Kerosene

Diesel 0.05S and kerosene, meanwhile, are now no more than 14,243 VND and 13,004 VND per litre, down by 158 VND and 169 VND, respectively.

Meanwhile, the price of Mazut 180CST was capped at 13,757 VND per kilogramme, down 12 VND.

According to the two ministries, the prices of petrol and oil in the global market have been rising for 15 days, hence the upward adjustment.

They review fuel prices every 15 days to keep the domestic prices up to date with the global market.

VNA

Vietnamese GDP growth is anticipated to expand 7.1% this year, to be driven by strong exports and foreign investment attraction, according to the Quarterly Global Outlook 2021 recently released by the United Oversea Bank (UOB).

The report states that Vietnamese exports during the opening two months of the year increased by over 20% compared to last year. Major export items were mobile phones, computer components, and machinery and equipment.

Most notably, foreign direct investment (FDI) inflows have been encouraging, with the country attracting approximately US$5.5billion of registered FDI capital during January and February. This marks an annual decline of only 15.6% despite border closures and travel restrictions, in comparison to the unprecedented 25% fall in 2020.

Japan made up the largest source of registered capital during the first two months, pouring in roughly US$1.5billion, followed by Singapore with US$861.1 million and China with US$374.9 million.

According to industry experts, while the upward trend of economic activities remains on track, it is highly dependent on the containment of infections and vaccination globally. For the year ahead, Vietnamese GDP growth is forecast to grow at 7.1%, a rate which is higher than the 6% target set by the National Assembly.

Fifty five firms to be honoured with Vietnam National Quality Awards 2020

Fifty five businesses will be presented with the the Vietnam National Quality Awards 2020, including 19 winning the golden prize, according to a Decision issued recently by Prime Minister Nguyen Xuan Phuc.

Among the 19 businesses honoured with the golden prize, 15 are production enterprises, and four operate in services.

Meanwhile, the remaining 36 award winners include 27 production enterprises, and nine service companies.

The Vietnam National Quality Awards are the Prime Minister’s annual recognition of organisations and enterprises with remarkable quality achievements in production, business activities and services, thus helping to promote the standing of Vietnamese products and services in the domestic and foreign markets.

The awards, first presented in 1996, were initiated by the Directorate for Standards, Metrology and Quality under the Ministry of Science and Technology.

Petrol prices rise slightly in latest adjustment

Retail petrol prices rose from 3pm on March 27 following the latest review by the Ministry of Industry and Trade and the Ministry of Finance.

The retail price of E5RON92 bio-fuel rose 129 VND to 17,851 VND (0.78 USD) per litre at a maximum, and that of RON95 increased 165 VND to 19,046 VND per litre.

Diesel 0.05S and kerosene, meanwhile, are now no more than 14,243 VND and 13,004 VND per litre, down by 158 VND and 169 VND, respectively.

Meanwhile, the price of Mazut 180CST was capped at 13,757 VND per kilogramme, down 12 VND.

According to the two ministries, the prices of petrol and oil in the global market have been rising for 15 days, hence the upward adjustment.

They review fuel prices every 15 days to keep the domestic prices up to date with the global market./.

Sao Vang-Dai Nguyet petroleum port offshore Ba Ria-Vung Tau opens

The Ministry of Transport has issued a decision on putting the Sao Vang-Dai Nguyet petroleum port offshore the southern province of Ba Ria-Vung Tau into operation.

The port is designed to handle tankers and petroleum service ships and drilling rigs having capacity of up to 150,000 DTW.

In normal weather conditions, the port will have its pilotage areas spanning a circle with a radius of 1 nautical mile.

The Ministry of Transport has asked the investor of the project to ensure maritime safety and security as well as apply measures to prevent environmental pollution during the operations of the port, while collecting fees in line with regulations.

Interoperable QR Payment Linkage between Vietnam and Thailand launched

The Interoperable QR Code for retail payment linkage between Vietnam and Thailand was launched on March 26, signifying the successful implementation of the cooperation in the area of financial innovation between the State Bank of Vietnam (SBV) and the Bank of Thailand (BOT) which began in 2019.

The scheme aims at facilitating bilateral trade, investment, tourism as well as the use of local currencies between the two countries.

This linkage also represents another milestone for the ASEAN Payment Connectivity initiative, which aims to connect the payment services of ASEAN countries using new financial technology to help foster financial integration and sustainable growth in the region.

This service will facilitate cross-border payments of the people of both countries. This is especially the case when cross-border travel becomes the norm again, given that tourist flows between both countries were around 1.5 million in 2019. With this service, tourists from Thailand can make QR payments using their mobile phones to pay for goods and services in Vietnam and vice versa.

This will eventually help stimulate the economies of the two countries and the region as a whole.

SBV Deputy Governor Nguyen Kim Anh said that the launch of this pilot project marks a significant accomplishment in the relationship between the central banks and Vietnam and Thailand in general.

It also marks an important milestone in the collaboration of ASEAN central banks in implementing ASEAN’s initiative on payment connectivity using interoperable QR Codes to deepen regional economic integration and foster digital transformation of each economy, he said.

For his part, Ronadol Numnonda, Deputy Governor of the BOT, said that the benefits of this project will come in many forms. It will offer convenience and security for people travelling between Thailand and Vietnam, leading to growth in tourism and contributing to the two countries’ progress towards a more digitalised society, he said.

This project is made possible with the collaboration from various stakeholders from both countries under the joint stewardship of the SBV and the BOT. These include the National Payment Corporation of Vietnam (NAPAS) and the National ITMX (NITMX) as switching operators, as well as Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Bangkok Bank as the settlement banks responsible for cross-border settlements for the service.

The service banks which provide this cross-border QR payment service to their customers via their mobile banking applications include Tien Phong Commercial Joint Stock Bank (TP Bank), The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) from Vietnam, and Bangkok Bank from Thailand.

In addition, banks that have expressed their interests to join the project as service banks in the near future include The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) from Vietnam and Bank of Ayudhya, CIMB Thai Bank, Kasikornbank, Krung Thai Bank, and Siam Commercial Bank from Thailand. At this stage, both central banks believe that this cross-border QR payment will result in a safer, more efficient and cost-attractive alternative for retail payment by the general public. It will also serve as a catalyst for many more collaborations on financial innovations in the coming years.

In the first phase, Thai tourists using Bangkok Bank’s mobile banking application can scan this Project’s Viet QR Codes to pay for goods and services at TP Bank and BIDV’s merchants. Conversely, tourists from Vietnam using TP Bank and Sacombank’s mobile banking applications can scan the Thai QR Codes of Bangkok Bank’s merchants in Thailand./.

Global prospects abound for textiles

Vietnam’s textile and garment industry is being transformed to adapt to new challenges by diversifying its export and input markets, thereby lessening the dependence on certain countries.

Restructuring had been the major goal in the transition of Duc Giang Garment Corporation in 2020 in the midst of disrupted global supply chains and stagnating orders for the textile and garment industry during the first two quarters of the year. However, the company has put its faith into plans to develop four research and development centres, two online sales centres, and several sales and showrooms.

The company earlier this year emphasised the scale of its ambitions and announced it would step up trade promotion, focus on key customers, seek new ones, and strongly develop the domestic market, aiming to increase by 11 per cent to reach a revenue of VND2.3 trillion ($100 million) and pre-tax profit of VND35 billion ($1.5 million), up 40 per cent compared to 2020.

General director Vu Duc Giang said the corporation had “acceptable business results in 2020” as revenues reached VND2.1 trillion ($91 million), with exports making up $72 million of this and a profit of around VND25 billion ($1.08 million). However, Giang also noted that the complicated development of the pandemic “will remain a great challenge.”

Last year, Vietnam’s textile and garment industry’s gross output decreased by 22 per cent over the previous year. According to the Ministry of Industry and Trade, the export value of the industry has shown signs of recovery since June thanks to the increased demand from major export markets such as the United States and Europe.

In a report published in early March, VNDIRECT Securities Company found that only a few companies changed production lines in a timely manner, while most of them were heavily affected by the pandemic. VNDIRECT estimates that the total revenues of 2020 of listed textile and garment companies decreased by 15.1 per cent while net profits plummeted by 20.9 per cent over the previous year.

Nguyen Duc Hao, an analyst at VNDIRECT, said that some textile enterprises have converted a part of their production lines to medical masks and personal protective equipment, thereby partly compensating for the decline in sales.

Vietnam’s mask production capacity for exports is already very large, and Hao believed that after satisfying the domestic demand, products can be exported, with Vietnam having the potential to become the world’s new hub for the export of facemasks.

Positive forecasts are now covering the worldwide market. According to the Global Textile and Garment Market report, the total global demand is expected to increase from $594 billion in 2020 to $654 billion by the end of 2021, up 10.1 per cent. This growth comes mainly from rearranged production lines and a gradual recovery from the pandemic.

VNDIRECT expects the export turnover of Vietnam’s textile and garment industry in 2021 to recover according to the prospects of economic recovery in major export markets such as the US, the EU, Japan, and South Korea.

The securities company estimated that textile export value will increase 6.2 per cent on-year to $6.8 billion in the first quarter of 2021 due to strong pent-up demand in countries such as China, the US, and South Korea.

Many free trade agreements (FTAs) that Vietnam participates in is the driving force for its textile and apparel industry in the long term. However, fabric production is still a bottleneck for the industry as it must comply with the requirements of the FTAs on product origin.

For instance, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership requires the application of the three-stage principle of spinning, weaving, and sewing to be implemented in CPTPP member countries.

Meanwhile, the EU-Vietnam FTA (EVFTA) imposes a technical requirement called “fabric onwards” and prohibits the use of fabrics originating from certain locations in China. Since Vietnam has to import most of the fabric from China, which accounts for 58 per cent of the total value of Vietnam’s fabric imports, it will cause certain difficulties.

VNDIRECT’s Hao realised that producers will need time to develop the proper production chain to meet the initial rules, but the EVFTA will have a positive impact on the textile industry in the long run.

The dependence on raw materials from China, Hao said, could be resolved by cooperating with other countries in the region. For example, an online trade conference between the Vietnam Trade Office in India and the Chamber of Commerce and Industry of Indian Importers was held in December.

According to the Apparel Export Promotion Council of India, the country’s businesses are considering investment into textile and garment with Vietnam to promote the development of the domestic industry.

Meanwhile, Vietnam has negotiated with EU countries on a provision allowing domestic businesses to add the origin of textile and garment materials imported from South Korea and other countries that have signed an FTA with the EU to their textile products.

“In addition, the Regional Comprehensive Economic Partnership (RCEP) could become a double-edged sword for fabric and yarn manufacturing,” Hao commented.

The RCEP, signed in November between six ASEAN member countries and five non-ASEAN countries, creates a market of 2.2 billion consumers. With it, Vietnam will enter a wider market with less stringent commitments than within the EVFTA and the CPTPP.

VNDIRECT thus still expects the RCEP to support textile businesses to reduce input costs as fabric export taxes from China are reduced from 10 to 2 per cent. It projected that the cost of goods sold in the garment segment will decrease by 5-5.5 per cent.

Vietnam bond market surges 32% to US$71 billion in 2020

Government and corporate bonds comprised 82.8% and 17.2% of the local currency bond market, respectively, at the end of December 2020.

Vietnam’s local currency bond market posted yearly growth of 31.7% to reach VND1,640.8 trillion (US$71 billion), according to the latest edition of the Asian Development Bank (ADB)’s Asia Bond Monitor.

Government bonds outstanding totaled VND1,358.3 trillion (US$58.73 billion), rising 7.1% quarter-on-quarter in the fourth quarter of 2020. Corporate bonds outstanding increased at a much faster rate of 13.6% quarter-on-quarter to VND282.5 trillion (US$12.21 billion).

Government and corporate bonds comprised 82.8% and 17.2% of the local currency bond market, respectively, at the end of December 2020.

Corporate bond issuance in Vietnam dropped 31.6% quarter-on-quarter in the October-December period of last year to VND45.6 trillion (US$1.97 billion) due to the implementation of Decree No. 81/2020/ND-CP, which tightened regulations on corporate bond issuance effective 1 September 2020.

For the emerging East Asia region, local currency bond markets expanded to US$20.1 trillion by the end of 2020, 3.1% higher than the preceding quarter and 18.1% higher than a year earlier, for which the ADB cited an improving global economic outlook and progress on the Covid-19 vaccinations as major factors.

“Bond markets in emerging East Asia continued to grow, mobilizing funding for the region’s sustainable recovery from the pandemic,” said ADB Chief Economist Yasuyuki Sawada. “Successful vaccination campaigns, accommodative monetary policy stances, and easing of restrictions are spurring economic activity and shifting the recovery into higher gear.”

Emerging East Asia comprises China; Hong Kong (China); Indonesia; South Korea; Malaysia; the Philippines; Singapore; Thailand; and Vietnam.

Vaccine rollouts have started in most markets in the region, lifting confidence, according to the report. At the same time, the uncertainty of the pandemic’s trajectory, particularly with regard to new variants and a possible resurgence in cases, continue to weigh on the development outlook. Uneven vaccine access and a potential adjustment in asset prices due to an escalation of long-term interest rates also pose risks.

Government bond yields in most advanced economies and emerging East Asian markets increased between December 31, 2020 and February 15, 2021. Meanwhile, improved sentiment boosted most equity markets and regional currencies. Capital flows into the region’s equity and bond markets also recovered in the last quarter of 2020.

Government bonds dominated the region’s bond stock at US$12.4 trillion as of the end of December, while corporate bonds amounted to US$7.7 trillion. China remained the region’s largest bond market, accounting for 77.4% of emerging East Asia’s total bond stock.

Big space for private businesses over the next 10 years

Vietnam will continue adjusting and improving its business climate with a new socioeconomic development strategy for the next 10 years, in which full protection of business and investment activities will be ensured.

The recent 13th National Party Congress adopted a hallmark political report, which sets out the overall goals for the country’s development orientations until 2045. Specifically, the country will become a developing nation with a modern-oriented industrial sector, exceeding the level of lower middle income by 2025. In 2030 when the country will be celebrating the centenary of the Party, it will become a modern industrial developing nation, with a high income level. By 2045, when Vietnam will be celebrating the centenary of its independence, it will have become a developed nation with a high income level.

The 13th National Party Congress also adopted the Party Central Committee’s wrap-up report of the 10-year Socioeconomic Development Strategy (2011-2020) and the building of the next 10-year Socioeconomic Development Strategy (2021-2030), shaping Vietnam’s future development path over the next 10 years.

The country has set the target that the economy will grow 6.5-7 percent per year between 2021-2025. By 2025, the per capita GDP will be around US$4,700 – 5,000, with the ratio of the total-factor productivity (TFP) in the economy’s growth at 45%. TFP is a measure of the efficiency of all input into a production process. Increases in TFP usually result from technological innovation or improvement. Also, the rate of urbanisation will reach 45%, and the proportion of manufacturing and processing in GDP will hit more than 25%, while that of the digital economy in GDP will be about 20%.

Under the new strategy, Vietnam is set to grow about 7% a year in the 2021-2030 period. Among the measures to be implemented, Vietnam will ensure full rights for enterprises to conduct business and investment activities, and will also effectively ultilise all national resources based on market principles. This would mean that the private economic sector will have a bigger space to perform and the state will narrow down its role as a trader and increase its role as a facilitator for the market to operate in an effective manner.

“Enterprises’ rights and safety will be ensured in conducting business, while all resources will be effectively mobilised, allocated, and utilised based on market principles. Legal frameworks have to be bettered and implemented on a pilot basis, firstly focusing on the law regarding enterprises, startups, intellectual property, trade, and investment so as to enable the national digital transformation and development of new products, services, economic models, and digital economy under the market principles,” the report stated.

According to the report, the state will perform its function as the builder of strategy planning, mechanisms, and policies, and distributor of national resources under the market mechanisms. Enterprises’ and people’s rights to possess legal assets and their freedom in doing business and carrying out contracts have to be ensured in accordance with the law.

The private economic sector will also be encouraged to develop across all sectors not banned by the law, especially in the sectors of production and business, and services. It will also be supported to grow strong companies and groups with high competitiveness. In addition, it will also be encouraged to forge co-operation with state-owned enterprises, co-operatives, and business households, and to develop joint stock companies engaged in by all entities in the society, especially labourers.

Meanwhile, foreign-invested enterprises are considered an important part of the national economy, and will play a major role in mobilising investment capital sources, technology, modern management methods, and the expansion of export markets.

Two months ago, Prime Minister Nguyen Xuan Phuc released a letter to the Vietnamese business community.

He underscored the significant contributions of Vietnamese businesses to the country’s socioeconomic development achievements over the past 35 years of economic reform.

“In the new period, with both massive opportunities and challenges, Vietnamese businesses and entrepreneurs need to enhance patriotism, national pride and the aspiration to rise up, while continuing to make great strides and undertake proactive reform,” PM Phuc said.

He expected the business community will further bolster its social responsibility by supporting the disadvantaged, protecting the environment, complying with the law and saying no to corruption and irregularities in business activities.

“The Party and the state will continue accelerating administrative reforms as steadfast assistance for Vietnamese enterprises’ sustainable development,” the prime minister stressed.

Recently he called for the consolidation of confidence among people and enterprises, via a healthy, fair and transparent business environment.

“We will continue offering the best conditions, space, resources, and opportunities to the private economic sector to develop further, with the keywords of ‘creating equality’, ‘be protected’, ‘be encouraged’, and ‘offering opportunities’,” he stressed.

According to him, ‘creating equality’ means the private sector is to be equally treated before the law and in competition and the allocation of resources with the other economic sectors.

Meanwhile, ‘be protected’ means private enterprises’ assets will be protected, with freedom in business given to them under the law.

‘Be encouraged’ means private enterprises, especially those with a sense of social responsibility, are to be extolled by the state, while ‘offering opportunities’ means that private enterprises are to be offered opportunities in access to resources, technologies, and markets with lower costs.

According to the Party Central Committee, in the time to come, Vietnam will continue conducting “drastic and effective reform of administrative procedures, with the removal of all impediments to the freedom to conduct business”, and “healthy, fair, and transparent competition will be ensured.”

It is expected that by 2030, Vietnam’s business climate will be ranked in the world’s top 30 nations with the best corporate environment, and the Vietnamese private sector will be strongly developed quantitatively and qualitatively as an impetus for national economic development.

According to the Ministry of Planning and Investment, the number of active Vietnamese private enterprises increased from about 324,700 in 2011 to 346,800 in 2012, 373,200 in 2013, 402,300 in 2014, 442,500 in 2015, 477,800 in 2016, 561,000 in 2017, and about nearly 800,000 at the end of last year.

In 2020, as many as 135,000 enterprises were newly established with a total registered capital of about US$97.2 billion, down 2.3% in the number of enterprises but up 29.2% in capital, as compared to the previous year. In addition, operating businesses also raised their levels of capital by an additional US$145.3 billion. Furthermore, more than 44,100 firms resumed operation, representing a 11.9% increase as compared to 2019.

Network carriers transforming into digital technology companies

Leaders of Viettel Military Industry and Telecoms Group (Viettel) shared that in 2020, they have basically finished transforming from a conventional telecoms enterprise into the one offering digital services. The earnings last year witnessed an increase of 23.7 percent compared to 2019 because of that.

Meanwhile, President of Vietnam Posts and Telecommunications Group (VNPT) Pham Duc Long affirmed that in order to develop, his organization needs to become the pioneer in researching and mastering cutting edge digital technologies. VNPT aims at being the national leader in digital service provision in 2025.

To fulfill that mission, VNPT has already developed various digital products and connection platforms making use of advanced technologies (Cloud, on demand, Big data, IDC tie 3). The most notable ones are VNPT HMIS (the software for grassroots healthcare management), VNPT MSS (the platform for information security management).

Following the same direction, MobiFone has cooperated with Ernst & Young Vietnam Ltd. to prepare a development strategy for the period from 2021-2025, with a vision to 2030. It exercises the strategy of ‘Customer centricity’.

MobiFone plans to create suitable infrastructure for 5G network, high-quality broadband. It is also going to apply modern technologies like Artificial Intelligence, Blockchain, Big Data, Virtual Reality in developing services and products for the establishment of an e-government and then digital government. Another plan is to form its own service and product ecosystem to help other businesses in their digital transformation process. Mobile Money pilot scheme is one of its feasible plan as well.

Obviously, leading telecoms companies in Vietnam are heavily investing into advanced technologies so that they can become the providers of multi-platform digital services to meet the demand of organizations ranging from healthcare, education, agriculture, tourism, to traffic in the national digital transformation process.

However, telecoms services are not at all neglected, especially those related to the 5G technology.

Minister of Information and Communications Nguyen Manh Hung affirmed that the development direction of major telecoms enterprises in Vietnam right now is strategically sensible to both serve the national digital transformation process and foster a sustainable development for themselves.

Banking revenue to be managed by digital models by 2025: survey

The rapid advancement of technologies in the banking sector should be accompanied with substantial changes in current legislation, said a banking expert.

About one-third of banking revenue from traditional sources will be managed by digital models by 2025, said Vice General Director of Ernst & Young Vietnam Nguyen Thuy Duong at a conference discussing the future of digital banking in Vietnam held in Hanoi on March 25.

Customers experience digital services provided by LienVietPostBank. Photo: Cong Hung

The survey showed that the majority of banks are providing services for customers based on digital platforms, including wire transfer, online saving, bill payment, and online shopping.

“Around 41% of banks expect to providing online loans for customers,” she added.

In addition to transforming customer services, 73% have digitalized their internal procedures and 42.8% adopt digital signature.

As for problems challenging banks during the digitalization process, Duong said the majority has not set a clear vision on digital banking and put the right attention to the relation between business and digitalization strategies.

“Digitalization is a journey and in a modern world of rapid technological advancement, any institution should think as a strategist, innovate as a startup, design as a tech firm, and invest as a venture capitalist,” she asserted.

Sharing the same view, Pham Xuan Hoe, former Deputy Director of the Banking Strategy Institute, said digital technologies, including internet of things (IoT), artificial intelligence (AI), or machine learning, are transforming the way banks provide finance-banking services to their customers.

“The emergence of fintech has also put banks under pressure to change their business models,” he added.

Hoe referred to a survey conducted by the State Bank of Vietnam (SBV) that digitalization would help banks save up to 70% of operational costs, on the other hand, customers could now enjoy better experience in dealing with banking services.

Hoe, however, said the rapid advancement of technologies in the banking sector should be accompanied with substantial changes in current legislation, while banks should be prepared to invest a substantial amount for digital transformation.

Vice Director of the Vietnam Institute of Digital Transformation and Innovation (VIDTI) Hoang Nguyen Van told Hanoitimes of his concern over the lack of detailed instruction from the legislation viewpoint in digital transformation, saying this may cause “confusion among firms that are looking to engage on this process.”

“The Covid-19 pandemic is making digitalization an urgent issue for firms to increase their survivability by transforming business operation and technologies to cope with a new situation. So the quicker the government provides legal guidance for digital transformation, the better,” he concluded.

Hopes escalating for post-pandemic growth in M&A

Vietnam’s mergers and acquisitions, though rather muted in the beginning months of 2021, are expected to revive on the back of both vaccination programmes and legislative changes.

Commenting on this trend, Masataka Sam Yoshida, head of the Cross-border Division of RECOF Corporation, said that this situation is just temporary, and a bright future is expected ahead. For instance, Japanese investors have become more cautious than ever after the latest wave of the pandemic in Japan.

Vietnam has been extremely successful in keeping the pandemic under control, but the strict travel restrictions make it difficult for Japanese companies to arrange short-term business travels, which are fundamental and crucial in considering and proceeding with M&A transactions. “Having said that, the rationale for the investment in Vietnam has not changed. Vietnam has much higher growth potential than Japan where the economy is too mature. We are aware that Japanese companies remain interested in Vietnam, even though they are not active at this moment,” he said.

According to RECOF’s M&A database, the number of outbound transactions from Japan decreased by 33 per cent to 557 transactions in 2020, while the same number in Vietnam declined by 30 per cent to 23. Vietnam ranked sixth as the destination country for Japan among all countries worldwide, and second only to Singapore in Southeast Asia.

Sam Yoshida added, “COVID-19 has been the sole reason for the recent sluggish M&A transactions between Vietnam and Japan, so assuming the COVID-19 will be subdued with the start of vaccinations and the removal of travel restrictions, we are more than confident that the market will recover in the latter half of 2021.”

Meanwhile, Vo Ha Duyen, chairwoman of Vietnam International Law Firm, cited data by the Corporate Investment and Mergers & Acquisitions Center showing that the value of M&A deals in Vietnam in 2020 dropped by about a half from 2019. Various factors may have affected such activities, she said – the pandemic has had a significant impact on the global economy and also caused difficulties to dealmaking, while travel bans and lockdowns have hampered M&A due diligences and negotiation meetings.

According to Duyen, the ongoing changes to the laws of Vietnam have also contributed to some uncertainties. Under the new Law on Competition, a substantially higher percentage of M&A deals are subject to merger control filing requirements than under the old laws. Investors initially hoped that the introduction of the 30-day “preliminary review” track to the merger control filing procedure under the new law would help reduce procedural burdens.

Nonetheless, because sub-law regulatory guidance has not been issued, it seems that a majority of filing cases have not seen application of the 30-day preliminary review and have been subject to complex and uncertain evaluations which last for months.

In addition, local departments of planning and investment have had difficulties in applying the new Law on Investment as documents guiding the implementation of the law have not been issued. This could increase cases in which the licensing authorities have to seek opinions from other relevant authorities, which may contribute to delays in the M&A process.

“We hope that new decrees and circulars providing detailed and favourable regulatory guidance will be issued soon to support the competition and investment authorities in dealing efficiently with M&A transactions and to effectively reduce the time gap and uncertainties in the procedures, helping boost the recovery of M&A activities when the pandemic settles down,” Duyen said.

According to Vietnam M&A Forum Research Team, a number of mega deals are expected to be secured in 2021. Foreign investors from South Korea, Japan, Singapore, and Thailand will continue to dominate the market with the value of deals reaching up to $500 million. At present, Vietnam’s M&A market remains attractive to investors despite the impact of the global health crisis – in particular, in the second and third quarter of 2020 Vietnam witnessed more M&A deals after the country successfully contained the summer wave of infections.

That being said, Vietnam is hopeful about potential for post-pandemic M&A growth. Some experts have forecast that the main sectors that will contribute to the recovery of value in Vietnam are telecommunications, energy, infrastructure, pharmaceuticals, education, and e-commerce.

Sam Yoshida from RECOF said that Japanese companies are concerned with stability of global supply chains. Vietnam is not only competitive as a location for manufacturing, but also it stands at the crossroads in terms of free trade agreements with major economic zones and so is well positioned.

“Additionally, more Japanese companies are paying attention to sustainability and technology innovations, and they are eagerly looking for opportunities to apply their expertise, such as in renewable energy, smart cities, AI, and more in Vietnam, where the people are open to new ideas,” he said. “As for the pandemic, we highly evaluate Vietnam’s success in keeping the pandemic under control, and this fact makes the country even more attractive for the Japanese investors.”

Cyber-criminals target Vietnam finance-banking SMEs

Cybersecurity companies predict that the rise of cyberattacks will continue in 2021 in Vietnam.

Second in the list of favorite subjects of cyber crimes are SMEs providing internet-based services to customers (CRM products, logistics, e-commerce), according to Nguyen Huu Trung, founder of Cystack Cybersecurity JSC.

According to BKAV, Vietnamese network security solution provider, in 2020 alone, hundreds of billions of dongs were stolen through one-time password  (OTP) hacking and banking security breach. The increasing threat of cyber-attacks against financial service providers is driving a major focus on cybersecurity, particularly in banking.

A recent survey in Southeast Asia conducted by Kaspersky showed that companies owning 50-250 employees in Indonesia, Thailand and Vietnam suffered the most phishing attacks in the region in 2020.

The fight against the Covid-19 pandemic is not over yet, so cybersecurity companies predict that the trend of cyberattacks will continue in 2021.

Effective early detection and response, as well as investment in technology to speed up response times, are key to reducing the impact of cybersecurity incidents and the costs associated with  personal data theft as well as minimizing business losses, according to IBM.

SOEs chosen to lead sector growth

The Ministry of Planning and investment has named the key players for a proposed pilot project on reinforcing 17 state-owned juggernauts to break a path and guide Vietnamese companies into a tech-enhanced new era.

According to the initial proposal, three high-tech groups (Viettel, VNPT, and MobiFone), two energy groups (Electricity of Vietnam and PetroVietnam), the seaport and logistics operator Saigon Newport Corporation, and commercial banking giant Vietcombank were picked for the initiative.

These seven fit the bill in terms of having registered capital of over VND1.8 trillion ($78.26 million); having at least 30 per cent share of their prospective markets with the potential to expand this to a controlling stake; having an efficient corporate governance model; and applying high technology throughout their operations. Besides that, they operate in fields with high spillover effects.

While the pilot will feature these SOEs, the plan is to have a total of 17 groups and corporations once the programme is fully underway.

Developing the SOE ecosystem was set as a crucial task by the closing resolution of the recent 13th National Party Congress, which outlined the country’s main development directions.

MPI Minister Nguyen Chi Dung emphasised that throughout their participation in the project, “selected SOEs must become true leaders, guiding others. Each of them must become an innovation centre from which others can learn. Besides that, they will have to build an ecosystem and a value chain to support private enterprises.”

Le Manh Hung, director of the MPI’s Enterprises Development Agency, said that the target of the leadership and guidance to be offered by these SOEs will be to create closer links with the private sector, make way for new sectors, improve technology adoption, and promote domestic innovation.

The pilot project outlines orientations for each participating SOE to ensure they can fulfil the role meant for them.

Notably, plans for PetroVietnam include bolstering its already impressive financial and technological potential as well as competitiveness and its capacity to promote international integration. At the same time, within 2025-2030, PetroVietnam will take up a majority share in the domestic oil and gas market and achieve a stature on par with leading oil and gas groups from Thailand and Malaysia.

Meanwhile, Viettel will be a dynamic and modern economic group and set out to become a global group – while remaining a key player in Vietnam’s defence development.

MobiFone will reinforce its position as a key national telecommunications operator while deploying new technologies to develop mobile services, focusing on data, integrated, and value-added services.

“The proposal also requests policies to facilitate these SOEs by encouraging the development of digital services, the establishment of a technology development fund for Viettel, and mechanisms to support port clusters. In the finance-banking sector, there will be mechanisms to promote investment banking and set up investment funds, including venture capital funds,” Hung said.

Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development, said that prioritising the development of the defence industry and promoting Viettel’s role is reasonable. However, he called for caution in selecting enterprises in the sectors of energy, telecommunications, banking, and logistics. Recalling the previous failure of large-scale state-owned groups like Vinalines or Vinashin, he stressed that SOEs can only develop with competition.

“These guides will have to be clear on their role as the builders of the foundations and infrastructure that will allow the development of other stakeholders in the economy. Their focus cannot be on simply dominating the market,” Dong said. “The development of SOEs will have to result in the optimisation of the use of state power. Thus, the MPI proposal needs a clause urging SOEs to develop basic infrastructure to promote the development of digital technology.”

Dong also asked why no agricultural SOE is included in the proposed pilot, despite this sector being a particular strength of Vietnam that is also vulnerable to fluctuations.

Reacting to feedback, Minister Dung said that the MPI will continue carefully studying the pilot project proposal before submitting it to the prime minister for approval soon.

Credit growth may reach 12-13 per cent in 2021

Credit growth is expected to reach 12-13 per cent this year despite modest growth in the first quarter.

Banks share that usually the demand for credit in the first quarter tends to increase slower than in the remaining quarters, making it hard to raise deposit rates.

Interest rates have reduced despite good liquidity and idle money flowing into banks. The State Bank of Vietnam (SBV) said, in January-February, total mobilised capital volume in Ho Chi Minh City grew 0.3 per cent compared to the end of last year.

Financial analysts noted as credit growth is slow, banks will likely not raise deposit rates for some time.

Nguyen Dinh Tung, general director of Ho Chi Minh City-based Orient Commercial Joint Stock Bank (OCB), shared that the appetite for capital is generally not high in the first quarter. In addition, credit institutions have reduced costs to cut interest rates based on the SBV’s policy to assist borrowers in the context of COVID-19. As a result, the deposit interest rate remains stable.

As the pandemic is being gradually contained, banks expect on rising credit growth in the forthcoming quarters, with lending focusing on prioritised areas of production and business.

The State Bank has set the banking industry credit growth at about 12 per cent. The goal, however, is not fixed and may be adjusted if necessary.

As the pandemic is being gradually contained, banks expect credit growth in the forthcoming quarters, with lending focusing on priority areas of production and business.

SSI Securities Corporation (SSI)’s recent assessment shows that banks will continue to benefit from lower-cost capital as the deposit interest rates have lowered by 2-2.5 per cent in 2020. The credit growth would reach 12-13 per cent this year.

Tung from OCB added that his bank would follow its retail strategy with loans prioritising small- and medium-sized enterprises and trading households. Besides, the bank will build separate products and services catering for each customer group.

Le Duc Tho, chairman of VietinBank, one of the four leading state commercial lenders, noted the bank targets credit growth at 8-11 per cent this year, but it also depends on market conditions and the SBV’s monetary policy.

Meanwhile, privately-held LienVietPostBank said that the bank will continue implementing its retail strategy, concentrating on lending for priority areas such as agriculture and rural development, green and high-tech agriculture which are less affected by the COVID-19 epidemic, so the efficiency of lending would be high.

According to Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, a sharp drop in interest rates would not boost credit as the aggregate demand remains declining. Besides, lending activities should be monitored carefully to limit bad debt emergence.

Cautious optimism

The International Monetary Fund (IMF) and financial institutions have shown optimism about the world’s economic outlook as they have said there are many signs of a strong recovery.

As planned, in early April, the IMF will update its global growth forecast and reevaluate the expected level of 5.5% announced in January. The fund also hailed US President Joe Biden’s proposed US$1.9 trillion rescue package, considering it a key factor to promoting the world’s largest economy. The IMF spokesman Gerry Rice said that the Covid-19 bailout package will boost US GDP growth to 5%-6% in the next three years. This financial package will also support small businesses and extend unemployment benefits until September along with a direct payment of US$1.4 trillion to American citizens.

The United Nations Conference on Trade and Development (UNCTAD) pointed out that the world economy can grow by 4.7% thanks to a higher US recovery than previously forecast. The adjustment of this forecast is due to the expectation of an increase in American consumer spending as well as the progress of the COVID-19 vaccination programme and the large economic stimulus package. The Chair of the Federal Reserve also said that the recovery momentum of the US economy “seems to be strengthening”. The US economy has grown faster than forecast thanks to unprecedented monetary and financial policy moves issued by the US Congress and the FED, helping businesses withstand pressure amidst the pandemic. The FED forecasts that the US economy should grow by 6.5% in 2021, the highest level since 1984; meanwhile, the unemployment rate would drop to 4.5% by the end of the year.

The European Union (EU)’s economy is also forecast to grow again in the second half of 2021 though the recovery momentum is not as steady. According to Vice President of the European Commission Valdis Dombrovskis, the EU needs a fiscal policy to continue supporting its economy over the next two years. Accordingly, the “exit clause”, which permitted savings in the bloc to overcome the impact of the pandemic while ensuring fiscal sustainability, will continue to be in place until 2022. The UK’s economy is also expected to gradually recover, as economic activity is forecast to return to pre-pandemic level late this year after the “misty country” launches its vaccination campaign.

In Asia, many Japanese businesses are placing a high level of expectation on the economic recovery. As a result, 76.8% of enterprises have set plans to gradually expand their businesses. The Organisation for Economic Cooperation and Development (OECD) also forecasts that the economic growth rate of the Republic of Korea (ROK) will be 3.3%, higher than the previous forecast. The OECD raised its growth forecast for the ROK thanks to its belief in a positive impact from the US’ economic stimulus package on its major trading partners, including the ROK.

However, both the IMF and UNCTAD warned that the complicated development of the pandemic could cause profound damage to the global economy. According to the IMF, policy makers need to be cautious about the dangers of overspending. The pandemic has caused long-lasting consequences, requiring governments to maintain their support of their economies. The world’s economic output was estimated to have reduced by 3.9% in 2020 due to pandemic prevention measures. The epidemic also caused an unprecedented decrease in incomes, especially for people in developing countries.

The maintenance of economic bailout packages and the acceleration of vaccination campaigns against COVID-19 were expected to contribute to supporting the global economic recovery. The optimistic signs are from a number of major economies; however, recovery prospects are still assessed as uncertain and uneven. The pandemic crisis has left many economies around the world lagging and it will get worse if there are no measures to reduce inequity in global access to the Covid-19 vaccine.

Ministry to favor other means of transport over road to reduce logistic costs

Vietnam’s Ministry of Transport plans to shift inland logistics to favor waterway, rail road, and air transportation as a direct result of increased logistic costs due to an overly reliance on road transport across the country.

Although there had been policies since 2014 to facilitate reducing the market share of road transport while increasing that of air, rail road, and inland waterway transport, the structural shift has not been very successful, said the Ministry of Transport.

Specifically, the market shares of passenger road transport went down from 71.7 percent in 2011 to 65.6, but goods transport increased by 8 percent. Those of air passenger transportation increased from 21 to 31.4 percent, but goods transport increased only slightly.

Meanwhile, shares of inland waterway went down from over 60 to 51 percent. Railway transport share also hit a new low in 2020 with less than 0.2 percent in passenger and 1.2 in goods transport segment.

According to experts, the imbalance is caused by biased investment in roads. Evidently, investment for road transport accounts for 89.93 percent of the industry total in 2011-2015, and 80 percent in 2016-2020.

What’s more, the capital investment for inland waterways and railway transport only take up 1.5-2.2 and 2.34 percent that of the transport industry respectively, though they cost half the budget of road infrastructure.

Inadequate infrastructure, especially the lack of connecting roads to inland ports, also cause imbalance in market shares. Many modern gateway ports have not been utilized effectively due to congestions on existing connecting roads.

Proposing a solution, Minister of Transportation Nguyen Van The said relevant authorities will be requested to come up with ways to redirect public investment into other sectors instead of road transport.

In response, Mr. Bui Thien Thu, head of Vietnam Inland Waterways Administration in the South proposed raising public capital for several key projects, namely raising the Duong bridge, building Quang Ninh – Ninh Binh road crossing Luoc river, and building a canal connecting Day and Ninh Co rivers in the North.

In the South, projects to be prioritized are dredging the Cho Gao canal (phase 2), building the Cho Dem – Ben Luc transport route, upgrading the Muong Khai – Doc Phu Hien canal, building the the Ben Cuc – Ben Cui section in Saigon river route, and overall focusing on local logistics.

Regarding railway development, Head of Vietnam Railway Authority Vu Quang Khoi said medium-term public capital would be raised for the 2021-2025 period. Projects of priority are the national railway connecting the Hai Phong area with Lach Huyen port, connecting the railways in the Lao Cai – Ha Khau border area, and building a railway route from Trang Bom (Dong Nai) to Cai Mep – Thi Vai port.

Finally, the head of national aviation said the industry would need some VND365,100 billion (about US$15.8 billion) from the state budget and ODA to improve capacity for the 2020-2030 period.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

By Hai Van

Vân Nguyễn

AN GIANG — Néang Sốt, 29, lives on the side of a dirty road near the forest in a makeshift house erected from steel frames with her four children in An Tức Commune, southern An Giang Province.

Sốt doesn’t have a job and together with her children, aged between two and 10, has to live on VNĐ2 million (US$87) her husband sends back every month.

Her mobile phone is the only way the young mother can keep in touch with her husband. Living in an off-grid area in An Tức where houses are located sparsely, she fears most her phone will run out of battery in the middle of the night when she needed to make a call.

In most parts of Việt Nam where reliable supply of electricity is taken for granted, people can charge their phone almost anywhere, anytime, whether at home, supermarkets or restaurants.

But for Sốt, this means that she would have to make a short walk to her relative’s house to charge the phone.

In recent years, Việt Nam has experienced a renewable energy boom but off-grid communities are still too remote to benefit.

According to the state-owned Vietnam Power Group, the total installed capacity of solar power in Việt Nam has reached 19,400 MWp, accounting for about 25 per cent of the total installed capacity of the national power system.

The total solar power generation output in 2020 alone was 10.6 billion kWh, accounting for about 4.3 per cent of the total electricity output of the national power system.

The Ministry of Industry and Trade set the target to provide 21,000 households with electricity from renewable energy in 2016-2020, however, the target fell short with only 617 households having access to solar electricity under the ministry’s scheme as of 2020.

“The investment for renewable energy is much lower than for grid and suitable for areas where locals use a small amount of electricity,” said Lưu Tùng Giang, deputy head of the Division of Grid and Rural Electricity under the Ministry of Industry and Trade.

However there are difficulties in managing the panels if these are installed in rural areas, using state funds, he said, adding that these will be treated as state property and managed by the local commune or district. Meanwhile, there isn’t any policy related to this, he said.

While the authorities are still struggling with the management scheme, as many as 871,263 households in 2,197 communes across Việt Nam live either without electricity or with a disrupted, unstable source of power.

Aware that it will take a long time and an unaffordable sum of money to have the grid in this remote, sparsely populated area, Sốt spent VNĐ1.5 million ($65) to buy a solar panel last year.

She said: “Solar energy has made my life a lot easier. Before we could hardly do anything under the dim light of kerosene lamps at night, but now everything is more convenient with electricity,”

Just last year, Sốt still had to cycle a few kilometres on dirt road to buy kerosene as fuel for lighting.

Now her family doesn’t have to put up with the petroleum-like odour of kerosene and she can spend the night time playing with her kids, help the eldest daughter with homework, surf the Internet and have video calls with her husband.

The initiative to bring solar energy panels to off-grid communities in An Giang is implemented by Green Innovation and Development Centre (GreenID), a Vietnamese non-for-profit organisation in cooperation with the province’s Department of Agriculture and Rural Development.

An Giang province has an ideal condition for solar with a dry season lasting for five months and high solar radiation level.

With more than 450,000 Euros, mostly funded by Bread for the World, the project has been implemented in four communes of An Hảo, Châu Lăng, An Tức and Ô Lâm in the two districts of Tri Tôn and Tịnh Biên since 2019, according to Nguyễn Thị Hà, project manager of GreenID.

These localities are chosen as the number of households living without electricity here is still high and they are mostly poor with average income of VNĐ10-13 million ($435-565) a year, who can hardly afford the grid electricity, she said.

“Poor infrastructure and remote locations make grid electricity very expensive here,” Hà said.

“Individual rooftop panels are a suitable solution. So our goal was to offer them a cheap model that can provide enough electricity for household’s use.”

In each commune, energy teams were created made up of local residents. These teams will help raise awareness about the benefits of solar panels, look for solar panel providers, install systems and carry out maintenance work.

Despite the COVID-19 pandemic, which delayed some of its activities and events, the project has achieved the target of providing solar panels for more than 500 households with the total capacity of 1,500kWp by the end of 2020.

A package of a PV system including a solar panel and a charger is sold at half price at VNĐ1.5 million. Depending on families’ demand, locals will buy batteries to store the power for night time or rainy days.

37-year-old Trần Đức Anh in An Hảo Commune used to travel 6km from his house to the township’s centre to charge the power generator almost every day.

A 25 amp generator took almost half a day to be fully charged so he had to bring the generator to the charging point in the morning, then go to work and come back to pick it up in the late afternoon.

“Sometimes, it was pouring and I didn’t feel like going out at all but there was no other choice,” said Anh, adding that a family of four now would have to spend VNĐ200,000-300,000 ($9-13) a month for charging expenses if they do without electricity.

After installing 475w solar panels, his family now has access to a reliable, clean and cheap source of electricity for household’s use.

The father of two has bought a new television and more fans to cope with the scorching summer here.

“Providing electricity is a fundamental step in reducing poverty here in the long term,” said Néang Sa Rum, deputy chairwoman of An Tức’s People’s Committee, adding that the cost to be connected with the electricity network ranges from VNĐ6-10 million depending on different locations.

This seems to be unaffordable for people in these two districts who earn an average income of VNĐ10-13 million ($435-565) a year.

Trương Kiến Thọ, vice director of An Giang’s Department of Agriculture and Rural Development told Việt Nam News: “It is hard to achieve the target of having all rural households connected with grid networks, especially in remote mountainous areas where people are sparsely populated. Solar is a perfect alternative in these areas.

“This project has profound impacts on the use of solar energy among ethnic minority communities in two mountainous districts of Tịnh Biên and Tri Tôn. It also has ripple effects to non-ethnic communities in other communes of the two districts,”

But he did say there are still 437 households living without electricity in An Giang as of 2020.

With positive results from the project in An Giang, GreenID’s project manager said she hoped to duplicate this initiative in other areas with similar conditions to create impacts for local communities.

For people like Đức Anh and Sốt, this is the new chapter in their life and a hopeful future for their children.

“The solar brings light to our area and a better future for the young generation,” said Sốt. — VNS

* This story was written & produced as part of a media skills development programme delivered by Thomson Reuters Foundation. The content is the sole responsibility of the author and the publisher.

Solar power can be used to produce electricity for household’s use in An Giang Province. — VNS Photos Tin Nguyen

Sot doesn’t have a job and together with her children, aged between two and 10, has to live on VND2 million (US$87) her husband sends back every month.

Her mobile phone is the only way the young mother can keep in touch with her husband. Living in an off-grid area in An Tuc where houses are located sparsely, she fears most her phone will run out of battery in the middle of the night when she needed to make a call.

In most parts of Vietnam where reliable supply of electricity is taken for granted, people can charge their phone almost anywhere, anytime, whether at home, supermarkets or restaurants.

But for Sot, this means that she would have to make a short walk to her relative’s house to charge the phone.

Néang Sốt (second, left) sits with her neighbours in An Tuc Commune. Most men and young people have left the commune to look for jobs.

In recent years, Vietnam has experienced a renewable energy boom but off-grid communities are still too remote to benefit.

According to the state-owned Vietnam Power Group, the total installed capacity of solar power in Vietnam has reached 19,400 MWp, accounting for about 25 per cent of the total installed capacity of the national power system.

The total solar power generation output in 2020 alone was 10.6 billion kWh, accounting for about 4.3 per cent of the total electricity output of the national power system.

The Ministry of Industry and Trade set the target to provide 21,000 households with electricity from renewable energy in 2016-2020, however, the target fell short with only 617 households having access to solar electricity under the ministry’s scheme as of 2020.

“The investment for renewable energy is much lower than for grid and suitable for areas where locals use a small amount of electricity,” said Luu Tung Giang, deputy head of the Division of Grid and Rural Electricity under the Ministry of Industry and Trade.

However there are difficulties in managing the panels if these are installed in rural areas, using state funds, he said, adding that these will be treated as state property and managed by the local commune or district. Meanwhile, there isn’t any policy related to this, he said.

While the authorities are still struggling with the management scheme, as many as 871,263 households in 2,197 communes across Vietnam live either without electricity or with a disrupted, unstable source of power.

Aware that it will take a long time and an unaffordable sum of money to have the grid in this remote, sparsely populated area, Sot spent VND1.5 million ($65) to buy a solar panel last year.

A local NGO has helped more than 500 households in two districts of Tinh Bien and Tri Ton have access to solar energy.

She said: “Solar energy has made my life a lot easier. Before we could hardly do anything under the dim light of kerosene lamps at night, but now everything is more convenient with electricity,”

Just last year, Sot still had to cycle a few kilometres on dirt road to buy kerosene as fuel for lighting.

Now her family doesn’t have to put up with the petroleum-like odour of kerosene and she can spend the night time playing with her kids, help the eldest daughter with homework, surf the Internet and have video calls with her husband.

The initiative to bring solar energy panels to off-grid communities in An Giang is implemented by Green Innovation and Development Centre (GreenID), a Vietnamese non-for-profit organisation in cooperation with the province’s Department of Agriculture and Rural Development.

An Giang Province has an ideal condition for solar with a dry season lasting for five months and high solar radiation level.

With more than 450,000 Euros, mostly funded by Bread for the World, the project has been implemented in four communes of An Hao, Chau Lang, An Tuc and O Lam in the two districts of Tri Ton and Tinh Bien since 2019, according to Nguyen Thi Ha, project manager of GreenID.

These localities are chosen as the number of households living without electricity here is still high and they are mostly poor with average income of VND10-13 million ($435-565) a year, who can hardly afford the grid electricity, she said.

“Poor infrastructure and remote locations make grid electricity very expensive here,” Ha said.

“Individual rooftop panels are a suitable solution. So our goal was to offer them a cheap model that can provide enough electricity for household’s use.”

In each commune, energy teams were created made up of local residents. These teams will help raise awareness about the benefits of solar panels, look for solar panel providers, install systems and carry out maintenance work.

Despite the COVID-19 pandemic, which delayed some of its activities and events, the project has achieved the target of providing solar panels for more than 500 households with the total capacity of 1,500kWp by the end of 2020.

Access to electricity is a fundamental step to reduce poverty in Tri Ton and Tinh Bien districts.

A package of a PV system including a solar panel and a charger is sold at half price at VND1.5 million. Depending on families’ demand, locals will buy batteries to store the power for night time or rainy days.

37-year-old Tran Duc Anh in An Hao Commune used to travel 6km from his house to the township’s centre to charge the power generator almost every day.

A 25 amp generator took almost half a day to be fully charged so he had to bring the generator to the charging point in the morning, then go to work and come back to pick it up in the late afternoon.

“Sometimes, it was pouring and I didn’t feel like going out at all but there was no other choice,” said Anh, adding that a family of four now would have to spend VND200,000-300,000 ($9-13) a month for charging expenses if they do without electricity.

After installing 475w solar panels, his family now has access to a reliable, clean and cheap source of electricity for household’s use.

The father of two has bought a new television and more fans to cope with the scorching summer here.

“Providing electricity is a fundamental step in reducing poverty here in the long term,” said Néang Sa Rum, deputy chairwoman of An Tuc’s People’s Committee, adding that the cost to be connected with the electricity network ranges from VND6-10 million depending on different locations.

This seems to be unaffordable for people in these two districts who earn an average income of VND10-13 million ($435-565) a year.

Truong Kien Tho, vice director of An Giang’s Department of Agriculture and Rural Development told Việt Nam News: “It is hard to achieve the target of having all rural households connected with grid networks, especially in remote mountainous areas where people are sparsely populated. Solar is a perfect alternative in these areas.

“This project has profound impacts on the use of solar energy among ethnic minority communities in two mountainous districts of Tinh Bien and Tri Ton. It also has ripple effects to non-ethnic communities in other communes of the two districts,”

But he did say there are still 437 households living without electricity in An Giang as of 2020.

With positive results from the project in An Giang, GreenID’s project manager said she hoped to duplicate this initiative in other areas with similar conditions to create impacts for local communities.

For people like Duc Anh and Sot, this is the new chapter in their life and a hopeful future for their children.

“The solar brings light to our area and a better future for the young generation,” said Sot.

VNS

* This story was written & produced as part of a media skills development programme delivered by Thomson Reuters Foundation. The content is the sole responsibility of the author and the publisher.