BUSINESS IN BRIEF 27/4 Viet Nam climbs up on UL safety index      Viet Nam is becoming a safer nation relative to many others, and once again improved its safety ranking in 2017, according to the latest report released by Underwriters Laboratories (UL), a global safety science company. In the latest UL Safety Index, Viet Nam moved up 11 places to 76th. The overall injury rates in the country decreased sharply last year, with drowning deaths falling by 15 per cent, poisoning by 14 per cent and transport deaths by 8 per cent, according to the report. “Our mission is to help advance safe living and working environments for people in Việt Nam and around the world, and contribute to the discourse on public health and safety,” David Wroth, director, Data Science– UL, said. “The findings from the study this year illustrate that Việt Nam is performing better in its overall efforts to improve safety.” The index attributes the improvement to certain indicators like strong economic growth and rise in individual incomes. Besides, education standards have improved significantly since 2000. Lastly, Viet Nam also improved its technology utilisation to better manage public safety, identify hazards and communicate about intervention programmes, thus reducing fatalities. UL predicted the country would continue to progress, with opportunities remaining to further enhance safety. Specific actions to improve safety performance include addressing the rate of drowning incidents, falls among older adults, and transport injuries, where Việt Nam ranks among the lowest tier of countries in Asia. The index provides a snapshot of a country’s relative safety performance based on three measurable drivers of safety: institutional drivers like economics and education, safety frameworks and safety outcomes. Enterprises ignore online-tourism The HCMC Department of Tourism and Vietnam E-commerce Association (VECOM) co-organized yesterday the conference themed “the 2018 Online-Tourism Trend” in HCMC. Many participants said domestic enterprises have not yet paid attention to e-tourism model and state-enterprises have not applied new technologies in e-tourism while small medium-sized enterprises have not had enough capital to invest in. As a result, around 80 percent of e-tourism products in Vietnam have been hold by foreign enterprises such as Agoda,com, Booking.com… In Vietnam, some famous companies such as Gotadi.com, Tripi.vn, Ivivu.com attract only local clients. Representatives of Nielsen Vietnam, Facebook Vietnam shared travel agencies should have detailed plan to attract more domestic and foreign clients. FLC to upgrade Dong Hoi Airport     The central province of Quang Binh has approved in principle real estate developer FLC Group to invest in and upgrade Dong Hoi to an international airport. In document No 533/UBND-KTTH, the provincial People’s Committee said the upgradation project would be implemented under the public-private-partnership (PPP) model. According to the document, the Dong Hoi Airport is under the management of Airports Corporation of Viet Nam (ACV) and Ministry of Transport. Therefore, Quang Binh Province has asked FLC to work with the ministry and ACV. The province, on its part, has promised to provide favourable conditions for the group to implement the project. On April 7, 2018, FLC submitted a proposal to relevant ministries and agencies on investment to upgrade the airport. Meanwhile, the Government has asked the Ministry of Transport to consider a master plan for upgrading the airport so that it can receive larger aircraft and meet higher demand for air travel. Once approved officially, FLC Group will strictly go through the investment and operation procedures in line with the prevailing regulations, the company said in its proposal. FLC signed a memorandum of understanding with Airbus last month to purchase 24 A321neo aircraft for its start-up carrier, Bamboo Airways. Bamboo Airways is expected to begin operations late this year, with aircraft to be leased from third-party lessors before taking delivery of the aircraft under the deal with Airbus. The airline will focus on bringing domestic and international tourists to some of the country’s increasingly popular destinations, such as Quy Nhon, Quang Ninh, Hai Phong, Thanh Hoa and Quang Binh. “With a strategic location in the north-central region, Dong Hoi Airport has been important for Quang Binh to connect to world heritage sites in the central region while providing a convenient transit for many flights nationwide,” FLC said. The potential of the airport has not been fully tapped, and there is a lot of scope for the growth of tourism in the province. “The upgradation of the airport to welcome the increasing number of tourists to Quang Binh Province should be implemented soon. Dong Hoi Airport will also be one of the key operation areas for Bamboo Airways in the central region,” said Dang Tat Thang, deputy general director of FLC cum general director of the airline. Thang added that FLC would begin the project as soon as it received formal approval and expected it to be complete by the end of 2019. FLC Group has invested VND20 trillion (US$527 million) in the 2,000ha FLC Quang Binh Beach and Golf Resort Complex. This is the largest tourism project in the central region to date. The project is expected to fuel the province’s tourism development as well as socio-economic growth.  Branding critical amid FTAs      National branding must accommodate international integration and sustainable export development, according to experts at the annual brand forum organised on Friday by the Viet Nam Trade Promotion Agency (VIETRADE) under the Ministry of Industry and Trade (MoIT). Vu Ba Phu, VIETRADE’s director, said the forum was a good opportunity to discuss branding trend development and the benefits of sustainable exports to foreign markets as many Free Trade Agreements (FTAs) are implemented. Phu commented that Viet Nam’s current brand competition strategy has been strongly implemented at the local, national and international level, though businesses still hope for further state guidance on branding related issues in the import and export sector. Ngo Chung Khanh, deputy director general of the MoIT’s Multilateral Trade Policy Department, said that the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has made national branding more urgent than ever. By opening up of the domestic market and reducing many tariff lines to 0 per cent, the CPTPP will grant a plethora of prestigious imported products access to Vietnamese consumers, causing some local brands to lose on their own turf. Khanh suggested that Vietnamese businesses step up their branding strategy to combat foreign competition. Nguyen Quoc Thinh, advisor for the National Trademark Programme, also emphasised the importance of brand identity in the integration period. According to Thinh, the process of brand building relies not only on product quality but also on customer service, as nowadays buyers have hundreds of different reasons to choose or reject a product. As such, he advised that since customers tend to pick products with the most reliable information and standardised quality, domestic firms should aim to establish such credibility. The forum commemorated notable national brands including the Hanoi Trade Corporation (Hapro), Chu Dau ceramics, Hanoi Trading Service Fashion Jointstock Company (Hafasco) and the Thuy Ta Joint Stock Company. Nguyen Tien Vuong, Hapro’s Deputy General Director, expressed his delight in seeing the company affirmed as one of Ha Noi’s leading brand names, in both its main areas of import-export and domestic trade, ranging from convenience stores, electronics, clothing to dining services in nearly 80 countries and regions around the world. Vuong said that in order to expand and develop its brand name in foreign markets, Hapro has been actively participating in trade fairs, market surveys and other promotion activities, which he recommended to other firms. Across the world, over 80 countries are actively implementing national branding programmes to promote local brands in overseas markets, said Phu. This year’s Vietnam Branding Forum focused on solutions for brand development in foreign markets, as well as its role in market expansion and an overview of the National Trademark Program with practical experiences from local businesses. Established in 2003, the Vietnam National Trademark Program has been the sole State-sponsored only programme for the promotion of national goods and services branding. Since 2008, April 20 has been the official Vietnam Trademark Day to acknowledge domestic businesses, promoting noteworthy local brand names in both Vietnamese and international markets. Women’s leadership means leading one’s self first, overcoming social prejudices      A female leader needs to first lead herself, before thinking about leading others, said Ha Thu Thanh, CEO and Chairwoman of the audit firm Deloitte Vietnam. Also, a woman needs to be confident and passionate enough to overcome the prejudices set by her family, friends, relatives and society, and seek the best inside of herself to advance in her own life and work, Thanh said at a conference on Thursday. The conference was co-organised by the US Embassy in Ha Noi and the Vietnam Executive MBA Programme in Ha Noi, University of Hawaii (VEMBA Programme). Thanh has held the position as the chair of Deloitte Vietnam since 1998. She was the only chairwoman among Deloitte’s 152 branches throughout the world prior to 2014. A woman must be mentally strong, be aware and have the desire to rise, Thanh said. “Therefore, a woman needs to lead herself, before leading others.” Women need to be provided with fair and equal opportunities so they can have the same chance as men do to prove their abilities and rise above social prejudices about women, she said. “A woman also needs to struggle with her own issues and overcome them, and she should ask on her own for opportunities to work and prove her capabilities.” Women are often disregarded in every culture and society, even in the Western world and developed countries, she added. The biggest challenge for Vietnamese women to overcome is prejudices, she added. Families should not be among those who place prejudices upon Vietnamese women, and it must be their own motivation that assists Vietnamese women in overcoming and advancing as they accomplish their own achievements, Thanh said. “When given an opportunity, it’s not the matter of gender, it’s the matter of you being able to do a job well, or not.” She urged all Vietnamese women to seek better educations, improve their skills and conduct themselves with good manners and professionalism so that they become exceptional, compared to others in the same organisation. “In addition, they should be passionate enough about their job. Passion creates more and more energy for a person to keep working daily, improving her abilities and skills, and motivates her to do her job better day after day, in order to serve the common goals of the organisation and her own desires.” Nguyen Phuong Mai, managing director of the head-hunting firm Navigos Search, said female managers seem to excel at solving problems. According to a recent Navigos survey, which has been carried out since March and is still ongoing, 48 per cent of respondents – both male and female managers – thought gender diversification seemed to help their firms better resolve problems. Thirty-six per cent of respondents thought a mixture of both male and female managers would enable firms to work with a diversity of customers, while 23 per cent of answers indicated that female managers would help businesses conduct better recruitment and retention of employees. In all industries, human resources management and finance were the two positions handled by most of the mid-level and senior female managers (56-70 per cent for HR and 43-61 per cent for finance), while manufacturing was the lowest (12-30 per cent). That also indicated that the percentages of female leaders in banking-finance and services were the highest (41 per cent and 38 per cent, respectively) while it was the lowest in the manufacturing sector (3 per cent). The research also pointed out that there remains a lack of family and social support for women, as well as unfair evaluations, treatment and opportunities, along with gender discrimination and a lack of empowerment, which were the factors that prevent women from reaching great achievements in their careers. Foreign firms keen on traffic projects in Vietnam Multiple foreign companies have explored the possibility of getting involved in traffic infrastructure projects in Vietnam. Early this week the Ministry of Transport met with three foreign firms – Greenland Holding Group, Vision Transportation Group and Vietnam Infrastructure and Property Development Group (VIPD) – over a couple of projects in the nation. Deputy Minister of Transport Nguyen Nhat told representatives of these firms that the traffic infrastructure sector is open to private investors. By 2020, the ministry plans to open some 2,000 kilometers of expressway to traffic. Of which, 654 kilometers would be built under public-private partnership (PPP). For railways, the ministry will pass a project to develop an express railway connecting the country’s north and south to the National Assembly for approval next year. Two sections of the rail line – Hanoi-Vinh and HCMC-Nha Trang – will get underway first. The country has international seaports able to receive vessels of more than 100,000 DWT such as Lach Huyen in the north and Cai Mep-Thi Vai in the south. A plan is underway to modernize international seaports and connect seaports with the national road network and regional logistics centers. Regarding aviation, the Long Thanh International Airport project with an annual capacity of 100 million passengers and five million tons of cargo is being carried out in Dong Nai Province. In addition, existing international airports such as Noi Bai, Tan Son Nhat, Danang, Can Tho and Cam Ranh will be upgraded. Moreover, the sector will develop the waterway traffic system in the Mekong Delta, connecting to Cambodia and Cai Mep-Thi Vai Port. Nhat said there are many potential projects in which international investors can participate. Vietnam always needs investors to get involved in traffic projects in the country, so mechanisms and policies for PPP projects have been improved to attract more domestic and foreign investors. At the meeting, representatives of the three firms asked about investment procedures, policies, profitability and capital recovery, among others. Mao Juncai, executive vice president of Greenland Holding Group, said foreign investors were interested in traffic infrastructure development projects in Vietnam. The firms also proposed the Ministry of Transport and relevant agencies support and provide them with necessary information about particular projects. Property firm Nam Long to auction 40 million shares to raise capital      Housing developer Nam Long Investment Corporation (HOSE: NLG) approved a plan at its general meeting held over the weekend to auction off as many as 40 million shares, equivalent to 21.2 per cent of its outstanding shares, to raise capital. The plan, which received support from about 80 per cent of its shareholders, has made the group the first listed firm in the country to raise capital by a share auction. The auction is widely open for domestic and international investors who are keen on NLG stock. The starting price is set at VND22,300 (98 US cents) per share, equal to 120 per cent of its book value as of the end of 2017. The group’s board of directors set the bidding price at 30 per cent of the average opening price of NLG stock in the last 60 trading days on the southern bourse. NLG stock closed at VND40,600 on Friday, down nearly 0.5 per cent from the day before. Nguyen Thanh Huong, Investment and IR director of the group, told the general meeting that the share auction was meant for shareholders’ best interest as they would be the ones who decided the winning price. Meanwhile in private offering, the selling price of shares is set by the issuer. “The auction is a way to find the best price for the company’s shares in a fair way. And with it, the door is open for both existing shareholders and new investors. “The company strongly believes in the success of the auction as it is expected high revenue and profit growth rates from now to 2020,” she said. Nam Long is expected to raise as much as VNĐ1 trillion from the auction. The money will be used for its existing projects as well as buying land in HCM City and Hà Nội. It will resume the Water Point Long An project this year. Covering an area of 355 hectares, the project is expected to be a model urban area of the province and serve as a gateway between HCM City and provinces in the Mekong Delta. The group now still has a land bank of 399ha and aims to buy around 20-25ha in big cities to develop more strategic product lines under the brand name of Ehome, Flora, and Valora. It also plans to build more facilities for its housing projects such as kindergarten, schools, shopping malls to generate more stable income, which it expects to reach $5 million by 2022. In the long run, return from this investment is expected to account for 30 per cent of its profit by 2030. Nam Long reported a post-tax profit of VND756 billion last year, nearly double the amount in 2016, beating the yearly target by 15 per cent. Its net profit attributable to the shareholders was VND535 billion, up 55 per cent from 2016. NLG stock enjoyed a robust year in 2017 as its value has gone up by 35 percentage points and its EPS was up 53 per cent. As of the end of last year, the group’s total asset was worth VND7.9 trillion, up VND1.7 trillion from the beginning of the year. At the general meeting, Nam Long set a revenue target of more than VND3.8 trillion and a net profit of VND614 billion, up 22 per cent and 15 per cent respectively compared with 2017. ­ HCMC sees 10,000 apartments for sale in Q2      The real estate market in HCM City will continue to grow in the second quarter of this year, with particularly strong supply of apartments as about 10,000 apartments are open for sale. The growth forecast was made by the Viet Nam Association of Property Brokerage, under Viet Nam Real Estate Association (VNREA). The market tends to develop low-cost condominiums in the surrounding districts, while apartment prices in the central areas continue to rise due to limited supply. By the end of the first quarter this year, the number of apartments for sale advertised by investors was nearly 34,000 units (of which nearly 19,370 units have not officially opened), nearly equal to the number of apartments offered for the entire year of 2017. It is expected that in the second quarter, about 10,000 apartments will be officially offered to the market. Apartments in the east and south of the city accounted for a large proportion of supply. Mid-range apartments will remain dominant in the market. The supply of townhouses and villas shows signs of decline. According to real estate experts, there are some factors that may affect the supply of apartments offered for sale in the second quarter in HCM City, as the State Bank of Viet Nam may respond to recent increases in inflation by limiting credit. The Carina apartment fire incident also caused some anxiety for purchasers. Some land real estate investors have taken advantage of this opportunity to leverage the media and promote free-standing homes, which are often more expensive but regarded as safer especially in the wake of the Carina apartment fire. However, the real demand for this type of housing is not high because affordable options far from the city centre often lack infrastructure and transportation access. Talanx AG seeks controlling stake in PVI      Vice President of Talanx AG Group Christian Hinch has proposed to the Vietnamese Government to raise the ownership ratio of foreign investors at PetroVietnam Insurance (PVI) to 49 per cent. Hinch, who is also chairman of HDI Global SE, which owns over 47 per cent stake in PVI, said his group wanted to hold controlling stake in the enterprise, which is a member of the Vietnam Oil and Gas Group (PVN), to meet the interests and requirements of PVI shareholders who were interested in expanding the scope of its activities to the ASEAN market. Hinch proposed this at a meeting with Deputy Prime Minister Vuong Dinh Hue in Ha Noi on Thursday. Hue said the market for life insurance and non-life insurance in Viet Nam was growing rapidly, but the scale was still modest compared to the country’s GDP (gross domestic product). “The Government will restructure to develop the insurance market in Viet Nam. Talanx’s intention of expanding investment in the country is in line with Viet Nam’s policy of restructuring the financial and credit system, including the insurance market,” Hue said. As a major shareholder, Talanx has helped PVI improve its management capacity and enhance its human resources, said Hue. He added that the Vietnamese Government plans to withdraw PVN’s capital contribution from PVI. Hue said the Government would assign the Ministry of Industry and Trade to set up a divestment roadmap and determine methods of capital withdrawal and selling prices in line with PVI’s previous commitments with PVN. Office rent in HCMC mounts The demand for office space in HCMC leaped while the availability of office buildings for lease was limited in quarter one this year, resulting in a slight uptick in office rent, the website of Nguoi Lao Dong newspaper reports. According to several market research companies, office space was in short supply in HCMC in the first quarter. In the last few months, no new office buildings, including grades A and B, have been put into operation, hence a slight increase in rent. The average offered rent has continued to climb over the past four years and reached a record high in the first quarter of 2018. According to property market consultant CBRE, office rent in the Grade A segment averaged out at US$39.71 per square meter, up 7.4% against last year, whereas Grade B also hit US$22.35, up 1.8% against 2017. Statistics from Cushman & Wakefield, meanwhile, shows that Grade B currently accounts for 80% of the total floor area leased in this quarter. Some 60% of total transactions go to office buildings in District 1. Apart from the new buildings that set high rent, existing towers may also to revise up rent due to the limited availability of buildings at prime locations. It is forecasted that the uptrend will likely continue in the short and medium terms due to the undersupply. Alex Crane, general manager of Cushman & Wakefield Vietnam, said offered prices are still on the increase, partly because investors have reduced incentives for clients. The robust demand for office space is attributed to strong economic growth and rising foreign direct investment. Following Vietnam’s impressive achievements in 2017, the macroeconomy is predicted to remain stable this year with gross domestic product (GDP) growth predicted at between 6.5% and 6.8% this year, and inflation below 4%. Meanwhile, the Asian Development Bank (ADB) said in its latest report that Vietnam’s GDP growth is forecast to accelerate from 6.8% last year to 7.1% this year. In the first two months of 2018, total foreign direct investment (FDI) approvals reached over US$3.3 billion. In addition, over 18,700 new businesses were established, fueling the demand for office space. BIDV plans to raise chartered capital by 28% this year The Bank for Investment and Development of Việt Nam (BIDV) has proposed a plan to its shareholders to increase its chartered capital this year by 28 per cent, compared to the end of 2017. In the plan which was unveiled at the bank’s annual general shareholder meeting on April 21, BIDV proposes to add VNĐ9.45 trillion (US$418.2 million) to its chartered capital, so the figure would reach VNĐ43.65 trillion by the end of 2018. Specifically, BIDV will issue 965 million ordinary shares with a face value of VNĐ10,000 per share. Of the total, more than 171 million shares will be sold to the public through an initial public offering or private placement, 603.3 million shares to be sold to foreign strategic investors under private placement, and over 171 million shares sold under the Employee Stock Ownership Plan (ESOP). The increase in chartered capital is part of BIDV’s plan to increase its equity to meet the minimum capital adequacy requirement set by the State Bank of Việt Nam, which is aligned with Basel II. The move is also expected to help the bank improve the credit rating results of international institutions, enhance prestige in its business operations, and improve its financial capacity and competitiveness, in both domestic and international markets. Also, the bank commits to use added capital in the business areas of BIDV, with reasonable guidance to ensure the capital is used with efficiency and maximises benefits to shareholders. Cash dividend payment Regarding the profit distribution plan in 2017, the Board of Directors has submitted to shareholders to approve the cash dividend payment plan at the rate of 7 per cent. The total amount of dividends is nearly VNĐ2.4 trillion. The remuneration of the Board of Directors and Board of Supervisors in 2018 will be, at maximum, 0.44 per cent of the profit after tax in 2018. In 2018, BIDV sets the target of credit growth of up to 17 per cent; before-tax profits of VNĐ9.3 trillion; a bad debt ratio below 2 per cent; and a dividend payout ratio is expected to range from 5 to 7 per cent. At the meeting, BIDV General Director Phan Đức Tú said that in 2017, BIDV continued to be the market leader, maintaining its position and market share in the industry. Accordingly, its total assets reached over VNĐ1.2 quadrillion, up 19.5 per cent, compared to 2016. Total deposits of the bank reached VNĐ 1.12 quadrillion, up 19.7 per cent over the beginning of the year. The consolidated profit before tax was VNĐ8.6 trillion, up 13 per cent year on year, exceeding the target set by the General Meeting of Shareholders in 2017, with a return on assets reaching 0.63 per cent and a return on equity (ROE) of 5 per cent. Soc Trang province attracts clean energy investors A lot of investors operating in the fields of wind power, solar power and agriculture have recently come to the Mekong Delta province of Soc Trang to seek investment opportunities. Earlier, the Ministry of Industry and Trade approved 22 locations with potential for wind power development in the province. These locations cover a total area of 35,740 hectares with plants holding a combined designed capacity of 1,470MW. To date, 19 investors have made fact-finding tours and mapped out projects at the planned locations. Among those, two have completed procedures and were granted with investment decisions. Chairman of the provincial People’s Committee Tran Van Chuyen said that the province always creates favourable conditions for enterprises and will choose the most competent investors to promote the efficiency of the projects. The province is speeding up the drafting of a master plan on wind power, he added. An investment promotion conference in Soc Trang will be organised in May, during which the province will grant investment decisions, investment licences, and memoranda of understanding on investment cooperation to 47 projects, with a total investment of nearly 123 trillion VND (5.4 billion USD). Transport ministry suggests solutions to Cai Lay Tollgate impasse   Vehicles are seen passing Cai Lay BOT Tollgate without having to pay toll fees following protests by drivers over the location of the tollgate Five capital recovery plans for the controversial Cai Lay Tollgate in the Mekong Delta of Tien Giang have been forwarded to the Prime Minister for consideration, heard a meeting between the Transport Ministry and Tien Giang authorities last week. The operator of Cai Lay tollgate, National Highway No.1 Tien Giang Investment Co Ltd, built a 12-kilometer road bypassing Cai Lay Town, and gave a facelift to a 26.5-kilometer section of National Highway 1 which runs through Cai Lay town in Tien Giang under the build-operate-transfer (BOT) format. The company set up a tollgate on National Highway 1 to recover roughly VND1.7 trillion of investment, but since toll collection started, drivers had staged strong protests, repeatedly paralyzing the tollgate’s operation. Drivers reason that the investor built the bypass, so it only had the right to collect tolls on those vehicles using this road section. It was unreasonable to charge vehicles running on National Highway 1A, let alone the toll fee was too high, almost the same as the fee for using the 40-km HCMC-Trung Luong Expressway. Following such protests, the Government ordered the tollgate be suspended, and the Transport Ministry look for solutions. At the above-mentioned meeting, the ministry floated five options, including fare reductions and tollgate relocation. In the first solution, the ministry suggested keeping the tollgate at the current site and offering 30% discounts for all kinds of vehicles. The ministry also suggested fare reductions and exemptions for nearby households. Regarding the second option, the ministry proposed building another tollgate on the bypass alongside the current one on National Highway 1A. Fares of a standard vehicle will be VND15,000 and VND25,000 per trip on the national highway and the bypass respectively. However, the new tollgate will cost an additional VND90 billion for construction. In addition, road users will likely travel on the national highway due to lower fares, thereby causing traffic jams. Therefore, the plan could have a knock-on effect on other BOT road projects. The third plan is to keep the location of the tollgate and the current fare of VND25,000 per trip. If chosen, the plan will be financially viable, as it will not tap the State budget. However, it will be faced with public opposition. The fourth plan is to relocate the tollgate to the bypass. The Government will spend VND1.25 trillion from the State budget to support the investor. Certain types of vehicle will be forced to travel on the bypass, so they will likely object, given higher fares. The fifth plan is to remove the current tollgate. The Government will make annual payments of about VND2,026 billion (US$88.8 million) to the investor for a period of seven years and seven months. Deputy Minister of Transport Nguyen Nhat said the approved plan should be carefully weighed so that it would not affect other BOT projects and the investment environment, especially the execution of the North-South Expressway project. Garment exports to US surge in first quarter of 2018 Vietnam’s textile and garment exports to the US reached approximately 3.14 billion USD in the first quarter of this year, marking a year on year increase of 13.2 percent – the highest pace in the last three years, according to statistics from the General Department of Customs. The Vietnam Textile and Apparel Association (VITAS) attributed this positive export growth to the rebound of the US economy, which has fuelled its textile and garment imports. During the period, the US imported an estimated 25.29 billion USD worth of textile and garment products from foreign markets, up 4.2 percent year-on-year. According to Vitas, the US trade tension with China beginning in March was one of the main factors affecting the global textile picture in 2018. If the US extended curbs on Chinese garments and textiles, Vietnam could export more to the world’s largest economy, the association said. Vitas forecast that Vietnamese apparel exports to the US would likely hit nearly 13.84 billion USD in 2018, 11 percent higher than 2017. Vietnam earned a total turnover of 7.83 billion USD from textile and garment exports from January to March, surging 15.4 percent over the same period last year, mainly thanks to the country’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and its efforts to speed up exports to China. Besides the US, Vietnamese shipments of textile and garment products to the three major markets of Japan, the Republic of Korea and China also experienced encouraging respective growths of over 27 percent, 22.3 percent and 26 percent, reaching 958 million USD, 896 million USD and 832 million USD. Meanwhile, exports of these items to the EU – another important outlet – saw a modest yearly rise of 1 percent to 1.13 billion USD, according to the department’s statistics. With a positive performance in the first quarter, Vietnam’s textile and garment industry is striving for a year-on-year increase of 10 percent in export value, to 34.3 billion USD for the whole of 2018, Vitas said. Relaxed visa policy could be ‘magic wand’ for Vietnam’s tourism Relaxing its visa policy could be Vietnam’s ‘magic wand’ to attract more foreign visitors and transform itself into a top regional and global destination, experts say. Nearly 13 million foreign tourists visited Vietnam in 2017, a year-on-year growth rate of almost 30%. Experts attribute the remarkable growth to the country’s visa waiver program for citizens from five European countries – Germany, France, the UK, Italy, and Spain. First launched in July 2015, the visa-free policy immediately boosted tourism from these countries by 13.8%-29% over the following year. The yearly growth rate was maintained at levels between six and 20% in 2017. “Such growth is rare if not unprecedented, especially for tourists from countries as geographically distant from Vietnam as Western Europe,” said Nguyen Van Tuan, director of the Vietnam National Administration of Tourism. “It shows that the visa waiver program positively impacted Vietnam’s tourism.” Since Vietnam implemented a visa-free policy for Japanese passport holders in July 2004, the number of annual tourists from Japan has increased threefold, from 267,000 in 2004 to nearly 800,000 in 2017. Japan is now Vietnam’s third-largest market for foreign tourists. The numer of visitors from the Republic of Korea saw a tenfold rise from 233,000 in 2004 to more than 2.4 million in 2017, following the introduction of a visa waiver program for Korean citizens in 2004. Similar results were seen for visa exemptions given to Danish, Norwegian, Finnish, and Swedish nationals in 2005 and Russian nationals in 2009. “The fee for a single-entry tourist visa to Vietnam is currently US$25, a minimal fee compared to how much a tourist spends during their stay,” said Nguyen Thi Huyen, CEO of local tour operator Vietrantour. “A tourist from Europe spends an average of US$100-US$130 a day, and they tend to stay in the country for seven to ten days. It benefits the community by boosting the GDP and creating jobs for locals.” Despite the benefits, Vietnam only offers visa exemptions for citizens from 23 countries and territories as of April 2018. In comparison, other popular tourist destinations in Southeast Asia, such as Singapore, Malaysia, Indonesia, and the Philippines, have visa waiver policies for between 160 and 169 countries, even though not all of them hold bilateral visa waiver agreements. Vietnam’s e-visa and visa-on-arrival policies are also considered less competitive than emerging regional markets such as Cambodia, Laos, and Myanmar. Tour operators complain about the fact that some visa waiver programs, such as the one for citizens from five Western European countries, need to be renewed yearly, leaving travel agencies walking a thin line when targeting those markets. These drawbacks contribute to Vietnam’s rank of 116 out of 136 countries in terms of visa requirements, according to a 2017 tourism competitiveness report published by the World Economic Forum. “For tourists from developed countries, what troubles them is not the visa fee but the arduous process of applying for a visa,” said Dr. Luong Hoai Nam, deputy general director of Vietstar Airlines. Vietnam reported tourism revenue of VND510 trillion (US$22.36 billion) last year, a much larger number than the revenues it generated from visa fees, Nam said, citing statistics from the tourism administration. With more relaxed visa policies, Vietnam’s tourist industry could be freed from its chains and become a popular destination, capable of competing with others in the region, experts say. Production costs need to be lowered to spur exports   PM Nguyen Xuan Phuc is seen on the podium at a national teleconference on how to boost exports in Hanoi on April 23. Prime Minister Nguyen Xuan Phuc, speaking at a national teleconference on how to boost exports in Hanoi City on April 23, urged solutions to reduce production and service costs, and improve the quality of goods to prop up export growth. The 2017 export growth, excluding phones and electronic accessories, could reach a mere 15.8%, said Minister of Industry and Trade Tran Tuan Anh. Vietnam made a record high of US$200 billion in merchandise exports last year. Though this was a positive result, Minister Anh cautioned, the foreign direct investment (FDI) sector accounted for more than 70% of the nation’s outbound sales. Last year’s strong export growth played a vital part in the country’s higher-than-expected gross domestic product (GDP) growth. It helped improve the balance of payments, stabilize the macro economy, bolster production, create jobs, and raise incomes of millions of workers, according to Minister Anh. However, he pointed out some shortcomings in the 2017 export performance. The export sector was more dependent on electronic products than crude oil as the former made up 33% of total exports. If phones, computers and electronics were excluded, the country’s export growth would be a mere 15.8%. He also noted manufacturing activities of foreign-invested companies have long been dependent on regional and global supply chains. The country’s export growth would be adversely affected if there emerge external shocks like trade war or global supply chain changes. Some types of agricultural and seafood products are mainly exported to Asia. Items such as cassava, rubber and dragon fruit go to a single foreign market, according to the minister. Small-scale production makes the quality of agricultural and seafood products inconsistent, he noted, so food safety remains an issue to be solved and it is hard to apply international criteria for tracking the origin of goods. He said there is some improvement in food safety but it is not sustainable. Some export shipments have been returned to the country for failure to meet food safety criteria, damaging the reputation of Vietnamese products. It would be easy to ship products of high quality. Product quality control must be tightened, said Prime Minister Nguyen Xuan Phuc. Phuc said some legal documents should be amended to boost exports and create favorable conditions for the business community. He will directly inspect the reform of administrative procedures in the customs sector. High costs will cut into the competitiveness of Vietnamese products, he noted, calling for reductions in logistics costs, procedures and informal fees. Market research should be done before production by further updating producers on what is happening on the market, he said. He said Vietnam should further strengthen international cooperation to secure sustainable export markets to increase export volume and value by 15-20%. At the same time, the country should diversify its export markets and increasingly join export networks and global value chains. He noted there should have a comprehensive strategy for bolstering exports. Thus, local companies should be supported to cooperate with foreign partners, thereby helping them join global value chains. As much as 75% of export revenue is contributed by the FDI sector. If the link between local and foreign firms is formed, Vietnamese products will have higher added value, according to the PM. He requested relevant agencies to remove obstacles related to taxes, fees, surcharges, customs procedures, specialized inspections, and production and business costs. Besides, he added, the country should develop a modern logistics system to make local products more competitive in price. VNN