistic and suggest that the growth can be attributed to an aging population and increased healthcare spending.

There has been a notable increase in capital flowing into the pharmaceuticals sector from foreign corporations, with a particular focus on investments from Japan, South Korea, and the US. The attention from abroad highlights the sector's promising prospects for expansion and creativity.

In light of the growing demand for tech-driven services in healthcare, major drug retailers are increasingly meeting this market need with greater confidence.

By December 2023, the Long Chau chain had established a strong market presence, experiencing an impressive quarterly growth rate of 23 per cent since 2020.

Another major chain, An Khang, has also noticed a surge in the demand for modern drug retail services. Given the increasing number of users embracing modern healthcare services, there are numerous exciting projects and lucrative opportunities available for IT professionals skilled in handling complex healthcare systems and data.

The generous salaries earned by professionals in the IT field within the pharmaceuticals, banking, and finance sectors reflect the current state of prosperity and the promising outlook for continued growth.

In the midst of Vietnam's fast-paced digital transformation, influx of foreign investments, and thriving sectors, IT professionals have a golden chance to make significant contributions and enjoy the advantages of the country's economic growth.

The trajectory is evident – Vietnam has become more than just a place for investment; it is a promising hub for IT professionals who are skilled in handling advanced banking, finance and healthcare technologies and regulations.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes