Gdp

The country’s economic growth in the second quarter of the year is expected to be lower than expected. However, the economy will also continue recovering strongly, with processing and manufacturing, and the service sector serving as key drivers of growth.

At a recent government cabinet meeting, the Ministry of Planning and Investment said that based on positive performance of the economy in the first five months of 2021, it is projected the nation’s economic growth rate will be about 5.8%. This will be lower than the target of 7.11% set in Government Resolution No.01/NQ-CP, released on January 1, on the key tasks for the implementation of the socioeconomic development plan and state budget estimates for 2021 (see box).

The driving force of Vietnam’s economic growth this year will be the industrial-construction sector and the service sector, especially processing and manufacturing, the MPI said.

According to the General Statistics Office (GSO), in May, the resurgence of the COVID-19 pandemic has caused disruptions in supply chains and trade, as well as transport activities in a number of localities who are home to big industrial production like Bac Giang, Bac Ninh, and Ho Chi Minh City.

However, in the first five months, trade and transport activities still increased as compared to the same period last year.

Specifically, the total retail and service consumption revenue of the entire economy expanded 7.6% to more than VND2 quadrillion US$86.96 billion, and total import turnover of goods went up by 33.5%, while passenger transportation rose 4.2%, and goods transportation climbed 10.5%.

Global analysts FocusEconomics (based in Spain) said that Vietnam’s economy recorded solid growth in the first quarter of 2021. GDP growth clocked in at 4.5% year-on-year in the first three months of this year, matching the growth rate from the last quarter of 2020.

As such, while the first quarter’s readings marked the joint-strongest expansion since the fourth quarter of 2019 and are likely to be well above those of other key ASEAN economies, it nevertheless undershot market analysts’ expectations of a near-6% growth rate.

“Looking at subsectors, growth in the industrial sector rose to 6.3% in the first quarter of the year (the fourth quarter of 2020: +5.6% year-on-year), with the manufacturing subsector continuing to play a driving force in overall economic activity,” FocusEconomics analysts said. “On the other hand, growth in the services sector slowed to 3.3% year-on-year in the first three months of 2021 (Q4: +4.3% year-on-year) and agricultural production growth ebbed to 3.2% (the last quarter of 2020: +4.7% yoy). Looking ahead, the economic recovery should gather pace later in 2021, with the second quarter’s outturn projected to be significantly higher than in the first quarter of the year.”

The GSO also said that Vietnam’s production activities strongly bounced back in general in the first five months. Specifically, the economy’s index for industrial production (IIP) expanded by nearly 10% as compared to 1% in the corresponding period last year.

Notably the manufacturing and processing industry increased 12.6% in comparison with only 2.2% in the corresponding period in 2020.

The IIP in May climbed 11.6% as compared to the corresponding period in 2020, when it decreased 3.1%.

Also according to the GSO, in the first five months of 2021, as many as 55,800 businesses were newly established, with total registered capital of VND778.3 trillion (US$33.84 billion), employing 412,400 new labourers, up 15.4% in the number of enterprises and 39.5% in registered capital.

If another VND975.1 trillion (US$42.4 billion) registered by 19,100 operational enterprises is included, total capital inserted into the economy in the period was VND1.753 quadrillion (US$76.2 billion), up 27.5% year-on-year. Furthermore, 22,600 businesses also resumed operations, up 3.9% year-on-year.

According to FocusEconomics, the economy is forecast to expand rapidly this year, with growth set to outstrip regional peers, strengthening domestic and foreign demand dynamics. However, further outbreaks of the virus and a relatively slow vaccine rollout are causes for concern, while the sti?ed state of the tourism sector poses an additional risk.

“Our panellists expect GDP to expand 7.1% in 2021, and 6.8% in 2022,” said FocusEconomics analysts.

The network of the German Chambers of Commerce Abroad (AHKs) said that German businesses are showing optimism about Vietnam’s economy in the medium term and look forward to a recovery year heading towards 2022.

Despite the pandemic, Vietnam is becoming a strategic investment destination in the process of restructuring the global and regional supply chain, a potential domestic market to attract international corporations, according to a AHK World Business Outlook Survey conducted in spring 2021 and released two weeks ago.

“Vietnam is still one of the countries with the fastest economic growth in Southeast Asia. Foreign-invested enterprises, especially German businesses, are also showing optimism about Vietnam’s economy in the medium and long term,” said the survey. “German business leaders in Vietnam maintain a positive view with the economic expectation as well as with their situation in Vietnam and they look forward to a recovered year of 2021 and 2022.”

Under the survey, 55% rate their current business situation in Vietnam as good, and 11% as poor, while in 2020 only 36% had a positive view of their situation in Vietnam. Negative ratings fell from 23 to 11%.

Furthermore, 47% of German companies in Vietnam intend to expand their activities in the country – up from 22.7% in spring last year, and 50% assume an increase in employment in 2021/2022 – up from 27.3% in the spring of 2020. About 65.8 and 73.7% expected the country’s economic and business situation will get better this year.

In the same vein, according to new data from the European Chamber of Commerce in Vietnam, when asked about the prospects of Vietnam’s business environment in the April-June period, 67% of its members predicted either ‘excellent’ or ‘good’, up 12% on-quarter.

Meanwhile, business leaders are also more optimistic about their own companies. More than two-thirds (68%) forecast that their orders and revenue will ‘maintain or increase’ during April-June, up 25% from the fourth quarter of 2020.

In 2020, Vietnam surprised the world with its impressive control of COVID-19 and its inspiring economic growth rate of 2.91% in 2020, an average annual rate of 6.8% in the 2016-2019 period, making the country one of the world’s top 10 nations in terms of growth, and also one of the 16 most successful emerging economies in the globe in 2020.

Last year, the economy’s GDP was estimated at about US$268.4 billion, up US$11.4 billion against 2019, fourth in Southeast Asia, with total export-import turnover of US$543.9 billion, up 5.2% year-on-year – a record trade surplus of US$19.1 billion, notably in the context of strong decline in global trade.

Vietnam a bright spot for foreign investors: experts

Vietnam has been chosen among leading destinations in Southeast Asia by Japanese investors, Nakajima Takeo, Chief Representative of the Japan External Trade Organisation (JETRO) in Hanoi, has said.

Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Torben Minko said that European firms are confident about Vietnam’s efforts in COVID-19 prevention and control, as industrial parks maintain operations, the number of laid-off workers is kept to a minimum and the supply chain is maintained.

A recent survey by EuroCham revealed that the Business Climate Index (BCI) hit 73.9 points in the first quarter of this year, the highest level since the Q3 2019, before the pandemic broke out.

When asked about the prospects of Vietnam’s business environment in the next quarter, 67% predicted either “excellent” or “good” – a 12% increase compared to the previous one.

EuroCham Chairman Alain Cany said that while COVID-19 wreaks havoc in countries around the world, Vietnam can be certain that companies can operate their business without interruptions.

For her part, Michele Wee, Chief Executive Officer at Standard Chartered Bank Vietnam, said that FDI influx to Vietnam will be maintained in the medium term.

The country posted a GDP growth rate of 2.91% in 2020, being among economies with the highest economic expansion in the year.

Foreign investors pumped nearly US$14 billion into the country as of May 20, a year-on-year increase of 0.8 percent, according to the Ministry of Planning and Investment.

Disbursed FDI in Vietnam hit US$7.15 billion in the first five months, an increase of 6.7% compared to the same period last year.

Global credit rating agencies of Moody’s, S&P and Fitch recently revised Vietnam’s outlook to “positive”.

Hanoi’s tourism prepares recovery plan after COVID-19

Although the COVID-19 pandemic has seen continuous complicated developments and caused negative impacts on tourist activities in Hanoi, the capital city’s hospitality sector has prepared a recovery plan for as soon as the pandemic is under control.

Accordingly, in the second half of this year, the city’s Tourism Department has asked tourism businesses, organisations and agencies in the city to strictly observe COVID-19 prevention and control.

The Department will continue to advance the application of information technology in managing tourist activities and the supervision of travel agencies and tour operators who meet COVID-19 safety standards based on the Ministry of Culture, Sports and Tourism’s set of evaluation indicators.

In addition, the department will take action to improve the quality of tourist products, increase the attractiveness of destinations, develop tours promoting the value of heritages, relic sites and craft villages in the city.

The department will also coordinate with the city’s authorities in planning festivals and cultural events when the COVID-19 pandemic is brought under control.

In the first five months of this year, the city received 2.89 million domestic visitors, down 6.7% over the same period in 2020, and earned VND 8.1 trillion in tourism revenue, down 50.7% due to the impact of COVID-19. In May alone, domestic holiday-makers coming to the capital numbered 115,000, a steep decrease of 55.3% year-on-year.

Vietnam’s protective equipment production rises six-fold

Vietnam’s production of personal protective equipment (PPE) rose six-fold last year, according to the World Bank’s International Finance Corporation (IFC).

The IFC said on June 9 that it is helping developing countries, including Vietnam, with PPE production, with an aim to provide front-line medical staff with quality and trustworthy products and curb COVID-19 spread.

Vietnam is emerging as one of the new PPE suppliers in the global market as a number of garment companies have shifted to producing PPE to cope with medical emergency status and mitigate losses caused by their cancelled orders, it said.

The corporation added that the global demand for PPE such as medical masks, gloves, glasses, protective shoes, protective suits and respirators soared 3-4 fold during 2019-2020, which is expected to keep rising by 6-9 percent annually till at least 2025./.

Conference links Vietnamese, Japanese firms in supporting industries

Twenty-one Vietnamese enterprises in supporting industries and 48 Japanese businesses took part in an online conference on June 10, where they exchanged information and sought partners.

Vu Ba Phu, Director of the Vietnam Trade Promotion Agency (Vietrade) at the Ministry of Industry and Trade, briefed the conference on Vietnam’s foreign trade activities, with export revenue in the first five months of this year estimated at 130.94 billion USD, up 30.7 percent year-on-year.

The export value of phones and spare parts increased 19.6 percent; computers, electronics and components 26 percent; and machinery, equipment, tools, and spare parts 74.8 percent, he continued.

Vietnamese enterprises in supporting industries are growing in terms of both number and quality, and integrating intensively into global production chains, Phu said.

They account for nearly 4.5 percent of enterprises operating in the processing and manufacturing sector, generate jobs for more than 600,000 workers, or nearly 8 percent of the workforce in the processing and manufacturing sector, and contribute 11 percent of total revenue in the sector.

In his remarks, Masataka Fujita, Secretary General of the ASEAN-Japan Centre (AJC), pledged that it will make greater efforts in promoting trade between Vietnam and Japan in the future.

Akutsu Michio, an expert from the Association of International Business Advisors, meanwhile, pointed out the challenges to Vietnamese supporting enterprises such as low productivity and a shortage of trained workers.

He suggested enterprises improve their production capacity and product quality and take measures to attract high-quality workers, saying that apart from providing products for Japanese enterprises in Vietnam, domestic businesses should also seek partners abroad.

To facilitate the supporting industries, the Vietnamese Ministry of Industry and Trade launched a database in June 2020 that provides information on more than 3,600 domestic firms operating in mechanics, auto, electronics, and garment-textiles./.

Binh Dinh proposes withdrawing two local ports from planning

The People’s Committee of the south central province of Binh Dinh has proposed the Ministry of Transport and the Vietnam Maritime Administration withdraw two local ports from master planning for seaport development in 2021-2030.

De Gi and Tam Quan ports were proposed to be removed from the planning and instead developed into fishing ports while the lagoon areas would be developed into storm shelters for fishing vessels.

The provincial People’s Committee said for many years, De Gi and Tam Quang estuaries have had low levels of water and narrow channels only suitable for fishing vessels. Currently, no cargo is transported via these ports.

Removing these two ports out of the planning would not cause any problems as no investment projects were being carried out at the ports, the People’s Committee said.

Dang Dinh Dao, former Director of the Institute for Economics and Development Studies, said the proposal had set an example for other localities in making planning in the context that every coastal locality wanted seaports without paying adequate attention to the natural, social, economic or environmental conditions.

A lot of planning had proven to be unrealistic, Dao said, adding that it would be a big problem if every locality had an international seaport and did not pay attention to regional links or master planning.

He said Vietnam had more than 20 international seaports but none of them had received the investment to reach international standards.

He pointed out that there were a number of lessons. The planning of the wholesale market was an example. Many wholesale markets within planning were built but had not been put into operation due to problems attracting sellers and buyers.

Planning must be innovated, not only for seaports but also for other infrastructure developments, he said.

“It’s time localities closely work with central agencies to develop realistic planning which ensures consistency with other socio-economic planning,” he said.

Vietnam is developing new master planning for seaports in 2021-2030 with a vision to 2050 to promote economic development.

There are 286 ports across the country with a total wharf length of 96km, more than 4.5 times longer than in 2000. The seaport system handled a total cargo volume of more than 692 million tonnes in 2020, 8.4 times higher than 2000./.

Can Tho shrugs off COVID, achieves impressive growth

In the first five months of the year, the Mekong city of Can Tho achieved impressive growth in industrial production, retail sales and tourism despite the effects of COVID-19.

Industrial production grew by more than 9 percent year-on-year, and total retail sales and services grew by nearly 15 percent to around 63.1 trillion VND (2.7 billion USD).

The tourism sector is recovering, with its revenues rising by 18 percent to 1.25 trillion VND. The number of visitors grew by nearly 58 percent.

Investment in the city tripled during the period to 1.3 billion USD as it ranked third in the country’s FDI list.

However, only a fraction of the proposed public spending has been disbursed, one of the city’s biggest problems for many years now.

Its exports too fell.

Tran Viet Truong, chairman of the municipal People’s Committee, said that the city has been focusing on both reviving its economy and staying safe from the pandemic.

He instructed official agencies to focus on disbursing public spending funds, acquiring and clearing lands for investment projects and approving project carefully to stop unnecessary changes later.

Can Tho aims to become a major industrial hub and the Mekong Delta’s leading one by 2025, and targets economic growth of 7.5-8 percent a year until 2025.

It is focusing on restructuring its four key sectors, foodstuff and beverage processing, chemicals; machinery and electronics, and electricity generation.

It is also seeking to create a favourable environment for investment through support policies and administrative reforms, and facilitating industrial start-ups./.

Auto sales down 15 pct. in May: VAMA

The Vietnam Automobile Manufacturers’ Association (VAMA) has reported that its members posted a 15 percent month-on-month decline in automobile sales in May to 15,585 units, due to the impact of COVID-19 and a shortage of semi-conductor chips for the industry.

Its members sold 17,581 passenger cars in May, 7,482 commercial vehicles, and 522 special-use vehicles, falls of 14 percent, 16 percent, and 33 percent, respectively, against April.

Sales of domestically-assembled vehicles were down 20 percent month-on-month to 13,825 units, while those of completely-built-up (CBU) vehicles fell 7 percent to 11,760.

In the January-May period, VAMA members sold 126,894 vehicles, up 53 percent against the same period last year, with a 51 percent rise seen in the sales of passenger cars, 56 percent in commercial vehicles, and 59 percent in special-use vehicles.

These figures do not fully reflect the situation in Vietnam’s automobile market, however, as they do not include sales of brands such as Audi, Jaguar, Land Rover, Mercedes-Benz, Subaru, Volkswagen, and Volvo.

A representative from TC Motor said the company sold 6,053 vehicles in May and 28,477 in the first five months of the year. It led all brands in May sales, followed by Toyota with 5.139, Kia 3,336, Mazda 2,426, Ford 1,666, and Honda 1,423.

Toyota Vios was the best-seller during the month, with sales of 1,789, followed by the Hyundai Accent with 1,620.

Industry analysts said that along with COVID-19, a shortage of semi-conductor chips in both the global and domestic market will continue to slow down production at automobile manufacturers over the remainder of 2021 and even into 2022./.

Vietnamese overseas investment triples

Vietnamese firms poured 546.7 million USD into overseas projects in the first five months of 2021, more than triple the figure of the same period last year.

Of the sum, 144 million USD was from 21 newly-licensed projects, down 11.3 percent year-on-year, according to the Ministry of Planning and Investment.

Meanwhile, 403.2 million USD was pumped into nine existing projects, surging 22-fold year-on-year, the ministry said.

A major part of the capital outflow – 271 million USD – was poured into the science-technology sector, accounting for 49.5 percent of the total. The wholesale and retail sector came next with $148.4 million or 27 percent, following by the agro-forestry-fisheries sector and auxiliary services.

Fifteen countries received investment from Vietnam from January to May with the US the top receiver with 303 million USD, holding the lion’s share of 55.4 percent. It was followed by Cambodia with 89.1 million USD or 16.3 percent. Next were Canada and France with 32.1 million USD and 32 million USD, respectively.

Vietnamese firms have increased their overseas investments in recent years to expand their global reach.

As of May 20, Vietnam had 1,420 valid overseas projects worth a total of nearly $22 billion, mainly in the sectors of mining, with 36.4 percent of total capital, while agro-forestry-fisheries had 15.3 percent.

Laos was the largest receiver for Vietnam’s overseas investment, making up 24 percent of the total capital, followed by Cambodia (13.1 percent) and Russia (13 percent)./.

China remains key market for Vietnamese garments and textiles

China is anticipated to become a major market for Vietnamese garments and textiles moving forward due to the country facing numerous challenges when exporting items to the United States, the EU, and Japan this year.

This information was unveiled in a document unveiled at the recent annual general meeting of shareholders by the Vietnam National Textile and Garment Group (Vinatex).

Moving forward, China will not focus on producing apparel and textiles in line with its five-year strategy, thereby turning the northern neighbour into a major consumer of Vietnamese textiles and garments.

During  the first quarter of the year, local garment and textile exports to China witnessed robust growth among the five major markets, achieving the same export turnover as that of EU in the process.

Furthermore, the US remains the largest Vietnamese export market with a growth rate of 5.9% in the first quarter. During the remainder of the year, the US market is expected to bounce back thanks to the implementation of a stimulus package of US$1.9 trillion coupled with the mass rollout COVID-19 vaccination scheme.

The country’s garments and textiles to the EU and Japan will continue to face difficulties in the near future due to the EU facing the risk of a third wave of COVID-19, while the Japanese economy has not shown any signs of recovery, according to Vinatex.

McKinsey’s projection anticipate that the global apparel and textile industry will rebound by the third quarter of next year, or perhaps later in the fourth quarter of 2023.

Currently, Vietnamese garment enterprises have sufficient orders until the end of the second quarter, although prices remain low.

Vinatex predicts that the garment and textile sector will recover one year ahead of scheduled compared to the global forecast.

The industry is striving to achieve a revenue of VND17,365 billion this year, up 17% compared to 2020.

Belgium startup interested in Vietnam’s automation industry

Zorabots, a company specialized in robot and automation in Eastern Belgium, is looking towards Vietnam as a potential market.

Fabrice Goffin, co-founder and CEO of Zorabots said their robots can speak 53 languages including Vietnamese.

Explaining why he chose Vietnam for expansion, Goffin said he has read reports on the vibrant and potential Vietnamese automation market. Besides, before the global pandemic, Vietnam hosted multiple automation exhibitions and fairs with the participation of many prestigious technology and industrial automation companies.

“For a potential country like Vietnam, we will have many opportunities to expand,” the Zorabots CEO said.

Zorabots is currently working with its Vietnamese partners to quickly make its appearance in this market.

“We want to focus on education and health, which are two sectors requiring the support of robots and technology, especially education. Vietnam should prepare its younger generations well since they will master technology in all aspects of life”, Goffin emphasized.

Zorabots was founded by two tech enthusiasts, Fabrice Goffin and Tommy Deblieck, in 2011. The company now has branches in the US, Canada, Australia, Africa and serves customers all over the world. Zorabots computer engineers create software for robots according to customer needs.

Zarobots is installing robots at airports in the Netherlands and France to guide passengers in complying with COVID-19 prevention regulations. The company is pursuing the development of different robot models to serve more people in the coming time./.

Agency banking model develops in rural, remote locations

The State Bank of Viet Nam (SBV) is amending regulations related to the operation of agency banking to improve access to the banking system.

Agency banking is a type of branchless banking that allows traditional banks to extend their network of branches and services through authorised agents.

The model arrived in the country in recent years, especially since the Government issued the national comprehensive financial strategy in early 2020.

According to the SBV’s research, Brazil, Kenya, Mexico and India have all seen agency banking become an important tool to expand access to basic financial services and promote financial inclusion. Five years since Brazil launched the agents, the network has served 12.4 million new bank accounts.

The state bank said in Southeast Asia, Malaysia’s agency banking model uses the nationwide telecommunications network to expand the network of traditional banking services to customers in rural and remote areas at a low cost. The model also helps Malaysian banks save more than 80 per cent of costs for setting up service points and 60 per cent of transaction costs compared to the traditional bank branch network.

According to the latest Comprehensive Financial Report of World Bank released in 2018, 69 per cent of adults in Viet Nam were unbanked and relied on cash while the rate in the world was 31.5 per cent at the same time.

Meanwhile, the national strategy of financial services sets the goal to have at least 50 per cent of communes accessing financial service points and 80 per cent of adults having transaction accounts at banks or other institutions by 2025.

Experts reckon the low rate of bank accessing in Viet Nam is a big chance to develop banking agents across the country.

By the end of 2017, the SBV piloted agency banking in rural areas with three models.

MB Bank work with Viettel services, PGBank with Petrolimex sales points and Vietcombank with M_service Company, reaching 32,185 sales points.

More than 11 million transactions with a value of more than VND81 trillion (US$3.49 billion) were recorded among some 6 million customers.

Outside of the SBV pilot, LienVietPostBank took advantage of post office locations to develop savings services, while Jens Lottner, CEO of Techcombank, shared the bank’s plan to work with Masan Group to take advantage of convenience stores to bring the bank’s financial products and services to a wider population.

Between 2020 and 2025, Agribank plans to set up a network of banking agencies and work with postal organisations, public administrations and microfinance projects to deploy low-cost, convenient, safe products for individual payment transactions.

Seeing the potential of the model, a SBV representative said there must be a legal corridor.

The SBV said completing the legal framework on agents was proposed in the national comprehensive financial strategy) to improve the level of access to financial services for people.

The central bank said it was amending other regulations related to the operation of the model, especially those on anti-money laundering/terrorist financing, regulations on electronic money and know-your-customer (KYC) processes.

CEO of TPBank Nguyen Hung said such regulations would need to go into detail to guide the establishment of agencies to provide banking services, such as regulations on approved and prohibited services, criteria to become authorised agencies and the form of operation.

Hung mentioned two main forms of authorisation used in Brazil known as full authorisation and credit authorisation, adding a fully authorised agent will provide a full range of services from receiving and forwarding application documents for opening a payment account, savings account, deposit/withdrawal transaction, transfer, payment as well as loan applications and opening credit cards. Meanwhile, a credit agency will only provide services on payment, borrowing and credit.

Taking another example of Bangladesh, Hung said authorised dealers can provide cash withdrawal/deposit services, support for small loan disbursement and debt collection/instalment, bill payment assistance, fund transfer assistance, balance queries, collect and forward applications for opening accounts, opening savings, loans and credit cards. However, they are not allowed to approve the decision to open card/loan accounts, conduct financial appraisals and conduct foreign currency transactions.

According to another financial expert, it is necessary to clarify the quality and capacity of organisations authorised to act as banking agents.

The agents must ensure that they meet all the standards of financial capacity, reputation, ability to meet commitments under adverse conditions, ability to provide financial services based on technology and capacity of internal control, security assurance and anti-money laundering.

Binh Dinh proposes withdrawing two local ports from planning

The People’s Committee of the southern province of Binh Dinh has proposed the Ministry of Transport and the Viet Nam Maritime Administration withdraw two local ports from master planning for seaport development in 2021-30.

De Gi and Tam Quan ports were proposed to be removed from the planning and instead developed into fishing ports while the lagoon areas would be developed into storm shelters for fishing vessels.

The provincial People’s Committee said for many years, De Gi and Tam Quang estuaries have had low levels of water and narrow channels only suitable for fishing vessels. Currently, no cargo is transported via these ports.

Removing these two ports out of the planning would not cause any problems as no investment projects were being carried out at the ports, the province said.

Dang Dinh Dao, former Director of the Institute for Economics and Development Studies, said the proposal had set an example for other localities in making planning in the context that every coastal locality wanted seaports without paying adequate attention to the natural, social, economic or environmental conditions.

A lot of planning had proven to be unrealistic, Dao said, adding that it would be a big problem if every locality had an international seaport and did not pay attention to regional links or master planning.

He said Viet Nam had more than 20 international seaports but none of them had received the investment to reach international standards.

He pointed out that there were a number of lessons. The planning of the wholesale market was an example. Many wholesale markets within planning were built but had not been put into operation due to problems attracting sellers and buyers.

Planning must be innovated, not only for seaports but also for other infrastructure developments, he said.

“It’s time localities closely work with central agencies to develop realistic planning which ensures consistency with other socio-economic planning,” he said.

Viet Nam is developing new master planning for seaports in 2021-30 with a vision to 2050 to promote economic development.

There are 286 ports across the country with a total wharf length of 96km, more than 4.5 times longer than in 2000. The seaport system handled a total cargo volume of more than 692 million tonnes in 2020, 8.4 times higher than 2000.

Ben Tre’s shrimp sector targets production value of $1 billion by 2025

The production value of the shrimp industry in the Mekong Delta province of Ben Tre aims to increase by an average of 41.1 per cent each year to 2025 and reach US$1 billion.

According to a plan to develop the sector, issued recently by the provincial People’s Committee, the locality will develop 4,000 ha of brackish water shrimp aquaculture areas applying high technology by 2025, to promote the sustainable development of the fisheries economy and the coastal province’s socio-economic development.

Chairman of the provincial People’s Committee Tran Ngoc Tam said Ben Tre aims to modernise its industrialisation-oriented marine shrimp farming sector and turn it into a large commodity production sector with high levels of competitiveness, productivity, and quality, creating breakthroughs in the stable and sustainable development of the fisheries economy and, most importantly, contributing to the province’s GDP growth.

Local authorities have implemented solutions such as re-organising production, improving the quality of young marine shrimp, prompting the research and application of science and technology in production, developing infrastructure, managing the environment, and developing shrimp processing activities.

Attention will be paid to developing concentrated and large raw material production areas and expanding effective aquaculture models to help local farmers improve their earnings.

According to the Deputy Director of the provincial Department of Agriculture and Rural Development Nguyen Van Buoi, Ben Tre currently has nearly 1,700 ha of brackish water aquaculture areas applying high technology, with an annual average yield of 36 tonnes per ha and profit of VND2.1-VND2.4 billion ($91,400-$104,560) per ha per year.

Brackish water shrimp farming has been developing strongly in Ben Tre, especially intensive and semi-intensive shrimp cultivation.

According to the department, as of 2020, the locality had exploited 45,747 ha of aquaculture area out of 50,000 ha of potential aquaculture area, including 36,000 ha of intensive and semi-intensive marine shrimp farming areas, with total production reaching some 70,000 tonnes.

Infrastructure in the province’s aquaculture areas has been gradually improved, especially road and irrigation networks, basically meeting current demand.

Vegetable and fruit exports hit $1.77 billion during Jan-May

Viet Nam’s export turnover of fruits and vegetables hit US$1.77 billion in the first five months of this year, a year-on-year increase of 18 per cent, reported the Ministry of Agriculture and Rural Development.

In May alone, fruit and vegetable exports raked in $400 million, a surge of 48.3 per cent compared to the same period last year.

China remained the top importer of fruits and vegetables from Viet Nam. These products are also witnessing positive signs in other major markets such as the US, Japan, Russia, and Australia.

Notably, the fourth outbreak of the COVID-19 pandemic amid the lychee harvest season has made export activities face many difficulties. However, with flexible solutions, ministries, localities and businesses are making efforts to export the fruit during the pandemic.

Particularly, Viet Nam’s lychee crop will have more advantages when exporting to the Japanese market this year.

When lychee was first exported to the Japanese market last year, many customers appreciated the quality of the shipments. Therefore, the Viet Nam Trade Office in Japan is continuing to co-ordinate with relevant domestic authorities as well as supermarket and distribution systems in Japan to promote the fruit in Japan.

The Viet Nam Trade Office in Australia will also make proposals to Australian agencies to promote favourable customs clearance when lychees arrive in Australia. It is expected that about 100 tonnes of Vietnamese lychee will be exported to South and Western Australia within this year.

To boost the export of fruits and vegetables, the ministry assigned the Director of the Plant Protection Department to negotiate to open 19 markets for 20 types of products, assist in handling, negotiating and removing technical difficulties arising in the export process, co-ordinate with localities to build codes for growing areas and export establishments to ensure traceability and meet requirements of major importers.

Vietnam Railway revenue slumps due to a drop in passengers

Vietnam Railway Corporation (VNR) reported its five-month revenue decreased by 51.4 per cent year-on-year due to the impact of the COVID-19 pandemic.

The railway served about 1.147 million passengers, a reduction of 35.4 per cent compared to the same period last year, bringing in over VND400 billion (US$17.4 million) in revenue.

In May, which saw the peak of COVID-19 outbreaks in the latest wave, the number of passengers was only by 132,300, equal to 48.4 per cent of the corresponding figure last year. As a result, revenue from passenger transport stood at VND44.7 billion, equivalent to 55.4 per cent of the figure of the same period last year.

According to VNR, a decline in revenue and demand for transportation and travel is attributable to travel restrictions prompted by outbreaks of COVID-19 in many localities across the country.

The VNR curtailed most of its operations in May. It is currently operating only one train on the Ha Noi-HCM City route.

Also due to the COVID-19 resurgency, more than 11,300 tickets were returned on the occasion of the Reunification Day (April 30) and May Day (May 1) holidays, worth about VND4 billion.

Disease-free zones key to exporting animal products

Forming more disease-free farming zones is seen as critical to exporting livestock products as few such zones in Viet Nam meet the World Organisation for Animal Health (OIE) standards.

The country exported 2,150 tonnes of meat and related products worth US$6.95 million in April, up 27.1 per cent in volume and 3.7 per cent in value compared to March, with Hong Kong (China), mainland China, and Thailand among the main destinations, data from the General Department of Viet Nam Customs showed.

The Cong Thuong (Industry & Trade) newspaper cited Nguyen Van Long, Deputy Director of the Department of Animal Health at the Ministry of Agriculture and Rural Development, as saying Viet Nam must comply with international regulations to export animal products, including those set by the World Trade Organisation (WTO) and the OIE.

Exports of animals and related products can only come from countries and territories that have farming establishments and zones free of disease and ensure biological safety.

As of May, Viet Nam had 2,288 closed farming establishments and zones but these only satisfy Vietnamese standards, with none meeting OIE requirements, Long pointed out.

He added that as outbreaks of dangerous disease are spreading, many countries have set up strict requirements on imported fresh products. Meanwhile, Viet Nam faces difficulties in organising safe animal farming, especially in terms of disease control, monitoring of farming zones, and grassroots safety chains.

Recently, authorities have stepped up negotiations on animal product exports with some countries, Long said, noting that to secure smooth exports the most important issue is that such products hail from disease-free zones meeting OIE rules.

To do this, it is first necessary to exert sound control over disease outbreaks and minimise the risk from animal diseases nationwide. A national programme for monitoring and certifying animal products should also be carried out to pave the way for exporting qualified products, he said.

There are 15 disease-free zones around the country at present, and co-ordination with localities is needed to help such zones under Vietnamese standards meet OIE requirements.

Long recommended cities and provinces devise plans to form and maintain disease-free animal farming zones while paying attention to animal husbandry.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

A survey conducted by Prudential Vietnam on 500 people (30-45 years old) in Ho Chi Minh City and Hanoi revealed that only 4 out of 10 respondents are confident of being financially independent in their old age.

“The Prudential survey reflects the current social picture. Our goal is to change the perception among the community so anyone can start preparing for independent seniority,” said Phuong Tien Minh, CEO of Prudential Vietnam.

Vietnam is amid its demographic window period, the most balanced development stage of a country when the proportion of labor force is double the number of dependents. A total 75 percent of the population is of working age, making a crucial contribution to driving Vietnam’s GDP growth, the fastest in Southeast Asia.

From 2040, Vietnam will transition into an undesirable stage: the period of an aging population. One of 10 countries with the fastest aging population in the world, Vietnam has an estimated 30 years within the “demographic window” period, considerably shorter than many of its neighbors. The rapid aging rate and low ratio of independent seniority are expected to entail considerable pressure on social security.

Phuong Tien Minh, CEO of Prudential Vietnam. Photo by Prudential Vietnam.

Senior citizens in the big picture

Expansion of urban areas has attracted a wave of young migrants seeking jobs, leaving behind nearly 30 percent of senior citizens living alone in rural areas.

Nguyen Xuan Truong, director general of Population Structure and Quality Department, said 70 percent of older adults in Vietnam are making their own living with their offspring’s support and only only 25.5 percent of them live on pensions and social benefits.

Giang Thanh Long, associate professor at the National Economics University, estimated current government support policies only cover about 8 percent of the senior group. It is forecast that by 2049, the medical needs of this group would increase 2.5 times compared to today.

Consequently, when Vietnam enters the aging population period, it will not only place financial pressure on the younger generation but also burden social security.

Everyone can actively prepare for a personal financial plan. Photo by Prudential Vietnam.

Action for early financial freedom

According to Long, many developed countries have successfully prepared for their aging population period based on three pillars: economy, health, and social preparedness. He said insurance organizations, banks, and the like should be encouraged to actively participate in the provision of life insurance-related services. This diversity not only supports middle-income earners and above but also creates income safety nets and protects the health of low-income people.

Phuong Tien Minh, CEO of Prudential Vietnam, said an aging population is a challenge. While government leaders must resolve the macro problem, everyone can actively participate by preparing a personal financial plan. “People have different perceptions of finance per life stage. The earlier you prepare, the easier it is to achieve financial freedom and independent seniority,” said Minh.

Investors are looking forward to the Ho Chi Minh City Stock Exchange (HSX) adopting new infrastructure in July to resolve congestions and lagging.

“The Ministry of Finance (MoF) is implementing drastic solutions to thoroughly handle the technical outages on HSX. The MoF, the State Securities Commission, HSX, and related units have been making great efforts to address this problem,” emphasised the minister.

The prolonged technical issues and overload have been cause for widespread concern over the past few months and have prompted relevant authorities to implement many urgent solutions such as increasing the board lot size from 10 to 100, stopping the trading of newly-listed shares on HSX, technical improvements from FPT. The latest solution will be the forthcoming adoption of technical infrastructure from the Korea Exchange (KRX).

Restrictions to preserve system stability have not gone down altogether too well among investors, who have been criticising securities companies for restricting them from editing and cancelling orders on HSX since June 2.

The implementation of KRX infrastructure will take place between June 14 and August 6, with the official launch expected in the third or fourth quarter of this year.

In the latest initiative, the MoF signed Decision No.81/QD-TTr on June 10 on administrative inspection at the HSX over the bourse’s trading congestion.

“Based on the current situation of the COVID-19 outbreak in Ho Chi Minh City, the inspection team will draw up a specific work plan in line with regulations on COVID-19 prevention and control,” the MoF said in an official announcement.

Vietnam emerges as one of new PPE suppliers globally: IFC

Vietnam has emerged as one of the new personal protective equipment (PPE) suppliers globally and its PPE manufacturing capacity surged six-fold last year, according to the International Finance Corporation (IFC), a member of the World Bank Group.

This ramped-up supply was initially driven by textile manufacturers shifting production in response to the health emergency during the Covid-19 pandemic and to mitigate losses caused by canceled orders for garments.

“Some textile manufacturers who started producing PPE products as an immediate response to the pandemic, are now considering the medium to longer-term business opportunity in this area,” said Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association.

“However, local manufacturers have struggled with insufficient input materials, technical skills and sector knowledge and the disparity between local and international standards to access the global market,” he added.

In response, as part of the global PPE advisory program supported by the UK Government, IFC is working with local garment manufacturers through the Vietnam Textile and Apparel Association and national labs through the Directorate for Standards, Metrology and Quality of Vietnam, IFC announced on June 9.

The aim is to improve PPE producers’ operations and reduce costs by removing unnecessary burdens related to PPE standards and conformity assessments.

“The Covid-19 pandemic has tested the resilience of supply chains to the limit, especially in terms of medical supplies, including PPE. The UK believes that the diversification of PPE manufacturing will make the global supply chain more adaptable and prevent future disruption,” said Gareth Ward, British Ambassador to Vietnam.

“I am very pleased that Vietnam has been chosen as a priority country for this UK government-funded program. Vietnamese companies have a lot of potential to succeed globally with a skilled labor force,” he added.

Over the next 18 months, the program will support select manufacturers to scale quality PPE production, access the reliable supply of materials and equipment and achieve PPE international standards and certification to expand exports.

According to Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Laos, access to cost-effective and quality PPE products is vital to the national Covid-19 response, helping to contain and manage the spread of the coronavirus.

“Promoting the production of PPE products in compliance with international standards not only helps increase Vietnam’s resilience to the pandemic, but also presents a business case as the PPE global supply chain is diversifying with opportunities for new manufacturers from emerging markets including Vietnam,” he said.

CAAV asks Transport Ministry for consultancy over cargo airline project

The Civil Aviation Authority of Vietnam (CAAV) has written to the Ministry of Transport asking for consultancy over IPP Air Cargo JSC’s proposal to establish an airline specializing in cargo transport.

CAAV said that in accordance with the Investment Law, the IPP Air Cargo airline project is not included in the list of projects whose investment plans need to be approved by relevant agencies.

Besides, according to the Government’s Decree No. 89, IPP Air Cargo has to complete procedures for the issuance of a business certificate on air cargo transport.

In 2020, the prime minister agreed with the Ministry of Transport’s proposal that the establishment of new airlines will only be considered after 2022, when the aviation market recovers.

Therefore, to respond to IPP Air Cargo’s proposal, CAAV needs the Ministry of Transport’s directive on instructing IPP Air Cargo to prepare the necessary documents to request a business certificate on air cargo transport.

IPP Air Cargo JSC, whose chairman is well-known businessman Johnathan Hanh Nguyen, is an arm of Imex Pan Pacific—a retailer that makes up nearly 70% of Vietnam’s luxury items market and a large shareholder of Southern Airports Services JSC and the Cam Ranh International Terminal Company.

IPP Air Cargo airline has a total investment of VND2.4 trillion, including 30% of IPP Air Cargo JSC’s equity and 70% mobilized. The airline will operate both in Vietnam and abroad.

IPP Air Cargo expects to transport some 115,000 tons of cargo and generate revenue of US$71 million in the first year of operation.

According to the plan, IPP Air Cargo will operate five planes in the first year of operation, seven plans in the second year and 10 planes in the third year. It hopes to earn profits from the fourth year.

Vietnam has yet to have a cargo transport airline. Meanwhile, more than 80% of Vietnam’s imports and exports transported by air are done by foreign airlines.

In 2008, Trai Thien Air Cargo was granted a certificate to operate air cargo transport. However, the airline was nonoperational after that and the certificate was retrieved in 2011.

Since the Covid-19 outbreak, many Vietnamese air carriers have used aircraft transporting passengers to transport cargo to earn more revenue.

In 2020, Vietnam Airlines used 12 Boeing 787 and Airbus A350 planes to transport cargo. The national flag carrier transported 196,000 tons of cargo last year, surging 54.3% compared with 2019.

Low-cost carrier Vietjet transported 60,000 tons of cargo in 2020 and its revenue from air cargo transport soared 75% year-on-year.

2021 economic outlook remains positive despite COVID-19 resurgence

Despite the complexity of the fourth COVID-19 wave, Vietnam’s GDP growth is forecast to exceed 6.5 percent this year on the back of surging industrial production and global economic recovery, according to Assoc. Prof. and PhD Dinh Trong Thinh, a senior economist from the Academy of Finance.

Given the economy is growing well in the first half of 2021, it is likely to expand over 7 percent in the remaining months, setting the scene for the country to achieve an overall GDP growth of at least 6.5 percent this year, Thinh told the Lao Dong (Labour) newspaper.

The coronavirus is gradually brought under control, he said, plus domestic production has been experiencing positive growth, with manufacturing and processing picking up at a current rate of 10 percent. The sector may rise by 17 – 18 percent during the final months of 2021, he added.

Data shows that industrial production index in the first five months of the year advanced 9.9 percent year-on-year, with manufacturing and processing up 12.6 percent. Total retail sales of goods and services hiked 7.6 percent year-on-year.

Thinh went on to say that the US, Chinese and EU economies are bouncing back, and increases in global credit demand will provide a good opportunity for Vietnam’s exports. The US’s economic growth remains positive at present and Vietnam’s shipments to the US is growing strong, he added.

A recent report by RongViet Securities Corporation (VDSC) forecast that the country’s GDP will grow by 7.2 percent in the second quarter of 2021 and 6.5 percent for the year as a whole.

Asian Development Bank (ADB) Country Director for Vietnam Andrew Jeffries said Vietnam is capable of achieving the twin goals of curbing the pandemic and sustaining economic growth this year. The country’s success in containing the virus has strengthened foreign investors’ confidence in its economy, he added.

It is important for Vietnam to boost growth and easy ways for small- and medium-sized enterprises (SMEs) to grow at the same time, thereby creating a solid foundation for a future private sector-led economy, Jeffries remarked.

According to the latest economic outlook report from Oxford Economics (OE), commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW), despite the recent resurgence in COVID-19, Vietnam’s growth outlook remains optimistic and the economy is expected to return to pre-pandemic levels by the second half of 2021.

The country’s GDP is forecast to grow at 7.6 percent in 2021, among the highest rates in the region, the report said, noting that Vietnam was one of the few economies in the world to grow in 2020 due to its success in containing the pandemic.

“This early success enabled the economy to benefit from the surge in global trade activity and enjoy strong foreign direct investment flows that boosted export-oriented and manufacturing industries,” according to the report.

It said together with Singapore, Vietnam is expected to continue leading the region in recovery. “Despite a resurgence of COVID-19 cases in Vietnam, which has affected its manufacturing sector and export industries, its economy is predicted to rebound swiftly once restrictions are lifted,” the report read.

Economist Thinh emphasized that the most important thing at present is that Vietnam must give priority to giving COVID-19 vaccine to workers and preventing the virus from spreading inside companies and industrial parks.

Accelerating COVID-19 vaccine inoculation and keeping the coronavirus at bay remain key factors to sustain growth because with the COVID-19 resurging, declining incomes and economic conditions will have long-term impact on consumers’ spending behaviour and lifestyle, he said./.

Many nations in the world currently have to cut down on their greenhouse gas emissions.

Budget collection up over 15 percent in five months

State budget collection was estimated to reach 98.6 trillion VND in May, pushing total revenue in the first five months of 2021 to 667.9 trillion VND (nearly 29 billion USD), equivalent to 49.7 percent of the yearly estimate, up 15.2 percent year on year, the Ministry of Finance has reported.

Of the amount, contributions to the central budget totalled 347 trillion VND, fulfilling 46.9 percent of the yearly target, while local budget revenue was 320.9 trillion VND, equivalent to 53.1 percent of the estimate.

Meanwhile, State budget spending was 125.8 trillion VND in May and 581.6 trillion VND in the first five months, equivalent to 34.5 percent of yearly estimate, similar to that in the same period last year, according to the ministry.

Spending on development and investment was at 102 trillion VND, representing 21.4 percent of the estimate, including 47.8 trillion VND for debt payment and 430.8 trillion VND for regular expenditure./.

Vietnam has 620 industrial aquatic processing facilities

Vietnam has 620 industrial aquatic processing facilities, according to the Directorate of Fisheries at the Ministry of Agriculture and Rural Development.

Of them, 415 have met standards for exports to Japan, the US, Europe and other markets.

In addition, there are some 3,000 small-scale establishments at traditional trade villages.

Aqua product processing has become a spearhead sector which boasts a large production volume and takes the lead in international integration, said the Directorate.

Vietnamese aqua products have made their appearance in 176 markets across the globe.

Furthermore, local processors are striving to boost domestic production and consumption as exports are hindered by the COVID-19 pandemic.

Vietnam earned 790 million USD from exporting aquatic products in May, lifting the total figure in the first five months of this year to nearly 3.3 billion USD, a year-on-year rise of 14 percent./.

Ho Chi Minh City aims to promote hi-tech use in agriculture cooperatives

Ho Chi Minh City aims to have at least 30 percent of its agriculture cooperatives apply advanced technologies in production, including bio technology, information technology, and automation.

The project is designed to with the aim of raising the proportion of high-tech agriculture production to 75-80 percent of the city’s total agricultural production value by 2030. By that time, 70 percent of local households and over 80 percent of businesses in agriculture will have applied high tech cultivation and harvest techniques, mechanization and automation in farming, livestock breeding and waste processing, particularly in the production of key agricultural products, namely vegetable and fruit, pig, milch cow, shrimp and ornamental fish./.

Vietnam working to stabilise economy amid challenges from pandemic

Despite the complex developments of the COVID-19 pandemic, Vietnam’s overall macro-economy remains stable, with encouraging growth seen in industries and a low rise of average consumer price index (CPI).

According to the Ministry of Planning and Investment, Vietnam’s industrial production index (IIP) is estimated to have increased 9.9 percent in the first five months of this year compared to the same period of 2020. Agricultural production growth was recorded, with rice production increasing over the same period of 2020. Inflation was under control, while the average CPI in the first five months increased just 1.29 percent year-on-year, the lowest rate since 2016.

Accumulated State budget collections met 49.7 percent of the annual estimate in the period and were up 15.2 percent year-on-year. Export turnover, meanwhile, was estimated to have increased 30.7 percent compared to the same period last year.

The lending interest rate was low, creating favourable conditions for enterprises to borrow capital for production and business. The number of newly-established enterprises during January-May neared 55,800, the most for five years. FDI inflows in the period hit 14 billion USD, an annual increase of 0.8 percent.

Apart from these encouraging outcomes, the ministry also pointed out a series of challenges in the upcoming months. These include the increasing number of enterprises withdrawing from the market, unstable growth in foreign investment attraction, a pandemic-hit labour market, and difficult social welfare issues.

At a regular Government meeting in May, Minister of Planning and Investment Nguyen Chi Dung proposed a host of solutions. He said the Ministry of Health should cooperate with localities to build pandemic prevention options at industrial parks to avoid interruptions in supply chains, while studying the extension of the prioritised groups for COVID-19 vaccinations.

He projected inflationary pressure to rise over the remaining months of the year, recommending that the Ministry of Industry and Trade (MoIT) closely monitor global price fluctuations and trends in certain costly materials such as steel and cement, so that suitable forecasts can be made and solutions adopted.

Regarding foreign trade, MoIT and the Ministry of Finance were advised to research and prepare plans for adjustments to import taxes as well as for temporarily suspending or adjusting trade remedies for a number of commodities and raw materials with strong price increases, in a bid to meet market demand and promptly support businesses.

As for the disbursement of public investment capital, the Ministry of Planning and Investment proposed that ministries, branches, and localities proactively update, adjust, and announce unit prices of building materials and construction price indexes in line with market developments, to help enterprises and ensure their projects are on schedule.

Dung also forecast that the pandemic would remain complex for the time being, saying it is necessary to maintain and replicate effective agricultural production models and methods./.

Major transport projects in Mekong Delta to be prioritised: MoT

The Ministry of Transport (MoT) has suggested prioritising investment in expressway projects in the Mekong Delta over the next ten years to ensure socio-economic development and national security and defence.

This is part of the specialised master plans for road, railway, maritime, inland waterway, and aviation transport in the 2021-2030 period with a vision to 2050, which have been submitted to the Prime Minister for approval.

Priority will be given to a number of expressway projects, including Chau Doc-Can Tho-Soc Trang (Tran De), Can Tho-Ca Mau, My An-Cao Lanh, Cao Lanh-Lo Te-Rach Soi, Ha Tien-Rach Gia, and Hong Ngu-Tra Vinh.

The ministry also suggested the arrangement of capital for the HCM City-Can Tho railway line and Tran De Wharf (in Soc Trang province), and the upgrading of the Cho Gao canal in the second phase.

The development of maritime corridors and logistics networks in the southern region and the upgrading of the three mainland waterways routes of Muong Khai-Doc Phu Hien, Ham Luong River, and Ha Tien-Rach Gia-Ca Mau are also included.

Nearly 252.7 trillion VND (11 billion USD) in the mid-term investment plan for the 2021-2025 period will be allocated to the ministry. Of this, the ministry plans to allocate 50.6 trillion VND (2.2 billion USD), or 20 percent of the sector’s total investment, for the Mekong Delta to carry out expressway projects under public-private-partnerships and other key projects./.

Vietnam wishes to learn from others’ experience in building circular economy

Ambassador Le Thi Tuyet Mai highlighted Vietnam’s wish to learn from developed countries’ experience in operating a circular economy and developing sustainably while addressing a recent virtual meeting of the World Trade Organisation (WTO).

The teleconference on circular economy, economic diversification, and aid for trade took place as part of the aid-for-trade work programme for 2020 – 2022 of the WTO Committee on Trade and Development.

Speakers included representatives of some international organisations like the WTO, the UN Industrial Development Organisation (UNIDO), the Organisation for Economic Cooperation and Development (OECD), the Asian Development Bank (ADB), and the Royal Institute of International Affairs of the UK (Chatham House).

Presenting Vietnam’s viewpoint and experience, Ambassador Mai, Permanent Representative of the country to the United Nations, the WTO, and other international organisations in Geneva, said in its socio-economic development strategy for 2021 – 2030, Vietnam identified building a circular economy model as one of the orientations and solutions for fast and sustainable development.

Some policies and mechanisms promoting factors of a circular economy have been included in the country’s guidelines, policies, and laws about environmental protection and the national action plan to implement the 2030 Agenda for Sustainable Development.

In particular, they have been institutionalised in the Law on Environmental Protection, the national green growth strategy, and the national action plan on sustainable production and consumption, she went on.

She emphasised that since the Doi moi (Renewal) period began in 1986, Vietnam has continually paid attention to the combination of economic development with environmental protection, sustainable use of natural resources and production materials, and realisation of the Sustainable Development Goals (SDGs).

These policies have proved effective, as seen in many enterprises succeeding in applying clean production models, she said.

Mai also pointed out major challenges to Vietnam during the transition from the traditional economy to a circular one, adding that the country wishes to learn from developed countries’ experience in how to operate a circular economy and develop sustainably.

Stepping up international economic integration via commitments under the WTO and recently inked trade agreements will help Vietnam promote the building of a circular economy, achieve the SDGs, and bring about benefits to its people, the ambassador said./.

HCM City to auction thousands of apartments in Thu Thiem New Urban Area

The HCM City People’s Committee has instructed the Department of Natural Resources and Environment to complete procedures required to auction 3,790 resettlement apartments in the Thu Thiem New Urban Area in Binh Khanh Ward, Thu Duc City.

They are part of 12,500 completed in 2015 on an area of 38.4ha in the centre of the old District 2, with convenient transportation to central districts.

There were attempts to auction them in 2017 with a reserve price of VND8.8 trillion (US$384.66 million) and in 2018 at VND 9.1 trillion ($397.46 million), but there were no buyers.

The department now proposes to divide them into two auction packages, one with 1,570 apartments in 11 blocks, the other with 2,220 in 14 apartment blocks.

The department has sought the city property valuation council’s approval of the reserve price for publishing on its website and for the City Land Fund Development Centre to invite eligible bidders.

The prices are expected to be higher than the previous ones.

Winners of the bids can convert the apartments into commercial housing for sale, but must get approval from the People’s Committee if they want to start new projects on the land.

The HCM City Real Estate Association has told its member businesses to attend the auction.

The apartments are in a prime location, and winning the bid would enhance the prestige of their brands, it said.

However, companies with experience in developing housing projects said attracting interest in the auction is not easy despite the prime location because of the likely starting price of more than VND10 trillion (nearly $437 million).

The previous auctions failed for similar reasons: bidders had to deposit 20 per cent of the reserve price, and the winner had to pay 50 per cent within a month and the rest within 90 days, not sums most companies could raise within that short time frame.

Dr Su Ngoc Khuong, senior director, Savills Vietnam, said it would be convenient for bidders if the city divides the bidding packages into smaller ones, each with a few hundred apartments.

Besides, it could hold several auctions to gradually increase the reserve price, like commercial housing developers do, he said.

Le Hoang Chau, chairman of HoREA, said if the auction is not successful this time, the city should consider reducing the price by 10 per cent and create smaller bidding packages.

Central ports propose upgrades

Many ports in the central region are improving their capacity or proposing upgrades to meet the rising demand for foreign trade.

Several businesses are investing in upgrading ports in Quang Ngai Province’s Dung Quat Port Cluster, a network of eight ports, including three general and five specialised ones meant for private businesses.

Among the ports, one specialised facility is capable of berthing ships of 150,000 – 200,000 tonnes ships, while the remaining seven can only receive vessels of 50,000 – 70,000 tonnes.

The province has over 20 businesses exporting and importing goods using container ships and around 6,500 containers annually, and they currently have to use ports in Da Nang and elsewhere in the central region.

Dang Van Minh, chairman of the Quang Ngai Province People’s Committee, said the Dung Quat Port Cluster has reached full capacity, and so fresh investment is crucial for the province’s export-import needs.

In Binh Dinh Province, Quy Nhon Port is handling 2,500 tonnes of goods per berth metre, more than five times its capacity.

The Quy Nhon Port Joint Stock Company will begin upgrading one of its piers in August to expand its capacity.

Phu Yen Province is planning to build a deep-water port.

The Cam Ranh Port Joint Stock Company in Khanh Hoa Province is planning on building a new berth in its Cam Ranh Port.

Dr Tran Du Lich, a member of the Government Advisory Group, said coastal provinces in central Viet Nam had been soliciting investment in ports.

Now the region typically transports goods to ports in Hai Phong or HCM City for exporting, and investment is spread too thin for many ports to berth large vessels, according to Lich.

Quang Tri inks MoU with Singapore Manufacturing Federation

The People’s Committee in the central province of Quang Tri signed a memorandum of understanding (MoU) with the Singapore Manufacturing Federation (SMF) via a video conference late last week.

The two sides have agreed that this year the Singaporean not-for-profit organisation will introduce experts to assist the province with its planning and propose ideas, solutions, and adjustments to a master plan for the South East Quang Tri coastal economic zone.

Quang Tri authorities have allowed enterprises introduced by SMF to conduct feasibility studies and submit investment proposals for certain infrastructure projects, including those on the construction of airports, seaports, and industrial parks.

Speaking at the signing ceremony, Secretary of the provincial Party Committee Le Quang Tung said the agreement marked a milestone in Quang Tri’s socio-economic development strategy and would present opportunities for the comprehensive and sustainable development of the two sides’ operations in the future.

He also voiced his hope that SMF would promptly carry out cooperation plans and propose ideas that capitalise on the potential and advantages the province holds.

SMF had studied opportunities for Singaporean firms to invest in Quang Tri since 2016, SMF President Douglas Foo said.

Regulations on temporary suspension of payment to the retirement and survivorship fund needed amendment

The Ministry of Labour, War Invalids and Social Affairs has proposed the Government amend the regulations on temporary suspension of contributions to the retirement and survivorship fund for enterprises affected by the pandemic.

The ministry said due to the complicated developments of the COVID-19 pandemic, many businesses have suspended operations or reduced production. The suspension of contributions to the retirement and survivorship fund would help enterprises ease financial difficulties and maintain their operations during the pandemic.

Under the current regulations, enterprises who have been forced to reduce at least 20 per cent of their employees since the COVID-19 outbreak in April would be allowed to suspend their payment for the retirement and survivorship fund.

Enterprises would be allowed to suspend payments for no longer than three months.

A recent survey by the Vietnam Chamber of Commerce and Industry revealed that 12,000 businesses have difficulty accessing this policy.

The ministry said the regulations needed to be amended so that more enterprises would be eligible .

According to the ministry, enterprises who have had to reduce 10 per cent of their employees can suspend the payment for the retirement and survivorship fund, and the time of suspension should be six months instead of the current three months.

The Vietnam Social Security, the unit in charge of managing the two funds, agreed. But deputy director Trần Đình Liệu proposed adding some conditions to the beneficiary group.

The policy would only apply to businesses operating in the areas of transport, hotels, restaurants, tourism, education, culture, sports or businesses in isolated industrial zones, clusters or export processing zones.

In addition, enterprises must fully pay social insurance, health insurance and unemployment insurance until the end of this April.

The ministry estimates that about 39,000 businesses with 1.15 million employees will be temporarily suspended from paying the retirement and survivorship fund with a total amount of VNĐ8.45 trillion (US$365 million) if the amendment of the policy is applied.

According to the Vietnam Social Insurance, after a year of implementing the Government’s Resolution 42, more than 1,800 enterprises have temporarily suspended their payments to the retirement and survivorship fund with the amount of VNĐ786 billion ($34 million).

Effective control of COVID-19 vital to ensure industrial production growth

Implementing effective COVID-19 prevention measures at industrial parks and export processing zones should be a top priority for the country from now until year-end to ensure stable industrial production growth, according to the Ministry of Industry and Trade (MoIT).

The management boards of industrial parks and export processing zones should require enterprises operating in these zones to self-review and then revise measures to both prevent and control the spread of COVID-19 and ensure their production activities, the MoIT said.

The ministry also requested localities to strictly handle violations made by civil servants in COVID-19 prevention and control that might negatively affect local production and business activities.

The index of industrial production (IIP) grew by 9.9 per cent in the first five months of this year over the same period last year.

By sector, the processing and manufacturing industry increased by 12.6 per cent; the electricity production and distribution industry increased by 8.3 per cent; water supply, drainage and waste treatment 7.5 per cent; while the mining industry fell by 7 per cent.

Among the secondary industries, a number of key industries had a high production index in the first five months compared to the same period last year.

Metal production grew by 38 per cent; motor vehicle production 35 per cent; production of beds, wardrobes, tables and chairs 18.3 per cent; and production of electronic products, computers and optical products 15.5 per cent.

The positive IIP in the period was attributable to effective COVID-19 prevention measures and the State’s accurate and timely policies to support businesses, stimulate the domestic market and boost exports, the ministry said.

However, the complicated development of the COVID-19 pandemic from the end of April, which directly affected a number of industrial zones in the two provinces of Bac Giang and Bac Ninh still caused concerns for many enterprises.

Chairman of the Ha Noi-based TOMECO An Khang JSC Le Quy Kha told Ha Noi Moi (New Ha Noi) newspaper that the increasing prices of steel and the fourth COVID-19 wave would impact business and production activities.

Thus, besides tax payment extension, businesses also hoped to soon access the source of vaccines so that all of their workers could be vaccinated, Kha said.

Spain-based FocusEconomics, which provides in-depth economic analysis globally, said in its May report that after last year’s slowdown, industrial production is projected to gain momentum on the back of returning demand from key international partners.

“Despite the ongoing COVID-19 pandemic, the underlying strength of Viet Nam’s industrial sector remains intact: Viet Nam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to US-China trade tensions,” it said.

“That said, a sluggish rollout of the vaccine, coupled with an uncertain development of the pandemic, pose a risk to the positive outlook.”

FocusEconomics also estimates that Viet Nam’s industrial output will grow 9.2 per cent in 2021, down 0.2 percentage points from last month’s forecast.

For 2022, FocusEconomics expects the country’s industrial production to expand by 8.4 per cent.

Management of off-plan property to be enhanced

The Ministry of Construction has asked localities to enhance the management of sales of off-plan property before June 15.

The ministry made the request due to recent reports of legal violations in the development and transactions of off-plan property, causing disputes, creating risks for buyers and harming the real estate market.

The construction ministry requested localities to publicise information about off-plan property projects. Such projects eligible for transactions would be integrated into the national public service portal.

Provinces and cities must check to ensure compliance with laws about procedures and conditions for transactions of off-plan properties, especially payments and mortgages.

The rules for buying and selling off-plan property were included in the Law on Real Estate Business in 2006.

Despite this, transactions of off-plan property remain complex, forcing several provinces to urge buyers to be cautious and send warnings about law violations from developers.

The Department of Construction of Quang Nam Province in mid-May issued a document to better manage the real estate market in the central province. The provincial construction department asked developers of real estate projects to put their developments for sale only when meeting requirements in the Law on Real Estate Business and other legal documents.

The northern province of Bac Giang’s Department of Construction recently announced a list of urban and residential projects which were not eligible for transactions, urging citizens to study projects carefully before purchasing.

Early this year, Son La Province’s construction department announced 11 commercial housing projects not eligible for capital raising or transactions as of March.

A lawyer said the transactions of off-plan properties had not been put under property management, resulting in violations from developers such as using buyers’ advance payment for the wrong purposes, especially developers with weak financial capacity, and not following commitments about project quality or progress.

Ministry to inspect stagnant, abandoned projects

The Ministry of Natural Resources and Environment said it could work with provincial People’s Committees to inspect real estate projects suffering stagnant progress or sitting unfinished and abandoned for years.

Real estate projects which were left deserted were causing significant waste of land resources. The ministry pointed out several reasons for the stagnation, including slow construction progress of contractors, failure to complete legal documents, facing disputes, shortage of infrastructure system and inconsistencies in overall planning.

In Ha Noi, there were a number of stagnant projects, mainly in Hoai Duc, Me Linh, Nam Tu Liem and Bac Tu Liem districts.

Some have been deserted for years, such as Song Hong City which was approved in 1994 and AIC new urban area, approved 13 years ago.

A report by the municipal People’s Committee showed 383 projects in the capital city had signs of violations of the land law, 379 of which were inspected from July 2018.

Among them, 35 projects with a total area of 57ha were given 24 months of extension for the deadline to put the land into use. If the developers still failed to put the land into use after the extension, the land would be confiscated without any compensation.

Twenty-nine projects with a total area of 1,840ha were proposed to be revoked land and the investment projects cancelled.

Vaccination important factor in Southeast Asia growth: Oxford Economics report

Progress in vaccination will continue to be an important barometer for growth in the second half of 2021 in Southeast Asia including Viet Nam, experts have said.

In the latest economic outlook report from Oxford Economics (OE), commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW), Mark Billington, managing director international, ICAEW, said: “We expect that countries which are able to contain new COVID-19 cases and reach high levels of vaccinations will outperform the rest of the region and be better placed for recovery.

“While most Southeast Asian economies have experienced a surge in COVID-19 cases since the start of 2021, leading to the reinstatement of social distancing measures, this has dimmed but not derailed economic recovery.”

According to the report, despite the recent resurgence in COVID, Viet Nam’s growth outlook remains optimistic and the economy is expected to return to pre-Covid levels by the second half of 2021.

The country’s GDP is forecast to grow at 7.6 per cent in 2021, among the highest rates in the region.

Viet Nam was one of the few economies in the world to grow in 2020 due to its success in containing the pandemic, the report said.

“This early success enabled the economy to benefit from the surge in global trade activity and enjoy strong foreign direct investment flows that boosted export-oriented and manufacturing industries.

“Singapore and Viet Nam are expected to continue leading the region in recovery. Despite a resurgence of COVID-19 cases in Viet Nam, which has affected its manufacturing sector and export industries, its economy is predicted to rebound swiftly once restrictions are lifted.”

Southeast Asia’s GDP would rebound strongly to grow at 4.8 per cent this year, after contracting 4.1 per cent last year, it said.

ICAEW and Oxford attributed the rebound to an improvement in global trade activities, accommodative policies, continued government fiscal support and low interest rates across the region, adding growth is forecast to improve to 6.5 per cent in 2022 as countries move closer to herd immunity and the recovery becomes more synchronised across sectors.

The report said Southeast Asian economies would continue experiencing varying speeds of recovery in 2021 driven by their ability to contain fresh waves of COVID infections and procure and distribute vaccines.

Uncertainties remain as rates of recovery depend on the progress of vaccine rollouts and whether the possibility of further lockdowns remains high in the near-term, it said.

However, the economic outlook is optimistic in the medium to long terms, it said.

Recent lockdowns in Singapore, Viet Nam and Malaysia mean household spending reduced in the second quarter of 2021, but it is unlikely to dip significantly since households and businesses are better equipped with digitisation to enable them to work and shop remotely, it said, adding Governments have also used more targeted measures than nation-wide lockdowns, which have minimised disruption.

Vietnam Railway revenue slumps due to a drop in passengers

Vietnam Railway Corporation (VNR) reported its five-month revenue decreased by 51.4 per cent year-on-year due to the impact of the COVID-19 pandemic.

The railway served about 1.147 million passengers, a reduction of 35.4 per cent compared to the same period last year, bringing in over VND400 billion (US$17.4 million) in revenue.

In May, which saw the peak of COVID-19 outbreaks in the latest wave, the number of passengers was only by 132,300, equal to 48.4 per cent of the corresponding figure last year. As a result, revenue from passenger transport stood at VND44.7 billion, equivalent to 55.4 per cent of the figure of the same period last year.

According to VNR, a decline in revenue and demand for transportation and travel is attributable to travel restrictions prompted by outbreaks of COVID-19 in many localities across the country.

The VNR curtailed most of its operations in May. It is currently operating only one train on the Ha Noi-HCM City route.

Also due to the COVID-19 resurgency, more than 11,300 tickets were returned on the occasion of the Reunification Day (April 30) and May Day (May 1) holidays, worth about VND4 billion.

First-half GDP growth for Vietnam projected at 5.8%

The figure is 0.42% less than the target the Government set in its resolution 01/NQ-CP and 0.12% less than the Government target revised after quarter 1.

The MPI forecast agro, forestry and fishery sector would develop steadily in the first six months, but meet difficulties in consumption. The sector is projected to grow approximately 3% in the first half, 0.35% lower than expected.

Similarly, the industrial and construction sector is anticipated to increase 7.85%, 0.71% lower than the set target. The emergence of the SARS-CoV-2 virus has slowed its growth despite its recovery efforts in recent times.

Similarly, the services sector is likely to grow approximately 5%, or 0.33% lower than estimated.

The MPI also forecast consumption would continue to bounce back, with total retail sales of goods and services expected to increase about 7.1%. However, a number of services such as tourism and transportation would continue to experience difficulties due to the impact of the COVID-19 pandemic.

It’s worth remembering that the General Statistics Office, in an earlier issued report, announced Vietnam’s GDP grew 4.48% in the first quarter of the year, or 0.8% higher than the figure recorded in the first quarter of 2020.

The high rate demonstrated the adaptation, resilience and recovery of the national economy despite the impact of the coronavirus outbreak in late January.

However, the latest COVID-19 outbreak, which started in late April and has since spread to 39 cities and provinces, seems to negatively impact the economy.

The MPI’s calculations show the economy is yet to completely get back on track and are putting mounting pressure on ministries, sectors and localities in the second half of the year, aiming to meet the 6.5% GDP growth target which has been set by the Government and later approved by the National Assembly.

Vietnamese lychees with origin tracing stamp hit shelves in France

The first batch of fresh lychees originating from the northern province of Hai Duong have hit the shelves of a supermarket chain in France, thereby marking the first time that the local fruit has been imported to the European country via official channels.

The shipment of approximately a tonne of lychees arrived at the Paris Charles de Gaulle Airport in France on June 12 and can be purchased at Thanh Binh Jeune, a supermarket chain specialising in selling goods of Asian origin, especially those from Vietnam.

Ngo Minh Duong, chairman of Thanh Binh Jeune Company, said overseas Vietnamese in France are highly appreciative of the quality of fresh lychees which originate from the Vietnamese market. Moving forward it is expected that the company will continue to import roughly five tonnes of lychees from now until the end of the season.

Duong went on to state that the official import of lychees the EVFTA implementation along with the appllication of quality standards and the rule of origin have clearly reflected the company’s professionalism and help the products to become more reliable among foreign consumers.

At present, Thanh Ha lychees are sold at the supermarket for €18 per one kilo box, equivalent to more than VND500,000 per kilo.

Vu Anh Son, head of Vietnam’s Trade Office in France, said the successful export of a lychee batch labeled with the Vietnamese itrace247 origin tracing stamp clearly demonstrates the Vietnamese Government’s determination to support firms amid the complicated nature of the COVID-19 pandemic.

Son noted that in order to penetrate the most demanding market in Europe, the European – American Market Department under the Ministry of Industry and Trade (MoIT) has continuously urged Vietnamese trade offices abroad to seek new outlets specifically for Vietnamese agricultural products.

In order to adapt to France’s continuous lockdowns and social distancing measures, Vietnam’s Trade Office and the Vietnamese Embassy in France have co-ordinated efforts with local and French agencies to deploy online trade promotion activities to introduce the potential of Vietnamese agricultural products to French businesses.

The Vietnamese trade office has initiated plans to support local firms as they export nearly one tonne of lychees every week, along with over 10 tonnes via air and marine routes, this year.

The office therefore revealed that negotiations are also underway to bring more shipments of lychees and other Vietnamese agricultural products to the Rungis market system, or Tang Frères, the largest Asian supermarket chain in France.

After the conclusion of events aimed at promoting Vietnamese lychees at Asian supermarkets, the Vietnam Trade Office and the Vietnamese Embassy in France will co-ordinate alongside other units to introduce the product within the framework of the Vietnam Food Festival 2021 in Paris.

Vietnam’s agro-products: Strategies for safeguarding intellectual property rights needed

Safeguarding intellectual property rights in agriculture is not a new issue in Vietnam. However, Vietnamese agricultural producers and exporters still do not have a good grasp of the necessity of ensuring these rights in the long run and how they can formulate a strategy for doing so.

Inadequate attention to intellectual property rights in agriculture leads to many drawbacks such as loss of trademark rights (consider, for example, Trung Nguyen Coffee in the United States; Phu Quoc fish sauce in China, Australia and the U.S.; and ST25 rice, which a foreign enterprise registers as a trademark for rice) or registration rights for intellectual property protection (applicable to, say, plant variety or innovations). Market share may be eroded and the financial cost incurred by brand development or research and development (R&D) can be squandered.

In the long run, specific strategies for intellectual property rights are beneficial. They fuel innovations across big, medium and small enterprises, which will thrive in a knowledge-based economy. The risks of instability triggered by natural disasters or dwindling demand can be lowered, opportunities (new markets and better funding prospects by virtue of better products) may arise and the firms’ reputation will be polished. Enterprises can also recoup investment in R&D (via licensing, transfer of intellectual property rights and so on).

To flesh out appropriate strategies for safeguarding intellectual property rights that stoke production and boost consumption in both domestic and overseas markets, enterprises should focus on the following factors.

First, these strategies should identify intellectual properties that a firm has or will have.

In agriculture, these intellectual properties of enterprises are mainly industrial property rights (trademarks, patents, geographical indications, trade secrets and plant variety protection). Two attributes are worth highlighting. First, the intellectual property rights are country-specific (registration in a country is effective only in that country). Second, the early bird catches the worm (first come, first served). Understanding both attributes will enable firms to actively safeguard their intellectual property rights, especially in overseas markets. Once a market has been identified, firms should apply for intellectual property protection there. There are some systems under which protection applies across several countries (such as trademark and plant variety protection in Europe) to reduce registration fees and simplify registration procedures.

It is crucial to have a clear understanding of a country’s laws. For example, plant variety protection differs from country to country. In most countries, it applies to new varieties that meet other criteria such as uniqueness, consistency and stability (Article 158 of Vietnam’s Intellectual Properties Law). New varieties are not eligible for patents in these countries. However, in some countries such as the U.S., apart from plant variety protection, patents, including utility patents, can be issued for such cases as methods that generate new varieties. Consequently, many new plant varieties are patented in the U.S. Aware of these differences, enterprises will not lose opportunities to get new patents and acquire fresh intellectual property rights.

Consumers in cities have helped “rescue” excessive agroproducts of farmers in the provinces

To ensure that the protection is in force in the long run, big firms often appoint representatives that look into administrative matters such as fee payments to ensure that the rights will remain. Enterprises should be ready to intervene when offenses arise, as in the case of ST25 paddy. Firms need to make good use of intellectual property rights and capitalize on such activities as licensing and transfer of rights.

Complex regulations on intellectual property rights mean that firms should seek help from experts on marketing and market survey, so that the strategies formulated will be efficacious. Creative collaboration among enterprises, farmers, research institutes and the Government will help to develop and safeguard intellectual property rights. The damage inflicted by the lack of strategies may far surpass the costs of developing them.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes