To benefit from Artificial Intelligence (AI), Vietnam needs to invest in the AI ecosystem in different factors and fields, including computer hardware and software, cloud computing, data, machine learning algorithms, AI applications, user markets, and regulatory systems, said Torus.AI (Torus Actions) Company's Director - Distinguished Professor of Mathematics, University of Toulouse Nguyen Tien Dung.

Speaking at a talk “Investment for AI: Opportunities for Vietnam” held by Tia Sang Magazine on May 7, Dung said that AI is an industry that opens up a lot of career opportunities for people and students at home and abroad. In the race for AI research and development, the industry is predicted to generate more than 15 trillion USD, equivalent to more than 10% of the world economic output annually from 2030.

Vietnam now has economic and scientific potential, especially since the country has well-trained young AI researchers and it is ranked second in Southeast Asia in terms of a number of AI patents.

However, the weakness of Vietnam is that the new data and computing infrastructure is at an early stage.

Although there is a lot of data, the data is scattered everywhere and it needs to be processed and standardised, he said.

Suggesting a development strategy for Vietnam through 12 aspects of the AI economy, Dung emphasised that to benefit a lot from AI, Vietnam must invest heavily in the AI ecosystem in many different factors and fields including computer hardware and software, cloud computing, data, machine learning algorithms, AI applications, user markets, and regulatory systems.

Every field is necessary and has many opportunities, but each individual, organisation, and country needs to choose the fields in which they have advantages, few barriers, and the easiest to create surplus value, Dung said, adding that it also needs to keep learning, cooperating and importing technologies to overcome its shortcomings.

According to the National Strategy on Research, Development, and Application of Artificial Intelligence (AI) to 2030 issued under Decision No.127/QD-TTg dated January 26, 2021, of the Prime Minister, Vietnam sets a target of turning AI into a spearhead technology and gradually becoming a bright spot in AI in the region and the world.

Bright prospects ahead for exports to Japan and RoK

With Vietnamese goods making up only 2.7% and 3.3% in Japan and the Republic of Korea, respectively, there remains a wealth of opportunities open for Vietnamese exports to enter these promising markets, according to the Ministry of Industry and Trade (MoIT).      

Do Quoc Hung, deputy director of the Asia-Africa Market Department under the MoIT, revealed that both Japan and the RoK have great import demand in areas where Vietnam has strengths.

Japan imports garments and textiles worth about US$24 billion annually, although Vietnamese export turnover to the market stands at only US$2.9 billion, equivalent to roughly 12% of the market share in Japan.

Vietnam also exports leather and footwear products worth US$823 million to this market, accounting for only 18% of the overall market share.

Moreover, some Vietnamese agricultural exports such as bananas, frozen vegetables, coffee, cashew nuts, aquatic, and wooden products make up just 0.6%, 1.6%, 14%, 5.2%, 22%, and less than 5% of the market share in Japan, respectively.

Hung pointed out that Vietnamese exports to both Japan and RoK enjoy tax incentives under the signed free trade agreements (FTAs) with tariffs placed on garments and textiles, aquatic products, and fruits slashed to 0%.

Meanwhile, other countries in the region such as China, Bangladesh, and India are subject to high tax rates when exporting products to these markets.

However, Vietnamese businesses are currently encountering difficulties in meeting the high import standards set in terms of quality and sustainability for the environment and society, Hung noted.

In addition, local businesses have not fully tapped into distribution channels, with management capacity remaining weak.

Insiders have  advised local firms to strictly monitor market requirements and stringent regulations set on food hygiene, safety, and traceability by importers, as well as further exploring consumer trends and tastes in a bid to boost exports to these markets moving forward.

Japan and the RoK are currently the two leading foreign investors in Vietnam. They are also Vietnam’s two major economic partners accounting for more than 20% of its total trade turnover with the world.

Vinacomin exports 23,000 tonnes of coal to South Africa

The Vietnam National Coal – Mineral Industries Group (Vinacomin) on May 7 delivered 23,000 tonnes of coal to South Africa.

This is the first time that the group has exported the product to the South African market this year.

Vinacomin is planning to export more than 60,000 tonnes of coal from now to the end of May. The export is expected to help the group increase sales and ensure stable exploitation and delivery of coal from mines in the Cam Pha area, the northern province of Quang Ninh.

Strategy set to bridge major gap between domestic, international standards

The National Standardisation Strategy for 2030 has set a target of raising Việt Nam’s harmonisation ratio with international, regional and foreign standards to at least 65 per cent by 2025 and 75 per cent by 2030.

As Việt Nam is integrating into the global economy, and is a member of the World Trade Organisation (WTO), the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) forum, as well as new-generation free trade agreements, the country has to observe stringent regulations and requirements on technical standards in foreign markets.

In fact, Vietnamese goods draw warnings from foreign countries repeatedly due to their failure in satisfying technical standards and barriers set by importers.

The Việt Nam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Việt Nam) under the Ministry of Agriculture and Rural Development reported that last year it received nearly 1,000 notices relating to food safety and animal and plant quarantine. The complaints are up 10 per cent year-on-year, mostly from Japan with 83 notices, followed by Brazil, the EU, Canada, and the US. 

To handle this issue, Việt Nam must raise its standards harmonisation ratio toward international acceptance.

According to the Directorate for Standards, Metrology and Quality, Việt Nam’s current national standards system, with over 13,500 standards in most economic sectors, has a harmonisation ratio of over 60 per cent with regional and international standards.

Despite a remarkable number of national standards, Việt Nam’s Global Quality Infrastructure Index scored only 54, behind many countries such as China, Japan, the Republic of Korea (RoK), India, Indonesia, Singapore, and Malaysia.

Currently, its national standards are built and managed by 13 ministries. However, the process has shown a lack of long-term orientations and consistency among them.

The SPS suggested Việt Nam raise its harmonisation ratio with international standards to respond to trade barriers imposed by other member countries of the FTAs and reduce violations.

To meet the Government’s target by 2030, Việt Nam needs to quickly build and issue the standardisation strategy, striving to become a member of the International Organization for Standardisation, and the International Electrotechnical Commission in 2025.

The country also needs to complete building a database for the national standardisation system and complete the digital infrastructure connected with ministries, agencies and localities. 

Retail spending rises sharply during holidays in HCM City

Retail spending in HCM City during the Reunification Day holidays (April 29 to May 3) increased by 100 to 200 per cent as many families spent the five-day holiday at commercial centres and supermarkets.

Reports from a number of commercial centres and supermarket chains in the city show that spending on essential consumer goods during this holiday increased two or three times compared to normal weekdays.

The increased spending focused on vegetables and fruits, sea food, frozen and semi-processed foods, convenience store food, beer and soft drinks.

A representative of LOTTE Mart said the number of customers at the shopping centre expanded by about 80 per cent and its revenue grew by 45 per cent compared to normal days thanks to various promotion programmes and entertainment activities.

Strong spending was also reported at supermarkets such as Big C and Co.opmart, as well as in traditional markets such as Ben Thanh, Tan Dinh, Nguyen Van Thoi and Ba Chieu.

The trend is expected to continue in the next few days when people return to the city after the holiday.

Retailers have offered abundant quality products and services at stable prices in an effort to promote their prestige and raise consumer confidence.

According to a report by the City Statistics Office, in April 2023, sales of a number of goods and services grew, including food and food retail, which increased by over 4 per cent; household appliances increased by 11.4 per cent; phones, computers and electronic components surged by 33.8 per cent.

Total retail sales of consumer goods and services in April 2023 increased by 12.2 per cent over the previous month and up 6.2 per cent compared to April 2022. Through the first four months of 2023, sales increased 5 per cent over the same period.

Many discounts and promotions taking place to stimulate consumer demand during this holiday also brought positive results to retailers and businesses with higher spending than usual.

However, compared with the time before the COVID-19 pandemic, the growth of commercial and service activities is still slow because the number of international visitors to the city has not increased much, therefore eating, drinking and entertainment activities have not yet recovered strongly, people's incomes have not increased as expected and there is still a saving mentality. 

PPP model needs more balancing, equality for private investors

Viet Nam's increased demand for infrastructure development in the coming years requires governmental policies that encourage the private sector's participation, said economists and policymakers.

According to estimates from the Asian Development Bank (ADB), by 2030, Viet Nam's basic infrastructure investment needs will amount to around US$480 billion.

Infrastructure projects play a key role in spearheading the country's socio-economic development, especially those in the transport and industrial sectors.

To speed up the process, the government has implemented several legal frameworks and policies, including the Law on Investment in the Form of Public-Private Partnerships (PPP) in 2020 and several decrees and regulations.

Such moves aim to provide comprehensive guidelines and regulations on how to form public-private partnership projects.

However, there are still many shortcomings and limitations, according to economists.

Vu Tien Loc, chairman of the Vietnam International Arbitration Center (VIAC) and former chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said the private sector's participation would be the solution to the country's infrastructure problems, given the state's limited budget.

In addition, PPP projects typically would offer opportunities to introduce more efficient financial and construction management, as well as more advanced technologies.

Current regulations, however, had not managed to find a balance for PPP projects on responsibilities, interests, and risk sharing among players, a major setback in attracting more private investors.

Le Dinh Vinh, a lawyer from Vietthink Law Firm, said many PPP projects faced prolonged land transfer, compensation, clearance, and resettlement issues.

It's often difficult for investors to gain access to long-term credit or benefit from lower interest rates. There have also been grievances over the slow disbursement of state capital.

According to Vinh investors often face more risks in the planning and construction phases. Even when a project is completed, risks continue with capital return, contract modification, and revenue-sharing mechanisms.

In addition, policy changes, inflation, exchange rates, and taxes remain all factors that can hurt investors' bottom line.

A common issue investors have with the current PPP framework is a lack of unity, clarity, and transparency across economic sectors and localities. In many places, the state's representative still views private investors not as partners but as subjects for micro-management.

When things go wrong, investors' interests are often the first to be ignored.

To address said issues, Loc urged the Government to quickly implement a detailed description of each party's rights and obligations, emphasising the amount of risk and difficulties they have to handle.

It's time the Government started building a conflict management mechanism for PPP projects to handle potential disputes during and after implementation.

Disbursement of public investment capital slows in 4 months of 2023

The disbursement of public investment capital was only more than VND110.63 trillion in the first four months of 2023 though the Government has taken many solutions to speed up and remove difficulties for the work, the Ministry of Finance estimated.

The value was equal to only 14.66 per cent of the plan, compared with 18.48 per cent of the same period in 2022.

Three ministries and agencies, and 19 provinces and cities currently have a disbursement rate of more than 20 per cent, including Dong Thap Province with 38.3 per cent, Ben Tre Province with 36.96 per cent, the Management Board of Ho Chi Minh Mausoleum with 36.66 per cent, Tien Giang Province with 33.85 per cent and Phu Tho Province with 32.99 per cent.

However, there are still 47 ministries and agencies, and 27 provinces and cities with disbursement rate below 15 per cent of the set plans. Thirty-two ministries and agencies, and a province even disbursed less than 5 per cent of the set plans. For example, the Ministry of Culture, Sports and Tourism; the Ministry of Education and Training and Ministry of Science and Technology disbursed only 0.25 per cent, 1.1 per cent and 3.45 per cent, respectively. The Committee for Ethnic Minority Affairs and the State Audit even had a disbursement rate of zero.

According to the Ministry of Finance, the Government’s leaders last month organised inspection teams to urge and remove difficulties and obstacles with an aim to accelerate disbursement of public investment capital in 2023 at ministries and agencies. The inspection found a number of existing problems and difficulties that have affected the disbursement.

First, some projects need to prepare for investment in 2023 but cannot allocate capital because the project’s approved medium-term plan for the 2021-25 period does not separate investment preparation capital and implementation capital. As a result, the project does not have the capital to carry out the investment preparation, which affects the approval progress of the project.

Besides, some investment preparation tasks are still slow due to problems in land procedures, adjustment of detailed planning of construction land, and site clearance.

In addition, there are problems caused by rising prices of construction materials, regulations on fire safety, environmental protection and design.

To boost the public investment capital flow, with the responsibility for capital management and payment, the Ministry of Finance is proposing the Prime Minister assign the Ministry of Planning and Investment in having specific instructions on conditions for allocating capital for investment preparation in the medium-term and annual public investment plans so that ministries and agencies can have a basis for unifying implementation.

At the same time, the Ministry of Finance has also proposed the Prime Minister direct ministries, agencies and localities to strictly implement the reporting regime as prescribed.

The Ministry of Finance has also requested the Ministry of Planning and Investment to soon complete the dossier to submit and report to the Government on the extension of time for implementation and payment of public investment capital from the State budget from 2022 to 2023 for ministries and agencies according to the Government’s direction.

Besides, the Ministry of Planning and Investment must coordinate with the Ministry of Transport to report to the competent authorities about the allocation of capital plans from sources of revenue increase thanks to the reduction and savings in central budget expenditure in 2021 for component projects for implementation.

For ministries and agencies, the Ministry of Finance has proposed to implement Directive No. 08/CT-TTg dated March 23, 2023 of the Prime Minister on key tasks and solutions to promote allocation and disbursement of public investment capital, as well as three national target programmes in 2023 to urge the allocation and disbursement of public investment plans of the State budget in 2023. 

Housing supply expected to increase in the future with new credit package

The housing supply in the domestic market is expected to increase in the future thanks to a credit package of VND120 trillion for social housing development and a project on developing one million social houses, as well as other solutions removing existing obstacles.

This credit package is carried out by four State-owned commercial banks, Vietcombank, Agribank, BIDV and VietinBank, with annual interest rates from 8.2 to 8.7 per cent. This programme has been implemented since April 1, 2023.

This is also one of the important factors in promoting the development of social housing, meeting most people's needs.

Regarding this credit package, the State Bank of Viet Nam issued Document No 2308/NHNN-TD on April 1, 2023, guiding the lending interest rates, the application period of the preferential interest rates and the beneficiaries (customers).

Meanwhile, the Ministry of Construction issued Official Dispatch No 1551/BXD-QLN on April 20, 2023, guiding the determination of the list of projects, subjects, conditions and criteria for preferential loans for developing social housing and worker housing and renovating and rebuilding old apartments.

Phung Thi Binh, deputy general director of the Bank for Agriculture and Rural Development of Viet Nam (Agribank), said that the bank has so far provided loans under this credit package for two projects.

Le Ngoc Lam, general director of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV is waiting for the Ministry of Construction to announce the list of eligible projects.

Nguyen Quoc Hung, general secretary of the Viet Nam Banking Association, said the banking industry has many solutions to implementing the credit package. Still, there are obstacles in ministries, sectors and localities.

The banks have agreed to reduce interest rates. Therefore, it is necessary to have solutions from ministries, sectors and localities to speed up the progress of lending, said Hung.

Finance expert Nguyen Tri Hieu said this support package is a short-term solution that the Government and the banks can immediately implement to support the property market.

This credit package will be absorbed quickly because of its small scale and being launched when the real estate market is very thirsty for capital. Loan procedures will be done in two weeks for eligible projects and customers. The loans can be disbursed in one month after the courses are approved.

The market's absorption capacity depends on the conditions of providing loans under the package and the efficiency in implementing this package, he said.

Primarily, it is necessary to have a monitoring mechanism so that capital flows to suitable projects and the right businesses to pay for the debt. That will avoid the situation that people who are not low-income or already have a house but still enjoy the support, Hieu said.

Besides that, many people need the loans from this package, but they cannot prove their income to qualify for loans if they do not have a bank account transaction, even though they have income and the ability to pay, he said.

Le Hoang Chau, chairman of HCM City Real Estate Association, has also added that it is necessary to consider the investment in social housing development for low-income workers as the priority in the investment of local medium and long-term capital.

In addition, it is necessary to supplement regulations on capital sources for housing development, such as mobilising capital from local development investment funds and foreign investment for social housing development.

Chau has suggested that the Government should continue to study and submit to the National Assembly for approval on a credit package worth around VND110 trillion ($4.6 billion) in the form of financing for commercial banks to refinance social housing projects and housing projects for workers with a preferential interest rate of about 4.8-5 per cent each year for a maximum period of 25 years. The VND110 million package is similar to the VND30 trillion package in 2013-16.

Nguyen Quoc Khanh, chairman of DTJ Investment and Distribution Joint Stock Company, said that capital is a necessary factor at this time, but it is still not enough. Besides capital, the investors of social housing projects always want the project investment procedures and disbursement procedures to be resolved quickly.

To effectively disburse this credit package, overcoming the bottlenecks in current social housing development is still necessary. Specifically, it is to establish a land fund for social housing development as soon as possible and reduce procedures in receiving approval for the projects and trading social housing products, Khanh said.

The Government has approved a project to build one million social housing units from now to 2030. So now, localities have more than 300 social housing projects with about 400,000 apartments.

Viet Nam expects to have a total of 1,062,200 social housing apartments by 2030, including about 428,000 apartments in the period of 2021-2025 and about 634,200 apartments in the period of 2025-2030.

This project targets to develop social housing, housing for workers with affordable prices for middle- and low-income households in urban areas and workers in industrial parks and export processing zones.

Deputy Minister of Construction Nguyen Van Sinh affirmed that besides the VND120 trillion credit package, the Government had introduced a series of solutions to amend the institution, create a land fund, and support taxes and land use fees for communal housing projects.

Those solutions are efficient according to the market demand at present; the problem is how to implement those by stakeholders efficiently, Sinh said.

He believes that in the future, besides many existing projects that will overcome the difficulties, the project of one million social housing units will make the housing supply on the market more abundant, contributing to bringing house prices back to a more suitable level with people's income. 

Business investment forum to open in Tay Ninh in June

 A series of opportunities to invest in the agriculture sector in the southern province of Tay Ninh will be introduced at the “Businesses connection forum to invest and develop high-tech agricultural ecosystem in Tay Ninh province in 2023", which will be organised on June 2.

The forum aims at introducing and promoting the potential, strengths, investment incentives and policies of Tay Ninh Province; helping domestic and foreign investors to access key projects, especially ones in economic zones, tourist resorts and agricultural projects, especially in high-tech agriculture.

The forum is also an opportunity for the province to invite reputable businesses and strategic investors with financial and technological strengths to invest in high-tech agriculture, in line with the province's socio-economic development plan so that they will contribute to local economic development.

"Through this forum, the provincial People's Committee wants to meet and connect with both domestic and foreign investors to establish co-operation relationships and attract investment, said Nguyen Thanh Ngoc, chairman of Tay Ninh Province's People's Committee.

At the forum, investment trends and experiences in attracting investment from members of the European Business Association in Viet Nam (EuroCham) will also be shared.

"Viet Nam is opening up many business opportunities for EuroCham members and partners to maximise their potential in the Vietnamese market, including high-tech agriculture. With EuroCham's foundation and extensive network, I believe that EuroCham can make landmark changes in the agricultural sector in Viet Nam," said Gabor Fluit, president of EuroCham in Viet Nam cum the co-chair of the forum.

With more than 1,300 members, EuroCham has become one of the largest foreign business associations in Viet Nam. Many of the members are operating in the field of high-tech agriculture and have been very successfully investing in the country. This is also the motivation for EuroCham to decide to co-operate with Tay Ninh Province's People's Committee to organise the forum.

The forum, which is expected to attract around 400 guests, is expected to be attended by Government leaders and representatives from relevant ministries and businesses of EuroCham and local enterprises such as De Heus Group and Hung Nhon Group.

Vinacomin exports 23,000 tonnes of coal to South Africa

The Vietnam National Coal – Mineral Industries Group (Vinacomin) on May 7 delivered 23,000 tonnes of coal to South Africa.      

This is the first time that the group has exported the product to the South African market this year.

Vinacomin is planning to export more than 60,000 tonnes of coal from now to the end of May.

The export is expected to help the group increase sales and ensure stable exploitation and delivery of coal from mines in the Cam Pha area, the northern province of Quang Ninh.

Petrovietnam seeks measures to restart Long Phu 1 Thermal power project

The Vietnam Oil and Gas Group (Petrovietnam) and contractors are discussing measures to restart Long Phu 1 thermal power project that has been postponed since 2019.

At a meeting with the project management board and contractors last weekend, Petrovietnam General Director Le Manh Hung, Petrovietnam Deputy General Director Pham Tien Dung, other managers of the group and contractors, including the Petrovietnam Technical Services Corporation (PTSC) and the Petrovietnam Construction Joint Stock Corporation (PetroCons), discussed the deadline to complet the project, total new investment amount, the best options to carry out and implementation plans.

Petrovietnam General Director Le Manh Hung asked the Long Phu 1 Project Management Board to coordinate with relevant departments to soon identify options and implementation plans.

Hung also requested the Long Phu 1 Project Management Board to establish working groups to update the total project estimate, review the legal status of contracts, and re-evaluate the capitalisation value of the project.

He asked PTSC to continue to support the Long Phu 1 Project Management Board to better evaluate, classify and maintain machinery and equipment on the construction site, making it ready to restart the project.

According to the Long Phu 1 Project Management Board, since Russian constructor Power Machines Company withdrew from the project due to the US’s sanction on January 26, 2018, the project's completed workload was still kept at over 70%. Meanwhile, the company announced the termination of its EPC contract on February 22, 2019.

At a meeting late last year, the Project Management Board also said that it was coordinating with Petrovietnam and the legal consultant to prepare and complete procedures to submit to the international arbitration council at the Singapore International Arbitration Center (SIAC).

The magement board also completed the plan to restart the project. Accordingly, the project is expected to be completed by 2026 and the board prepared for the selection of a new EPC contractor.

The construction of the Long Phu 1 Thermal Power Plant in Long Phu district, Soc Trang province, started in early 2011. The project consists of two turbines with a total installed capacity of 1,200 MW. Once put into operation, the plant will contribute to the national grid with about 7.8 billion kWh per year.

Northern region faces high risk of serious electricity shortage

The northern region is facing a high risk of serious electricity shortage this summer due to rising demands and low output of hydropower plants as a result of unfavourable weather conditions, according to the Vietnam Electricity (EVN).

In a report to the Ministry of Industry and Trade, the EVN underlined that the water level of reservoirs in the northern region in the first four months of this year was equivalent to 70-90% of the average in many years. Similar situation was also seen in many other reservoirs in the central and southern region.

As of April 24, the water level had been low enough to pose a risk of affecting power security and electricity supply for daily activities in the rest of this year’s dry season. As a result, the remaining capacity of producing electricity of reservoirs in the whole system is 4.5 billion kWh, 1.6 billion kWh lower than the plan, and 4.1 billion kWh lower than the same period in 2022.

According to the National Centre for Hydrometeorological Forecasting, the El Nino phenomenon will occur in the last months of 2023, causing the temperature to rise and the rainfall to be lower than the average of many years. This is likely to make the flow to the lakes in the last months of the year to decrease.

Meanwhile, the supply of fuel for coal and gas power plants is also limited due to low production and exploitation. EVN-managed plants will face a shortage of 1.3 million tonnes of coal.

Production from renewable energy sources such as wind power in May, June, and July are also forecast to be lower than 2022.

The EVN held that in the event of extreme situations such as a year-on-year rise of 15% in power consumption in the north due to hot weather, power system incidents and a sharp fall in the water level of large hydropower reservoirs, the northern region may face a power shortage of up to 1,600- 4,900 MW in May and June.

To prevent the situation, the EVN will optimise hydroelectric power sources in the north, while increasing power transmission from the central region to the north and regulating water sources to ensure operations of hydropower projects.

At the same time, it will also intensify inspections to minimise incidents, and speed up the negotiations for electricity purchase from renewable energy projects.

The EVN also underlined that saving electricity and using electricity efficiently is a very important solution to ensure enough electricity during the hot period.

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