BUSINESS IN BRIEF 14/12 Major home expo to feature 450 firms VIETBUILD Home, the annual housing, home decoration and household appliance exhibition,, will take place at the Sài Gòn Exhibition and Convention Centre tomorrow, enabling people to shop for the upcoming New Year holidays. Nearly 450 exhibitors from 12 countries and territories, including South Korea, Japan, Singapore, China, the US, India, Germany and Việt Nam will set up 1,500 booths, an increase of 30 per cent from last year. The expo will showcase new products related to construction, intelligent housing systems, interior and exterior decoration, as well as household equipment like air conditioners, kitchen utensils and more. Property transaction floors will introduce housing for low-income earners together with incentives. Nguyễn Trần Nam, chairman of the Việt Nam Real Estate Association and head of the organisation board, said the demand for interior and exterior furnishings usually increases at the year-end, as people renovate their homes to welcome Tết, the Lunar New Year. The five-day event is therefore well-timed for companies to market their products and consumers to look for home decor, he added. The exhibition will also serve as a forum for local and international businesses to meet and discuss co-operation. Gelex initiates plan to take over STG      Vietnam Electrical Equipment Joint Stock Corporation (Gelex) has announced its plan to purchase 21.3 million shares of South Logistics Joint Stock Company (Sotrans). The shares are equal to 24.93 per cent of Sotrans’s charter capital. The purchase is due from December 15, 2016 to January 14, 2017. Previously, in its annual general meeting this August, Gelex declared it was expanding its manufacturing operations into the field of logistics business by acquiring stake in Sotran. Besides, Gelex is also expected to further invest VND812 billion into logistics. To implement this investment plan, Gelex is scheduled to release 77.25 million shares at VND18,000 per share to mobilise over VND1.39 trillion and increase charter capital from VND1.55 trillion to VND2.322 trillion. Gelex was originally established in 1995 with initial charter capital of VND177 billion. The company operates in the electrical engineering industry. Its main products are electrical equipment, electrical cables and power metres.  PNJ shoots past full-year profit target         Phu Nhuan Jewelry Joint Stock Company reported pre-tax profits of VND561 billion (US$24.73 million) in the first 11 months of the year, a year-on-year increase of 132 per cent and higher than the full-year target. Revenues rose by 9 per cent to VND7.682 trillion ($338.7 million). The jewellery manufacturer opened 24 new stores last month, raising the total number to 214 in 47 provinces and cities. The company, which has the largest distribution system in the country, will open seven more this month. Constant investment in new technologies and equipment and training for its artisans, effective financial management activities and professional marketing are the key factors that help it surpass its targets, PNJ said. Meanwhile, PNJ Charity Fund has contributed VND4.5 billion this year for social and environmental protection activities, including construction of houses for poor people in the flood-hit province of Quang Binh.  Japan firm to build waste plant in Hung Yen      Japanese Kume Group plans to invest in a waste to organic fertiliser plant in Hung Yen, aiming to help the northern province tackle waste and boost environmental protection, according to a local official. Nguyen Van Phong, Chairman of the provincial People’s Committee said that Kume Group would work with the Japan International Cooperation Agency to construct the plant. A pilot plant will be built to treat and classify waste and turn the waste to organic fertiliser, while guidance will be given to locals on how to classify rubbish, he said, adding that another plant will be constructed after the pilot. Kume Group has also asked for support from the province, especially in researching waste releasing in the locality and waste gathering for the plant. Phong expressed his belief that the project would be effective, pledging that the province will create optimal conditions for its implementation, especially in land use, clean water, infrastructure and power supply. The province will back the construction of the pilot plant, while directing provincial departments and agencies to co-ordinate with Kume Group during the project, stated Phong.  Experts differ on VN investment      Deputy Chairman of the National Assembly Economics Committee, Nguyen Duc Kien, is urging investors to pour money into production and business rather than into traditional investment areas. Speaking at a conference hosted by bizlive.vn on Saturday in northern Thanh Hoa Province, Kien said that Viet Nam expected to become a start-up nation and the Government was developing policies to promote the start-up wave that would provide investment opportunities. “Look at the market demand when making a decision on investment,” Kiên said. Kien said the ongoing privatisation of State-owned enterprises (SOEs) would open significant opportunities for private investors to participate in a number of sectors, which were previously Government domain. But experts at the conference also said that privatisation of SOEs would help boost the securities market. According to Nguyen Thanh Long, Chairman of Hà Noi Stock Exchange, the stock market performed well in 2016, with capitalisation value increasing by 40 per cent to $135 billion, or 65 per cent of the gross domestic product (GDP). Although it is difficult to forecast market performance as developments in the global market is unpredictable, foreign investors remain bullish on the stock market of Viet Nam, Long said. Economic expert Nguyen Tri Hieu said investments next year in securities and real estate appeared promising. The securities market will receive stimulators from the listing of many SOEs, while the property market is more diversified in term of products together with commitments of returns by developers, Hieu said. However, Hieu said the property market should be a choice for those looking for long-term investments. Still, Hieu said bank savings remained the least risky investment avenue, adding that there would be unpredictable developments in gold and foreign currencies in 2017. Hieu said that Vieệt Nam’s economy was facing the pressure of mounting public debt, plus out-of-control factors such as climate change, as well as developments in the world, such as Brexit. Economic expert Ngo Tri Long said Viet Nam needed to have measures in place to tackle the public debt and boost reform amid potential instabilities in the global economy.  Credit guarantee policies need revision to further support SMEs      Policies related to credit guarantees need to be revised to improve the credit access of enterprises, especially small- and medium-sized enterprises (SMEs) and micro firms, Deputy Prime Minister Vuong Dinh Hue said on December 13. He emphasised the important role of credit guarantee mechanisms given that the State budget is limited and the business community has not received significantly efficient support. In 2011, the then-Prime Minister issued a decision on credit guarantee mechanisms for SMEs to access loans from commercial banks. In 2013, another decision on establishment of credit guarantee funds in provinces and cities was promulgated. Deputy minister of finance Tran Van Hieu said that the legal framework is expected to create favourable conditions for SMEs to access capital from credit institutions in order to maintain operation and expand production. Currently, there are 27 credit guarantee funds nationwide but most of the funds have weak financial capacity because the capital comes mainly from local State budgets, Hieu said. Credit guarantee funds have three sources: local State budgets, contributions from enterprises, and finances from domestic and foreign organisations. The overseas source is almost insignificant while contributions from enterprises are not regular as they have to struggle themselves. The total charter capital of the 27 funds is approximately VND1.4 trillion (US$65 million) while the amount of guaranteed loans reaches VND361 billion. Nguyen Chi Trang, deputy general director of the Viet Nam Development Bank (VDB) which is also assigned by the Government as a guarantor for SMEs, said the bank’s guarantee activities are hindered by the inconsistencies in the project appraisal procedures by VDB and commercial banks, not to mention the shortage of money. Due to the inconsistencies, it takes SMEs up to three months to get loans, deputy governor of the State Bank of Viet Nam Nguyen Dong Tien said. The Viet Nam Association of Small and Medium-sized Enterprises Chairman Cao Sy Kiem told the Vietnam News Agency that the majority of enterprises hesitated to use credit underwriting to borrow bank loans. He attributed the hesitation to complicated procedures in accessing the guarantee service. When firms deal with both guarantee funds and commercial banks, they face the same assessment process but have to pay fees twice, he added. The lack of close co-operation and mutual confidence between guarantors and commercial banks is also an obstacle for SMEs to receive supports, Kiem said. Given the situation, Deputy PM Hue asked relevant ministries and agencies to work out clear criteria to define which enterprises really need supports. He assigned the Ministry of Finance to revise the credit guarantee mechanism, study the possibility of providing guarantee service without requiring collaterals, and set reasonable guarantee fee levels.  PM approves Quang Binh solar power project adjustments      Prime Minister Nguyen Xuan Phuc has approved adjustments to the solar power project in the central province of Quang Binh, which is funded by South Korea’s official development assistance. Under the project, solar panels will be installed in households and administrative buildings in hamlets in communes which the national grid has not reached. The project will be carried out in eight border communes of four districts – Ngan Thuy and Kim Thuy of Le Thuy District, Truong Xuan and Truong Son of Quang Ninh District, Thuong Trach, Tan Trach and Son Trach of Bo Trach District and Trong Hoa of Minh Hoa District. The project is expected to provide solar power to more than 1,200 households in 40 hamlets once it is completed on July 1, 2018. The US$13.7 million project was launched on July 1, 2015, with the initial aim that 46 hamlets in nine communes in the four districts get access to solar electricity. It was scheduled to begin operation in the fourth quarter of this year.  Dung Quat shipbuilding company may declare bankruptcy       Dung Quat Shipbuilding Industry Co. Ltd (DQS) may declare bankruptcy, one of the possible solutions for the company, due to the huge losses it has incurred over the past years. This was stated in the Ministry of Industry and Trade’s report submitted to the prime minister recently. Two other solutions are to restructure DQS to resolve its difficulties in production and business or to transfer DQS to other companies to manage. Under the ministry’s report, this transfer would be planned by Viet Nam National Oil and Gas Group (PetroVietnam), the parent company of DQS. Bankruptcy according to existing regulations is the last choice for DQS, the ministry said. The ministry reported that DQS was established in 2006 and was a member of Shipbuilding Industry Corporation (SBIC), formerly Vinashin. In 2010, the company was transferred under the management of PetroVietnam. According to the financial statement as of June 30, 2010, when DQS was transferred to PetroVietnam, the former had chartered capital of VND3.758 trillion and total losses of VND7.44 trillion, including bank loans worth VND4.8 trillion. DQS did not have the ability to pay its debts, vneconomy.vn reported. When PetroVietnam took over management of DQS, it pumped VND5.095 trillion into DQS, including chartered capital of VND1.99 trillion and VND3.104 trillion for paying its debts. However, by June 30, 2016, DQS still had a total loss of VND6.893 trillion, including loans at banks worth a total of VND1.227 trillion. DQS made profits in 2014 and 2015, but it was expected to incur a loss of VND103.7 billion in 2016 because of the current difficulties in business. This shipbuilding company still has three large loans pending -- a loan of VND490 billion from Vinashin Finance Company (VFC), a loan of VND528 billion from Viet Nam Development Bank (VDB) and a loan of VND548 billion from YMC-Transtech, a contractor of DQS.  VN tea exporters enjoy record year      Tea exports in the past 11 months reached 118,000 tonnes, earning US$197 million, increasing 7.1 per cent in volume and 4.3 per cent in value compared to the same period last year. Of these, the export volume of Vietnamese tea in November is estimated at 12,000 tonnes with a turnover of $21 million, according to the Ministry of Agriculture and Rural Development (MARD). However, the tea price for exports in the first ten months decreased nearly 14 per cent compared to the same period last year, to $1,656 per tonne on average. According to the Viet Nam Tea Association (Vitas), export value for the whole year is expected at $235 million, with 46 per cent from green tea and 53 per cent from black tea. Top importers of Viet Nam’s tea products include Afghanistan, Indonesia, Russia, Pakistan, Taiwan, the US, mainland China, the UK and the United Arab Emirates (UAE). Pakistan was the top consumption market of Vietnamese tea in the first 10 months of the year, accounting for 34 per cent of market share. Export volume to the market increased 1.8 per cent but declined 8.7 per cent in value compared to the same period last year. Markets whose tea imports increased include China, Indonesia and Malaysia. The association also predicted that tea export volume would increase by 10 per cent next year. However, according to Vitas, to meet the expectation, co-operation between central and local relevant agencies is required, such as planning tea plantation land and processing units with suitable capacity. The association also suggested tight control for safe tea production, as well as supporting policies for enterprises and farmers in production, investment and material purchase. The Hai Quan (Customs) newspaper quoted Nguyen Thi Anh Hong, Vitas vice president, as saying that ASEAN was becoming a more important market for the Vietnamese tea sector. In the last five years, Indonesia, Malaysia and Singapore have always been in the top 10 importers of Vietnamese tea. However, Indonesia imports lower grade tea compared to the two other countries, but with a larger volume. Besides the three countries, Thailand is emerging as an important importer of Vietnamese tea, she said. Among tea importers, Pakistan remains a stable import market. Meanwhile, export to Taiwan’s market faced a lot of difficulties due to the exceptionally strict conditions on residues in plant protection products. However, the problem was solved after the MARD’s National Agro-Forestry Fisheries Quality Assurance worked with the Taiwan side. Taiwan raised the permitted residue levels, therefore, tea exports, especially, jasmine tea, to the market have improved, she added.  Textile exports to hit US$28.5b Vietnam’s textile and garment exports this year are estimated to reach US$28.5 billion, meeting roughly 92% of the set plan due to market difficulties, the Vietnam Textile and Apparel Association (Vitas) reports. According to the association, the industry’s largest export market in 2016 remains China, which accounts for more than half of the industry’s export value. Exports to the US this year are also estimated at $11.4 billion, up 4% against last year. The EU, Japan, India, Brazil, Russia and Canada were also large importers of Vietnam’s textile and garments in 2016, the association reported. The association attributed the low export turnover to a lack of export orders in 2016 due to fierce competition from foreign textile and garment producers, while global demands declined. Hoang Ve Dung, chairman of the Duc Giang Garment and Textile Corporation, said obtaining orders had become more complicated, demanding higher quality and moving forward delivery deadlines. Nguyen Xuan Duong, chairman of the Hung Yen Garment Joint Stock Corporation, said that importers asked his company to lower selling prices by 18-20%, and even 30%. However, several still found partners who were less expensive in other countries.   Increasing production costs, limited orders and pressure by exporters to reduce selling prices have placed a burden on the corporation, Duong said. Experts said that the textile and garment sector would continue facing challenges in 2017 due to fierce competition by other major exporters – including China, India, Bangladesh and Pakistan –while global demand is forecast to slow down. Le Tien Truong, General Director of the National Garment and Textile Group (Vinatex), said textile and garment exports to the US and the EU will also see negative impacts, as consequences of Brexit and US President-elect Donald Trump, who opposes the TPP trade pact. Therefore, the sector anticipates an export growth rate of just 5-7% next year, if no appropriate policies are enacted, Truong said. Vitas chairman Vu Duc Giang said that it made several proposals to the Ministry of Industry and Trade (MoIT) to support local industry, including strengthening management of both domestic and foreign investment projects in the industry, reviewing policies on minimum wage increases and working hours. The association also asked for adjustments to the sector’s development and assistance in human resources training. In addition, Vitas proposed that the MoIT review and revise legal documents causing difficulties for garment and textile businesses. Korean strawberries officially imported into Vietnam aT Center Hanoi under the Korea Argo-Fisheries & Food Trade Corporation under Korea Ministry of Agriculture, Food and Rural Affairs organised December 13 event to introduce Korean strawberries, on the occasion that this product is officially licensed to be imported into Vietnam. This event aims to promote advantages of Korean strawberry – a new product which has been licensed for quarantine by Vietnamese government and will be imported into Vietnam from this year.  This highly competitive Korean product with strict quality management system has been exported to about 20 countries all over the world, such as Hong Kong, Singapore, Malaysia, Thailand,… At the event, aT Center Hanoi introduced the processes of production and management, which use science and technology to help maintain the good quality and sweetness of Korean strawberries. In Korea, strawberries are grown in smart farms with complete automation from cultivation to rearing in order to minimize the use of fertilizers and pesticides in accordance with Good Agricultural Practice (GAP) standard.  Moreover, the Korean government also has technical training on cultivation and production management for farmers with an aim of improving quality and sweetness of the product; thereby improving its competitiveness.  In the other hand, the issue of food hygiene and safety is also ensured thanks to training on safety and hygiene carried out continuously by the Korea Institute of Agricultural Products Quality Management.  After being harvested, strawberries are classified, packaged with high CO2 content process technology and specialised packaging, then transported by air. Just two days after being harvested, the products will be available in Vietnam with the freshness and deliciousness equivalent to the ones sold in Korea. In Vietnam, Korean strawberry is promoted by a famous celebrity - actress and singer Miu Le, which gives a friendly image to the product. Because of the different climatic conditions, products with trade exchange potentials between Vietnam and Korea are so diverse and abundant.  In the last five years, the commercial transaction value of agriculture, fisheries and food between the two countries has increased twofold, up to US$1.9 billion. “In the context that Vietnam is focusing on development of agriculture, food industry as well as diversification of food products, that Korean strawberry products are licensed for quarantine and officially imported into Vietnam will help Vietnamese consumers access high-quality, safe and healthy Korean agricultural products,” said Kim Dong Kwan, representative of aT Center Hanoi. aT Center Hanoi, like aT Centers in other countries, is responsible for promotion of Korea’s agricultural – fisheries products and food through the organisation of product advertising programs such as sales promotion programs at supermarkets, Korean food free trial programs at cultural festivals and food fairs,…, supporting Vietnamese businesses in importing food items from Korea by providing cold storage, connecting Vietnam importers and Korean exporters, and inviting customers to visit food exhibition programs in Korean. Meanwhile in Korea, besides commercial functions such as importing agricultural products such as cereals, rice and vegetables for domestic consumption, aT is a tool which, on behalf of the government, stabilises agricultural – fisheries market prices by event organizing and price support programs such as promotional product exhibitions and fairs. Developing resources of rice gene adapting to climate change   Vietnam is one of the countries most vulnerable to the effects of climate change, so it is essential for the Vietnamese rice industry to help ensure sustainable national food security. In the context of such efforts, the development of varieties of rice tolerant to drought and salt intrusion (from 0.4% to 0.6% or even higher) for crossbreeding with the existing crops in the country is a top priority. By the end of 2014, 90 hybrid rice varieties from the International Rice Research Institute (IRRI) were certified in Vietnam and Vietnam sent 3,000 rice varieties to the IRRI’s banks to be preserved.  Earlier, the IRRI provided 2,000 crops for Vietnam to use in research, as well as in selecting and creating new seeds. According to Deputy Head of the Cultivation Department Tran Xuan Dinh, currently, the domestic production capacity only meets 40%-45% of demand.  In implementing the programme supporting hybrid rice seed production (both parental strains and F1 hybrid seeds), Vietnam produces 6,500-7,000 tonnes of seeds per year; meanwhile, around 11,000 – 12,000 tonnes of other seeds are imported. However, the importing of hybrid rice varieties is not likely to result in many advantages for domestic rice production.  Particularly in the context of complicated climate change, unusual weather such as droughts and flooding have seriously affected the results of production, resulting in corns with few seeds and a shortage of tomatoes, which has left some families in poverty.  Therefore, cooperation in researching and crossbreeding varieties of rice adapted to the affects of climate change has become an urgent task. According to statistics released by the Vietnam Agricultural Sciences Institute, Vietnam was provided with 40 top-quality rice seeds from numerous countries around the world.  However, they could not be used immediately due to weather conditions in the country; therefore, it is essential to select, improve and utilise genes with good resilience in the face of such disasters and high productivity in order to create varieties suited to changing climate conditions in the country. The IRRI has been the traditional partner of Vietnam’s rice industry since the 1980s.  In a seminar on prior programmes to raise the position of the Vietnamese rice industry on November 4 in Hanoi, the IRRI’s General Director Matthew Morell affirmed that the institute’s gene banks were collecting natural resources for natural genes, the genetic structure and representatives of selected rice seeds.  They are important natural resources for the collection of important traits as well as the varieties adapted to the impacts of climate change in Vietnam. The IRRI can support Vietnamese partners in increasing productivity and reducing inputs (including pesticides, fertilisers, water, workers and seeds) while improving the rice quality.  Its research can contribute to reducing losses during and after the harvest, as well as optimising the supply of resources and the quality of products. In order to face the challenges presented by climate change, the enhancement of cooperation between Vietnamese rice industry and the IRRI is very essential, creating favourable conditions in which for Vietnam to maintain its top position in rice exports around the world.  Deputy Minister of Agriculture and Rural Development Le Quoc Doanh proposed that Vietnam should change the ways it cooperates with the IRRI in selecting and creating new rice varieties with the aim of developing Vietnam’s rice brand. In order to develop Vietnam’s gene bank, in addition to expanding cooperation, domestic scientists need to be more active in developing rice varieties through crossbreeding and producing seeds in the country. Professor Le Huy Ham, Director of Vietnam’s Agricultural Genetics Institute, said that Vietnam is home to many rice varieties, therefore it is not essential to create more new seeds.  Vietnamese scientists should bring genes that can adapt to climate change into existing varieties, he added. In addition, Vietnam wants to promote cooperation in new scientific fields, such as agronomic genetics. Currently, domestic research facilities have fully mastered the technology to select and create varieties through the traditional hybrid methods, in combination with techniques from biotechnology; therefore, Vietnamese scientists can proactively produce hybrids and genuine breeds, contributing to curbing the need for imports of rice seeds.  The country should also pay much attention to the co-operation with foreign countries to exchange material resources, contributing to diversifying exported rice products. Vinacomin Power debuts on UPCoM Vinacomin Power Holding Corporation Limited, a State-owned subsidiary of Vietnam National Coal and Mineral Industries Group (Vinacomin), will debut 680 million shares on the Unlisted Public Company Market (UPCoM) on December 15. This was announced by the Hanoi Stock Exchange. The shares, under code DTK, will start the first trading day at 14,000 VND (0.62 USD) per share. At this price, the company’s market capitalisation will reach 9.52 trillion VND, making it among the highest-valued stocks on the UPCoM. The power company made its initial public offering (IPO) last year, with 236.4 million shares put up for sale, a record in terms of volume of shares put up for auction at that time. However, only 1.2 million shares, equivalent to less than 1 percent, were sold. Vinacomin, currently, still holds over 99 percent of the company’s charter capital. The power company, established in 2009, engages in development, construction and management of thermal and hydro power plants. It is a major electricity producer in the local power market and is implementing 14 power projects with a total capacity of 5,880MW. It has five subordinate companies, two subsidiary firms and four associate companies with holdings of less than 50 percent of capital. Ending September 2016, Vinacomin Power reported a loss of 228 billion VND, lifting its cumulative losses to 1.14 trillion VND. Its equity capital was nearly 5.8 trillion VND and total asset value reached 26.4 trillion VND. The UPCoM, which went live on June 2010, is the market for unlisted or delisted public companies under the management of the Hanoi Stock Exchange. There are currently 387 stocks here with daily trading volume of some five million shares worth over 100 billion VND.- Seminar promotes GI development for Binh Thuan dragon fruit Measures on sustainable development of geographical indication (GI) for the dragon fruit – a fruit specialty of the southern central province of Binh Thuan, were the main focuses of a seminar in the locality on December 13.  Participants discussed issues related to the GI system for Binh Thuan dragon fruits and difficulties facing the locality in effectively managing the system.  Director of the provincial Department of Science and Technology said the locality’s relevant sectors has paid due attention to raising public awareness of the importance of intellectual property protection for the Binh Thuan dragon fruit trademark, contributing to improving the prestige of this product in the market.  A total of 85 local organisations and individuals have been so far granted GI protection for their dragon fruits with a combined area of 2,300 hectares. Up to now, 12 countries and territories worldwide have agreed to protect GI for Binh Thuan dragon fruits, including the US, the UK, the Netherlands, Germany, and Japan. Participants stressed the need to build a strategy to promote GI registered products in domestic market and potential markets.  The local authorities should build a dragon fruit production value chain. Binh Thuan boasts 26,500 ha of dragon fruit-farming land, producing about 500,000 tonnes per year. Up to 80 percent of the volume is sold abroad, mainly in China, the US, the Netherlands and the Republic of Korea.- ADB maintains economic growth forecast for Southeast Asia The Asian Development Bank (ADB) on December 13 maintained its estimates for Southeast Asia’s economic growth in 2016 and the next year. In a supplement to its Asian Development Outlook 2016 Update report, the bank said growth forecasts remain unchanged at 4.5 percent in 2016 and 4.6 percent in 2017, with Malaysia and the Philippines expecting stronger growth. The bank also slightly lowered its 2016 growth forecast for developing Asia, including India. The developing Asia, which groups 45 countries and territories in the Asia-Pacific region, is expected to expand 5.6 percent this year, slightly weaker than a previous forecast of 5.7 percent, the ADB said in its report. The bank trimmed its growth estimate for India this year to 7.0 percent from 7.4 percent due to weak investment, agricultural slowdown and the government's recent demonetisation, but India is expected to end 2017 at faster growth rate of 7.8 percent. The ADB said China is seen expanding 6.6 percent this year and 6.4 percent next year. Meanwhile, the bank downgraded the forecast in South Asia from 6.9 percent to 6.6 percent in 2016. Growth will bounce back in 2017, reaching 7.3 percent. Kazakhstan holds great potential for Vietnamese investors Kazakhstan can be the gateway for Vietnamese firms to enter the East Europe market, according to Kazakhstan’s Ambassador to Vietnam Beketzhan Zhumakhanov. He said Kazakhstan has opened its border entirely to Russia and Belarus, and with the free trade agreement between Vietnam and the Eurasia Economic Alliance (EAEU), Vietnamese goods can go through Kazakh to neighbouring East European countries.  The ambassador also stressed that the country is undertaking economic reform while offering incentive policies to foreign firms.  Kazakhstan is rich in oil and gas, and recently the country is looking to diversify its economy to reduce its dependence on oil industry. The focus is put on metallurgy, chemicals, pharmaceuticals, machinery manufacturing, light industry, tourism, information and communication technology, and energy. Lying on the corridor connecting Europe and Asia, Kazakhstan has seven railway routes connecting China, Southeast Asia to Russia, Europe and Turkey, making Kazakhstan a great place for moving goods between Europe and Asia. Trade between Vietnam and Kazakhstan has been expanding in recent years but the scale is still modest compared with potential, according to Vietnam’s Ambassador to Kazakhstan Doan Thi Xuan Hien. The Vietnamese Embassy in Kazakhstan is assisting several companies such as Interserco and Viettel in studying the market in Kazakhstan and Central Asia.  Vietnam will attend the world largest international fair EXPO 2017 in Kazakhstan’s capital city of Astana. The Vietnam area includes a Vietnam House and a commercial space where Vietnamese enterprises can display their products.  This is an opportunity for Vietnamese companies to seek contracts with partners from Kazakhstan as well as around the world. According to the Kazakhstan Embassy in Vietnam, two-way trade value grew from 44 million USD in 2010 to 162 million USD in 2015. Workshop promotes market-relevant human resource development The Ministry of Labour, Invalids and Social Affairs (MoLISA) and the International Labour Organisation (ILO) jointly organised a workshop to seek ways to help Vietnamese workforce better prepare for changes in technology and labour requirements. Addressing the event, MOLISA Deputy Minister Dao Hong Lan highlighted challenges facing Vietnam’s economy that are brought about by the globalisation process and the technology revolution. He said the world has witnessed enormous leaps forward in information and communication technology, internet, automation, and the digital revolution based on knowledge and artificial intelligence, but Vietnam has lagged far left behind regional and international nations. As of 2016, 79.4 percent of the total 54.36 million labourers in the country do not receive any training, and there is a big quality gap between the urban and rural workforces, the Deputy Minister said, adding that at the same time, vocational training has failed to meet market’s demand. Major industries critical to economic growth such as mechanical engineering, electronics and electrical engineering suffer from serious workforce shortages, according to Lan. Meanwhile, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said the economy’s major industries such as garment-textile, footwear, and electronics are still relying on low-skilled workforce. Therefore, labour market reform must be the most important task to enhance the Vietnamese economy’s competitiveness and ensure jobs for local workers, he said. Loc called for businesses to join human resource training, by linking up with training establishments to provide high-quality vocational training. Deputy Chairman of the Vietnam General Confederation of Labour Mai Duc Chinh was of the opinion that Vietnam needs to enhance labour productivity and promote technology application in production. For his part, ILO Deputy Director for Asia Pacific Countries David Lamotte suggested Vietnam strengthen coordination among policy-makers, employers and training institutions to modernise the vocational training system to better prepared for changes in workplaces. He also called for incentives to encourage young people pursue science- technology, engineering and mathematics. HCM City authorities vow to facilitate British investment Ho Chi Minh City is resolved to improve its investment environment and create favourable conditions for foreign investors, including those from the United Kingdom, to do long-term business in the city, said a local official. At a meeting with leaders of the UK Consulate General and the British Business Group in HCM City on December 13, Vice Chairman of the municipal People’s Committee Le Thanh Liem noted that, based on the growing Vietnam-UK strategic partnership, relations between HCM City and the UK is developing well, opening up new cooperation opportunities. Liem affirmed that HCM City wants to continue cooperation with British investors during its development process, especially in building a smart city. British Consul General in HCM City Ian Gibbons spoke highly of the municipal administration’s efforts to perfect its investment climate, thereby attracting more British enterprises. During the meeting, the city’s officials and representatives of the British Business Group exchanged views on arrange of issues such as tax policy, infrastructure development and high-quality personnel training. The UK currently ranks 12th among 79 countries and territories investing in HCM City, with 126 valid projects worth over 500 million USD. Two-way trade between HCM City and the UK reached 755 million USD in the first 11 months of 2016. Korea Rice Foodstuffs Association opens office in Can Tho The Korea Rice Foodstuffs Association (KRFA) of the Republic of Korea inaugurated its Vietnam representative office in the Mekong Delta city of Can Tho on December 13.  KRFA Chairman Kim Nam Doo said the opening of the office is aimed at facilitating links between food processing firms of the two countries, contributing to the development of the industry in both countries.  The office will help connect RoK firms with the Vietnamese market, KRFA executive director Lee Soong Ju said, adding that it will provide information on the market, the distribution system, local farm produce and development trend to DRFA member companies which want to invest in Vietnam.  The office also works as a bridge for enterprises of both countries, proposing possibilities for their cooperation and assisting with the export of products to the other country.  Vice Chairman of Can Tho People’s Committee Truong Quang Hoai Nam said he hopes the representative office will help bring more KRFA member firms to Vietnam  Can Tho is seeing more RoK investor coming, with a remarkable investment project being a 171 million USD sport shoe factory of Tae Kwang group.  The city has exported 30.3 million USD worth of goods to the RoK so far this year, and imported 4.2 million USD from the Northeast Asian country, mostly pharmaceutical materials, fertilizer, cloth and garment accessory. Vietnam should clear economic bottlenecks to keep high growth: experts Vietnam should recognise factors that affect its economy’s productivity and competitiveness to maintain high and sustainable growth, domestic and foreign experts have said. They made the recommendation at a workshop in Hanoi on December 13 that discussed research on Vietnam’s economy and growth diagnostics. The country’s economic growth reached 6.68 percent in 2015 – a five-year high since 2011. This year’s GDP is expected to expand 6.3 percent. Presenting the research findings, Ricardo Hausmann – Director of Harvard University’s Centre for International Development – said there are three groups of bottleneck in Vietnam’s economic growth. Short-term bottlenecks include the ineffective administrative system, wastefulness, corruption, inappropriate land policies, and high financial costs. The mid-term ones are macro-economic and micro-institutional risks. In the long term, bottlenecks lie in infrastructure and human resources issues.  The research says the State plays a key role in outlining a vision for economic development, making flexible mechanisms and policies, and attracting and encouraging businesses’ participation to tackle bottlenecks. Vietnam’s production potential is in hi-tech industries like machinery and electronics. The Government also needs to keep attention on traditional manufacturing and export sectors like agriculture, apparel, footwear and mining, but should diversify products and prioritise ones with high added value, according to the research. Cao Duc Phat, deputy head of the Party Central Committee’s Commission for Economic Affairs, said Vietnam’s economic growth still depends on natural resources exploitation, investment and cheap labour, instead of science-technology application or economic restructuring. The economy is growing at a slower pace and with lower quality, he noted. The research on Vietnam’s economy and growth diagnostics was conducted by the Economic Commission and some domestic and foreign experts with the assistance of the US Agency for International Development. GENCO 1 produces nearly 20.6 billion kWh of electricity The Power Generation Corporation 1 (GENCO 1) said in the past 11 months, the company produced nearly 20.6 billion kWh of electricity, equal to 91.5 percent of its yearly plan. Of which, 5.5 billion kWh was generated by hydropower plants and the remaining by thermal power plants. In December, GENCO 1 plans to produce more than 2.4 billion kWh of electricity. The corporation will sign a contract with the Vietnam Coal and Mineral Industries Group on supplying and transporting coal to Duyen Hai 1 and Uong Bi thermal electricity plants. Among underway power projects, the first turbine of the Duyen Hai 3 thermal power plant completed trial tests while the work on the second turbine will finish before December 15. Efforts have been made to accelerate the progress of hydropower projects like the expanded Ban Ve and Da Nhim plants. Vietnam taxpayers want bigger relief to cover illness Vietnamese taxpayers want to enjoy more lenient rules when they become ill, as the current regulations will give little or no relief for their financial burden. vietnam taxpayers want bigger relief to cover illness hinh 0 Local payers of the personal income tax lament that they will still have to fulfill tax obligations, or are only eligible for a modest exemption or reduction even when they catch serious or fatal diseases. In the meantime, the current procedure for sick taxpayers to apply for such a reduction or exemption is so complicated that few are able to follow through all the paperwork to get their benefits. Vietnam currently applies progressive personal income tax, with the taxpaying threshold set at VND5 million (US$223) and the tax rates ranging from five percent to 30%. The taxable income is calculated by deducting VND9 million (US$402) from an individual’s total income, and another VND3.6 million (US$161) for each of their dependents. For instance, a man who earns VND20 million (US$893) a month with an under-18-year-old child has a taxable income of VND7.4 million (US$330). Also under the current tax law, if that person has one in a list of 42 serious diseases – cancer, heart attack, stroke, coma, kidney failure, brain injury and blindness – or has paralyzed/amputated legs/arms, he/she can apply for a tax reduction or exemption. The tax relief, however, is not allowed to exceed the total tax that person has paid in the year he becomes ill or starts receiving treatment. This regulation is causing trouble to taxpayers. In 2015, Tran Thi Hau, a Hanoi liver cancer patient, had to spend VND150 million (US$6,696) covering treatment for her disease. Due to her illness, Hau had to quit work for six months, and her income dropped accordingly. The woman paid a total of VND26 million (US$1,161) in income tax in 2015, meaning she was only able to enjoy a tax reduction of VND26 million as per the rule. Hau said she had paid up to VND30 million (US$1,339) in income tax every year in the pre-2015 period, but the calculation was done on the very year when she had lower earnings. A chief accountant at the tax office in Phu Nhuan District, Ho Chi Minh City, said there have been cases in which taxpayers started their retirement or almost had no taxable income in the very year their tax reduction and exemption are calculated, so they “received no tax relief at all.” “Taxpayers feel unfair as the huge amount of taxes they paid in the past is useless,” he said. An official at a tax office in Ho Chi Minh City said the current regulation just “provides insignificant relief for sick taxpayers.” He added that this appears to be the reason why his tax office has so far received only a couple of taxpayers who came to apply for tax exemption or reduction to cover their medical treatment. But the chief accountant in Phu Nhuan District said red tape may be another reason because “you have to provide numerous different papers to complete the procedure.” Many taxpayers have demanded that the reduction and exemption be calculated based on their tax payments in the subsequent years from the year they become ill or start treatment. “This is a reasonable proposal and I personally back this idea,” said Ta Thi Phuong Lan, deputy head of the agency in charge of personal income tax under the General Department of Taxation. Lan said businesses are currently allowed to carry over their losses in one certain year to the following years to reduce the amount of corporate income tax, so individuals should be allowed to do the same to ensure fairness. “The tax rule must be changed to create fairness between individuals and businesses,” she said. “Exempting or reducing taxes for taxpayers suffering ailments basically has no impact on the state budget revenue.” As promised, trade agreements good for agriculture Vietnam is and must remain one of the world leading agriculture exporters, said officials of the Ministry of Agriculture and Rural Development at a recent sales promotion event in Ho Chi Minh City. Businesses in the agriculture segment excel at growing, producing and exporting a wide variety of agriculture produce such as rice, fruit and vegetables to a vast array of foreign countries, they noted. However, if agriculture is to thrive and continue to be a source of prosperity and jobs then it must be able to sell in expanding markets around the globe and – vice versa – products from other countries must be allowed entry into Vietnam. This, said the officials, is why the Vietnam government has signed on to a series of bilateral and free trade agreements and instituted other initiatives aimed at tearing down tariff and non-tariff barriers to global trade. Even though just starting to be implemented, the Korea, Japan, ASEAN and China free trade agreements have already resulted in growth of Vietnam agricultural exports to those economies for select produce. Similarly, products from those economies are experiencing – in some cases –  triple-digit percentage growth crossing the border into Vietnam. Official statistics, they said, showed agriculture exports for the first eleven months of calendar year 2016 leading to December registered US$186 million, up US$1.8 billion for the same period in 2015. Roughly 70.4% of those shipments went to China, trailed by the Republic of Korea (4%), the US (3.5%) and Japan (3.1%). Meanwhile, they added, that imports (principally from Thailand and China) into country shot up a staggering 44% for the period to US$814 million. Geographical limitations, seasonality, capital access, infrastructure restrictions and market access are just a few of the challenges facing the country’s farmers today, they pointed out. Luckily, they added, the overall improvement and economic growth in the economy is sprouting a hot bed of agriculture activity and stellar programs that aim to bolster local farmers so they can succeed in the – new marketplace – of today. The Ministry is supporting local farmers by providing VietGAP, GlobalGAP, and other good agricultural practices and food safety training along with marketing, advertising and other promotion assistance. The Ministry’s aim is to help farmers bridge the gap that exists in accessing the wider marketplace. And bridging this gap also means money, in the form of grants, which help farmers make capital investments and infrastructure improvements. To feed the country now and into the future, said the Ministry officials, it’s necessary to support local farmers and producers with programs that offer a chance for the little guy to overcome the obstacles they face and succeed. The country’s economy is deep-rooted and well-grounded in agriculture, they concluded, and – as the Government promised –  with the benefits of trade agreements, there are no limits to what farmers and agriculture can achieve. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR