Agricultural cooperation

The two countries aim to take their bilateral strategic partnership to a new height.

Vietnam and Singapore will expand cooperation in fields of green energy, smart city, innovation, digital economy and digitalization to take advantage of the Industry 4.0.

Prime Minister Pham Minh Chinh during the phone talk. Photos: Nhat Bac

Such was one of the key topics discussed by Prime Minister Pham Minh Chinh and his Singaporean counterpart Lee Hsien Loong on a phone talk today [April 20].

It would come on the back of existing partnership between the two countries in potential fields and sector of finance, IT, agriculture, education and infrastructure, aiming to take  the bilateral strategic partnership to a new height.

In 2020 and the first quarter of 2021, Singapore remained Vietnam’s largest investor, while the Vietnam – Singapore Industrial Park (VSIP) model has been a symbol for bilateral economic cooperation.

Overview of the phone talk

Singapore’s PM Lee Hsien Loong stressed that his country continues to give priority to the relations with Vietnam, saying it would share experience on economic management and train high quality human resources to Vietnam.

PM Chinh thanked Singapore’s support for Vietnam when the country took on the role of the Chair of ASEAN 2020, hoping the ASEAN neighbor will continue supporting Vietnam as non-permanent member of the UN’s Security Council for the 2021 term.

Both leaders agreed on further cooperation to help repatriate citizens to each country, at the same time negotiating for priority travel mechanism, a key step to reopen safe commercial flights to boost trade, investment and tourism between Vietnam and Singapore.

Vietnam and Singapore are committed to actively participating in building a strong and united ASEAN Community to realize its central role for peace, security of the region and the world.

The mango growing area currently stands at some 87,000 ha, 48 percent of which is in the Mekong Delta.

Vietnam shipped over 180 million USD worth of mangoes abroad last year, accounting for only 1.15 percent of the world’s total.

China was the largest market of Vietnam, with nearly 152 million USD, or 83.9 percent of the total, followed by Russia, the U.S., the Republic of Korea, the EU, Australia, and Japan, according to MARD’s Agro Processing and Market Development Authority.

To achieve the export target, Deputy Director of MARD’s Plant Protection Department Nguyen Thi Thu Huong called on the ministry to upgrade her department’s technical centers so as to carry out studies helping to remove technical barriers, seek new markets, and conduct pre-export checks.

She also recommended MARD digitize its databases on farming zones, processing establishments, and packaging facilities.

While localities should enhance connectivity between cultivation areas and increase training for local staff in charge of farming techniques, businesses need to seriously comply with regulations from both importing countries and Vietnam, boost production cooperation, maintain constant monitoring to ensure sufficient supply and quality materials, and remain updated on export information, Huong added.

Deputy Minister Tran Thanh Nam said having 48 percent of the mango growing area concentrated in the Mekong Delta is favorable in improving quality and meeting the requirements of importing markets.

However, as the area meeting VietGAP and GlobalGAP standards makes up just 3.8 percent of the Mekong Delta’s mango growing area, it is necessary to boost the adoption of these standards, he noted.

Nam also urged provinces and cities in the Mekong Delta to work to improve quality in every step, from farming and harvesting to preservation, while strengthening links in mango sales.

In particular, they should identify target markets and work with enterprises and cooperatives to help farmers align cultivation practices with international standards.

Source: VNA

Under a new plan issued recently by the municipal People’s Committee for the 2021-2025 period, HCM City will continue to improve the Provincial Competitiveness Index (PCI) while seeking measures to improve the investment and business environment towards easier, more transparent and fair orientations.

The city expects to become one of the five leading localities in PCI by 2025.

Meanwhile, HCM City aims to enter the list of top localities nationwide in socio-economic management quality, with rapid digital transformation.

To this end, the municipal People’s Committee has introduced a number of measures, including strengthening the leadership and direction of improvements to the city’s competitiveness as well as the local business and investment environment, and building plans to speed up administrative reform.

To increase the PCI component indexes, the city targets that at least 93 percent of business registration requests and 40 percent of investment licence issuance will be processed online.

It will also enhance the operational efficiency of the centre for land reserve development to prepare land for investors.

Along with making public all processes regarding administrative procedures to make it easier for people and businesses to follow, the city will also work to reduce the time needed for processing and improve public service quality.

The municipal People’s Committee has assigned the Department of Planning and Investment to cooperate with the Vietnam Chamber of Commerce and Industry (VCCI) to design and implement a set of criteria to assess the capacity of departments, sectors, and localities around the city in applying measures to improve the business and investment environment and the PCI in the 2021-2025 period.

Source: VNA

Bamboo Airways is looking to raise $200 million with an IPO in the US. Photo: Duc Thanh

Last week investors were hoping to make a killing after VinFast – the automaker of Vietnamese behemoth Vingroup – was said to be considering an initial public offering (IPO) in the New York Stock Exchange (NYSE), which could raise as much as $2 billion.

Despite a number of flops by other Vietnamese peers, media outlets such as Bloomberg and Reuters reported that VinFast could be valued at around $50 billion after a successful listing – seen as surprising given that car giant Ford was valued at $144 billion in 2018, while VinFast is only a few years old. News of the consideration led Vingroup’s ticker to rise significantly in multiple consecutive trading sessions last week.

Meanwhile, Bamboo Airways, a subsidiary of FLC Group, also revealed plans to raise up to $200 million in an overseas IPO in the third quarter of this year, particularly in the United States. The company aims to secure market capitalisation of up to $4 billion.

“The IPO will be part of our efforts to expand our services globally. We will start conducting chartered flights to the US in July and target the launch of non-stop commercial flights between Ho Chi Minh City and San Francisco in September, with an initial frequency of three flights per week,” said company chairman Trinh Van Quyet.

Quyet revealed that the carrier has been working with an international auditing firm for a potential IPO on the NYSE. Previously, Bamboo Airways signalled its intention to file for an IPO in Vietnam itself, but Quyet said that was now “a backup plan, depending on market conditions,” according to Reuters.

Kent Wong, head of Banking and Finance Capital Markets at VCI Legal, noted that Vingroup-affiliated companies have tried their luck in the overseas listing game before. In 2014, the conglomerate failed in listing on the Singaporean Stock Exchange (SGX). Huy Vietnam, owner of the Mon Hue restaurant chain, also tried to list in Hong Kong five years ago.

In fact, a number of major domestic corporations have not stood up to the scrutiny of global public markets.

Previously, VNG Corporation – Vietnam’s first unicorn – signalled its intention to file for an IPO in the tech-heavy NASDAQ. Budget-cost carrier Vietjet also followed suit, saying it would ramp up its effort to list on the NYSE.

In 2008, dairy giant Vinamilk had been approved on the SGX, but its IPO plan was consistently delayed and the group is still nowhere closer to entering the regional bourse.

In 2019, Quyet also announced that his group was ramping up efforts to be listed on the SGX at the bourse’s 20th anniversary event, a move which he said would “bolster its business, hone its image, and replenish overseas capital.”

“The SGX is a top international destination which provides value to businesses that want to extend their overseas ambition. FLC aims to become listed on the SGX next year or in 2021,” he said at the time.

Wong of VCI Legal noted that Vietnamese companies might need 2-3 years to prepare for overseas listing, mainly due to differences between accounting standards and high standards of corporate governance and internal controls in overseas stock exchanges.

“While it is applaudable that VinFast is looking to raise capital through an alternative channel overseas, I would query whether it has objectively considered its readiness,” he told VIR. “Breaking into global markets which are highly competitive will be tough going. The long-term strategy of the company and timing are also key. Given the ‘new normal’, external factors and the strong macroeconomic conditions of Vietnam do not make compelling enough arguments.”

Vietnamese regulators, on the other hand, can develop the legal framework to be more in line with international standards. Recent reforms to the Law on Securities and the Law on Prevention of Money Laundering are positive signs. In addition, cooperation with more overseas exchanges will give potential issuers more chances for dual listings and, as a result, more liquidity.

Michael Kokalari, chief economist at VinaCapital said, “The government should focus on developing Vietnam’s capital markets first, and should especially focus on making it easier for foreign investors to bring money into Vietnam before regulators encourage Vietnamese companies to list their shares on foreign stock markets.”

Wong agreed, adding, “The NASDAQ has been tightening listing standards due to the spate of Chinese companies listing, for example. However, the special purpose acquisition company route looked at by VinFast might be achievable, provided there is a strong sponsor.”

In total, Australia has committed AU$40 million (US$31 million) over three years to support Vietnam’s vaccine procurement and delivery efforts.

The Australian Embassy and the United Nations Children’s Fund (UNICEF) have announced an assistance worth US$10.5 million to support Covid-19 vaccine delivery in Vietnam, ensuring the country’s expanded immunization program.

Australian Ambassador to Vietnam Robyn Mudie said at a press conference in Hanoi on April 19 that her country will explore options to procure vaccines to support Vietnam.

Some of those vaccines in due course are likely to be manufactured in Australia and the Australian government expects some of the homemade vaccines will be part of the country’s contribution to Vietnam, according to the ambassador.

Australian Ambassador to Vietnam Robyn Mudie (middle) poses with other representatives at the press conference. Photo: Australian Embassy

Mudie said the support will help Vietnam purchase cold chain equipment to store and transport vaccine doses to areas in need.

It is also intended to fund training courses and materials for Vietnam’s health workers and officials and developing immunization in remote provinces to ensure equitable and uniform vaccine coverage.

Rana Flowers, UNICEF Representative in Vietnam, said introducing a new vaccine, especially for Covid-19, was a colossal task for any government with many important steps involved.

Thanks to the partnership with the Australian government, UNICEF has committed to working with Vietnam’s health ministry and other partners vaccinate the prioritized 20% of population in the country by late 2022.

“No one is safe until everyone is safe, so mass vaccination against Covid-19 is an important step to contain the pandemic, protect frontline workers who serve children and for Vietnam to reopen to the rest of the world,” Rana Flowers stressed.

Funding for the program is drawn from US$404 million regional Vaccine Access and Health Security Initiative, as well as from Australia’s bilateral development cooperation program with Vietnam.

In total, Australia has committed US$31 million over three years to support Vietnam’s vaccine procurement and delivery efforts.

In the coming months, Australia will liaise with the Ministry of Health to set up vaccination roll-out plan in Vietnam, Ambassador Mudie said.

In case the US can fully disburse the entire US$1.9-trillion stimulus package, Vietnam’s GDP could expand by an addition of 0.76 percentage points.

Vietnam could reach an economic growth in range of 6-6.3% in case the Covid-19 pandemic is fully contained domestically and the global economy returns to its upward trend.

Chief Economist of the Vietnam Institute for Economic and Policy Research (VEPR) Pham The Anh gave the remarks at the launch of its quarterly macro-economic report on April 20.

Overview of the conference. Photo: Hai Yen

“Strong trade performance as a result of a number of free trade agreements that Vietnam is a part of, wave of investment shift to disperse risks from US -China trade war, effective public investment and stable macroeconomic environment are factors that would support the country’s GDP growth this year,” stated Anh.

Meanwhile, the VEPR’s economist pointed out the fact that Vietnam is facing many risks and challenges in an unstable world economic environment.

“The resurgence of Covid-19 in countries around the world and the subsequent lockdown measures could extend the disruption of supply chain this year,” said Anh, noting geopolitical conflicts between large countries can put an open economy like Vietnam into a disadvantageous situation.

Besides, the weakness of Vietnam’s economy also comes from internal issues such as high fiscal deficit, low development investment budget; the insufficiently improved health of the banking – financial system; the heavy dependence of growth on the FDI sector; low labor quality; and the stagnated privatization process of SOEs.

Economist Can Van Luc, however, gave a more positive outlook by saying the country’s GDP   could grow 6.5-7% for 2021.

“This, however, is no small task, as Vietnam would be required to achieve a growth rate of 7.3-7.4% in the second quarter, and 6.3-6.8% in the third and fourth quarter,” Luc stated.

According to Luc, Vietnam is among countries that could benefit from US’s US$1.9 trillion stimulus package.

“In case the US can fully disburse the entire amount, Vietnam’s GDP could expand by an addition of 0.76 percentage points,” he asserted.

In the meantime, agriculture, exports and FDI inflows would continue to be the three major driving forces for economic development, Luc said.

As countries around the world, including Vietnam, are adopting monetary easing policy to aid economic growth, Luc expected inflationary pressure continues to be a long-term issue.

Shoppers at a Hapro’s supermarket. Photo: Thanh Hai

“Overacting against inflation is not necessary, however, as it may delay the process of economic recovery,” Luc warned, adding he predicts inflation to be 3.5-3.7% this year, lower than the government’s target of 4%.

Both two economists agreed the government’s priorities should be to ensure social security, keep the macroeconomic environment stable, and support operational businesses.

In all situations, inflation, interest rates, and exchange rates need to be maintained stably, to secure the foundation for economic recovery after the pandemic.

VEPR’s report suggested the necessity to diversify export/import markets to avoid heavy dependence on some major economic partners.

As Vietnam is looking to move on despite the pandemic, the report called for a fiscal buffer to be gradually built to prevent future shocks.