BUSINESS IN BRIEF 19/12
Lanmei Airlines launches two new Vietnam routes

On December 20, Cambodian Lanmei Airlines will launch two new non-stop flights between Phnom Penh and Hanoi as well as Siem Reap and Ho Chi Minh City, scheduled to depart every Tuesday, Wednesday, Friday, and Sunday.

On December 12, the Cambodian airline announced the opening of the single non-stop flight from Phnom Penh to Hanoi with the intention of promoting international business activities.

Additionally, the Siem Reap-Ho Chi Minh City route is expected to be a huge step in the exchange of culture and tourism potential between Cambodia and Vietnam.

On the occasion of opening the new routes, Lanmei Airlines announced a give-away programme for the first two flights departing from Hanoi on December 20 and December 22 as well as for the first five flights of the Siem Reap-Ho Chi Minh City route departing on December 20-27.

Thanks to the three pillars of Phnom Penh, Siem Reap, and Sihanoukville, as well as the current thriving tourism market, Lanmei Airlines has been able to create “on & off board” and “on & off line” distinctive product platforms.

Inspired by the affordable airline model, the Cambodian airline strives to become a new public network airline which meets the leaping demand of air travel within the country as well as constructing an “air-highway” for economic, trade, and cultural exchanges among the six nations of the Greater Mekong. The carrier specifically applies narrow-body aircraft with simple and practical structure to reduce costs and maximize aircraft capacity.

The airline set the target of acquiring an aircraft fleet of 20 Airbus A320 models by the end of 2020, connecting three cities in Cambodia, Phnom Penh (PNH), Siem Reap (REP), Sihanouk Ville (KOS) to overseas destinations within and outside the ASEAN, such as Vietnam (Hanoi-HAN and Ho Chi Minh City-SGN), Thailand (Bangkok-BKK), Myanmar (Yangon-RGN), Singapore (SIN), Malaysia (Kuala Lumpur-KUL), Macau (MFM), Hong Kong (HKG), Taiwan, China, the Republic of Korea (Seoul-ICN), Japan (Tokyo-NRT), and India.

Lanmei Airlines Co., Ltd. is a Phnom Penh-headquartered aviation enterprise established on March 7, 2016. The corporation commenced its maiden flight on September 29, 2017.

Russian products showcased in HCM City

Russian Export Centre and E&N Group on December 14 opened Russian Gastro House in HCM City’s District 1 to help Russian companies introduce their products directly to Vietnamese customers.

Evgeny Volosov of E&N Group said: “Demand for Russian products has increased in Vietnam. Therefore, we established Russian Gastro House to present Russian products to the market.”

The products on display include children’s food, chocolate, bread, meat, fish and meat/fish-based products, sunflower seeds, ice cream made from fresh milk, dairy products, and alcoholic and non-alcoholic beverages, with their quality meeting Russian food safety standards.

Some 100 Russian companies are displaying their products at Russian Gastro House, which is at 86-88 Ham Nghi Street, Volosov said.

Another 200 would come soon, he said.

Talking about the prices, he said the prices of Russian products are more competitive than those of the US and EU and even Thailand and China.

Russian Gastro House is also willing to help Vietnamese export their products to Russia, he added.

Trade between Russia and Vietnam topped 3.2 billion USD in the first 11 months of this year, up 26.7 percent year-on-year. The two countries have set a target of 10 billion USD by 2020.
 
Vietnam attends ASEAN Natural & Organic Show in India

Vietnamese businesses are participating in the ASEAN Natural & Organic Show in India from December 15-17.

The event was held in Kolkta city of the western state of Bengal by the Associated Chambers of Commerce and Industry of India (Assocham) as part of the activities to mark the 45th anniversary of Vietnam-India diplomatic ties and 25th anniversary of ASEAN-India dialogue relations.

Nearly 80 businesses from Vietnam, Singapore, Thailand, Malaysia, the Philippines, Bangladesh, and Russia and close to 200 Indian firms are offering a variety of products such as pharmaceuticals, cosmetics, food supplements, foods, beverages, herbs, decorations, crafts, and natural essential oil.

The Vietnamese firms brought clean coffee, tea and spices and soil fertilising organic products.

The natural and organic market in the Association of Southeast Asian Nations (ASEAN) is evaluated to hold a lot of potential. Its value is forecast to reach over 4.4 billion USD with average growth of 9.5 percent, making up about 6.6 percent of the global organic cosmetics and functional food market by 2020.

Meanwhile, India is the world’s second exporter of functional foods and natural products, after China.

Organic farming – important part of Vietnam’s agriculture, PM says

Organic farming is an important part of Vietnam’s agricultural production, and Vietnam’s agriculture must be successful so that the country’s industrialisation and modernisation reach success, Prime Minister Nguyen Xuan Phuc has said.

He made the remark while addressing a plenary session of an international forum themed “Vietnam Organic Agriculture – Development and Integration” in Hanoi on December 16.

The event was organised by the Ministry of Agriculture and Rural Development, the Vietnam Organic Agriculture Association, and TH Group. It attracted more than 400 Vietnamese and foreign experts, along with representatives of businesses, ministries, sectors and localities.

PM Phuc said the market’s growing demand is a golden chance for the development of organic agriculture in Vietnam. 

He noted the Government will devise necessary institutions, policies, decrees and circulars so as to create conditions for organic agriculture to develop. 

Many products of Vietnam can be produced by organic farming, he said, requesting the formation of clean agriculture for nearly 100 million Vietnamese people and for export.

The practice of organic farming in each locality also demonstrates the responsibility towards the community and future generations, he said.

The Government leader added organic agriculture will satisfy the demand of a high-end segment in the market and help Vietnam better integrate into the world. Therefore, it must be developed in a methodological and scientific manner.

Meanwhile, non-organic agriculture should not be underestimated as with high productivity, it will still keep the role of ensuring national food security, PM Phuc noted.

He called on scientists, farmers, businesses and the whole society to engage in developing organic agriculture for the sake of a clean environment and the health and happiness of each Vietnamese people.

At the forum, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the shift from existing agricultural practices to organic farming with strict standards is very difficult. Thus, it needs joint efforts by the Government, businesses and farmers.

Some speakers said it is necessary to harmonise the interests of farmers and investors so as to consolidate land, which is a condition to boost organic agriculture.

Statistics highlighted at the forum show that organic agriculture is developing rapidly in the world with 51 million hectares and the market potential worth nearly 82 billion USD. Thirty-three of the 63 provinces and cities in Vietnam have developed organic farming models, but their scale is still small, about 76,000 hectares in total.

Vietnam, Czech Republic seek to promote trade, investment

A seminar bolstering trade and investment between Vietnam and the Czech Republic was held in Czech Republic’s capital city of Prague on December 15.

It was jointly held by the Embassy of Vietnam, the Ministry of Industry and Trade, along with the Transport Union of Czech and the Asia Centre. 

In his remarks, Vietnamese Ambassador to the Czech Republic Ho Minh Tuan cited statistics as saying that the two-way trade has increased over the years, hitting 912.5 million USD in 2016. The figure is estimated to reach one billion USD this year.

However, as of November 2017, there were 36 projects of the Czech Republic in Vietnam, with total capital of about 110 million USD while Vietnam had only four investment projects worth five billion USD in the country, the diplomat noted.

Deputy Minister of Industry and Trade of the Czech Republic Jiri Koliba affirmed that Vietnam remains an important economic partner of the country, adding that the Ministry has chosen Vietnam among 12 strategic export markets of the Czech Republic by 2020. 

At the event, Vietnamese participants introduced the country’s business environment and shared information on Vietnam’s incentives and priorities in trade-investment for foreign investors.

HCM City seeks WB’s assistance in many aspects

A high-ranking delegation of Ho Chi Minh City had a working session with leaders of the World Bank (WB) in Washington DC, the US, on December 15, seeking for the institution’s support in many fields.

Secretary of the Ho Chi Minh Party Committee Nguyen Thien Nhan appreciated the WB’s assistance to his city and Vietnam over the past years.

With a population of more than 10 million, HCM City needs a new economic model to meet its development demand. It plans to build a centre for research, simulation and forecasting of economic development strategies which is a rather new term in Vietnam but will play an important role in making plans for the city in the future.

He expressed his hope that the WB will consider and suggest ideas for the centre construction and introduce experienced agencies and organisations which HCM City can cooperate with.

He noted that his city also wants the WB to help assess and organise workshops on public spending, build the city’s budget plans from 2019, and evaluate public feedback on the quality of administrations’ services.

The HCM City delegation’s visit also aims to learn from the US’s experience in startup promotion, Nhan noted, adding that they had had a working session on this topic with the MIT Sloan School of Management.

The official also asked for the WB’s assistance for Vietnam to solve issues facing the Mekong Delta region, which has been suffering from serious subsidence, erosion, and saltwater intrusion.

Victoria Kwakwa, WB Regional Vice President for East Asia and Pacific, said the bank can help to promote the city’s development.

It can send working groups to HCM City to discuss and assist the city in devising concrete solutions relevant to the assessment of public spending effectiveness and public feedback on local administrations’ services, she said.

That HCM City is seeking ways to promote startups, thus creating more jobs, is a right direction, she added.

At the working session, WB experts and HCM City officials also looked into such issues as urban planning, smart city building, and innovation. 

The experts shared the view that it is necessary to build HCM City into a smart city, and with its capacity and experience, the WB can connect HCM City with many smart cities around the world so that the city can learn from their experience.

Also on December 15, the HCM City officials had a working session with the International Finance Corporation (IFC).

At the event, the municipal People’s Committee and the IFC signed a memorandum of understanding on cooperation. This document aims to set up feasible steps that can lead to the two sides’ cooperation in upgrading and expanding infrastructure in HCM City by diversifying local administrations’ capital sources through the IFC’s provision of financial tools and non-refundable technical consultancy services for the municipal People’s Committee.

The same day, the Vietnamese delegation took part in a discussion with researchers from the Global Cities Initiative of the Brookings Institution.

CLV Development Triangle Area promotes trade, tourism

A trade and tourism fair of the Cambodia-Laos-Vietnam (CLV) Development Triangle Area was opened in the southern province of Binh Phuoc on December 16.

The four-day event is part of the 11th meeting of the joint coordination committee of the area to strengthen the trilateral solidarity and traditional friendship.
 
It features 100 pavilions showcased by businesses from Cambodia, Laos and Vietnam, including some localities in the southeastern region of Vietnam.

The CLV Development Triangle Area was established in 1999, covering 13 provinces, including four of Cambodia, four of Laos and five of Vietnam.

According to a representative from Vietnam’s Ministry of Industry and Trade, the fair introduces typical products of the area and enables businesses to share experience, promote brands, and seek partners as well as expand economic cooperation exchanges between the three countries.

The host Binh Phuoc province has an excellent opportunity to introduce its potential and advantages to establish cooperative relations in development investment in the coming time.

Vice Chairman of the provincial People’s Committee Huynh Thi Hang said the event is expected to develop economic, trade and investment ties between Cambodia, Laos and Vietnam, embrace links among enterprises, and accelerate production, trade of goods, and tourism growth in the region.

Vietnamese products showcased at Cambodia’s import-export fair

Vietnamese enterprises are showcasing their products, ranging from handicrafts to construction materials and power devices, at the 12th Cambodia Import-Export and One Province One Product Exhibition which opened in Phnom Penh on December 15.

This is the ninth time Vietnam has participated in the exhibition.

Taking place through December 18, the event attracts nearly 200 businesses with 286 booths from 25 Cambodian localities and several foreign countries such as Vietnam, China, Japan and Thailand.

Speaking at the opening ceremony, Cambodian Prime Minister Hun Sen stressed that the exhibition offers a chance for participating enterprises to introduce and promote their products.

He said he hopes enterprises will have new customers, expand their market and production and business scales after the event.

Two-way trade between Vietnam and Cambodia hits 3 billion USD per year and the two countries are striving to raise the figure to 5 billion USD in upcoming years.

Firms advised to capitalise on ASEAN-China, Hong Kong FTAs

Officials, experts and entrepreneurs gathered at a workshop in Hanoi on December 15, discussing measures to help businesses capitalise on the ASEAN-China and ASEAN-Hong Kong Free Trade Agreements (FTAs).

Nguyen Thi Thu Trang, Director of the Centre for WTO and Economic Integration under the Vietnam Chamber of Commerce and Industry (VCCI), briefed the participants on the two pacts, which would bring new opportunities for economic and trade cooperation between ASEAN member nations and China as well as Hong Kong.

The ASEAN-Hong Kong Free Trade Agreement (AHKFTA) would facilitate the flow of commodities, movement of experts and investment between the two sides, she noted.

Trang stressed that the deals bring few benefits in terms of tariffs and investment conditions, but can help Vietnam increase exports to Hong Kong – an important gateway to enter the Chinese market.

She said Vietnamese firms should thoroughly study potential opportunities and benefits of the pacts, and find promote their competitive advantages in comparison with Hong Kong and Chinese products.

Bui Kim Thuy, a representative from the Export and Import Department under the Ministry of Industry and Trade, suggested Vietnamese enterprises update on technical solutions and warned of risks when dealing contracts with Chinese partners.

In order to enjoy favourable taxes from the FTAs, together with the Government’s efforts to negotiate tariffs and product origin, businesses must ensure that their products meet origin requirements and step up production activities in the FTA member economies.

Workshop seeks to promote links between domestic and FDI firms

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment held a workshop in Hanoi on December 15 to strengthen links between domestic and foreign direct investment (FDI) enterprises to develop the supporting industry in Vietnam.

The number of domestic businesses joining supply chains for FDI firms remains limited, especially in the key fields of automobile manufacturing and assembling, electronics and industrial machinery, said Nguyen Manh Linh, deputy director of the centre for developing supporting industry enterprises under the Institute for Strategic and Policy Studies of the Ministry of Industry and Trade.

He noted that only a few of domestic enterprises are capable of meeting the quality requirements of FDI companies due to restrictions in production technologies, management system and undiversified products. 

Additionally, there are not many assistance programmes from the Government and relevant agencies to increase information exchanges between Vietnamese supporting enterprises and FDI firms, Linh said.

The official suggested local businesses proactively connect with FDI firms and invest in new technologies and human resources while joining supply chains suitable with their development level.

He called on FDI businesses to outline strategies to connect and cooperate with Vietnamese partners and support them to increase corporate governance capacity, technological application, and human resource quality. 

The Government should devise preferential policies to promote links between domestic and FDI firms and encourage the expansion of effective models adopted by FDI businesses, Linh said.

He also mentioned measures to improve the investment environment and encourage all economic sectors to invest in the supporting industry.

Meanwhile, FIA Director Do Nhat Hoang underlined the increasing contributions by FDI enterprises to Vietnam’s gross domestic product (GDP), noting that political stability and reform are attractive factors to foreign investors. 

Vietnam will focus on drawing selective projects applying high technologies while strictly prohibiting those causing environmental pollution, he said.

Chairman of the Vietnam Association of Foreign-Invested Enterprises Nguyen Mai said that FDI businesses are making up 70 percent of the country’s total export turnover and contributing 18 percent to the State budget collection and 20 percent of the GDP.

They also generated jobs for 3.7 million direct workers and adopted new business production and distribution methods, he added.

Dong Nai, Ukrainian locality to cooperate in developing IZs

Southern Dong Nai province and Ternopil oblast of Ukraine, signed a Memorandum of Understanding to boost cooperation in developing industrial zones in Bien Hoa City on December 15.

Accordingly, the two sides will hold consultations in investment innovation and together seek priorities for cooperation in operating industrial zones.

They will facilitate meetings and discussions among enterprises from Dong Nai and Ternopil on issues of mutual interest.

Speaking at the MoU signing ceremony, head of the Ternopil Oblast State Administration Stepan Barna said Ternopil has developed agriculture with large-volume exports of alcohol, milk, and poultry. Ukraine has adopted a number of preferential policies for foreign investors, Barna unveiled, adding that as from 2022, the country will provide full tax exemption for the import of certain kinds of machines and machine parts.

Dong Nai has seen strong growth in industry. It is home to 32 industrial zones with more than 1,200 FDI projects, worth a total of about 30 billion USD, said Tran Van Vinh, Vice Chairman of the provincial People’s Committee.

Vietjet links Ho Chi Minh City to Thailand’s Phuket, Chiang Mai

Vietnam’s low-cost carrier Vietjet Air on December 15 held a jubilant ceremony to celebrate the debut of its two routes connecting Ho Chi Minh City and Thailand’s tourist destinations of Phuket and Chiang Mai.

The ceremony was attended by Ambassador of Thailand to Vietnam Manopchai Vongphakdi and leaders of the Aviation Administration of Vietnam, the Culture, Sport and Tourism Department of Ho Chi Minh City, among others.

The new routes are expected to meet increasing travel demand of both sides, making contribution to promoting regional trade and integration.

The Ho Chi Minh City – Phuket route operates a return flight every Monday, Wednesday, Friday, and Sunday with around two hours per leg. Flights depart Ho Chi Minh City at 10:15 and arrive in Phuket at 12:10. Return flights take off at 13:05 in Phuket and lands in Ho Chi Minh City at 15:10. 

Meanwhile, the Ho Chi Minh City – Chiang Mai route operates a return flight every Tuesday, Thursday, Friday, and Sunday with a flight time of just under two hours per leg. Flights depart Ho Chi Minh City at 11:35 and arrive in Chiang Mai at 13:30. Return flights take off at 14:20 in Chiang Mai and land in Ho Chi Minh City at 16:25. 

By opening two more new routes, Vietjet now operates six flights to Thailand - “the Land of Smiles” from Vietnam. 

Aiming to become a leading consumer airline, Vietjet has continually opened new routes while adding brand-new aircraft to its fleet, investing in modern technology and offering more added-on services and products to serve all customers’ demands. Since its establishment just a few years ago, Vietjet has continuously contributed to the community and created flying opportunities for tens of millions of domestic and international passengers.

100 trillion VND needed for Bac Van Phong Special Zone


100 trillion VND needed for Bac Van Phong Special Zone, Rubber export revenue picks up 39 percent, Trade protectionism continues, GDP growth increasingly dependent on labour productivity



The People’s Committee in the central coastal province of Khanh Hoa estimated that more than 100 trillion VND (4.4 billion USD) was needed to develop infrastructure for the Bac Van Phong Special Administrative-Economic Unit by 2025.

Of the total, developing the technical infrastructure system required a sum of 53 trillion VND by 2025. The money will be used to build a road system, 20km railway from Van Phong Port to the station of the North-South railway, power system, water supply system and waste treatment system.

An amount of 46 trillion VND would be spent on developing the social infrastructure system, including 65 kindergartens, 39 middle schools, 26 high schools, 67 medical stations and clinics and stadiums.

The rest would be used for land clearance and planning.

The provincial People’s Committee said part of the capital would come from the budget and through private investment under build-operate-transfer, build-transfer and public-private partnership practices.

Le Duc Vinh, Chairman of the provincial People’s Committee, was quoted by Nguoi Lao Dong (Labourer) newspaper as saying that the province had proposed special mechanisms to develop Bac Van Phong.

Among the proposals was one according to which the province would be allowed to keep revenue from import-export taxes collected in the current Van Phong Economic Zone and the future Bac Van Phong Special Administrative-Economic Unit until 2030, as well as 50 percent of the central budget’s collection in five years from the foundation of the special zone.

In addition, the province proposed that the Government consider extending the road system to Bac Van Phong when developing the North-South expressway or express railway, along with policies to attract strategic investors to develop the zone.

The province agreed to develop the unit from the current Van Ninh district, where has total area of 111,000ha with 13 communes and towns and a population of 128,000.

The zone will focus on developing marine transport, logistics, trade and financial services, as well as tourism, healthcare, education services and hi-tech industries.

Rubber export revenue picks up 39 percent

Vietnam earned more than 2 billion USD from exporting 1.2 million tonnes of rubber during January-November, up 39 percent in value and 8.4 percent in volume, according to the General Department of Vietnam Customs.

This was the first time in four recent years rubber export value exceeded 2 billion USD. The value exceeded 2 billion USD in 2010 then hit a record high of 3.2 billion in 2011. However, export revenue fell sharply during 2014-2016, falling to below 2 billion USD.

Sharp rises in rubber export prices have improved the product’s export value. In the first ten months of this year, the average price of rubber increased 32.6 percent to 1,680 USD per tonne. 

However, the Ministry of Industry and Trade said global natural rubber prices started to dip from mid-November while rubber supply increased. According to the Association of Natural Rubber Producing Countries, global rubber output as of October went up 5 percent to 10.43 million tonnes.

China remained largest importer of Vietnamese rubber. In the first 11 months of the year, the country purchased more than 785,800 tonnes of Vietnamese rubber worth nearly 1.29 billion USD, about 64 percent in quantity and value of the country’s rubber exports.

Trade protectionism continues

Global trade growth is expected to exceed 3.5% this year. But there remain downside risks, in particular protectionism for local production that could threaten the world economy and block the recovery of global trade.

Protectionism, a technical term, describes economic policies of restraining trade between countries through methods such as tariffs on imported goods, restrictive quotas, and strict standards of quality, origin, and hygiene and safety.

The essence of protectionism is governments wanting to protect locally made products against foreign rivals who can sell the same products at lower prices.

The World Trade Organization has consistently warned that growing protectionism will have a negative effect on global trade prospects.

According to a recent study by the Bertelsmann Institute, protectionist measures could cause great losses for the US. In the worst-case scenario, its annual GDP would drop by 2.3% - US$415 billion.

Asia-Pacific could also be severely affected by an isolationist policy. The region exports about 15% of its products to major markets like the US.

At the just concluded WTO Ministerial Conference in Buenos Aires, WTO Director-General Roberto Azevedo warned of a possible trade war due to protectionism and insisted that trade and technology are the keys to global progress.

High-tech farming model helps farmers escape poverty

High-tech applications in agricultural development have been widely promoted in Hai Phong City.

high-tech farming model helps farmers escape poverty hinh 0 Along with projects by other economic groups, the high-tech agriculture model applied by the Southeast Asia Service and Import Export Company has brought economic benefits and contributed to poverty reduction.   

Cao Van Anh and his family in Nghia Doan commune, Hai Phong City, are preparing for a muskmelon harvest and tending beds of pear-shaped melons in his greenhouse.

For the past two years, the Southeast Asia Service and Import Export Company has provided seedlings and secured buyers for all output. The company specializes in producing qualified farm products in Hai Phong.

Cao Van Anh says greenhouse farming is more profitable than traditional farming, reduces adverse climate effects, and minimizes threats from insects and plant diseases. Much of the work is done on a computer or smart phone.

“Each year I grow three muskmelon crops. Each of my greenhouses is 500 square meters. I harvest about 1.5 tons per year, giving me a more stable income than traditional farming did. I have invested almost US$44,000 in each greenhouse. We have begun to recoup the investment capital over the past year. We use coconut fiber instead of soil, a form of hydroponic cultivation in which dissolved fertilizer and water are pumped directly to basins,” Van Anh said.

The model has been widely implemented in Hai Phong’s districts. In four years, the company has invested in and purchased the produce of 25 greenhouses covering more than 20 ha.

Tran Thanh Diep, the company’s Director, says “The first high-tech food and vegetable model was the model I used to grow vegetables on my family’s 5,000 square meters to meet our own needs. Then many people wanted to buy my produce, so I decided to expand the model for commercial purposes. After three years, we now have 25 greenhouses. Each greenhouse is about 1,000sq.m and cost more than US$35,000, on top of the money needed to buy or lease the land. A greenhouse can withstand sun, wind, even level 12 storms, and is equipped with an automated irrigation system, dramatically reducing production costs.”

The company has offered multiple training courses on new farming techniques and has local farm households construct greenhouses. Diep told VOV that this has helped many farmers escape poverty and stabilize their lies. Some of them have dared to expand the model.  

Diep says, “if a farm household wants to build a greenhouse to grow fruits, we will help them with seedlings and buy all their output. We will also send technicians to their farm to help them with farming techniques and open a series of shops in Hai Phong and Hanoi. We will help them choose qualified vegetable and fruit seedlings.”

The model focuses on quality, hygiene, and safety of the produce. The company’s products are regularly ordered by more than 5,000 households, 50 hotels, and numerous restaurants, supermarkets, and industrial zones in Hai Phong, Hanoi, and Bac Ninh.

Nguyen Thi Quynh, a resident in Hai Phong, says “I have known products of the Southeast Asia Service and Import Export Company for three years and introduced them to my friends because we want safe food for our families. The safe production process of vegetables and fruits, and company - organized field trips to greenhouses gives the customers greater confidence.”

 The Southeast Asia Service and Import Export Company is currently expanding the farming areas and developing Hai Phong’s brand towards exporting to the global market.

GDP growth increasingly dependent on labour productivity

Against the context that all the Vietnam's development factors are limiting, GDP growth seems to increasingly dependent on labour productivity.

gdp growth increasingly dependent on labour productivity hinh 0 According to Dr Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), while Vietnam has achieved its annual growth targets, the growth rate has clearly declined. If the GDP growth remains the same, it will be difficult to narrow the development gap with other countries in the region. GDP growth is becoming increasingly dependent on labour productivity.

Data of the General Statistics Office shows that Vietnam's labour productivity is still low compared to other countries in the region, reaching $9,894 in 2016, equaling 7 per cent of Singapore, 17.6 per cent of Malaysia, 36.5 per cent of Thailand, 42.3 per cent of Indonesia, 56.7 per cent of the Philippines and 87.4 per cent of Laos.

"It should increase by at least 6 per cent per year to reach the growth target. Labour productivity has increased mainly due to economic structural adjustments, while the increase in sectoral productivity is lower than in previous periods," Cung said.

The increasing rate of added value in the private sector is relatively high and has been continuously improving in recent years. However, it has not attracted more labour or created more jobs. The state economic sector's efficiency is lower, but its size has not been significantly reduced, according to Cung.

Investment efficiency in agriculture is high, but the volume of investment capital has not been growing accordingly. Vietnamese enterprises have high capital intensity, but capital productivity is the lowest in the region, as capital is not channelled into technological innovation. The concentration of capital is not linked with labour productivity, mainly due to the low-performing SOE sector.

In order to help Vietnam overcome the challenges in terms of the productivity and increase the competitiveness of the economy, the Australian government pledged to provide $5 million to support the Vietnamese government to achieve its targets for improving the business environment and move Vietnam towards becoming a more market-oriented economy.

This programme that will last for four years (Aus4Reform) will assist the development and implementation of economic policies, laws, and institutions critical to helping the Vietnamese economy to meet its potential. The initiative will also build linkages between Australian and Vietnamese institutions to share expertise and experiences.

“Vietnam has a long history of pursuing economic reform and Australia is proud to have offered our support throughout this process,” Australian ambassador Craig Chittick said at the Launching Workshop of the $5-million Aus4Reform held on December 13. “Economic reform is tough, but Australia will continue to support Vietnam on this journey.”

Australia’s support will help Vietnam register one million new formal private enterprises by 2020, increase the percentage of women-led enterprises and accelerating growth in private sector employment.

Aus4Reform brings together Vietnam’s leading think-tanks and government agencies responsible for economic policies, including CIEM, the Vietnam Competition Agency (VCA), the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), and the Vietnam Chamber of Commerce and Industry (VCCI), and the Economic Committee of the National Assembly (ECNA).

Aus4Reform builds on the reform momentum achieved through previous Australian support programmes, including “Beyond WTO” and “Restructuring for a more competitive Vietnam.”

Global startup competition to march on to regional rounds

VietChallenge 2018, a world-scale startup competition for Vietnamese entrepreneurs, announced the date of the regional rounds. Accordingly, the Hanoi round will be on December 19 and the Ho Chi Minh City round on December 22.

Ten semi-finalist teams will present their pitches and compete to be in the top three for the national round in 2018.

To date, members of the judging committee in the Hanoi regional round are Bui Hai An, manager, director and co-founder of Silicon Straits, MSV Tech, Cognito CRM and TGM Tech, and Dung Phan, founder of Big Cat Entertainment.

Additionally, the judging panel for the Ho Chi Minh City regional round will consist of Bui Cam Van, CEO of Up Co-working Space; Le Quoc Vinh, chairman and CEO of LeGroup; Nguyen Dinh Thanh, managing director and co-founder of Elite PR School; Tran Phuong Hoa, CEO of Summit Education Services; and Denny Cowger, chief administrative officer and general counsellor of Ortholite.

In April 2018, the final round of the competition will take place in Massachusetts Institute of Technology (MIT), Boston.

Following the 2017 entrepreneurial competition, VietChallenge will shake hands with Association of Vietnamese Students and Professionals in the US, targeting to elevate the startup competition to the next level.

Thanks to the competition, winners and finalists have successfully connected with suitable investors engrossed in their business concepts as well as earning financial initiatives of up to US$32,000 as a hand in glove action-based scholarship platform.

In the mission of bridging the gap among Vietnamese startups around the world, the annual competition has drawn over 250 applications from startups based in 23 nations over the last two years as well as the attention of countless eminent US-based investment firms.

VietChallenge is one of the first startup competitions specifically designed for Vietnamese talents wherever they may be, providing a fair competition on the global scale, valuable opportunities for young startups to connect with interested investors, and highly-valued mentorship, as well as profound insights from experienced mentors.

Vietnam, RoK step up tourism ties

The Vietnam Ministry of Culture, Sports and Tourism and the Vietnamese Embassy in the Republic of Korea (RoK) on December 14 held a tourism-culture festival, aiming to promote cooperation between the two countries in this sector.

Addressing the event, Minister of Culture, Sports and Tourism Nguyen Ngoc Thien expressed his belief that apart from enhancing bilateral cultural and tourism ties, the festival will boost the strategic cooperative partnership between Vietnam and the RoK. 

The official also voiced his hope that the number of Korean tourists to Vietnam will increase in 2018. 

Vietnamese Ambassador to the RoK Nguyen Vu Tu highlighted the fruitful political ties and cultural similarities shared by the two countries, which, he said, have helped promote business, cultural and tourism links.

At the opening ceremony, the Vietnam National Administration of Tourism introduced famous landscapes in Vietnam and major tourism events to be held in the country next year. 

On the occasion, Thien handed over the decision to appoint Ly Xuong Can, a descendant of King Ly Thai To – the first king of the Ly dynasty (1010-1225), as Vietnam’s tourism ambassador to the RoK for 2017-2020. 

A banquet was held following the opening ceremony to mark the 25th anniversary of bilateral diplomatic ties (December 22).

On December 13, Thien met with RoK Minister of Culture, Sports and Tourism Do Jong-hwan in Seoul. 

The two sides agreed to intensify cultural, sport and tourism cooperation in order to enhance mutual understanding and friendship between their people. 

The Korean side pledged to share its experience with Vietnam in areas of its strength like archery, shooting, taekwondo and e-sports. 

They agreed to ask their airlines to open more routes from the RoK to tourist destinations in Vietnam and increase the frequency of flights, while organising tourism promotion programmes. 

Vietnam urged the RoK to hold more training courses on the Korean tourism market and Korean language for Vietnamese tour guides.

HCM City talks tax with businesses

HCM City authorities discussed the current shortcomings of tax and customs regulations in Vietnam at a dialogue with enterprises on December 15.

As many as 400 representatives from 320 enterprises participated in the dialogue organised by the HCM City Investment and Trade Promotion Centre (ITPC) and the HCM City Tax Department.

Most enterprises asked questions related to policies on VAT, enterprise income tax, special consumption tax and import-export tax as well as tax refunds and tax preferences for enterprises and income tax for expats in Vietnam.

Nguyen Nam Binh, deputy chief of the HCM City Tax Department, said the comments and recommendations of enterprises would help improve the policy-making process, creating a fair and attractive business environment for local and foreign enterprises.

Cao Thi Phi Van, deputy director of ITPC, said ITPC would continue to perform its role as head of the executive board of the dialogue system between the city’s authority and enterprises, which was established in 2002 by the city People’s Committee.

Since 2002, ITPC has worked with concerned agencies to organise 174 dialogues, attracting the participation of 26,819 enterprises and answering 11,839 questions from company representatives at the meetings.   

Prior to the meeting, the organisation board received more than 90 questions from enterprises related to tax-related issues.

Last year, ITPC held 17 dialogues on taxes, customs, labour issues, social insurance, construction, environment, planning, trade, investment and traffic, among others.

Together with the direct dialogues, the online dialogue system continued to be a channel to help resolve problems, in which the business community places its trust.

The members of the dialogue system includes departments, agencies and districts of HCM City and central departments and agencies which answer online questions and deal with obstacles of enterprises in a timely manner.

Last year, all of these authorities answered 540 tax-related questions from enterprises. 

Global startup competition to march on to regional rounds

VietChallenge 2018, a world-scale startup competition for Vietnamese entrepreneurs, announced the date of the regional rounds. Accordingly, the Hanoi round will be on December 19 and the Ho Chi Minh City round on December 22.

Ten semi-finalist teams will present their pitches and compete to be in the top three for the national round in 2018.

To date, members of the judging committee in the Hanoi regional round are Bui Hai An, manager, director and co-founder of Silicon Straits, MSV Tech, Cognito CRM and TGM Tech, and Dung Phan, founder of Big Cat Entertainment.

Additionally, the judging panel for the Ho Chi Minh City regional round will consist of Bui Cam Van, CEO of Up Co-working Space; Le Quoc Vinh, chairman and CEO of LeGroup; Nguyen Dinh Thanh, managing director and co-founder of Elite PR School; Tran Phuong Hoa, CEO of Summit Education Services; and Denny Cowger, chief administrative officer and general counsellor of Ortholite.

In April 2018, the last round of the competition will take place in the venue of Massachusetts Institute of Technology (MIT), Boston.

Following the 2017 entrepreneurial competition, VietChallenge will shake hands with Association of Vietnamese Students and Professionals in the US, targeting to elevate the startup competition to the next level.

Thanks to the competition, winners and finalists have successfully connected with suitable investors engrossed in their business concepts as well as earning financial initiatives of up to $32,000 as a hands-in-glove action-based scholarship platform.

In the mission of bridging the gap among Vietnamese startups around the world, the annual competition has drawn over 250 applications from startups based in 23 nations over the last two years as well as the attention of countless eminent US-based investment firms.

VietChallenge is one of the first startup competitions specifically designed for Vietnamese talents wherever they may be, providing a fair competition on the global scale, valuable opportunities for young startups to connect with interested investors, and highly-valued mentorship, as well as profound insights from experienced mentors.

Logistics a key contributor to economic growth

The Vietnam Logistics Forum 2017, entitled “Improvements in Competitiveness & the Development of Vietnam Logistics Services”, was held by the Ministry of Industry and Trade, the Ministry of Transport, the World Bank in Vietnam, and Vietnam Economic Times on December 15 at the JW Marriot Hotel Hanoi to discuss strategic issues regarding the development of Vietnam logistics sector into the future.
 
In attendance were Minister of Industry and Trade Tran Anh Tuan, leaders from the Ministry of Transport, the Country Director of the World Bank in Vietnam, economists, and more than 300 logistics enterprises and associations in the country.

This year’s Forum was the fifth holding and takes place in a special context, as Prime Minister released Decision No. 200/QD-TTg, dated February 14, 2017, endorsing the action plan for enhancing the competitiveness and development of logistics in Vietnam by 2020.

Ambassador Nguyen Phu Binh, Deputy Editor-in-Chief of Vietnam Economic Times, noted that now in its fifth year, the Vietnam Logistics Forum is not only for the domestic and international logistics community to gather together, a platform for sharing and updating information on logistics services development in Vietnam and elsewhere around the world, and an event where policy makers and regulators can meet, discuss, and hear feedback from specialists and practitioners on existing policies for logistics development and to come up with appropriate corrective actions, but also an opportunity for businesses to have their voices heard and engage in face-to-face dialogue as well as recommend viable and effective strategies to spur the development of the global logistics sector, so that it can catch up to and connect with global value chains. “This year’s Forum will touch upon essential and meaningful topics, in preparation for a vital next phase of development for the logistics services industry in Vietnam,” he sai.

Minister Tuan told the Forum that the growth in Vietnam’s logistics sector over the year has significantly contributed to overall economic growth, expanding to international markets and providing more benefits to consumers and helping transform the national economy. “However, various persistent gaps and challenges have existed in Vietnam’s logistics sector for many years and are waiting to be resolved, including planning work among relevant sectors still lacking inter-connections, transport, trade and information technology infrastructure remaining in poor condition and unable to connect to those of other countries in the region, existing human resources in logistics still lagging behind requirements, and, especially, the competitiveness of logistics services providers in Vietnam still being lower than in other countries in the region and around the world,” he said.

Mr. Ousmane Dione, Country Director of the World Bank in Vietnam, said that logistics performance is particularly important for an economy like Vietnam, which is highly dependent on participation in global value chains and exports, and this will translate into productivity gains that Vietnam needs to achieve its ambitious development objectives. “However, Vietnam often carries out the lowest value-added segment of production in global value chains,” he explained. “Therefore, a strategy to enhance trade competitiveness that is complementary to trade liberalization is needed to support Vietnam’s vision of becoming an upper middle-income country by 2035 with a more sophisticated economy and exports that sustain accelerated growth.”

Important memoranda of understanding were signed at the Forum, between Vietjet Air Cargo and Viettel, Hoa Phat Dung Quat and Vinalines, Novaon and Bao Viet, and the Vietnam Logistics Businesses Association and the Hanoi National University.

100 trillion VND needed for Bac Van Phong Special Zone, Rubber export revenue picks up 39 percent, Trade protectionism continues, GDP growth increasingly dependent on labour productivity
 
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