BUSINESS NEWS HEADLINES MAY 13   02:49 VN corporate bond market faces risks: Finance Ministry official Corporate bonds exceeded 58 trillion VND (2.5 billion USD) in the first four months of this year The domestic corporate bond market developed rapidly in April, an official from the Ministry of Finance (MoF) said on May 11, marked by the strong involvement of private investors. The involvement of small and private investors with no financial analysis capacity, however, plus the overall risks of businesses will, in turn, present potential risks for the market, Nguyen Hoang Duong, Deputy Director of MoF’s Department of Banking and Financial Institutions told local media. Duong said corporate bonds exceeded 58 trillion VND (2.5 billion USD) in the first four months of this year, with the engagement of newcomers, especially production firms. The past issuance of corporate bonds has been in accordance with the orientations of the Government to diversify sources of social capital and gradually ease reliance on credit institutions, he added. Studies reveal that real estate enterprises hold the lion’s share of the market, making up about 49 percent of issued bonds with interest rates at over 11 percent compared with an average of 9.63 percent. Bonds issued by private investors increased from 8.8 percent in 2019 to 26.8 percent in the first four months, according to the official. Duong stressed that management agencies must pay more attention to building a legal framework to facilitate the capital mobilisation of businesses in the market, ensure market transparency, and protect investors’ rights, rather than tightening or loosening regulations on corporate bond issuance. He cited amended Decree No. 163/2018/ND-CP and a draft document on corporate bond issuance, which together with the Securities Law, set to come into force on January 1, 2021, and the amended Law on Enterprises, to also be put in place in January next year, will create a synchronous legal framework for the development of the market. The new documents set confidence indexes for issued bonds, making it easier for investors to make decisions, Duong said./. Honda Vietnam’s sales plummet in April Honda Vietnam’s motorbike and automobile sales in April plunged 72 percent and 52 percent year-on-year, respectively, due to the COVID-19 pandemic, Head of its External Relations Division Nguyen Huy Trung said. The pandemic forced the manufacturer to suspend production from the start of the month until April 22. In addition to the suspension, dealerships were also closed because of social distancing measures. A total of 61,752 motorbikes and 843 cars were sold during the month. Honda Vietnam shipped 4,512 wholly-assembled motorbikes to different markets, with revenues remaining undisclosed. It submitted a report in late April to the Ministry of Planning and Investment on its operations and recommendations to offset automakers’ difficulties brought about by COVID-19./. Receiving the movement of FDI inflow The attraction of foreign direct investment (FDI) in the first months of 2020 has slowed down due to the COVID-19 pandemic, but there are signs that FDI inflows in Vietnam will ‘boom’ in the last few months of the year. To accommodate the movement of investment, Vietnam must be ready to become the ‘factory of the world’ accompanied with a favourable environment regarding business, labour and supporting industries. According to the Ministry of Planning and Investment (MPI), newly registered capital, supplemented capital and capital contributions of foreign investors in the first four months of 2020 reached a total of US$12.33 billion, equivalent to 84.5% of the figure for the same period in 2019. The decrease in FDI pledges in the four-month period was also less than the decrease in the three-month period. This is an indication that the decline of FDI inflow will soon end and it is expected to increase sharply in the near future. According to economic experts, Vietnam's successful control of the COVID-19 pandemic will be the driving force to lure FDI inflow into Vietnam in the near future. Not only FDI, Vietnam has the opportunity to attract investors who wish to relocate their projects. American, Japanese, and European enterprises who intended to move their production out of China due to increasing labour prices and the impacts of the US-China trade war will accelerate this process amid the pressure from the COVID-19 pandemic. Moreover, the transition process will also receive support from their own countries. Specifically, Japan will spend approximately US$2.2 billion to support Japanese enterprises in relocating their factories to Japan or to diversify production facilities by moving to the Southeast Asia region. According to Dr. Nguyen Dinh Cung, a member of the Prime Minister's Economic Advisory Group, before the outbreak of the COVID-19 pandemic, the shift of production chains out of China appeared mainly due to the need to diversify the supply chain and to reduce risks of over-reliance on a single market, the increasing labour costs in China and especially the effect of the US-China trade war. Amid the development of the pandemic, the trend has become more visible. The production in China has been recovering but production and transportation costs have become more expensive. The COVID-19 pandemic has promoted the shift of investment out of China, the restructuring of the value chain and the trend of bringing production closer to the consumer market. When the US-China trade war began, Vietnam was forecast to be an attractive location for many foreign investors that may receive a wave of investment movement from China. However, Vietnam has yet to see benefits as expected. Dr. Nguyen Dinh Cung said that, from the perspective of globalisation, where has better financial efficiency and cheaper costs will attract more investment capital. China became the "factory of the world” because it met the conditions of investors. It means that if Vietnam wants to attract production chains, it needs to meet the above conditions, and even exceed them. Regarding industry, it is necessary to revise the industrialisation strategy with specific plans for the 2021-2030 period, with a vision to 2045, including solutions to help Vietnamese enterprises to participate in the global supply chain. The "2019 Supplier Day" event, held for the first time by the US Agency for International Development (USAID) and the American Chamber of Commerce (Amcham) in Hanoi on April 25, 2019, attracted more than 60 Vietnamese suppliers and more than 300 businessmen, including representatives from large US enterprises. The event marked an important development step in the quality and scale of the programme on connecting global value chains in Vietnam. According to US enterprises, Vietnam is one of the fastest growing economies in the world, particularly in the past two decades. American businesses have looked forward to doing business with Vietnam businesses, helping Vietnamese businesses to participate in global value chains. This was also the clearest evidence of the attractiveness of the Vietnamese market and the most specific opportunity that Vietnamese businesses need to seize. In fact, there is a wave of enterprises moving away from China and looking to Vietnam, but about 90% of Vietnamese enterprises are currently not ready to provide services for international businesses. On the other hand, Vietnam needs to have young and high-quality human resources. But Vietnam currently has an aging population and the supply of labour will only be able to meet the demand of the manufacturing and assembly industries in the next 10 years. This is a problem that Vietnam should have a solution for in the near future. According to Dr. Tran Toan Thang from the National Centre for Socio-Economic Information and Forecast (Ministry of Planning and Investment), FDI attraction is very important but keeping investors, especially large enterprises, is more important. Incentives regarding tax, land, natural resources, and cheap labour can only attract foreign investors but it is difficult to keep them. If Vietnam wants to keep foreign investors, besides open and transparent business environment, modern and synchronous transport infrastructure, and stable law systems, the country must have high-quality human resources, a large enough domestic market and a system of domestic enterprises capable of providing supporting industry products for FDI enterprises. Indonesia devises rescue package for national flag carrier Indonesia is finalising a financial bailout plan worth 1 billion USD for the national flag carrier PT Garuda Indonesia to help it avoid bankruptcy after the COVID-19 pandemic forced the airline to ground most of its planes. Deputy State-Owned Enterprises Minister of Indonesia Kartika Wirjoatmodjo said the rescue plan includes a proposal to restructure the carrier's 500 million USD of sukuk ("sharia compliant" bonds) due next month and arrange new bridge loans of as much as 500 million USD to meet working capital requirements for three to six months. Garuda will table the sukuk proposal to investors on May 18 that will include an option to extend the maturity of the securities by three years or a staggered repayment, Wirjoatmodjo said. Last month, the carrier asked bondholders to begin talks with its financial adviser, citing an "extremely challenging environment for airlines" following the outbreak. The government help in tiding over the financial crunch should sooth investor concerns about Garuda's ability to survive the pandemic that has forced airlines worldwide to seek state bailouts and emergency funding. Garuda, in which Indonesia's government owns almost 61 percent, has already cut employee salaries and renegotiated aircraft lease agreements to tackle a slump in travel sparked by the pandemic. Deputy Minister Wirjoatmodjo said Garuda remains a good company with bright prospects, adding that its business will remain robust after the outbreak ends. Garuda's Chief Executive Officer Irfan Setiaputra said in a March interview the airline won't default on the debt and was in talks with several banks about refinancing. The airlines has received three loan facilities from state-owned Bank Rakyat Indonesia (BRI) with a total value of 382 million USD to fund its working capital./. Provinces ramp up installation of systems to fight illegal fishing Coastal provinces across the country have ramped up the installation of vessel monitoring systems (VMS) in fishing ships as part of measures to combat illegal, unreported, and unregulated (IUU) fishing. The move is expected to help lift the EU’s existing “yellow card” warning on Vietnamese seafood products when a delegation of the European Commission (EC)’s Directorate-General for Maritime Affairs and Fisheries (DG-Mare) will visit Vietnam from May 25 to June 5 to inspect the implementation of the EC’s recommendations against IUU fishing. The EC inspection team identifying illegal fishing in this third inspection may result in an extension of the “yellow card” or even turn it into a “red card”, meaning a ban on Vietnamese seafood exports, according to the Ministry of Agriculture and Rural Development (MARD). Nguyen Quang Hung, Deputy Director of MARD’s General Department of Fisheries, said Vietnam has made a great deal of effort over the last three years to implement the EC’s recommendations against IUU fishing. After two inspections in June 2018 and November 2019, the inspection team recognised the country’s commitment to having the “yellow card” removed, Hung said, but a lot of work still needs to be done regarding the installation of VMS. The Mekong Delta province of Ca Mau possesses a fleet of some 4,925 fishing ships, including 1,665 that are longer than 15 metres and are designed for offshore fishing, which must be equipped with a VMS as stipulated by government regulations. The province has installed VMS on some 72 percent of its ships of more than 15 metres and 86.5 percent of those longer than 24 metres, said Chau Cong Bang, Deputy Director of the provincial Department of Agriculture and Rural Development. In the Mekong Delta province of Ben Tre, the installation rate was 50.75 percent for those longer than 15 metres and 96.58 percent for those longer than 24 metres. Chairman of the Ben Tre Provincial People’s Committee Cao Van Trong said the province has requested relevant authorities strictly punish vessels sailing into other countries’ waters. All ships detained by foreign countries have had their licenses revoked. South-central Binh Dinh province, meanwhile, has a total of 3,270 fishing vessels of more than 15 metres. To date, all vessels more than 24 metres long and 89 percent of those 15 to 24 metres long in the province have been equipped with Movimar, a French fisheries satellite surveillance system. It has accelerated inspections to identify any vessels operating without a fishing license or having its licenses expired, and will help them register or renew the license. In central Quang Tri province, the local Department of Agriculture and Rural Development has gotten tough on violations and asked relevant authorities to prevent any ship with a length of 15 to 24 metres from cruising offshore if it does not have a VMS. As at the beginning of April there were only 18 ships over 24 metres in length and 120 ships 15 to 24 metres in length in the province with a VMS. The low rate is largely due to the relatively high cost of a VMS, which can be up to 30 million VND (1,285 USD). According to MARD, due to the EU “yellow card”, Vietnam’s seafood exports to the EU fell by 6.5 percent to 390 million USD in 2018 and by 11.5 percent to 345.2 million USD in 2019. From being the second-largest import market for Vietnam’s seafood, after the “yellow card” the EU dropped to fifth and its imports have decreased from 18 percent to 13 percent of Vietnam’s total exports./. Businesses in Thailand urge relaxing lockdown to stem job losses The private sector in Thailand is calling on the government to continue easing its lockdown measures to allow other businesses, particularly those related to tourism and supply chains, to restart to curb escalating unemployment. Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce (UTCC), said the latest survey on business sentiment nationwide has found operators most desire an easing of lockdown measures by the government as soon as possible to prevent any further business interruption. Tourism and supply chains are the sectors most affected by the COVID-19 pandemic, resulting in lower employment, said Thanavath. Consumer purchasing power has dwindled. The UTCC expects the number of unemployed will decrease if businesses are allowed to reopen this month. The Joint Standing Committee on Commerce, Industry and Banking predicted last month about 7 million workers will be out of job by June because of shutdowns from the pandemic, with most of the layoffs being low-paid workers. An estimated 4.2 million retail and shopping mall workers would lose their jobs, along with 1 million construction workers, 978,000 hotel workers, 250,000 restaurant workers, 200,000 spa and massage workers and 200,000 garment factory workers. Thailand’s labour market employs about 38 million workers. According to Thanavath, the business sector also calls on the government to come up with relief measures for affected businesses that have to temporarily cease operation because of the COVID-19 pandemic. The measures include relaxing lending conditions to small and medium-sized enterprises and access to new loans to ease their liquidity and retain their employment. Thailand began the first phase of the lockdown easing on May 3, although the ordinance on emergencies and the night curfew order are still valid until late May. The second phase of the four-phase process is expected to start on May 17 if the number of new COVID-19 cases does not increase./. The ASEAN Post highlights measures to avoid food crisis amid pandemic The ASEAN Post on May 11 published an article titled “Building food security during the pandemic”, calling on the international community to act immediately to keep food supply chains operating. The article spotlighted urgent measures that countries need to take to ensure food security amid the COVID-19 pandemic, which is seriously affecting agriculture and food processing. Governments of countries, especially underdeveloped nations, should provide cash transfers and safe food distribution channels to ensure that vulnerable citizens are protected, it said. Policymakers need to focus on clearing logistics bottlenecks in both domestic and international value chains so that food can move freely between and within countries, it added. The article also underlined the necessity to apply technological solutions to agricultural production and implement self-sufficiency policy to reduce countries’ reliance on food imports. At the global level, policymakers must implement four types of action, including increasing funding for food-relief and social-protection measures in poor countries, investing in local agricultural production, alleviating disruptions to global food and agricultural produce supply chains by supporting regional and local logistics hubs, and encouraging the private sector to fund agro-processing and agri-tech companies, it said. The article noted that resources should be channelled rapidly toward investment opportunities that are emerging as a result of the pandemic, especially for innovative value-chain solutions. Top of FormIt said these solutions should be implemented rapidly if the humankind want to prevent a catastrophic food crisis in developing countries./. TAT: Tourist arrivals to Thailand may be lowest level in 14 years The Tourism Authority of Thailand (TAT) has forecast that the number of foreign tourists may plunge by almost two-thirds to 14 million this year, the lowest level in 14 years due to impacts of the COVID-19 pandemic. In its forecast released on May 11, the TAT predicts only 14 million to 16 million foreign tourists visit the country this year, a sharp drop from 33.8 million projected in March. Last year, Thailand welcomed a record 39.8 million foreign visitors. TAT Governor Yuthasak Supasorn said that tourism is crucial to Thailand. Spending from foreign tourists amounted to 1.93 trillion baht (59.9 billion USD), that accounted for 11 percent of the gross domestic product last year, according to Yuthasak.  He hoped foreign visitors would return to Thailand in October, as high season begins. The number of foreign tourists to Thailand fell 38 percent to 6.69 million in the first three months of this year./. Thailand mulls over tourism levy Thailand’s Tourism and Sports Ministry is considering a plan to collect tourism levy from foreign arrivals once inbound flights and tourism activities resume in the country. Bangkok Post newspaper reported that the levy is set to be 300 baht (10 USD) or less per person that could cover pandemic insurance. It would be collected once foreigners arrive in Thailand. The scheme is part of the 20-year national strategic plan that requires Thai government agencies to have recurring income to sustain and stabilise the national economy. The levy will be added to the tourism fund managed by the tourism and sports ministry that aims to rebuild and develop domestic tourism supply chains, as well as offer safety and security protection for tourists. The goal is to have tourists entering via air travel charged as a part of their air tickets, but the measure of collection for land and sea transport is yet to be finalised. Thai Minister of Tourism and Sports Phiphat Ratchakitprakarn said this idea was initiated last year but was delayed because of the pandemic, adding that now is the right time to initiate collection. The Tourism Authority of Thailand's new target is 16 million arrivals this year. However, Phiphat voiced his doubt as international tourists will not come back before the fourth quarter. Compared with the last quarter of 2019, when Thailand served 11-12 million arrivals, the new goal is too high amid these circumstances, he said./. Joining hands to stimulus tourism The Ministry of Culture, Sports and Tourism recently launched the ‘Vietnamese people travel Vietnam’ programme, which will take place from June 1 to December 31, 2020. The programme has received much interest and participation from localities and people nationwide. It can be seen that the spreading of the COVID-19 epidemic has caused serious consequences for countries around the world and has paralysed many sectors, including tourism. In Vietnam, thanks to the efforts and determination of the entire Party, the entire population and the involvement of all levels and sectors, the epidemic has been put under control. Vietnam reported no new COVID-19 cases on the morning of May 12, marking the 26th consecutive day without new infection in the community, according to the National Steering Committee for COVID-19 Prevention and Control. Although we are not allowed to be subjective in the prevention and control of the epidemic, this result illustrates the level of safety in Vietnam and serves as an important foundation for domestic sectors to recover after the epidemic. The launching of the ‘Vietnamese people travel Vietnam’ programme reflects the positive participation of the tourism sector in stimulate domestic travel demand. Different from previous tourism stimulus programmes which targeted epidemic-free localities, this programme is being implemented nationwide. The Vietnam National Administration of Tourism has coordinated with localities, functional agencies, associations, airlines, and companies to design attractive travel packages for visitors while enhancing their available tourist products and services. A fundamental principal has been set for the implementation of the programme, which requires that all activities to be held under its framework must strictly follow regulations on epidemic prevention and control while ensuring the safety of tourists, those working in the hospitality sector, and local people. Localities are also encouraged to take detailed measures to stimulate domestic travel demand, such as offering discounts on entrance fees at local tourist sites and museums, and increasing the attractiveness of travel packages. Over the past few years, Vietnam's tourism sector has maintained a double-digit growth rate, with the indicators of the number of international and domestic tourists as well as the sector’s total revenue having maintained steady growth. Accordingly, Vietnam served more than 73 million domestic visitors in 2017, and the figure reached 80 million and 85 million in 2018 and 2019, respectively. As domestic travellers have contributed significantly to tourism revenue, stimulating domestic tourism is now a sound solution towards the gradually recovery of the hospitality sector and helping it to regain its pace of growth. In response to the programme, many tourism stimulus packages have been adopted in cities and provinces nationwide. Hanoi municipal authorities, for example, have mapped out plans to boost agricultural-based tourism and tours to the city’s traditional craft villages. Meanwhile, the Thua Thien Hue provincial authorities have decided to offer a 50% discount on entrance fees to local monuments in Hue City for three months, from May 8 to July 31. The People’s Committee of Quang Binh Province also issued a document on the price reduction on a number of tourism products and services in the province. It is believed that the full participation of localities and functional agencies as well as enthusiastic response from Vietnamese people will contribute to advancing the country’s tourism sector in 2020, helping to continue promoting Vietnam as a safe and friendly country with unique cultural features in the eyes of international friends. First 30 tonnes of Yen Chau mango exported to China The first batch of 30 tonnes of Yen Chau mango planted in Yen Chau district, in the northern province of Son La, was shipped to China through official channels on May 11. The district has 2,700 ha dedicated to mango production, including 170 ha that have been granted area codes to export mango to foreign markets and nearly 130 ha meeting VietGAP standards. Director of Chieng Hac Agricultural Cooperative Ha Van Son said that his cooperative was delighted to ship the first batch of Yen Chau mango to China and the fruit was appreciated by the partner. Son noted that his cooperative has always paid great attention to the quality of the fruit and the quality of this shipment was recognised by the Chinese partner. This year, it is estimated that nearly 13,000 tonnes of Yen Chau mango will be harvested from an area of 900 ha, including over 3,200 tonnes meeting standards for export. Trinh Van Thang, director of Thien Anh company based in Lao Cai province said that this is the first year that his company went to Yen Chau to buy mango and saw that the local fruit met high requirements in terms of quality. Thang noted that the company has order 1,000 tonnes of Yen Chau mango to ship to supermarkets in China. Business confidence and Vietnam’s post-coronavirus economic recovery The economy of a nation or a region is always subject to a variety of factors. If an economy is equated with a mathematical function, such a function would be composed of several variables such as macroeconomic policy, market supply-demand, labour and technology. In that function, business confidence is also a variable, which is hard to quantify but important to the whole economy. During the past several months of combating the coronavirus outbreak, the public have placed complete confidence in the Vietnamese government’s response in the spirit of “fighting the epidemic is like fighting the enemy”. Today, Vietnam is, to a certain degree, on the winning side of the epidemic but a bumpy road lies ahead, with the challenge of reviving the economy which was hurt by the coronavirus. On this journey, if the business circles have confidence, economic recovery will definitely be accelerated. The government has made many important policy decisions and now is the time to enact such policies quickly from the central to local levels. Within that process, the role of local governments is very important because if they are disobedient to the higher levels, businesses will find it hard to place confidence in the government. Instead of implementing policies by prohibiting activities difficult to keep under control, governments at all levels should accompany enterprises and promote any businesses that can return to normality while taking coronavirus prevention measures. Curbing the outbreak is hard but curbing the outbreak while keeping the economy going is even harder. It is the litmus test for the capacity of governments at all levels to build confidence of the business community and the public in general. For instance, amid huge concerns over the coronavirus in the last few months, the factories of Pouyuen, one of the largest employers in Ho Chi Minh City with 72,000 workers, have largely remained in operation, having shut for only two days, which was a great success, especially as no cases were reported in the company. Not only is this success significant to this particular enterprise but it creates confidence for foreign investors in Vietnam’s method of curbing the outbreak. The government can replicate this example by providing enterprises with the best conditions possible. That is the way to build up confidence and to make the government’s policies be soon embraced by the business community. When they have confidence, although they may not receive all the financial support as requested, businesses are still motivated to look for creative avenues towards a quick economic recovery. IMF sees Vietnam’s growth recovering to 7% in 2021: Reuters The International Monetary Fund (IMF) is projecting that Vietnam’s economic growth will slow to 2.7% in 2020 due to Covid-19 before rebounding to 7% next year, according to a report by the Reuters news agency. The IMF representative in Vietnam Francois Painchaud was quoted by Reuters as saying that Vietnam’s strict measures to contain the coronavirus, the global recession and weak domestic demand are expected to slow its economic growth this year from an average of about 7% in 2018 and 2019. He stated that some severely hurt sectors include tourism, transportation and accommodation. But the IMF chief in Vietnam noted that growth is expected to recover as containment measures are lifted, reaching 7% in 2021, supported by monetary and fiscal easing, Vietnam’s relatively strong macroeconomic fundamentals and a gradual recovery in external demand. Earlier this month, the Economist magazine listed Vietnam as the 12th strongest economy in its report on the financial strength of 66 emerging economies in the wake of the Covid-19 fallout. Vietnam receives two transformers for Ninh Thuan solar farm Trung Nam Group has taken delivery of two transformers and other equipment for its Thuan Nam solar farm, which is being built in the south central coastal province of Ninh Thuan.  The equipment was unloaded at Vinh Tan Port in the neighbouring province of Binh Thuan. In addition to a 450-megawatt solar farm, Trung Nam will also build the 500kV Thuan Nam Substation and 17 kilometres of transmission lines to connect with the national power grid. As the heart of the substation, the two transformers weigh a total of 1,500 tonnes, have a combined power of 1,800 megavolt-amperes and were produced by the German industrial equipment manufacturer Siemens. The Thuan Nam solar farm and its transmission lines are an urgent project designed to power Ninh Thuan Province and the broader central coastal region. With a total cost of VND12 trillion (about US$513.7 million), the project is scheduled for completion by the end of the year. Trung Nam Group is currently the top investor in the field of renewable energy in Vietnam. Timely support provided for businesses to ease difficulties from COVID-19 In the face of difficulties caused by COVID-19, the business community is in need of support to revive its operations, and the Government has acted quickly to assist enterprises in overcoming this challenging period. Nearly four months since the outbreak of COVID-19 in Vietnam, the local production, business operations and macroeconomics have changed to a new and very different state than before. GDP growth in the first quarter of 2020 was only at 3.82% over the same period in 2019. "The growth engine" – the business community – is facing difficulties unprecedented in history, forcing enterprises to drastically reduce their labour force while "hibernating" or maintaining operations at the minimum level. If businesses stop operating, the cost to restart is very huge, and the more worrying issue is that it may lead to the economy losing its growth momentum. In a report to the Prime Minister on the impact of COVID-19 on the production and business activities of corporations under its management, the Committee for the Management of State Capital at Enterprises (CMSC) announced that up to the end of the first quarter this year, there were seven out of 19 enterprises suffering total losses of over VND3.7 trillion. Among them, Vietnam Airlines Corporation (VNA) has suffered the most. Chief Accountant cum Head of VNA Finance Tran Thanh Hien said that in Q1 of 2020, VNA witnessed output reduction of about 40%, while the expected loss was at about VND2.4 trillion. In the worst scenario, it is expected that VNA will suffer reduced revenue of about VND50 trillion in 2020, while total losses may reach nearly VND20 trillion. These are very large numbers which the corporation itself cannot withstand through its own potential. VNA board of leaders affirmed that, like the global aviation industry, the epidemic impact has gone outside of risk management scenarios by VNA. To minimise such negative impacts, since January, the VNA has promptly developed operating scenarios suitable to the disease outbreaks and government policies. Amidst the passenger transport market has been in the lowest level, VNA specialised departments have strived to find alternative sources of cargo transport to help ease difficulties while maintaining trade – the "blood vessels" of the economy. Contracts signed with traditional partners, such as an agreement with Vietnam Post on express delivery of goods and postal items on A321 aircraft, are expected to bring revenue from commodity segments worth from VND250-300 billion for VNA in April. Along with internal solutions, VNA has called for support from its partners and customers to reduce prices and extend the payment schedule. The Government has also introduced initial solutions such as reducing some taxes and fees to support businesses. The decline in oil prices due to the sharp drop in transportation demand since the global coronavirus outbreak has caused losses in revenue of nearly VND13.2 trillion for the Vietnam Oil and Gas Group (PVN) in the first quarter of 2020, down nearly VND4.6 trillion in earnings after tax over the same period last year. According to scenarios built by PVN, if the crude oil price drops by US$55 to US$30 per barrel, PVN's annual revenue from crude oil will decrease by VND9.2-55.1 trillion, making the total revenue drop by VND23-141 trillion and resulting in a decrease of VND5-27.1 trillion in the State budget contribution compared to the set plan. According to CMSC, it is expected that in 2020, if the epidemic is prolonged while the oil price does not recover, the revenue of its corporations will decrease by about VND279.7 trillion compared to the set plan. Eight out of its 19 corporations would suffer total losses at about VND26.3 trillion, while contributions to the State budget would drop by about VND32.8 trillion. For example, Vietnam Maritime Corporation and Vietnam Railways are also suffering difficulties, with estimated respective losses at VND111 billion and VND100 billion in the first quarter. In addition to implementing solutions to overcome difficulties as set out by CMSC, currently 19 corporations under the committee are adjusting their production and business targets in 2020 to suit the new situation. One of the requirements set out in this adjustment is the development of a solution to cope with risks and minimise the negative impacts from the epidemic and market, as well as the proposal of specific recommendations to restore production and business operation in the post-epidemic period. Difficulties have not only besieged economic drivers but are also challenging the resistance of the entire Vietnamese business community. For the first time in many years, nationwide business registration recorded a higher number of enterprises ceasing operations and leaving the market than the number of registered enterprises. In the first quarter of 2020, the country witnessed the withdrawal of nearly 34,900 enterprises from the market in the form of business suspension, pending for dissolution and completion of dissolution procedures. In particular, the number of enterprises temporarily suspending business has increased by 26% over the same period last year. The sudden increase in the number of enterprises withdrawing from the market reflects their difficulties and also the hesitation of investors who are waiting for the situation with the disease to progress before making their decisions to continue or close their business. Economists fear that bankruptcy has never been so near and suggest that saving the economy must start from saving businesses. According to recent surveys, if COVID-19 progresses in a complicated and prolonged manner, only half of enterprises will be able to sustain operations for more than six months. The battle on the economic front is entering a very challenging period with the "health" of the business community beginning to decline. If the "golden period" of pouring capital to revive production and business is missed, it is likely that a majority of businesses will not be able to wait for support, even though the Government has issued multiple appropriate and timely policies including an interest rate reduction support package and restructuring of debt worth VND285 trillion, in addition to a tax payment extension package and land rent worth VND180 trillion. According to the State Bank of Vietnam (SBV), after SBV’s work sessions with credit institutions, the latter agreed by a high consensus to reduce lending interest rates by 2% for existing loans, as well as for new loans. So far, credit institutions have offer over VND300 trillion in the total amount of debt rescheduling and exemption/reduction of new loan interest rates. Dr. Truong Van Phuoc, former Chairman of the National Financial Supervisory Commission, said that several countries have skipped "lending" to switch to "giving", meaning they switched the support from loans from banks to directly assist enterprises by capital from the state budget. Vietnam cannot follow such direction but it can shift its focus to fiscal instruments, through tax policies, to promote public investment, Phuoc said, adding that in this “war” against the coronavirus, the fiscal policy should act as an armoured vehicle that takes the lead, while monetary policy should act like infantry soldiers to follow in the battlefield. Selecting priority in pandemic response policies is a difficult issue, but it determines the success of governments. Economist Tran Du Lich assessed that with limited resources, the Vietnamese Government's support policy is currently prioritising resources for micro and small enterprises, which accounts for the majority of the business community but is still limited in accumulating resources and experience in dealing with the crisis. It is the correct priority choice, Dr. Lich stressed, suggesting that the current priority policies can be applied until May, after which it is necessary to provide support to large enterprises, including State-owned ones, as proposed by their governing body – the CMSC. This is essential because they are enterprises that make important contributions to the State budget, Lich stated. In the same opinion, Assoc. Prof., Dr. Tran Dinh Thien, a member of the Government 's Economic Advisory Group, said that the Government' s policies are aimed at general support but need more specific solutions to support the large corporations who are the mainstay for national economic development. The Government needs support, which is considered an insurance policy, for these businesses to survive and then revive after the epidemic ends, according to Thien. Assoc. Prof., Dr. To Trung Thanh, Head of Scientific Management Department under the National Economics University, said that it is difficult to forecast the impacts of COVID-19 on Vietnam's economy in the long term. It requires different economic policy scenarios, from short to long term ones, in order to respond. Accordingly, Vietnam should not only focus on the liquidity of businesses but also the solvency, he suggested. SBV needs to be ready to pump more liquidity into the banking system so that interest rates can be cut by one to two percentage points. When monetary or traditional fiscal policies are not capable of supporting the solvency of enterprises, it is necessary to have direct fiscal intervention from the Government, such as debt repurchase, increasing state ownership in enterprises and directly pumping money into some important areas to minimise the collapse of large corporations. Farmers troubled as piglet prices double from last year The prices of piglets have soared to VND 2.5-3 million (US$108-129), two times the prices a year ago, according to farmers. Tran Thi Hoa, a farmer in Dong Nai Province, said they cost VND300,000 per kilogramme, and piglets bought for raising normally weigh up to 10 kilogrammes. “I decided not to buy even though pig on the hoof prices are very high at VND76,000-87,000 per kilogramme on the farm in the south. “But …I am afraid the Government could fix the price at VND60,000, and I will suffer losses.” In traditional markets in the south, the prices are VND150,000-200,000 per kilogramme depending on the cut. The prices have been rising since last year when the African swine fever decimated pig herds, and the number of head in provinces like Binh Duong, Dong Nai and Tien Giang plummeted from several million to a few hundred thousand. Luong Quoc Hung, a pig farm owner in Dong Nai Province’s Xuan Loc District, said he is raising some 300 pigs, and at current prices of VND85,000 per kilogramme he would earn VND2 million per pig. The price is unlikely to fall because of low supply and rising costs, he said. The epidemic caused a scarcity of animals and dependence on large enterprises, he said. To buy piglets he has to order many weeks in advance and agree to pay an intermediary VND100,000 – 200,000 per animal, he added. On top of that, farmers have to pay for bran, antibiotics, medicines, waste disposal, labour, electricity, and farm costs as they raise and sell an 80-100kg pig for around VND6.6 million, he explained. To reduce the price of live pigs to VND60,000 per kilogramme as required by the Government, it is necessary to find ways to reduce the price of piglets to VND1-2 million, he added. According to the General Statistics Office, in the first quarter of this year pork output fell 19.3 per cent year-on-year to 811,000 tonnes. The output is expected to rise to one million tonnes in the third quarter and 1.1 million tonnes in the fourth quarter. Thus, by the third quarter the domestic supply of pork would meet around 90 per cent of demand. In the first quarter Viet Nam imported nearly 25,300 tonnes of pork, up 205 per cent year-on-year, according to the Ministry of Industry and Trade. VNN