BUSINESS IN BRIEF 21/11 Can Tho seeks stronger cooperation with RoK The Mekong Delta city of Can Tho and the Republic of Korea (RoK) hold great potentials for further cooperation, therefore, the RoK Ambassador to Vietnam should work as a bridge to bring RoK investors to the city, said a local official. During a working session with the RoK Ambassador to Vietnam Lee Huyk on November 18, Secretary of the municipal Party Committee Tran Quoc Trung said Can Tho is calling for investment in the fields of industry, hi-tech agriculture, and transport infrastructure in industrial zones. Trung informed his guest that Korean firms are investing in nine projects with combined registered capital of 340 million USD in Can Tho, notably the 171 million-USD Teakwang Vina sport shoe factory and 62 million-USD Lotte shopping mall. Can Tho has shipped rice, aquatic products and apparels to the RoK and imports materials, he said, adding that two-way trade remains modest, reaching just 45 million USD last year. While hailing Can Tho’s development potentials, Lee promised to promote cooperation between Can Tho and the RoK – the largest foreign investors in Vietnam – by introducing the city’s strengths to RoK investors. He hoped that the city authorities will support a project launched in Can Tho last month to provide vocational training for repatriated Vietnamese brides and orientations for to-be-bride women before they come to the RoK. Petrol price drops by over 500 VND per litre The prices of RON 92 petrol and bio-fuel E5 dropped 521 VND and 355 VND per litre respectively, from 3:00 pm on November 19. Following a joint decision by the Ministry of Industry and Trade and the Ministry of Finance, the prices of diesel 0.05S and kerosene also declined 514 VND and 578 VND per litre respectively. Under the joint decision, RON 92 and E5 petrol is sold at no more than 16,371 VND (0.726 USD) and 16,221 VND (0.719 USD) per litre respectively, while current ceiling price of diesel 0.05S and kerosene are 12,509 VND (0.555 USD) and 10,965 VND (0.486 USD) per litre. The ministries also decided to keep retailers’ contribution to the Petroleum Price Stabilisation Fund unchanged and give them a subsidy of 0 VND per litre. It was the first decrease in fuel prices in recent months after six consecutive hikes. It also marked the 22nd adjustment this year, with 11 increases bringing prices up by a total 5,000 VND (0.221 USD) per litre, nine cuts with a total amount of 4,463 VND (0.198 USD) per litre and two times unchanged. Chinese importers survey An Giang’s rice market Rice traders from China and the Mekong Delta province of An Giang met in the Vietnamese locality on November 18 to discuss measures to boost rice exports to the Chinese market. Deputy Director of the provincial Department of Industry and Trade Tran Thanh Tam told participants that An Giang is the country’s second biggest rice producer with an annual output of over 4 million tonnes. The province has annually shipped more than 600,000 tonnes of rice to 63 countries and territories worldwide. Its rice exporters have focused on markets in Asia, Europe, Africa, America, Oceania and the Middle East. Local businesses have taken the lead in zoning off large-scale paddy fields whose products satisfy importers’ demand. A representative of the China Food Association said China has a great demand for rice, having imported 3.9 million tonnes of rice since 2012. Chinese importers have been keen on Vietnamese rice, he said, adding that this offers a good opportunity for An Giang in particular and Vietnam in general to promote the export of agricultural products to China. Doosan Vina hailed for contributions to Quang Ngai The factory of Doosan Heavy Industries Vietnam Co. Ltd. (Doosan Vina) has helped to create the brand name for “made-in-Vietnam” heavy industrial products and contributed remarkably to Quang Ngai province’s budget, said a local official. Speaking at a ceremony marking the Korean-invested company’s 10 th founding anniversary on November 18, Chairman of the provincial People’s Committee Tran Ngoc Cang stressed that the project has also helped to reduce poverty and generate jobs for local people. He expressed his hope that Doosan Vina would continue expanding its production and business, increase the use of domestically-produced materials and equipment, and enhance technology transfer and management. Cang also called on the company to serve as a bridge connecting local firms and enterprises of the Republic of Korea, and encourage its partners to invest in Quang Ngai, thus promoting the province’s economic growth. Covering an area of 110 hectares in the Dung Quat Economic Zone, the factory has total investment of 300 million USD. It specialises in manufacturing industrial equipment such as boilers for thermal power plants, cranes for seaports, salt water filtering systems, among others. Since 2006, the company has provided products worth billions of USD for 197 projects in Vietnam, and shipped its products to 28 countries and territories worldwide. Doosan Vina General Director Yeon In Jung said, besides boosting production and business, his company has actively taken part in social activities. It has spent over 5.6 million USD on corporate social responsibility (CSR) activities in Quang Ngai. The firm has also made great efforts in protecting the environment, ensuring labour safety, transferring technology and sharing experience with Vietnamese enterprises in the field of mechanical industry. Airlines talk facilitating transport Representatives from domestic and foreign air carriers suggested the Ministry of Transport and the Civil Aviation Authority of Vietnam (CAAV) announce the plan on upgrading and expanding Ho Chi Minh City-based Tan Son Nhat International Airport so they can prepare operation plans in the time ahead. They made the suggestion at a conference on air transport policies held by the Transport Ministry in Hanoi on November 18 with the participation of such airlines as Vietnam Airlines, VietJet Air, Cathay Pacific, Thai Cargo, Cebu Pacific and Cagorlux, and airport corporations like the Airports Corporation of Vietnam (ACV) and the Vietnam Air Traffic Management Corporation (VATM). In reply, the Transport Ministry and CAAV said the upgrading will target the airport apron of Tan Son Nhat International Airport and its terminal T2 whose capacity will be raised from 10 million passengers to 12-13 million per year. The carriers also called on Vietnamese management agencies to take measures to cut operating costs in Vietnam, which, they said, remain high compared with other regional countries. Regarding this issue, CAAV explained that the operating costs in Vietnam are the third highest in the region, after Singapore and Thailand. The prices are set in line with guidelines of the International Civil Aviation Organisation and many of them have been unchanged for years. However, CAAV has offered discounts to carriers during their commercial launch of new routes to/from Vietnam, it said. Representatives of the carriers suggested establishing a committee on airport collaborative decision making in order to manage the operation of planes at airports. They also proposed administrative punishments for airlines that violate air transport regulations as well as rewards for those who have significantly contributed to rising air transport quality. Addressing the conference, Deputy Transport Minister Nguyen Nhat said the number of foreign airlines to/from Vietnam increased from nearly 20 to 55 at present. The number of international routes to/from the country also climbed from more than 20 to 100. The amount of passengers and cargos handled at the Vietnamese airports also rose by 14-15 percent annually over the past 20 years, he said. HCM City seeks development assistance from Japan Chairman of the Ho Chi Minh City People’s Council Nguyen Thanh Phong asked for more financial and technical assistance from Japan for the city’s metro and water environment improvement projects in the time ahead. At a meeting with visiting D eputy Managing Director of the Japan International Cooperation Agency (JICA) Shinya Ejima on November 18, Phong thanked and appreciated Japan’s support for infrastructure development projects of Vietnam and HCM City in particular. He called on JICA to continue helping the city implement projects using Japanese aid. For his part, Shinya Ejima affirmed Japan will try to maintain non-refundable and technical assistance for development projects of Vietnam and HCM City in particular. He said the city should enhance cooperation with private enterprises under the public-private partnership (PPP) form in order to mobilise all resources for its infrastructure projects. The JICA will cooperate with the Asian Development Bank (ADB) to continue supporting the third phase of HCM City’s water environmental improvement project, he stated, adding that the agency is willing to call on Japanese firms to work with the city in transferring technology, training human resources, and maintaining metro lines. He also highlighted the importance of synchronous transport development, committing that the JICA will consider providing more support for the construction of metro routes 3A and 3B in the coming time. Wood consumption to rise by 10%     Consumption of wood products in the domestic market is expected to increase by more than 10 per cent this year from last year’s figure of $1.3 billion, according to the Handicraft and Wood Industry Association of HCM City (Hawa). Huỳnh Van Hạnh, Hawa’s standing deputy chairman, said the recovery of the Vietnamese property market this year had increased demand for wooden furniture. To capitalise on opportunities, many Hawa members have carried out plans to expand their market share in the domestic market, including employing designers, developing product lines for the domestic market, and building a distribution system. Since the ASEAN Economic Community took effect a year ago, wood products imported from the ASEAN region to Viet Nam have not increased, he said, adding that this spurred enterprises to expand their market share in the domestic market. To promote locally-made wooden furniture, home decor and handicraft products in the domestic market, Hawa Corporation have organised the annual Viet Nam Furniture and Furnishing Fair (VIFA Home) in HCM City for many years. This year VIFA Home 2016, to be held in District 11’s Phu Tho Sport Centre from November 24-27, will feature 477 booths set up by 109 local and foreign firms involved in wood processing, handicrafts, sanitation equipment and supporting services for the wood processing industry. The fair will offer opportunities for customers to shop for furniture, and interior and exterior furnishing items meeting export standards. It will offer designers, manufacturers and distributors a good chance to form co-operation to provide to the market with the best quality products at reasonable prices, Hanh said. Nguyen Quoc Khanh, Hawa’s chairman, said Viet Nam had been the largest producer and exporter of wood products in Southeast Asia for many years and the local industry is competitive in the region. According to the Ministry of Industry and Trade, Viet Nam earned $5.76 billion from wood and wooden products exports in the first 10 months of the year, a year-on-year increase of 0.8 per cent, with the US the largest importer of Vietnamese wood products, followed by Japan. Revenue from wood and wood product exports is expected to reach $7.2 billion this year. Worldwide demand for furniture remains huge, while Viet Nam’s export turnover accounts for a tiny proportion of the world’s total consumption, he said. Vietnamese banks urged to go digital     Digital banking has assumed crucial importance in the development of Viet Nam’s banking system, Dao Minh Tu, deputy governor of the State Bank of Viet Nam (SBV) stressed at a recent conference. The conference themed “Digital bank - the future of banking?” was held in Ha Noi last week. At the conference, experts discussed challenges to the security of digital banking and the future of banking. Digital banking poses opportunities and challenges to the Vietnamese banking system, said Tu. Digital banking was different from traditional banking, forcing banks to continuously learn and develop, he said. William Anthony Jennings, vice chairman of the management board of the Institute of Manpower, Banking and Finance said that the digital technology era for banks had arrived. Up to 50 per cent of customers would want to switch to digital banking soon, said the vice chairman. He advised banks to consider the trend and plan accordingly. At the workshop, Douglas Jackson, regional director in the Southeast Asia for Boston Consulting Group (BCG), said that Vietnamese customers were still dependant on cash transactions. Thus, it was necessary for customers to change their thinking first before banks’ thinking changed, he said. Viet Nam is a young country, whose human resources are in the golden population structure, which creates young human resources using digital technology, according to Jackson. Dang Tuyet Dung, deputy general director of Maritime Bank, said that the bank had implemented digital banking. "Currently, the services we offer for our customers include not only internet banking but also combo packages”. Recently, as customers at big banks lost money due to online fraud, many blamed the lost money on weak security of banks. "Investments to improve information technology infrastructure and enhance security is crucial. Besides the general principles of security applying to the entire commercial banking system under the direction of the State Bank, banks also need to develop their own security measures," said Phan Thai Dung, deputy director of the Informatics Technology Department under The State Bank. At the conference, the BCG revealed the findings of study of 200 clients, which are financial institutions, to find their difficulties in digital banking. The results showed that though banks have many routes they lack a common vision for digital banking. Interfaces and systems are not integrated, infrastructures are outdated and ability to access multi-channel data is poor. However, according to Douglas Jackson, if banks can overcome these obstacles, the benefits of digital banking are huge such as increasing revenue and market share, improved performance and a competitive advantage versus competitors which can not afford digital features. PlayStation®4 officially launched in Viet Nam     Sony Electronics Vietnam today announced that the PlayStation®4 (PS4™) and PlayStation®4 Pro (PS4 Pro) computer games systems will become available in Viet Nam. The new PS4, available from Thursday, and PS4 Pro available in December, will be introduced in Viet Nam. Sony Electronics Vietnam is also offering retail services for Vietnamese users. The PS4 and PS4 Pro systems and games will be available nationwide in over 60 authorised shops and dealers in Viet Nam. Along with retail stores, after sale centres are available, with some 65 Sony authorised service centers in the country. K+ offers AFF football cup promotion     K+ Satellite Digital Television has announced a special promotion for watching the AFF cup 2016, which begins today in Myanmar. Any new subscriber of the Premium+ package will enjoy the HD equipment price at VND750,000, instead of VND1.3 million per set. The promotion is available nation-wide and will be ongoing from November 17 until December 11. Glasstech Asia to be held in HCM City     The 14th International Glass Products, Glass Manufacturing, Processing and Materials Exhibition (Glasstech Asia 2016) will be held in HCM City from November 24-26, featuring a wide range of the latest products and technologies of the glass industry. The exhibition will feature more than 160 exhibitors from 14 countries and territories, with six national pavilions from Germany, Singapore the UK, China, Taiwan and Viet Nam. Two conferences will be held alongside the event, enabling various members of the glass industry to exchange knowledge on the evolution of glass and its role in the future, according to Adrian Tan, manager of Conference & Exhibition Management Services Pte Ltd (CEMS), one of the event’s organisers. The conferences will also explore how glass in architecture can be customized for Viet Nam’s building landscape, as well as explore how to further streamline the processes in the workplace in order to maximize efficiency and productivity. Glasstech Asia 2016 will be held concurrently with the 11th Specialized International Exhibition for the Hollow Glass Manufacturing, Machinery, Equipment & Glass Products Industry (Hollow Glass Asia) and the first International Windows, Doors, Skylights, Curtain Wall and Facade Technology Exhibition (FENESTRATION Asia 2016). Organised by CEMS and the Viet Nam Advertisement and Fair Exhibition Joint Stock Company, the exhibitions at the Saigon Exhibition and Convention Centre is expected to provide an excellent platform for industry players across the globe to tap into the growing market of Southeast Asia. Gan Geok Chua, chairman of the Singapore Glass Association, said on a global scale, the flat glass industry is expected to reach an estimated US$66.6 billion by 2019. The major drivers of flat glass are substantial growth in the automotive and construction industries. Vietnamese goods fair opens in Hanoi The Vietnamese Goods - Hanoi Fair 2016, organised by the Hanoi Department of Industry and Trade, opened at the Agriculture Trade Promotion Centre on November 19. The fair features more than 300 booths of 192 enterprises specilising in producing Vietnamese commodities such as consumer goods, key industrial products, support products, craft products. Other commodities on display at the fair are foods, drinks, fashion, shoes and garments and textiles. Besides that, nineteen provinces and cities brought their products to the fair. The Hanoi Department of Industry and Trade said the fair is a good occasion for people in Hanoi to buy high-quality goods. The event will conclude on November 24. Binh Phuoc develops local cashew nut brand The southern province of Binh Phuoc is thought to have one of the best cashew nuts in the world. To develop a brand for this product, Binh Phuoc has master-planned its cultivation areas and sought ways to increase productivity and quality, and farmers’ income. A number of farmers in Long Ha hamlet, Bu Gia Map district, have grafted cashew trees to increase productivity, inspiring cashew and farmers’ associations to build 41 high-quality cashew growing models. “The model has been widely duplicated. Each year we welcome many delegations that come to learn from it”, said Nguyen Van Hung, President of Long Ha’s Farmers’ Association in Phu Rieng district. Apart from projects designed to produce safe cashew nuts, the provincial Department of Agriculture and Rural Development has worked with the provincial Farmers’ Association to promote genetically superior cashew trees well suited to the local climate to ensure the quality of Binh Phuoc-branded cashews. Since 2007, the Binh Phuoc Cashew Association has helped Tien Hung hamlet produce safe cashew products and develop a cooperative model. Participating members have been provided with qualified seedlings, farming techniques, fertilizers, and a guarantee that all products will be bought at a predictable price. Dam Xuan Tho, Deputy Director of the Hung Phuoc Agricultural Production Cooperative in Dong Xoai town, said “Annually, members of our management board attend training courses organized by Fairtrade International (FLO). The trained managers will, in turn, provide training for farmers to turn out branded organic products which later can be sold worldwide." Binh Phuoc cashews, which account for half of Vietnam’s total cashew exports, have been shipped to China, the US, the Netherlands, Britain, and a number of other European countries. This year, the average productivity reached 1.4 tons per hectare, up 40% against 2009. There are more than 200 exporters and processors in the province with a yearly capacity of 400,000 tons of raw "For long-term development, we should pay attention to not only materials, but also expanding markets and increasing efficiency in processing and trading. Special attention should be given to getting enterprises to invest more in processing technologies to boost added values", noted Cao Duc Phat, former Minister of Agriculture and Rural Development. TPP leaders promise efforts to implement deal Leaders of 12 member states of the Trans-Pacific Partnership (TPP) have agreed to step up efforts to implement the free trade agreement as US President-elect Donald Trump has opposed the deal. The Kyodo News Agency quoted a senior Japanese official as saying that, in a meeting in Lima, Peru, the leaders affirmed their intention to advance domestic procedures such as ratification by parliaments of member states so that the US-led TPP can enter into force. They underscored the significance of the pact, both economically and strategically, in ensuring stability and prosperity for the region. According to the official, although it is unclear whether the free trade pact will come into force under a new Trump administration, the leaders did not discuss the possibility of implementing the TPP without the participation of the US. US President Barack Obama was quoted by the official as saying his administration will continue efforts to win domestic support for the pact, which Trump has vowed to scrap once he takes office in January. Meanwhile, the White House said President Obama "discussed his support of high-standard trade agreements like TPP, which level the playing field for American workers and advance our interests and values in the economically dynamic and strategically-significant Asia-Pacific region." Obama also "urged his fellow leaders to continue to work together to advance TPP," it said. For his part, Japanese Prime Minister Shinzo Abe said: "If we stop our domestic procedures, the TPP will be completely dead. It will be impossible for us to curb protectionism." The leaders met on the sidelines of a two-day summit of the Asia-Pacific Economic Cooperation (APEC) forum, at which the 21 member economies are expected to underscore the importance of free trade and open markets as the world is faced with rising protectionism and stagnated trade growth. APEC groups the TPP members - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam - and China, Hong Kong, Indonesia, Papua New Guinea, the Philippines, Russia, South Korea, Taiwan and Thailand. HCM City ranked among top 5 real estate markets in Asia-Pacific Investors expect annual returns of 20-25%, the new Emerging Trends report says. Ho Chi Minh City is in the top five of the Asia-Pacific region for real estate investment and development prospects, with annual returns expected to be up to 25%, according to a new report. Emerging Trends in Real Estate Asia Pacific 2016, jointly published by the Urban Land Institute and consulting firm PwC, has ranked the city fifth for investment and fourth for development. Tokyo is at the top, followed by Sydney and Melbourne. Osaka and Ho Chi Minh City are neck and neck. The Vietnamese city has emerged as one of the most promising markets in the region over the past two years, jumping from the 19th place in 2014 to one of the top five this year. Foreign investors, mainly from Japan, the Republic of Korea and Singapore, are interested in the city's property market on expectations of an annual return of between 20 and 25%, according to the report. The report also attributes the city’s rise as an attractive destination to the government’s efforts to stabilize the local currency, control inflation, ease property lending and improve market access for foreigners. Global investors prefer entering Vietnam’s real estate market through mergers and acquisitions. They are laying eyes on a wide range of projects, from beach resorts, serviced apartments, residential buildings to hotels, mostly in the three major cities Hanoi, Ho Chi Minh City and Danang. For instance, Singapore-based investment fund Frasers Centrepoint Limited has acquired a 70% stake in a luxury residential apartment project from a local real estate developer. The US$100-million project, namely G Home, covers a one-hectare area in downtown Ho Chi Minh City. Emerging Trends is based on the opinions of 343 internationally renowned real estate professionals, including investors, developers, lenders, brokers and consultants. Vietnam to pull in more investment next year: CEO survey Half of respondents plan to expand in the country over the next 12 months even though confidence in the Asia-Pacific region has taken a hit. Just 28% of CEOs in the region are “very confident” in revenue growth in 2016, according to the Asia-Pacific Economic Cooperation (APEC) CEO Outlook survey conducted by PricewaterhouseCoopers. Vietnam, however, remains an attractive option, together with China and Indonesia. Over the next 12 months, more than half of the respondents believe that investment in Vietnam will increase thanks to its population of over 90 million and its rapid growth of income per capita. Responses came from 800 CEOs operating in the 21 economies of the APEC region. For many CEOs, free trade agreements will support small and medium-sized enterprises and provide a path to growth for the region. “The best thing you can do for SMEs is to remove trade restrictions. The more we can trade, the more companies benefit,” said Mike Smith, CEO of Australia and New Zealand Banking Group Limited. However, some have warned that lowering barriers to trade and foreign investment may do more harm than good to SMEs, arguing that free trade may intensify the competition between SMEs and global firms. In Vietnam, 97% of the companies are SMEs, so with the door opened under free trade agreements, they have to compete with foreign companies, said Hoang Van Dung, chairman of Vietnam APEC Business Advisory Council, calling this "the biggest challenge." Hitachi expands elevator, escalator footprint in Vietnam Hitachi Ltd, headquartered out of Tokyo, Japan, has announced that it has expanded its footprint into the elevators and escalators sales and services segment in Vietnam with the opening of a wholly owned subsidiary. In making the announcement on November 18, representatives said the newly formed subsidiary – Hitachi Elevator Vietnam – will widely render full-services from sales to maintenance for elevators, escalators and moving sidewalks. In Vietnam, the reps noted the demand for urban railway systems, hotels, office buildings and residential buildings has been steadily on the upswing due to recent rapid growth of the urban population. Hitachi Ltd has forecast that the demand for elevators and escalators that enable smooth transfer of people and freight in these metropolitan areas will also robustly grow at more than a 7% per annum rate over the next few years. The reps added that Hitachi had received an order for 32 sets of elevators and 31 sets of escalators in 2015 for elevated station buildings of the Urban Railway Line 1 in Ho Chi Minh City, which is the first urban railway system in Vietnam. Following this, the company had begun sales of a new machine-room-less elevator (MRL) for Asia and the Middle East, which has been gradually released since September 2016. Hitachi, with this MRL model, plans to enhance its market share of elevators and escalators in Vietnam. Hitachi Ltd, delivers innovations that answer society's challenges with their talented team and proven experience in global markets, said the reps. The company's consolidated revenues for fiscal 2014 (ended March 31, 2015), the latest year for which audited figures are available totalled US$81.3 billion. For Vietnam's hi-tech sector, skilled workers remain elusive The labor shortage is an obstacle in Vietnam's ambition to move up the value chain and away from the traditional low-tech model. Thousands of people attended a recent job fair at Saigon High-tech Park (SHTP), seeking opportunities to work for one of the companies here. A total of 23 companies, out of around 100 tenants at SHTP, were trying to find the best candidates for their 1,000 vacancies. To their disappointment, many job seekers were not qualified and 300 positions remained unfilled. “Recruitment has become very difficult and takes a long time,” said Henry Pham, human resources director of Nidec Vietnam, a fan manufacturer with over 3,000 employees. Duong Minh Tam, deputy manager of SHTP, said the tech park, which has attracted around US$5 billion of investment, now has 32,000 workers but a majority are low-skilled. The number of workers with college degrees is very small, Tam said, adding that it's difficult for SHTP to reach its goal of producing more products with high added value. Statistics show that high-tech products contributed 28.7% in Vietnam’s gross domestic product in 2013, up from 19.1% in 2012 and 11.7% in 2011. The target for 2020 is 45%. “For high-tech parks, 35% to 45% of the workforce should have college-level or higher degrees,” said Tam. “Working in an industrial high-tech park requires a matching level of education.” Yet, ironically enough, a report from Vietnam’s Ministry of Labor showed that many people with college degrees could not find jobs. It said as of the second quarter, 39% of 1.09 million unemployed people were well-educated professionals, half of them with college and post-graduate degrees. Dr Le Van Hien, an expert in vocational training, said the problem lies in the unbalanced structure of the labor market and a disconnect between businesses and schools. Hien said the pressure to earn a bachelor’s degree has been drawing young people away from occupational training, which leads to a severe shortage of skilled labor despite the large working-age population. Vocational training has not been able to match the demand of businesses, he added. SHTP aims to increase the ratio of its skilled workforce with vocational training or college education to at least 80% by 2020. But experts said the target is not easy to achieve. Many companies now take training into their own hands, despite the risk of spending a lot of money and ending up losing the employees to other companies. “I hired some people and offered to provide vocational training. However, some workers broke their promises of working for us for at least three years and just left," said Hong Nhung, a recruitment officer for a company in SHTP. Agreement helps Vietnam boost timber exports to EU Vietnam and the European Union (EU) have basically concluded the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT) after nearly six years of negotiations. Minister of Agriculture and Rural Development Nguyen Xuan Cuong and European Commissioner for Environment, Maritime Affairs and Fisheries Karmenu Vella co-chaired a press conference in Hanoi on November 18 to announce the agreement. The VPA means to ensure the legal export of all timber products and help the Vietnamese wood sector obtain sustainable development and expand foreign markets, especially the EU. It also aims to prevent illegal logging and strengthen forest governance and promote trade in legally produced timber. Under the agreement, Vietnam will build and operate a timber legality assurance system (VNTLAS) in line with the country’s situation and the EU's requirements on tracing the origin of legal timber in the supply chain. Minister Nguyen Xuan Cuong said the full operation of the VNTLAS will signficantly contribute to ensuring the origin of Vietnamese legal timber export to the EU and other markets. The FLEGT license will allow Vietnamese businesses to export wood products to the union without taking accountability on the origin of legal timber products, he added. Commissioner Karmenu Vella suggested focusing on the implementation of the agreement to achieve social, environmental and economic targets. The key commitments are establishing a strong and reliable system which is involved by parties concerned and effective mechanisms to detect any violations and ensure law enforcement, he said. The EU will strictly monitor Vietnam ’s realisation of the VPA and pledged to support the country’s efforts in this field, he confirmed. Vietnam and the EU began negotiations on the VPA/FLEGT in October 2010. The country conducted 10 high-level and 18 technical negotiating sessions before reaching a conclusion. Central region seeks to restore tourism Tourism enterprises, experts and managers on November 17 discussed ways to promote tourism in the north central region after the massive fish death crisis that hit the coastal areas in April. The conference attracted representatives from Thanh Hoa, Ha Tinh, Nghe An, Quang Binh, Quang Tri and Thua Thien-Hue provinces. Nguyen Van Tuan, head of the National Administration of Tourism (VNAT), officially launched a campaign to revive the tourism industry, which suffered serious loss recently. “The environmental trouble caused major losses for the local economy, including tourism,” he said. “People are still afraid of travelling to the central region, as they doubt the safety of seafood and water. Many popular tours have been cancelled.” By the end of this month, the VNAT will organise two familiarisation trips for the media and travel agents from Hanoi and HCM City to the north central region to promote tourism products. Next month, the VNAT will hold a road-show in Bangkok and Udonthani (Thailand) to introduce the region to the Thai market, which is close and accessible for overland travel. Le Tran Sang, Vice Director of the Ha Tinh Department of Culture, Sports and Tourism, suggested that apart from beach tourism, the northcentral region can lure tourists with cultural and spiritual products. “Ha Tinh will promote tours to historical relics, pagodas and ecological sites in the near future,” he said. “While we overcome the environmental disaster, we can also still promote local tourism with the rich and diverse traditional culture and cuisine.” Also the same day, the Institute for Tourism Development Research met with media and tourism agency representatives in the north central region. “The tourism potential of the region is very big and we should find a strategy to promote and invest effectively,” said Nguyen Anh Tuan, director of the institute. Solutions include creating specific products that can’t be found in other regions, opening new tours, and upgrading the regional Dong Hoi Airport.- Plan approved for 2016-2020 implementation of ASEAN and national OSS mechanisms The Prime Minister has approved a master plan for the implementation of the ASEAN and national One-Stop-Shop (OSS) Customs Mechanisms in the 2016-2020 period. Specifically, the plan aims to complete the implementation of all administrative procedures of ministries and sectors managing the exit, entry and transit activities of commodities, people and vehicles, through the national OSS mechanism by 2020. The customs clearance time relating to OSS procedures must coincide with that of the four nations leading the ASEAN region regarding the issue, while 100% of the administrative procedures performed via the national OSS mechanism have their charges and fees collected online, it notes. The plans stipulate a number of measures to implement the mechanisms from now until 2020, firstly including completing the legal basis and accelerating administrative reform, aiming to create a full legal corridor for the use and exchange of electronic vouchers and dossiers with domestic administrative procedures and those of other countries, economic blocs and communities. Secondly, legal documents must be reviewed, adjusted and supplemented in orientation towards reducing unnecessary forms, simplifying implementation steps as well as the vouchers and dossiers that need to be submitted, and reusing information, e-vouchers and administrative decisions belonging to saved dossiers on the national OSS portal. The third measure is to build a national database for electronic forms and vouchers in the administrative and commercial fields, to be generally applied in procedures performed through the national OSS mechanism, while creating a legal basis for the use of the services offered by a third party to provide utilities for both businesses and state agencies in performing administrative procedures via the ASEAN and national OSS mechanisms. Under the plan, the national OSS portal should have all technical elements completed in order to implement the ASEAN OSS mechanism in line with the roadmap and ensure the exchange and handling of trade documents with countries and economic blocs and community as well as between enterprises, aiming to facilitate trade and enhance the national competitiveness. Vietnam currency firmer against hard currencies The Vietnam dong currency has strengthened against strong currencies since the surprise outcome of the U.S. presidential election last week while the local gold price has edged down 4%. In the four days after Republican Donald Trump’s election win, the dong rose 4% against the Japanese yen and nearly 3.5% versus the euro. Meanwhile, banks quoted gold at around VND35.7 million (US$1,594.8) per tael on November 13, a sharp decline from VND37.2 million before Election Day (November 8). A tael equals to 1.2 troy ounces. The foreign exchange market became volatile in tune with global financial market movements, with the yen losing 6.7% against the U.S. dollar in less than 100 hours after the U.S. election and the euro falling 4.5%. The yellow metal also retreated, tumbling from over US$1,300 to US$1,227 an ounce. Before the election, Wall Street experts and investors forecast gold would hit U$1,500 an ounce on the backdrop of the dollar fall if Donald Trump won the White House race. On the contrary, the dollar would be firmer against the currencies of G7 industrialized economies if Hillary Clinton was the winner. The dollar soared while the Dow Jones hit a record high of 18,847 and gold tumbled, breaking the usual pattern that risky assets would dip when a currency gets firmer. In Vietnam, the dong remained stable against the greenback, hovering at VND22,360 to VND22,370 per U.S. dollar. Since early September, the domestic currency has lost a slight 0.13%. The State Bank of Vietnam’s central rate has increased 0.62%, meaning the dollar has appreciated 0.62% versus the dong since early September and 0.76% since early this year. Banks and traders on the informal market have barely revised exchange rates, an indication that dollar supply is ample. Notably, the dong has stabilized against the Chinese yuan. Since early this year, the yuan has dropped 4.6% against the dollar, the biggest fall in nearly 30 years. CIEM: Thruway tolls too high Tolls on build-operate-transfer (BOT) expressways in Vietnam are much higher than in other countries, according to a report of the Central Institute for Economic Management (CIEM). The report, released last week, says the average thruway toll is around VND1,500 per kilometer in other countries. But in Vietnam, the highest fee applicable to trucks of over 18 tons and 40-feet container vehicles is VND840,000 (US$37.6) on the 105-kilometer Hanoi-Haiphong Expressway while the lowest fee is VND160,000 for passenger vehicles of under 12 seats. For the 245-kilometer Noi Bai-Lao Cai Expressway, the fee ranges between VND300,000 and VND1.22 million for vehicles using the entire road. Among the expressways recently opened to traffic, several were upgraded from national highways such as Phap Van-Cau Gie, Hanoi-Bac Giang and Hanoi-Bac Ninh. Though those roads do not meet expressway standards, vehicles have to pay a high charge to use these roads. The four-lane Phap Van-Cau Gie road was built in 2002 and in 2013 the Ministry of Transport licensed a BOT consortium to upgrade it into an expressway in two phases with the first phase re-asphalting the road at a total cost of VND2 trillion and the second phase adding two more lanes. However, the 32-kilometer road does not meet thruway standards but the toll is VND1,500 per kilometer, or VND480,000 for using the entire route. CIEM suggested the Government consider lowering the fee and the duration of toll collection for the benefit of the community. Cost overruns are often seen in many expressway projects, leading to high toll levels, the report said. For example, investors of HCMC-Trung Luong Expressway originally registered VND6.5 trillion for the project but the final figure was VND9.9 trillion. Investors of Cau Gie-Ninh Binh Expressway adjusted up the cost from VND3.7 trillion to VND8.9 trillion while capital for Hanoi-Haiphong Expressway was almost doubled to VND45 trillion. Expressway construction costs in Vietnam are extremely high while road quality is lower than international standards. US$25.8 million was spent on each kilometer of Ben Luc-Long Thanh Expressway while the average cost in China is US$10.9 million and US$17.4 million in the U.S. In addition, many expressway projects have been dogged by long delays, which have led costs to rise. CIEM also pointed out in the report that the Government has not managed expressway toll collections well as it mainly depends on reports submitted by investors. The institute asked the Government to tighten controls on toll collections of BOT projects and ensure transparency in the toll collection process. In addition, expressway investors largely rely on bank loans as their equity accounts for 10-15% of project costs, and this is a key reason behind high tolls, said the institute. BOT road toll collection time to be shorter Many BOT projects have consumed less cash than originally approved after their financial statements were approved, meaning their toll collection durations will be shortened. The financial statements of a number of BOT projects like the widening of National Highway 1A and Ho Chi Minh Highway sections through the Central Highlands show the actual investment costs are lower than the originally approved levels. Specifically, the BOT project for development of the Ho Chi Minh Highway section passing through Dak Nong Province was initially planned to cost more than VND1.02 trillion. But the actual figure was only VND634 billion. Similarly, the highway section running through Dak Lak actually needed VND724 billion only, whereas the earlier approved number was VND836 billion. As for the section passing through Gia Lai Province, the number provided in the financial statement is nearly VND1.3 trillion, down from VND1.77 trillion. The situation is the same at a number of other BOT projects. For example, the National Highway 1A section in Binh Thuan used over VND2.19 trillion, down from the original VND2.6 trillion. Meanwhile, in the renovation of the Phan Thiet-Dong Nai section of National Highway 1A, VND1.94 trillion was spent compared to the approved VND2.08 trillion. The Ministry of Transport said the actual costs of some projects are equivalent to around 70% of the original estimates. Explaining this situation, Nguyen Viet Huy, deputy head of the public-private partnership project management department under the Transport Ministry, said the originally approved investment levels served as a basis for investors to plan and manage their capital in the construction process, not the actual value used for determining the toll collection duration. To accurately calculate tolling time, the Ministry of Transport will look at audits conducted by independent entities or the State Audit of Vietnam to settle payments for investors and reconsider contract terms and toll collection time. Therefore, many BOT projects will have a shorter duration of toll collection than originally planned after their financial statements are approved. Besides, the Ministry of Transport and the Ministry of Finance have considered asking future BOT projects to complete their financial statements before the start of toll collection to make the investment costs of these projects transparent. In August 2016, following the audits of the BOT road and bridge projects, the State Audit of Vietnam requested the Transport Ministry to cut toll collection time at four projects by at least five years. The time was even slashed from 24 years to 13 years at some toll stations. Firms can continue borrowing in foreign currency The State Bank of Vietnam may allow commercial banks to continue offering short-term loans in foreign currency for corporate clients until the end of next year. The central bank is seeking comment on a draft circular revising and supplementing some articles of Circular 24/2015/TT-NHNN that permits local banks and foreign bank branches to continue lending in foreign currency to businesses. According to the draft, the extension is aimed at helping companies gain easy access to short-term capital to produce goods, especially for export. Borrowers are required to have sufficient foreign currency revenue from export activities to repay loans. Upon getting loans, borrowers must immediately sell foreign currency to lenders based on the spot foreign exchange trading method, but this will not apply if foreign currency loans are used to directly make payments. The central bank issued Circular 24 banning commercial banks from providing foreign currency loans for exporters from April 1, 2016. However, enterprises have since complained the ban has stripped them of cheap foreign currency loans. In late May, the central bank issued Circular 07/2016/TT-NHNN allowing companies having demand for short-term loans in foreign currency to borrow from banks to satisfy their short-term capital needs. The decision is valid till the end of this year. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR