Supporting economic transformation

Vietnam will give priority to promoting innovation in digital technology development, carrying out digital transformation in business, society and governance, and gradually forming a digital economy, digital society and digital government.

Resolution bolsters Vietnam’s digital transformation

The world has quickly entered the digital era and Vietnam is now striving to catch up.

Vietnam ranks 55th in digital transformation

Vietnam ranked 55th in digital transformation with 41 points in Huawei’s Global Connectivity Index (GCI 2020).

The Hanoitimes – Vietnam is seen to be one of the world’s most attractive emerging economies.

As the world pulls out of the crisis, Vietnam will be an economic benefactor from the way they managed the catastrophe, according to CEO of HSBC Vietnam.

This is reflected in positive economic forecasts for the year ahead with HSBC’s own house-view that the country’s GDP will rebound strongly with 8.1% growth in 2021 from 2.6% in 2020, said CEO of HSBC Vietnam Tim Evans.

Vietnam’s growth set to rebound thanks to the way it deals with the crisis

2020 achievements

Facing many obstacles caused by the Covid-19 pandemic, Vietnam still recorded a GDP growth of 1.8% in the first half of 2020, and is one of the very few countries in the world to maintain positive growth momentum in 2020.

Average inflation over the first 11 months in 2020 was effectively controlled with an increase of 3.51% on-year, which is lower than the target of below 4% set by the National Assembly. This was achieved thanks to the government’s efforts to control the epidemic and the subsequent waves that hit the country.

Despite 2.6% being the lowest growth rate in many years, Vietnam is still the only ASEAN country to evidence positive growth this year. Also, according to the International Monetary Fund (IMF), Vietnam’s GDP growth is expected to reach 2.4% for 2020 and remains one of four economies in the world that have positive growth of GDP per capita this year, including Taiwan, Egypt and China.

In 2020, manufacturing and exports remain the two driving forces for Vietnam’s economic growth, together with foreign direct investment (FDI) which also plays a crucial role.

November indicators showed that Vietnam was on track for a solid economic recovery. Manufacturing has grown double digits for the first time since the start of the Covid-19, while exports continue to shine due to increased electronics shipment.

The index of industrial production (IIP) for 11 months of 2020 is estimated to increase by 3.1% over the same period last year. The export turnover of 11 months of 2020 is estimated to achieve US$254.6 billion, up 5.3% on-year.

Vietnam’s international profile continues to grow with increasing economic integration from joining the World Trade Organization (WTO) and the signing of 14 active multi- and bi-lateral trade agreements.

This international trade connectivity has been a major driving force for Vietnam’s economic development, but it also means the economy might be impacted when subjected to a global crisis like Covid-19.

However, the Vietnamese economy has shown its incredible resilience during these unprecedented times. In fact, the World Health Organization (WHO) and many other countries have lauded Vietnam for its highly successful and effective response in handling the pandemic.

CEO of HSBC Vietnam Tim Evans

Business resilience

Another thing that Tim Evans would like to call attention is the remarkable determination of Vietnamese businesses community.

He said the business community has decided to not surrender or succumb to the difficulties caused by the external environment but instead has looked to find ways to overcome the challenges they faced as a result of lockdowns, closed borders and social distancing measures.

According to the recently published HSBC Navigator report, 68% of Vietnamese companies implemented changes over the last 12 months to cope with the pandemic. In addition, moving forward, they intend to focus their investment on sales channels, up-skilling their workforce, enhancing the customer experience and improving cash flow/capital management in 2021.

They also intend to invest in technologies that will help improve speed to market, customer targeting and enhance automation/ operational efficiency.

He said in his own meetings with HSBC clients during 2020, he has seen first-hand how they seek to continuously improve their business model through leveraging digital transformation, proactively approaching banks to find solutions to optimize cash flow management and applying digital solutions to maximize operational efficiency.

It’s worth noting of not only a continuous growth, but much of Vietnam’s recovery comes from internal forces.

Supporting factors

The General Statistics Office’s statistics show that manufacturing and services have continuously accelerated from the sharp decline experienced during the lockdown period, meaning that the economy has growth momentum. Exports rose 10.7% on-year in November, after upwardly revised growth of 12.2% on-year in October.

While weakness in textiles and footwear (down 12% on-year) has exacerbated as a result of the renewed lockdowns globally, strong expansion in machine equipment (62% on-year) and electronic shipments (6% on-year) have more than offset their declines leading exports on a steady recovery path.

The PMI, although dipping to 49.9 in November after two months’ expansion does not mean a gloomy manufacturing outlook. The storm and flood disruptions were pointed as the reason for the setback, which is likely to be temporary.

After all, new orders continued to expand, and the gap between new orders and inventory remained in positive territory.

“Therefore, we continue to hold a positive outlook for the Vietnamese manufacturing industry and for the Vietnamese economy as a whole,” Tim Evans said.

Another bright spot for Vietnam’s economy in 2020 has been the government’s consensus in pursuing the international trade integration policy which has been reflected by the conclusion of negotiation of the UK Vietnam Free Trade Agreement (UKVFTA) in December, the effect in August of the Vietnam – EU Free Trade Agreement (EVFTA) and the recently signed Regional Comprehensive Economic Partnership (RCEP).

These agreements will help Vietnam diversify export markets and trading partners, which is also one of the best ways to minimize risks from excessive dependence on a specific trading partner which Covid-19 has made this risk apparent.

The increased and diversified global integration will also help Vietnam access foreign capital sources, supporting Vietnamese businesses to become more competitive.

“I, for one, continue to see Vietnam as being among the world’s most attractive emerging economies,” Tim Evans emphasized.

The Hanoitimes – Senior officials give solutions to address current problems and challenges facing Hanoi in various fields.

In meetings with Hanoi’s authorities to draft future plans and address existing issues, all government ministers stressed their full support to ensure the city’s rapid and sustainable growth.

Below are the views and thoughts of top government officials to move the city forward that Hanoitimes collected during the meeting.

Minister of Planning and Investment Nguyen Chi Dung: Urgency in infrastructure development

Over the years, Hanoi has achieved significant progresses in socio-economic development. Even in 2020 with the severe Covid-19 impacts, the city still delivered a positive economic growth and improved productivity.

Along with the local government’s efforts in improving the business environment, Hanoi remains an attractive destination for foreign investment, which came on the back of staying at top of the country in terms of attracting foreign direct investment (FDI) for the 2018-19 period.

However, the city’s potential remains vastly untapped and there have not been clear development breakthroughs, while innovation progress has left much to be desired.

Social issues have also been a source of public discontent with traffic congestion and overloaded infrastructure system.

It is worth mentioning that Hanoi is at the center of the northern key economic zone, so there is an urgency to push for greater investment in infrastructure development.

The Ministry of Planning and Investment (MPI) supports Hanoi’s initiatives in building new transportation routes to form economic corridors, at the same time upgrading urban technical infrastructure of railway routes, bridges, and belt roads.

The MPI would closely cooperate with Hanoi in the master planning process and realizing the socio-economic development plan in the 2021-30 period, with vision to 2045. During this process, the ministry would help Hanoi attract large scale FDI projects using modern technologies with high added-value; reform administrative procedures; and support Hanoi’s enterprises during the digital transformation process.

Minister of Finance Dinh Tien Dung: Sustainable budget structure

Despite growing global and domestic uncertainties, Hanoi is still able to keep a sustainable budget structure, in which domestic revenue makes up 80% of the total city revenue and records an average growth rate of 9.7% per year.

Such growth is higher than the national average of 8.8%, and the city’s domestic revenue contribute 21% of the total nationwide.

For the city’s upcoming finance-budget plan in the 2021-25 period, Hanoi should continue to adopt drastic measures in improving the business environment, as well as realizing its current advantages to enhance economic competitiveness. A strong economic growth would create a strong base for Hanoi to attract investment capital, especially hi-tech projects that would contribute to sustainable source of revenue for the state budget.

In the coming time, Hanoi should pay more attention to the privatization of state-owned enterprises under the instruction of the government, while ensuring greater efficiency in the budget management, especially in the utilization of natural resources, lands and public services.

Minister of Information and Communications Nguyen Manh Hung: Technologies and innovation key for growth

Technologies and innovation would be the decisive factors to support Hanoi’s development and further attract foreign companies to commit long-term businesses in the city.

As part of Hanoi’s efforts in developing smart city, digital transformation should be at its core, and the Ministry of Information and Communications (MIC) stands ready to help Hanoi realize its goals.

Regarding the development of e-government, Hanoi should target to have 100% of public services at the advanced online stage 4 in 2021. A digital government would be able to provide more services and support for the people.

Smart city in its nature is to apply technologies into all aspects of life, from education, healthcare to transportation. On the other hand, Hanoi should consider stepping up efforts in securing cyber security to become one of the world’s safest cities in the cyber environment.

Minister of Industry and Trade Tran Tuan Anh: Prioritizing e-commerce infrastructure

Hanoi is not only Vietnam’s key production hub, but also where headquarters of major exporters are located.

Therefore, if enterprises in Hanoi could take advantage of free trade agreements (FTAs) that Vietnam is a part of, this would create high spillover effects to their local peers in other provinces/cities.

The Ministry of Industry and Trade (MoIT) has been working with Hanoi in ensuring efficient implementation of FTAs.

In terms of e-commerce and digital transformation,  there remain shortcomings in legal framework. The MoIT expects Hanoi to invest in infrastructure for e-commerce and consider this as key driving force for growth in the next development phase.

Meanwhile, Hanoi could also provide support for domestic retailers in accessing logistics and infrastructure system to further penetrate international retail markets.

Minister of Natural Resources and Environment Tran Hong Ha: Opportunity for Hanoi to create breakthroughs in legal reform

Hanoi is a large city with rapid urbanization rate, so the city has been dealing with a large number of social issues. While Hanoi is among those hardest-hit cities in Vietnam by the Covid-19 pandemic, the city has effectively put the pandemic in control, showcasing the strong capabilities of Hanoi leaders.

At the moment, Hanoi is facing challenging environmental issues and difficulties in land management. But from other perspective, this could be seen as an opportunity for Hanoi to create breakthroughs in legal reform. To continue addressing environmental pollution, the efforts of the state is insufficient, which requires the participation of the entire society.

Hanoi, thus, should raise public awareness in environmental protection.

Regarding the issue of land management, Hanoi should focus on improving efficiency in operation of local authorities at district- and ward-levels, especially in the issuance of land-use rights certificate.

Minister of Agricultural and Rural Development Nguyen Xuan Cuong: Greater role for agricultural sector

In the immediate future, Hanoi has identified two priorities, including the capability of self-supplying basic necessities for a population of 10 million people, and to become an agricultural production hub of the country.

Hanoi’s agricultural sector should hold greater role in Vietnam’s overall economic development. In this regard, farmers in Hanoi should be pioneers in applying modern technologies from the Industry 4.0.

Moreover, the city should have more incentive policies to attract talents into the agricultural sector.

In the Red river zoning plan, the Ministry of Agricultural and Rural Development would continue to work with Hanoi in speeding up the process and tackling negative impacts from climate change in this area to mitigate risks to the people living in the region.

Hanoi (VNA) – The north-central province of Thanh Hoa has set a target of turning tourism into a spearhead economic sector by 2030.

Amid the difficulties posed by COVID-19 , the province welcomed 7.3 million visitors in 2020, earning 10.394 trillion VND (over 453.6 million USD), representing 65.5 percent and 50.7 percent of targets, respectively.

Thanh Hoa’s tourism sector has posted impressive growth in recent years.

But Vice Chairman of the provincial People’s Committee Nguyen Van Thi said that its development is still not commensurate with potential.

Thanh Hoa lacks high-quality products to attract and meet the demand of international tourists, while its promotional activities remain ineffective and tourism human resources fail to meet requirements in the context of integration, he said.

According to Deputy General Director of the Vietnam National Administration of Tourism (VNAT) Nguyen Thi Thanh Huong, Thanh Hoa needs to introduce changes to take its tourism industry forward.

It should propose that the Government allow it offer incentives for tourism investment, she said.

Attention should be paid to accelerating the implementation of priority strategies for tourism development and administrative reform, and supporting businesses towards attracting strategic investors in developing infrastructure facilities serving tourism development, especially transport infrastructure.

Thanh Hoa should also focus on enhancing its cooperation with other localities to create new tours, develop high-quality and competitive products, and promote digital transformation and the application of information technologies in tourism activities./.

VNA

In early 2020, Novartis Vietnam Ltd. successfully transformed into a foreign-invested enterprise and fully operationalized its import activities.

Through long-term commitments, Novartis is supporting Vietnam’s domestic healthcare system and contributing to the country’s socio-economic development.

Novartis is a leader in innovative medicines across many therapeutic areas, namely oncology, cardiology (hypertension, heart failure, diabetes), respiratory diseases (asthma, COPD), ophthalmology, pain relief, neuroscience, dermatology and immunology, cell and gene therapy, and others.

The company is a leader in high-quality generics and biosimilars through the firm’s Sandoz arm, and one of the largest investors in clinical trials in Vietnam.