BUSINESS IN BRIEF 16/3 Smart home gadgets fail to find a mass market The vision of the smart home has been around for decades and it is a hyped trend that has failed to take off and find a mass market, according to a survey by Accenture digital, a leading US global technology consultant. The 2016 Accenture Digital Consumer Survey for communications, media and technology companies polled 28,000 consumers in 28 countries on their use of consumer technology and found that growth was stalled in both smartphones and smart homes.  The days of huge growth in the smartphone market appear to be over, the survey found. Only 48% of consumers said they planned to purchase a smartphone during the next 12 months, which was a six-point drop from the purchase intent rate in 2015and a more than nine-point drop from the 2014 peak. As it related to smart homes, promoters and builders of the Internet of Things (IoT) have long promised consumers a more convenient future where people would live in smart homesthat have surveillance cameras, thermostats and garage door openers that would turn themselves on and off automatically. Their refrigerators would automatically detect when the groceries it holds were low and reorder and deliver them from the supermarket. It’s a vision of a world where computers triumph and controlthe lighting and heating of a house. The smart home, of course, would have intelligent appliances in the kitchen, connected to the Internet, which could both cook or refrigerate food as directed from a mobile phone or personal computer. The only problem with this hypothetical world is that consumers have – almost no interest whatsoever – in using technology for home automation or control, the Accenture survey showed. Other studies sponsored by companies including Whirlpool, Cisco Systems, Direct Energy, Hewlett-Packard, Microsoft, Procter & Gamble and Zensys reached the exact same conclusion. Consumers reported that price was the top barrier to the purchase of smart home gadgets, with 62% believing they are too expensive. This perception was consistent across all age groups and countries. Russia, Romania and the Philippines reported the highest share of consumers saying price was a barrier. In addition to a lack of interest and price, other roadblocks to the mass adoption of smart home solutions included the fact that smart home devices and security systems have proven easily hackable by cyber attackers. Overall, nearly half (47%) of consumers surveyed by Accenture cited privacy risk/ security concerns as a barrier to adoption with Indonesia (60%), South Africa and China(both 58%) reporting the greatest concerns. Complexity was also listed as a top barrier. The ultimate purpose of the smart home is to solve problems, not create new ones. However, ease of use is not the norm with current smart home products. Clearly, when it comes to smart home products, most consumers perceived little value that would make a positive change in their lives and were more interested in simple solutions to real, everyday problems they face. Korean Tourism launches marketing blitz in Vietnam The Korean Tourism Organization has launched a marketing blitz, touting the technology, culture and food of their country as they seek to persuade sports fans from Vietnam to make the long journey to north-east Asia. The organizers are proud that they are hosting the U20 World Cup 2017 this coming May 20-June 11 and the PyeongChang Winter Olympics 2018 and see the events as an opportunity to attract tens of thousands of Vietnamese. There is good reason for optimism, said Ms Trang, one of the organizers, as we expect Vietnamese visitors will top last year’s numbers in 2017 and hit a record high of more than 300,000, largely due to the sporting events. Local markets gain marginally, await US Fed announcement        Shares went up marginally on Wednesday morning on rising caution ahead of the results of the US Federal Reserve meeting. The benchmark VN Index on the HCM Stock Exchange inched up 0.04 per cent to 715 points. On the Hà Nội Stock Exchange, the HNX Index was up 0.3 per cent at 87.4 points. Many large-cap stocks such as VinGroup (VIC), Saigon Securities Inc (SSI), Military Bank (MBB), Bao Viet Holdings (BVH), PV Gas (GAS), Hoa Phat Group (HPG) and Hoa Sen Group (HSG) slipped this morning. On the positive side, property stocks continued to attract money inflows and buoyed the markets. FLC Group (FLC), Hoang Quan Consulting Trading Service Real Estate (HQC), Dat Xanh Real Estate Service & Construction (DXG) and Novaland Investment (NVL) were among the most heavily traded stocks and rose between 0.4 per cent and 2.4 per cent. The US Fed Reserve went into a meeting on Tuesday night. Results of the two-day meeting will be revealed on Thursday morning, Vietnamese local time. The positive report on the US unemployment rate has strengthened the forecast of an interest rate rise. The Fed’s decision may have a negative impact on emerging and frontier markets, including Viet Nam, in terms of foreign withdrawal and forex movements. A total of 101 million shares worth around VND2.1 trillion (US$93.6 million) were traded in the two markets. The afternoon session starts at 1pm. Business expo to boost ASEAN-Africa trade The 2017 Africa-ASEAN Business Expo (AABE) will take place in Johannesburg city, South Africa, from November 6-8. Ambassadors and chief trade representatives of ASEAN, Mauritius, Zambia, Namibia, Mozambique, and Cameroon in Pretoria met with Edward Liu, Managing Director of Conference & Exhibition Management Services (CEMS), on March 15, to discuss the event. The event will include an exhibition, a business forum for the African-Asian region, and business match-making meetings, focusing on education, environment, services, finance and business, food, retail, healthcare, housing construction, infrastructure building, information technology, transport, water treatment, and tourism. The expo, which will be held by Singapore Manufacturing Federation and CEMS, is expected to draw 3,000-4000 visitors and entrepreneurs. ASEAN’s trade-investment promotion organisations, including the Vietnam Trade Promotion Agency and the Vietnam Chamber of Commerce and Industry, are partners of the AABE organising board. Vietnamese Ambassador to South Africa Vu Van Dung, who is also Chairman of the ASEAN Committee in Pretoria, said trade and investment between southern Africa and ASEAN has enormous potential. The upcoming expo will create an excellent opportunity for businesses to embrace links and promote trade and investment, he added. It will also help popularise ASEAN and its members, including Vietnam, to South Africa and the southern part of Africa, on the occasion of the 50th founding anniversary of ASEAN, he said. Trade between ASEAN and Africa recorded an annual increase of 15 percent from 1989 to 2014.  Thailand, Indonesia and Singapore are the biggest trade partners of Africa, while South Africa, Nigeria and Egypt are the largest importers of the bloc. Currently, 300 companies from ASEAN are operating in Africa, mainly in agriculture, machine manufacturing, oil drilling, and urban development. South Africa is the main market of Vietnam in the south of Africa. Two-way trade reached about 1.1 billion USD in 2015 and is expected to increase. Vietnam ran a trade surplus of nearly 1 billion USD with South Africa, mainly exporting mobile phones, footwear, computers, electronic products, and garments, while importing iron, steel, chemicals, cotton, fibre and fertiliser. VN-Index slips, awaits US Fed results Shares dropped slightly on March 15 on the HCM Stock Exchange as investors remained cautious ahead of the results of the US Federal Reserve (Fed) meeting. The benchmark VN-Index edged down 0.22 percent to close at 713.14 points. The southern market increased 0.64 percent on the previous day. On the Hanoi Stock Exchange, the HNX-Index inched up 0.34 percent to end at 87.45 points. Blue chips led the downturn as 18 of the 30 largest shares by market value and liquidity slumped and only eight advanced. The results of the two-day Fed meeting are set to be revealed on March 16 in Vietnamese local time. However, according to analysts, this rate hike, if any, is forecast to have little impact on the emerging and frontier markets. Unlike the previous two rate hikes, currencies in emerging and frontier markets have maintained positive movements since the end of December until now and there has been no sign of foreign capital withdrawal from these markets. Investors were calm before Fed’s announcement due to advance warning from the US central bank and stable developments in emerging markets are expected to keep foreign capital inside these countries, said Nguyen The Minh, head of the capital market analysis division at Saigon Securities Inc. “When the decision is announced, the market will be able to fluctuate. But in my opinion, such volatility will be short term and the market will soon be back to normal,” Minh told the website ndh.vn. After a surge in the past rallies, shares in developed markets in the EU and United States have become more expensive in comparison with counterparts in emerging markets and foreign funds will unlikely sell off here, Minh added. On March 15, a total of 178 million shares worth nearly 3.9 trillion VND (171 million USD) were traded in the two Vietnamese exchanges. Foreign investors were net buyers for a combined value of 56 billion VND in the two markets. Losers included market-leading stocks in financial, energy and steel sectors such as Vietinbank (CTG), Vietcombank (VCB), Military Bank (MBB), Saigon Securities Inc (SSI), PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), Hoa Phat Group (HPG) and Hoa Sen Group (HSG). After a hot rising streak, many realty shares corrected down, including Hoa Binh Construction (HBC), Novaland Investment (NVL) HCM Infrastructure and Investment (CII), Kinh Bac City Development (KBC), Tan Tao Investment Industry (ITA) and Coteccons Construction (CTD). Airlines face turbulent airport charge hikes in Vietnam However, aviation authorities maintain that the hike will not affect ticket prices.  The Civil Aviation Administration of Vietnam (CAAV) wants to raise the service charges airlines have to pay to fund airport expansion projects, but claims this will not affect ticket fares. Airlines would have to pay an extra VND143 billion ($6.3 million) annually following the increase, while just VND5,100 or U.S.22 cents would be added to ticket fares. “The change is too small for airlines to justify a ticket hike,” said Le Manh Hung, director general of Airports Corporation of Vietnam, the operator of domestic civilian airports. Pending approval, the charges would rise by five percent from July 1, and jump 10 percent from January 1, 2018.  Vietnam’s largest airports, including Tan Son Nhat in Ho Chi Minh City and Noi Bai in Hanoi, designed for both domestic and international flights, have become increasingly overloaded. Proceeds from the hike would fund projects to upgrade runways and departure gates to accommodate the increasing number of people traveling by air in Vietnam, according to the CAAV. The charges Vietnamese airlines pay have remained unchanged since 2011, the CAAV said, adding they are only 47-67 percent of what other Southeast Asian countries charge. Vietnam’s airline industry is growing at the third-fastest pace in Asia-Pacific, with the number of travelers jumping 29 percent in 2016 from the year before to about 52.2 million passengers, according to the CAAV. Hoa Sen to attend Vietbuild International Exhibition Fair With the aim of broadly advertising its products, the Hoa Sen Group again participated in this year’s Vietbuild International Exhibition Fair in Hanoi, with the theme “Construction - Building Materials - Real Estate & Interior Decoration Exterior,” which opened  on March 15 at the National Exhibition Construction Center, 1 Do Duc Duc Street, Nam Tu Liem district, Hanoi. The exhibition, which will last until March 19, features 1,700 booths from 450 companies in the fields of construction, real estate, and interior décor. With a 54 sq m booth in Area A1, Hoa Sen’s products have attracted many visitors.  Hoa Sen focuses on three main products at the fair: Hoa Sen Steel Sheet, Hoa Sen Plastic Pipes, and Hoa Sen Zinc Tubes, which are all of international-standard quality with reasonable prices, fast delivery times, and sound after-sales services, to meet the strictest demands of local and foreign markets. All three products have won national brand awards for a number of years. Hoa Sen  also holds visual experiments to help customers see the durability, flexibility and impact resistance of Hoa Sen Plastic Pipes. This is testimony to the Group’s commitment to product quality, with pipes manufactured using advanced technology from Europe under a strict quality control process. Over the past 16 years, the Hoa Sen Group has been striving to bring the best products to consumers nationwide. Thanks to the serious implementation of sales policies at its branches, Hoa Sen is becoming increasingly closer to consumers in all regions of the country. In order to expand the Hoa Sen brand, the Group is rapidly deploying plans to expand its distribution network, especially in the north, by opening more than 100 branches this year and 500 branches nationwide in 2018. It is also constantly expanding its production systems in all regions to improve capacity, reduce logistics costs, and increase product competitiveness. The Hoa Sen Group began construction of the Hoa Sen Yen Bai steel pipe factory project in Tran Yen district, northern Yen Bai province, on March 1, witnessed by Ms. Pham Thi Thanh Tra, Chief of the Provincial Party Committee, and other senior provincial officials, partners of the Hoa Sen Group, and local people. Covering an area of 20ha, the project has investment capital of over VND1 trillion ($44 million) with three phases. Upon completion, the steel pipe factory is expected to make a major contribution to the provincial budget and create 400 jobs. The factory is a major project within the Group’s expansion plans, which are aimed at enhancing production capacity and expanding supply chains to meet increasing demand in the north of the country. “The Hoa Sen Yen Bai steel pipe factory is Hoa Sen’s fifth in the north and one of ten major projects around the country,” said Mr. Tran Ngoc Chu, CEO of the Hoa Sen Group, adding that the factory will operate effectively and contribute to economic development in Yen Bai in particular and the north in general.   With the aim of expanding domestic and international markets, the Hoa Sen Group will boost its investment in major projects, especially in the northern and central markets. This is a key part of affirming its leading position as a global growth business, as voted by Euromoney.  Seaprodex's capitalization up 50% in three sessions After announcing positive business results, the market capitalization of the Vietnam Seaproducts Joint Stock Corporation(Seaprodex) increased 50 per cent in just three sessions where its ceiling was reached. Seaprodex’s shares (UPCoM stock code SEA) increased in the three sessions to VND19,000 ($0.83) per share. Though still short of the peak reached late last December, the share price has increased 41 per cent since the beginning of March. All 125 million SEA shares have been traded on UPCoM since December 23, 2016, with a reference price on the first trading day of VND11,400 ($0.5) per share. It rose quickly, hitting its ceiling for three consecutive sessions and peaking at VND23,800 ($1.04) per share. The Southern General Export-Import Corporation (Geleximco) sold all its 18.75 million shares around this time, withdrawing more than VND290 billion ($12.7 million). SEA shares then declined sharply, to as low as VND12,000 ($0.53) per share. Its recent rise has been put down to the positive business results in 2016 contained within its consolidated financial statements for the fourth quarter of 2016. Annual revenue was nearly VND1.513 trillion ($66.3 million), up 6 per cent compared to 2015. But due to increased costs of goods sold, gross profit was VND118 billion ($5.17 million), down VND4 billion ($180,000). However, it also recorded nearly VND310 billion ($13.6 million) in profit from associates and joint ventures, of which VND304 billion ($13.32 million) was from Proconco Vietnam Joint Stock Company, compared to VND56 billion ($2.45 million) in 2015. 2016 after-tax profit was VND308.4 billion ($13.57 million), 4.2 times higher than the profit in 2015. After-tax profit for parent shareholders was over VND302 billion ($13.2 million). At the end of 2016, the company’s undistributed earnings after tax reached more than VND514 billion ($22.52 million). Equity was VND1.879 trillion ($82.3 million), of which contributed capital was VND1.25 trillion ($54.8 million). Phu Nhuan Jewelry to issue 9.8mn shares in private placement The Phu Nhuan Jewelry Joint Stock Company (HSX stock code PNJ) has recently approved the issuance of 9.83 million shares in the form of private placement for individual and institutional investors with financial capacity. Re-sale of the shares will be restricted for one year. PNJ currently has over 98.27 million shares. The new issuance is equal to 10 per cent of charter capital and it is expected that charter capital will increase to over VND1.081 trillion ($47.56 million) after the issuance. The minimum offering price will be no less than 10 to 15 per cent of the closing price at the date of approval of the share offering plan by the State Securities Commission. About VND60 billion ($2.63 million) from the proceeds will be used to cover the cost of opening 40 new stores and branches this year and VND600 billion ($26.3 million) as working capital for the 40 stores. The company is also expected to use about VND25 billion ($2.63 million) for purchasing new jewelry-making machinery and equipment. Phu Nhuan produces and trades gold, silver, and gemstone jewelry and buys and sells gold bars and fashion accessories and is one of the largest enterprises in the industry. It has three sales channels: retail, wholesale and export. The retail segment plays the most important role, accounting for 55 per cent of total revenue and 80-85 per cent of gross profit. PNJ is the market leader in jewelry in Vietnam, with a market share of 25 per cent, and is far ahead of its nearest competitors, DOJI and SJC, which hold market shares of less than 10 per cent. PNJ’s shares were listed on the Ho Chi Minh Stock Exchange in March 2009. Since the beginning of this year, its share price has increased from VND67,000 ($2.93) to VND78,000 ($3.42), or 16 per cent. HVG shares hit ceiling on promise of higher profits After announcing an expected net profit of VND400 billion ($17.5 million) in 2017, the share price of the Hung Vuong Joint Stock Company (HSX stock code HVG) hit its ceiling on March 14. HVG has just published its annual report for 2016. Its management noted it was a difficult year due to the impact of oil price fluctuations, Brexit pushing up raw material prices, and export prices of pangasius (basa fish) falling sharply. It therefore lost more than VND49 billion ($2.15 million) during the year. The company’s 2017 target is for VND20 trillion ($876.2 million) in revenue and net profit of VND400 billion ($17.5 million). In 2018 it will record VND25 trillion ($1.095 billion) in revenue and about VND700 billion ($30.67 million) in net profit. In 2016 it lost VND49 billion ($2.15 million) after auditing, while its financial report put net profit at VND308 billion ($13.5 million). The company said this was due to an incorrect accounting of revenue. In the first quarter of this year, HVG recorded revenue of VND5.787 trillion ($253.5 million), up VND200 billion ($8.76 million) year-on-year. However, cost of goods sold increased sharply, resulting in a pre-tax profit of VND37.4 billion ($1.64 million), down 45 per cent year-on-year. After-tax profit was VND 30.5 billion ($1.34 million), with less than VND10 billion ($440,000) for shareholders of the parent company. According to its annual report, it currently has 33,000 tons of fish fillet in stock. Its pig breeding project is a new step in Hung Vuong’s strategy. The pig industry is booming, with most profits being earned by foreign corporations due to the lack of high quality breeding centers. Hung Vuong’s two pig breeding projects in An Giang and Binh Dinh province are therefore suitable investments. Hung Vuong is one of the largest seafood producers, processors and exporters in Vietnam. The company listed its shares in November 2009. Its charter capital currently stands at more than VND2.27 trillion ($99.45 million). Vietnamese agencies to inspect, remedy problems mentioned by Japanese firms Japan External Trade Organization (Jetro) hosted a talk between Japanese enterprises and Vietnamese agencies about export import problems and food safety and hygiene standards yesterday, when agency representatives directly responded to some mentions by the enterprises and said that relevant ministries would immediately inspect and remedy other problems in HCMC. According to Mr. Motohisa Nakagawa, head of Business Environment Committee Board under the Japanese Business Association of HCMC, food samples imported into Vietnam for development study purposes must experience official inspection procedures if volume exceeds five kilograms as per current regulations. That has increased commercial costs and slowed customs clearance of businesses. Local agencies’ certification of food safety knowledge of sales personnel at distribution systems has been longer than the regulation of 10 days. In addition, regulations on shelve system and goods display at convenient stores and modern distribution systems have caused waste and trading cost raise for businesses. Especially, the use of pesticides with high toxicity at many farms in Lam Dong province has indirectly affected food quality and safety standards of farms invested by Japanese firms, he added. A representative of Vietnam Customs answered that the customs sector has no regulation on sample volume inspection and now proposes to repair Government Decree 38/2012 in order not to tighten sample volume because each type of goods need a different sample volume. The Ministry of Health’s representative said that sample inspection could not base on quantity to prevent from the equitation of all types of goods in inspection. Five kilograms of material can create only some products but five kilograms of aromatic spices can produce a lot of products. The representative advised businesses to prove that their import consignment is for testing and commit not to consuming or circulating in the market. Relevant ministries will inspect other problems reported by Japanese firms at the event and remedy shortcomings in law enforcement. Nidec says to pour more capital into HCMC Nidec Corporation of Japan, which has invested in numerous projects in HCMC over the years, will continue pouring capital into its projects in the city, including a research and development (R&D) center, the company’s president said at a meeting on March 14 with Chairman of HCMC Nguyen Thanh Phong. Nidec has invested in 46 countries and territories around the world, including 21 years in Vietnam. “We want to invest more, but we also need better support,” said Nidec Corporation’s President Shigenobu Nagamori at the meeting here on March 14. He added Nidec will continue investing in HCMC, Hanoi, and Danang, and will boost technology transfer in Vietnam in the near future. Nidec is one of the most important investors in Saigon Hi-Tech Park (SHTP) with five factories and registered capital of more than US$380 million. Chairman Phong noted that during his visit to Nidec’s factory in Japan, he was impressed by Nidec’s manufacturing technology. Phong appreciated the plan by Nidec to set up an R&D center in Saigon Hi-Tech Park, saying the deeper investment and technology transfer of Nidec will create a spillover effect, boosting investment and technology transfer from large corporations, especially high-tech corporations in the city. “We are looking forward to speeding up advanced manufacturing technology, increasing localization and improving the role of HCMC and Vietnam in the global value chain. Therefore, I appreciate the commitment and strategy of Nidec to coordinate in long term with HCMC,” Phong said. To prepare for the operation of the R&D center, SHTP is currently working with Nidec Corporation to recruit staff to send to Japan for training. Till now, 16 students have been recruited and sent to Japan by Nidec. However, to ensure human resources for Nidec’s R&D center in the future, Phong suggested the corporation should provide advanced technology and equipment and collaborate with trainers from universities and vocational schools in the city. Phong said HCMC is making efforts to improve the investment environment, from administrative reform and investment procedures to infrastructure improvement. “We will create favorable conditions for Nidec to expand business in the city, especially in providing high-quality labor,” Phong added. Enterprises more environment-conscious after Formosa crisis The Formosa environment pollution incident is a wake-up call to enterprises as they have become more compliant to policies and adopt internal environment regulations, announced the Vietnam Chamber of Commerce and Industry in their Provincial Competitiveness Index (PCI 2016) report released on March 14. The report points out that since Formosa dumped toxic industrial waste into the sea on the central coast, killing more than 100 tons of fish, businesses have been more aware of their obligations to conform to environmental regulations issued by local authorities despite higher costs. This rate is as high as 95% at FDI enterprises and 91% at domestic enterprises. Besides, 97% of FDI enterprises and 96% of domestic enterprises agreed that it is enterprises that should be responsible for protecting the environment. Edmund Malesky from the U.S.-based Duke University, one of the authors of the PCI 2016 report, said enterprises have accepted not to pursue economic growth at the cost of the environment. He also revealed that enterprises are willing to spend more to comply with environmental regulations or to enforce their own internal regulations to avoid causing pollution. The survey shows that the majority of enterprises (50% of FDI enterprises and 45% of local firms) believe that environmental protection is important and they are willing to pay a reasonable cost for specific activities as well as the application of more regulations. In addition, it is also widely understood that enterprises would suffer from environmental pollution. The results of the PCI survey also show that a large number of enterprises have made concerted efforts to prevent environmental pollution by applying internal environmental regulations and launching training programs. Some 75% of FDI enterprises and 73% of private enterprises are now applying “green policies” such as using energy and material in the most economical and efficient manner to minimize pollution in their own working environment. Fuel firms: VAT invoice requirement causes big headache Fuel firms are having difficulty complying with regulations on issuing value added tax invoices for customers, heard a dialogue with the HCMC Tax Department on March 14. The Ministry of Finance’s Circular 39/2014 specifies that when an establishment sells goods to partners in other provinces and cities, it must issue value added tax invoices for use in the transport process, according to a representative of Dai Nam Petroleum Import-Export Limited Liability Co. The representative said as a general fuel agent, the company sells goods to various retail agents in many localities at different times. As a result, the enterprise finds it hard to provide such documents for its numerous customers in a timely manner. Talking to the Daily on the sidelines of the event, the representative said the company sends by fax the VAT invoices for drivers, and then forward original documents to purchasers. However, faxes are not valid when market monitors inspect their commodities, resulting in hefty fines. Hence, the representative proposed the tax department come up with an effective solution to permit the company to use a different kind of documents instead of VAT invoices to ship their goods. Nguyen Nam Binh, deputy director of the department, said enterprises must follow the circular’s regulations strictly. However, the department has plans to make a recommendation to higher agencies to make amendments and additions to the policy in line with enterprises’ production and trading activities. VSI explains management cost leap Vietnam Social Insurance (VSI) said higher payouts and investments in better services for customers have led to an upsurge in its management cost in recent years and stressed that the increase is in line with its roadmap. VSI made the point after a State Audit of Vietnam report showed that its total management cost was pushed up to VND7.4 trillion in 2015, leaping nearly 75.8% over the previous year, equivalent to over VND3.19 trillion (around US$140 million). For this reason, experts expressed concern over the solvency of the agency. However, VSI explained the payment surge was due to increasing payouts for beneficiaries and more money spent on information technology (IT) to improve the agency’s operation that were all anticipated in its roadmap.    Speaking at a dialogue on the management cost of VSI in Hanoi last week, VSI’s deputy general director Pham Luong Son said the agency had sent a plan on the cost increase of over VND3.19 trillion to the Ministry of Finance and other relevant ministries and agencies. In fact, the management cost of social, health and unemployment insurance in 2015 was checked and submitted by the Ministry of Finance to the Prime Minister, and the Government leader approved the cost to be at VND6.56 trillion, up 59% or over VND2.44 trillion compared to the estimate in 2014.  The rise of over VND2.44 trillion aimed to enable VSI to finance a number of plans it implemented in 2014 and the previous years but did not get or receive sufficient capital allocations to realize the Government’s Resolution 11/NQ-CP dated February 24, 2011 to rein in inflation, stabilize the macro economy and ensure social welfare.  Son said some of the amount was spent on the increasing number of social, health and unemployment insurance allowances, boosting administrative reform and online transactions, and investing in the application of IT. In 2015, the cost of services for and expanding numbers of insurance customers soared 36% compared to 2014 due to higher premiums collections and payouts. However, VSI’s regular expenditures in 2015 inched up only 6% year-on-year as a result of the annual pay rise, Son said. He underscored the importance of adjusting up the management cost to help the agency fulfill urgent tasks. Bui Sy Loi, deputy chairman of the National Assembly’s Social Affairs Committee, said people always attended to the benefits of social and health insurance policies and were concerned over administrative cost increases. It is important to explain to them the rationality of higher costs. Loi said the NA Standing Committee issued a resolution approving the management cost of VSI to rise a maximum of 2.3% compared to total premiums collections and payouts and was financed by the profit the agency earned from its investments, not the social insurance fund.  Earlier, the health insurance sector set a target that 80% of the country’s population would have bought the insurance product by 2020 but the proportion has already reached 81.7%. An additional one million people purchased social insurance last year. The 2014 social insurance law requires a boost to the application of IT in the sector to make the operation of VSI transparent and better connect social and health insurance buyers with hospitals and the national social insurance system. New balm production line built in Da Nang      The Da Nang Pharmaceutical Joint Stock Company (Danapha) has invested VND80 billion (nearly US$3.5 million) to build a new production line for the Golden Star Balm, a product that it will export to the Russia and East European markets. The company told Viet Nam News that exports of the balm to Russia, East Europe and Southeast Asia accounted for 70 per cent of the company’s annual revenue, with the domestic market accounting for just 5 per cent of total sales. The Da Nang-based company said 20 million units of various balm products including inhalers, balm and medicated oil are exported to Russia and East European countries annually. Last year, the city granted an investment licence to Danapha’s first nano-technology and biotech project with total investment of VND1.5 trillion ($67 million) at the city’s Hi-Tech Park. The company plans to produce a billion tablets and 100 million units of injectable drugs per year from 2017-2018, and it is testing nanotechnology-based cancer injections to make treatment of the disease cheaper. Danapha opened its first plant meeting GMP-WHO (good manufacturing practices criteria set by the World Health Organisation) standards in 2009.  HCMC seeks to connect IT solution vendors with enterprises The HCMC Department of Information and Communications plans to organize an event in April to link information and telecommunication technology (ICT) enterprises with other businesses and agencies in need of new solutions. The information was announced at the conference “IT enterprises to build a smart urban city” held at the HCMC Convention Center. Vo Thi Trung Trinh, deputy director of the HCMC Department of Information and Communications, said that in April 2017, her department, at the request of the HCMC People’s Committee, will hold a meeting between firms in demand of technology solutions and ICT enterprises. Participants will have their own booths for solution introduction and presentation to representatives of HCMC agencies. Speaking at the event, HCMC vice chairman Tran Vinh Tuyen said the city, with the aim to develop the smart city, wanted to apply technology to solve specific problems such as transport infrastructure, flood control, waste management, and urban environment. HCMC is willing to place orders for practical solutions from ICT firms. At the event, many ICT enterprises also presented their new solutions applicable to various sectors of the city’s economy. Phi Tuan Anh, chairman and CEO of P.A.T Information Technology Consulting Company, presented solutions to waste management and smart urban city construction at the event. Of that, data about waste collection labor, quantity of waste, and collection equipment will be collected and analyzed to provide appropriate solutions for waste collection process optimization. In addition, data about daily waste collection routes is needed to be managed by technology to rationalize collection schedules, he said. A representative of CMC Saigon System Integration Limited Company said HCMC should build a data center at city level to support the deployment of technology applications in different sectors. Nguyen Viet Dung, director of the HCMC Department of Science and Technology, said there will be many IT solutions for the smart city plan. Therefore, the city should set up a channel to receive such solutions and facilitate cooperation between solution providers and users. Law on secrecy underway The draft Law on Protection of State Secrets has just been unveiled, with the dates of declassification for each level of secrecy. Unlike the prevalent Ordinance on Protection of State Secrets, this draft law does not specify the scope of State secrets according to each level of confidentiality. Instead, it stipulates the most common issues concerning national security and interests as a basis for State agencies, organizations and localities to identify and draw up the list of State secrets. However, on the authority to decide the scope of State secrets, the drafting agency is considering two options. In the first option, the Prime Minister shall decide the list of State secrets viewed as “strictly confidential” and “top secret”, while the Minister of Public Security shall be in charge of “confidential” ones. The Minister of Defense shall issue a list of “confidential” materials in the field of national defense and compile a list of “strictly confidential” and “top secret” ones for submission to the Prime Minister for approval. This option ensures the stability of the list of State secrets when the Law on Protection of State Secrets takes effect. However, the Minister of Public Security shall have to wait for the Prime Minister to promulgate the list of State secrets seen as “strictly confidential” and “top secret” before the release of the list of “confidential” materials. In the second option, the Minister of Public Security shall decide on the list of State secrets on the basis of agreement with the heads of central and local agencies and organizations, while the Minister of Defense shall be responsible for the State secrets in the field of defense. With this option, the list of State secrets is uniform and takes effect at the same time for practical implementation. IFC, Loc Troi help farmers with sustainable rice farming Training courses will be organized for around 4,000 farming households to learn new farming practices to grow high-quality rice in a sustainable way. The training is part of an international sustainable rice production program in Vietnam, which is being carried out with the support of International Finance Corporation, an arm of the World Bank Group, Vietnam’s Loc Troi Group, the International Rice Research Institute (IRRI) and the International Sustainable Rice Forum with SRP (Sustainable Rice Platform). Loc Troi said in a statement that the program would support farmers to embrace sustainable farming practices in the group’s value chain. It will also help Vietnam’s agriculture expand its global market share, increase profitability and improve farmers’ livelihoods, Loc Troi said. In the next two years, the group will get IFC support to show 4,000 farming households how to grow rice in line the Sustainable Rice Platform’s agricultural standards and practices. Adopting the SRP standards, farmers would gain many benefits such as effective farming practices and higher income. Chairman of Loc Troi Group Huynh Van Thon said he expected the program would help the group successfully build a high-quality rice brand to compete on international markets. Richard Bale, Canadian consul general in HCMC, said he appreciated the involvement of the private sector in promoting sustainable and inclusive economic growth as it would benefit  thousands of farmers in the Mekong Delta. Loc Troi Group is building a rice production value chain model in Vietnam with the participation of about 25,000 farming households. Used public autos sold at VND46 million each Ministries, agencies and local governments in Vietnam have reported revenues of VND35 billion (US$1.5 million) from 761 used public autos which were auctioned off last year, meaning each brought around VND46 million (over US$2,000) on average. Tran Duc Thang, head of the Public Asset Management Department at the Ministry of Finance, told a meeting in Hanoi last week that the actual number of vehicles sold at auction last year totaled 1,105 units. Meanwhile, an additional 2,041 autos are subject to auction but the agencies using them have yet to report to the ministry, Thang added. Auctions of State assets must be made public and transparent in line with the prevailing regulations, he stressed, adding those deliberately infringing State regulations would face punitive sanctions. Statistics show the total number of public automobiles had amounted to more than 34,000 by late last year. He said their combined original cost was VND22 trillion (around US$1 billion) and their residual value was VND7-8 trillion. When asked about the legal basis for local governmetns to receive cars gifted by enterprises, Thang said the Prime Minister’s Decision 64 issued in 2007 allowed ministries, ministerial agencies and local governments to decide whether or not to receive gifts and there is no need for them to report to the Ministry of Finance. But he noted the decision seems to be no longer suitable for the reality, so it might be revised in a way that requires gift recipients to report. Satra to launch IPO late next quarter Saigon Trading Group (Satra) plans to launch its initial public offering (IPO) at the end of quarter two this year, said deputy general director Tran Van Bac last week. Bac said Satra and a consulting firm have finished the group’s asset evaluation and submitted a report to the city’s Steering Committee for Equitization. He said the city’s departments and agencies have approved the plan. It is expected the city government will have the final say on the enterprise’s value, and Satra after that will launch its IPO. The equitization plan, in fact, has been slower than targeted, as the State Audit of Vietnam had to certify the process of determining the asset value, financial figures and reports in advance. The HCMC People’s Committee must then review the accuracy of evaluation, and asset transfer processes, he said. He added the State will own over 65% of Satra’s chartered capital after the IPO, and will gradually reduce the stake in line with Decision 58/2016 by Deputy Prime Minister Vuong Dinh Hue. This means the Government will lower the State stake to less than 50%. Revenue of its whole system reached VND55.2 trillion (US$2.42 billion) last year, a 12.3% rise over 2015. The profit, however, was estimated at nearly VND11.1 trillion, up 26.2%. The parent company reported revenue of VND9.5 trillion and profit of over VND2.7 trillion. Satra has plans to implement major projects such a commercial zone at the Binh Dien wholesale market, logistics service at the zone, a new cold storage system, and a trading platform for flowers and ornamental plants this year. Satra will also develop retail systems, especially Satrafoods convenience stores, with an aim to create goods distribution channels for its member companies and others. Retail sales are expected to reach VND15-16 trillion in revenue. Can Tho pledges support for enterprises Chairman Vo Thanh Thong of Can Tho City has said the city will lend a helping hand to local enterprises. Right at a meeting between the city government and nearly 100 enterprises last week, Thong solved about 20 petitions regarding planning, environment, land, tax and administrative reform. For a proposal by Vinacam Company for a high-tech agriculture loan, he asked the branch of the State Bank of Vietnam in Can Tho to work with Vinacam and other enterprises with the same need this week to mull whether such loans could be given. He told the Department of Natural Resources and Environment and Thot Not District to tackle another proposal by Vinacam for leasing 1.6 hectares of land as part of the company’s US$100 million export rice production expansion plan. Regarding VND46.1 billion in tax arrears and goods procedures at Vinataba Philip Morris, he requested the Tax Department to ask the General Department of Taxation and the Ministry of Finance for early resolution. For a plan of the Western Agricultural Products Export Company to lease 200 hectares of land for expansion, Thong said this is a legitimate need of a company, so the company and the Department of Agriculture and Rural Development will have to meet and give an answer to the company. Thong assigned the director of the Department of Industry and Trade to propose solutions to violations of contract terms by agricultural goods enterprises and farmers. Tan Cang - Cai Cui Company asked Can Tho City to reduce maritime fees to help it develop logistical services for container ships. The company also wants the city to support it to network with local enterprises. The chairman said he took note of the company’s proposals. Finance Ministry hailed as administrative reform pioneer The Ministry of Finance has been a pioneer in administrative procedure reform, particularly in tax and customs, Vietnam Chamber of Commerce and Industry (VCCI) President Vu Tien Loc said. Loc made the point at a seminar held by the Ministry of Finance, VCCI and the World Bank (WB) in Hanoi on Tuesday to announce an assessment report on tax reform and business satisfaction, according to the Government’s news website (chinhphu.vn). Considering businesses as a key driver for the country’s growth, the Government has issued Resolution 19 on improvement of the country’s business environment and competitiveness on a yearly basis since 2014 and Resolution 35 on supporting business growth.  Loc said since the issuance of Resolution 19, the ministry has always taken a lead in administrative reform, focusing on tax and customs procedures. Assessment reports conducted by independent research organizations on business satisfaction with tax reform showed the ministry and the General Department of Taxation had been open to constructive comments and willing to make changes for the benefit of businesses. The business community hailed the ministry’s effort to streamline tax procedures as this has made tax policies transparent and consistent with international practices, resulting in a higher level of satisfaction among firms and people. Nguyen Van Thoi, chairman of the business association in Thai Nguyen Province, said the association with more than 5,500 member firms had a positive view on tax procedure reform. Dau Anh Tuan, head of the legal department at VCCI, said six financial and four tax regulations were among the 30 best business regulations just nominated by VCCI. This is a clear indication of real reform. Minister of Finance Dinh Tien Dung said the ministry had been executing an action plan for the financial sector, particularly for tax and customs. The ministry has revised and simplified administrative procedures to cut the time required for preparing, filing and paying taxes by 420 hours to 117 hours a year. Last year, the ministry eliminated 32 tax procedures, and tax agencies applied information technology to tax collection and payment to help taxpayers save time and create favorable conditions for firms to complete relevant procedures. As a result, more than 99% of firms have filed taxes only, over 96% have registered to pay taxes online, and nearly 94% have registered for Internet banking service. More than two million tax payment transactions totaling over VND404 trillion have been done successfully. However, up to 64% of firms said the tax data transmission system was usually jammed and 41% claimed tax procedures remained burdensome and tax refunds were still time-consuming. Dung said the assessment report on business satisfaction and tax procedure reform gave the ministry an overview of what has been achieved and what needs to be improved for tax management to meet the expectations of taxpayers. HCMC to impose strong sanctions on land-use violations HCMC authorities have announced to carry out inspections and impose strong sanctions against violations of land use and management in the city from now to 2020. According to a plan issued on March 7 by the city government, law enforcement agencies will inspect land management at district and ward levels this year. In 2018, authorities will inspect land use and management at industrial zones and economic zones, especially those showing signs of violation. In 2019, the city will inspect land use and management outside industrial zones and economic zones, particularly land allocation, land lease, land transfer, change of land-use purposes, and land rights and obligations. In 2020, the city will concentrate on inspecting land used for growing rice. Statistics show the city currently has more than 10,000 establishments inconsistent with urban planning. HCMC authorities have just planned to relocate them for fears that they impact on the environment and people's lives. Many of the establishments outside industrial zones and economic zones are of small scale and have low investment capital, limited space and outdated waste treatment technology. Business unsatisfied with online public services Import-export firms have complained that they still have to come to customs offices to get multiple procedures done, instead of handling them online. The General Department of Customs said online services for 41 procedures have been made available since early March. Speaking to the Daily, a manager of a customs services firm in HCMC said just half of the procedures are still handled offline. Enterprises are required to fill in the form and scan it for online submission. After that, they have to print it out and ask for approval. For South Korea-issued certificate of origin (C/O), the customs should go online to view it but enterprises are still told to print it out and send the paper to the customs. A leader of a customs department in southern Vietnam said that for some procedures, electronic documents could be submitted online but are never processed by the customs. Enterprises thought customs officers lack a sense of responsibility while customs officers said relevant ministries and agencies did not coordinate well with the customs, rendering online customs services helpless. February auto sales jump 50% February auto sales dipped against the previous month but soared strongly versus the same period last year, said a report by the Vietnam Automobile Manufacturers Association (VAMA). The report, issued on Wednesday, showed 17,621 autos found buyers last month, a 13% month-on-month decrease but a year-on-year rise of a whopping 50%. Of the volume, there were 10,044 passenger cars, down 32% against January, 6,344 commercial vehicles, up 24%, and 1,233 special-purpose autos, up 220%. Automakers delivered 14,560 domestically-assembled cars to customers last month, down a mere 6% over the previous month but only 3,061 imported completely-built-up (CBU) autos were sold, down a hefty 35% compared with the previous month. Auto sales usually slow during the first months of year, especially the month after the Lunar New Year holiday (Tet), since people tend to purchase cars for travel during Tet holiday. February auto sales were lower than in January but sharply leapt against the year-ago period. Industry watchers said month-on-month comparisons would not reflect the true picture of the industry. Year-on-year comparisons would help, they said, adding auto sales reply on seasons. By comparing with the same period last year, the auto market has changed for the better. For instance, Truong Hai Auto Joint Stock Company (Thaco) took the lead with 7,720 units sold last month, accounting for 45% of the market’s total and rising a whopping 85% against the same month last year. Similarly, Toyota Vietnam came second with nearly 3,580 units sold, up 51% year-on-year, followed by Ford Vietnam with over 1,800 autos finding buyers, up 23% year-on-year. Other automakers such as General Motors Vietnam, Mitsubishi Motors Vietnam, Mercedes-Benz Vietnam, and Honda Vietnam also enjoyed respective year-on-year sales growth of 80%, 69%, 65% and 15%. Overall, over 37,800 autos have been sold in the year to date, up 8% year-on-year. In particular, nearly 24,800 passenger cars were sold, up 21%, 11,400 commercial vehicles, down 11% and some 1,600 special-use vehicles, up 5%. Especially, domestically-assembled cars rose by 13% to over 30,000 units while CBU autos dropped by 5%, totaling nearly 7,790 units. VAMA predicted auto sales would grow around 10% this year compared to 2016 sales of over 304,000 units. Singapore’s ex-minister: Metro development should supercede road expansion Mah Bow Tan, former Minister of National Development of Singapore, has urged HCMC to prioritize developing metro and bus transit to cope with traffic problems, especially congestion, instead of widening roads. Speaking at a meeting city vice chairman Le Thanh Liem and leaders of some departments on Tuesday, Mah Bow Tan said Singapore experienced the same problems in the past and that the city should have short-, medium- and long-term plans to solve them. Charging vehicles for entering the city center or imposing a car parking fee is a short-term vision, he noted. The medium-term plan is to develop metro lines and bus routes rather than expand roads. In Singapore, he added, the roads have been even narrowed to restrict car use. Vice chairman Liem said HCMC is experiencing a slew of challenges such as insufficient infrastructure, flooding and pollution. An official of the HCMC Department of Transport said the city has more than 12,000 taxi cabs aside from a huge number of Uber and Grab vehicles. The total number of passenger vehicles of less than nine seats is nearly 34,000, he noted. Mah Bow Tan said Singapore has about 28,000 taxi cabs but still allows Uber and Grab services. However, Singapore considers taxis as private cars. In the downtown area, taxi drivers are required to pay a fee, which discourages taxis from entering the city center. Buildings still electricity guzzlers Buildings in Vietnam are and will remain the largest consumers of electricity despite plenty of regulations on green buildings. According to the European Chamber of Commerce in Vietnam (EuroCham), the rapidly growing middle class and its associated lifestyle which includes intensive air-conditioning use, accounts for a big proportion of energy consumption growth in the main cities of the country. Tomaso Andreatta, chairman of the green growth sector committee of EuroCham, said the development of green buildings in Vietnam is still in its infancy with only 40 buildings with green certification. This is due to a lack of enforcement of regulations and there is little or no incentive to reduce operating costs due to low energy prices. There are already several measures taken by the Government and the Ministry of Construction since 2010, such as Decision 567/QD-BXD (30-40% non-fired brick usage by 2020); Directive 10/CT-TTg and Circular 09/2012/TT-BXD (100% state projects and other projects over nine floors to have over 50% usage of non-fired brick materials); and Decree 121/2013/ND-CP (VND20-30 million fines for non-compliance). However, the enforcement of these laws is not properly implemented. Besides, the Vietnam energy efficiency building code (VEEBC) published in 2013 by the Ministry of Construction is legally mandatory and comprehensive, and reflects international and local norms. Nonetheless, the code is poorly disseminated and buildings are not currently required to follow this code to obtain a construction license. EuroCham recommends the Government provide effective encouragement for building owners to have their buildings certified as green. In addition to international green building certification already available in Vietnam such as Leadership in Energy and Environmental Design (LEED) of the U.S. Green Building Council and Excellence in Design for Greater Efficiencies (EDGE) of International Finance Corporation (IFC), the Vietnam Green Building Council (VGBC) issues LOTUS green building certification. EuroCham will support a move to recognize multiple systems for use in Vietnam, letting the market determine which systems are practical and useful. These systems could be licensed for operation based on a set of simple criteria such as transparency, reliability and coherence according to recognized norms. EuroCham also recommends the Government encourage all buildings to achieve the minimum standards of the VEEBC code in order to receive a building license at basic design stage. Vietnam Electricity Group (EVN) could apply lower power tariffs to buildings with low energy consumption but higher prices to power guzzling buildings. Tomaso Andreatta said a lot of sustainable building solutions on the market and best practices at companies are available. EuroCham recommends a macro perspective showcase to define incentives and policies to have a clear urban planning design including not only green building but water, waste, traffic and environment livelihood improvement and implementation towards a smart city vision. According to real estate developers, operators will benefit from green buildings. Property developers can use green building certification for their apartment buildings as a way of improving publicity while homeowners can benefit. Tran Nhu Trung, deputy general director of Nam Cuong Corporation, one of the real estate developers which have set a goal of obtaining EDGE certification of IFC for all its buildings in 2020, said energy consumption in buildings with EDGE certification is 20-27% lower than in normal ones whereas construction cost may increase 2% to 5%. Poul E. Kristense, senior technical adviser to the Vietnam Green Buildings Program of World Bank/IFC Hanoi, said, according to Danish experience, there is a need for state regulation to support the development of green buildings. Instead of building new power plants, the Government of Vietnam should support construction of green buildings to save energy to reduce the use of fossil fuels. Korea-Vietnam Incubator Park faces impediments The Korea-Vietnam Incubator Park (KVIP) has been facing a lot of difficulties, leading Deputy Prime Minister Vuong Dinh Hue to order relevant ministries and agencies to swiftly find ways to prop up the park in the Mekong Delta city of Can Tho. Hue, speaking at a meeting in Hanoi on Tuesday, told the Ministry of Industry and Trade to negotiate with Korea over financial support to purchase necessary equipment and bring Korean experts to the park to boost technology transfer and incubation. The Ministry of Finance will be responsible for proposing preferential import-export and corporate income taxes for KVIP. The Ministry of Science and Technology will have to provide consultants for the park to support business incubation and innovation startups. Hue proposed KVIP look for scientists and experts at the city’s universities and promote the image of the park to attract domestic and international investors. As part of a multi-faceted cooperation program between the two countries to fuel the delta’s socio-economic development, KVIP requires a total investment of US$21 million, with nearly US$17.7 million of it coming from a Korean grant and the remainder from the Can Tho government. The park was put into operation in Can Tho City in the third quarter of 2015. The Korean side has given equipment for research and development activities in three major sectors: farm produce, seafood processing and mechanical engineering. Korea has yet to send Korean experts to the park to help with operation and provide finances for buying indispensable equipment. Therefore, activities of KVIP remain limited. The park has attracted only three incubation projects which occupy a mere 200 square meters out of a total of more than 13,000 square meters, and cost a total of VND17 billion. Foreign suppliers eye local packaging industry Vietnam’s packaging industry, with average annual growth of 15-20%, has grown attractive to foreign suppliers of machinery and equipment, heard at a press conference on ProPak Vietnam 2017 in HCMC on March 9. The international exhibition will take place from March 21 to 23 at the Saigon Exhibition and Convention Center in the city, featuring around 380 exhibitors from 28 countries and territories such as India, Taiwan, Denmark, Germany, South Korea, Japan, Singapore, Thailand, China, and Italy. BT Tee of Singapore Exhibition Services in Vietnam, one of the two organizers of the exhibition, said Vietnam has a strong appeal to overseas manufacturers because of the market’s advantages and human resources. Meanwhile, domestic producers are improving production efficiency and investing in the packaging sector to enhance their competitiveness. Moreover, the increasing demand for food, beverages and pharmaceuticals has led to a pickup in packaging demand. International firms said the nation’s packaging industry has been sluggish while domestic goods production for local and overseas markets is expected to grow sharply, resulting in huge packaging demand. Many machinery, equipment and technology suppliers have seen the potential of the domestic market through their participation in fairs and exhibitions. They have launched Vietnam-based offices in order to respond manufacturers’ needs promptly. Cigarette smuggling causes huge tax losses The Vietnam Tobacco Association has sent the Government a report saying that cigarette smuggling caused tax losses of VND8 trillion (US$350.8 million) last year. Illegal trading and transportation of cigarettes are forecast to increase by 10% against 2015, Tien Phong newspaper quoted the association as saying. The association has sent seven measures to the Government, ministries and agencies to step up the fight against cigarette smuggling. The association has sought approval from the Government for destroying all smuggled cigarettes which have been confiscated and building a cigarette incinerator for environmental protection. The Government, according to the association, should provide modern equipment for law enforcement to deal with cigarette smugglers. The association proposing filing criminal charges against those smuggling 500 packs of cigarette or above. The association ascribed the increase in cigarette smuggling to lax law enforcement.  Jan-Feb oil output down sharply Vietnam saw a steep decline in crude oil output in the first two months of the year, driven by tough production and business conditions, VietnamPlus quotes a Ministry of Industry and Trade report as saying. About 1.2 million tons of crude was pumped in February, down 15.9% over the same period last year. This took to 2.6 million tons the total production in the first two months, down 14.2% over the same period last year. In February, Vietnam exported 540,000 tons of crude worth US$225 million, down 5.4% over the same period in 2016. After two months, 1.04 million tons of crude was shipped abroad with a total value of US$432 million, down 9.6% year-on-year. This year, Vietnam Oil and Gas Group (PVN) is expected to pump 14.2 million tons of crude, down more than three million tons against 2016. Its total revenue in 2017 is forecast to reach VND437.8 trillion (US$19.2 billion) with the oil price projected at US$50 per barrel. To achieve the above targets, the ministry asked PVN to pump as much oil as possible and put into operation White Rabbit 3 oilrig in the second quarter of 2017. Besides, PVN needs to work with contractors to revise exploration plans to facilitate an oil pumping boost. Despite the oil price plunge in 2016, PVN realized its production and business targets. PVN sold 16.68 million tons of crude, with 7.59 million tons of it going abroad and 7.1 million tons supplied for the Dung Quat Oil Refinery. Crude oil output beat the 2016 target by 1.19 million tons, reaching more than 17 million tons. Of this, domestic extraction was 15.2 million tons, 1.18 million tons higher than expected and overseas production was 2.03 million tons, up 0.6% against 2015.  In 2016, PVN reported total revenue of VND452.5 trillion (US$19.85 billion), contributing VND90.2 trillion (US$3.96 billion) to the State budget. Pepper growers stop selling on price fall Pepper prices have plunged to around VND100,000 a kilo in recent days, leading farmers to stop selling to wait for better days. Hoang Phuoc Binh, deputy head of the Chu Se Pepper Association in Gia Lai Province, said the current pepper price is much lower than expected, so pepper growers are retaining their stocks in anticipation of a price rebound. The pepper growing area has been expanded over the years, leading to an oversupply on the market. According to the Ministry of Agriculture and Rural Development, the country in the January-February period this year shipped 16,000 tons of pepper worth US$112 million to foreign markets, down nearly 20% in volume and 36% in value against the same period last year. The average pepper export price in January stood at US$7,492 per ton, falling 20% year-on-year. In addition, the Vietnam Pepper Association (VPA) has forecast 2017 would be a difficult year for the country’s pepper sector due to price volatility and pepper output in 2016-2017 will amount to 180,000 tons. Japan provides US$345 thousand of ODA for Vietnam Representative from the Ministry of Planning and Investment and Japan signed agreements on March 10, providing US$345 thousand of non-refundable ODA for five programs in southern Vietnam. The programs are aimed at improving socio-economic infrastructure and include the construction of a kindergarten, water systems, medical equipment at hospitals and technology to assist people with hearing problems in Ho Chi Minh City and the provinces of Dak Lak, Ninh Thuan and Tra Vinh. Speaking at the signing ceremony, Kawaue Junichi, Consul General to HCM City, said that since 1995, Japan has provided an estimated US$13.5 million in non-refundable ODA for programs in southern Vietnam. Japan, said the Consul General, is proud to be the largest ODA donor to Vietnam. Vietnam active in regional economic, trade integration Vietnam will continue reforming its economy, improving the business climate and fully implementing the commitments it has made to the free trade agreements (FTAs), actively contributing to regional economic and trade integration. Vietnamese Ambassador to the US Pham Quang Vinh made the statement at a recent ceremony to launch of the report “Charting a course for trade and economic integration in the Asia-Pacific” at the Australia Embassy in Washington D.C, the US. He noted the Vietnam – US relations, affirming that the two nations will continue fostering their comprehensive partnership in all fields, including raising the economic – trade relations to a new height on the win-win basis. As the host of APEC 2017, Vietnam will work with the US and other member economies to boost the dynamic development of the region, he said. According to the report, global and regional trade, particularly in the Asia-Pacific, has been suffering huge challenges because of a growing number of people around the world are questioning the value of trade agreements, reflected by Brexit and the US’s withdrawal from the Trans Pacific Partnership (TPP). Further, global trade is slowing, and existing trade agreements have not kept pace with the changing nature of trade itself. But trade has been one of the strongest drivers behind global growth and stability, particularly in Asia. The region’s openness has been a critical ingredient in spurring growth, creating jobs, and lifting millions out of poverty, it said. Central Highlands’s untapped potential awaits investors: PM Prime Minister Nguyen Xuan Phuc has described the Central Highlands as a "sleeping beauty” whose enormous potential and advantages have yet to be fully tapped. He made the comment at the region’s fourth investment promotion conference in Buon Ma Thuot city of Dak Lak province on March 11.  The biggest-ever investment promotion event in the region brought together nearly 1,000, including economists, Vietnamese and foreign entrepreneurs, along with representatives of international organisations and diplomatic agencies. The Government leader considered the Central Highlands, consisting of Dak Lak, Kon Tum, Gia Lai, Dak Nong and Lam Dong provinces, as a springboard to the development of the central region as well as the southeast and southwest of Vietnam.   The region is home to nearly 2 million hectares of basalt, or 60 percent of this soil’s total area in Vietnam, which is favourable for coffee and pepper farming. Although the country is a leading coffee and pepper exporter in the world, most of the exported products are unprocessed with low added value, PM Phuc analysed, suggesting investors focusing on these trees to rake in higher benefits. Regarding tourism potential, he said the Central Highlands boasts imposing natural landscapes, many beautiful sites and a nice climate which are suitable for tourism and also cannot be found in other regions. He underlined the Government and the region’s determination to turn the Central Highlands epics into world intangible cultural heritage, asking the region to conserve local cultural identities, especially the gong culture. At the conference, PM Phuc asked the Central Highlands provinces to form large-scale organic agricultural areas. He recommended them promote industrial development by modernising agriculture, boosting processing activities, and expanding the value chain of products from industrial trees. The Central Highlands also needs to enhance regional connectivity to expand the market for its products and foster tourism, he added. He reiterated the Government’s resolve in protecting forests, which is regarded as the core of security in the region as well as the entire country. “We should be aware that protecting forests is meant to protect the living environment, water resources, livelihoods of people and heritage space of our ancestors. All activities to destroy forests and exploit forest products illegally are crimes,” he said.  The leader praised investors in the region for creating a new momentum for local development, asking them to do as they say when investing here. At the event, head of the Steering Committee for the Central Highlands To Lam, who is also Minister of Public Security, pledged to support and closely cooperate with investors. Aside from the Government’s incentives, the provinces also have their own support policies such as in site clearance, infrastructure building, and making environmental impact assessment reports. They will streamline administrative procedures and ensure transparency to help investors save time and unofficial expenses, he added. At the conference, some projects received credit agreements worth over 29 trillion VND (1.27 billion USD) from banks. Investment certificates and agreements were handed over to projects with a combined capital of 80 trillion VND (3.5 billion USD). HCM City, Belgian locality look for closer ties Authority of Ho Chi Minh City is always willing to create favorable conditions for Belgian firms in general, and those from East Flanders in particular, to invest into the city, especially in high-tech agriculture and biotechnology, a municipal official has said.   Chairman of the municipal People’s Committee Nguyen Thanh Phong made the statement at a meeting with visiting Governor of Belgium’s East Flanders province Jan Briers on March 10.  While briefing the guest on the city’s recent development, Phong affirmed the exchange of visits of the two localities’ officials has contributed to strengthening the Vietnam-Belgium relationship and links between HCM City and East Flanders in particular.  He suggested East Flanders officials facilitate HCM City firms’ operation in the Belgian locality, helping them connect with more local enterprises in the coming time.   He said he looks forward to stronger cooperation between East Flanders and other Belgian localities with the Vietnamese locality, thus increasing two-way trade value as well as the number of investment projects in HCM City.  For his part, Jan Briers said East Flanders’s authority always maintains close relations with HCM City, adding that the win-win cooperation between the two localities is positive.   He affirmed that his visit to HCM City demonstrates East Flanders’s confirmation to promote cooperation programmes between the two localities, bringing interests to both sides.  He expressed his hope that the two sides will work to jointly organise trade and investment promotion activities, aiming to bolstering links across fields. Conference promotes Vietnam-Singapore trade partnership Up to 110 small- and medium-sized enterprises (SMEs) of Vietnam attended a conference in Singapore on March 10 to seek trade and investment partnership.  The businesses’ participation benefited from an initiative jointly made by the Vietnam-Singapore Friendship Association, the Vietnamese Embassy in Singapore and the Vietnamese Entrepreneurs’ Club under the Vietnamese Association of Small- and Medium-sized Enterprises. In his speech at the event, Vietnamese Ambassador to Singapore Nguyen Tien Minh highlighted the significance the conference and the presence of Vietnam’s SMEs at the event, saying this shows the businesses’ dynamism to look for business and investment opportunities in foreign markets. Through Singapore, Vietnamese firms can make inroads into other markets in the region and the world, especially Europe – the important trade partner of both Vietnam and Singapore, he noted. Thian Tai Chew from the Singapore Business Federation (SBF) said many of the SBF’s 24,000 members, mostly SMEs, are interested in Vietnam’s food, retail, e-commerce, supply chain, and infrastructure and urban development.  These sectors are Singaporean SMEs’ strengths and they want to share experience with Vietnamese partners, he said, reporting the SBF’s latest survey that says Vietnam ranks third among ASEAN member nations that Singaporean firms want to pour their investment into.  The Vietnam-Singapore relations have recorded strong developments in recent years across such fields as economy, defence, education-training, and people-to-people exchange.  Singapore is Vietnam’s third largest foreign investor, with a total investment of over 38 billion USD poured into 1,600 projects in terms of processing, technology, production, real estate, construction, transport and logistics.  The country is also the 12th biggest trade partner of Vietnam, with two-way trade doubling in the last decade, hitting nearly 16 billion USD in 2016.  Recent high-ranking visits of the two countries’ leaders helped lift the bilateral ties, promising to open many new opportunities for the two sides’ enterprises to foster trade and investment links.  The upcoming visit to Vietnam by Singaporean Prime Minister Lee Hsien Loong in late March is expected to promote all-around ties between the two countries, especially in people-to-people exchange. Experts urge firms to enter supply chains Companies that want to enter the global supply chain should show initiative and make concerted steps to enhance their capacity and growth, Dr Shantanaru Bhattacharya of Singapore Management University said at a forum held in HCM City on March 10. “They should not passively wait for the government to help their growth,” he said. Bhattacharya spoke at a seminar on the global supply chain held by the Business Association of High-Quality Vietnam Product Companies. “Vietnam is perfectly positioned to be the next manufacturing hub in Asia,” he said, adding that the country has a huge advantage in location and cost as well as human capital. However, the training level of the workforce remains at a basic level, and employees lack the skills to quickly adapt to work, he added. Both Vietnamese and foreign employers have had to spend more capital to retrain their employees, he said. Small- and medium-size enterprises, which account for large proportion of businesses in Vietnam, have also faced difficulties accessing domestic and foreign finance. He said the Vietnamese government should create stable policies to develop the manufacturing economy. Zulkifli Bin Baharudin, executive chairman at Indo Trans Logistics Corp in HCM City, said that many Vietnamese were not good at teamwork. However, team skills help companies improve, which, in turn, makes it easier to enter the global supply chain. Many Vietnamese enterprises represent only a small part of the global supply chain, according to a representative of Vietnam Supply Chain. For example, in the garment sector, local companies’ contracts are primarily for sewing and cutting designs for their partners, she said. If employees have higher skills, companies can more easily move up the global supply chain, she added. At the forum, the Business Association of High Quality Vietnam Products Companies signed a memorandum of understanding with the Singapore Management University to provide a general non-binding framework of collaboration between the parties. Cooperation will include management practice in Vietnam and the Mekong Delta region, and assistance in research and exchange of academic publications and information. The partners will also engage in joint research projects and academic activities. Formation of Bac Van Phong special administrative-economic zone debated Officials of the Government and the southern central province of Khanh Hoa looked into a plan on building the Special Administrative-Economic Zone (SAEZ) of Bac Van Phong (Northern Van Phong) on March 11. The working session in Nha Trang city also discussed the making of draft laws on special administrative-economic units. It was an activity to implement the Government’s Resolution No. 103/NQ-CP, dated December 5, 2016, on the formation of the special administrative-economic units of Van Don (northern Quang Ninh province), Phu Quoc (southern Kien Giang province), and Bac Van Phong (Khanh Hoa). Accordingly, the Bac Van Phong SAEZ will be located in the north of the Van Phong Economic Zone and have an expected area of around 66,000ha. The People’s Committees of Quang Ninh, Kien Giang, and Khanh Hoa were ordered to work with the Ministry of Planning and Investment and relevant agencies to complete the SAEZ plans. They also have to propose specific mechanisms and policies for the respective zones to authorised agencies so as to make a draft law for each zone. At the session, Deputy Prime Minister Truong Hoa Binh stressed that the SAEZs will be established by the National Assembly and directly subordinate to the Government. He asked Khanh Hoa’s authorities to clarify the scale and organisation of an administration needed for the Bac Van Phong SAEZ so that it will suit the zone’s development orientations. The province also needs to continue fine-tuning mechanisms and policies necessary for optimising the Bac Van Phong SAEZ’s particular advantages, he added. Chairman of the Khanh Hoa People’s Committee Le Duc Vinh said the Bac Van Phong SAEZ should become an international centre of seaport, financial, tourism, medical and educational services that meet global standards. He suggested a common law be designed for the three SAEZs of Van Don, Phu Quoc, and Bac Van Phong and also include specific mechanisms for each zone as recommended by the Ministry of Planning and Investment. He said the draft law should be part of the lawmaking plan for 2017 and submitted to the National Assembly for approval in 2018. The Van Phong Economic Zone covers an area of 150,000ha, including 70,000ha of land and 80,000ha of water surface, in Van Ninh district and Ninh Hoa township. It is a multi-sectoral economic zone with a designed focus on container and petroleum transit services, oil refining, and petrochemistry. It has attracted 145 investment projects with a total registered capital of 1.47 billion USD. Seventy-nine projects with an implemented capital of 600 million USD have been operational. Joint efforts urged to improve national business climate Deputy Prime Minister Vu Duc Dam has asked for a concerted effort and responsibility of all Vietnamese enterprises to further improve the national business climate and competitiveness in line with the spirit of the Government’s Resolution No.19.  Addressing at a conference to launch the Resolution in 2017 in Hanoi on March 10, the Deputy PM underlined the role of the Government in guiding the implementation, and called on the business community to have confidence and patience to improve the national business climate.  This is the fourth time in the four consecutive years the Government has issued a Resolution on tasks to improve the business climate and national competitiveness, showing the country’s strategic breakthrough effort in institution reform, with the focus on administrative procedures. This has contributed to Vietnam’s improved business environment ranking done by the World Bank (WB) in 2016, now standing at 82nd from the 91st – the highest improvement level since 2008.  Vietnam is aiming to reach the level of ASEAN 4 countries (Singapore, Malaysia, Thailand and the Philippines) later this year in terms of business environment; become one of the top 70 and 80 countries in terms of start-ups and protection of minority investors, respectively; and among the top 30 countries listed by the World Bank in transparency and access to credit.  By 2020, the country also targets being among the top 40 countries ranked by the World Economic Forum in access to loans, achieving the average level of ASEAN 4 countries in competitiveness and that of ASEAN 5 (Malaysia, Vietnam, Indonesia, Thailand and the Philippines) in terms of the Global Innovation Index released by the World Intellectual Property Organisation.  On e-government, comprehensive reform will be conducted in telecommunications infrastructure, human capital and online service indexes, so that the country will be rated among the top 80 countries in the UN e-government ranking. By the end of this year, most public services involving citizens and businesses will be launched at Level 3 and Level 4 which allows online payments and applications. The government asked ministers and leaders of ministry-level agencies, government units, centrally-run municipal and provincial People’s Committees to devise action plans before February 28 to execute the resolution.  Municipal and provincial authorities were requested to launch one-stop shop models to simplify and shorten time for administrative procedures involving taxes and fees. Deputy PM urges acceleration of highway project in Tien Giang Deputy Prime Minister Trinh Dinh Dung has asked relevant ministries, sectors, and investors to work closely with authorities of the Mekong Delta province of Tien Giang to quicken the construction of  the Trung Luong – My Thuan expressway, aiming to complete the project by 2019 – one year ahead of the schedule.   During a working session with the local authorities, ministries, and sectors on March 10, the Deputy PM highlighted the significance of the infrastructure project to tapping into local economic potential and reducing traffic congestion, urging relevant units to take all-out efforts to ensure the set progress. He praised efforts made in overcoming difficulties to perform the project, saying that units involved need to pay special heed to both mobilising investment sources for the project, and ensuring safety in the process of construction and the quality of the work.  According to Deputy Minister of Transport Nguyen Nhat, the Trung Luong-My Thuan expressway has a total length of 51.1km, running through districts of Chau Thanh, Tan Phuoc, Cai Lay, Cai Be and Cai Lay town of Tien Giang.  It is implemented with a total investment of over 14.67 trillion VND (642.4 million USD). Land clearance for the work was basically completed and the construction is expected to begin in the second quarter of this year.  Le Van Huong, Chairman of the provincial People’s Committee recommended the Deputy PM to urge investors to accelerate the construction progress, towards promoting socio-economic development and helping reduce traffic jams and accidents in the locality.  Previously, Deputy PM Dung made an inspection tour of the intersection between the Trung Luong-My Thuan expressway and the Trung Luong-Ho Chi Minh City highway in Chau Thanh district, and examined the construction of a section of the Trung Luong-My Thuan highway in Cai Lay town. Hanoi, Japan beef up trade, tourism ties A forum on trade – tourism promotion between Hanoi and Japan took place in the capital city on March 10, with a range of cooperation pacts signed. Chairman of the municipal People’s Committee Nguyen Duc Chung said Hanoi welcomes Japanese investment in high-tech agriculture, urban railway projects, human resources training, tourism and health care. He pledged to create favourable conditions for Japanese investors. Nagai Katsuro, who oversees economics affairs at the Japanese Embassy in Vietnam, said Japan has strongly invested in Vietnam for years and intends to increase capital in the northern region, including Hanoi, to make use of the competent workforce and potential market. The Japanese Government is considering raising official development assistance for Vietnam with a particular interest in major infrastructure projects in Hanoi, he noted. He also highlighted the appeal Vietnam has for Japanese tourists. Participating Vietnamese and Japanese firms discussed cooperation in tourism, health, culture, and transport. As part of the forum, Hanoi authorities and Japanese investors signed memorandums of understanding on various joint projects in the city, including the building of a shopping mall, the transfer of automatic flower cultivation technology, and the provision of flower seeds. Other projects mentioned were on developing an international-standard medicine distribution system and training operators for the Hanoi Metropolitan Metro Railway project. Japan is now the top investor in Hanoi, with more than 800 projects worth about 5.2 billion USD. Soc Trang to build high-quality shrimp farm The People’s Committee of the Mekong Delta province of Soc Trang met representatives of the Viet-Uc Seafood Joint Stock Company on March 9 to discuss building the first high quality shrimp farm in the locality.  The 40 billion VND (about 1.75 million USD) project will sprawl 23 hectares in Huynh Ky Hamlet, Vinh Hai Commune, Vinh Chau District. Once operational, it will produce 3 – 4 billion juvenile shrimps.  The project aims to provide shrimp to producers nationwide, said Tony Dang Quoc Tuan, Vice President of Director Board of the Viet – Uc Seafood Joint Stock Company, adding that it is also hoped to help build a Vietnam shrimp brand.   Construction of the farm is set to start in April this year, helping Vinh Chau become a centre for supplying shrimp products and high-quality young shrimps in the Mekong Delta.  The farm is expected to boost development of the local aquaculture sector while contributing 30 – 50 billion VND a year to the local budget.  Agencies in Vinh Chau District have been asked to carry out land clearance and support the investor in completing documents to implement the project, said Le Thanh Tri, Vice Chairman of the provincial People’s Committee.  As the biggest young shrimp producer in Vietnam, the Viet – Uc Seafood Company has seven shrimp farms from Nghe An to Ca Mau and one super-intensive indoor shrimp farming system in Bac Lieu. Leather, footwear industry seeks ways for growth The Vietnam Leather and Footwear Association (Lefaso) will run a leather and footwear promotion conference focusing on improving business and export capability for enterprises on March 15 in HCM City. About 300 firms manufacturing footwear and materials for the industry inside and outside Vietnam are expected to attend the conference  The enterprises are expected to discuss various problems in the industry, including planning, the investment environment and impact of free trade agreements. They will also touch on the state of the industry in Vietnam in the context of integration, market demand and technical requirements for the industry to benefit from free trade deals. Lefaso hopes the conference will bring benefits to local and foreign enterprises, promote cooperation and attract investment. Vietnam promotes trade in Egypt The Vietnam Embassy in Egypt is willing to support local firms in seeking Vietnamese partners to study each other’s market, stated Ambassador Do Hoang Long at a trade promotion workshop in Mansoura city, Dakahlia province, on March 9. The workshop was organised by the Vietnam Embassy and the business chamber of Dakahlia, gathering representatives from more than 40 major import-export companies in the province. In his speech, Long stressed that Vietnam offers favorable conditions to foreign investors. Based on their friendship, Vietnam and Egypt should intensify measures to boost partnerships, particularly in agro-forestry-fishery and tourism, the diplomat added. Introducing the local market, head of the Dakahlia business chamber Ahmed Roab said the workshop was an opportunity for Egyptian enterprises to learn about the Vietnamese market, thus facilitating trade-investment ties between localities of the two countries. Trade counsellor at the Vietnam Embassy Pham The Cuong informed the workshop of Vietnam’s business climate and policies for investment attraction, and fielded questions on trade affairs between the two countries.  According to Cuong, trade revenue between Vietnam and Egypt hit about 314 million USD last year, of Vietnamese exports to Egypt made up 249 million USD. Participants proposed Vietnam send business delegations to trade fairs in Egypt. They said they expected the Vietnam Embassy’s support would help Dakahlia enterprises boost exports, particularly fruit, to Vietnam. In an interview with the Vietnam News Agency, trade counsellor Cuong said bilateral trade has fallen short of potential, while Egypt’s political unrest and currency depreciation affected Vietnamese goods in the market. However, the northeast African economy is being reformed, which could be a good sign for bilateral trade in the future, Cuong noted. Egypt has a population of 92 million, with import demand estimated at more than 80 billion USD per year. International Mekong Delta agriculture festival opens The International Agriculture Festival and Fair of the Mekong Delta region opens in Can Tho City on March 9, featuring nearly 150 domestic and international exhibitors. The five-day event includes 300 booths displaying agriculture-related products and technologies. Speaking at the opening ceremony, Deputy Minister of Science and Technology Tran Van Tung said that the festival aims to create opportunities for scientists, inventors, enterprises, cooperatives and farmers to seek investment cooperation to branch out while promoting Mekong Delta agriculture. Some 50 standout businesses in the delta were awarded the “creative agricultural science” medals at the ceremony. The award honours enterprises and individuals who made remarkable achievements in the search for and production of high-tech equipment for agriculture. The festival also includes 14 seminars on using technology to improve productivity and quality and a programme to connect suppliers and buyers of agricultural technologies and equipment. In addition, cultural and entertainment activities are scheduled during the event such as a cooking contest and an Ao ba ba (Vietnamese silk ensemble) contest. The Mekong Delta, which has a city and 12 provinces, plays an important role in the country’s agrarian economy, accounting for 80 percent of rice exports and nearly 60 percent of seafood shipments. Hai Phong fosters investment, tourism links with Japan A forum was held in Hai Phong on March 12 to promote investment and tourism partnerships with Japan, one of the biggest investors in the northern port city. Secretary of the municipal Party Committee Le Van Thanh noted Japan is the fourth biggest trade partner and the largest official development assistance provider of Vietnam. Hai Phong was one of the first localities to welcome Japanese firms seeking business opportunities after Vietnam began the Doi Moi (Reform) process. Its achievements over the last three decades are partly thanks to Japanese investors, he noted. The city currently houses 486 foreign direct investment projects worth nearly 14 billion USD from 36 countries. They include 130 Japanese projects with combined capital of 4.14 billion USD. Japan ranks first in number of projects and second in investment capital in the city. Introducing local tourism potential, Thanh said Hai Phong is a coastal city with hundreds of islands of all sizes and magnificent landscapes, including Cat Ba Island – a UNESCO world biosphere reserve – and Do Son beaches. In 2016, the city posted economic growth of 11 percent, about 1.7 times higher than the national average. Hai Phong Port handled more than 80 million tonnes of goods, a year-on-year rise of 17 percent.  Meanwhile, about 3 billion USD of foreign investment was poured into Hai Phong, making the city the top foreign investment destination in Vietnam, Thanh said, adding that the city also has developed transport infrastructure. At the forum, Japanese entrepreneurs mentioned the benefits of enhanced partnerships with them to Hai Phong, especially in industry, tourism, and employment opportunities in Japan for Vietnamese people. Hai Phong and Japan signed three memorandums of understanding (MoU) on cultural exchanges and tourism promotion.  The city also inked an MoU on flower cultivation with the Greenwin company and another on developing logistics and transportation systems with Fukuyama Transporting Co. Ltd. Vietnam active in regional economic, trade integration Vietnam will continue reforming its economy, improving the business climate and fully implementing the commitments it has made to the free trade agreements (FTAs), actively contributing to regional economic and trade integration. Vietnamese Ambassador to the US Pham Quang Vinh made the statement at a recent ceremony to launch of the report “Charting a course for trade and economic integration in the Asia-Pacific” at the Australia Embassy in Washington D.C, the US. He noted the Vietnam – US relations, affirming that the two nations will continue fostering their comprehensive partnership in all fields, including raising the economic – trade relations to a new height on the win-win basis. As the host of APEC 2017, Vietnam will work with the US and other member economies to boost the dynamic development of the region, he said. According to the report, global and regional trade, particularly in the Asia-Pacific, has been suffering huge challenges because of a growing number of people around the world are questioning the value of trade agreements, reflected by Brexit and the US’s withdrawal from the Trans Pacific Partnership (TPP). Further, global trade is slowing, and existing trade agreements have not kept pace with the changing nature of trade itself. But trade has been one of the strongest drivers behind global growth and stability, particularly in Asia. The region’s openness has been a critical ingredient in spurring growth, creating jobs, and lifting millions out of poverty, it said. Rise in inter-bank interest rates dismissed as seasonal Since mid-February interest rates on VND loans on the inter-bank market have surged, somewhat surprising analysts since liquidity at most banks is pretty steady. In the first week of March interbank rates for all tenors went up by 30-70 basis points from less than 4 percent. In fact, the average interest rate on the interbank market rose rather sharply, especially for overnight loans, by 0.66 percent a year to 4.22 percent. The rates for one-week and two-week loans went up by 0.36 percent and 0.28 percent to 4.32 percent and 4.44 percent per year, while one-month rates hardened by 0.3 percent to 4.74 percent. Some analysts said though liquidity in the banking sector is still high, it has reduced a bit. They pointed to the fact that the State Bank of Vietnam has been injecting money steadily in recent times through open market operations (OMO). According to Bao Viet Securities Company, between February 20 and 24 the central bank pumped in 15.715 trillion VND (698.4 million USD) through OMO. Meanwhile, bonds worth 5.036 trillion VND have matured. Also during this period the central bank issued seven- and 14-day treasury bonds worth 7 and 9 trillion VND, while bonds worth 49.9 trillion VND fell due. This means a total 33.9 trillion VND was pumped into the economy via treasury bills. Rising interest rates on the inter-bank market has helped stabilise the dollar-dong exchange rate after a strong rise by the dollar in recent times. Many analysts opined that the higher inter-bank rates would not last long, and expect them to fall sharply right in the end of the first quarter. Others said the increasing rates are not a cause for concern since the inter-bank rates remain below the levels that require the central bank to intervene. Besides, the banking sector’s loans-to-deposits ratio remains at 80-85 percent, meaning liquidity is good. In other words, the increase in the inter-bank rates is merely seasonal, they said. In the early part of the month credit institutions often park their money with the SBV to meet compulsory reserve requirements, and in the latter part actively lend money. That is why inter-bank interest rates often rise in the first and second weeks of a month and decrease later on. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR