BUSINESS NEWS HEADLINES APRIL 7  01:46 Wood orders see mass cancellations or delays amid COVID-19 Since mid-March buyers from the United States and Europe have moved to stop buying, cancel, or delay orders from Vietnamese wood processing and manufacturing enterprises, causing a staggering 80% fall in order numbers. Statistics released by the Vietnam Timber and Forest Product Association, indicate that the five largest exporters of Vietnamese wood and timber products, the US, the EU, Japan, the Republic of Korea, and China, account for over 90% of the nation’s overall export market. The impact of the novel coronavirus (COVID-19) has caused a number of nations to impose lockdown orders, resulting in many Vietnamese wood processing firms being inundated by notifications from buyers regarding cancellations or delays. According to a preliminary report compiled by local wood associations and wood processing companies, 81% of businesses have received notices from buyers looking to cancel orders or to delay their purchases. Orders coming from the Japanese, Korean, and Chinese markets have also suffered a drop of between 60% and 80%, while a massive 96% of local enterprise have been under pressure when it comes to interest rates and re-paying loans. This trend looks set to continue as many key markets globally are displaying negative signals for the coming quarters, with several businesses having to face a sharp increase in the price of wood materials by between US$10 and US$20 per m3 of raw wood in order to maintain both the remaining orders and keep smaller ones. This will cause a significant number of domestic wood processing firms to halt operations, lay off workers, and go bankrupt if they receive no support from the state. In addition to facing difficulties in terms of production and customers proposing deferment of deliveries and payments, the biggest challenge now facing businesses is how to manage debt payments due between April and June. This issue needs to be immediately tackled with the collaboration of local banks otherwise many enterprises face the possibility of going insolvent. Solutions for Vietnam to maintain its economic growth Despite enjoying a large degree of economic openness, the Vietnamese economy is facing a range of challenges in the upcoming quarters and has been negatively influenced by many aspects of the turbulent global economy, according to Nguyen Bich Lam, director of the General Statistics Office (GSO). A report released by the GSO indicates that the year’s first quarter saw the economy’s growth slow in three sectors: agriculture-forestry-fishery, service, along with industrial and construction. Lam says that during the reviewed period only a limited number of service industries were able to successfully maintain stable growth rates, including banking and finance, insurance, information communication, health care, and social assistance activities. The growth from these sectors can be considered as positive signs which helped the national economy temporarily escape the risk of stalling. In the country’s economic structure during the first quarter of the year, the manufacturing and processing industry remained as the main driver of economic growth, despite the overall economy failing to achieve a high growth rate. According to Pham Dinh Thuy, director of the Department of Industrial Statistics under the GSO, the first quarter saw both the industrial and construction sector obtain low growth rates in comparison to the same period from last year as a result of the huge impact caused by the novel coronavirus (COVID-19) epidemic. With the processing and manufacturing industry recording its lowest growth in the year period from 2016 to 2020, electricity production and distribution grew steadily, whilst the mining industry endured a slowdown in growth as a result of a sharp drop occurring in crude oil production. “If the epidemic situation persists until the second quarter, the processing industry will continue to witness a sharp decline in growth, especially in textile and apparel, footwear, electronics, steel and iron industries, and motor vehicle production”, the GSO representative notes. As we move into the year’s second quarter, the GSO has put forth three scenarios for economic growth in the year ahead. The first scenario sees the epidemic lasting until the end of the second quarter, causing GDP growth for the whole year to grow at over 5%. The second scenario involves the epidemic dragging out until the end of the third quarter, in which case GDP growth is forecast to stand at over 5%, but lower than the level seen in the first scenario. In the third scenario, GDP growth for the year is expected to reach 6.8% as set out by the National Assembly. Despite this, Lam states that, "achieving the 6.8% growth target is a big challenge as the country has a high level of economic openness, over 200% annually, and is heavily dependent on outside partners while major partner countries are closing trade borders to prevent the epidemic outbreak which is exerting an enormous impact on the Vietnamese economy". As a means of solving difficulties relating to production and business, the government has launched a bailout package worth a total of VND280,000 billion. This includes VND250,000 billion of credit support which aims to freeze and extend debt payments for enterprises affected by the COVID-19, along with VND30,000 billion in tax deferrals for businesses. Simultaneously, the State Bank of Vietnam has issued a decision which adjusts interest rates, with reductions placed on refinancing interest rate from 6% to 5% annually, in addition to dropping rediscount interest rates from 4% to 3.5% per year. This comes after the Ministry of Finance recently proposed increasing the fiscal support package for deferral tax payments to VND80,200 billion. According to economic expert Dr. Ngo Tri Long, there has yet to be indications of growth in the second quarter of the year in terms of both the global and Vietnamese economies due to the complicated developments of the COVID-19 epidemic. In the current context, keeping a check on the disease and continuing to stabilize production and business activities should be the top priority for the time being. “To help enterprises stabilize production, the government needs to synchronously implement many solutions, including monetary solution policies with three objectives: restructuring the repayment term, interest rate waivers and reductions, along with keeping the debt group. This shows government support but does not provide subsidy for weak enterprises,” Dr. Long notes. Economic experts believe that despite the Prime Minister directing a range of comprehensive and timely solutions, all ministries and sectors must remain active in putting policies into practice in a timely manner. Therefore, solutions should be implemented swiftly and properly in the near future. This will serve as a driving force for growth, production, and business, thereby creating a long-term and more sustainable revenue source for the state budget. Spreading COVID-19 presents hurdles for tuna firms Together with a material shortage for processing, the novel coronavirus (COVID-19) has exerted a great impact on the production and export plans of Vietnamese tuna processing enterprises, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). February saw the country’s tuna export value increase by approximately 40% in comparison with the same period from last year. This growth can be attributed to the recovery of exports to major markets such as the EU, ASEAN, Canada, and Egypt. Despite initial growth, this trend is not projected to be maintained due to shortages occurring in export processing materials and the growing impact on the market caused by the COVID-19 epidemic. Big tuna consumers such as the United States, Italy, and Spain where the epidemic is spreading rapidly, have suspended importing the product from Vietnam since March. Indeed, the current crisis has caused tuna prices globally to skyrocket, presenting a challenge for firms looking to purchase raw materials. This has forced businesses to seek alternative raw material sources from other countries in a bid to tackle the shortage of input materials. Simultaneously, enterprises are also facing difficulties transporting goods, with ships being delayed for several days or even canceled all together, resulting in rising costs for businesses and longer transport times. Moreover, the customs clearance of goods in several countries has been suspended while their lockdown orders have led to severe congestion occurring at ports, affecting the delivery capability of enterprises. According to VASEP, from now until June, if the spread of the COVID-19 continues to worsen, many tuna enterprises and other seafood companies look poised to encounter difficulties concerning capital and material shortages for production and export activities. Small and medium enterprises have been advised to draw up better financial plans in a bid to withstand the current situation. They should find themselves in dire need of government support, especially in terms of capital, debt extension, interest rate reductions, raw material reserves, as well as a simplification of administrative procedures. VASEP recommends that firms consider shifting to produce canned food to meet the current consumption demand whilst enjoying incentives that come from new-generation free trade agreements such as the EU-Vietnam Free Trade Agreement, along with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Businesses forced to adapt during COVID-19 crisis With the initial outbreak of the novel coronavirus (COVID-19) occurring over two months ago, the scale of the virus has begun to take a heavy toll on many Vietnamese firms, prompting them to either scale back production and lay off staff or face bankruptcy. Preliminary statistics released by the Ministry of Labour, Invalids and Social Affairs indicate that roughly 9,000 workers throughout 22 provinces and cities have been laid off as a result of their businesses cutting or suspending production due to the impact of the COVID-19. In an attempt to weather the storm and cope with the fallout from the epidemic, many enterprises have been forced to adapt themselves to the crisis by putting forward alternative business and market research strategies in order to maintain production and make preparations for the post-crisis period. With shortages occurring in terms of materials and orders, garment companies have agreed to share existing orders and material reserves so they can retain production during March and April, while simultaneously seeking alternative sources of materials. Several popular garment makers such as Garment No10, Viet Tien, Hoa Tho, Nha Be, and Phong Phu have begun to produce anti-bacteria face masks which have been in short supply in recent weeks. Elsewhere, firms that supply essential goods necessary for daily consumption have also moved to introduce new strategies in an attempt to adapt to the new business climate. Indeed, Masan, the group that owns the VinMart and VinMart+ supermarket chains, believes that alongside ensuring supply sources of quality products remain in place, all of its retail stores have offered online or phone services, making it convenient for consumers to place orders and then subsequently have their items delivered. With the scale of the COIVD-19 being vast, economic experts agree that the crisis can be considered as a test of the economy's ability to withstand external shocks, forcing it to become more competitive, improve its overall production capacity, and develop consumption within its own domestic market. According to Mac Quoc Anh, Vice President and General Secretary of the Association of Small and Medium-sized Enterprises, this marks the time for experienced enterprises to restructure their organisation and production chains so they can get ahead and enjoy more efficient business strategies in the context of Industry 4.0. In contrast, many small firms will lose out oe even go bankrupt if they fail to seize their opportunities such as their state subsidy, Anh says. Sharing this view, economist Nguyen Minh Phong believes the crisis will test each businesses’ ability to respond to market fluctuations and introduce new, efficient business solutions. The crisis will also give enterprises a lesson in how to connect with employees. If firms are able to guarantee both the short- and long-term interests of their employees, then they will be able to retain their workforce and thus maintain post-crisis business efficiency, says Phong. Vĩnh Long speeds up site clearance of Mỹ Thuận – Cần Thơ Expressway Vĩnh Long Province has stepped up efforts to speed up site clearance, compensation and resettlement for households affected by the Mỹ Thuận – Cần Thơ Expressway project’s first phase. The provincial People’s Committee on Friday (April 3) met with the project’s investor, the Cửu Long Corp for Investment, Development and Project Management of Transport Infrastructure (Cửu Long CIPM). Trần Hoàng Tựu, vice chairman of the provincial People’s Committee, said a site clearance board had been established to closely work with the Cửu Long CIPM to speed up progress of the project. He urged the Cửu Long CIPM to quickly send documents related to the project to local authorities for implementing compensation, site clearance, and resettlement assistance for affected households. The corporation will ask the Ministry of Transport to grant approval to build a path linking National Highway 1 in Vĩnh Long Province to the Mỹ Thuận – Cần Thơ Expressway, and to upgrade three bridges on provincial Highway No 908, he said. “That will improve the efficiency of the expressway,” he said. The path leading to the expressway will address local businesses' need to transport goods faster and will help reduce traffic jams in the area. Upgrading Kênh Bô Kê, Cái Tàu Sóc Tro and Kênh Tư bridges will help ensure smooth traffic flow on provincial Highway No 908 which connects National Highway 1A and the expressway. The Mỹ Thuận – Cần Thơ Expressway, part of the HCM City – Cần Thơ Expressway, is an important route in the north-south expressway system, facilitating transport between HCM City and the Cửu Long (Mekong) Delta. Phan Duy Lai, deputy director of Cửu Long CIPM, said the expressway project's first phase will be built under a public-private partnership (PPP) investment form with a build-operate-transfer (BOT) contract. Project investment has total capital of more than VNĐ4.7 trillion (US$201.5 million), including VNĐ932 billion ($39.5 million) for site clearance sourced from the State budget. It will cover around 153ha of land in Long Hồ and Bình Tân districts, Bình Minh Town and Vĩnh Long City in Vĩnh Long Province, and Đồng Tháp Province’s Châu Thành District. With a total length of nearly 23 kilometres with six lanes, the expressway will start at Mỹ Thuận 2 Bridge and end at the starting point of Cần Thơ Bridge on National Highway 1A. Localities are asked to hand over land for construction of the expressway project before November 10. The expressway construction is expected to begin this year and to be completed in 2022. Bulrush cultivation offers stable income for farmers The cultivation of bồn bồn (Typha orientalis), also known as bulrush, has offered stable income for farmers in Khánh An Commune in Cà Mau Province’s U Minh District. Bulrush is harvested for the inner portion of its lower stalk used as food. The wet plant is used in many dishes like fresh salads, pickles and hotpots. The Cửu Long (Mekong) Delta province is entering the peak dry season and many farming areas are affected by drought, but bulrush farmers in the commune have high yields and stable incomes. Lê Thị Chung has grown bulrush on a 3ha field in Khánh An’s Hamlet 1 for six years and harvests 3.5 – 4 tonnes of the inner portion of the lower stalks a month. The inner portions are sold to traders at VNĐ22,000 – 25,000 (US$0.9 – 1.1) a kilogramme. She earns a profit of more than VNĐ50 million ($2,100) a month. “I have never suffered a loss from growing bulrush and have harvests to sell year round,” she said. Traders from other localities visit the commune to buy bulrush since supply cannot meet demand, according to farmers. The commune’s bulrush is sold in Cà Mau, other provinces and HCM City. The commune has fresh water year round for the cultivation of bulrush, which grows in wet locations, including fields, ponds and lakes. It is the peak dry season so farmers are pumping water into fields so that water levels are at least 50 centimeters deep for bulrush growth. Bùi Văn Màu, who was the first farmer growing bulrush in Khánh An’s Hamlet 14, said: “With water pumping, farmers have bulrush harvests to sell in the dry season.” Last year, Hamlet 14 established a co-operative group for growing bulrush. It helps its members access farming techniques and loans. Tăng Văn Thắng, deputy head of the group, said its members earn a profit five times higher than from rice or banana. The cultivation of bulrush also provides jobs for many labourers, he said. Labourers who are hired to harvest bulrush are paid VNĐ200,000 ($8.4) a day and those who are hired to peel stalks get VNĐ80,000 – 120,000 ($3.4 - 5) a day. Đặng Thành Công, deputy head of the Hamlet 14, said the hamlet has a submerged area, so bulrush cultivation in the dry season has a higher yield, quality and price than in the rainy season. Farmers should grow small – leaf bulrush variety as it is resistant to alum-affected soil, and the inner portion of its lower stalk is sweeter and more delicious, he said. The commune is located in the buffer zone of the U Minh Hạ National Park and most farmers live on rice and forests. However, the cultivation of rice does not provide high yield because of the alum-affected soil. With stable income from bulrush cultivation, more farmers in the commune have switched to grow the plant. Bulrush cultivation has helped many households escape poverty. Farmers also breed shrimp or fish in bulrush fields to earn additional income. The commune has selected bulrush as its strong agricultural product for the “One Commune, One Product” programme launched nationwide in the 2018 – 20 period. The commune will create conditions for farmers to develop bulrush cultivation sustainably to improve their income, according to local authorities. Dung Quat oil refinery plans to halt production due to COVID-19 Binh Son Refining and Petrochemical (BSR) is planning to halt production at the Dung Quat oil refinery as demand for petroleum falls due to COVID-19. Based in Quang Ngai Province, the US$3 billion oil refinery has an annual capacity of 6.5 million tonnes of crude oil. A report from BSR said petroleum sales had fallen badly due to the impacts of COVID-19.” BRS said the pandemic had caused a sharp decrease in transportation demand, leading to a decrease of between 30 per cent and 40 per cent in domestic gasoline consumption in the first quarter over the same period of previous years. A company representative told local media that social distancing meant domestic petroleum demand would continue to fall in April, adding: “Both the Dung Quat and Nghi Son refineries must reduce capacity.” The firm said gasoline inventories at Dung Quat had reached more than 90 per cent, so they had been forced to store products at other depots at great cost. The representative told Baodautu.vn the firm was considering its options, adding that if inventories rose to high, it would be forced to halt operations at Dung Quat and wait for the market to recover. BSR asked the Government to minimise or suspend imports of petroleum products and provide financial support such as disbursement of zeros and tax breaks for the firm. Banks asked to cut lending rates to mitigate Covid 19 pandemic Deputy Governor of the State Bank of Viet Nam (SBV) Dao Minh Tu has instructed commercial banks to continue reducing lending rates for firms affected by COVID-19 by 2 percentage points per year. The banking industry played an important role in the economy so these solutions would have direct impacts, Tu said during an online meeting on Tuesday. Tu also directed banks to implement support measures such as debt rescheduling to help firms maintain production and business. It is estimated there is VND926 trillion (US$39.85 billion) in outstanding debt affected by the pandemic that will not be paid as scheduled, accounting for more than 11 per cent of total outstanding loans. Banks are also facing difficulties this year due to the economic slowdown, so Tu asked them to cut operational costs and reduce deposit interest rates in order to boost lending. In addition, he said banks must continue to review their customers' business and production as well as outstanding loans damaged by the pandemic and report to the central bank for consideration. Despite the Government’s 15-day nationwide social distancing order, starting from April 1, commercial banks will still meet all essential transactions of enterprises and individuals in the coming days. According to Tu, banks would provide essential services and ensure the continuous operation of online banking services and ATMs. Banks support enterprises Incomplete statistics show that businesses have enjoyed cuts of at least VND100 trillion (US$4.25 billion) to support them amid the COVID-19 pandemic. The State Bank of Viet Nam (SBV)’s deputy governor Dao Minh Tu said amid the complex situation of COVID-19, the banking industry should implement measures to support enterprises.  These include debt restructuring, debt postponement and extension, as well as interest rate reductions on old and new loans. The deputy governor emphasised that commercial banks aim to cut lending rates for businesses and households affected by the disease by about 2 per cent compared to before the pandemic occurred. The economy and credit institutions are forecasted to face many difficulties this year, so the deputy governor said commercial banks needed to cut operational costs and deposit rates. The banks should also develop business, profit plans and salary policies, he noted. Chairman of the board of directors of Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV) Phan Duc Tu said the bank had about VND155 trillion of debt and had conducted debt restructuring and extension for about 3,300 customers so far. Nguyen Dinh Vinh, deputy general director of Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank), said that the bank received support requests from about 115 customers affected by COVID-19 with debts of nearly VND16 trillion. Economic experts said the monetary policies the banking industry was implementing to support businesses was a positive step. Economist Nguyen Tri Hieu said recent SBV policies were very quick and timely but still not enough. Interest rate lowering was not enough to bring the economy through the crisis, the reduction only affects the market, while the problem of the economy was not only in the monetary economy but also the commodity economy. The commodity market was stagnant, he noted. “I think that monetary policy measures are only supportive measures, which require the support of fiscal policy through support packages to help businesses severely affected by COVID-19 to have the liquidity to pay for partners, pay salaries and pay interest," Hieu said. Fruit, vegetable exports hit US$831 million in first quarter Vietnam’s fruit and vegetable exports during the first quarter of the year dropped by 11.5% to US$831 million in comparison with the same period from last year, according to the General Department of Vietnam Customs. The first half of March saw the export of fruit and vegetables enjoy an annual increase of 4.8% to US$152.5 million, bringing the total export figure since the beginning of the year to US$681.7 million, an on-year fall of 6.3%. The downward trend can be attributed to a sharp decline in export shipments to China, with the outbreak of the novel coronavirus (COVID-19) greatly impacting trade with the country’s biggest buyer. Ministry of Industry and Trade statistics show fruit and vegetable exports to China during the year’s first two months raked in US$300.3 million, representing a year-on-year decline of 29.4% due to the impact of the COVID-19. Despite exports to the northern neighbour falling, the country’s fruit and vegetable exports to other markets such as Thailand, the Republic of Korea, Laos, Taiwan (China), and Russia increased significantly by 365.8%, 270.4%, 112.4%, and 246.1%, respectively, throughout the reviewed period. With the export of fruit and vegetables to China bouncing back in early March, the prospect of exporting to other markets appeared gloomy due to the COVID-19 pandemic spreading to major markets globally such as Europe, the United States, and Japan. Within the context of the unpredictable developments of the COVID-19, it is anticipated that processed products will be consumed more. Consequently, the Ministry of Trade and Industry has advised fruit and vegetable processors to prepare sufficient sources of material supply to boost exports after consumer markets recover from the pandemic. With regard to the Chinese market, locals firms have been advised to restrict exports via unofficial channels as a result of the complicated nature of the COVID-19 epidemic, while also seeking to negotiate with partners to export via official routes. Domestic enterprises should therefore also be proactive in taking steps such as changing stamps on traceability and ensuring food safety when exporting their products to this market in the future. Cement, clinker exports slump on COVID-19 Viet Nam exported 7.5 million tonnes of cement and clinker in the first quarter of this year, earning US$291 million, statistics from the Ministry of Industry and Trade revealed. Exports witnessed strong decreases of nearly 40 per cent in quantity and 19 per cent in value compared to the same period last year due to the impacts of the COVID-19 pandemic and a global price decline. During the same period last year, the country shipped 12 million tonnes of cement and clinker abroad for $360 million. Earlier this year, the Ministry of Construction forecast cement demand would increase by 4-5 per cent in 2020 thanks to a recovery in the real estate market. Demand was estimated to reach 101-103 million tonnes, an increase of 4-5 per cent from last year, of which 69-70 million tonnes would be used at home and 32-34 million tonnes would be shipped overseas. Two cement production lines were expected to be put into operation this year, bringing the total number of cement production lines in Viet Nam to 86 with a total output of 105.84 million tonnes. The total consumption volume of cement and clinker in 2019 reached about 98 million tonnes, an increase of 2 per cent year-on-year. Domestic consumption reached 67 million tonnes, up by 1 per cent, while the export volume stood at about 32 million tonnes, earning $1.27 billion. Agro-forestry-aquatic exports enjoy 50% trade surplus in Q1 The agro-forestry-aquatic sector recorded a trade surplus of nearly US$3 billion in the first quarter of the year, an annual increase of 48.9%, according to figures released by the Ministry of Agriculture and Rural Development (MARD). During the reviewed period, the MARD state that the import-export turnover of agro-forestry-fisheries products stood at over US$15 billion. Most notably, export earnings were over US$9 billion, equivalent to the same period last year, while imports fell to roughly US$6.2 billion on-year. This comes after the export share of agro-forestry-fisheries products to major markets has faced significant changes as a result of the impact of the novel coronavirus (COVID-19) pandemic. The United States held the largest market share with export turnover totaling US$2.1 billion, a rise of 18% and accounting for 23.2% of the country’ overall market share, followed by China, the European Union, Japan, and fellow ASEAN member states. The MARD pointed out that they will continue to deploy agricultural export plans that will be suitable for meeting the rising demand when China declares itself free from the COVID-19 epidemic. In addition, the ministry will also increase its focus on meeting the stringent requirements which will be in place when looking to expand into new markets such as the Eurasian Economic Union and Brazil, while also strengthening seafood exports to Saudi Arabia. Over 9.72 trillion VND raised from Government bonds in March The State Treasury mobilised over 9.72 trillion VND (over 407 million USD) through Government bond auctions on the Hanoi Stock Exchange (HNX) in March, down 29 percent compared to the previous month. The annual interest rates of G-bonds in March reduced by from 0.11 percent to 0.61 percent for all maturities, with the 10-year term recording the highest fall of 0.61 percent per annum. On the secondary G-bond market, the total volume of G-bonds sold by the outright method surpassed 183.7 trillion VND (7.7 billion USD), up 46.9 percent month-on-month in value. Meanwhile, the trading volume through repurchase agreements (repos) exceeded 120.2 trillion VND (5.09 billion USD), up 48.21 percent. Foreign investors made outright purchases of more than 7.3 trillion VND (306.2 million USD) and outright sales of over 9.2 trillion VND (385.9 million USD). They made repos sales of 193 billion VND (8 million USD). The total value of listed G-bonds was estimated at nearly 1.13 quadrillion VND as of March 31. Effects of COVID-19 ripple through fisheries sector The adverse impacts of the COVID-19 pandemic are being felt in Vietnam’s fisheries sector, with export value falling 30 percent year-on-year in March. The Vietnam Association of Seafood Exporters and Producers (VASEP) reported that fisheries export revenue reached just 549 million USD in the month, with declines seen in the export of tra fish and tuna fish (over 29 percent), squid (31 percent), and shrimp (about 15 percent). The sharpest fall was seen in the EU (of 40 percent), followed by China (25 percent), the Republic of Korea (24 percent), and Japan (19 percent). Total export turnover had reached over 1.5 billion USD as of the end of March, a fall of 14 percent, with the sharpest contraction seen for tra fish, mainly due to shrinking exports to China in the first two months. Some 35-50 percent of shrimp orders from the US and the EU have been suspended or cancelled, according to Le Van Quang, Chairman of the Minh Phu Seafood Corp. A similar situation was seen by mid-March in orders from the Middle East, Asia, and South America. Quang said that despite such difficulties, domestic firms have still purchased shrimp from tens of thousands of farmers in the Mekong Delta in an effort to shore up employment. Apart from market obstacles, businesses must also shoulder the burden of extra container storage charges as well as expenses for equipment like face masks, thermometers, and sanitier used to fight COVID-19. VASEP General Secretary Truong Dinh Hoe said concerns over falling shrimp and tra fish prices prompted farmers to conduct an early harvest. If farmers cut production at this time, this will lead to a shortage of materials at the end of this year when the disease has been stamped out and consumption demand is increasing, he warned. Local fisheries processors and exporters have proposed the Government instruct the Vietnam General Confederation of Labour to consider exemptions of trade union fees and social insurance collections this year. They also called for reductions in corporate income tax and bank fees along with other credit incentives. WB: Vietnam’s economy stays resilient to external shocks While Viet Nam remains significantly exposed to the COVID-19 outbreak and the ongoing turbulence in the global financial markets, its economy stays resilient to external shocks in the first few months of 2020. According to the World Bank’s East Asia and Pacific Economic Update April 2020, Viet Nam is strongly positioned to benefit from numerous free trade agreements that are coming into force over the forecast period. In the first two months, its exports have expanded by 8%, FDI inflows amounted to US$2.5 billion and retail sales were up by 5.4%, the bank said, noting that while prospects remain favorable for the Vietnamese economy in the medium term, GDP growth will be affected negatively by the recent coronavirus outbreak, now a global pandemic. The WB cited preliminary estimates as suggesting that the rate of expansion of the economy could decline to about 4.9% in 2020. Over the medium term, growth is projected to rebound back to 7.5% in 2021 and converge at around 6.5% in 2022, reflecting an improved external demand and a firming of the services sector, as well as a gradual recovery in agricultural production, the WB added. It also suggested Viet Nam manage external risks by diversifying its trade flows, improving its competitiveness and adhering to new trade agreements. The World Bank Group is rolling out a US$14 billion fast-track package to strengthen the COVID-19 response in developing countries and shorten the time to recovery. The immediate response includes financing, policy advice and technical assistance to help countries cope with the health and economic impacts of the pandemic. The IFC is providing US$8 billion in financing to help private companies affected by the pandemic and preserve jobs. IBRD and IDA are making an initial US$6 billion available for the health-response. As countries need broader support, the World Bank Group will deploy up to US$160 billion over 15 months to protect the poor and vulnerable, support businesses, and bolster economic recovery. VinFast, NIssan Vietnam suspend operations due to COVID-19 VinFast and Nissan Vietnam have decided to temporarily cease their operations, starting on April 5, to minimize the impact of the novel coronavirus pandemic that is spreading globally, including Vietnam. A VinFast representative says it is unclear when the car assembly plant will resume its operation, depending on the developments of the epidemic in Vietnam as well as the implementation of the Government’s recent decree on social distancing. The decision to temporarily suspend the company’s operation is to protect its employees amidst the complex nature of the epidemic, says the representative. The company will research and manufacture ventilators (both invasive and noninvasive) and body temperature monitors for local consumption. It will also research and manufacture new car models and expand its dealers’ network. Meanwhile, Nissan Vietnam decided to cease its operation for 15 days, starting from April 5. The company’s statement says 25 of its dealers nationwide will also be closed from April 1-15. Earlier, four other car assembly plants: Ford, Toyota, TC Motor and Honda had temporarily shut down operations in Vietnam to protect their employees from the coronavirus epidemic. Elsewhere in South East Asia, famous carmakers have made similar decisions in Thailand and Indonesia. As of 06.00 am on April 4, Vietnam had confirmed 233 cases of the COVID-19, of whom 86 have been discharged from hospital after a full recovery. Online sellers make a killing as apartment residents stay home Online food sellers in Saigon apartments are recording three time their normal sales as fellow residents rely more on deliveries amidst the COVID-19 crisis. Duong in District 8, HCMC, who sells food to apartment residents, has seen her revenues go up three times from before the outbreak. These days, she makes up to VND1.5 million (US$64) in revenue a day from selling dumplings, beef jerky and frozen food to a Facebook group comprising residents in her apartment building. "My prices are 20% lower than physical stores because I don’t have to pay for the brick and mortar costs. Most of my customers are apartment residents who know of my online reputation." Another seller, Loan, said that in the last three weeks, she has seen a five-time surge in orders, and even more in recent days after HCMC ordered restaurants and nonessential businesses to close. She sells Vietnamese sausage and spring rolls to a group in an apartment complex in Thu Duc District with 15,000 members, earning profits of VND400,000 (US$17) a day, matching the earnings of a typical white-collar worker. "Customers like this type of food because it is easy to cook and preserve." The rising number of apartments in HCMC in recent years has contributed to the establishment of online market groups where residents sell and buy food. As the number of confirmed COVID-19 cases in the country go past 200 and most commercial establishments including have been asked to close, apartment residents are relying more on such these groups for daily meal ingredients as they refrain from going outside in compliance with authorities’ orders. An administrator of an online market group in Thu Duc said that the number of posts has surged this year amidst the pandemic with hundreds a day advertising food and ingredients. "We only allow residents to sell products to ensure high food quality. Farm produce is often sold out during the day because of high demand for fresh food." Residents say they also enjoy the convenience and quality. Hoa, who lives in an apartment building in District 8, has been reducing her shopping frequency in nearby markets due to fear of contracting the virus. "I now buy breakfast every day for my family online. The sellers have lots of different foods with no shipping fees." Other buyers say although these groups do not have the product range of a supermarket, they provide customers with fresh and reliable food, as most sellers are residents in the same complex. Now, more sellers are considering doing this business job long term, not just during the pandemic crisis. About six months ago, Oanh abandoned her milk tea shop in Binh Thanh District to focus on online sales among an apartment Facebook group of 8,000 members. Without rent, she managed to offer prices lower than milk tea chains and earns up to VND2 million (US$85) a day in revenue. "I sell up to 200 cups a day easily." Millions face job loss as employment market feels COVID-19 effects Craft associations believe that a host of enterprises are poised to face insurmountable difficulties, with millions of workers facing the prospect of being laid off as the economic impact of the novel coronavirus (COVID-19) begins to be felt. The Ministry of Industry and Trade reports that firms operating in the garment, leather and footwear, and woodwork processing sectors have been hit by a double impact from the ongoing COVID-19, after many of their buyers chose to delay delivery of signed orders in the months ahead. Moreover, the vast majority of buyers are currently declining to enter into to negotiations for new orders. Local electronic businesses that made approximately US$5 billion from exports during the year’s first quarter fear they will be left with no new orders from importers unless the COVID-19 is eradicated in the near future. The economic impact of the virus is even affecting giants such as Samsung Vietnam, one of the country’s largest hard currency earners, which are poised to scale down production. Indeed, the firm’s projected export value for the year will also be slashed by roughly US$6 billion to US$45.5 billion in comparison to last year’s US$51.3 billion. This negative outlook is also being mirrored in other sectors, with the Vietnam Timber and Forestry Product Association stating that all five key importers of Vietnamese woodwork products, including the United States, the European Union, Japan, China and the Republic of Korea have chosen to either delay or cancel orders that had been placed with their Vietnamese counterparts. The Vietnam Leather, Footwear and Handbag Association fears that a long continuation of the ongoing COVID-19 epidemic will led to massive layoffs. In a report recently submitted to the National Assembly Committee on Social Affairs, the association outlines their prediction that between 60% and 80% of its firms will move to temporarily suspend operations by the middle of April, therefore affecting 800,000 workers. This massive number of layoffs could increase to 1.2 million by the end of April if all businesses cease operations. Moreover, some 70% of orders signed for April and May are to be cancelled, while there are no signs of negotiations getting underway for new orders for June and the subsequent months, according to the report. These grim predictions come after the government recently approved a rescue package for local firms and an additional financial aid package worth US$2.6 billion aimed at supporting those vulnerable to the COVID-19 epidemic. With garment businesses under increasing pressure, Le Tien Truong, Director General of the Vietnam Garment and Textile Group, proposes that support policies for businesses should be implemented immediately before the situation worsens. Without an adjustment in policy, it is highly likely that a number of enterprises will lose their liquidity by the end of April, he warns. VNN