BUSINESS IN BRIEF 11/12 RoK initiates AD investigation into Vietnam Ferro and Silico-Manganese   The Korean Trade Commission (KTC) has announced to initiate an anti-dumping investigation on ferro-manganese (FeMn) and Silico-Manganese (SiMn) products imported from Vietnam, Ukraine and India. The move followed a petition lodged by Korean businesses namely Dongbu Metal, Simpac Metal, Simpac Metalloy and Taekyung Industrial on September 29. The period subject to investigation is between July 1, 2015 and June 30, 2016 (which can be adjusted after considering opinions of plaintiffs and defendants) and the loss analysis will be conducted for the period from January 1, 2013 to June 30, 2016 (which can be extended if necessary). A Vietnamese exporter is named in the KTC’s announcement. If Vietnam businesses want to join the investigation they should send an Application for Participation to the KTC within three weeks. Businesses which are not an object producer of investigation but still apply for participation will be imposed a weighted average of dumping rate according to the Republic of Korea’s Customs Act. Those businesses which do not submit applications for participation or export products after the investigated period, the KTC may levy anti-dumping margins based on available information according to the Customs Act. The KTC will send a questionaire to relevant businesses, producers and governments. They will have 40 days to answer these questions. Individual savings at banks surge over 17 percent Savings at banks remained attractive to locals, with deposits of individuals in the first nine months of this year seeing a sharp surge of more than 500 trillion VND (22.02 billion USD). According to a report from the State Bank of Vietnam, individuals deposited nearly 3.5 quadrillion VND at banks in the first nine months of this year, up 17.08 percent against late last year. Savings at banks by institutions during the period also rose 10.65 percent to 2.34 quadrillion VND, the central bank reported. Despite low interest rates, depositors said they preferred savings at banks since it was absolutely safe, while other investment channels, such as securities and real estate, had high risks. According to the central bank, currently, the popular deposit interest rates are 0.8-1 percent per year for demand and under one-month terms, and 4.5-5.4 percent for 1-6 month terms. The popular rates applicable for medium- and long-term deposits of 6-12 months and above 12 months are 5.4-6.5 percent and 6.4-7.2 percent, respectively. In the past week, several commercial banks, such as BIDV, Agribank, Techcombank and Viet Capital Bank, unexpectedly slightly cut dong-denominated deposit interest rates by 0.1-0.3 percent per year to balance their liquidity and cut input costs. Thanks to the increase in deposits, liquidity at commercial banks this year is abundant, helping the banks in lowering lending rates to support domestic production and business. The central bank reported that lending of the banking sector as of November 22 had expanded by around 14 percent against December last year, with dong loans rising 15.3 percent. The central bank’s credit growth target of 17-18 percent this year is feasible with focus on five prioritised sectors of agriculture, exports, spare-parts industries, high-tech, and small- and medium-sized enterprises. Madagascar welcomes Vietnamese businesses Madagascar is willing to roll out red carpet for Vietnamese businesses to make investment in the country, Vietnamese Honourary Consul in Madagascar Eric Andry Ramiandrasoa told President Tran Dai Quang on December 8. Ramiandrasoa, who is leading a trade delegation to Vietnam, said the current trip offers a good opportunity for Madagascan businesses to study cooperation agreements with Vietnamese partners such as the military-run telecom group Viettel and the national flag carrier Vietnam Airlines. The recent visit to Madagascar by President Tran Dai Quang to attend the 16th Francophone Summit has created a premise for collaboration between the two countries’ business communities, he added. For his part, President Quang affirmed that the Vietnamese State always supports the development of equal and win-win business cooperation based on national and international law. Vietnam is home to over 600,000 enterprises, including numerous groups and companies operating effectively abroad, he noted. The Southeast Asian country is ready to partner with Madagascan firms in agriculture, aquaculture, garment-textile, cement production, and construction materials, he said. It also boasts strength in other fields such as aviation, telecommunication, hydropower, infrastructure investment – seaport, and accommodation for low-income earners. Vietnam pledged to create optimal conditions for Madagascan companies to build bilateral business partnership, he affirmed. First gas flow from Thien Ung field pumped The Vietnam-Russia Oil and Gas Joint Venture Enterprise (Vietsovpetro) has welcomed the first flow of oil and condensate from TU-6 well of BK-TNG platform in the Thien Ung field. About 540,000 cubic metres of gas and 200 tonnes of condensate a day are generated from the well. Vietsovpetro has applied technical solutions to bring gas and condensate to the mainland via Bach Ho oil as soon as possible. BK-TNG platform in the Thien Ung field is part of Lot 04-3, which was assigned to the Vietnam National Oil and Gas Group (PVN) and Russia’s AO Zarubezhneft Oil and Gas Company. Vietsovpetro was assigned as the manager. The Thien Ung field was discovered by Vietsovpetro in 2009.- Vietnam, RoK hold joint committees’ sessions Two joint committees between Vietnam and the Republic of Korea have taken place in Seoul to promote bilateral trade and investment. The Vietnamese delegation to the events was led by Minister of Industry and Trade Tran Tuan Anh, while the RoK delegation was headed by Minister of Trade, Industry and Energy Joo Hyung-hwan. In the minutes signed at the end of the seventh session of the Vietnam-RoK Joint Committee on cooperation in nuclear power, industry and trade, the two sides were unanimous on some contents of bilateral cooperation in such fields as energy and mineral, technology incubator, material and spare part production, human resources development, garment-textile, distribution, logistics and trade promotion. This will be foundation for the two sides to build and carry out specific projects to boost collaboration in industry, trade and energy. In the joint statement of the first session of the Joint Committee on the implementation of the Vietnam-Korea Free Trade Agreement (VKFTA), the two sides acknowledged each other’s efforts in carrying out bilateral cooperation activities in the fields of animal and plant quarantine, technical standard, thus implementing commitments in the VKFTA effectively. Ministers Tran Tuan Anh and Joo Hyung-hwan spoke of the development of the two countries’ economic, trade and investment ties in recent years, especially after the VKFTA came into effect in late 2015. They agreed to continue efforts to deepen the trade, industry and energy cooperation, contributing to realising the two countries’ strategic cooperative partnership and the goal of 70 billion USD in bilateral trade by 2020. They also agreed to convene the next sessions of the two joint committees in 2017. The time and venue will be discussed and fixed later. APEC dialogue looks to create dynamism for growth, integration An Asia-Pacific Economic Cooperation (APEC) dialogue with businesses was held in Hanoi on late December 8 under the theme “Creating new dynamism for growth and integration”. The dialogue, an initiative of Vietnam as the host of APEC activities in 2017, drew about 400 delegates from international and regional organisations, commerce chambers, associations and businesses from APEC economies. Alan Bollard – Executive Director of the APEC Secretariat and Antonio Basilio – Director of the APEC Business Advisory Council’s International Secretariat were among keynote speakers. Opening the dialogue, Deputy Foreign Minister Bui Thanh Son, Chairman of the 2017 APEC Senior Officials’ Meetings, said Vietnam wants to turn APEC into a forum for the sake of people and businesses. Diverse activities involving enterprises will take place throughout 2017. Meanwhile, Chairman of the Hanoi People’s Committee Nguyen Duc Chung highlighted the Vietnamese capital city’s reform and integration efforts and reiterated commitments to revamping local business climate change towards a big hub in Asia-Pacific. He highly valued the APEC dialogue’s cooperation focus on business facilitation, trade liberalisation, and technical economic investment and cooperation, adding that Hanoi expects APEC 2017 will effectively implement the prioritised orientations on sustainable and inclusive growth, creativity, and regional economic connectivity to improve small and medium enterprises’ competitiveness, and ensure food security and sustainable agriculture. He stated that Hanoi welcomes and will always create a favourable environment for businesses’ cooperation for mutual development. It hopes more and more APEC partners will consider this city as a trustworthy destination for cooperation and investment. At the dialogue, entrepreneurs appreciated APEC’s efforts to promote trade and investment liberalisation and build an open and transparent business and investment environment. They also voiced their wish to join in and practically contribute to APEC’s cooperation in 2017. Japan boosts agriculture partnership with Vietnam The Japan-Vietnam Friendship Parliamentary Alliance will actively work with the Vietnam Farmers’ Union to implement cooperation activities and share experience in developing high-quality agricultural production following Japan’s model. Tsutomu Takebe, special advisor to the alliance, made the affirmation while meeting with Deputy Prime Minister Pham Binh Minh in Hanoi on December 8. He noted that the Japan International Cooperation Agency (JICA) has coordinated with the Vietnam Farmers’ Union to carry out programmes that attracted many businesses. Deputy PM Pham Binh Minh said he hopes the two countries will boost cooperation in agriculture, forestry and fisheries in the coming time. He proposed Japan provide more support for Vietnamese farmers in applying Japan’s efficient models. Swedish firms seek links with Vietnamese counterparts Leading Swedish companies including Ericsson, ABB, and EP joined a press conference in Hanoi on December 8 to introduce their strengths, aiming to seek cooperation with Vietnamese partners. At the event, Swedish Ambassador to Vietnam Pereric Hogberg stated he will attempt to boost cooperation between the two nations, especially in economy and trade. Representatives from Ericsson, ABB, and EP introduced participants to their projects in Vietnam and other countries. Ericsson - a global leader in ICT solutions, mentioned consumer trends in 2017, stressing that artificial intelligence, virtual reality technology, and products based on the platform of the two technologies will be popular. New technologies and products will help narrow the distance between producers and consumers, and create new business models. ABB – a technology firm specialising in energy, focused on renewable energy and smart grids, and the use of these in Vietnam. The firm also pointed out challenges facing Vietnam in developing the electricity industry, and gave recommendations on smart grid models and energy saving. Meanwhile, EP shared its experience in education and training, especially in foreign language training. UN convention supports Vietnamese businesses The UN Convention on International Sales Goods (CISG), which supports the businesses of its 80 member countries, will take effect in Vietnam on January 1, 2017. Nguyen Thi Thu Trang, Director of the WTO Centre of the Vietnam Chamber of Commerce and Industry said that Vietnam aims to boost exports through the convention. Vietnam’s import-export activities have been rising and international goods sales amount to a large number. Businesses can use the CSIG without trade negotiations, she added. Vietnam joined CSIG in December 2015 and most of Vietnam’s major trade partners are members of the convention. Expenses in contract negotiations will be saved when it takes effect. Dialogue seeks to increase Vietnam’s exports to Malaysia Vietnam and Malaysia are aiming to achieve 15 billion USD in two-way trade by 2020, a goal the two nations’ leaders set, Vietnamese Ambassador Pham Cao Phong told a dialogue with Malaysian importers in Kuala Lumpur on December 8. Attending the event were 20 Malaysian firms which import agro-forestry-fisheries, iron and steel products from Vietnam. Phong said the dialogue aims to acquire feedback to achieve the goal. Participants put forward proposals to increase Vietnam’s exports, including conducting more marketing campaigns at home and abroad and improving the quality of food preservation. Several firms expressed interest in building a processing plant and a preservation warehouse in Vietnam. Phong answered Malaysian importers’ questions and pledged to convey their suggestions to Vietnamese authorities. The embassy and Malaysian firms agreed to establish the Malaysia-Vietnam Trade Office in Malaysia, which will group Malaysian firms doing business in Vietnam. According to the General Statistics Office, two-way trade hit 6.8 billion USD in the first ten months of this year, up 3.4 percent annually. Vietnam exported 2.7 billion USD worth of goods to Malaysia, down 14 percent, and spent 4.1 billion USD on imports, an 18.8 percent increase. Steel sector’s growth to hit 10-12 percent in 2017 The steel industry is likely to enjoy a 10-12 percent growth next year, said the Vietnam Steel Association (VSA) at a workshop in Ho Chi Minh city on December 8. According to Chu Duc Khai, VSA Vice President and General Secretary, steel consumption greatly depends on the country’s GDP growth. With expected GDP growth of 6.2 percent this year, and the operation of 10 steel projects in 2017, the sector’s growth is expected to further expand, Khai said. However, he warned of challenges ahead as cheap steel from China would continue to enter the domestic market. Vietnam also has to meet strict technical standards when it exports steel. To cope with difficulties, the country will have to apply trade protection measures and technical barriers to restrict steel imports, Khai noted. The VSA has filed petitions to the Government demanding anti-dumping measures be imposed on several steel products imported to the country. Subjective, objective flaws hamper national single window’s effects Subjective and objective shortcomings have hampered the national single window (NSW) mechanism from fully benefiting businesses, Deputy Prime Minister Vuong Dinh Hue has said. He made the assessment at a meeting of the national steering committee for the ASEAN Single Window, the NSW and trade facilitation in Hanoi on December 8. He attributed the flaws to lax coordination among ministries and sectors in administrative procedures. The most important point is that ministries, sectors, authorities at all levels, enterprises and people must be fully aware of the NSW, he said, repeating the Government’s commitment to providing optimal conditions for businesses. Highlighting the NSW’s benefits, Hue said it helps save custom clearance costs and time and creates an attractive investment climate, improving national competitiveness. The mechanism is also useful to building a modern administration, a component of an e-government. Only 13 percent or 36 of the 280 administrative procedures are performed through the NSW. Meanwhile, Vietnam targets 80 percent and 100 percent of those procedures to be handled by the NSW by 2018 and 2020, respectively. The Deputy PM asked for all administrative procedures related to state management of imports, exports, goods in transit, people and vehicles entering, exiting or in transit in Vietnam to be handled through the NSW at level 4 – the highest level of online public services. The Government aims to put Vietnam in the top four ASEAN countries in terms of administrative procedures settlement by 2020. Those objectives are not easy to achieve, and utmost efforts must be made to realise them, Hue stressed. He underlined the need to persuade businesses to have their procedures handled through the NSW as the mechanism won’t be effective if businesses don’t use it. Ministries and sectors must overhaul legal frameworks and streamline administrative procedures since most obstacles come from this step. The national steering committee should listen to the opinions of firms to minimise irksome procedures, he added. Ten ministries and sectors have used the NSW as of November 2016. 213,000 administrative dossiers of more than 8,350 businesses were handled through the NSW by November 25, said General Director of the General Department of Vietnam Customs Nguyen Van Can. According to the World Bank, Vietnam climbed 15 places from 2015 to the 93rd position among 190 economies in terms of trading across borders. The time needed to carry out export and import procedures is 108 and 138 hours, respectively. While the time for document compliance for imports was cut from 106 hours to 76 hours, while that for exports was reduced to 50 hours from 83 hours. The cost for document compliance for both imports and exports is about 2.5 USD per hour, saving 600 million USD in the first 10 months of 2016. Business community – impetus for ASEAN economic links: PM The ASEAN Business Community is the momentum for the economic linkage, creating a new impetus for trade and investment development within the bloc, said Prime Minister Nguyen Xuan Phuc. Addressing the 3rd Bloomberg ASEAN Business Summit in Hanoi on December 8, he stressed the community plays an important role in initiating creative start-up ideas. Vietnam is joining ASEAN efforts to further strengthen and deepen the intra-bloc cooperation, he said, noting the centre role of ASEAN in the region, especially in economic, trade and investment cooperation have received support of international business communities, including global leading groups. The world and ASEAN region are facing with great challenges in security, economy, food, monetary, climate change, and protectionism. However, the 4th industrial revolution brought great opportunities to development, he said. He urged for closer cooperation in economic and transport infrastructure development, thus facilitating cross-border trade and investment. ASEAN member nations need to promote renovation and creativeness, improve their competiveness, and engage more in the global supply in order to achieve higher added values, he stressed. While expressing the hope that outside investors will seek win-win cooperation opportunities with ASEAN partners, Phuc affirmed that the Vietnamese Government is working hard to improve investment and business climate, and welcomes all enterprises from ASEAN and other regions to the country. This is the first event of this kind that brought together ASEAN leaders working in trade and finance, and representatives of government agencies from the regional nations. It focused on measures to overcome challenges and define important opportunities for growth, cooperation and development in the region. Participants assessed policies in the ASEAN Economic Community, and debated issues related to cross-border investment in the field of consumer products, infrastructure, goods, energy, finance-banking, communications and technology. ASEAN, comprising Vietnam, Thailand, Singapore, the Philippines, Myanmar, Malaysia, Laos, Indonesia, Cambodia and Brunei, forms a consumption market of 600 million people and a GDP of nearly 3 trillion USD a year. EVN to put into use key power projects in December The Electricity of Vietnam (EVN) has said it will inaugurate and put into operation a number of key projects in December to ensure power supply in the dry season of 2017. The projects include the hydropower plant in the northwest province of Lai Chau and the 220kV power lines in Hanoi, northern Lao Cai and Yen Bai, central coastal Binh Thuan and Ba Ria – Vung Tau, and southern Binh Duong provinces. The EVN has upgraded two turbines at the Vinh Tan 2 thermal power plant in the central province of Binh Thuan and continued measures to ensure environmental safety at Vinh Tan Power Centre. The National Power Transmission Corporation has so far launched 316 national grid projects and completed 304 of them. The EVN completed the building of the 110-kV sea-crossing cable line to provide electricity to Lai Son island commune in Kien Hai district, southern province of Kien Giang. It also launched rural electricity projects in the northern mountainous province of Lang Son, southern Ca Mau, Hau Giang, Kien Giang and south central coastal Khanh Hoa provinces./ Cooperative development programme reviewed in Quang Nam A Canada-funded programme to promote the economic efficiency of cooperatives in Quang Nam, An Giang, Tien Giang from 2012 – 2017 was reviewed in the ancient city of Hoi An in the central province of Quang Nam on December 7. The review was jointly organised by the Vietnam Cooperatives Alliance and SOCODEVI, a Canadian non-profit international cooperation and development organisation. Statistics show that the programme has helped 17 cooperatives in the provinces improve their performance, providing better services for their members and communities. Experts have guided cooperatives how to make business plans and strategies, personnel development plans and market research. Thanks to the training, cooperatives have actively applied advanced tools to improve their management capacity. Nearly 300 training courses were organised for 15,000 cooperative members in the three provinces to better their understanding of cooperative-related legal documents and the role of cooperatives in economic development. The programme provided more than 2 billion VND for 19 business development projects of participating cooperatives. From these outcomes, the programme will be expanded to other localities nationwide. Nguyen Thanh Su, Director of the Dai Hiep Cooperative in Dai Loc district, Quang Nam province, said the programme has helped enhance the capacity of his cooperative’s leaders, thus improving its performance. His cooperative now has over 2,000 members. Vice President of the Vietnam Cooperatives Alliance Nguyen Dac Thang underlined the need for Vietnamese cooperatives to learn from international experience. The alliance will continue perfecting related policies to develop the collective economy in the new situation, he said. Vietnam, Russia’s Kursk province reinforce partnership Vietnamese firms converged at a business forum in Hanoi on December 7 to learn about the potential of doing business in the Russian province of Kursk. Speaking at the event, Chairman of the Kursk committee on external relations Grebennikov Vicktor Nikolaevich said Kursk boasts a convenient location and temperate climate suitable for cultivation and animal breeding. The province produces different types of cereals, high-quality meat and dairy products, and develops heavy and light industries, and mining. Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam-Russia ties have been strengthened in the pillar fields of trade, investment, oil and gas, and energy. Two-way trade is on the upward trend. Vietnam has so far invested in 20 projects worth 3 billion USD in Russia while Russian businesses have poured 2.08 billion USD into 114 projects in Vietnam. Kursk province and Vietnam could supplement each other in the fields of industry, agriculture, food, communications and mining, Phong said. Tran Kim Oanh, Director of the Industry and Trade Investment Promotion Centre from the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency, said two-way trade between Vietnam and Kursk hit 2 million USD last year. According to Oanh, Kursk exports mechanical products, electrical appliances, chemicals, consumer goods and food to Vietnam. The two sides can expand collaboration in industry, nuclear power, agriculture and processing, education - training, and tourism. A number of Kursk-based firms such as the Kursk nuclear power plant, Spektr-Pribor, Conti-Rus are interested in expanding partnership with Vietnam. Measures sought to develop enterprises in HCM City The third session of the ninth People’s Council of Ho Chi Minh City on December 7 focused on measures to realise the target of 50,000 new firms in 2017 and 500,000 by 2020 while improving local business performance. Currently, the city has 290,000 enterprises. Of which, 36,000 were established in 2016, with 39.8 percent in real estate, and 18.7 percent in trading – retail, and only 6.4 percent in science and technology field. Deputy Pham Quoc Bao said despite the statistics, only 175,000 firms are actually operational, and the number of those which suspended operation or moved out of the city is rising. In order to achieve the set target of new enterprises, it is necessary to review statistics and the real performance of firms, while more attention should be paid to firms’ quality, he said. Deputy Cao Anh Minh suggested that the city offer more incentives to encourage new firms in support industry and science-technology field. Another deputy, Cao Thanh Binh cited a survey conducted in several districts on the conversion of family businesses into firms, which showed only a few of them have changed their models. Council deputies paid attention to the need to develop public services to support the increasing number of local firms, including administrative reform and the tax agency’s workforce. Director of the municipal Department of Taxation Tran Ngoc Tam said his department is working with local tax agencies to assist family businesses in changing their operation model. According to Director of the municipal Department of Planning and Investment Su Ngoc Anh, the city has designed funding packages to support newly established firms. He stressed that the authorities are doing their best to improve the investment environment and business climate to facilitate business operation and expansion. Task huge for Vietnam to cut trade deficit with ASEAN The task of cutting trade deficit with ASEAN is huge for Vietnam as it involves a wide range of efforts from reforming technology to improving product quality, according to trade officials. With a population of over 600 million and a growing income, ASEAN is an important trade partner for Vietnam but the problem the country faces is that it imports more than it exports. Vietnam has been unable to narrow the trade deficit, which has been about six billion USD since 2010. By October, 2016, Vietnam’s exports to ASEAN hit 14.2 billion USD but imported goods worth 19.1 billion USD from the market, creating a deficit of around five billion USD so far this year. Myanmar has been a bright point of Vietnam’s exports to ASEAN countries, with export growth rate surging by 93.5 percent in 2013, 51.7 percent in 2014, 9.5 percent in 2015 and 22 percent by the end of May, 2016. According to experts, the formation of the ASEAN Economic Community (AEC) has facilitated trade among member countries, allowing goods from other ASEAN countries to enter Vietnam easily and pushing Vietnam’s import bill higher. On the other hand, Vietnam’s goods have not been very competitive internationally and faced fierce competition and technical barriers to ASEAN markets, slowing down Vietnam’s exports to ASEAN countries. Another problem is that Vietnamese enterprises lack information on clients and rivals to successfully penetrate ASEAN markets, according to Pham Minh Hoa, from the Dong Anh Electrical Equipment Corporation, adding the Ministry of Industry and Trade (MoIT) should do more to help enterprises. Pham Thu Hang, General Secretary of the Vietnam Chamber of Commerce and Industry, said to boost exports to ASEAN, Vietnamese enterprises need to reform administration and build appropriate business plans, boost linkages, improve competitiveness and capability to meet market demands. Enterprises should be flexible and sensitive in identifying and seizing opportunities offered by the AEC to create long-term plans. An expert from the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production under the Ministry of Agriculture and Rural Development, advised enterprises to provide updates on legal regulations, especially food safety, and reform technology to produce high-quality products. A representative from the MoIT said information on ASEAN markets will soon be published on ministry’s website. The MoIT’s E-Commerce Department also has a general information channel on markets as well as export-import tariff charts. Vietnamese tourists to South Korea on the rise More than 230,000 Vietnamese tourists visited South Korea between January 1 and November 30, a 53.2 percent year-on-year increase and up 75.4 percent compared to 2014, according to the Korea Tourism Organization (KTO) in Vietnam. The number of Vietnamese tourists visiting South Korea is expected to reach 240,000 this year. The number of South Korean tourists visiting Vietnam is also rising, hitting 1.4 million in the first 11 months of this year, an increase of 39 percent over the same period last year. South Korea has ranked as the 2nd place among top countries with most tourists to Vietnam behind China. The KTO has organized many events promoting South Korean tourism in Vietnam and honoring Vietnamese partners who have outstanding contribution to the success of South Korean tourism industry. Vietnam endeavours to shift to productivity-led growth model A recent resolution adopted by the 12th Party Central Committee bases Vietnam’s new growth model on three pillars: growth quality, labour productivity and competitiveness to replace the old one led by capital, cheap labour and exports. The document, known as Resolution 5, adds that in order to update the growth model, it is necessary to reform public services, agriculture as well as industry and services, in addition to continuing to restructure state-owned enterprises, the financial market and public investment - three major tasks pursued over the last five years. Although Vietnam is still among the fastest-growing economies in the world, its GDP growth rates in recent years have been fairly unsteady. The average growth rate during the 2011-2015 period was 5.91%, compared with 6.32% during the 2006-2010 period and far below the target of between 7% and 7.5%. If Vietnam cannot sustain high growth in the years ahead, the country is likely to be caught in the middle-income trap when the population is growing towards 100 million but the gross domestic product is not rising correspondingly. Last year, Vietnam produced goods and services worth a total of only US$192.4 billion and its GDP per capita reached US$2,100, just above the low-income level. The quality and pace of growth cannot improve when both sectoral and regional shifts in the economic structure are slow. At the end of 2015, agriculture still made up nearly 19% of GDP (down by 8 percentage points compared with two decades earlier) while contributions of the industrial sector rose by the same points to 37% and services largely remained unchanged at 44%. Moreover, economic growth was mainly stimulated by a number of major provinces and metropolises. Only 13 provinces and centrally-governed cities made contributions to the central budget revenues while the remaining 50 provinces had to frequently receive funds from the central government to balance their budgets. Although total investment has fallen to 31.7% of GDP during the 2010-2015 period from 39.2% five years earlier, the efficiency of investment has made little improvement with ICOR, a measure of efficiency, remaining high at 5.4 during the 2010-2015 period, down from 6.2 during the previous five-year period. Notably, state-owned enterprises still accounted for nearly 40% of total investment, of which 40-50% was financed by the state budget, which led to a higher fiscal deficit and public debt level. In the past five years, the budget deficit has always far exceeded expectations. Public debt also rose from 50% of GDP in 2011 to 62.2% in 2015, of which government debt went up from 39.3% to 50.3% and foreign debt from 37.9% to 43.1%. As such Resolution 5 has targeted a spending deficit below 4% in 2020 and 3% in 2030, public debt at 65% or less, government debt at 55% or less and foreign debt at 50% or less by 2020, with each of the above-mentioned indicators falling by 5 percentage points by 2030. Vietnam’s labour productivity has increased steadily from VND44 million a year in 2010 to VND79.4 million in 2015 but remains low compared with many countries in the region and the world. In addition, productivity differs sharply between economic sectors and clearly reflects a growth model led by cheap labour and exploitation of natural resources. While productivity of the mining and property sectors stands at VND1.7 billion and VND1.3 billion respectively, that of manufacturing is only VND71 million and the agricultural sector is even lower at VND30.6 million. As such, Resolution 5 sets a series of goals and solutions to increase productivity. Productivity over the next five years will increase by 5.5% annually and the percentage of farm workers will fall from 44% in 2015 to below 40% in 2020. Total factor productivity will contribute 30-35% to economic growth during 2016-2020. The ratio of skilled workers will increase from 19.9% in 2015 to 25% in 2020 through education, training and development and transfer of advanced technologies. According to the World Economic Forum, national competitiveness is the set of institutions, policies and factors that determine the level of productivity of a country. National competitiveness is closely connected with competitiveness of each locality, sector, enterprise and product. Though having seen much improvement, Vietnam’s competitiveness still has many shortcomings. According to the Global Competitiveness Report 2015, Vietnam ranked 56th among 140 economies with a score of 4.3, up 12 notches compared with 2014 and was Vietnam’s highest position during the 2016-2015 period. However, in the ASEAN region, Vietnam only ranked above Laos, Myanmar and Cambodia while remaining below Singapore, Malaysia, Thailand and Brunei, which all scored above 4.5. Areas that Vietnam performed poorly included institutions (85/140), financial market development (84/140), higher education and training (98/140), infrastructure (76/140), business sophistication (100/140), technological readiness (92/140) and innovation (73/140). In the 2016-2017 Global Competitiveness Report, Vietnam ranked 60/138, down 4 places from the previous year despite achieving a higher score. Meanwhile Singapore ranked number 2, Malaysia 25, China 28, Thailand 34, Indonesia 41, the Philippines 57 and Brunei 58. It is apparent that enhancing national competitiveness is a critical factor in the age of globalisation and economic integration characterised by increasingly intense competition. Aware of the significance of higher national competitiveness in the new growth model, Resolution 5 continues to place a strong emphasis on three strategic programmes, namely the fine-tuning of market institutions, the upskilling of the labour force and the upgrade of infrastructure, while pushing reforms in all economic sectors together with taking measures to streamline state economic management towards building a supportive government that facilitates the growth of strong private corporations with advanced technologies as well as assisting small and medium-sized enterprises to increase their innovation capacity. Kazakhstan eyes all-round links with Vietnam Kazakhstan wants to boost cooperation with Vietnam, especially in politics, trade and investment, Kazakh Ambassador to Vietnam Beketzhan Zhumakhanov has said. Speaking at a press conference in Hanoi on December 7 on the threshold of Kazakhstan’s Independence Day (December 16, 1991-2016), the diplomat highlighted flourishing relations between Vietnam and his country over the last 24 years. The free trade agreement (FTA) signed in 2015 between Vietnam and the Eurasia Economic Union (EAEU), which is joined by Kazakhstan, Russia, Belarus, Armenia and Kyrgyzstan, contributes to fostering trade between the two sides, he added. He hoped through the agreement, goods exchange will be increased between Vietnam with Kazakhstan and with other EAEU member nations. Regarding negotiations to build a railway linking Vietnam, China, and Kazakhstan, the ambassador said the three sides signed railway transport agreements, which enable the goods to transit through China. Electricity output climbs over 11 percent in 11 months The Electricity of Vietnam (EVN) said it produced and bought 162.1 billion kWh of electricity between January and November, up 11.21 percent compared to the same period last year. Of the total, the amount of produced electricity reached 75.06 billion kWh, an annual increase of 22.32 percent. The EVN estimated that its combined power output would hit 177 billion kWh in 2016, exceeding the yearly target by 1.1 billion kWh and up 10.85 percent from 2015. The rate of electricity loss in the first ten months was calculated at 7.88 percent, down 0.34 percent annually. During January-November, the EVN began the construction of 268 power projects and put into operation 288 facilities with capacity raging from 110 to 500 kV. These figures are expected to jump to 316 and 304, respectively, by the end of this year. In December, the group plans to complete upgrading two turbines at the Vinh Tan 2 thermopower plant and implement measures to address environmental issues at Vinh Tan power centre. Wheat imports up in ten months Vietnam imported more than 4 million tons of wheat valued at US$849.5 million during the first ten months of this year, up 100.1% in volume and 62% in value, according to Vietnam Customs. wheat imports up in ten months hinh 0 Australia was seen as the top leader in exporting wheat to the Southeast Asian nation with 1.3 million tons at US$323.5 million, accounting for 68% (up 35.88% in volume and 15.64% in value), trailed by Brazil and the US. Wheat imports from Canada dropped sharply by 81.31% in volume to US$54,800 tons and 80.09% to US$14.5 million. In the reviewed period, the nation imported from the two new suppliers, 69,900 tons from the UK and 58,500 tons from Russia. SJC gold price stunted     Saigon Jewelry Company’s (SJC) gold price experienced a slight rise of VND50,000 (US$2.26) per tael (1.02 ounces), despite strong fluctuation of the world gold price. As of the end of the December 8 morning session, growth rate for official listed SJC gold price slowed, clocking in at VND36.5 million per tael ($1650), compared with the previous session at VND36.45 million per tael ($1652). SJC gold price listed by Doji Ha Noi experienced slight increase and slight drop, eventually returning to the previous session’s price at VND36.42 million per tael ($1646). This constancy in price ended following the sudden surge that SJC gold price experienced during the previous three days. As of December 07, 2016, the listed price for SJC gold reached VND36.6 million per tael ($1654), equal to a VND400,000 rise per tael ($18.08) compared with the price on December 5, 2016, and VND4.5 million ($203.8) higher than the world gold price at that point. On the current situation, the Foreign Exchange Management Department of the State Bank of Vietnam (SBV) officially commented, assuring stability in the gold market, despite expanding difference in domestic and international price. The amount of circulated and traded gold remained relatively low, down by some 20 per cent compared with the same period last year, and there was no mass hysteria in buying or selling. Representatives from SBV also affirmed a close watch on the domestic gold market’s development and readied appropriate means and procedures to intervene if required. The current world gold price is some $1.176.5 per ounce, up by $8 per ounce since the close of the last session. This was an increase of 0.6 per cent from the severe drop within the last 10 months at $1.157 at the beginning of the week. The FED expects to increase fund rates in the following week, which signifies a negative movement for gold price as this would in turn increase the holding cost for unproductive assets such as gold. Domestic investors are advised to remain calm and discreet with their purchases or only speculate using prestigious gold brands. Changes at powerhouse FLC Group FLC Group has announced plans to divest its capital of VND550 billion ($24.2 million) at two subsidiaries including FLC Vinh Phuc Investment and Development JSC and FLC Hoang Long Industrial Zone JSC. The FLC’s Board of Director on December 6 decided to transfer all shares with a value of VND100 billion ($4.4 million), equivalent to 100 per cent charter capital of FLC Vinh Phuc Investment and Development JSC. The group also decided to transfer its capital of VND450 billion ($19.8 million), equivalent to 100 per cent charter capital of FLC Hoang Long Industrial Zone JSC. In the third quarter, FLC’s Group revenue stood at over VND1.09 trillion ($48 million), down 18 per cent year-on-year, with profit after tax at VND86 billion ($3.8 million). In the first nine months, the group’s revenue reached over VND4.7 trillion ($206.8 million), up 40 per cent year-on-year, of which, revenue from real estate accounted for 51 per cent of the total revenue. Profit after tax reached VND655 billion ($28.8 million), up 4 per cent year-on-year. Ms. Huong Tran Kieu Dung, CEO of FLC Group in an interview with local media in November said that the group completed a pre-tax profit plan of VND1.2 trillion ($52.8 million). “In the last two months, the group continued to implement projects and promote mergers and acquisitions (M&A) with a number of other projects,” Ms. Dung was quoted as saying. “Currently, the group is developing detailed plans for 2017, and we hope to continue to record positive business results in the future.” Last month, the Faros Construction Corporation (ROS), in which FLC Chairman Mr. Trinh Van Quyet holds 65 per cent of the capital, will issue additional shares to fund real estate projects and rename itself as the FLC Faros Construction Corporation. At an extraordinary shareholders meeting on November 29, ROS announced a proposal to issue 107.5 million shares to existing shareholders, at a ratio of 4:1. The share issue will collect a minimum of VND1.075 trillion ($47.72 million) and fund the investment in the FLC Sea Tower project in Quy Nhon city in south-central Binh Dinh province. The offering price is expected to be VND12,500 ($0.55) per share and will not be lower than the par value of VND10,000 ($0.44). ROS’s shares are currently trading at around VND120,000 ($5.32). The issue will be conducted in the first quarter of 2017 after being passed at the upcoming shareholder meeting with procedures approved by the State Securities Commission (SSC). Mr. Quyet overtook Vingroup Chairman Pham Nhat Vuong as the richest man on Vietnam’s stock market on November 14. With 279.559 million shares in ROS and 108.86 million in FLC, his holdings stood at VND33.25 trillion ($1.49 billion) on that day, up VND2.1 trillion ($96 million). In contrast, shares in Vingroup (VIC) fell VND1,100 and closed at VND42,900, pushing Mr. Vuong’s holdings down VND1.16 trillion ($52 million) to VND30.7 trillion ($1.37 billion). The FLC Group and Faros have become major players in Vietnam’s real estate and construction sectors. The total value of their projects nationwide, including the VND5.5 trillion ($246.6 million) FLC Samson Beach & Golf Resort in Thanh Hoa, the VND7.5 trillion ($337.7 million) FLC Quynhon Beach & Golf Resort in Binh Dinh, and the FLC Vinh Phuc Resort (Phase I) in Vinh Phuc, has been estimated by real estate consultants Savills at more than $3 billion. Construction begins at HCMC's $233 million tower The Saigon Diamond Corporation, a Vietnamese real estate joint venture, has recently organized the ground breaking ceremony for the Saigon Jewelry Center (SJC) tower project located at the “golden” quadrangular area surrounded by Le Loi, Nam Ky Khoi Nghia, Le Thanh Ton and Nguyen Trung Truc streets in Ho Chi Minh City’s District 1. Saigon Diamond is a joint venture of three shareholders including Ho Chi Minh City Finance and Investment State-owned Company (HFIC), Sai Gon Star Infrastructure and Real Estate Investment Development Corporation (Sai Gon Star) and Vietnam Infrastructure and Property Development Group (VIPD). “The project includes 6 basements and 54 floors with a total investment capital estimated at around $233 million,” Ms. Nguyen Thi Thanh Loan, Head of Public Relations Department at Saigon Diamond Corporation told VET. The joint venture was established for investment and management of the SJC tower project only, she said. This project was said to be related to Van Thinh Phat Group, one of the leading real estate and hospitality groups in Vietnam, by local media. However, the representative of the joint venture gave no further comment on this information. Saigon Diamond Corporation was founded in 2007 and then was given the investment certification for the SJC tower project in the same year by the Ho Chi Minh City People’s Committee. The project is located in the “core” central area of the southern city where a range of the busiest trading and cultural activities usually take place. The tower is designed as a luxurious multi-purpose building complex with a height of 200 meters consisting of a trade center, offices, apartments, restaurants and many enclosed amenities which aim at providing the highest quality services for customers. At the same time, the project also contributes to enhancing the modern landscape of the city’s central area. The project is planned to be constructed and put into operation within four years. Once completed, it will be a modern designed skyscraper, fitting into the urban landscape of the area and contributing to the development of the city’s business environment. VIPD, one of the project’s major shareholders, has announced on its website that it will invest in a number of real estate projects in the future including VIPD Tower, Minh Ngan Industrial Park, Catinat Square and others. It is also known as the company which bought Vincom Center A from Vingroup at the price of nearly $440 million in 2013 then changed the name of the trade center to Union Square. Kinh Do Corporation (which has been known as Kido Corporation since 2015) sold 50 per cent of its stakes in the SJC project in 2010 with a profit of about $19 million although the buyer has not been unveiled. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR