BUSINESS IN BRIEF 22/6 VET unsuccessfully sought comment from SHB The Nam Dinh Textile and Garment Urban Development Co. under the Vietnam National Textile and Garment Group (Vinatex) has begun construction of the Nam Dinh Textile Urban Area, with total investment of over VND410 billion ($18.45 million). The urban area is being built on an existing site that currently houses textile, garment, yarn and sewing plants belonging to the Nam Dinh Textile and Garment JS Corp, which will be relocated. The project covers an area of 24.8 ha and will be built in three phases. The first will take two years and include modern infrastructure, parks, and car parking, costing an expected VND130.9 billion ($5.89 million). In the second phase, two textile plants will be relocated to build technical infrastructure and a school, costing VND130.1 billion ($5.85 million). In the third phase the remaining garment, yarn, and sewing plants and an office area on 10.5 ha will be relocated to build remaining facilities for the urban area. This phase will cost an expected VND151.9 billion ($6.83 million). The project is expected to be completed in 2021, creating a clean land area for about 936 villa plots, 20,076 sq m of green parks and sports areas, 16,314 sq m of commercial land and 34,748 sq m for services, education and healthcare, with comprehensive technical infrastructure. Mr. Le Tien Truong, CEO of Vinatex, said the project will meet the standards of a Grade 1 urban area and be in accordance with the urban planning of Nam Dinh province. Upon completion, Nam Dinh province will have a large and modern urban area and the Nam Dinh Textile and Garment JS Corp. will have a wider area to increase production scale after relocation. Textile, garment and yarn production will remain in the city for three to four years to ensure employment for 4,000 workers before moving into the new area. The Nam Dinh Textile and Garment JS Corp. is a high-performance unit and has made major contributions to the development of Vietnam’s textile and garment industry. In its 100 years the company has made many changes but continued to be a major contributor to the province’s economic development, attracting and creating jobs for many workers. Vinatex held its annual general meeting on June 14, announcing targets in export turnover of $2.6 billion for this year, representing growth of 10 per cent. The group also aims to develop the original equipment manufacturer (ODM) - free-on-board (FOB) model as a breakthrough measure in increasing its competitiveness domestically and with textile exporters in other countries such as China, India, and Bangladesh. Vinatex has now 85,000 employees earning an average monthly income of VND6.3 million ($284). Last year its industrial production value stood at over VND36 trillion ($1.62 billion), revenue VND39.5 trillion ($1.77 billion), and pre-tax profit VND628 billion ($28.2 million). Ariyana Da Nang selects sales agent The Ariyana Joint Stock Company authorized the Real Estate Project Supermarket System STDA as the exclusive agent selling apartments and condotels at the Ariyana Da Nang project in central Vietnam at a signing ceremony for a strategic cooperation agreement on June 16. Construction of Ariyana Da Nang will begin this month and be completed in April 2018. Ariyana is a member of Sovico Holdings, a multi-sector investment group of large scale and strong financial capacity active in more than ten countries and territories worldwide. Sovico invests in a range of fields, such as banking (a joint venture with the Ho Chi Minh City Development Bank - HD Bank), in aviation (a co-founder of VietJet Air), in property, owning the five-star Furama Resort in Danang and an ecological tourism area on Phu Quoc Island, and a host of real estate projects in good locations operated by Ariyana. With economic potential and strategic vision, Sovico continues to promote investments in resorts on beaches in Da Nang, Khanh Hoa, Cam Ranh and Phu Quoc. These are international projects and promise to provide customers with memorable experiences and unforgettable vacations. The Real Estate Project Supermarket System STDA is the consultant and agent for many real estate projects in Vietnam. After successfully conquering central Vietnam’s property market with projects such as Sentosa Riverside and Sentosa City it continues to cooperate with Ariyana in delivering Ariyana Da Nang, one of most the outstanding condotel projects in the country. Ariyana Da Nang is a chain of apartments and condotels constructed and managed by Ariyana and located inside the Furuma Resort and of international standard. Ariyana Da Nang therefore inherits all facilities at Furama Resort. According to a recent report from CBRE, Vietnam’s condotel market is growing in popularity. There were 2,436 units from six projects launched in the first five months of this year, 89 per cent of which were in the high-end sector. Total supply from condotel projects increased to 3,084 units, of which high-end developments accounted for the largest proportion, of 76 per cent, followed by the mid-end (16 per cent) and the luxury segment (9 per cent). As at March, Da Nang had more than 390 foreign direct investment (FDI) projects with total registered capital of $3.66 billion. Of these, 26 were real estate projects valued at $1.9 billion, accounting for around 54 per cent of investment capital. Transport industry yields US$91.46 million from non-core divestments The Ministry of Transport reported that it has divested state capital from five corporations as per instruction by the Prime Minister and yielded VND2,039 billion (US$91.46 million). The companies include Civil Engineering Construction Corporation No. 6, Transport Engineering Design Inc, Waterway Transport Corporation Jsc and Vietnam Motors Industry Corporation. In addition, Civil Engineering Construction Corporation No.5 has withdrawn 23.18 percent of chartered capital. By the end of this year, the ministry will approve capital withdrawal measures at two other companies and continue instructing corporations to conduct non-core divestments. Good tax payers honored in HCMC The HCMC Taxation Department yesterday hosted a ceremony to praise 339 businesses and businessmen who are representatives of 1,233 companies of well paying tax obligations last year. Stating at the event, deputy chairman of the city People’s Committee Tran Vinh Tuyen appreciated their efforts in production and trading making great contribution to the country’s economic development and budget revenue. He asked the taxation department to speed up administrative reform and IT application in management to reduce time and cost for businesses. Each civil servant at tax agencies should follow the Prime Minister’s instruction to consider businesses as driving force for the country’s economic development and accompany them during their development process. Call to raise deposit rates on US dollar   Several experts have suggested raising the US dollar deposit rates, which are currently pegged at zero percent, in order to attract domestic savers. The prime minister has just given approval to the plan to repay national debts. This year, the government will borrow USD20bn and spend USD12bn on paying maturing bonds and loans. The Ministry of Finance was asked to review a policy to raise VND17trn (USD772.7m) via domestic and foreign government bonds. The government needs foreign currency and issuing foreign bonds is a way to go. However, according to economists, the current situation is different from last year, when Vietcombank bought USD1bn in bonds. In early June the State Bank of Vietnam allowed commercial banks to provide short-term loans in foreign currency for export firms. This has resulted in huge demand and forced banks to call for more deposits in foreign currency. But the deposit interest rate for USD was previously lowered to zero to minimise the dollarisation of the economy which made everything more difficult. Some banks have had to find loopholes to have more domestic deposits or borrowed from abroad. Meanwhile the public are happy to hoard huge amounts of foreign currency. Economists suggested raising the USD deposit rates. Tran Du Lich, a member of the National Monetary policy Consultancy Council, said trying to minimise the dollarisation of the economy is right but it the policy would need to be changed due to changes in the situation. Lich said the zero interest rate on dollar deposits just meant people weren’t saving money via the official banking system. "If our policies are to attract huge remittances to Vietnam then people must be able to earn interest on the dollar somehow. This is not a simple problem and we need to consider raising the USD deposit rates," he said. Nguyen Duc Huong, vice chairman of Lien Viet Post Bank, said the banks could apply a small interest rate such as 0.5% a year for six-month terms or longer to attract deposits. Huong went on to say that the currency exchange might be affected a little but nothing big to worry about as long as there was a good difference between the VND and USD deposit rates. Moreover, Vietnam’s exchange rate management mechanism needed to become increasingly flexible. 2014 budget deficit higher than approved The Ministry of Finance estimated  the budget deficit in the fiscal year 2014 at VND260.145 trillion, over VND36 trillion higher than approved by the National Assembly (NA). Minister of Finance Dinh Tien Dung told a session of the NA Standing Committee in Hanoi on Wednesday that the budget deficit approved by the legislature was VND224 trillion (5.3% of GDP). With the additional amount, the 2014 budget deficit swelled to 6.61% of the country’s GDP in that year. According to the minister, the actual excessive amount was VND36.952 trillion, mostly spent on transport and irrigation projects. Dung said the excessive overspending had caused public debt to rise. However, NA Vice Chairman Phung Quoc Hien cited the 2013 Constitution and the law on State budget as saying that the Government must have strictly sticked with the budget deficit goal adopted by the NA. Hien’s view was also shared by NA Chairwoman Nguyen Thi Kim Ngan. According to a report of the NA Financial and Budgetary Committee, if there are cost overruns in projects funded by official development assistance (ODA), the Government should submit reports to the NA Standing Committee and the NA in line with the law on State budget. When assessing the implementation of the 2014 budget plan and the 2015 estimate, the committee requested the Government to do what is approved by the legislative body. However, the Government has yet to report to the NA on the matter. As a result, the assessment committee requested excluding VND36.952 trillion from the approved budget spending in 2014. JETRO: Supporting industries still underperform The Japan External Trade Organization (JETRO) said supporting industries in Vietnam are still underperforming as the Government’s incentive policies for them have not produced as many positive results as expected. The underperformance was mentioned by Hirotaka Yasuzumi, managing director of the JETRO office in HCMC at an event held  on June 15 for the office, the HCMC Investment and Trade Promotion Center (ITPC) and Thailand-based Reed Tradex to sign an agreement to organize an exhibition on supporting industries later this year. Yasuzumi said the Government decree on supporting industries issued last year has not borne fruit. As enterprises active in the industries are small and medium and lack capital, they are unable to invest in modern technology and machinery. They have found it extremely difficult to gain access to bank loans. Competent agencies have not worked hard enough, so incentives specified in the prevailing laws have not reached enterprises in supporting industries, according to Yasuzumi. Local firms have not got sufficient backing amid the country’s stronger international integration. Many of them will have to leave the market if they are not supported right now. Yasuzumi said small and medium enterprises (SMEs) in Japan can get loans with an interest rate of below 1% per year. In many cases, borrowers can take out unsecured loans. A JETRO survey showed in the past two years, the ratio of domestically-made parts supplied for Japanese firms in this market has improved compared to four years ago. However, the improvement has been mainly contributed by foreign-invested firms while local enterprises are responsible for 17% in the south and 9% in the north. Meanwhile, the respective ratios of Chinese, Thai and Indonesian firms are 37%, 24% and 20%. Another JETRO survey conducted in 2015 indicated that labor cost accounted for 19% of production costs of Japanese companies in Vietnam, while materials made up 58%. Yasuzumi said if local SMEs can supply more parts, they would help manufacturers reduce costs significantly. The exhibition on supporting industries and an international machine tools and metalworking technology exhibition known as Metalex Vietnam will take place at the Saigon Exhibition and Convention Center in HCMC’s District 7 from October 6 to 8. WB economist pinpoints main pillars for Vietnam’s growth Vietnam’s economy should grow based on three main pillars of environmental protection, social equity, State capability and accountability, said the lead economist of the World Bank (WB) in Vietnam. Speaking at a workshop on Vietnam’s development of a dynamic private sector and the need for institutional reforms in HCMC yesterday, Sandeep Mahajan described the three pillars as a tripod which serves as a firm foundation for Vietnam’s economy to reach growth targets between now towards 2035. Mahajan said Vietnam’s growth may cool if one of the three legs is broken. This means that market principles must be respected and the State should not interfere too much in the market. The State should be accountable before the public. However, there are many challenges for Vietnam to overcome in order to realize the targets the country aims for in the coming years, Mahajan said at the workshop organized by the WB, the Vietnam Chamber of Commerce and Industry (VCCI), and the Ministry of Planning and Investment. Mahajan noted Vietnam has achieved high growth since 1990 and succeeded in poverty reduction. Looking to the next decades, Mahajan said if Vietnam targets reasonable economic growth with annual gross domestic product (GDP) per capita expanding around 4%, the country would be as developed as China does now in the period of 20 years. Vietnam would be like South Korea today if it achieves growth of 7% annually in the period. Earlier, the Government called on ministries and agencies to do whatever it takes to make the 2016 GDP growth of 6.7% a reality despite slower growth in the first months of this year compared to the same period last year. The slowdown was due partly to the severe impact of protracted drought and saltwater intrusion in parts of the country. Mahajan advised Vietnam not to solely focus on GDP growth but attach growth to the three said pillars. In the long term, he called for the country to create a breakthrough in labor productivity improvement, promote innovations, and back enterprises to invest more in new technologies. Tra fish sector sets sights on sustainable development The Vietnam Pangasius Association (VPA) will take various measures to achieve the stable and sustainable development of tra fish between now and 2019, said its new Chairman Duong Nghia Quoc at the VPA’s second Congress in the Mekong Delta city of Can Tho on June 19. Specifically, the VPA will improve the quality of tra fish, from the stage of choosing fries to cleaning breeding facilities, as well as enhance corporate capacity for adapting to strict technical barriers in the future, considering it a top task to the sector. According to Nghia, the improvement is prompted by the European Union’s demand for quality products and the US’s anti-dumping taxes and Farm Bill Act that set barriers to farm produce imports. VPA’s members will be guided how to adapt to free trade agreements, particularly the US’s Farm Bill, and expand the growth of promising markets to at least 10 percent. Improving the value chain, refining databases and launching an information network will be aided by a map of the tra fish sector in the Mekong Delta that is to be devised by the VPA. Trade promotion programmes, including exhibitions and fairs, will give trade fish breeders and processors a full and correct picture of the markets at home and abroad, Quoc said. The customs statistics showed that Vietnam raked in 1.44 billion USD from tra fish export to 132 countries and territories in 2015. Government bonds remain attractive Government bonds have been popular this year and in fact are considered the favourite asset class for credit institutions and foreign investors. The State Treasury said in May bond issuances raised 43.34 trillion VND (1.93 billion USD), almost half higher than in April, with five-year papers being the bestsellers, accounting for 77 percent. Liquidity in the economy and buying by foreign investors have been the prime reasons for the heavy buying. For banks it was not the peak lending period, meaning many of them were sitting on piles of cash from short-term deposits. According to the Ministry of Planning and Investment, the banking sector’s credit grew by only 4.52 percent as of May 20. The Treasury, on its part, saw this as an opportunity to mop up cash. The banking sector has been awash in liquidity: the central bank has mopped up nearly 20 trillion VND via open market operations while the interbank interest rates have dropped sharply across the board. The interest rates for overnight to one-week loans on the interbank market last week plunged to the lowest level in more than one year after the central bank issued Circular 06/2016/TT-NHNN to reduce banks’ adequacy ratios. The overnight rate fell by 32 basis points to 1.46 percent a year and the one-week rate dropped 51 points to 1.55 percent. The central bank has also been buying a lot of foreign exchange to increase its reserves to an estimated 7 billion USD now. Foreign investors have been very active on the bond market, the primary market since Vietnam does not have a secondary bond market. In the last week of May alone, for instance, their buying topped 2.2 trillion VND, taking their total net buying this year to 10.7 trillion VND. The treasury plans to issue bonds worth 70-80 trillion VND in the second quarter, most of them for short terms. It expects to easily achieve this target since in its recent Circular 06 the central bank increased the maximum rate of short-term deposits that can be invested in government bonds from 15 percent to 35 percent for foreign banks and to 25 percent for State-owned banks. This means dozens of trillions of VND worth of bonds are likely to be sold. State revenue from dividends still low As of May, the Government's revenue from dividends remained low at only 13.5 trillion VND (602 million USD), equal to only 25 percent of the estimates for the year. Nguyen Van Phung, Director of the Tax Management Department of the Ministry of Finance (MoF), said that this year the dividend estimates gained from enterprises that the State holds a stake in would be roughly 55 trillion VND. Currently, the State has authorised the State Capital Investment Corporation (SCIC) to represent the State's interests in enterprises. As of December 31, 2015, SCIC's portfolio comprised 197 enterprises, with the State capital's book value being more than 20 trillion VND, accounting for 23 percent of the charter capital and a market value of nearly 95.7 trillion VND. Phung attributed the low earnings from dividends in the first five months to many of the enterprises not having organised annual shareholders' meetings. Phung affirmed that State income sources from dividends at enterprises could not be lost as there are many supervisory mechanisms, especially the supervision of those who represent the State in these enterprises. However, he also said that the payment of dividends depends on decisions made at the shareholders' meetings of the enterprises. He said that the tax authorities could not make ‘rough interventions' to the dividend payment, but must follow the law besides using the vote made by persons who represent the State in the enterprises. Statistics from the MoF showed that State budget revenues in the first five months this year was 396.2 trillion VND, equal to only 39.1 percent of the annual estimate, while budget spending reached 466.3 trillion VND, equal to 36.6 percent of the annual estimate. In the first five months, the country spent 64.55 trillion VND on foreign debt settlement, up 5.3 percent year-on-year. It also disbursed 68 trillion VND for development projects and 332 trillion VND for national defence and administrative governance. Tumbling crude oil prices cut budget revenue considerably in the period, with revenue from oil in the first five months of 2016 falling sharply by 48.1 percent to 15.9 trillion VND, accounting for only 4 percent of total budget revenue. Canadian group to help Binh Phuoc firms The Canadian Northstar group, which specialises in providing financial services for small- and medium-sized enterprises, wants to support firms in the southern province of Binh Phuoc. President and Chief Executive Officer of Northstar Trade Finance Inc, Scott Shepherd, made the remark at a meeting with local authorities last week. He said the Canadian group has 24 years of experience in the field and it hopes to exchange and cooperate with Vietnamese firms given the two countries are implementing new-generation free trade agreements. The company will support Vietnamese businesses in importing spare parts and machines from developed countries to serve domestic production, he added. Vice Secretary of the provincial Party's Committee, Le Van Chau, welcomed the group's investment in Vietnam and particularly in Binh Phuoc, and confirmed that local authorities will create the best conditions for foreign enterprises and investors, including those from Canada, to run business in the province.- Vinacomin reports production output in five months The Vietnam National Coal and Mineral Industries Group (Vinacomin) said it produced 15 million tonnes of coals in the first five months, a decrease of 6 percent year on year. Of the total, 14.7 million tonnes were consumed, equaling the figure for the same period last year. Vinacomin Deputy General Director Nguyen Van Bien explained that the slightly lower yield was due to lesser demand for high quality coals, particularly from cement and steel producers. Vinacomin products are now mostly used in the electricity sector, he said, adding that the production reduction have little effect on the life and work of miners. Vinacomin has also imported coals for domestic processing and cutting stocks. The company anticipated that production and consumption in June would hit 2.9 million and 3.4 million tonnes, respectively. VN steel imports increase in May Steel demand in Thailand, Malaysia, Indonesia, the Philippines and Viet Nam are expected to maintain a growth rate of 6 per cent next year despite exposure to China's steel exports, according to World Steel Association (WSA). According to WSA, Viet Nam is the biggest steel importer in ASEAN and is ranked seventh in world. WSA said that infrastructure construction will increase steel consumption in the five ASEAN countries to 74.6 million tonnes in 2017. In emerging and developing economies excluding China, WSA forecasts that steel demand would grow by 1.8 per cent and 4.8 per cent in 2016 and 2017, respectively. Steel demand in these economies will amount to 457.1 million tonnes next year, accounting for about 30 per cent of the world's steel demand. Last year, Viet Nam imported 11.3 million tonnes, mostly from China, the Viet Nam Steel Association reported. In the first four months of this year, the country imported 3.7 million tonnes of steel from China. The Ministry of Industry and Trade revealed that steel imports in May increased by 32.4 per cent in volume and 7.2 per cent in value. Growth in the first five months was 50.5 per cent in volume and 1.6 per cent in value. The ministry said the steel industry had faced difficulties from the beginning of this year due to tough competition from foreign countries. However, there are positive signs as the demand is recovering and the price is up. Companies are increasing production to meet demand, according to the ministry. Over 1 billion USD in FDI poured into Binh Duong Southern Binh Duong province attracted 1.097 billion USD in foreign direct investment (FDI) as of mid-June, equivalent to 78.3 percent of its yearly plan and up 8.3 percent against the same period of last year, according to the provincial People’s Committee. A total of 113 new projects were licensed in the period with the total registered capital of nearly 731 million USD, while another 64 existing projects registered to increase capital by 367 million USD. The manufacturing industry was the largest FDI recipient with over 1 billion USD. Meanwhile, the service sector saw 14 new and added capital projects with supplements of 83.6 million USD. Singapore was the biggest foreign investor in Binh Duong during the first half of the year with seven new and eight added-capital projects, registering a total investment of 359.9 million USD. The Republic of Korea (RoK) ranked second with 149 million USD, while Japan came third with 84.89 million USD. Notably, Binh Duong province has attracted numerous big projects which match its orientations and plans for local industrial development. With these results, Binh Duong has attracted 2,700 FDI enterprises so far with a total registered investment of 24.75 billion USD. In the time ahead, the province will continue accelerating investment promotion activities in key markets such as the US, the EU, Japan, the RoK, Singapore and Taiwan (China), in order to lure investment in centralised industrial zones with projects in supporting industries, taking advantage of Vietnam’s participation in free trade agreements, including the Trans-Pacific Partnership (TPP). Besides, Binh Duong will pay attention to completing administrative procedure reforms towards publicity, transparency and simplicity, and improving the investment environment, aiming to create the most favourable conditions for enterprises.- Additional project in supporting industry land in Binh Duong The Far Eastern Group from Taiwan (China) is accelerating a 760 million USD project serving cloth and fibre production in southern Binh Duong province’s Bau Bang Industrial Park. Earlier, the group established the Polytex Far Eastern Vietnam Ltd Company and injected 274 million USD in a project serving the garment and textile sector in the Bau Bang Industrial Park. Deputy Chairman of the provincial People’s Committee Tran Thanh Liem said the Far Eastern Group’s plants will create jobs for about 7,500 locals and contribute to boosting the supporting industry for the garment and textile sector in the province. The provincial People’s Committee is making its efforts so that the project will be completed in 2017. According to the Binh Duong Garment-Textile Association, nearly 500 million USD in foreign direct investment (FDI) have been pumped into the garment and textile sector in Binh Duong after the signing of the Trans-Pacific Partnership (TPP) agreement. Lai Chau’s turbine group 2 ready to provide electricity Turbine group 2 with a capacity of 400 MW of the Lai Chau hydropower plant in northern Lai Chau province will provide electricity for the national grid on June 20 or 21. According to Director of the Son La-Lai Chau Hydropower Plant Project Management Board Pham Hong Phuong, the turbine group, which has completed test run, will be put into official operation four or five days ahead of its schedule on June 25. It help ensure power supply in summer season. The first 400MW turbine group of the plant was operational last year. Located in the upper reach of the Da River, the three-turbine plant is designed to have a combined capacity of 1,200 MW. It will supply over 4,670 million KWh of electricity for the national grid per year when all of its three turbines become operational. The plant will not only provide power and water for the Red River Delta in the dry season, but also contribute to promoting socio-economic development in Lai Chau and neighbouring provinces. Construction on the project began in Nam Nhun district, Lai Chau province in January 2011. Vietnam Airlines aims to serve 20.1 million passengers this year The Vietnam Airlines aims to serve 20.1 million passengers for a revenue of more than 3 billion EUR in 2016, said Nguyen Quoc Phuong, Director of the airline’s office in France and Europe during a meeting with its customers in Paris on June 18. Phuong revealed that following last year’s success, the airline served over 4.6 million passengers in the first quarter of this year, a rise of 11.6 percent year on year. In 2016, the airline’s France and Europe office hopes for optimistic performance with a revenue rise of 6-7 percent, he added. Last year, the Vietnam Airlines became first Asia-Pacific airline to add modern airplanes Boeing 787-9 and Airbus-900 to its fleet on air routes from Hanoi and Ho Chi Minh City to Europe , while upgrading its service to four-star standards, said Phuong. He also reiterated that the Vietnam Airlines and Japan’s All Nippon Airways (ANA) will work together to operate 30 domestic air routes in Japan and 10 international ones linking the two countries. During the meeting, the office also introduced the airline’s C and Premium-grade services in order to boost ticket sales in these market segments.- Da Nang hosts first exhibition on startups The Startup Fair 2016 was organised for the first time in Da Nang on June 18, targeting startup and entrepreneurship development across the central city. The event, organised by the Da Nang Entrepreneurship Support Co., Ltd. (DNES) includes a series of workshops and an exhibition of startup models focused on the startup ecosystem, support policies and investment for Da Nang startup. It also comprises dialogues among local government, businesses, partners, investment funds, and startups on the role of institutions supporting startup activities and networks of advisors network, experts, and consultants to startup ecosystem to make strategic orientation for the development of startups in Da Nang in particular, and in Vietnam in general. DNES Director Vo Duy Khuong highlighted the local potential for startups, saying that the locality has recorded the leading provincial competitive indicators (PCI) for many consecutive years. Established last December, the DNES is expected to contribute to building Da Nang a hub of technology in a bid to enhance resources collection for the State budget, Khuong said. Vice Chairman of the municipal People’s Committee Ho Ky Minh underscored opportunities and challenges alike facing domestic enterprises, particularly the small- and medium-sized ones in the international and regional integration. The DNES will provide support for feasible and sustainable startups to make them key producers of the city in the future, Minh said. Communication work will be promoted to raise the awareness of startup among local students, young people and enterprises. Connectivity will also be strengthened, in tandem with offering incentives for developing the startup city, according to Minh. Dominic Mellor an expert from the Asia Development Bank (ADB), who is also manager of the Mekong Business Initiative (MBI) stressed importance of investment for small- and medium-sized startups, pledging that the MBI will boost connectivity among international and Vietnamese businesses. The exhibition brought together 26 startup projects and 18 booths of companies, partners and units supporting Da Nang entrepreneurship. Among the projects exhibited, the organisers will select the 11 standout projects for presentation to investors at home and abroad. In addition, two projects from Germany and one Vietnamese project operating in Singapore joined the event. Economic restructuring enables Tra Vinh to fulfill development tasks The best way for Tra Vinh province to fulfill socio-economic tasks in the next few years is to foster economic restructuring in an extensive, practical and effective manner, Prime Minister Nguyen Xuan Phuc said. Talking to provincial officials in Hanoi on June 18, he applauded the Mekong Delta province’s development efforts in the first half of 2016, when it was severely affected by saltwater intrusion and unfavourable global and domestic economic conditions. He, however, pointed to Tra Vinh’s weaknesses, such as the modest number of businesses, slow economic restructuring and underdeveloped infrastructure. As the Government has no plan to adjust socio-economic development targets for this year, the province should take every possible measure to address difficulties facing local residents and businesses. It must pay heed to improving the business environment and supporting enterprises’ operations, the PM said, adding that Tra Vinh also needs to step up building new-style rural areas. He asked ministries and relevant agencies to provide assistance for the province to cope with short- and long-term problems. They should soon carry out infrastructure projects that can enhance the province’s capacity of responding to saline encroachment and climate change. Tra Vinh, a coastal locality in the southeast of the Mekong Delta, relies mostly on agricultural and sea-based economic activities. It is still a low-income province with a large number of ethnic minority people. The recent drought and saltwater intrusion have affected 29,067ha of rice in Tra Vinh, while 18,770 rural families have lacked water for daily use. From January to June, the province’s gross regional domestic product grew by 6.26 percent, lower than the 11 – 12 percent target, including the declines of 12.8 percent and 10.12 percent in agriculture and aquaculture. However, industrial production there rose by 98.9 percent, construction 10.89 percent and services 4.32 percent. Prime Minister hails startup ecosystem idea in Ben Tre Prime Minister Nguyen Xuan Phuc hailed the idea of building a startup ecosystem in the southern province of Ben Tre during a working session with local authorities on June 18 in Hanoi. The PM said this novel mindset will contribute to reducing poverty, improving management in State-run agencies, and supporting farmers and entrepreneurs to do business. A startup ecosystem is formed by people, startups in their various stages and various types of organisations in a location, interacting as a system to create new startup companies. The PM extolled Ben Tre for proactively enacting measures to cope with saltwater intrusion and ensure social welfares. He suggested the province promote innovation spirit in management and concentrate financial resources on tackling difficulties in realising the local development goals and improving local living standards. It is important to boost the application of science and technology in farming and raise public awareness of integrating economic development with climate change adaptation, he added. The Government leader asked the locality to diversify and mobilise capital resources to build climate change adaptive facilities, as well as prioritise investment in transport, irrigation and water resources projects to ensure sustainable development. Addressing the event, Deputy PM Trinh Dinh Dung suggested Ben Tre review its planning scheme in line with that of the Mekong Delta, focusing on transport infrastructure development and economic restructuring in accordance with the provincial and regional climate change strategy. He urged the province to improve roads and waterways while developing a seaports system to develop industry and marine transport. The province should develop its land fund as a primary factor to appeal for investment, he said, recommending balancing financial resources, selecting suitable investment models, and prioritising build-operate-transfer (BOT) projects, to yield higher efficiency. With a 65-km coastline and favourable infrastructure network, Ben Tre boasts strength in aquaculture and rice production. It also connects the Mekong Delta with the southern key economic zone. Like other Mekong Delta localities, Ben Tre had to bear brunt of the severe saltwater intrusion in the first half of 2016. The total economic loss was estimated at 1.5 trillion VND (67.5 million USD). Meanwhile, more than 20,000 hectares of rice and over 4,000 hectares of fruits were damaged. In January-June, the gross regional domestic product (GRDP) increased by only 2.68 percent against the same period last year, failing to reach its target of 6.5 percent and recording the lowest growth over the past few years. Son La to create Geographic Indication for Shan Tuyet tea Moc Chau district in the mountainous province of Son La is focusing on creating the Geographic Indication (GI) “Moc Chau” for its Shan Tuyet tea and a collective mark for Moc Chau Oolong tea. A plan for cooperation and link in production and consumption will be devised to help bring the tea to international consumers. In 2010, Shan Tuyet tea was granted a certificate of protection on GI. The protected area covers seven communes in Moc Chau district and six communes in Van Ho district. Moc Chau district currently has 10 companies and cooperatives specialising in producing tea, with a combined area of 1,822 hectares distributed in five communes and towns and around 600 labourers. The Shan Tuyet tea has been grown on Moc Chau plateau for a long time and thousands of old tea trees still produce buds. The climate features give Shan Tuyet tea a distinctively fragrant smell and high contents of dissolvable substance in the buds. New industrial revolution will be digitally-centered Vietnam should strengthen market-based reforms and invest in education and training in order to take advantage of opportunities arising from the next digitalisation-driven production revolution, experts have said. They made the point at the workshop, “The Next Production Revolution and its policy implications” jointly held by the Ministry of Foreign Affairs and the Organisation for Economic Co-operation and Development (OECD), in Hanoi on June 16. Experts said that the world was on the brink of the next production revolution with profound technological breakthroughs, while Vietnam was embarking on the new stage of development and integration with accelerated industrialisation from 2016 to 2020. Besides opportunities, the next production revolution posed challenges to Vietnam particularly the challenge of further lagging behind, according to the experts. It is time for policy-makers in Vietnam to acquire a better understanding of the digital revolution to make the best of the revolution’s opportunities in its early stages and to speed up industrialisation and modernisation, experts at the OECD said. They were optimistic that Vietnam would turn into a high-income country in the next four decades. Deputy Minister of Foreign Affairs Bui Thanh Son said that innovative thinking was critical for Vietnam to move forward while the country was losing its competitiveness in low-cost labour. Tran Dinh Thien, Director of the Vietnam Institute of Economics, said Vietnam signed free trade agreements with the world’s giant economies such as the European Union, the Republic of Korea and the US. “Amidst rapid integration coupled with the approaching next production revolution, if Vietnam went on the right path, the country could take a giant leap,” Thien said. Kensuke Tanaka, head of the OECD Development Centre’s Asia Desk, said at the conference that strengthening market-based reforms, SOE reforms and reforms to education and training to meet demand for skilled labour were essential. OECD, on its website, says that the spread of global value chains, the increasing importance and mainstreaming of knowledge-based capital, and the rise of the digital economy, are ushering in the “next production revolution”. However, a number of policy challenges must be tackled to enable the next production revolution, the website says. The world went through three industrial revolutions, according to the World Economic Forum. The first was in 1784 using water and steam power to mechanise production. The second was in 1870 using electric power to create mass production, and the third took place in 1969 using electronics and information technology to automate production. Now a digital revolution was in the making. Investing in education and training was now the clear choice for Vietnam to be able to grasp opportunities from the next production revolution, the OECD experts said at the conference. Alistair Nolan, senior policy analyst at the OECD’s Directorate for Science, Technology and Innovation said that as the digital revolution and globalisation were bringing radical changes to the world of work, education and training systems need constant attention. It was also important to improve the link between supply and demand in the labour market, which was a key factor for success, the experts stressed. Canadian group provides financial services for Binh Phuoc The Canadian Northstar group, which specialises in providing financial services for small- and medium-sized enterprises, wants to support firms in the southern province of Binh Phuoc. President and Chief Executive Officer of Northstar Trade Finance Inc. Scott Shepherd made the remark at a meeting with Vice Secretary of the provincial Party’s Committee Le Van Chau and Permanent Vice Chairman of the provincial People’s Committee Tran Ngoc Trai in the locality on June 17. He said the Canadian group has 24 years of experience in the field and it hopes to exchange and cooperate with Vietnamese firms given the two countries are implementing new-generation free trade agreements. The company will support Vietnamese businesses to import spare parts and machines from developed countries to serve domestic production, he added. Chau welcomed the group’s investment in Vietnam and particularly Binh Phuoc, and confirmed that local authorities will create the best conditions for foreign enterprises and investors, including those from Canada, to run business in the province. Businesses face challenges in TPP Panels discussed a number of obstacles facing local businesses, especially small- and medium-sized enterprises, when joining the Trans-Pacific Partnership (TPP) agreement, during a workshop in Hanoi on June 17. They said in addition to fierce competition from foreign enterprises, non-tariff barriers such as technology and the origin of goods pose a big challenge to local exporters. Deputy Director of the Central Institute for Economic Management Le Xuan Sang said such local staples as farm produce, garment-textile, footwear, seafood and timber products will be exempted from import duties when entering Japanese, Canadian and US markets. However, Vietnam is encountering setbacks in changing and reforming State policies in accordance with TPP regulations. He noted that the most important information for exporters is the origin of products, followed by the market information and the tariff reduction. Therefore, it is essential for businesses to get updated on the markets to compete in both domestic and international arenas. The TPP started out as P-4 with Chile, New Zealand , Singapore and Mexico. The US joined in September 2008 and Vietnam in early 2009. The deal now brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. The completion of the world’s largest free trade pact on October 5 in Atlanta, the US, elicited positive responses from many countries. The TPP will become a free trade region of 800 million people, accounting for 30 percent of global trade and about 40 percent of the world’s economy. The pact will help expand Vietnam's GDP by 23.5 billion USD by 2020 and 33.5 billion USD by 2025. Report stresses tech, innovation in sustainable industrial development The UN Industrial Development Organisation (UNIDO) has released the Industrial Development Report 2016, which focuses on the role of technology and innovation in inclusive and sustainable industrial development. The launch was held by UNIDO and the Vietnamese Ministry of Industry and Trade in Hanoi on June 17. Ludovico Alcorta, Director of UNIDO’s Development Policy, Statistics and Research Branch, said technology and innovation are closely connected with sustainable development. Inclusive and sustainable industrialisation can be quickly achieved when policy makers provide conditions and issue reasonable policies for industrialisation, while steering clear of mistakes made by other countries, he added. The report highlights the urgent need for international cooperation to boost technological changes and attain inclusive and sustainable industrial development. It underlines the role of technology and innovation in industrialisation and modernisation and affirms the inevitability of industrialisation during development. Additionally, technology is able to foster all the three aspects of sustainable development: economy, society and environment. However, the technological application in developing the economy and solving social problems in Vietnam is still limited, participants at the launch said. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR