Boosting online payments for e-commerce growth
Online shopping has become more and more popular and received a lot of attention in the past five years, especially amid the COVID-19 pandemic.
The Institute for Brand and Competitiveness Strategy organised a forum titled “Consumption tendency in Viet Nam: The future of online payments and consumption” in Ha Noi on Thursday.
Dang Thuy Ha, director of Nielsen in the northern region, said that there were four billion people connected to the internet worldwide this year with 30 per cent of retail sales done through electronic applications.
It is predicted that the global sharing economy will reach a value of US$300 billion by 2025.
Viet Nam’s internet users will account for nearly 60 per cent of the population this year and 33 per cent of Vietnamese consumers will make direct money transfers online when shopping.
Commenting on the future of Viet Nam’s retail industry, Dinh Thi My Loan, honourary Chairwoman of the Vietnamese Retailers’ Association, said that now was the era of e-commerce.
The fourth industrial revolution was putting businesses in a race, said Loan.
Digital transformation is considered to be an irreversible trend, but many Vietnamese businesses fail due to incorrect understanding and not being ready with resources.
A survey by the Viet Nam Software and IT Services Association (VINASA) showed that nearly 95 per cent of enterprises are aware of the importance of digital transformation.
However, 84 per cent of businesses fail to transform digitally and the application of new technology in businesses often fails.
That raises the question of where to start for a safe and efficient digital transformation journey and how to do it successfully.
Hoang Quoc Quyen, a representative of Tiki, said that online payments and consumption were a trend all over the world.
Online payments and consumption would promote many areas of development, in which e-commerce contributes to transparency in management and convenience for consumers, he said.
However, online payments for consumption has not really achieved their potential.
In fact, of 4.5-5 million Tiki orders a month, the number of online payments accounted for only about 40 per cent, 60 per cent were in cash, said the representative.
In order for shoppers to be ready for cashless and online payments, Quyen noted that it was necessary to handle e-commerce floors which sell fake goods or goods with unknown origin.
Along with that, there should be strong measures to create trust for shoppers towards online payments.
Banks, payment gateways and telecommunication carriers need to create favourable conditions and have supporting policies for people to pay online; at the same time, creating a shared database to minimise risks for customers.
ASEAN looks to promote post-pandemic recovery
An online consultation of ASEAN economic ministers with the ASEAN Business Advisory Council (ASEAN BAC) took place on August 24 under the chair of Minister of Industry and Trade Tran Tuan Anh.
Representatives from ASEAN BAC presented recommendations on strengthening coordination between governments and ASEAN’s business community in responding to the impact of COVID-19 and building a post-pandemic economic recovery plan.
Chairman of ASEAN BAC 2020 Doan Duy Khuong highlighted the theme of the ASEAN Business and Investment Summit (ASEAN BIS), which is scheduled for November in Hanoi within the framework of the 37th ASEAN Summit.
“Digital ASEAN: Sustainability and Inclusiveness” will discuss the importance of Industry 4.0 in stimulating trade and investment growth and addressing the consequences of the COVID-19 crisis and other challenges facing the region, Khuong said.
Ministers reviewed ASEAN BAC’s activities over recent years, including the Network of Digital Startups (Digital STARS) project, the Smart Growth Connect (SGConnect) project, the ASEAN Mentorship for Entrepreneurs Network (AMEN) project, and the Digital Trade Connect project.
ASEAN BAC also mentioned the ASEAN Business Awards 2020, an annual event honouring regional businesses and recognising their important position in the ASEAN economy.
ASEAN economic ministers valued the ASEAN BAC initiative, emphasising that close coordination between governments and business communities is essential not only in responding to COVID-19 but also in promoting economic integration within ASEAN as well as between the bloc and its partner countries.
They requested ASEAN BAC work more closely with regional governments in implementing objectives set out in the Hanoi Plan of Action and the Action Plan approved by the group and its partners, such as Japan and ASEAN 3 countries, to prevent and mitigate the economic impact of the pandemic in the region and to consolidate regional supply chains, contributing to promoting post-pandemic economic recovery in the region.
Experts discuss using AI to recover from pandemic
A kick-off seminar for the 2020 Viet Nam Artificial Intelligence day (AI4VN) was held in Ha Noi on Tuesday.
Participants discussed using AI to restore the operations of enterprises in the context of the COVID-19 pandemic.
In his opening remarks, Deputy Minister of Science and Technology Bui The Duy said this was the opening event in the series of annual AI4VN events, playing an important role in promoting the AI industry in Viet Nam.
“The organisation of the event in the context of COVID-19 aims to promptly provide information for enterprises to stabilise production and recover broken chains in the supply of goods, thereby ensuring employment for employees,” said Duy.
The event also aimed at promoting online system platforms and digital transformation, which were increasingly widely applied in the trend of the 4.0 revolution, said the deputy minister.
Nguyen Thanh Lam, director of the applied products division of VinAI Research Institute for Artificial Intelligence, gave an example that when launching a Vsmart, VinAI Research produced FaceID technology instead of spending a huge amount of money to buy this technology from the US or China.
Nguyen Xuan Phong, an expert on AI research at Canadian Mila Artificial Intelligence Institute, said AI had developed in the world for a long time, led by North America with big technology companies. The next wave came from Germany and Japan.
There was still plenty of room for AI in Viet Nam and AI could make its way through every industry, he said.
“It is important to have a key national strategy, selecting strengths in agriculture, health, agro-forestry and fisheries to promote,” said Phong.
Al has been included in the list of high technology prioritised for investment and development in Viet Nam since 2014.
The Government has determined this is one of the key and breakthrough technologies of the fourth industrial revolution, which is necessary to conduct research, but there has been a lack of specific contents to promote its development.
The Ministry of Science and Technology issued a plan to implement research and development of AI in 2018.
The plan aims to link the parties to develop, research, deploy and apply Al technology, promote the technology development in key and advantageous fields.
Mango exporters aim to remove hurdles amid cases of origin fraud
Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association, says the Chinese suspension of mango imports has exerted a significant impact on local businesses as the northern neighbour is the largest consumer of Vietnamese fruit, accounting for over 70% of total export turnover last year.
According to the Plant Protection Department under the Ministry of Agriculture and Rural Development, despite this suspension yet to have an impact on the country’s mango exports because of the season ending for the fruit in the south, domestic businesses are concerned about seeking fresh outlets for their products in the near future.
Nguyen notes that with Vietnamese mangos being grown in accordance to standards suitable for export to the Chinese market, these fruits will not be eligible to enter other demanding markets such as the United States and Japan.
Indeed, China may even tighten the inspection process for other Vietnamese fruit and vegetable products after the suspension of mango imports, Nguyen adds.
The Plant Protection Department therefore emphasizes that two of the 82 mango-growing regions, in addition to one of the 12 packaging facilities in Dong Thap, were named among the violation list.
Most notably, Dong Thap’s packaging and exporting establishments state that counterfeiters have faked origin traceability codes or have alternatively used their growing area codes in an effort to export the fruit, thus leading to poor-quality products and affecting the prestige of Vietnamese mangoes.
Dinh Kim Nhung, deputy director of Kim Nhung Dong Thap Co., Ltd., suggests that there should be certifications granted by the owners of growing areas for each export shipment, which will therefore be eligible for customs clearance.
These measures will serve to protect genuine businesses and farmers, whilst simultaneously avoiding counterfeiting origin traceability codes.
The Departments of Industry and Trade of provinces in the Mekong Delta have been working closely with the nation’s trade counselors and trade offices based abroad in order to diversify markets for mangoes and increase the export of the fruit moving forward.
In line with this, trade promotion schemes via online platforms will be held as a way of introducing the fruit to consumers.
The Vietnam Fruit and Vegetables Association stresses the necessity of increasing intensive processing and giving due attention to the domestic market through strengthening connectivity with distributors and supermarkets.
Cement exports rake in US$732 million over seven-month period
Most notably, in comparison to the same period from last year, despite the export volume rising by approximately two million tonnes, the value of revenue suffered a decrease of 5.4%, resulting in a fall in the export price.
The national cement industry’s four major export markets over the past seven months included China, Southeast Asia, the Philippines, and Bangladesh.
After importing products for many years, since 2010 Vietnam has been exporting cement and clinker. Indeed, cement and clinker has since joined a group of the country’s billion-dollar export items to become the leading cement exporter in Southeast Asia in the process, with the cement industry witnessing extremely fast and impressive export growth.
This comes after the local cement industry witnessed strong export in 2018 and 2019 with production exceeding 30 million tonnes per year. In particular, 2018 became the first year that cement and clinker joined the billion-dollar export club, with a total turnover of US$1.25 billion and an output of 32 million tonnes.
Following this, 2019 saw cement and clinker continue to maintain their strong performance in terms of export volume, with total output hitting approximately 34 million tonnes worth US$1.39 billion, marking the second year it made the billion-dollar export club.
The Ministry of Construction therefore estimates that cement consumption for the entire industry this year will reach between 101 million and 103 million tonnes, an increase of between 4% and 5% from last year, of which domestic cement consumption will make up roughly 70 million tonnes, with 32 million to 34 million tonnes for export.
With this in mind, this level of consumption is based on estimates made in late 2019 and completely excludes the unexpected factor of the COVID-19 epidemic.
HCM City strives to speed up public investment disbursement
Ho Chi Minh City had disbursed nearly 20.06 trillion VND (865.4 million USD) in public investment or 47.6 percent of the plan for the whole year as of the end of July, according to the municipal People’s Committee.
Though the disbursement rate was higher than the same period last year, it has failed to meet expectation of the government as well as the city leaders, and to become a factor boosting local economic growth.
It was largely attributed to the long delay in payment of land compensation, affecting progress of local projects and disbursement plans. Slow disbursement of Official Development Assistance (ODA) loans in Ben Thanh – Suoi Tien urban railway project was also blamed for the low rate. Just about 41 percent of the total 9.94 trillion VND in ODA allocated for the metro project has been disbursed so far.
Chairman of the HCM City People’s Committee Nguyen Thanh Phong said that the city will continue taking several measures to speed up the disbursement of the local public investment.
HCM City sets to disburse at least 80 percent of the planned investment by October 15 and over 95 percent of the plan by the end of this year, Phong vowed.
The city will classify projects according to their importance, and assign officials to monitor their progress and remove barriers if necessary, he said. The city also decided to disburse capital for eligible projects within four working days and produce reports about challenges facing the disbursement every two weeks.
The will accelerate progress in payment of land compensation and resettlement, he added.
Foreign firms optimistic about Vietnam’s economic recovery
Foreign corporate executives remain optimistic about Vietnam’s economic prospects despite the new COVID-19 outbreak that prompted the imposition of social distancing in some localities, especially in the central city of Da Nang.
Kenneth Atkinson, founder of international audit agency Grant Thornton and Vice Chairman of the Vietnam Tourism Advisory Board, said economists are warning that the new COVID-19 outbreak could overshadow the past optimistic forecasts about Vietnam’s short-term economic growth.
However, he still believed that Vietnam remains attractive to international companies.
Most foreigners living in Da Nang believed that the Vietnamese Government took swift and effective actions to combat COVID-19, both earlier this year and at present.
A foreign web designer said the Vietnamese Government is doing its best to prevent the new pandemic outbreak and current countermeasures are very important.
Singapore Airlines burns 3.2bln USD in just two months because of COVID-19
Singapore Airlines has spent 4.4 billion SGD (more than 3.2 billion USD) over the last two months as a result of the COVID-19 pandemic that has forced governments to close borders to stem the spread of the coronavirus.
The airline said since mid-June, it has spent 1.1 billion SGD on operating expenses, the settlement of maturing fuel hedging trades and ticket refunds following the cancellation of flights in view of the continuing border controls and travel restrictions.
Another 2 billion SDG has been used to repay a bridge loan while 0.2 billion SGD has been applied toward aircraft purchases. Approximately 0.9 billion SDG was to service debt, which included the redemption of the airline’s 10-year 500-million-SDG Fixed Rate Notes in July and repayment of funds previously drawn under certain lines of credit.
In June, the airline raised 8.8 billion SGD through its rights issues as the airline continues to suffer from the lockdown in international aviation.
Since the start of the COVID-19 pandemic, Singapore Airlines has taken steps to significantly reduce its monthly expenditure. To curb costs, it has slashed salaries and put staff on unpaid leave as it operates at less than 10 percent of capacity.
The Singaporean carrier posted a loss of 1.85 billion SGD in the first half of this year as the pandemic wiped out passenger traffic. Cathay Pacific lost 9.9 billion HKD (1.27 billion USD) and Qantas 1.96 billion AUD (1.4 billion USD).
RoK, Can Tho seek stronger economic ties
Leaders of Can Tho and Ministry of Foreign Affairs met with Ambassador of the Republic of Korea to Vietnam Park Noh-wan on August 20 to discuss future cooperation between in the Mekong Delta city and the RoK.
Speaking at the meeting, Secretary of the municipal Party Committee Tran Quoc Trung highlighted the recent development of the friendship and economic cooperation between the two sides, saying the RoK tops foreign investors in Can Tho with 14 FDI projects, worth a total 268 million USD.
The RoK is now the city’s largest strategic partner as the two-way trade exceeded 14 million USD last year and reached 2.9 million USD in the first half of 2020. Can Tho mainly exported to the RoK rice, fishery and agricultural products, garments and pharmaceuticals while imports included pharmaceutical materials, fabrics and veterinary medicines.
Trung hoped to receive more support and cooperation from the Ministry of Foreign Affairs, the Korean Ambassador and the RoK Consulate General in Ho Chi Minh City as well as Korean investors to further boost and sustain its development.
He called for Korean investment in various areas, including hi-tech, support industries, logistics, trade and tourism.
Deputy Foreign Minister Le Hoai Trung highly spoke of the strategic partnership between Vietnam and the RoK and mentioned Can Tho as an emerging destination for foreign investors.
RoK Ambassador to Vietnam Park Noh-wan, for his part, said more and more Korean firms have shown their interest in Can Tho and the Mekong Delta at large as the region holds great potential for economic development and Can Tho is a gateway to the delta.
Korean investment has been mostly poured into Hanoi over recent years, he said, adding that he expects a new wave of investment from Korean companies will land in Can Tho and the Mekong Delta in the coming time.
He wished to open more classes providing Korean-language lessons and proposed the establishment of a centre for sending Vietnamese guest workers to the RoK.
He unveiled that Vietnam and the RoK will co-host a Korea-Mekong Delta business forum in Can Tho in October.
Ha Long city boasts advantages in developing night-time economy
With the necessary infrastructure, attractive tour packages, and high-quality shopping services, Ha Long city in the northeastern province of Quang Ninh possesses a host of advantages to develop its night-time economy, especially tourism.
Over the next five years the night-time economy will be a focus of the city’s development goals and is expected to thrive.
Vice Chairman of the municipal People’s Committee Nguyen Ngoc Son said that over the past five years, 6-10 million travellers have visited Ha Long each year. It welcomed 11.9 million holidaymakers last year, 30-35 percent of whom were foreigners, mainly from Europe.
Local authorities plan to develop dance clubs, karaoke lounges, cinemas, exhibition spaces, arts performances, and casinos at night, as well as promote sightseeing tours around the city.
Shopping centres, convenience stores, and restaurants will be open later at night to serve customers.
One of the new points in the development of the city’s night-time economy is a proposal to open 12 pedestrian streets and 12 squares to attract visitors.
Besides waterfront streets along Ha Long Bay, there would be other routes reserved for pedestrians at Sunworld, the Tuan Chau tourism site, and the Dong Che flower village.
Cargo throughput of seaports still maintains growth in eight months
Nearly 485.3 million tonnes of cargo were handled at Vietnam’s seaports in the first eight months of this year, including over 13.9 million TEUs of container cargo, up 6 percent and 8 percent annually, respectively.
Deputy Director General of the Vietnam Maritime Administration Hoang Hong Giang said in August alone, nearly 57.3 million TEUs of cargo went through Vietnamese seaports, up 2 percent. Of which, the volume of container cargo surpassed 1.7 million TEUs, up 7 percent year-on-year.
The bulk of container goods handled by seaports is on the rise compared to July, Giang said.
Despite the COVID-19 pandemic, seaports in the central provinces of Quang Tri and Quang Ngai saw high increases in the volume of cargo, of up to 73-97 percent.
Seaports in Nam Dinh, Can Tho, Thanh Hoa and Thai Binh posted rises of between 20-32 percent.
In particular, the container throughput of seaports in My Tho soared by 276 percent, Thanh Hoa 96 percent, Quy Nhon 22 percent, Vung Tau and Ho Chi Minh City 15 percent.
Hanoi active in seizing opportunities from EVFTA
Having recognised the advantages for exports created by the EU-Vietnam Free Trade Agreement (EVFTA), Hanoi has designed a number of measures to make full use of the opportunities it brings about.
Addressing an online conference on implementing a plan to bring the EVFTA to life, a representative from the Hanoi People’s Committee noted that as many as 23 of the 27 EU member countries have invested in Hanoi, with total investment now standing at 4.16 billion USD, or nearly 10 percent of the total of 46 billion USD in foreign investment in the city.
EU enterprises primarily invest in support industries and high-tech production.
Meanwhile, the EU market receives 12-15 percent of Hanoi’s export products each year, mostly footwear, fruit and vegetables, and electronics.
In the first seven months of this year, Hanoi’s exported 998 million USD worth of goods to the EU, down 2.5 percent over the same period last year due to the impact of the COVID-19 pandemic.
Economists said that the 500-million-strong EU market, with annual GDP of 18 trillion USD, holds substantial promise for Vietnam in general and Hanoi in particular. The EU is also an important trade partner of Vietnam, with two-way trade standing at 55.8 billion USD in 2018.
Considered the “most modern, comprehensive, and ambitious agreement ever concluded between the EU and a developing country”, the EVFTA will abolish almost all tariffs between the two sides over the next ten years.
With commitments to open up markets and remove nearly 100 percent of import taxes, the EVFTA is expected to bring about major opportunities for businesses in Vietnam and Hanoi. Experts have forecast that revenue from exports to the bloc will rise about 42 percent by 2025 and nearly 45 percent by 2030.
According to a representative from the Ministry of Industry and Trade, Vietnam and the EU can supplement each other in goods supply and many Vietnamese products are already held in high regard in the EU market.
Based on the analysis, Hanoi has determined that the implementation of the EVFTA will promote growth in trade between Vietnam’s capital and the EU.
The EU, however, is quite a fastidious market and this requires exporters to ensure product quality and meet strict requirements on production processes and the use of labour. Along with quality, economists pointed out that EU consumers pay great attention to businesses’ social responsibility. Factors like not using child labour or regularly hosting charity activities and supporting the local community can contribute to enhancing the value of products in the market.
In order to conquer any market, Hanoi will need to increase its communications efforts and support enterprises by providing them with guidelines on standards for the entire production process, therefore helping local companies improve their competitiveness and access more export opportunities.
The capital will also continue to promote administrative reform and engage in investment promotion programmes calling for EU investors, especially in pharmaceuticals and sectors seeking high technology.
Hanoi has recently given support to small and medium-sized enterprises and start-ups to strengthen connectivity in building a start-up ecology and to create partnerships with the capital cities of certain EU member countries.
The city has proposed that the Prime Minister issue a plan to implement the EVFTA and direct ministries, sectors, and agencies to provide guidelines to cities and provinces, including Hanoi, to effectively bring the agreement to life, thus increasing export opportunities for businesses in Hanoi and Vietnam as a whole.
Over the years, under the Prime Minister’s direction, the capital has implemented plans to promote investment ties and partnerships with EU member countries, especially localities with which it shares a traditional relationship.
Thailand to cut down power generation reserve
The State-run Electricity Generating Authority of Thailand (Egat) is planning to reduce the power generation capacity reserve to 15 percent from 40 percent of total capacity, in a move to curb high power costs.
Decommissioning some power plants early, selling electricity to neighbouring countries and using more electricity in agribusiness will be carried out to allow for reductions.
Local media quoted Egat’s Governor Viboon Rerksirathai as saying that without these actions, the national power reserve would rise above 40 percent because of lower electricity demand during the economic recession. The more energy is stored in the grid, the more expensive power becomes for users.
The 2018 power development plan (PDP) projects that future electricity demand to grow by between 3-5 percent over the next decade, but the outbreak of COVID-19, which has led to lockdown measures worldwide, has made that estimate untenable.
Viboon did not name which plants are targeted for early decommissioning, saying the decision will depend on selection criteria and discussions with operators.
Without early decommissions, the country’s power generation capacity will rise from 51,390MW to 54,026MW in 2025.
Another option to reduce electricity reserves is sales to Myanmar and Cambodia, said Viboon. This requires upgrading transmission lines, but it would be worth the investment, he said.
The power surplus can also be used for chilling fruit and vegetables to prolong their shelf life before sale, he added.
The Thai economy has suffered sharp fall in the second quarter of 2020 due to the COVID-19 pandemic. The National Economic and Social Development Council announced on August 17 that the country’s GDP dropped by 12.2 percent from a year ago – the biggest decline since the Asian financial crisis in 1998. The second-quarter unemployment rate was at 1.95 percent, and an additional 1.8 million workers may be at risk of losing their jobs./.
Online workshop links Vietnamese companies and foreign distributors
An online workshop was held on August 20, providing training and networking activities to help connect Vietnamese enterprises with foreign distribution networks.
Part of a governmental project to facilitate such links, the workshop was co-organised by the Ministry of Industry and Trade (MoIT), giant retail groups such as Aeon, Walmart, Central Retail, and Lotte, and different sector associations.
It attracted the participation of 200 companies in agro-forestry and food processing along with thousands of viewers on its official Facebook page and YouTube channel.
Addressing the event, Deputy Minister of Industry and Trade Do Thang Hai said the workshop is one of a series of activities within the project, which aims to bolster the capacity of Vietnamese exporters in terms of production, market expansion, and finance.
COVID-19 is plaguing the operations of companies and supply sources, he said, adding that there is a need for stabilising the supply system and distribution market, particularly regarding goods for daily life, like farm produce and food.
Therefore, increasing exports via large distribution networks is an effective solution, he noted, which could help Made-in-Vietnam products more deeply enter global value and supply chains.
The MoIT has assigned the European-American Market Department to work with a number of major distributors on building a set of guidebooks for Vietnamese companies to improve their production and export capacity.
Ta Hoang Linh, head of the department, said the project aims to not only boost exports but also to build a capable business community that can meet demands from overseas markets.
The ministry has been working to link suitable partners together and to offer consultation services to Vietnamese companies, he said. To save time, both sides can join a chatroom to share details on their products after gaining the necessary information about each other, he added.
Fukui Tomoiaki, a senior manager from Japanese retailer AEON, said the group exported 268 million USD worth of Vietnamese goods in the first half of this year. The figure is expected to reach 500 million USD for the year as a whole, in line with AEON’s commitment to the MoIT in a cooperation pact on their strategic partnership.
Karim Noui from Central Retail noted that the retailer has held various programmes to date to support Vietnamese farmers and small- and medium-sized enterprises while working to send local products abroad.
45 million Vietnamese people shop online
Nearly 45 million Vietnamese people now access online shopping, a forum on domestic consumption trends on August 20 in Hanoi heard.
The Government aims to have 55 percent of the country’s 90-million-plus population shopping online by 2025, with revenues estimated at 35 billion USD.
The goal is perfectly feasible given the support coming from the Government, ministries, departments, and businesses.
Participants at the forum suggested making it easier for e-commerce enterprises to access capital to join online supply chains for Made-in-Vietnam goods.
It is also necessary to have policies for online payments and for guaranteeing the security of customers’ personal data, they suggested.
A representative from Nielsen Vietnam said the number of internet users in Vietnam is expected to reach about 60 percent of the country’s population this year, and 33 percent of Vietnamese consumers will make online payment while shopping.
Indonesia puts relocation of capital city on hold to tackle pandemic
Indonesia has put on a 33 billion USD project, initiated by President Joko Widodo, to relocate the capital city to the island of Borneo as it grapples to rein in the COVID-19pandemic.
Indonesian planning minister Suharso Monoarfa said the government is putting as its number one priority the recovery of the economy and overcoming the pandemic.
Making a frank admission of the obstacles to the project, he said groundbreaking could be delayed until 2022 or 2023, as the government focuses efforts on finding, and then distributing a COVID-19 vaccine to the population of nearly 270 million.
Construction of a state palace and other buildings was initially set to start by 2021, along with upgrades of airports, sea ports and the building of access roads in the forested area earmarked for transformation into a new smart city. Civil servants were due to start moving by 2024.
SoftBank’s chief executive Masayoshi Son, former British Prime Minister Tony Blair and Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed al Nahyan have been enlisted as advisers for the project.
Normally, such a big project should bring considerable positive ripple effects for the economy, but disbursing the government’s coronavirus stimulus response appeared more urgent now, said Wellian Wiranto, an economist at OCBC Bank.
At present, Indonesia could not afford to move its capital, as the pandemic’s strain on the national budget leads to a ballooning fiscal deficit, another economist said.
The downturn could last longer than the government anticipates, running until the second half of 2021, said Enny Sri Hartati of the Institute for Development of Economics and Finance.
Thailand aims to become first ASEAN nation to roll out 5G commercial service
Thailand is striving to become the first country in ASEAN to launch 5G commercial service, while existing 4G systems are ready to be upgraded to 5G, government deputy spokeswoman Ratchada Thanadirek said.
She said Prime Minister Prayut Chan-o-cha has encouraged investment in 5G to develop technology and the industrial structure. Fifth-generation connection and technologies would be used in the Eastern Economic Corridor as well as in big cities to turn them into “smart cities”.
Ratchada said the 5G project would commence in 2023 and cover 98 percent of the population by 2027.
The connection speed is expected to be 100 mbps in cities and 50 mbps in other areas. Some 7,000 SMEs are expected to apply 5G technology, and its value is likely to be 6.6 percent of the country’s GDP.
Moreover, basic education will be able to access about 700,000 digital educational services, which might help raise Thailand’s IMD World Digital Competitiveness Ranking to number eight.
Meanwhile, 5G innovation research can spur commerce by 50 percent, she added.
The Thai government has agreed in principle to apply incentives, including tax privileges, as a tool to promote the industrial sector using 5G technology in its production.
Rachada said the first meeting of the National 5G Committee chaired by Prime Minister Prayut on August 14 agreed that incentives such as a corporate income tax cut, special funding and soft loans would be instrumental to encouraging the private sector to rapidly adopt 5G technology.
The meeting also approved pilot 5G projects.
Indonesia considers plan to develop medical tourism
The Indonesian government is mulling over a plan to develop “medical tourism” in a bid to provide high-quality health care to the public and create a new source of national income.
The Coordinating Maritime Affairs and Investment Minister Office’s spokesman Jodi Mahardi said such a move could potentially bolster the country’s medical independence.
A report by PwC showed that 600,000 Indonesians sought medical treatment overseas in 2015 – the most in the world, he said.
Patients in Indonesia in general prefer overseas health care, citing lackluster domestic medical services related to the treatment of certain diseases.
He went on to say that the development of medical tourism in Indonesia was not only feasible, but also highly lucrative given the steady increase in the number of medical tourists around the globe.
Indonesia’s Southeast Asian neighbours, such as Thailand, Singapore and Malaysia, have already developed medical tourism.
Medical tourism, he added, could also serve as a catalyst for job creation and a more diversified economy in the country.
With such a goal, the Indonesian government has mulled over a plan to build international hospitals staffed with highly trained health professionals from other countries, in collaboration with related state departments and organisations, such as the Indonesian Doctors Association (IDI).
The plan to develop medical tourism in the country has been years in the making. In 2017, the Tourism Ministry and the Health Ministry signed a memorandum of understanding on the development of medical and health tourism, which was touted as a flagship of special interest tourism.
Wood processing to become spearhead economic sector by 2025
The wood processing industry is to become a spearhead economic sector by 2025, posting export turnover of about 20 billion USD to contribute to socio-economic development and stabilise the livelihoods of people living in forested areas.
Addressing a conference in Hanoi on August 20 to review policies on forestry investment and those on processing and trading forestry products, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said the forestry industry has recorded high growth in recent years, especially in export turnover.
The sector aims to improve the quality of forests and promote value and production chains for forestry products, focusing on investing in protective and special-use forests to protect the environment and ensure long-term biodiversity.
Support will be provided to poor farmers and the vulnerable, helping them access policies on forestry protection and development in combination with livelihood improvement.
Apart from promoting exports, it is also necessary to develop the domestic market which is valued at around 3 billion USD and demand keeps rising, Tuan said.
He underlined the need to have mechanisms and policies on non-timber forestry products, stressing that priority should be given to developing medicinal products.
Scientists believe that the environmental value and the value of non-timber forest products are about three to four times higher than the value of timber.
According to the Vietnam Administration of Forestry (VAF), about 50 trillion VND was mobilised for developing the forestry sector in the 2016-2020 period, including over 8.7 trillion VND from the State budget, over 3 trillion VND in official development assistance (ODA) capital, and nearly 27 trillion VND invested by organisations and individuals.
According to Bui Chinh Nghia, deputy general director of VAF, investment policies for the sector have proven effective, as the natural forestry area has been managed and protected well, forest quality has gradually improved, and forest coverage increased to 41.89 percent in 2019 from 40.84 percent in 2015 and is expected to hit 42 percent this year.
Many concentrated material areas have been created for the wood processing industry, reaching over 1.3 million ha.
The value of forestry production increased by an average of 5.73 percent annually in the 2016-2020 period. The export value of wood and wooden products rose to 11.3 billion USD in 2019 from 7.1 billion USD in 2015, and is estimated to reach over 12 billion USD this year.
Foodstuff businesses benefit as Covid-19 keeps people homebound
Many food processing firms have earned large profits this year with demand surging due to the COVID-19 outbreak as people have not been going out to limit contact with others.
Many of them have managed to do so despite having low charter capital.
Immediately after the outbreak began, cooking oil producer Tuong An Vegetable Oil Joint Stock Company (TAC) had to expand its production line to meet the demand.
In the first seven months of the year, its revenues were up by 30 per cent year-on-year to VND2.615 trillion, and profits by 23.3 per cent to VND370 billion.
KIDO Foods, the frozen foods subsidiary of KIDO Group, achieved revenues of VND832 billion. In the seven months, it achieved 94 per cent of its full-year pre-tax profit target.
The pandemic might be damaging the economy, but food processing businesses are having it good, analysts said.
Companies producing personal protective equipment (PPE) such as face mask also earned high profits, they said.
The Wakamono Group is manufacturing 20 tonnes of antimicrobial gecide fabric made using nano biotech daily to supply garment companies.
This fabric costs 30 per cent less than normal antimicrobial gecide fabric made without the use of nano biotech, Phan Quoc Cong, the company chairman, said.
Low-cost capital source drops sharply in many banks
Many banks no longer benefit from demand deposits as the low-cost capital source has declined sharply due to the impacts of the COVID-19 pandemic.
For banks, attracting a high proportion of demand deposits is important, because it creates a cheap source of capital. Normally, the interest rates of demand deposits are much lower than term deposits, being only around 0.2 per cent per annum.
At Kien Long Commercial Joint Stock Bank (Kienlongbank), though the bank’s customer deposits still grew by up to 10.4 per cent in the first quarter of this year, the amount of demand deposits significantly dropped by nearly 31 per cent to just more than VND1 trillion (US$42.9 million), Bizlive.vn reported.
The bank’s current account savings account (CASA) fell sharply from 4.62 per cent at the beginning of the year to 2.88 per cent by the end of June, being in the group of banks with the lowest CASA among the surveyed banks.
Similarly, the demand deposits at Bac A Commercial Joint Stock Bank (BacABank) decreased by 27.4 per cent in the first two quarters of the year, causing its CASA to plummet to a very low level of just 1.21 per cent.
Some other banks also recorded sharp fall of demand deposits, including Saigon Hanoi Commercial Joint Stock Bank (SHB, down by 21 per cent), Export Import Commercial Joint Stock Bank (Eximbank, down by 18.4 per cent) and Southeast Asia Commercial Joint Stock Bank (SeABank, down by 14.8 per cent).
In particular, SHB is one of the banks that recorded a sharp decline in CASA in the period, down from 9.38 per cent at the beginning of the year to only 6.95 per cent by the end of June.
At Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank), the CASA also decreased 2.28 per cent to 12.27 per cent, while SeABank saw a decline of 3.71 per cent to 8.73 per cent.
Even the three banks which have strong CASA including Military Commercial Joint Stock Bank (MBB), Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) also recorded a decline in CASA.
Despite leading the surveyed group with CASA of 35.61 per cent, MBB’s experienced a slight CASA decline from 38.38 per cent at the beginning of the year. Similarly, Vietcombank and Techcombank respectively recorded CASA falls of 1.98 per cent and 0.05 per cent.
The decline in banks’ demand deposits has been recorded as Viet Nam’s economy has been negatively affected by the COVID-19 pandemic, including a social distancing period.
Statistics of the State Bank of Viet Nam also showed the amount of deposits on payment accounts of the banking system experienced a sharp decline.
According to experts, the high CASA ratio will create a premise for the bank to improve its net interest margin (NIM) while keeping the lending rates at competitive levels in the market.
That is also the reason why in the past few years, the Vietnamese commercial banking system has witnessed an increasingly fierce race to increase CASA, with banks introducing many policies to attract demand depositors, such as exemption of transaction, money transfer and withdrawal fees.
Vietnam to develop infrastructure for border trade with Cambodia
The Prime Minister has issued a plan to implement a memorandum of understanding on the development and connection of border trade infrastructure between Vietnam and Cambodia.
The implementation started on August 19 and will last until October 2022. If the MoU is extended, the plan will continue to be carried out for three more years.
According to the plan, ministries, sectors, and localities involved are set to organise communications campaign to raise awareness on the content of the MoU; develop the Vietnam – Cambodia border trade infrastructure; promote trade with Cambodia; and share information and hold training courses; among others.
In the two years 2021 and 2022, they will carry out surveys for the building of at least a border market; run activities to encourage Vietnamese and Cambodian businessmen to invest in border trade infrastructure; increase related trade and investment promotion events; and support firms in introducing and distributing goods at border markets, trade centres, and trade fairs.
Vietnam and Cambodia share a land borderline of nearly 1,137km, passing through ten Vietnamese provinces of Kon Tum, Gia Lai, Dak Lak, Dak Nong, Binh Phuoc, Tay Ninh, Long An, Dong Thap, An Giang, Kien Giang and nine Cambodian provinces of Rattanakiri, Mondulkiri, Kratie, Tbong Khmum, Svay Rieng, Prey Veng, Kandal, Takeo and Kampot./.
Laos faces serious budget deficit
An elevated fiscal deficit will result in growing public debt, which will ramp up pressure on Laos’ debt servicing capacity amid the COVID-19 crisis, the Vientiane Times reported on August 21.
The Lao Government has estimated that the budget deficit will rise from 6.69 trillion kip (700 million USD) , equal to 3.7 percent of the country’s gross domestic product (GDP), to 10.3 trillion kip (1.1 billion USD), or 5.7 percent of the GDP.
Chairman of the Lao National Assembly’s Planning, Finance and Audit Committee, Dr Leeber Leebouapao told the paper that the government is seeking ways to address the country’s debt following a revenue shortfall.
The government may attempt to issue bonds to mobilise more funds or borrow more money from various sources to repay debts and address the projected budget deficit, he said.
The World Bank (WB) also stated that public debt is expected to rise to around 65 percent to 68 percent of GDP in 2020, leaving Laos at high risk of debt distress.
In June, Prime Minister Thongloun Sisoulith told the National Assembly that the government will issue bonds for the rest of this year to repay debts.
Economists have recommended the government to assist the private sector, notably small and medium-sized enterprises to lower their production costs in order to boost productivity for exports.
12th CLMV Economic Ministers’ Meeting held online
The 12th Cambodia – Laos – Myanmar – Vietnam (CLMV) Economic Ministers’ Meeting was held online on August 24.
The meeting is a key event within the framework of the 52nd ASEAN Economic Ministers’ Meeting and related meetings scheduled for August 22-30 in Hanoi.
Attending were Cambodian Minister of Commerce Pan Sorasak, Lao Minister of Industry and Commerce Khemmani Pholsena, Myanmar Minister of Investment and Foreign Economic Relations Thaung Tun, and ASEAN Secretary General Dato Lim Jock Hoi.
Minister of Industry and Trade Tran Tuan Anh, who led the Vietnamese delegation, proposed the CLMV countries enhance policy coordination to overcome difficulties caused by COVID-19, continue activities to link firms together, and remove obstacles facing exports and imports and cross-border trade.
Regarding the progress of the CLMV economic cooperation action plan for 2021-2022, many activities have been basically completed or achieved positive results.
Ministers agreed to adopt action plans in the fields of trade and investment cooperation, the delivery of regional commitments, post-pandemic recovery, the CLMV development framework, and human resources development.
They pledged to assign heads of delegations at the ASEAN Senior Officials’ Meeting (SEOM) to strengthen coordination and propose new and practical projects in the new era.
Anh suggested CLMV countries remain active and proactive in seeking resources support from development partners to carry out regional cooperation projects.
He said countries should outline new joint projects on capacity improvement and technical support in the fields of digital economy, innovation, start-up facilitation, smart production, 5G eco-systems, transportation, trade, and logistics infrastructure connectivity.
In order to ensure the operation of supply chains, he proposed that countries facilitate trade, simplify processes and procedures for exports-imports and customs clearance in border areas, and enhance transportation and logistics connectivity.
CLMV countries should continue sharing experience and information on policymaking, and create a favourable environment for attracting shifting investment waves, towards turning CLMV into an attractive destination for investors, he said.
Speaking highly of the Vietnamese minister’s proposals, participants agreed on the need to boost cooperation to mitigate the COVID-19 pandemic’s impacts on economic-trade links, maintain trade and investment flows, and improve the countries’ capacity to cope with the pandemic and economic recovery.
- Vietnam businesses in Germany urged to help boost bilateral ties
- Vietnam to gain $11b from wood and forest product exports in 2019
- Vietnam’s textile export value up almost 9% in eight months
- Foreign investors grasp more control overn Vietnam’s aviation market
- Vietnam spends much on vegetables, fruits import
- Japanese zipper-maker YKK to open second Vietnam plant
- Vietnam needs to remove fishing yellow card
- Vietnam real estate firms issue bonds to raise capital
- How long will Vietnam stay in the top 20 in economic growth?
- Vietnam’s GDP per capita is $3,000 per annum
- Vietnam may see negative impact from trade war in 2020: economists
- External factors torment investors in Vietnam
- Promoting cashless payments to boost internet economy in Vietnam
- Vietnam's SOE equitisation progress is “very slow”
- Explainer: South African Airways is in 'business rescue'. What does that mean?
- Vietnam's yarn industry experiences difficulties
- Vietnam is only country still developing condotels
- Poor logistics system hindering Vietnam agricultural products’ trade
- Vietnam’s steel industry facing nearly 50 anti-dumping and –subsidy investigations
- Vietnam's textile industry aims for green standards
VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 25 have 7432 words, post on vietnamnet.vn at August 25, 2020. This is cached page on Talk Vietnam. If you want remove this page, please contact us.