Vietnam’s economy keeps growing thanks to important drivers
With projected growth of 2-3% in 2020, Vietnam will be one of the fastest-growing economies in the region and the world by tapping into its internal strengths, taking advantage of opportunities and thanks to the economy’s adaptability to new situations.
The most notable aspect is that the main drivers of growth have picked up, helping the economy to recover quickly in the final months of the year.
The first engine is export. The Covid-10 pandemic has caused global trade to fall steeply while Vietnam’s export growth has remained in positive territory, with a rate of over 10% since the third quarter, making Vietnam the country with the fastest growth rate in trade.
As of October, the trade surplus rose to a record high of US$18.72 billion, helping Vietnam increase its foreign reserves. Exports by domestic companies have continued rising to offset the sharp decline registered by foreign-invested firms.
Such impressive results are thanks to the fact that Vietnam has been able to capitalise on signed free trade agreements along with enterprises’ resilience and rapid adaptation amid a highly unstable supply of input materials.
Manufacturing, one of the main economic drivers, has sustained growth while public investment has seen an uptick in disbursement from the third quarter thanks to the Prime Minister’s aggressive instructions and efforts of ministries and provincial authorities. By the end of October, the disbursement rate had reached 68% of the target for 2020. It is expected that disbursement will accelerate in the final two months as many projects are approaching completion.
Recently, the International Monetary Fund upgraded its growth forecast for Vietnam in 2020 to 2.4% thanks to its bold measures to contain the coronavirus, while the World Bank stated that Vietnam’s economy has remained resilient amid the Covid-19 crisis by seizing new opportunities in trade and the digital economy to maintain exports as well as reforming administrative procedures to facilitate businesses and people. The World Bank highly praised Vietnam’s adaptation in stepping up the building of electronic government.
Although Vietnam’s outlook remains positive in the short term, financial institutions recommend that Vietnam should closely monitor fiscal, financial and social risks due to domestic and global uncertainties.
In order to accelerate post-Covid economic recovery, the most important thing to Vietnam is the implementation of various measures in a bold and synchronous manner so as to sustain production and business activities. A survey by the General Statistics Office shows that key enterprises in the manufacturing sector are upbeat about the outlook in the fourth quarter.
Therefore, year-end support measures should focus on strengthening the health of enterprises by implementing existing packages effectively and quickly roll out new support packages in 2021.
In addition to maintaining the growth momentum with traditional drivers, it is necessary to develop new drivers, especially the digital economy, in order to take advantage of unprecedented changes in global economic and trade activity.
Remittances to Vietnam exceeds $71 bln
Total remittances to Vietnam have surpassed 71 billion USD in the 2015-2020 period at an average annual growth of 6 percent, helping improve Vietnam’s balance of payment and increase its foreign exchange reserve.
As of October, the diaspora had invested in 362 FDI projects in with a total registered capital of 1.6 billion USD. Overseas Vietnamese returning to the country have also established many large businesses, creating jobs, transferring technology and contributing to the socio-economic development of the nation./.
Rolling out red carpet for South Korea
Being in a key position for South Korea’s New Southern Policy, Vietnam expects to receive a large investment capital inflow from the country as a result of the newly-signed Regional Comprehensive Economic Partnership agreement.
Hundreds of South Korean enterprises participated in an investment promotion conference to lure investors into the northern province of Vinh Phuc organised last week by Vinh Phuc People’s Committee, the Ministry of Planning and Investment (MPI), and South Korean organisations already in Vietnam.
These enterprises had opportunities to meet local partners and work with authorities to scope out investment prospects in the province. The outcome of the conference is expected to open up opportunities for South Korean enterprises in industrial infrastructure development, manufacturing and processing, the supporting industry, innovation, and pharmaceuticals.
The Vinh Phuc promotional event was one of numerous similar events that South Korean investors have organised in cities and provinces across the country, in locations such as Nghe An, Ho Chi Minh City, Binh Duong, and Dong Nai. Several investment proposals worth hundreds of millions of US dollars have been made at the events, one of which was a $150 million technopark project in the southern province of Dong Nai proposed by Vietnam-Korea Techno Park, with the expectation to lure in $2-3 billion of high-tech investment in around 6-9 years of operation.
The strengthening of bilateral relations between Vietnam and South Korea has been a key mission of both and was once again repeated at the 18th Vietnam-Korea Economic Committee Meeting, hosted by the MPI and South Korea’s Ministry of Foreign Affairs last week.
Tran Quoc Phuong, Deputy Minister of Planning and Investment said, “Bilateral relations have acquired outstanding results in all sectors from investment and trade to tourism that create comprehensive benefits for both parties. South Korean enterprises have contributed an important part to Vietnam’s economy, which has made up 30 per cent of export turnover in the first nine months of this year.”
As of October 20, South Korea had about 8,900 valid projects in Vietnam with total registered capital of $70.4 billion, ranking first in total accumulated registered capital and project numbers from overseas investors. However, funding by Vietnamese counterparts into South Korea has been modest, with only 49 valid projects registered at $35.24 million.
This could all change in good time after the Regional Comprehensive Economic Partnership (RCEP) agreement, considered a catalyst to lure investment capital inflow from South Korea to Vietnam, was signed on November 15.
According to Minister of Industry and Trade Tran Tuan Anh, signing the RCEP will create more benefits for Vietnam in attracting foreign direct investment.
“In collaboration with other countries in ASEAN, Vietnam has opportunities to become a centre in luring such capital, especially from RCEP member countries,” he said.
According to newswire KBS, South Korea’s flagship broadcaster, the country’s administration described the RCEP signing as a “core result” of its New Southern Policy which aims to improve strategic ties with Southeast Asian nations.
Vietnam is evaluated as the key destination in South Korea’s New Southern Policy as Kim Hyun Chul, president of the New Southern Policy Committee, confirmed in the framework working session with Deputy Prime Minister Trinh Dinh Dung recently.
Chul said that the South Korean government will continue to encourage and create favourable conditions for its enterprises to invest in Vietnam in numerous sectors, including petrochemicals, renewable energy, and the environment.
In order to create favourable conditions for South Korean enterprises to develop projects in Vietnam, Lee Seong-ho, Deputy Minister for Economic Affairs, has proposed for Vietnam to resume commercial flights with South Korea and support their experts in entering the country to carry out vital work.
Do Van Su, general deputy director of the Foreign Investment Agency (FIA) under the MPI, said that the agency will cooperate with other authorities to deal with such proposals so that the projects in question can be implemented. “The FIA will also combine with local authorities to promote investment inflow from South Korea in sectors which save energy, use high-tech machinery, and which have a high localisation ratio,” Su said.
New expressways lift up interconnectivity
Businesses and investors in the Mekong Delta region are expected to benefit from stronger links in the transport network in the next five years when up to 300km of expressways are completed, opening brand new opportunities for the region’s socioeconomic development.
On the site of the Trung Luong-My Thuan Expressway project, more than 100 engineers and other staff are attempting to speed up construction, with a bustling atmosphere taking place over machines and equipment in full operation.
Trinh Van Tai, an expert on the expressway’s management board, said that contractors are focusing all of their efforts on completing the final stages so as to scatter asphalt of the surface of the XL04 section in early December.
The XL04 section, connecting Cai Be district of the Mekong Delta province of Tien Giang, is one of several packages of the project, with the majority of the construction of the foundation already completed, in addition to key works of bridges.
Nguyen Tan Dong, general director of Trung Luong-My Thuan BOT JSC, said that after over one year of development, about two-thirds of the project has been finished. “We plan to open for some traffic by the end of 2020,” Dong said.
The 54km long expressway is part of the Ministry of Transport’s (MoT) plan to develop an expressway network of 300km in the Mekong Delta region by 2025 to satisfy growing travelling demands among both locals and businesses.
The MoT is also developing a number of other ventures. At present, the 40km Ho Chi Minh City-Trung Luong Expressway is already operational, while My Thuan Bridge II and a connecting road of 7km will be completed in 2023.
At the National Assembly’s November interpellation, Minister of Transport Nguyen Van The said, “The 300km expressway target for 2025 is feasible because many important projects are scheduled to be completed by then.”
In addition, construction of 23km running from My Thuan Bridge II to the Mekong Delta city of Can Tho will be kicked off in December, and together with the route from Cai Gon to Can Tho Bridge, about 130km of expressway connecting Ho Chi Minh City to Can Tho will be put into use by 2023.
Next month, Prime Minister Nguyen Xuan Phuc is scheduled to attend the inauguration of the 51km Vam Cong-Rach Soi Expressway.
“Elsewhere, we plan to open an expressway connecting Lang Son to Ca Mau city by 2025. This means that around 170km of route from Can Tho to Ca Mau will be a priority in the 2021-2025 term,” minister The noted.
If everything goes smoothly as expected, by 2025 the country could even reach up to 400km of expressway in the region.
Transport experts have expressed their high hopes for the MoT plan because the network from Ho Chi Minh City to the Mekong Delta remains underdeveloped, leading to serious traffic jams and causing negative impacts on business activities amid strong socioeconomic development in the region.
Senior transport expert Le Do Muoi told VIR, “With this strong determination from the government, the plan is feasible. Moreover, because a better transport network in the region is an urgent need, leaders in regional cities and provinces are making strong moves in order to hand over cleared land for construction.”
The Mekong Delta has become an appealing destination to domestic and international investors in recent times with the US, Japan, and South Korea among countries creating strong interest in agriculture, processing and manufacturing, and clean energy.
According to regional statistics, in the first eight months of 2020 the region attracted a total of nearly $5 billion worth of new and added foreign investment, as well as state acquisitions. Dong Thap, Long An, Ben Tre, Vinh Long, and Can Tho provinces are deemed the most attractive spots.
Vo Tan Thanh, vice chairman of the Vietnam Chamber of Commerce and Industry, said that the region has been near the top of the country’s Provincial Competitiveness Index among regions over the last half-decade, with five regional localities named in the country’s top 20 in the index.
Vietnam, India seek to promote fishery cooperation
Enhancing fishery cooperation between Vietnam and India was the theme of the opening session of the online fisheries expo and conference which is taking place with the theme of ‘FISH MART’ from November 24 to 30.
Addressing the event, which is organized by the Confederation of Indian Industry (CII), Aditya Dash, a representative of CII said as one of Vietnam’s major suppliers of raw seafood materials, Indian businesses are keen to share their experience with Vietnamese counterparts to develop the seafood industry while Vietnamese businesses are being encouraged to invest in the aquaculture and seafood processing sector in India.
Le Hang, a representative of the Vietnam Association of Seafood Exporters and Producers (VASEP), briefed participants on the Vietnamese aquatic industry, along with prospects of Vietnam-India cooperation in the field.
According to Hang, Vietnam has so far exported seafood products to 160 foreign markets globally, with revenue reaching between 8 and 9 billion USD per year.
During the first nine months of this year, despite the impact of the COVID-19 pandemic, the nation grossed approximately 6 billion USD from exporting aquatic products.
At present, India is a major supplier of raw seafood material for Vietnam. During the nine-month period, Vietnam imported 188 million USD worth of seafood products from India, posting a year-on year increase of 26 percent and accounting for some 15 percent of the nation’s total seafood import turnover.
In the framework of the event, the trade office under the Vietnamese Embassy in India will hod a Vietnam booth and an online business matching event for Vietnamese enterprises on November 27./.
MoIT pledges to do its best to support Korean firms: Minister
The Ministry of Industry and Trade (MoIT) will make every endeavour to support Korean enterprises and attract high-quality investment from the Republic of Korea (RoK), Minister Tran Tuan Anh told a workshop hosted by the MoIT in Hanoi on November 26.
The workshop was an opportunity for the MoIT and Korean firms to chalk out ways to foster investment and strengthen the multifaceted relations between the two countries.
The MoIT has pioneered in providing assistance to entry of Korean experts into Vietnam amid challenges posed by the COVID-19 pandemic, he said, adding that so far, more than 10,000 Korean specialists have been sent to Vietnam this year to work for FDI projects. They are important to ensure the normal operation of the FDI businesses, including those of the RoK, in Vietnam, Anh said.
Vietnam has advantages and opportunities to create breakthroughs in the near future as the country has basically brought the pandemic under control and gained increasing confidence from not only the domestic business community but also foreign investors and partners, he noted.
The minister expected that Korean investors can take advantage of opportunities in Vietnam, soon recover production and boost growths in the coming time.
The Vietnamese government and the MoIT persist in supporting and facilitating domestic and foreign investors, particularly those from the RoK, to further expand investment and business in Vietnam, the minister said.
Speaking at the event, Korean Ambassador to Vietnam Park Noh Wan highlighted Vietnam as an open economy which has developed steadily and become member of many free trade agreements. These are good factors for Korean firms to stay confident about their investment and business in the Southeast Asian country, he said.
As the COVID-19 pandemic is causing disruption to global supply chains, enterprises from both nations need to exchange frequently and coordinate closely to further boost trade and investment, the diplomat said.
Currently, the RoK is Vietnam’s third largest trade partner, after China and the US, with bilateral trade reaching nearly 67 billion USD in 2019. It is also the fourth largest export market and second import market of Vietnam. The RoK mainly imports agricultural and aquatic products, processed food, textiles and garments, footwear, timber products, and electronic products from Vietnam.
The East Asian country is Vietnam’s biggest foreign investor with more than 9,000 FDI enterprises based in Vietnam and accumulative investment hitting about 70.4 billion USD as of October 2020, accounting for 18.5 percent of Vietnam’s total FDI./.
Vietnam, Italy seek ways to bolster economic ties
The Vietnamese Embassy in Italy organised an online forum on Vietnam-Italy economic cooperation to beef up bilateral economic relations on November 26.
Attending the event were member of the Italian Chamber of Deputies Tullio Patassini, who is also Vice President of the Italy-Vietnam Friendship Parliamentarians’ Group, and representatives from the General Confederation of Italian Industry (Confindustria), the Italy-Vietnam Chamber of Commerce, the Vietnamese Ministry of Planning and Investment’s Foreign Investment Agency (FIA), and around 70 enterprises of both countries.
In her opening remarks, Vietnamese Ambassador Nguyen Thi Bich Hue said that the Vietnam-Italy strategic partnership has been nurtured in numerous fields, especially in economics, as Vietnam is Italy’s largest trade partner in ASEAN and the latter is the former’s fourth biggest trader in the EU.
The economic cooperation can develop further in the time ahead through new legal frameworks such as the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement, she said, adding that the two documents were ratified by the Vietnamese National Assembly and are waiting for the ratification of EU member parliaments.
Patassini spoke highly of the Vietnamese Government’s efforts to create an open cooperation environment for foreign enterprises, including those from Italy.
Italy holds great potential to intensify cooperation with Vietnam in mechanics, electronics, food, shipbuilding and cultural exchange, he stated.
He affirmed that the EVFTA is an important foundation to further boost collaboration between European and Vietnamese enterprises as well as Italian and Vietnamese ones.
Head of the FIA Do Nhat Hoang said that foreign investment poured into Vietnam has increased in recent years, with a total capital of 382.9 billion USD from 139 nations and territories. With 115 projects, Italy is currently ranked 46th.
The figures are quite modest compared to cooperation potential between the two countries, added Hoang./.
Thailand tourism struggles despite loosened entry policies
Thailand welcomed first 1,201 foreign tourists in October since a ban in April aimed at averting coronavirus outbreaks, as the country gradually opens up to a select number of visitors.
The figure was just a fraction of the 3.07 million arrivals in the same month last year.
According to the Tourism Ministry, the latest visitors included 471 from China, 231 from neighbouring Cambodia, 178 from Middle East countries and 116 from Europe, all travelling on special 90-day visas that require two weeks of quarantine.
In January-October 2020, the number of foreign tourists in Thailand dropped 79.5 percent to 6.69 million. No tourists were seen between April and September.
But the country has yet to agree any such arrangements and previous plans were abandoned in August after coronavirus cases in Asia increased.
New outbreaks have seen several other travel bubbles between Asia-Pacific countries aborted or fail to take off, including between New Zealand and Australia, and Hong Kong and Singapore.
In the third quarter of 2020, the Southeast Asia’s second-largest economy contracted 6.4 percent from a year earlier after the second quarter’s 12.1 percent slump as most virus restrictions were eased, but an absence of tourists is limiting the recovery.
The country is forecast to receive 6.7 million foreign tourists this year after last year’s revised record 39.9 million visitors who spent 1.91 trillion baht (63 billion USD), or about 11.3 percent of gross domestic product (GDP).
It predicts only 5 million foreign visitors in 2021./.
Exporters advised to further tap into European market
Vietnamese exporters should further exploit the 28-member European Union to increase their market share in the promising region, Vietnam Trade Counsellor in Germany Bui Vuong Anh has said.
Addressing a conference on trade promotion to the European market held by the Ministry of Industry and Trade (MoIT) held on November 25, he noted that Vietnam’s exports account for only 2 percent of European imports.
Major exports from Vietnam with advantages in the market include agricultural and aquatic products, processed foods, footwear, garments and textiles, and some high value-added product categories, such as electrical products, electronics, telephones, equipment, and machinery.
Anh said there is still room for Vietnamese exporters and advised enterprises to optimise their advantages in agricultural and aquatic products, garments and textiles, and footwear to quickly increase market share in the region. For seafood products, enterprises should pay attention to origin warnings. He added that the EU is now increasing the frequency of checks on seafood exports from Vietnam.
The EU has 28 members but exports from Vietnam primarily go to just a few countries, such as Germany, the Netherlands, Italy, France, and Austria.
That enterprises only focus on a few markets puts them at risk, especially when the market experiences fluctuations, as it did from COVID-19. It is therefore necessary to consider expanding market share throughout the region. According to a representative of the trade office in Sweden, Vietnamese enterprises could immediately expand their market share in northern Europe, and products with great potential include garments for women, seafood, footwear, unroasted coffee beans, and unshelled cashew nuts./.
European firms in Vietnam more positive about Q3 performance
Leaders of European businesses in Vietnam were more positive about their firms’ performance in the third quarter of 2020, according to the Q3 Business Climate Index (BCI) released by the European Chamber of Commerce (EuroCham).
The index, conducted by YouGov Vietnam, rebounded in Q3, jumping 24 points to reach 57.5 – the highest score since the outbreak of the global COVID-19 pandemic.
In Q1, when COVID-19 first hit international trade and investment, the BCI fell to 26 points. It saw a slight increase in Q2 as Vietnam became one of the global success stories of the pandemic.
Now, with businesses able to operate with far fewer restrictions and the EU-Vietnam Free Trade Agreement (EVFTA) entering into force on August 1, the confidence of European business leaders has seen a strong resurgence, according to EuroCham.
Business leaders were more positive about their own enterprise in Q3, with 40 percent describing their performance as either “Excellent” or “Good” – more than double the 18 percent recorded in the previous three-month period.
EuroCham said Q4 looks to be even more promising, with 44 percent predicting a strong end to 2020. Meanwhile, most companies are anticipating stabilisation in their headcount (65 percent) and investment plans (57 percent), with just under half (44 percent) expecting to see an increase in their revenue and orders.
With the EVFTA entering into force in Q3, the BCI also asked EuroCham members about its impact on their business and investment plans. One-third said that the agreement was an important part of their decision to invest in Vietnam, with the top two factors predicted to drive growth being tariff reductions and greater market access for investors.
“The implementation of the EU-Vietnam Free Trade Agreement in August has, no doubt, helped to boost this growing confidence. Our data shows that falling tariffs and growing market access are important to our members, and will help to spur new foreign-direct investment from the EU in the future,” he added.
The BCI is a regular barometer of EuroCham members and their perceptions of the trade and investment environment. Each quarter, it tracks the performance of EuroCham’s member companies and their perceptions of the economic outlook in Vietnam./.
Forum seeks to boost domestic logistics growth
The Logistics Forum Vietnam 2020 was held by the Ministry of Industry and Trade (MoIT) in Hanoi on November 26, with more than 500 businesses attending.
In his address, Secretary of the Hanoi Party Committee Vuong Dinh Hue lauded the MoIT’s initiative to coordinate with the World Bank (WB) and relevant agencies to hold the forum, which offers a chance for entrepreneurs, scientists, and experts to discuss how to best promote the growth of the domestic logistics sector.
Noting that fluctuations in the region and the world, along with the COVID-19 pandemic, are affecting Vietnam, he stressed the need for cohesive and responsive efforts in overcoming the difficulties and challenges, making breakthroughs in the sector’s growth to serve socio-economic development.
In order to reduce logistic costs, Hue suggested the promotion of research and development (R&D) activities in the field.
Businesses also need to strengthen the application of achievements from the fourth Industrial Revolution in logistics services, he said.
Hue also advised enterprises to apply transport management systems using cloud computing technology that allows for the tracing of product origin and transportation routes, together with other technologies, to strengthen connections and ensure security for customers and partners.
Meanwhile, Deputy Prime Minister Trinh Dinh Dung asked the MoIT to soon establish a project on personnel matters in support of the National Steering Committee on ASEAN and National Single Window Mechanisms, while effectively implementing policies and action programmes on international economic integration, focusing on enhancing the capacity to realise international economic commitments.
He requested the Ministry of Planning and Investment coordinate with relevant agencies to promptly build a system for the compilation of logistics statistics to identify bottlenecks, and to mobilise social resources for the development of infrastructure.
Meanwhile, the Ministry of Finance was asked to propose plans to allocate financial resources for the implementation of the action plan to enhance competitiveness and develop the logistics services sector to 2025.
According to Minister of Industry and Trade Tran Tuan Anh, the COVID-19 pandemic saw logistics activities stagnate around the world.
Vietnamese businesses overall, however, benefited from the country curbing the spread of the pandemic and now have access to opportunities from new generation free trade agreements (FTA), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA (EVFTA).
Vietnam’s trade revenue stood at 439.8 billion USD in the first 10 months of 2020, he said, up 2.62 percent year-on-year. Trade was still in surplus, to the tune of 18.72 billion USD.
He said that people now tend to shop online more, leading to faster digital transformation in trade and logistics.
The implementation of FTAs has also intensified competitive pressure on domestic products, especially farm produce, which is closely attached to vulnerable groups of farmers during international economic integration.
Along with a plenary system on reducing logistics costs and enhancing competitiveness amid international economic integration, participants also discussed various issues relating to logistics infrastructure and the sector’s digital transformation./.
Five Vietnamese enterprises to compete at Asia-Pacific WEPs Awards
Nine Vietnamese enterprises on November 26 received the Women’s Empowerment Principles (WEPs) Awards at the national level, of whom the top five will represent Vietnam to participate in the Asia-Pacific WEPs Awards slated for December in Bangkok, Thailand.
This is an activity within the framework of the WeEmpowerAsia programme (WEA) jointly carried out by the UN Women and the European Union.
The WEPs are a set of seven principles that support companies to take a gender-sensitive approach throughout their value chain starting with corporate leadership and looking across the wider value chain from workplace, marketplace and community.
The WEPs Awards was launched in September in many countries in the Asia-Pacific region with the aim of encouraging and recognising the efforts of companies that promote practices, programmes and actions to create more gender-inclusive business cultures embracing the gender equality and women’s empowerment, raise awareness, and mobilise more companies to implement the WEPs within their own business.
Elisa Fernandez Saenz, UN Women Viet Nam Country Representative, said that the WEPs Awards recognise leaders and businesses’ efforts to promote gender equality for their employees, consumers and partners, and at the same time inspire other leaders and businesses to take action to bring about greater effects./.
Experts discuss Vietnam’s digital economic development post-COVID-19
Vietnam is constantly looking for new driving forces for growth and the country has leveraged opportunities from digital and e-commerce for economic growth, according to CIEM director Nguyen Thi Hong Minh.
The Central Institute for Economic Management (CIEM) held a seminar titled ‘Vietnam’s digital economic development post-COVID-19: Some requirements and roadmaps for institutional reform’ in Hanoi on November 25.
The world was witnessing rapid changes from the fourth industrial revolution with breakthroughs in many fields, including the digital wave of the manufacturing sector, said Minh.
Recognising its importance, many countries had concretised their digital economic development priorities, she added.
The COVID-19 pandemic had made the Vietnamese Government and the business community more interested in the digital economy, noted the director.
At the event, the CIEM’s Department General Economic Issues and Integration Studies released a report aimed at assessing policy priorities, implementation and the realities of digital economic development in Vietnam.
At the same time, the report identified conditions and requirements for institutional reform for the inclusive development of the digital economy and proposed a roadmap for digital economic development in Vietnam.
The CIEM director proposed solutions for the development of the digital economy, including ensuring a safe network security environment, completing competition policies, amending tax laws to regulate digital-based activities, enhancing the effectiveness of intellectual property protection, and regulating regulations related to the labour market and social security in the digital context and infrastructure.
Tran Minh Tuan, deputy director of the National Institute of Information and Communications Strategy, said there should be open data policies, allowing public access to encourage analysis, creation and development of applications from open data.
In addition, the technology applied in smart city development needed to conform to international standards and be compatible with other countries to be able to transfer data between economies in the context of global integration, added Tuan.
“In addition to the normal regimes, participating in the labour market will ensure workers’ technology skills improved, contributing to the success of building a digital economy in Vietnam,” said a representative of the CIEM’s Department General Economic Issues and Integration Studies./.
124 firms honoured as national brands
A total of 124 companies with 283 products were honoured as Viet Nam National Brands this year at the Viet Nam National Branding Programme Announcement Ceremony held on Wednesday at the Hanoi Opera House.
The figure this year was 27 higher than in 2019. Among them, 17 enterprises had products honoured as Viet Nam National Brands for a seventh consecutive time since the programme was launched in 2008.
At the ceremony, Deputy Prime Minister Truong Hoa Binh heaped praise on the firms for their efforts and contributions to socio-economic development.
“I am very glad that the number of products honoured as Viet Nam National Brands has increased rapidly through years, which clearly shows the growing confidence of businesses in the Government and the quality improvement of goods and services in Viet Nam,” Binh said.
The honoured enterprises had made efforts to innovate their products and services and their achievements demonstrated corporate culture and enhanced the competitiveness of Viet Nam’s national image internationally, he said.
The Deputy Prime Minister asked the enterprises to continue to make use of their potential and capitalise on their advantages to boost exports through brand value, building branding products, while at the same time promoting the spirit of innovation, enhancing proactive integration, especially in the context of the digital age.
Binh encouraged enterprises to pursue the core values of the programme, which is ‘Quality – Innovation-Leadership’, creating a spillover effect to support the development of the Vietnamese business community.
He asked the Ministry of Industry and Trade to listen to the proposals and recommendations of businesses and co-ordinate with relevant ministries and agencies to facilitate businesses in policies, mechanisms and resources so they can be more involved in the process of building and promoting the image of Viet Nam.
Deputy Prime Minister said he hoped there would be more and more Vietnamese enterprises participating in the programme so that by 2030 Viet Nam will have more than 1,000 products recognised as National Brands.
Minister of Industry and Trade Tran Tuan Anh said after nine months of selection, 124 companies were chosen from more than 1,000 enterprises to get the Vietnam National Brand title in 2020.
These companies’ combined revenues and export turnover hit VND1.4 quadrillion (US$60.5 billion) and VND137 trillion last year, respectively. They contributed more than VND200 trillion to the State budget and created jobs for some 471,000 labourers.
He said with the recognition of national brands, firms could affirm their position in the domestic market and expand in global markets.
Disruptions from COVID-19 create opportunities for investment in innovation
The COVID-19 pandemic may have caused disruptions to start-ups and innovative enterprises, but it had also created opportunities for them to turn into real businesses.
At the Vietnam Venture Summit 2020 with the theme “Going Digital” in Ha Noi on Wednesday, Minister of Planning and Investment Nguyen Chi Dung said Vietnamese start-ups grew well last year with investments worth more than US$800 million. However, the pandemic had completely changed the investment picture this year, revealing the limitations of many start-ups.
Local and foreign investors, funds and start-ups including Golden Gate Ventures, Softbank Venture, Sequoia, ADB Venture, Quiming Venture, VNG, Grab Vietnam, MoMo, GoJek, VNPay and Tiki Sendo represented the different sectors at the summit.
According to the National Centre for Innovation (NIC), Viet Nam was a destination for international investors in both FDI and start-up and innovation.
Dung said: “This is the right time to continue connecting investors, financial funds and the innovative ecosystem in the region to expand opportunities for co-operation and investment.”
“It is also time for an initiative to attract innovation investment by the Government of Viet Nam,” he added.
Though mentioning the pandemic’s influence on many start-ups, Dung considered some business models and tech firms had become more attractive and grown rapidly. They included online meeting applications, distance teaching apps, e-commerce and logistics for e-commerce.
“This is a pivotal period for Viet Nam, marking the beginning of a new development wave of the Vietnamese innovation ecosystem. It is time for the country to focus on promoting its creative capacity through science, technology and innovation, making it a driving force for rapid and sustainable economic development,” he said.
At the summit, Joonpyo Lee, CEO of SoftBank Venture Asia, said the pandemic had caused disruptions in many areas of the market but had also created an opportunity to turn new technologies into real businesses.”
The lock-down from the pandemic had limited travel but made online shopping, working remotely and transferring money online the best ways to survive, he said.
Changes in consumer behaviour had created great opportunities.
Lee said: “As a start-up investor, I see many opportunities in the transition, which is creating a legacy for the world.”
Nguyen Thai Hai Van, a representative of Grab Venture, the first unicorn business in Southeast Asia, said in this difficult context, the advice given to start-ups was to have real preparations that stick to a growth strategy. Of which, team-building was the core factor.
Van told the summit: “It is better to build talents than to buy talents,” mentioning after six years more than 90 per cent of Grab employees in Viet Nam were Vietnamese.
Sharing about market fluctuations in the post-pandemic world, Lukasz Roszczyc, CEO of Publicis Groupe in Viet Nam, said: “Thinking positively about new opportunities, people are spending more time on digital interfaces, smart devices such as TVs, smart home solutions and phones, bringing value to consumers and brands that innovate their approach and create meaningful stories to convey to consumers.”
Serving brands in Viet Nam, the Publicis Groupe leader said: “Many businesses own data about customers who have purchased products, but customer interaction is ineffective. We, with the help of technology and innovation, have helped them to best use the data to promote and attract more potential customers.”
He said the smart communication industry could develop by about 30 per cent in the next two years and a further 50 per cent after that.
Talking at the fintech discussion, one of four topics at the summit, Nguyen Ba Diep, vice chairman of MoMo E-wallet, said: “Instead of just being a rooster, we want to be an eagle in our own territory. Even though Viet Nam is inviting many international “eagles” to nest, we could become an eagle with support from the Government.”
Diep said the pandemic had led to remarkable growth for the e-wallet market, with 20 million domestic users currently.
He added: “Before the pandemic, there were 10 million customers, now we have double that.”
Seeing the State Bank of Viet Nam had licensed 38 e-wallets and promoted the use of fintech in the country to encourage digital transformation, Marcin Miller, associate partner of McKinsey & Company, said many Vietnamese people were still using cash, meaning there was more potential for fintech including e-wallets to grow.
MoMo leader Diep said he aimed to reach at least 50 per cent of the population, or 50 million users, with their wallet.
Co-hosted by the Ministry of Planning and Investment, Ministry of Science and Technology, and co-organised by the National Innovation Centrr and Golden Gate Ventures, the summit included seminars combining online and offline speakers in Viet Nam and in the region on the topics of unicorn hunters, education, technology, fintech and payment in ASEAN and regional logistics.
According to a new report by McKinsey & Company, Viet Nam could capture VND2,400 trillion (more than $100 billion) by 2025 through the formation of 12 large digital ecosystems across retail and institutional services.
These digital ecosystems constituted interconnected services from different industries that enabled automation on a large scale and integrated purchasing pathways, giving customers access to a variety of products and services on a single platform, said the report.
Indonesia to leave out some sensitive goods from RCEP tariffs
Indonesia plans to exclude several “sensitive” commodities such as rice, weaponry and alcoholic beverages from its scheduled commitment to eliminating tariffs in the Regional Comprehensive Economic Partnership (RCEP).
Speaking at a recent webinar, director general for international trade cooperation under the Trade Ministry Iman Pambagyo said that “these are the sectors that we always consider to be very, very sensitive for Indonesia”.
On November 15, Indonesia joined the nine other members of ASEAN, along with Australia, China, Japan, the Republic of Korea and New Zealand, in signing the RCEP.
According to data from Statistics Indonesia (BPS), the RCEP countries accounted for 61.6 percent of Indonesian exports and 71.3 percent of its imports last year.
Indonesia has committed to eliminating 91 percent of its tariff lines in the coming years under the world’s largest free trade agreement, with rice, weapons and alcoholic beverages among the 9 percent of tariff lines excluded from the deal./.
Outstanding Vietnamese banks in 2020 honoured
A ceremony for the Vietnam Outstanding Banking Awards 2020 was held by the Vietnam Banks Association and International Data Group Vietnam (IDG Vietnam) on November 26 in Ho Chi Minh City.
Held annually since 2012, the awards aim to recognise and honour banks with excellent performance and significant contributions to the development of the banking sector and the financial sector in general.
According to Nguyen Toan Thang, General Secretary of the Vietnam Banks Association and Chairman of the voting council, this is the first time the awards for banks with best performance in digital transformation application was designed, aiming to honour banks with many impressive digitalisation solutions suitable with the banking sector’s development.
The top five Vietnamese banks presented with the outstanding digital banking transformation bank award in 2020 were the Bank for Investment and Development of Vietnam (BIDV), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Tien Phong Commercial Joint Stock Bank (TPBank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Vietnam Prosperity Joint Stock Commercial Bank (VPBank).
BIDV, Sacombank and the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank)were the winners of the Outstanding Retail Banking Award.
Vietinbank, TPBank, Viet Capital Bank, Bao Viet Joint Stock Commercial Bank (BAOVIET Bank) and Vietnam Thuong Tin Commercial Joint Stock Bank (Vietbank) were honoured for their outstanding innovative banking products and services.
The Outstanding Bank for Green Credit Award was presented to Military Bank (MB), Nam A Commercial Joint Stock Bank (Nam A Bank) and Saigon – Hanoi Commercial Joint Stock Bank (SHB).
Maritime Commercial Joint Stock Bank (MSB), MB and SHB were honoured for the providing credit packages and support policies for businesses facing difficulties due to the COVID-19 pandemic.
The Vietnam Bank for Agriculture and Rural Development (Agribank) and Asia Commercial Joint Stock Bank (ACB), Bac A Commercial Joint Stock Bank (Bac A Bank), Kien Long Commercial Joint Stock Bank (Kienlongbank) and Southeast Asia Commercial Joint Stock Bank (SeAbank) received the Outstanding Bank for Community Award thanks to their charitable activities and poverty reduction efforts.
Agribank maintained the winner of the outstanding bank award for investing in high-tech agriculture.
Meanwhile, Moca Technology and Services Corporation (MOCA), M-Service Online Mobile Service Joint Stock Company (MOMO) and Smartnet Trading Service Co., Ltd (Smartnet) and Trusting Social Co., Ltd (Trust Social) were named Excellent Fintech Firms./.
European investors upbeat about Vietnam as business confidence rebounds
European investors are optimistic about the prospects of Vietnam as shown by the Business Climate Index (BCI) of the European Chamber of Commerce (EuroCham) rebounding in Quater.
The BCI is a regular barometer of EuroCham members and their perceptions of the trade and investment environment. Each quarter, it tracks the performance of EuroCham’s member companies and their perceptions of the economic outlook in Vietnam.
In the first quarter, when COVID-19 first hit international trade and investment, the BCI fell to 26 points. It saw a slight increase in the second quarter as Vietnam became one of the global success stories of the pandemic. Now, with businesses able to operate with far fewer restrictions and the EU-Vietnam Free Trade Agreement (EVFTA) entering into force on August 1, the confidence of European business leaders has seen a strong resurgence.
Business leaders were more positive about their own enterprise in the third quarter, with 40 per cent describing their performance as either “Excellent” or “Good” – more than double the 18 per cent recorded in the previous three-month period. The fourth quarter looks to be even more promising, with 44 per cent predicting a strong end to 2020. Meanwhile, most companies are anticipating stabilisation in their headcount (65 per cent) and investment plans (57 per cent), with just under half (44 per cent) expecting to see an increase in their revenue and orders.
With the EU-Vietnam Free Trade Agreement (EVFTA) entering into force in the third quarter, the BCI also asked EuroCham members about its impact on their business and investment plans. One-third said that the agreement was an important part of their decision to invest in Vietnam, with the top two factors predicted to drive growth being tariff reductions (33 per cent) and greater market access for investors (13 per cent).
Nicolas Audier, Chairman of EuroCham, said that, “Despite a difficult 2020 for international trade, our data shows that Vietnam’s swift and effective response to the global pandemic has paid dividends. European business leaders feel more positive both about their own enterprises and Vietnam’s trade and investment environment, and report a sense of cautious optimism going into the fourth quarter.”
“The implementation of the EVFTA in August has, no doubt, helped to boost this growing confidence. Our data shows that falling tariffs and growing market access are important to our members, and will help to spur new foreign-direct investment from the EU in the future.”
Thue Quist Thomasen, CEO of YouGov Vietnam, added that, “Drilling down into the data, we can see some of the trends that underlie the jump in positive sentiment in more detail. In short, business leaders are reporting a sense of cautious optimism in their own companies, and this is driving confidence in Vietnam’s macroeconomic prospects in the next quarter.”
“In particular, the proportion of business leaders predicting an increase in their orders or revenue in the next three months has risen by 20 per cent – from 24 per cent in the second quarter to 44 per cent in the third. Meanwhile, 23 per cent of business leaders expect to hire more staff in the next three months, compared to 14 per cent in the last BCI. Together, these signals point to a positive end to 2020.”
Bac Ninh invites investment projects from Sri Lanka
An official of Bac Ninh expressed his hope that Sri Lanka will invest in many projects in this northern province, as well as Vietnam as a whole, while receiving a delegation of the Sri Lankan Embassy led by Ambassador Prasanna Gamage on November 27.
Informing his guests about local development, Vice Chairman of the provincial People’s Committee Vuong Quoc Tuan said Bac Ninh is among the fast growing localities in Vietnam.
This year, its gross regional domestic product (GRDP) is estimated at 121.7 trillion VND (5.2 billion USD, up 1 percent from 2019), industrial production value over 1.1 trillion VND (ranking first in the country), exports 36.5 billion USD (up 7.3 percent), collection for the State budget nearly 29.8 trillion VND (up 1.6 percent from the target), and average per capita income 79.9 million VND (up 8.1 percent).
There are 16 industrial parks across the province at present, including 10 already becoming operational and attracting more than 1,500 FDI businesses from 37 countries and territories. Bac Ninh had been home to 1,614 valid projects as of November 20, he noted.
Tuan added since Sri Lanka hasn’t invested in any projects in Bac Ninh, the province hopes for many projects from the South Asian nation, noting the two countries’ potential, strengths, sound relations, and cultural similarities.
For his part, Ambassador Gamage highly valued Bac Ninh’s achievements in socio-economic development, particularly in FDI attraction.
Highlighting the sound friendship between his country and Vietnam, he pledged to serve as a bridge helping Sri Lankan firms to come to explore investment and trade opportunities in the province.
Sri Lanka has 14 investment projects worth some 76.7 million USD in Vietnam at present, mostly in the textile-garment sector. Bilateral trade reached 381 million USD in 2019. Sri Lanka is the fourth largest trade partner of Vietnam in South Asia./.
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