VIETNAM BUSINESS NEWS SEPTEMBER 4
15:53
Vietnam scores high in employee experience
A study has found that Vietnamese
small and medium size enterprises (SMEs) scored an average of 92 percent in
employee experience, 8 percent higher than other countries in the region. The employee
experience survey was conducted by Willis Towers Watson and SME
Magazine across Vietnam, Singapore, Malaysia and Indonesia to help SMEs
better understanding their employees’ perspectives. The study
found that SMEs’ employees are generally proud of their companies as they
trust the vision of their leaders and understand how their work contributed
to broader goals. Hence, 80 percent of respondents are willing to recommend
their company as a good place to work. At the end
of last year, 38 Vietnamese SMEs were honoured at the SME
Magazine’s SME100 Fast Moving Companies Awards./. Prime Minister urges Samsung Vietnam to raise domestic content Prime
Minister Pham Minh Chinh asked Samsung to increase the ratio of domestic
content in its electronic products manufactured in Vietnam during a visit to
its facility in the northern province of Thai Nguyen on September 3. He also
expressed his hope that there will be Vietnamese people in senior leadership
positions at its factories in Vietnam in the future. During the
visit, Prime Minister Chinh called for Samsung’s cooperation in importing
vaccines and transferring their technology to produce vaccines and treatment
drugs for COVID-19. The
Government leader proposed that Samsung, with its reputation and influence,
uses its voice to convince the Government of the Republic of Korea and
partners to sell, transfer and lend vaccines to Vietnam. The Prime
Minister said he welcomed the fact that Samsung has continued its long-term
investment strategy in Vietnam and vowed to work with the company to realise
the strategy successfully. For his
part, CEO of Samsung Vietnam Choi Joo Ho thanked the Vietnamese Government
for supporting its production and business activities and pledged to take
measures to guarantee a safe working environment. On the same
day, Prime Minister Pham Minh Chinh visited a boarding school in Dinh Hoa
District, where he chaired a virtual conference with the provincial
government and district authorities on socio-economic development, COVID-19
prevention and preparations for the new school year. Localities place focus on public investment  Following
the prime minister’s drastic instructions in recent weeks on 2021’s public
investment disbursement, numerous ministries, agencies, and localities have
built their plans and crafted measures to attempt to accomplish the yearly
plan set forth. Chairman of
Ha Tinh People’s Committee Vo Trong Hai last week signed a document to
accelerate public investment projects in the province, as well as establish a
task force to strengthen disbursement. He emphasised that this in combination
with improving the efficiency of public investment is a key political task. “We will
complete the disbursement plan on time (before January 31, 2022). The result
of public investment disbursement is considered as one of the important
criteria to evaluate the completion of the tasks in 2021 of relevant
organisations and individuals in the province,” Hai said. At present,
some key projects with large investment capital but disbursed at a low rate
in the province are in infrastructure for the comprehensive development of
the central province of Ha Tinh with the investment of $19.6 million and
disbursed $2 million, equivalent to 0.98 per cent; land and database
management scheme capitalised at $6.8 million; the integrated initiative of
dynamic cities (urban sub-project of Ky Anh town, borrowed from the World
Bank) at $7.46 million in capital and $69.6 million disbursed; and hundreds
of poor-performing ventures. For
behind-schedule projects like these in the Central Highlands province of Lam
Dong, the local Department of Planning and Investment will propose the
provincial people’s committee not to allocate capital next year. In addition
to Ha Tinh and Lam Dong, the determination of carrying out the assigned
schemes on schedule has been spreading and are the focus of implementation
for all ministries, agencies, and localities. The poor
performance of disbursement has been blamed partly on the pandemic, which has
caused challenges in transport, clearance, providing construction materials,
and increased prices by up to 60 per cent over the beginning of the year. Particularly,
in July, disbursement has slowed and numerous projects have halted entirely.
According to the General Statistics Office (GSO), the disbursement of the
state budget investment of 19 southern cities and provinces, mostly in lock
down since early July, was estimated at $509 million, capturing just over 30
per cent of total investment and down 26.6 per cent on-year. Ho Chi Minh
City was allocated $1.5 billion this year, accounting for 7.51 per cent of
the country’s total. However, the pandemic dropped disbursement there in July
by 67.5 per cent on-year, equivalent to 3.2 per cent of the city’s yearly
plan. An expert
from Bao Viet Securities JSC said that the disbursement of public investment
is often on a sharp increasing trend from the end of the second quarter in
recent years. Moreover, it is also one of the most important measures to
recover the economy after the crisis. “So it will sharply soar in the last
months of the year,” said the expert. In late
June, the government issued Resolution No.63/NQ-CP on the major tasks to accelerate
economic growth, speed up public funding, and promote sustainable exports in
the closing months of 2021 and early months of 2022. The disbursement rate of
public investment is expected to be at least 60 per cent of the plan by the
end of the third quarter and 95-100 per cent for the full year. GSO
director-general Nguyen Thi Huong said, “The realised investment demonstrated
the effectiveness of solutions to speed up disbursement of public funding,
the government’s policies to support enterprises as well as measures to
receive the foreign direct investment inflow was triggering a global
production shift. However, the current outbreak of the pandemic may hit
performance significantly.” In some
areas not as affected by the pandemic, public investment projects are being
boosted to accomplish the full plan. The Ministry of Transport asked to
urgently complete the dossiers of provincial approvals by December at the
latest, and investors must ensure disbursement of at least 90 per cent of the
plan until the end of the year as well as finalise all ventures with capital
sources from 2020. The Ministry of Construction also requested to accelerate
implementation and disbursement of the 2021 plan, with the goal of 100 per
cent allocated capital. To achieve
the goals, the government asked relevant ministries and localities to enhance
the discipline and accountability of the leaders. Besides that, the plan for
different projects must be reviewed to ensure the implementation progress and
ensure that funding goes to key and feasible initiatives. In the first
seven of the year, the trade deficit was at $2.41 billion, which will
challenge the economic growth for the remaining months of 2021 and the year
as a whole. Consumption is also being hit by complex fluctuations and mass
infection across numerous provinces and cities. Thereby, until a large number
of people in the country are vaccinated against COVID-19, public investment
will be the driving force for economic growth, especially as other driving
forces remain weak, according to the latest monthly report from Agribank
Securities JSC. The GSO
calculates that if public investment disbursement increases by 1 per cent,
GDP will rise by 0.058 per cent. In the period 2021-2025, if VND1 in
state-budget investment is disbursed, it can help mobilise VND1.61 in
non-state funding, higher than in the previous term at VND1.42. In the
mid-term of 2021-2025, total projects developing is estimated at 5,000 with
average investment of $9.13 million each, 2.4-fold over the previous period.
Meanwhile, the public investment disbursement plan for the term is $125
billion, 40 per cent higher than the realised capital across the 2016-2020
period. Vietnam’s investment shifting could boost economic resilience Phyllis
Papadavid, Head of Research and Advisory at Asia House, a consulting
organisation based in London, the United Kingdom, in her research, pointed
out that Vietnam should promote investment to revive its economy and
strengthen its ability to respond to new risks despite its success in dealing
with a crisis caused by the COVID-19 pandemic. According to
Papadavid - an expert in economics and financial strategy, Vietnam has been
an economic success story and has shown resilience during past crises,
including the current COVID-19 pandemic. The
economist cited data from the World Bank that the value of trade exchange
(including goods and services) of Vietnam with foreign countries was
equivalent to 209% of its gross domestic product (GDP) last year - second
only to Singapore in the region. This reflected the openness and deep
international integration of the Vietnamese economy. Trade
liberalisation has played an important role in Vietnam's success. Vietnam
joined the World Trade Organisation (WTO) in 2007 and signed free trade
agreements with countries of the Association of Southeast Asian Nations
(ASEAN), the US, and the UK. Last year, Vietnam also signed the Regional
Comprehensive Economic Partnership (RCEP) - the world's largest free trade
agreement. According to
the expert, the openness of the economy has made Vietnam resilient during the
COVID-19 pandemic. Despite production disruptions from the temporary closure
of some factories due to the impact of the COVID-19 pandemic, Vietnam is one
of the few countries with positive economic growth last year, showing the
country's ability to withstand and recover economic growth during the crisis. However, she
said, Vietnam also faced many challenges namely the climate change risks, a
decline in foreign direct investment (FDI) and exports due to the COVID-19
pandemic which has disrupted the supply chain. The expert
said that it was necessary for Vietnam to promote new policies to deal with
these challenges. She also highlighted the importance of investments to build
resilience to climate change and economic shocks. According to
Papadavid, given the important role of FDI in the country's economic growth,
Vietnam should promote FDI attraction in response to the impact of climate
change, prioritise investment in the field of agricultural technology,
biotechnology, automation and information technology, which are the
foundation for Vietnam's green economy. To build
resilience, she said it was essential for the country to attract FDI that
promotes the spatial re-patterning of the economy through creating new economic
clusters in non-coastal areas and generating employment opportunities. The expert
believed that the success of reform in the past would serve as a basis for
Vietnam to confidently cope with challenges in the future. Vietnam’s investment shifting could boost economic resilience Phyllis
Papadavid, Head of Research and Advisory at Asia House, a consulting
organisation based in London, the United Kingdom, in her
research, pointed out that Vietnam should promote investment to revive
its economy and strengthen its ability to respond to new risks despite its
success in dealing with a crisis caused by the COVID-19 pandemic. According to
Papadavid - an expert in economics and financial strategy, Vietnam has been
an economic success story and has shown resilience during past crises,
including the current COVID-19 pandemic. The
economist cited data from the World Bank that the value of trade exchange
(including goods and services) of Vietnam with foreign countries was
equivalent to 209 percent of its gross domestic product (GDP) last year -
second only to Singapore in the region. This reflected the openness and deep
international integration of the Vietnamese economy. Trade
liberalisation has played an important role in Vietnam's success. Vietnam
joined the World Trade Organisation (WTO) in 2007 and signed free trade
agreements with countries of the Association of Southeast Asian Nations
(ASEAN), the US, and the UK. Last year, Vietnam also signed the Regional
Comprehensive Economic Partnership (RCEP) - the world's largest free trade
agreement. According to
the expert, the openness of the economy has made Vietnam resilient during the
COVID-19 pandemic. Despite production disruptions from the temporary closure
of some factories due to the impact of the COVID-19 pandemic, Vietnam is one
of the few countries with positive economic growth last year, showing the
country's ability to withstand and recover economic growth during the crisis. However, she
said, Vietnam also faced many challenges namely the climate change risks, a
decline in foreign direct investment (FDI) and exports due to the COVID-19
pandemic which has disrupted the supply chain. The expert
said that it was necessary for Vietnam to promote new policies to deal with
these challenges. She also highlighted the importance of investments to build
resilience to climate change and economic shocks. According to
Papadavid, given the important role of FDI in the country's economic
growth, Vietnam should promote FDI attraction in response
to the impact of climate change, prioritise investment in the field
of agricultural technology, biotechnology, automation and information
technology, which are the foundation for Vietnam's green economy. To build
resilience, she said it was essential for the country to attract FDI that
promotes the spatial re-patterning of the economy through creating new
economic clusters in non-coastal areas and generating employment
opportunities. The expert
believed that the success of reform in the past would serve as a basis for
Vietnam to confidently cope with challenges in the future./. Med-tech groups open up to pandemic opportunities Application
of IT in the healthcare sector is now booming in Vietnam to serve the
pandemic battle, with future prospects of development to further enhance
medical tech businesses on the back of the Industry 4.0 era, and incentive
policies. Nguyen Tan
Duc, director of Tay Ninh Department of Information and Communications, said
that the application of technology is supporting the province, enabling it to
have accurate data and take speedy samples. “The testing
results are available on the National Technology Centre for COVID-19
Prevention and Control. Therefore, people can get the results online, thus
preventing gatherings,” he added. People
install Bluezone on their smartphones and get a health declaration QR code to
receive the testing result on the app. This platform helps healthcare workers
better manage and ease the pressure for them while preventing gatherings and
possible mistakes like late delivery of results. Tay Ninh
piloted the platform in four wards from mid-August and decided to expand to
nine districts, towns, and the city from August 18 after getting positive
feedback. Together with Tay Ninh, this platform is being deployed in
badly-hit southern localities such as Binh Duong, Dong Nai, Dong Thap, Can
Tho, and Vinh Long. Around 26 other localities are preparing to deploy the
platform. The system
is one of three (in conjunction with QR codes and health declarations)
developed by the National Technology Centre for COVID-19 Prevention and
Control, and being used commonly and consistently nationwide, aiming to
increase efficiency. The two others are medical declaration and management of
access to public places by QR code, and the COVID-19 vaccination management. Established
in June, the centre has the involvement of 20 digital technology businesses
nationwide, and thousands of state staff and domestic and international IT
experts. Leading technology brands involved include Bluezone developer Bkav,
CMC, FPT, and Sovico as well as emerging players like Got It, STEAM for
Vietnam, Kompa Group, Filum, and G-Group. In the wake of the importance of
technology as an indispensable tool in the battle, the Ministry of
Information and Communications (MIC) has mobilised many resources to build
technology platforms to support pandemic prevention and control in the country. Along with
the aforementioned nationwide platforms, others are being utilised to support
tracing those who have contact with infected cases, to monitor quarantine,
and to serve leadership and management activities through data analysis. Last
week, a new platform called Giup toi! (Help Me!) was launched to connect
doctors with people in need of remote healthcare consultations while social
distancing measures are in place. It is developed by Got It Vietnam, STEAM
for Vietnam, Kompa Group, and Filum AI. Many others
have been launched like an electronic health book application, a public
portal of vaccination information, a national immunisation support system,
and a telehealth system have been developed as well. Besides this, technology
is enabling about 4,000 health professionals to remotely screen and take care
of infections in Ho Chi Minh City, Binh Duong, and Hanoi. At present, many
resuscitation centres are also being put into operation in Ho Chi Minh City
to provide specific treatment for COVID-19 infections. To enable
locals to better access healthcare during the pandemic, in early August,
Vietnam launched a telehealth platform, connecting over 30 central hospitals
with all more than 1,400 district-level hospitals, including those located in
mountainous and island areas. Big tech companies are venturing further into
this national effort. Viettel and Vietnam Posts and Telecommunications Group
(VNPT) developed the telehealth system for hospitals and health facilities
nationwide. In the IT solutions market, FPT Healthcare, VMED Group, and
Isofth are also big players. Many tech startups and others are also venturing
into the segment. Industry
insiders said that Industry 4.0 is now a driving force for med-tech firms in
Vietnam to venture future, and advanced technologies of Industry 4.0 are now
among the focuses for technology firms. Nguyen Tu Quang, CEO of Bkav,
reaffirmed that AI is proving its strength and advantage in the COVID-19
fight in Vietnam and will be more effective – for example, the application of
camera AI to detect illegal entry to the country, and supervising activities
at quarantine areas. According to
Huy Nguyen, co-founder and CTO of KardiaChain, many regional countries like
Singapore, South Korea, and Malaysia are applying blockchain in the
management of COVID-19 vaccine passports. In addition in Vietnam, blockchain
is being deployed at some hospitals to manage medical records. As the prime
minister defined that technology is among the spearhead pillars in the
national COVID-19 fight, he has asked the Ministry of Science and Technology
(MoST) to work with the MIC along with the ministries of health, and finance
to work on incentive policies to encourage research and development of
technology products for the pandemic issue. Vietnamese farm produce introduced at chili fest in Italy Vietnamese
agricultural products have been introduced at the 10th Chili Pepper Festival,
one of the most awaited culinary fests in a year that is taking place in
Italian central city of Rieti from September 1-5. The event
drew about 150,000 Italian and foreign visitors, with more than 90 booths
introducing 450 varieties of chili peppers from all over the world. Addressing
the opening of the event, Vietnamese Ambassador to Italy Nguyen Thi Bich Hue
said that with tropical weather and diverse ecosystems, Vietnam is rich in
spices, including many very special and popular flavours such as cinnamon,
anise, pepper, cardamom, cashew and chili. She said
that Vietnam always considers farm produce as one of priorities in export
activities. She noted that thank to the EU-Vietnam Free Trade Agreement
(EVFTA) which became effective from August 2020, the import tax rate for
agricultural products has been cut to zero percent from 10 percent in the
past. Vietnam is
one of the leading exporters of a number of spices like cashew and
peppercorn, which account for 80 percent and 90 percent of the world export
volume, respectively, she noted, adding that Vietnamese products are becoming
better in quality thanks to improved technology in all stages from production
to harvesting, processing and packaging. The
ambassador held that the demand for spices is rising in the world, making
them not only export products but also means of spreading cultural and
traditional values. The
Vietnamese booth at the event introduced to visitors Vietnamese chili and
chili products and many other products such as peppercorn, tea and coffee. This is the
third time that Vietnam has joined the festival, which has helped form
partnership among 20 embassies of countries owning this special spice./. Vietnam ready to act as a bridge between Russia and ASEAN:
Minister As an active
member of the Association of Southeast Asia Nations (ASEAN) and a reliable
partner of Russia, Vietnam is ready to serve as a bridge connecting Russia
and the Eurasian Economic Union (EAEU) with ASEAN nations, Vietnamese
Minister of Industry and Trade Nguyen Hong Dien said. The minister
made the remarks via video on September 2 at a dialogue session between
Russia and ASEAN held within the framework of the Eastern Economic Forum
which is currently being held in Vladivostok, Russia. He suggested
that steps be taken to implement the free trade agreement between
ASEAN and the EAEU which serves as a basis for boosting cooperation between
ASEAN and Russia in particular and inter-regional collaboration between ASEAN
and the EAEU in general. After nearly
55 years of establishment and development, ASEAN is increasingly asserting
itself as one of the most successful regional cooperation organisations and
plays an increasingly important role in regional and international relations,
Dien said. The minister
said that at the special ASEAN-Russia Foreign Ministers' Meeting held on
the occasion of the 30th anniversary of the establishment of ASEAN-Russia
relations in July, the countries agreed on the necessity to create a new
impetus in the relationship and further strengthening the strategic
partnership. Vietnam and
other ASEAN countries had pledged to work closely with Russia to promote
trade and investment, maintain regional supply chains, intensify cooperation
between the EAEU and ASEAN, and make contributions to promote regional trade
and linkages, he said. Ivan
Polyakov, Chairman of the Russia-ASEAN Business Council Ivan Polyakov,
who chaired the dialogue, said ASEAN is a region with strong economic
development and still has great development potential. The
President of the Chamber of Commerce and Industry of the Russian Federation,
Sergey Katyrin said Russia has a lot of mechanisms and tools to cooperate
with ASEAN. Despite
the COVID-19 pandemic, Russia-ASEAN trade turnover increased by 20
percent in the first six months of this year, he said, adding that with this
growth rate, bilateral trade turnover is expected to return to pre-pandemic
levels by the end of this year. He also
noted the cooperation in developing a green economy in the context of more
natural disasters would occur in the world due to the impact of climate
change. At the
dialogue, speaker Do Quoc Viet - a member of the Vietnam Entrepreneurs
Association in Russia - said that transport infrastructure and logistics
activities always play an important role in economic cooperation and
development between the two countries. He cited a
lack of containers and congestion at seaports as reasons for an increase in
transportation fees for the route from Vietnam to Vladivostok. It has
increased from 1,000 USD per container in October last year to 10,000 USD.
The shipping time has also risen, sometimes up to 2-3 months. Viet suggested
that Russia build a larger port which is corresponding with the transport
capacity from ports in Southeast Asia to solve the problem. The most
important issue on the agenda between Russia and ASEAN as well as the between
the EAEU and ASEAN is to fully tap the potential of the two sides, Ivan
Polyakov, the Chairman of the Russia-ASEAN Business Council, told Vietnam
News Agency correspondents in Moscow after the dialogue. Polyakov
said he hoped that Vietnam and other ASEAN member countries are increasingly
interested in strengthening cooperation with Russia in the widest
range, not only in business, trade, or investment but also in culture and
tourism and mutual understanding./. Ventilator makers ramp up affordable development The
continuing task of trying to shut down COVID-19 outbreaks and save lives has
brought to the forefront the critical need for ventilators to provide
treatment for patients. In its
ventilator manufacturing facility in Ireland, Medtronic has increased the
number of employees dedicated to manufacturing – including transferring staff
from other Medtronic sites to support ramp up activities. Medtronic has also
introduced new shift patterns to bring the plant to 24/7 operation. In an
open-licence initiative, Medtronic has published design specifications for
its PB560 ventilator publicly, providing manufacturers around the world the
ability to rapidly accelerate production. The design specifications have thus
far been downloaded over 225,000 times. “We are
committed to getting more ventilators into the market and to the right
locations worldwide, to help the doctors and patients battling COVID-19,
including here in Vietnam,” said Verhulst. Meanwhile,
Tran Ngoc Phuc, the Vietnamese founder of medical equipment maker Metran Co.,
has teamed up with Vietnamese partners to transfer technology to produce
ventilators here. Metran Vietnam Co., Ltd, a subsidiary of Metran, is
operating a factory in Vietnam-Singapore Industrial Park II in the southern
province of Binh Duong to make artificial ventilators. According to
Phuc, the company has developed a slimmed-down ventilator that is more
affordable than conventional models. He hoped that producing simple and
low-cost devices in large quantities will help save countless lives. Since the
outbreak of the pandemic last year, Van Thinh Phat Holding Group and Van Lang
University have signed a contract with Metran to provide finance for
manufacturing 2,000 ventilators. As a result, Metran ventilators have been
mass-produced to save the lives of many patients. Meanwhile,
Vingroup has jumped on the bandwagon by producing the Vsmart VFS-510 invasive
ventilator. Specifically, Vingroup has flexibly altered its business and
production strategies to prioritise ventilator manufacturing from March 2020,
leveraging inherent industrial and technological strengths as well as
advanced production lines from its subsidiaries and research institutes. Vsmart
ventilators have been put into mass production and have been approved by the
Vietnamese Ministry of Health as meeting all criteria for quality, safety,
and operability. Nguyen Tu
Quang, CEO of local technology corporation BKAV, also announced that the
company has successfully produced high-flow nasal oxygen therapy devices for
COVID-19 treatment. It took BKAV nearly a year to research and develop both
the simple and advanced versions of the devices. “More people have contacted
the Delta variant in Vietnam. Thus, we have taken quick action to ensure the
supply of ventilators,” he said. Hua Phu
Doan, vice president and secretary-general of the Ho Chi Minh City Medical
Equipment Association told VIR, “Ho Chi Minh City has developed more field
hospitals amidst the spike in coronavirus patients. Each hospital has about
500 beds equipped with ventilators. As of present, companies have supplied
ventilators in a timely manner to support the city and neighbouring provinces
like Binh Duong and Dong Nai in developing field hospitals.” Doan added
that the majority of ventilators are imported. “We hope that custom procedures
will be relaxed to facilitate the import of ventilators into Vietnam. This
will help treat critically ill patients and help them recover faster,” he
added. Ventilators
are vital medical equipment in COVID-19 treatment so a ventilator
coordination group was established on August 2 to facilitate treatment. The
group will review and keep track of the number and types of ventilators
available at hospitals nationwide as well as the hospitals’ ventilator
demands. It is also engaged in distribution of the ventilators and nasal
oxygen devices for COVID-19 patients as well as training medical staff on
taking care of the machines. Likewise,
Medtronic has been hosting virtual webinar series led by medical experts on
mechanical ventilators. The series has attracted nearly 10,000 frontline
doctors in Vietnam to participate, learn, and share their experiences and
best practices. Medtronic has also hosted dozens of virtual physician forums
and medical education programmes to help physicians of various specialities
navigate the challenges of the pandemic. “It is
important to recognise that Vietnam will continue to grow and, in fact, it is
one of the fastest-growing markets for Medtronic in Asia-Pacific. We are
committed to serving our partners and patients here,” Verhulst said. Online trade promotion – key to overcome COVID-19 crisis Hundreds of
online trade promotion events have been organised effectively, helping settle
stagnant situation in the field and overcome difficulties brought about by
the COVID-19, which has broke out in the global scale, disrupting supply
chains and affecting export activities. In the
current context, online trade promotion is considered the key to
help businesses overcome the COVID-19 crisis and complete the
ecosystem of trade promotion using digital technology. According to
Vu Ba Phu, Director of the Trade Promotion Agency (Vietrade) under the
Ministry of Industry and Trade, amid the global COVID-19 pandemic, Vietnam
has been among first countries to accelerate trade promotion on digital platforms
as well as online trade exchange activities in an effective manner. The efforts
have assisted businesses to considerably remove obstacles in markets because
traditional trade promotion activities are unable to be organised amid
COVID-10, he said. Phu held
that speeding up digital transformation in trade promotion, along with the
combination of direct and online activities has helped Vietnamese firms
connect both domestic and foreign customers in a safe manner, thus ensuring
businesses’ operations and contributing to increasing import-export
activities of the country as well as the growth of the industry and trade
sector in particular. Right from
the beginning of the COVID-19 outbreak, the Ministry of Industry and Trade
has promptly applied IT applications and social networks to set up regular
connection channels among domestic exporters, trade associations, trade
promotion agencies, Vietnamese trade offices and representative offices
abroad, and foreign importers and partners. Thanks to
the regular and continuous information connectivity, a huge amount of
information on import-export goods from domestic firms has been provided to
foreign partners. The Vietrade
has become the pioneer in applying online and hybrid trade promotion models
in Vietnam. The agency has shared its experience to other agencies and
businesses across the country. Hundreds of
online trade promotion events have been held, generating certain outcomes.
This has proved that the renovated method is suitable to the current real
situation amid complicated developments of the pandemic, and can replace
traditional trade promotion method, helping Vietnam catch up with the global
economic trend, according to Phu. The Vietrade
director underlined that online and hybrid trade promotion models are an
optimal solution enabling businesses to approach markets, and a key for them
to overcome the “COVID storm”. The activities will become an indispensable
part of the trade promotion ecosystem using new technology, which will be a
great help for enterprises, he added./.  Talks held to find foothold for Vietnamese goods in Russia Despite
Russia opening its doors for goods from Vietnam, a lack of information and
transportation costs have caused local firms to face challenges in accessing
the potential market. During the
event, Vietnamese businesses introduced their potential products and
expressed their wishes to strengthen co-operation and investment alongside
Russian partners in numerous fields such as agricultural production, food
processing, beverage, household appliances, and seafood. They also
hoped to learn more and access information regarding trends of consumption
within the Russian market. Regina
Budarina, vice president of the Vietnam-Russia Friendship Association, said
that numerous Vietnamese products including farm produce, food, and beverages
have the chance and the potential to enter the Eastern European nation. Recent times
has seen some items even strengthen their position, proving these products
are of high quality and are particularly favoured by Russian consumers,
thereby attracting greater interest from wholesalers and retailers. In addition,
some of the most popular items among Russian people like fresh fruits,
vegetables, coffee, and nuts, can be viewed as Vietnam’s strong points.
However, the majority of supermarket shelves in the market lack Vietnamese
brands. To penetrate
this market, Budarina suggested that Vietnamese exporters should promote
market research regardless of the fact that their initial investment costs
may be high. Vietnamese
enterprises should therefore organise seminars and exhibitions aimed at
bringing Vietnamese brands closer to the Russian market, said Budarina. On the other
hand, as a way of reducing transportation costs, local enterprises must also
consider transporting goods by rail through China, and additional
Vietnam-Russia trade offices need to be established to support small and
medium enterprises. The Vietnam
Trade Office in Russia also noted that to clear a path into Russian
retail chains, apart from high-quality and eye-catching products, local
enterprises need to stock up goods and supply enough items to these retail stores. Given the
complicated developments of the COVID-19 pandemic, the office will continue
to promote trade activities and connect Russian and Vietnamese businesses. A number of
seminars will be held with the aim of creating greater opportunities for Vietnamese
goods to find a foothold within the Russian market. Vietnam’s investment shifting could boost economic resilience According to
Phyllis Papadavid, Head of Research and Advisory at Asia House, a consulting
organisation based in London, the United Kingdom, Vietnam has been an
economic success story and has shown resilience during past crises, including
the current COVID-19 pandemic. The
economist cited data from the World Bank that the value of trade exchange
(including goods and services) of Vietnam with foreign countries was
equivalent to 209% of its gross domestic product (GDP) last year -
second only to Singapore in the region. This reflected the openness and deep
international integration of the Vietnamese economy. Trade
liberalisation has played an important role in Vietnam's success. Vietnam
joined the World Trade Organisation (WTO) in 2007 and signed free trade
agreements with countries of the Association of Southeast Asian Nations
(ASEAN), the US, and the UK. Last year, Vietnam also signed the Regional
Comprehensive Economic Partnership (RCEP) - the world's largest free trade
agreement. According to
the expert, the openness of the economy has made Vietnam resilient during the
COVID-19 pandemic. Despite production disruptions from the temporary closure
of some factories due to the impact of the COVID-19 pandemic, Vietnam is one
of the few countries with positive economic growth last year, showing the
country's ability to withstand and recover economic growth during the crisis. However, she
said, Vietnam also faced many challenges namely the climate change risks, a decline
in foreign direct investment (FDI) and exports due to the COVID-19
pandemic which has disrupted the supply chain. The expert
said that it was necessary for Vietnam to promote new policies to
deal with these challenges. She also highlighted the importance of
investments to build resilience to climate change and economic shocks. According to
Papadavid, given the important role of FDI in the country's economic growth,
Vietnam should promote FDI attraction in response to the impact of
climate change, prioritise investment in the field of agricultural
technology, biotechnology, automation and information technology, which are
the foundation for Vietnam's green economy. To build
resilience, she said it was essential for the country to attract FDI that
promotes the spatial re-patterning of the economy through creating new
economic clusters in non-coastal areas and generating employment
opportunities. The expert
believed that the success of reform in the past would serve as a basis for
Vietnam to confidently cope with challenges in the future. Vietnam moves to accelerate administrative reform in 2021-2030 Vietnamese
Deputy Prime Minister Pham Binh Minh on September 2 signed Directive
No.23/CT-TTg on boosting the Master Programme on State Administration Reform
for 2021-2030 to meet future national development needs in the digital age
and increasingly growing international integration. The
administrative reform has produced positive results over the past years.
However, the work is frequently sluggish and ineffective, falling short of
national development requirements in the new era. Accordingly,
the directive tasked ministries, agencies, and cities and provinces to
further boost administrative reform to better serve people and businesses. Ministers,
heads of ministerial-level agencies, government agencies, and chairmen of
provincial and municipal People’s Committees directly under central
government must direct the implementation of the master programme on
administrative reform and take responsibility for results. They were
also directed to further simplify business conditions, accelerate the
completion of administrative settlements, and ensure healthy competition in
the recruitment of state personnel. As of last
November, more than 1,000 administrative procedures have been axed or
simplified through administrative reforms. As many as 3,893 of 6,191 business
conditions and 6,776 of 9,926 goods categories subject to specialised
inspection have been cut. These reductions have saved about 18 million
working days per year or over VND6.3 trillion ($273.9 million) a year for the
society, people, and businesses. Ports see increase in goods handling despite COVID Thanks to
the adoption of drastic COVID-19 prevention measures at ports, the volume of
goods that passed through ports in the first eight months of the year
increased by 18 per cent year-on-year to 16.8 million TEUs, the Viet Nam
Maritime Administration said. They
comprised exports of 5.4 million TEUs, up 16 per cent, and imports of 5.5
million TEUs. With 3.2
million TEU, the Cai Mep - Thi Vai Port Cluster in Ba Ria-Vung Tau Province
accounted two thirds of the imports and exports in the south and 100 per cent
of shipments from and to the US. Amid the
COVID-19 outbreak in many southern provinces and cities, port authorities
have been adopting many preventive measures like keeping its employees on
site and testing them all every three days. Nguyen Xuan
Ky, general director of the Tan Cang - Cai Mep International Terminal Company
Limited, said thanks to the strict implementation of prevention and control
measures, some COVID cases were detected in time and immediately isolated. But after
more than two months the model has also revealed certain limitations, he
said. The cost for
the "three on-site" model and the periodic COVID-19 test fee for
more than 350 company employees, up to more than VND1 billion ($44,000) a
week, are causing many difficulties for businesses, Ky said. Keeping the
workers at the port and not allowing them to go home for a long time also
adversely affects their psyche, directly affecting productivity and safety,
he added. His company
has called on the province People's Committee to allow the adoption of other
solutions such as allowing local employees living in areas with little or no
COVID cases to go home. Controversies arise as realtors feel left out amid health crisis The economic
downturn has affected almost all industries, including real estate. However,
the State Bank of Vietnam and other financial institutions are still keeping
a tight rein on this capital-intensive sector. Major banks
have continued to reduce lending interest rates and added preferential
interest rate packages to support people and businesses feeling the brunt of
the pandemic. The local government has rolled out tax incentives in
preferential schemes to enhance competitiveness for local producers. However, the
relief measures are not applied to securities loans and real estate business
loans, as they are of “a risky nature”, according to the State Bank of
Vietnam (SBV). Nguyen
Huong, CEO of Dai Phuc Land, said that the prolonged pandemic has directly
affected real estate businesses, and caused a severe decrease in revenues and
profits, leading to the inability to ensure the payment of due date loans. “Banks have
simultaneously rolled out a series of preferential interest rate packages to
support affected businesses and individuals. However, the application of
preferential interest rate policy excluding loans to securities and real
estate is not fair,” Huong said. Real estate
loans accounted for a large proportion of the credit structure of banks and
also brought significant profits for the banks. “Real estate
is also a key sector contributing to economic growth, affecting more than 200
related industries. Therefore, there is no reason why real estate loans are
not on the list of those entitled to the newly-announced interest rate
support policy,” she stated. “Banks should have solutions to temporarily
freeze, reschedule, and lower interest rates in the short term for current
loan packages, especially for developers who are currently in their project
development.” On the same
boat, Nguyen Hoang, director of Research and Development at DKRA Vietnam,
said that applying the preferential interest rate policy excluding loans to
securities and real estate is creating unfairness for the real estate market. According to
DKRA Vietnam, around 70 per cent of real estate brokerages are encountering
obstacles. Many brokers find it hard to maintain their current jobs. To
survive the pandemic, many real estate brokerage businesses had to cut staff,
reduce salaries, and many even had to halt operations. Moreover, 50
per cent of real estate brokerages surveyed by DKRA have reported revenues
decreasing by nearly 90 per cent compared to pre-pandemic levels. Only 10 per
cent of surveyed real estate brokerages reported stable revenues, consisting
of mostly large-scale companies. According to
Hoang, if there is no support from extension, debt reduction, or loan
interest, the real estate sector will become stuck in the mud. “Besides
interest rates reduction, real estate businesses need other tax assistances
such as corporate income tax and personal income tax, to name two,” he said. David
Jackson, general director of real estate firm Colliers Vietnam, told VIR that
with the current situation, lending is also not very effective due to low
transaction volume. “Buyers have limited travel to carry out procedures such
as notarisation, signing papers, and viewing land. Besides that, the sky-high
prices of raw materials and the suspension of construction works also make it
difficult to complete projects. In the market at this time, supply and demand
both decrease,” said Jackson. “Prime
Minister Pham Minh Chinh also asked the SBV to manage capital flows into real
estate, ensuring to serve the needs of the people. The SBV will strictly
control credit for potential risk sectors such as real estate, stock,
build-operate-transfer (BOT) projects, and so on, and strengthen risk
management for life loans and consumer credit,” he explained. Earlier in
August, the Ho Chi Minh City Real Estate Association had proposed some
suggestions to the SBV and commercial banks in a bid to support businesses
and homebuyers. “The
association suggested that commercial banks consider reducing loan interest
by about 2 per cent per year on existing and new loans to support the
business community,” said chairman of the association Le Hoang Chau. During this
market turbulence, many commercial banks have provided a number of relief
measures and lowered their interest rates to help customers ride out the
bumps. BIDV,
Vietcombank, MB, Viet Capital Bank, SeABank, Shinhan Bank, and several more
have promptly implemented interest exemptions, reductions, and debt
extensions for customers affected by the pandemic. MB has slashed
its interest rates by 0.5-1.5 per cent, depending on specific customer groups
and the extent to which customers are affected by the pandemic. Pham Nhu
Anh, member of the Board of Management and head of the Corporate and
Investment Banking Division at MB told VIR, “We roughly estimate that in the
last five months of this year, we will reduce interest rates by 0.5-1.5 per
cent, which is around $50 million for customers affected by the health
crisis. The preferential loan packages are applied for both existing and new
groups of customers, particularly for prioritised ones.” HDBank and
BIDV also announced to reduce interest rates for nearly 18,000 customers with
an average reduction of 1 per cent for three customer groups affected by the
outbreak, particularly for manufacturing and agricultural sectors. Viet Capital
Bank is one of several domestic lenders providing preferential interest rates
programmes for construction companies facing financial hardship due to
increasing construction material prices. “Viet
Capital Bank sets aside a support package of up to $34.8 million, the loan
interest rate from 7.5 per cent per year (lower than average rates), and
reducing guarantee fees by 55 per cent,” a representative from Viet Capital
Bank said. According to
VietinBank, the vulnerable industries which are hit hard by the pandemic and
should be given priority are textiles and garments, footwear,
pharmaceuticals, medical supplies, rice, agricultural businesses, essential
consumer goods, retailers, and aquatic products. The bank did not mention
property as a part of the prioritised group. Likewise,
Vietcombank noted its interest rate reduction will not be applied to
securities loans, real estate business loans, or mortgage loans. In April,
the SBV issued Official Dispatch No.3029/NHNN-TTGSNH to credit institutions
and foreign bank branches, instructing them to implement strict control over
the quality of credit in sectors with potential risks such as real estate and
securities. In particular, high-risk credit areas include investments in
corporate bonds, securities credit, real estate, BOT projects, and consumer
loans. Nathan Vu,
founder of local asset management Art Investor, says real estate is a
capital-intensive industry, while recent statistics compiled by the Vietnam
Real Estate Association pointed out that it makes up for around 7.62 per cent
of domestic GDP. “The
manufacturing industry plays the stellar role in the country’s advancement
and in GDP growth, followed by agro-forestry-fisheries. If real estate, while
accounting for a smaller proportion of GDP, enjoys the larger benefits of
financial support packages, this will spur financial fragility and
potentially create an asset bubble,” Vu said. Banks are
now well-positioned to manage risks, particularly those associated with the
real estate industry. “They might
be afraid of a downturn similar to that experienced in 2008, and they are now
bracing for repeated worrying signs. So it is reasonable for banks to adjust
their policy framework and be extra cautious of a sharp increase in real
estate’s leverage,” he added. Nguyen Duc
Hoang, senior analyst at Bao Viet Securities said, “Credit balance for real
estate loans is already high. Within a limited resource, if banks focus on
property, many other fragile sectors have to shut their doors, and this will
not create much value in terms of sustainable development.” “It’s hard
to discriminate between property’s legitimate consumers and speculators. So,
the SBV is completely fair and square for strict control over property-related
lending activities at the moment, and much-needed capital should be
channelled into the most vulnerable sectors instead,” Hoang said. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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