VIETNAM BUSINESS NEWS MAY 15  14:41  Mekong Delta hoped to see development breakthroughs The Politburo recently issued Resolution No. 13/NQ-TW on orientations for socio-economic development and defence - security safeguarding in the Mekong Delta until 2030, with a vision to 2045, aiming to make development breakthroughs across the region. The Mekong Delta comprises Can Tho city and the provinces of An Giang, Dong Thap, Long An, Tien Giang, Vinh Long, Ben Tre, Tra Vinh, Soc Trang, Hau Giang, Bac Liêu, Ca Mau and Kien Giang. It is one of the largest and most fertile deltas in Southeast Asia and the world. The Delta is next to the southeastern region, including Ho Chi Minh City - the southern economic hub of Vietnam, and adjacent to Cambodia to the north, the Gulf of Thailand to the southwest, and the East Sea to the southeast. The region is close to the East - West shipping route and also traversed by many important international air routes that connect South Asia and East Asia, along with Australia and archipelagos in the Pacific Ocean. It boasts a 700km coast, accounting for 23 percent of the country’s total coast, as well as about 360,000 sq.km. of the sea, continental shelf, and exclusive economic zone. It is also home to the Tho Chu and Nam Du archipelagoes and Phu Quoc Island, which are critically important to the control of shipping routes through the East Sea to the Pacific Ocean and the Indian Ocean. The Mekong Delta is the biggest food, fishery and fruit production hub in Vietnam, and has four Ramsar sites (wetlands of international importance), while holding huge potential for the oil and gas and renewable energy sectors. Over the years, the Government has issued many policies to boost socio-economic development in the Mekong Delta. Thanks to those policies and their own efforts, the 13 localities have witnessed strong improvements and currently contribute to about 50 percent of the total rice output, 95 percent of the rice export volume, 65 percent of farmed fishery output, 60 percent of fish export volume, and 70 percent of fruit production in Vietnam. Besides, transport infrastructure has also gained a facelift with a national highway network stretching nearly 2,690km, up 52 percent from 2002. Alliance of retailers seeks to change consumer behaviour An alliance of retailers who have pledged to reduce single-use plastic bags (the Plastic Alliance) has launched campaigns to encourage people to use environmental-friendly products. The Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE) under the Ministry of Natural Resources and Environment (MoNRE), in coordination with Hanoi's Department of Industry and Trade (DoIT), called on enterprises to sign up to the commitment related to plastic waste reduction. It is part of the “Rethinking Plastics - Circular Economy Solutions to Marine Litter in Vietnam” project funded by the European Union (EU) and the German Government, and carried out by the French Agency for International Technical Cooperation (Expertise France). A survey by the institute showed that up to 104,000 single-use plastic bags are used at supermarkets each day, equivalent to 38 million bags a year. Nguyen Trung Thang, Deputy Director of ISPONRE, said the Plastic Alliance gathers 16 retailers and has stepped up communication efforts aimed at encouraging and creating favourable conditions for residents to replace non-biodegradable plastic bags with eco-friendly bags. Fanny Quertamp, senior advisor of Expertise France in Vietnam, said concerns were raised at the beginning of the project because the perception was it would be difficult to change people’ behaviour, especially when plastic bags are free and some supermarkets are afraid of losing customers. However, it proved to be effective thanks to the participation of DoIT and active support from the alliance members, she said. According to Kim Thi Thuy Ngoc, head of the Science and International Cooperation Department under ISPONRE, communication activities play an important role in changing people's behaviour in shifting away from the use of single-use and non-biodegradable plastics to eco-friendly alternatives. Government policies relating to the production, import and use of nylon bags also contribute to reducing consumption of these products. She cited a project on strengthening the management of plastic waste in Vietnam as an example. The project, which was started by MoNRE and has been approved by the Prime Minister, targets the use of 100 percent environmentally-friendly plastic bags and packaging at shopping malls and supermarkets in the country by 2025. Other goals include collecting, reusing, recycling and treating 85 percent of plastic waste. It intends to reduce the volume of plastic waste dumped into oceans by half; and completely cut plastic waste from tourism complexes, hotels and other lodging facilities. Ben Tre expands farming of key aquaculture species The Cửu Long (Mekong) Delta province of Bến Tre is expanding farming of some key fisheries products for both domestic consumption and exports. They include black tiger shrimps, white-legged shrimps, clams, river giant prawns, and tra fish.   This year, the province aims to develop at least 500ha of hi-tech farms breeding brackish-water shrimp, taking the total to 2,500ha, he said. The People’s Committee has unveiled a plan for having 4,000ha of hi-tech shrimp farms by 2025, 2,500ha in Bình Đại, 1,500ha in Thạnh Phú and 500ha in Ba Tri. Some companies have entered hi-tech shrimp farming in the three coastal districts while the province is investing in infrastructure for hi-tech farming there. Authorities are also reviewing aquaculture zoning, developing hi-tech aquaculture areas and expanding efficient breeding models like two – stage shrimp farming. The model requires multiple ponds for breeding shrimp and treating water. Shrimp fry are first bred in a nursery pond for a few weeks before being transferred to the main pond for intensive breeding. The ponds are equipped with oxygenation facilities, anti-sunlight nets and plastic sheets for covering their beds. The model offers high yields of 40-50 tonnes per hectare per crop. The province is soliciting investment in processing, especially of marine shrimp. It has 11 plants that process seafood for exports, mostly tra fish and clam, with a total capacity of 72,000 tonnes a year. The province has 47,550ha under aquaculture with an expected output this year of 320,000 tonnes, according to the department. With a coastline of 65 kilometres, it is also expected to catch 236,500 tonnes of seafood.  Vingroup offers incentive for semiconductor manufacturers Vingroup is willing to offer incentives for semiconductor manufacturers who invest in Vietnam to produce chips for vehicles and help them rent land and hire facilities. Pham Nhat Vuong, chairman of Vingroup, said at the annual shareholders' meeting organised on May 11 that “It is a golden time for VinFast to expand its share in the domestic market and abroad, however, it is still challenging to source semiconductors.” The group has established a list of six groups of parts and materials for battery cell production and studied solutions to prepare long-term reserves of these products. The group’s main focus at present is looking for suppliers of raw materials to order a large volume for the long term. At present, its electric vehicles' localisation ratio is approximately 60 per cent and the group expects to increase this figure to 80 per cent. Vingroup is proposing a $400 million IP project in the central province of Ha Tinh's Vung Ang Economic Zone (EZ). Construction covers an area of just over 1,000 hectares with a 70-year lifespan and is set to complete next year. By the third and fourth quarters of this year, it will begin multiple projects in a 2,000ha complex in the zone, including the $11 billion VinFast auto factory and facilities to make auto parts and hi-tech audio-visual equipment. US partners interested in Vietnam’s energy development orientations Minister of Industry and Trade Nguyen Hong Dien on May 11 (local time) accompanied Prime Minister Pham Minh Chinh in many activities in the US, including meetings with US partners operating in the field of energy. US partners are interested in Vietnam's energy development orientations for the next years, especially the Power Development Planning VIII (PDP8) as well as the adjustments and supplements to the legal framework that paves the way for the development of a competitive power market in Vietnam. At a meeting with US Secretary of Commerce Gina Raimondo, PM Chinh highly valued of the remarkable development in economic - trade relations between the two countries in recent years. For her part, Raimondo spoke highly of the economic development vision and plan of the Vietnam, especially the transformation to the digital economy, increasing the use of clean energy, promoting green economy, and diversifying supply chains. In this process, the Ministry of Industry and Trade, as the Chair of the Vietnam-US Trade and Investment Framework Agreement (TIFA) has chaired, coordinated and promoted policy dialogues through the TIFA Council, thus settling many problems in the bilateral relations. On the occasion, PM Chinh and Raimondo witnessed the exchange of cooperation agreements among ministries, sectors and businesses of the two sides in many areas such as energy and climate change response, helping Vietnam realise commitments at COP26. They included the investment licence to AES and PetroVietnam Gas Corporation for the Son My LNG warehouse; the cooperation deal in power generation and transmission and the supply of services to gas-fueled power projects in the period of 2022-2027; and the agreement on investment cooperation to raise the operation efficiency of Nhon Trach 1 Power Plant. At a working session with leaders of Texhong Textile Group from Hong Kong (China), Dien said foreign businesses have made full use of free trade agreements that Vietnam has signed and paid attention to the origin of products. Texhong Textile Group's Chairman Hong Tianzhu thanked Vietnamese authorities for supporting the firm during its operation in Vietnam. He said that over a half of the group’s investment abroad, equivalent to over 1.5 billion USD, was poured in Vietnam, adding that it is employing more than 25,000 labourers. Noting that the majority of materials for the group’s production is imported from the US, he said, expressing his hope to receive more support from the Ministry of Industry and Trade during the settlement of negative information on the origin of imported cotton for fabric production. Dien underlined that the ministry is willing to send letters to relevant agencies of the US, asking them to ensure legitimate interests of the Vietnamese garment and textile sector as well as Vietnamese workers and US consumers during the building and implementation of laws that may affect Vietnamese businesses, thus not creating barriers for Vietnam’s garment and textile exports and allowing enterprises to explain their products’ origin. The same day, Dien joined a meeting with US Secretary of Finance Janet Yellen, attended a talk at the Centre for Strategic and International Studies (CSIS), and participated in meetings with Cambodian PM Hun Sen, Director General of the World Bank Axel Van Trotsenburg and leaders of Asia Group, Blackstone, and GenX/AES. Discounted tours on offer at Hanoi Tourism Festival 2022 The Hanoi Promotion Agency kicked off Hanoi Tourism Festival 2022 on May 13 under the slogan “Hanoi - Come to Love”, in celebration of the ongoing 31st Southeast Asian Games in Vietnam. As one of Hanoi’s most important tourism promotion events this year, the festival features 150 booths divided into two sections: offering discounted tours and introducing Hanoi’s craft villages and culinary delights. In addition to conventional promotion methods, there are also miniature scenes of famous attractions in the capital city as well as a “technological wall” which visitors can touch to be brough to various scenic spots. The festival sees the participation of the Tourism Authority of Thailand and nearly 100 enterprises, with major names such as Vietnam Airlines, Hanoitourist and Vietravel. Besides Hanoi, several other provinces, such as Khanh Hoa, Quang Nam, Thua Thien Hue and Quang Binh, are also taking part in the event to advertise their potentials and tours. The festival will run until May 15. Vietnam’s foreign trade surges 16% in Jan-Apr Vietnam’s foreign trade in the first four months of this year expanded 15.9% year-on-year to US$242.43 billion even though its economy had yet to be at full throttle due to the lingering impact of the Covid pandemic. Data from the General Department of Vietnam Customs showed that in the second half of April alone, the nation’s import-export value picked up 4.4% compared to the first half of the same month, reaching US$33.57 billion. Foreign-invested enterprises (FIEs) contributed some US$168.37 billion to the total value of foreign trade, up 14.9% year-on-year, while the figure of domestic businesses was US$74.06 billion, up 18.1%. This indicates FIEs remained the biggest contributor of the import-export sector. FIEs exported US$89.62 billion worth of goods in January-April, accounting for 73.2% of Vietnam’s total of US$122.48 billion. Vietnam’s e-commerce: driver for economic recovery in post-Covid-19 Omnichannel shopping will still dominate the retail market and businesses need to continue improving their competitiveness to optimize the shopping process. E-commerce is still growing strongly, contributing to post-pandemic economic recovery, local experts said. The market still has a lot of room for development with 71% of Vietnam’s internet users having made at least one online purchase. More than 90% of Vietnamese users will continue to use digital services, and 81% believe online shopping will become an indispensable part of daily life. Some local experts said that it is undeniable that the strong investment foundation during the pandemic has created momentum for businesses to develop e-commerce. At the same time, the field of digital transformation and online business accounted for a more important proportion of the management and operation of Vietnamese enterprises. According to a recent report on the performance of the e-commerce floor, in the first half of 2022, a number of beauty products, women's fashion, and household goods are the most interested and purchased items on the e-commerce floors of Shopee, Lazada, Tiki, and Sendo.  And the price segment of VND200,000 ($8.6)-VND5 million ($216) is where more transactions are made on all e-commerce floors. For high-value products which require long-term advice and warranty, consumers still prefer to shop at physical stores and showrooms. However, e-commerce still has many challenges, with limitations in the ability to control risks related to goods quality, payment methods, setting up flexible shipping routes, and handling customs procedures with optimal operating costs. ASEAN+3 agree to foster regional financial cooperation Ten ASEAN countries and three partners of Japan, China and the Republic of Korea have agreed to strengthen financial cooperation in the region to cope with negative impacts from the Russia-Ukraine conflict and COVID-19 pandemic. At the 25th ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM+ 3), which was convened on Ma y 12via videoconference, participants agreed that ASEAN+3 financial cooperation has a more essential role to play in supporting regional economies to navigate these obstacles. A joint statement released after the event stated that “the ASEAN+ 3 economies have remained steadfast in weathering the challenges posed by the COVID-19 pandemic." It noted that since early 2021, the countries have focused on ramping up the vaccination rates to protect their populations and have adopted more targeted containment measures to minimize the impact on their economies and to support recovery. As a result, the region saw robust growth of around 6 percent in 2021. Looking ahead, given the strong protection afforded by high vaccination rates in the region, the region can look forward to further opening-up and stronger economic recovery this year. The statement noted however, that the sharper-than-expected monetary policy normalisation in some major advanced economies, continuing supply chain disruptions, and rising food and energy prices aggravated by the current Russia-Ukraine conflict may pose downside risks to the outlook for the region’s trade and investment, growth, and inflation. Therefore, ASEAN+3 financial leaders affirmed that “continuing supportive policies are crucial in alleviating the impact of the pandemic and strengthening a sustained economic recovery.” At the same time, they acknowledged the importance of avoiding misallocation of resources and ensuring support for new and growing sectors, pledging that they will calibrate policy measures introduced in response to the pandemic as the economic recovery gains traction, preserve monetary and financial stability and long-term fiscal sustainability, and safeguard against downside risks and negative spillovers. In order to foster regional financial collaboration, they highlighted the importance of further strengthening the Chiang Mai Initiative Multilateralisation (CMIM), the ASEAN+3 Macroeconomic Research Office (AMRO), the Asian Bond Markets Initiative (ABMI), and ASEAN+3 Future Initiatives (AFI). Tourism hit by lack of personnel after reopening Human resource shortages plague the tourism industry even as tourism, transport and other services are resuming, HCM City authorities said. Lack of human resources is a global problem for the tourism industry, and Việt Nam is no exception, Bùi Thị Ngọc Hiếu, deputy director of the city Department of Tourism, said. It has been a longstanding issue in HCM City and was only exacerbated by the COVID-19 pandemic, she told a workshop on May 13. Around 80 per cent of workers were laid off or moved to other industries during two years of pandemic restrictions, creating a huge worker shortage, she said. The city is a leader in training people in tourism specialities, and has 24 universities, 20 colleges and 19 vocational schools, according to Hiếu. More than 12,000 people graduate from them every year, meeting around 60 per cent of demand, she said.   As of mid-April 454 travel operators and 342 hotels remained in business in the city, 1,341 fewer than in 2020, she said. Tourism authorities are stepping up efforts to address the shortage, she said. Nguyễn Quý Phương, head of the Việt Nam National Administration of Tourism’s travel department, said the pandemic affected the economy, and tourism was the worst hit. A large number of workers in the tourism sector sought work elsewhere, worsening the shortages, he said. Travel demand was expected to bounce back sharply as localities were focusing on efforts to stimulate domestic travel, he said. The country fully reopened to international tourists since mid-March, he said. Around 41,000 visitors came to Việt Nam in the first month since reopening, he said. “There are promising signs for tourism recovery and growth this year. “It is vital to invest in human resources in the long run with a focus on digital transformation and Industry 4.0.” Specific solutions needed for a strong recovery At the forum on Vietnam's economic forecasts, growth scenarios, and prospects for some key economic sectors on May 12, Deputy Minister of Planning and Investment Tran Quoc Phuong said that despite complicated movements in the world's economy, the country is still recovering in the first four months and several sectors are seeing some light. GDP growth in the first quarter was estimated at 5 per cent on-year. Inflation was controlled and the consumer price index in the first four months increased by 2.1 per cent. Vietnam's Business Climate Index by EuroCham has risen to 73 percentage points, an increase of 12 points over the last quarter of 2021, which is the highest since the fourth wave of the pandemic, showing that business executives are upbeat as the country opens up. The number of newly-established enterprises in the first four months hit almost 50,000. Analysing the impact of the world's economic movement on Vietnam, economist Can Van Luc pointed out the forecast of two GDP growth scenarios for the coming years. In the first one, the GDP growth of Vietnam will raise by 5.5-6 per cent, while in the negative scenario, it will be 4.5-5 per cent. Which occurs will be dependent on the process of pandemic prevention, socioeconomic recovery and development, and Vietnam's ability to minimise the impact of other global events. In the view of Francois Painchaud, representative of the International Monetary Fund in Vietnam and Laos, Vietnam has successfully maintained fiscal, external, and financial stability. Macroeconomic policies have helped cushion the impact of the pandemic. The programme for recovery and development is timely and well-placed to entrench the recovery. He expects that the national economy will recover strongly with growth of 6 per cent this year and 7.2 per cent in 2023, thanks to the supportive policies. However, he does believe that inflation will rise in the short term. Commenting on Vietnam's inflation, Nguyen Bich Lam, former director-general of the General Statistics Office, said that three factors will put pressure on the economy, including supply chain inflation, increasing prices for materials and fuels, and aggregate demand spikes in the context of supply chain disruptions. Lam said that it is necessary to implement some solutions, feeling that the government should resolve the difficulties in mechanisms, policies, and administrative procedures. Unreasonable regulations should be reviewed and abolished in order to cut input costs, create a fair and open business environment, promote aggregate supply, and reduce inflationary pressure. IFC to support Vietnam's transition to a low-carbon economic growth model The International Finance Corporation (IFC) – a member of the World Bank Group – announced on May 11 that it will support Vietnam to transit to a low-carbon economic growth model. According to an IFC statement, “As Vietnam transitions to a low-carbon green economy and meets its net-zero targets by 2050, the IFC is stepping up its support to promote sustainable finance, spur private sector participation, and reach the country's climate goals to drive sustainable growth.” The latest IFC support comes in the wake of new MoUs with the Ministry of Natural Resources and Environment (MoNRE) and the State Bank of Vietnam to leverage private sector innovation and finance in the country's transition to a green, resilient, and low-carbon economy. The MoUs were exchanged between signatories in Washington DC in the presence of Prime Minister Pham Minh Chinh, who is in town to attend the US-ASEAN Special Summit. As a driving force behind Vietnam's COP26 agenda, the MoNRE will partner with the IFC to create a conducive environment for private sector climate investment. Building on its ongoing support for the ministry to develop green project criteria, the IFC will also help develop and implement a policy and regulatory framework with an initial focus on key areas including green procurement, green taxonomy, and waste management – especially plastic recycling and e-waste. To facilitate green financial flows and align the banking sector with the country's climate goals, over the next five years the IFC will also scale up its support for the national sustainable finance agenda led by the State Bank of Vietnam. Nguyen Thi Hong, Governor of the State Bank of Vietnam stated, "Banks have a big role to support Vietnam's transition to a climate-resilient and low-carbon economy, helping to mobilise and allocate green capital." The IFC, in partnership with the Swiss State Secretariat for Economic Affairs, will further help the central bank strengthen its sustainable finance framework in a range of areas, including ESG risks and climate risk management, while continuing to help commercial banks build capacity in line with global sustainability and governance practices. As one of the most vulnerable countries to climate change and natural disasters and one of the most carbon-intensive economies in Asia, the government of Vietnam aims to decarbonise the economy and achieve carbon-neutral status by 2050. This will require huge investments over the next 30 years with state resources meeting only part of the financial need. Coolmate secures $2 million in Series A funding Coolmate, a Vietnam-based D2C menswear startup, on May 13 secured $2 million in a Series A round led by Access Ventures. Do Ventures, CyberAgent Capital, and DSG Consumer Partners also participated in this round. Founded in early 2019, Coolmate runs the D2C e-commerce business model without relying on traditional stores for marketing and selling, offering consumers high-quality clothing at a reasonable price. The company started with only 2,000 orders per month and now handles up to 10,000 orders per day, with more than half of all purchases coming from repeat customers. With its revenue growth rate, the company is on track to reach $19 million in revenue in 2022. Coolmate's products are minimalistic in design, highly functional, and eco-friendly. Advanced fashion technologies such as Excool (extremely cool), Anti-Smell (anti-odor), CleanDye (dry dye without pollution), and HeiQ Viroblock (anti-virus on fabric) are applied in its production. Coolmate’s e-commerce platform built by a team of seasoned engineers enables the company to develop exclusive features such as smart-size selection, size-fit analysis, and diverse payment methods. Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes