US represents largest export market for Vietnamese products
Vietnam’s total export turnover during the past 11 months rose 5.5% to US$254.93 billion, with the US becoming Vietnam’s largest commodity consumer, according to the Ministry of Industry and Trade (MoIT).
A total of 31 commodities enjoyed an export value of over US$1 billion each, making up 92% of total export turnover, says the MoIT.
The processing and manufacturing industries witnessed the highest level of annual growth, earning US$216.35 billion from export, representing a rise of 6.1% on-year.
Strong export growth could also be seen in other commodity groups, including computers, electronic products and components (up 24.3%), machinery, equipment, tools and spare parts (up 44.5%), and timber and wooden products (up 14.1%).
Amid a general increase in trade protectionism globally, a decline in international trade, coupled with the impact of the COVID-19 pandemic, has served to tighten non-tariff barriers.
Despite these challenges, Vietnam has constantly maintained positive export growth, with the US remaining the country’s largest export market.
MoIT statistics showed the US imported Vietnamese goods worth US$69.9 billion over 11 months, representing an annual increase of 25.7%. It was followed by China, the EU, ASEAN, the Republic of Korea, and Japan.
The MoIT says it will continue to strictly monitor the market situation, whilst striving to boost exports, take full advantage of free trade agreement (FTAs), and diversify export markets.
VRG earns big from leasing unused properties
The Viet Nam Rubber Group (VRG) has enjoyed the most income from leasing unused facilities and residential areas among all listed industrial zone developers.
Viet Nam’s largest rubber corporation logged a total of VND9.28 trillion (nearly US$400 million) from leasing its properties to companies, ndh.vn reported.
The figure included VND257 billion worth of short-term leases and VND9.03 trillion worth of long-term leases, according to the firm’s third-quarter financial report.
VRG owns 16 industrial parks with a total area of more than 6,500 hectares. In 2021-25, the group plans to raise the total area of industrial parks to 15,000 hectares.
Idico Corporation earned nearly VND6.2 trillion from receiving pre-payments from customers to use its facilities in Phu My, Nhon Trach, My Xuan and Que Vo industrial zones.
Idico is developing a plan to deploy 10 industrial parks nationwide with a total area of 3,270 hectares, most of which are located in the southern region.
Other listed industrial zone developers such as Sai Gon VRG Investment Corp, Sonadezi, Nam Tan Uyen and Viglacera also posted big gains from leasing unused industrial parks’ facilities.
Sai Gon VRG Investment Corp saw its leasing revenue up 11 per cent year-on-year to VND5.93 trillion from VND5.32 trillion, while Sonadezi raised leasing income by 8 per cent year-on-year to VND4.26 trillion.
Companies seeking vacancies at industrial parks often make full pre-payments for their entire terms to ensure their operations at the parks are stable, according to ndh.vn.
Therefore, leasing incomes will be definitely recorded and declared in the industrial park developers’ quarter-end financial reports.
Asian media seek answer for how Vietnam maintains economic growth amid pandemic
Vietnam seems to be an only bright spot in Asia, which ably balanced public health and economics right from the onset of the COVID-19 pandemic, according to Manila Times of the Philippines.
In an article published on December 3, Manila Times praised Vietnam’s efforts in the fight against the health crisis.
The article cited the World Bank’s forecast that Vietnam’s economy would grow by 2.8% in 2020, even as its Asian neighbours struggle to recover from the ongoing crisis.
Meanwhile, the Nikkei Asia of Japan stressed that Vietnam has succeeded in keeping the pandemic under control.
The country’s achievement in fighting COVID-19 has helped the country reduce the pandemic’s impact on its economy as manufacturing has resumed faster than it did elsewhere in the region, job losses were limited, and consumer spending, which accounts for 70% of GDP, has remained solid.
Vietnam’s exports grew 9.9% on the year in October to US$26.7 billion, it noted.
The International Monetary Fund (IMF) projects that Vietnam’s per capita GDP is likely to reach US$3,498 in 2020.
According to Sonny Africa, Executive Director of Ibon Foundation – a Philippines-based non-profit research, education and information-development institution, said the key to Vietnam’s success amid the health crisis is its ways to not only contain the spread of pandemic but also to keep its economy afloat.
Vietnam opened up its economy but ensured State ownership and control of strategic enterprises in agriculture, mining, telecommunications, railways, chemicals, water, oil, electricity, cement, steel and other heavy industries, as well as banking and finance, he said.
The scholar also took note that Vietnam considers foreign investment a driver of development, with the FDI flows into the country increasing strongly over the past three years.
Phu Yen to complete master plan of South Phu Yen EZ
Phu Yen People’s Committee has assigned the province’s economic zones management authority to adjust the master plan on construction of South Phu Yen Economic Zone by 2040.
Notably, it will work with Phu Yen Department of Transport and relevant authorities to determine the direction of the North-South Expressway and the North-South Railway projects. Besides, the management authority needs to discuss with Dong Hoa town to reach a compromise on the boundary of the area.
The target of the master plan is to build the South Phu Yen Economic Zone (EZ) suitable to the national maritime development strategy and Vietnam’s marine economic development strategy.
Besides, the master plan concretises strategic policies for the South Phu Yen EZ in the socioeconomic development orientations of the government for the key economic region of Central and South-Central Vietnam, as well as specify development orientations for the planning of South Phu Yen-North Khanh Hoa.
The province targets to build and develop this EZ into a multi-functional general EZ with a focus on high-tech industries and industries attached to seaports, contributing to creating a socioeconomic breakthrough in the region, linking the provinces of the South-Central Coast and the Central Highlands.
Local tech important for digital transformation: experts
Indigenous technologies are key to facilitating the country’s digital transformation and the widespread adoption of technologies, according to experts.
Deputy Minister of Information and Communications Phan Tam said Vietnamese technology businesses had to be pioneers in terms of disruptive strategies in innovation and digital transformation.
They had to help local businesses research and develop products to facilitate economic development, he said.
Attracting high-quality projects in the field on technology was a priority, he added.
Nguyen Duy Hong, deputy director of Smartlog Supply Chain Solutions Corporation, said the growing logistics industry, especially in HCM City, offered a great opportunity for providers of logistics management systems, and domestic businesses generally could provide solutions more suited to addressing Viet Nam’s logistic problems than foreign ones.
Le Huu Nguyen, director of MISA Joint Stock Company’s HCM City representative office, said ‘Made in Vietnam’ products were often cheaper and tailor-made for Vietnamese users, making them easier to use.
His company had been supplying systems to local authorities to manage schools and payrolls, accounting software to wards and communes and business management systems for a wide range of functions such as accounting, sales and human resource management.
Many Vietnamese systems could compete with foreign rivals, and his company had sold products to some customers in Europe, he said.
But local support was needed first for Vietnamese products to reach foreign markets, he added.
Bui Thi Thanh An, deputy head of the Ministry of Industry and Trade’s trade facilitation department, said of 283 products honoured as Vietnam National Brands in 2020, many utilise digital technologies, indicating the development of Vietnam’s ICT industry.
Vietnam has opportunities to approach wide commercial capital market: insider
Truong Hung Long, head of the Ministry of Finance’s Department of Debt Management and External Finance made the remark at a workshop seeking measures to intensify relations with investors being jointly held by the Ministry of Finance and the International Monetary Fund (IMF) on December 7-8.
The role and position of Vietnam has seen positive changes, with entering the group of middle-income countries as an important milestone, helping it able to manage debts proactively and effectively, he said.
He noted that intensifying and maintaining relations with investors is an important task to promptly and accurately convey information on the country’s socio-economic development situation and the Government’s policies toward investors.
Lack of information or inaccurate information can make investors or lenders have false understanding as well as negative assessment on risks of loans and investments, he added.
An IMF representative said that the target and principal of the investor relations are data transparency and the ability to contact with Government agencies to clarify publicised information.
Over half of foreign-sourced loans remain undisbursed as year-end nears
Over VND6.31 trillion worth of foreign concessional loans and ODA funds were disbursed in the first 11 months of 2020, accounting for 45.51% of the annual goal, which was revised down earlier in the year, Ha said at the conference reviewing the 11-month disbursement of foreign-sourced public investment.
Among the underperformers are the Ministry of Planning and Investment and the Ministry of Culture, Sports and Tourism, said Hoang Hai, deputy director general of the Ministry of Finance’s Debt Management and External Finance Department. The Ministry of Agriculture and Rural Development (MARD) and the Ministry of Natural Resources and Environment, which pledged to fully disburse these sources of financing this year, are doing no better, Hai said.
As of November 30, the MARD had disbursed VND763 billion worth of foreign loans, representing 41.7% of the already-revised plan of VND1.83 trillion for 2020, said Vu Thanh Liem from the ministry.
The MARD expects to disburse around 90-94% of the total this year, largely due to a lack of corresponding funds and the historic flooding striking central Vietnam in October and November, causing delays in many projects’ progress.
Meanwhile, the Ministry of Transport is among the best performers, disbursing close to VND4.65 billion, or 75% of the plan, as of November 24, as the ministry has significantly cut the time required for handling procedures and, more importantly, assigned specific tasks and responsibilities to each staff member, Deputy Minister of Transport Nguyen Ngoc Dong said.
Foreign sponsors in some cases have also played a role in slowing down projects, Hai said, adding that there were lengthy delays in the issuance of “no objection” letters from foreign sponsors to approve procurement or the appointment of consulting firms.
To enable faster disbursement, the Ministry of Finance proposed that priority be given to accelerating the progress of projects that end in 2020 or 2021. It also urged other ministries, governmental agencies, and investors to speed up the completion of procedures in terms of investment and construction licensing, residential resettlement, and site clearance for projects.
It is working with the Ministry of Justice and relevant agencies to revise Decree No 97/2018/ND-CP dated June 30, 2018 regarding the on-lending of government ODA and foreign concessional loans in a way that simplifies on-lending procedures and verification.
Da Nang draws two scenarios for future tourism development
The central city of Da Nang has focused on recovering the pandemic-hit tourism to continue boosting the sector’s sustainable development, focusing on high-end services in association with resort real estate.
According to the municipal People’s Committee, the city has drawn out two scenarios for tourism development in the 2021-2025 period.
In the first with optimistic vision, COVID-19 will be controlled in the city and Vietnam in late 2020 and the vaccine against COVID-19 is provided to the market in the third quarter of 2021, the city will launch a domestic tourism stimulation programme with the connection with other localities from 2021. In this scenario, the city expects a total number of visitors equivalent to 60-70 percent of that in 2019, with the domestic tourists recovering by 90 percent and foreign visitors 30 percent.
In 2022, after the re-opening of international air routes, the total number of visitors is hoped to reach about 8.7 million, equal to that in 2019.
In 2025, the city aims to receive 12.3 million visitors, up 1.4 times over 2019, including 4.2 million foreigners. The average growth of the sector in the 2020-2025 period is projected to reach 5-6 percent each year.
In the year, Da Nang hopes to earn 61 trillion VND (2.63 billion USD) from tourism, doubling that in 2019, with growth rate of 12-12.5 percent per year. The sector is expected to make up 27 percent of the gross regional domestic product (GRDP) in 2025. In the year, the city hopes to extend the stay to 2.75 days for domestic visitors and three days for foreigners.
In the second scenario, COVID-19 pandemic is controlled in Da Nang and Vietnam in the end of the first quarter of 2021 and a vaccine is provided in late 2021, tourists remain unconfident to the controlling of the pandemic. Under this, the city only expects the recovery of about 55-65 percent compared to 2019 in the number of domestic tourists, and the number of foreign arrivals recovering by only 5 percent.
International air routes are forecast to re-open for diplomats, experts and workers in the second quarter of 2022 and for all passengers in 2023. The total number of visitors is expected to recover 65-70 percent compared to 2019 in 2022 and equivalent to that in 2019 in 2023.
In 2025, the number of visitors to the city is hoped to reach 11.6 million, including 3.9 million foreigners. Total earnings from the sector is estimated at 54 trillion VND (2.33 billion VND), making up 23.8 percent of the city’s GRDP.
Along with the two scenarios, Da Nang will concentrate on designing planning for the sector’s development, focusing on the area along Son Tra-Ngu Hanh Son coast and the west of Son Tra peninsula, while investing more in sea-based, cultural, historical and spiritual tourism.
Vice Chairman of the city People’s Committee Le Trung Chinh said that in order to effectively implement the scenarios, the city will conduct twin targets of controlling COVID-19 and recovering tourism activities at the same time.
Meanwhile, the city will complete infrastructure system for tourism development, improving the human resources for the sector, and enhancing State management over the sector, he added./.
11M State budget revenue down 7.8 pct.
State budget revenue in the first 11 months of this year fell 7.8 percent year-on-year to just over 1.26 quadrillion VND (54.58 billion USD), the Ministry of Finance reported on December 8, blaming the economic fallout from COVID-19 for the decline.
The figure represented 83.4 percent of the annual estimate, with central and local budget collections at 77.4 percent and 91.1 percent, respectively, the ministry said.
Domestic collections were down 4 percent against the same period last year, to nearly 1.08 quadrillion VND, or 84.4 percent of the annual plan.
Revenue from crude oil totalled 31.5 trillion VND, a sharp decline of 38.9 percent against a year earlier and equivalent to 89.5 percent of the plan.
Revenue from imports and exports plunged 19.6 percent year-on-year to 161.5 trillion VND, or 77.6 percent of the plan.
State budget expenditure, meanwhile, rose 8.5 percent to close to 1.37 quadrillion VND, equivalent to 78.4 percent of the annual plan.
The ministry said that about 17.9 trillion VND has been spent from the State budget to cover COVID-19 response and financially support businesses and people affected.
More than 4.54 trillion VND has been used to address the aftermath of natural disasters and cope with African swine fever. This includes 1.63 trillion VND allocated to help nine central and Central Highlands provinces respond to the recent devastating flooding and 11 northern provinces deal with the consequences of hail storms, flash flooding, and landslides.
Nearly 32,950 tonnes of rice from the national reserve has been provided to aid natural disaster victims and those stricken by the crop failure./.
Localities see rise in disbursement of foreign-sourced public funds
The disbursement of public investment sourced from foreign loans in localities around Vietnam during January – November increased considerably compared to the first half of the year.
As of November 30, 41 percent of the public investment that is an additional allocation from the central budget to localities’ budgets and belongs to this year’s revised disbursement plan had been disbursed, a teleconference between the Ministry of Finance (MoF) and localities on December 7 heard.
There are four localities with disbursement rates exceeding 70 percent of the revised disbursement targets – Hanoi and the provinces of Binh Dinh, Tay Ninh, and Ba Ria – Vung Tau.
In terms of capital the Government re-lends to localities, disbursed funds account for 38 percent of the initial plan and 41 percent of the revised target.
Truong Hung Long, Director of the MoF’s Department of Debt Management and External Finance, said that although public investment disbursement, considered an important growth driver, had been sped up, it has begun to slow over the last two months as some projects are nearing completion and central provinces have had to invest efforts in coping with natural disasters.
The 11-month disbursement rate of 41 percent is still low, as most localities have committed to this figure reaching 90 percent or higher, he noted.
The MoF requested localities take prompt actions. since there is not much time left for the task and the undisbursed capital from foreign concessional loans remains relatively large./.
Central provinces predict negative economic growth for 2020
Some central provinces and cities are estimated to experience negative economic growth in 2020 due to Covid-19 and natural disasters.
For the first time, the gross regional domestic product (GRDP) of Danang is predicted to drop by -9.77% this year. The city budget revenue would reach only 70% of the goals. Some major policies have not proved effective, the budget for public investment projects have been disbursed more but it was still very slow. The city still has to deal with other problems like pollution and congestion.
Nguyen Van Quang, party secretary of Danang People’s Committee, said, “In 2021, we’ll have to review and adjust the policies to improve the business environment, focus on developing the infrastructure to attract investments from big corporations and speed up the disbursement of public investment. It’s important to carry out everything smoothly to recover the economy from Covid-19 and the storms and flooding.”
In Khanh Hoa Province, gross regional domestic product dropped by 9.8%. This year’s drought also badly affected the economy and daily lives. Nine out of 16 economic goals weren’t met. Budget revenue reached VND14.2trn (USD611m) or 82% of the target while import-export revenue reached USD1.36bn, 90% of the set goal.
Despite the difficulties, Khanh Hoa’s authorities still worked hard to meet many social goals such as reducing the number of poor households or further promoting health insurance. The authorities have set the economic growth rate of 7.4% for 2021.
In a similar situation, Quang Nam provincial authorities have also reported that many socio-economic goals for 2020 weren’t met. The economic growth rate dropped by 7.2% compared to 2019 and the budget revenue goal was only fulfilled by 78.7%. As the supply chain was disrupted and spending fell, many businesses had to close temporarily. The revenue from tourism activities dropped to 82% due to fewer visitors.
For 2021, Quang Nam authorities will develop tourism services as a key sector for the province.
Covid-19 and floods caused damage of VND13trn (USD559m) in Thua Thien-Hue Province. The provincial growth rate was estimated at over 2%.
Le Truong Luu, party secretary of Thua Thien-Hue Province said, “Despite the challenges, we have been able to fulfill 10 out of 14 goals. The budget revenue reached VND8.5trn, an increase of 11.2% compared to the set goal and 0.7% higher than last year.”
APEC promotes fintech skills of women-led MEMES amid COVID-19
The Vietnam Ministry of Foreign Affairs came together with the Secretariat of the Asia-Pacific Economic Cooperation (APEC) forum on December 8 to organise a webinar entitled “Harnessing fintech skills of women-led micro small and medium sized enterprises (MSMES) in promoting inclusive growth against COVID-19”.
The event saw the participation of roughly 80 international and Vietnamese delegates at over 30 virtual sites from 21 APEC members, in addition to five international and regional organisations.
In his address at the function, Deputy Foreign Minister Bui Thanh Son highlighted this year as being important for APEC due to the adoption of the APEC Vision to 2040. This is along with the orientation for APEC co-operation over the coming decades, in which innovation, creativity, digitisation, sustainability, inclusivity, and resilient economic growth, represent important pillars of co-operation.
Moving forward, financial technology (fintech) will play a frontline role in promoting financial inclusion in the face of economic shocks, with efficient use of fintech helping women-led MSMEs. It will also help other vulnerable groups to effectively use financial resources that were previously difficult to access through traditional banks and financial institutions, Deputy Minister Son said.
Dr. Rebecca Fatima Sta Maria, executive director of the APEC Secretariat, spoke highly of the nation’s initiative to organise the webinar, before sharing that women-led MSMEs are suffering great pressure from the negative effects of social-distancing measures and travel restrictions in response to the novel coronavirus (COVID-19) pandemic.
In the future, APEC must continue to play a leading role in the ongoing challenging situation, whilst striving to put women at the centre of the economic recovery process. Indeed, APEC members should focus on solving challenges, along with on the roles and contributions of women in response to the pandemic, and the recovery process of economic growth, she emphasised.
Francois Painchaud, chief representative of the International Monetary Fund (IMF) in Vietnam, stated that fintech plays an important role in minimising the socio-economic impact of the COVID-19 pandemic. He also stressed the positive effects of fintech as a means of boosting economic growth and narrowing the gender gap, before stressing that women should be one of the top priorities to ensure that no one is left behind in the current period.
This marks the first APEC workshop to be held immediately after the APEC Summit Week 2020, with a specific focus being placed on the impact of the COVID-19 pandemic on women-led MSMEs and potential opportunities brought about by fintech for women entrepreneurs in the process of accessing resources. Other areas of interest are solutions to effectively utilise fintech as a way of promoting the recovery of MSMEs by women as a contribution to current inclusive economic and financial recovery efforts.
Along with the success of ASEAN activities with regard to women empowerment in the digital age, the high-level ASEM Dialogue on promoting women’s economic empowerment amid the COVID-19 pandemic was held from October 12 to October 13, with the workshop continuing to affirm the role and contributions of the nation.
These functions showed how the country can operate in multilateral frameworks, as well as participating in global efforts to promote gender equality and empowerment, especially in relation to increasing support for women during the economic recovery process as a result of the impact of COVID-19, which has become one of the top priorities at present.
The two-day webinar covers a total of four main sessions under discussion regarding opportunities and challenges caused by fintech for women-led businesses, practices, and experiences in promoting and utilising fintech in APEC member economies. It also proposes various fintech solutions for women-led MSMEs for the economic recovery process and inclusive finance in the Asia-Pacific region.
The workshop is an initiative that was developed and proposed by the country and endorsed by APEC’s Policy Partnership for Women and the Economy (PPWE) in 2019. The initiative has received the strong backing of APEC members, with 13 economies involved in co-sponsoring and co-ordinating the implementation of the initiative.
HCM City businesses to enjoy 0% interest rate credit package
Ho Chi Minh City will work alongside economic experts to devise orientations for a new bailout package, with local firms hardest hit by the COVID-19 pandemic expected to receive the package with interest rates of 0%, according to Nguyen Thanh Phong, chairman of the HCM City People’s Committee.
Phong made the statement during the 23rd session of the ninth municipal People’s Council on December 7 aimed at reviewing the implementation of socio-economic tasks for this year.
With regard to offering support for enterprises, Phong outlined that the southern city will conduct surveys with the purpose of providing timely assistance to investment and business activities of enterprises, especially small and medium enterprises (SMEs).
He went on to emphasise that businesses in the are primarily SMEs, the majority of whom have been negatively affected by the impact of the pandemic, adding that the southern city has launched a range of bailout packages by deferring tax payments for personal income tax and value added tax in an effort to support local businesses.
With regard to support for local residents, the southern city has made great strides in ensuring that no one is left behind, especially with regard to the vulnerable and those facing difficult circumstances.
Recent times has seen the metropolis support over 20,000 lottery ticket sellers in overcoming various challenges caused by the pandemic.
Rice export price soars to roughly US$500 per tonne
Vietnam exported a total of 5.74 million tonnes of rice worth US$2.85 billion during the opening 11 months of the year, with the price of 5% broken rice in November reaching approximately US$500 per tons, according to the Agro Processing and Market Development Authority (Agrotrade).
This data represents a decline of 2.2% in volume and an increase of 10.4% in value compared to the same period from last year.
During the initial ten months of the year, the Philippines ranked first in terms of being the leading country’s rice export market, making up 32.9% of the market share, followed by Indonesia and China, with the average rice export price soaring by 12.7% to US$493.3 per tonnes from the same period last year.
Most notably, the price of Vietnamese 5% broken rice over the course of a month increased slightly from US$495 per tonne to roughly US$498 per tonne, while Thailand’s 5% broken rice price witnessed sharp rises from US$466 per tonne to US$480 per tonne.
Furthermore, the recent enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) has given fresh impetus to rice export growth due to the EU giving the country a quota of 80,000 tonnes of rice with a 0% tax rate annually. This includes 30,000 tonne of milled rice, 20,000 tonnes of unmilled rice, along with 30,000 tonnes of fragrant rice in line with the three-to-five-year roadmap, according to some experts.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong assessed that the trade deal will serve to help agricultural exports enter a potential market that is home to more than 511 million people and has a GDP per capita of over US$35,000.
It is anticipated that local rice exports, including fragrant rice, to the EU until the end of the year are set to record an increase despite the adverse impacts caused by the COVID-19 pandemic, with the export volume reaching between 6.5 million and 6.7 million tonnes.
Collaboration required to steer towards recovery
The pandemic severely impacted the global economy, with its aftermath becoming far worse than the Great Recession of the 1930s. In September, the Asian Development Bank (ADB) forecast that economies in East Asian nations would contract from 5.4 per cent in 2019 to -0.7 per cent in 2020 if the pandemic was controlled in the third quarter of the year.
According to the ADB, Vietnam is forecast to grow by 1.8 per cent this year before bouncing back to 6.3 per cent next year. Vietnam is showing stronger resilience than most comparable economies in the region, and the economy’s outlook over the medium and long term remains positive.
Vietnam’s positive growth this year and its resilience are largely attributed to the country’s success in containing the COVID-19 pandemic. The effective response to the pandemic is not only an outstanding medical success of the country, but also helps maintain the main drivers of the economy, building stronger foundations for economic recovery.
Thanks to the effective containing of the pandemic, almost all economic assessments and forecasts strongly believe that Vietnam’ economic recovery will follow a positive trend in 2021.
In addition, such an effective response to the pandemic has greatly supported economic activities that will help spur on the domestic economy. Activities in local tourism bounced back in May and June. After some slowdown caused by the return of the pandemic in July, the sector is gradually recovering.
Transport activities witnessed an increase of 2.3 per cent in the volume of passengers in November. Domestic demand continues to be a key driver for maintaining economic growth. Total revenue from retails and consumption services increased 8.5 per cent on-year in November. In the long term, the domestic market with nearly 100 million consumers will make an important contribution to maintaining growth momentum.
Despite the difficulties caused by the pandemic, Vietnam’s exports remain a bright spot, with an impressive trade surplus of nearly $20.1 billion in the first 11 months of 2020. Free trade agreements have been and will become important channels for Vietnam to maximise benefits from the investment and supply chain shifting globally as well as in the region. Along with global strides in researching and producing vaccines, Vietnam’s major trading partners have become adaptive to the ‘new normal’, and external demand, therefore, will gradually recover in 2021, which will benefit for a large open economy like Vietnam.
Despite the COVID-19 pandemic continuing to weigh heavily on health and the economy, increased disbursement of public investment has made significant contribution to maintaining growth momentum. These are great efforts by the government, line-ministries and agencies in managing and accelerating disbursement of public investment, especially in the context that private investment, in particular foreign direct investment, declined by 16.9 per cent year-on-year in the first 11 months of the year. According to the General Statistics Office, disbursement from the state budget in this period reached about VND406.8 trillion ($17.7 billion), up 34 per cent year-on-year.
It would be a pity not to mention the efforts and dynamism of Vietnamese enterprises in overcoming the challenges caused by the pandemic, laying a strong foundation for post-pandemic recovery. Nevertheless, the crisis has seriously hurt Vietnamese businesses, with nearly 93,500 firms forced to suspend their operations in the first 11 months of 2020.
However, global supply chain disruptions have enabled adaptations to a new normal, in which businesses can engage in producing components and products that they used to import for domestic manufacturing. Many firms have quickly shifted to producing healthcare equipment and medical masks for domestic use and export. Strong government support of employers and businesses is warranted in the form of payroll support, unemployment assistance and tax deferral. The State Bank of Vietnam instructed commercial banks to support affected businesses by restructuring debt, lowering interest rates, waiving interest for existing loans.
The Vietnamese government has sought advice from international organisations on solutions for post-pandemic economic recovery and development, including continued promotion of economic restructuring and improving quality of institutions, developing the private sector, improving labour productivity, applying science and technology, and further developing infrastructure.
These are also the areas that the ADB will integrate when preparing the upcoming Country Partnership Strategy 2021-2025 with Vietnam, which is expected to be approved in August 2021.
With the strong foundations, along with unceasing efforts by the Vietnamese government, businesses, and the people, as well as strong support from international partners including the ADB, we are confident that Vietnam will steadily weather the challenges to drive itself on the path toward recovery and prosperity.
Leader Energy from Singapore pours $43.6 million into BCG Energy
BCG Energy, a subsidiary of Bamboo Capital Group, successfully raised $43.6 million under convertible bonds form Leader Energy Pte., Ltd. to continue investing in the renewable energy projects of BCG.
Receiving growing interest from international investors, BCG Energy has strengthened its brand and reputation by focusing on increasing its capabilities in the renewable energy industry. In 2019, BCG Energy had successfully completed construction and began commercial operations of two solar farm projects, BCG – CME Long An 1 & 2 (Long An province) with the total capacity of 40.6MW and 100.5MW, respectively.
Currently, BCG Energy is also constructing the 330MW Phu My solar farm (Binh Dinh province); and 49.3MW VNECO solar farm (Vinh Long province) with the expected commercial operation date before December 31, 2020. Early next year, BCG Energy will start the construction of the 50MW Krong Pa 2 solar farm (Gia Lai province).
BCG Energy is also developing numerous rooftop solar projects with the total capacity of 50MW in various industrial parks in the south region of Vietnam. In the wind energy sector, BCG Energy owns a 550MW portfolio in Ca Mau, Soc Trang, and Tra Vinh provinces. BCG Energy aims to reach 2.3GW of total capacity of energy projects installed by 2025.
Leader Energy, a subsidiary of Singapore-based HNG Capital, was founded in 1994. The corporation has over 20 years of experience in the power sector. As of today, the company has experienced significant success through the acquisition and development of multiple energy generating projects throughout Cambodia, Vietnam, and Malaysia. Leader Energy targets to build a balanced portfolio of generation technologies and geographical diversification in the high-growth markets of Southeast Asia.
Hanoi People’s Council approves five-year SMEs support project
The 15-tenure Hanoi People’s Council adopted a resolution on the small- and medium-sized enterprises (SMEs) support project in the capital city from 2021 – 2025 during its 18th sitting on December 9.
The project will provide support to SMEs and help those converted from business households play a part in sectoral linkages and supply chains, with Hanoi’s exclusively designed policies.
It aims to accelerate public administrative reforms and delivery of Level 3 and Level 4 public administrative services; to improve the city’s Provincial Competitiveness Index (PCI); and to achieve an average annual growth of 10 percent and have around 30,000 newly-established enterprises annually.
The project also sets for the local SMEs to create about 1.5 million new jobs and to make up more than 25 percent of Hanoi’s total exports, over 40 percent of the city’s Gross Regional Domestic Products (GRDP) and 30 percent of the local budget.
It is expected to benefit at least 500 SMEs in manufacturing and processing in the areas of information technology, electronics, mechanics, hi-tech, food and agricultural preservation and processing.
To do the work, the city will need over 957 billion VND (41.3 million USD), including about 832 billion VND to be funded by the city’s budget.
According to a report by the Hanoi People’s Committee, the capital city is estimated to rake in around 4 billion USD in foreign direct investment (FDI) and 145 trillion VND in domestic investment this year. It has more than 26,000 new businesses this year, accounting for 20 percent of the country’s total and raising the number of local firms to around 303,000.
Later the same day, the Hanoi People’s Council wrapped up its three-day 18th meeting during which it adopted 20 reports and 16 resolutions, laying a basis for the city to effectively mobilise resources for socio-economic development in 2021 and beyond.
Despite the impact of the COVID-19 pandemic, Hanoi has maintained its economic growth, with GRDP expanding around 3.98 percent this year, 1.5 times higher than the national average.
Hanoi’s budget collection totaled 280 trillion VND, exceeding the estimate by 2 percent, and up 3.5 percent year-on-year.
The city seeks to raise its GRDP by 7.5 percent next year, social investment is projected to increase 12 percent, and inflation is expected to kept below 4 percent./.
ACMF to issue ASEAN sustainability bond standards
The ASEAN Capital Markets Forum (ACMF) announced results of the 33rd Chairs’ Meeting held via video conference on December 9.
It was the final event among the activities within the scope of the ACMF in 2020 held under the chair and coordination of Vietnam’s State Securities Commission (SSC).
At the meeting, leaders of capital market management authorities in ASEAN countries spoke highly of Vietnam’s efforts in promoting the implementation of targets in capital market integration in the region, deepening regional linkage with the international community for sustainable development, and improving adaptation and institutional capacity of ASEAN.
With the theme of “Sustainable Finance”, the meeting discussed and agreed that the ACMF will roll out sustainability bond standards to support bond issuance for the realisation of sustainable development goals, aiming to complete tools for ASEAN bond issuance.
To further foster the regional sustainable eco-financial system, delegates also agreed to conduct research on the building of a sustainable classification system.
They commended the SSC’s role and coordination in partnering with their counterparts in ASEAN countries and member markets in the building of the ACMF Action Plan for 2021-25.
Five main priorities of the action plan were approved at the meeting, which will be submitted to the 34th ACMF Chairs’ Meeting.
Leaders of ASEAN’s capital market management agencies reaffirmed commitment to ensuring the ceaseless flow of the financial services market.
They also pledged to continue priorities for cooperation and collaboration policy between countries in the region and international financial organisations, in an endeavour to bolster sustainable economic development and financial stabilisation in ASEAN.
The Monetary Authority of Brunei will take the rein of the 2021 ACMF./.
ACB shares debut on HoSE, soaring 8.1 percent
Shares of Asia Commercial Joint Stock Bank (ACB) soared 8.1 percent on December 9 as the bank officially listed more than 2.16 billion shares on the Ho Chi Minh Stock Exchange (HoSE).
The shares debuted at 26,400 VND apiece and could trade on a 20 percent trading band on either side in the debut day. ACB shares surged to 28,550 VND apiece on December 9.
At the opening price of 26,400 VND, ACB’s market value was set initially at more than 57 trillion VND.
ACB moved its shares to HoSE from the Hanoi Stock Exchange (HNX). The last trading on the HNX was December 1.
The bourse-switching decision was made in June after shareholders approved a plan to move the bank’s shares to HoSE to help increase the market capitalisation.
ACB was founded in June 1993 with starting charter capital of 20 billion VND. At the moment, charter capital is 21.6 trillion VND.
The bank became the third lender to switch trading bourse after LienVietPostBank (LPB) and Vietnam International Bank (VIB) and also the 13th listed bank on the stock market.
In 2018-19, total revenues of the bank were 14 trillion VND and 16.1 trillion VND, respectively, and total post-tax profits were 5.14 trillion VND and 6.1 trillion VND, respectively.
In January-September 2020, total revenue was near 13 trillion VND and post-tax profit was 5.13 trillion VND.
According to HoSE, the listing of ACB shares on the southern bourse will help the bank tap the huge resource of capital, improve its brand and prestige to customers.
“As the major market regulator, HoSE will also partner with local companies to help them execute the tasks, especially in information disclosure, and update the policies and regulations, and create training programmes for all market members,” the HoSE said in a statement on December 9./.
Toyota to pour 2 bln USD into electric vehicle production in Indonesia
Japanese carmaker Toyota is planning to invest 2 billion USD in developing electric vehicles (EV) in Indonesia in the next five years.
The commitment was made during a virtual meeting on December 8 between Toyota’s chief executive officer for Asia region Yoichi Miyazaki and Coordinating Minister for Economic Affairs Airlangga Hartarto.
Toyota is set to cooperate with the Indonesia Tourism Development Corporation to carry out the EV Smart Mobility project in Nusa Dua, Bali’s eco-tourism ecosystem.
Miyazaki said the manufacturer plans to introduce 10 electric vehicles to Indonesian consumers by 2025, noting that it prepares the country to become an export hub for Toyota products, not only for the ASEAN region but also for other markets.
In 2019, its unit PT Toyota Motor Manufacturing Indonesia (TMMIN) announced to start the EV production in its factory located in Karawang, West Java province. The TMMIN president director, Warih Andang Tjahjono, said a change in the production line is required to run the planned.
The company is attempting to produce hybrid vehicles in Indonesia. Hybrid vehicles are perceived as being better aligned toward the production of electric vehicles since its engine uses both battery and gasoline. The car producer expects to begin producing hybrid cars in 2022 with sport utility vehicles and multipurpose vehicles as a start.
Indonesian President Joko Widodo used to voice his desire to turn the archipelago nation into an EV hub for Asia and beyond with a target to start the production in 2022 and the share to reach 20 percent of total car production by 2025./.
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