Globalization of the world economy has been led primarily by

Asian economy to grow 6.5 pct in 2021: report

April 18, 2021 by en.nhandan.org.vn

The figure represents a significant rebound from the 1.7-percent contraction registered last year, said the report titled “Asian Economic Outlook and Integration Progress,” citing data from the International Monetary Fund (IMF).

South Asia will see its economy grow 9.7 percent this year, the fastest growth in the region, the report said, citing the IMF.

East Asia is expected to see its economic growth hit 6.5 percent during the same period, the report showed.

The report attributed the relatively high growth rate to effective epidemic control and orderly production and work resumption in China and the Republic of Korea, among other factors.

The Asian economy has taken up a growing share of the world economy. Measured by purchasing power parity, the region’s economy is expected to account for 47.9 percent of the world’s total in 2021, up from 45.3 percent registered in 2017, according to the IMF data the report cited.

Despite the impact of the COVID-19 pandemic, the Asian economy has presented many highlights and opportunities, according to the report.

Asian economies have introduced new measures to promote the digital economy, advancing digital infrastructure construction and international digital cooperation, among other initiatives.

The digital economy has helped promote production resumption, stabilized the economic situation, and become a new driving force for Asia’s economic growth in the future.

The economic and trade cooperation among Asian countries has continued to deepen.

By February 2021, 186 regional trade agreements were in force, accounting for 54.9 percent of the global total, the report said, citing data from the World Trade Organization.

In particular, the signing of the Regional Comprehensive Economic Partnership Agreement in November last year will further accelerate the Asian economic integration, said the report.

Declining business confidence due to COVID-19

April 18, 2021 by vov.vn

More than 87% of local businesses affected by COVID-19

According to the 2020 Provincial Competitiveness Index (PCI) survey, the COVID-19 pandemic has led to a widespread negative impact on the operations of local enterprises. More than 87% of them, including domestic private and foreign-invested firms, have reported that their operations last year were heavily impacted by the global pandemic.

The proportion of businesses reporting the impact of the pandemic as “completely negative” stood at 15% for domestic private enterprises and 13% for FDI firms, respectively. Only 2% of businesses, of which less than 1% are FDI enterprises, rated COVID-19 as having a “positive” effect, while approximately 11% of each group said they have suffered no impact from the pandemic.

Dau Anh Tuan, director of PCI Project and head of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI), says that the narrowed domestic market coupled with disrupted supply chains represent the largest difficulties facing local businesses.

“COVID-19 has greatly affected business operations of various sectors from garments and textiles, tourism to aviation, and transportation which all endured a decline in revenue compared to the previous year. 30% of businesses said they had to lay off their employees. This is a very high rate, severely affecting enterprises’ operations,” Tuan states.

This comes as the turnover of numerous local firms in 2020 came in significantly lower due to travel limitations of consumers as they tried to either protect their health or comply with social distancing measures. Due to this, roughly 66% of domestic private firms and nearly 62% of FDI enterprises reported a fall in revenue last year. On average, business revenue dropped by about one thirds in comparison to 2019’s figures, he adds.

Decline in business confidence

Business size over the next two years is forecast to decrease significantly in comparison to a figure of 51% recorded in 2019. This marks the third lowest level since 2006, when the PCI survey initially began on a national scale.

This figure is only higher than the bottom recorded in the 2012 to 2013 period when the Vietnamese economy faced the dual impact of the global financial crisis coupled with domestic macroeconomic instability.

“In the 2020 PCI survey, up to 13% of businesses plan to scale down their business operations or close down. This is the highest level in 15 years since the VCCI conducted PCI surveys in all provinces and cities nationwide,” the PCI Project director says.

Many local businesses have therefore devised solutions aimed at dealing with the pandemic as well as setting out long-term solutions, such as changing and diversifying supply sources to the market whilst boosting digital transformation.

Local authorities across all levels should therefore give priority to assisting businesses and citizens to overcome the negative impact of the pandemic in a fair and appropriate manner. In particular, it can be viewed as necessary to consider investing resources in retraining and providing skills for workers who have lost their jobs due to COVID-19.

This is due to many labourers currently looking for jobs in sectors capable of responding to the crisis in a more flexible way, the PCI Project director emphasizes.

Việt Nam contributes to maintaining international peace, security

April 18, 2021 by vietnamnews.vn

Vietnamese military doctors hold up two flags of the United Nations and Viêt Nam at Juba International Airport, South Sudan as they begin to carry out UN peacekeeping missions in the African country. VNA/VNS Photo

HÀ NỘI – As President of the United Nations Security Council in April 2021, Việt Nam will organise a high-level open debate on the role of regional organisations in promoting confidence-building and dialogue in conflict prevention and resolution on April 19 via both in-person and online forms.

The event will be presided over by State President Nguyễn Xuân Phúc, marking the first time a high-ranking leader of Việt Nam has chaired an event within the framework of the UN Security Council. This is also the first important multilateral diplomatic event of the Vietnamese President since the 13th National Party Congress.

Building trust and dialogue

Deputy Foreign Minister Đặng Hoàng Giang said that Việt Nam has presided over the making of, and actively consulted to pass the Statement of the UN Security Council President.

The Statement will affirm the importance of cooperation between the United Nations, its Security Council and regional organisations in conflict prevention and settlement through peaceful measures, on the basis of respecting basic principles of international law and the UN Charter, and underlined confidence-building and dialogue measures as essential elements to contribute to conflict prevention and settlement.

The Statement will call for efforts to strengthen cooperation between the UN, its Security Council and regional organisations as well as between regional organisations in conflict prevention and settlement towards the building of sustainable peace, while encouraging the UN and the international community to support the improvement of capacity of regional organisations in conflict prevention and settlement, post-conflict reconstruction, and peace maintenance.

“The role of regional organisations in promoting trust building and dialogue in conflict prevention” is the most important and inclusive theme of the UN Security Council which is the UN’s main body in the prevention of wars and conflicts and maintenance of international peace and security, Giang said, adding that as a member of many important regional mechanisms, especially ASEAN, Vietnam wants regional organisations to further promote their roles, improve their images and share responsibility with the UN in preventing and solving conflicts in the region, for the stability and prosperity of the region and the world.

Đỗ Hùng Việt, head of the Foreign Ministry’s Department of International Organisations, emphasised that when building priorities for the working term as a non-permanent member of the UN Security Council for 2020-2021, Vietnam determined to promote the role of regional organisations in cooperation with the UN Security Council in particular and the UN in general.

The upcoming high-level open debate will elevate Việt Nam’s initiatives to contribute to maintaining international peace and security. Through this event, Vietnam wants to affirm its commitment and efforts to address global challenges facing the international community, Việt added.

In particular, President Nguyễn Xuân Phúc’s presiding over the event is the affirmation at the highest level about Vietnam’s foreign policy of independence, self-reliance, diversification, multilateralism, and proactive and active international integration during its new stage of development.

Intensifying ASEAN’s role

According to Việt, as a member of ASEAN, Việt Nam wants ASEAN to have an increasing voice, position and role in matters directly related to the region as well as enhancing the bloc’s presence as a regional organisation at the UN.

Through this event, Việt Nam will contribute to drawing the attention of the international community and the United Nations to cooperation with ASEAN, and strengthening the bloc’s role at international forums and institutions in the coming time.

The open debate will be also an opportunity for leaders of the UN and regional organisations such as ASEAN, the European Union (EU), the African Union (AU), as well as the UN Security Council member states to assert the important role of regional organisations, share experience of each regional organisation in dealing with difficulties and challenges in their respective regions.

Việt Nam expects this to be the start of a longer process at the UN Security Council on issues related to regional organisations and their role in promoting trust building and dialogue in conflict prevention, thus contributing to the UN’s joint efforts to maintain peace, security and development in the world. VNS

Giant container port operator, Viettel in strategic tie-up

April 18, 2021 by vietnamnews.vn

Saigon Newport Corporation and telecom company Viettel sign an agreement on Thursday (April 15) to promote the use of IT and develop logistics and other services. VNS Photo Thu Hằng

HCM CITY — The country’s largest container terminal operator, Saigon Newport Corporation, and military-owned telecom company Viettel on Thursday (April 15) signed an agreement to promote the use of IT and develop logistics and other services.

They will join hands to develop eco-system services for the port’s customers and partners.

Port Community System, a national single window for sea -port operation services, smart operation systems and a data warehouse will be developed.

They plan to speed up development of smart warehouses and logistics centres in key economic zones across the country.

Development of e-commerce infrastructure will also be a focus.

Speaking at the signing ceremony, Senior Captain Ngô Minh Thuấn, general director of the port, said with the “comprehensive co-operation” Saigon Newport would underscore its leading position in maritime and port services.

It accounts for nearly 50 per cent of container export-import market, and ranks among the top 20 containers terminal globally.

Viettel has unveiled a mission of pioneering a digital society and its transition from a telecom services provider to a digital services provider.

It is among the world’s 500 most valuable brands according to the UK-based Brand Finance and valued at US$6.016 billion, up 3.4 per cent from last year. —VNS

New normal adaptation

April 18, 2021 by english.thesaigontimes.vn

New normal adaptation

By Nguyen Dinh Bich

Overall, compared with the year-earlier period, although export sales reached US$48.7 billion, a three-fold increase (24.7% versus 8.7%), import value soared to US$47.1 billion, a jump of 9.5 times (26.4% versus 2.8%) – PHOTO: ANH QUAN

The new year has entered its second quarter and clear signs have been seen of a rapidly changing world market. In such a context, the Vietnamese economy, which has a high degree of openness despite its low economic development, has been strongly affected by import-export in an unprecedented way. How to cope with these fluctuations should therefore be taken into account.

Globally speaking, statistics obtained from the World Bank show that compared with the end of last year, the world power price climbed unexpectedly by 25.9% in February, Likewise, prices of non-fuel commodities rose by 7.1%, of which the price of farm produce rose by 6.4% (prices of cereals soared by 15%, prices of metals by 6.9% and prices of fertilizers by 26.9%, a record high). These hikes were very remarkable against 2020.

Given such conditions, Vietnam with her special basket of imports and exports will benefit significantly from exports. What’s more, she will suffer significantly from import activities, too.

Calculations from statistics released by the Vietnamese customs authorities over the past two months show that while Vietnam enjoyed US$285 million from her exports worth US$4.9 billion from 16 commodities with recorded quantities and value, she lost US$730 million in importing 18 commodities from the world market. That means Vietnam suffered a net loss of US$445 million, or 3% of the total import-export revenue of these groups of commodities. This is a completely reversing scenario from the year-ago period when Vietnam enjoyed significant net gains in exporting and importing these commodities.

A closer look shows that although during the past two months, export sales soared by 17.3% (US$4.9 billion versus US$4.2 billion), the increase would be only 10.5% (US$4.6 billion versus US$4.2 billion). Similarly, the import value of these commodities rose even higher, at 20.6% (US$9.98 billion versus US$8.3 billion). However, if adjusted to the price in the same period last year, the hike would be only 11.8% (US$9.25 billion versus US$8.3 billion).

What the above figures may indicate is world prices have contributed significantly to the amplification of Vietnam’s both import and export baskets.

It is this reason that Vietnam’s trade surplus has come down, absolutely and relatively, from US$1.82 billion in the year-ago period to US$1.64 billion now with the corresponding rate of 4.9% and 3.5%, respectively.

From all the above facts, the following conclusions can be drawn.

First, if the world prices continue their current trend in the coming months, Vietnam’s exports will rise. However, imports will outpace exports and trade surplus will decline. The possibility of a trade deficit cannot be ruled out in this context.

Second, all the above fluctuations will play a significant role in warming up the domestic market, which may prolong. The recent inflationary hike may be only the start of the process.

Two hidden corners

Aside from the above external affects, import-export fluctuations may come from the resonance of the following subjective factors.

First, although the new FTAs (Free Trade Agreements) have received heaps of praises, Vietnam’s import-export market still follows the same beaten track, if not worse.

Of the six markets which are Vietnam’s key foreign trade partners and are signatories in the new-generation FTAs, Vietnam saw the ratio of her total export sales to five of them—including China, Japan, South Korea, ASEAN and EU – 28 (EU plus Britain)—drop to 51.7% from 54.7% in the same period last year while the total import value from these markets rose from 71.9% to 74.5% year-on-year.

The only bright spot in this regard related to the Chinese market when the export ratio jumped from 14% to 16.4% year-on-year. However, this market was also the “darkest spot” when the ratio of imports soared from 24.9% to 32.7%.

Meanwhile, the ratio of export to the United States, Vietnam’s only key trading partner not to be governed by an FTA, also surged equally remarkably, from 26.3% to 28.4%. However, the ratio of import value from this market plummeted from 5.9% to 4.8%.

These wide fluctuations led to the fact that while Vietnam’s trade deficit with China was reinstated, trade surplus with the U.S. skyrocketed to a new record at US$11.6%.

Second, as far as groups of imports are concerned, agricultural-forestry-fishery commodities surged to US$4.25 billion posting a growth rate of 42.1% while their export value reached only US$6.27 billion and their growth rate was only a half, at 20.3%.

The import value of manufactured and processed commodities also rose to US$8.3 billion at a growth rate of 28.2%, slightly lower than export sales in this sector which were US$8.4 billion and posted a growth rate of 26.8%.

In this industry, there were two influential factors: imports from ASEAN climbed 1.88 times and China 1.77 times.

Of the group of manufactured and processed commodities, the relations between import from China and export to other markets were so clear. Imports from China over the past two months surged to US$5.83 billion (posting a growth rate of 69.8%). Meanwhile, exports of this group of commodities to the U.S. escalated to US$2.73 billion (63.9%); to other markets (excluding the six key markets) to US$2.36 billion (35.9%); and to EU – 28 to over US$1 billion (22.5%).

The most typical among this group of commodities was imports of machinery, equipment and other spare parts from China, which rose from US$1.98 billion to US$3.36 billion (ratio rising from 38% to 49.4%). Meanwhile, exports of the same commodities stateside rose from US$952 million to US$2.73 billion (from 30.4% to 48.8%).

To cut a long story short, although a strong rise in export should be encouraging, import also climbed sharply during the period, resulting in a shrinking trade surplus. Aside from fluctuating world prices, which are a force majeure, the possible reason was that the new-generation FTAs still failed to work effectively to boost export and restrict import. Consequently, only the U.S. market accounted for 36.9% of the hike of exports and only the Chinese market accounted for 62.2% of imports.

All considered, the relations between exports to the U.S. and imports from China should be a question policymakers have to solve to make Vietnam adaptive to the new normal in the making.