Vietnam shoes industry

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

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

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

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

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

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

Overview of the phone talk

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

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

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

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

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

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

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

Overview of the conference. Photo: Hai Yen

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Ministry of Finance has recently issued Circular 23/2021/TT-BTC on printing, issuance, management, and usage of e-stamps labeling on tobacco and alcohol products.

Chau Bui is a famous Vietnamese fashionista. Photo courtesy of Chau Bui.

“Selected from over 2,500 nominations and vetted by our team of reporters and a panel of A-list judges, this year’s list features 300 young entrepreneurs, leaders and change makers across the Asia-Pacific region who are braving the challenging environment brought about by the Covid-19 pandemic and finding new opportunities amidst the new normal,” the Forbes magazine noted.

The list selects 30 honorees for each of the 10 categories.

The criteria for honorees making the list include their “demonstration of leadership, how they embody the entrepreneurial spirit that is synonymous with Forbes , and their potential of success in their industry. Other factors like innovation, disruption – and size and growth of their ventures in some categories – play a role in making the final decision,” the magazine said.

Last year, Vietnam had six representatives in the 30 under 20 list.

Suez Canal incident keeps Vietnamese exporters busy, photo AFP

Furniture exporter Viet Products Corporation last week said that even though the backlog has been cleared up at the Suez, it has still borne the growing costs for shipping. “The expense per container has increased to $5,000, from $3,000 last year,” said Nguyen Van Sang, managing director of Furnist, a brand under Viet Products. Sang said that due to operating under the free-on-board form, its partners have been afraid to book new orders, resulting in interruption in its performance.

“It takes us several attempts to ship a container. For example, with a 10-container booking, we can only ship about three or four containers, and the remaining ones will have to wait. That has hampered us from delivering on schedule,” Sang said.

The seafood industry has also been put in the same corner. Truong Dinh Hoe, secretary-general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that the sector is facing accumulating costs for hiring frozen containers to export to the European Union and the United States. The problem stemmed from the effect of the Suez Canal and also serious shortages of containers which has been an issue in recent years.

Kelly Dung, sales manager at international transport firm T&M Forwarding, said that lasting impacts of the recent Suez incident will continue to force growing expenses for shipping. “Shipping companies will have to cut some vessels because of that as well as the ongoing impacts of COVID-19,” Dung told VIR.

With the logistics industry being paralysed due to the pandemic for over a year, now congestion at EU ports may send vessels back to Asia, adding complexity to the situation.

“The current expense is on average about $4,000 per container travelling to the US and about $7,500 per container to the EU,” Dung added. “The price may even double in late April and early May.”

According to Thetech Co., Ltd, a small electronic component importer and exporter, the sums are “too heavy” for its operation. For over a year, the company has been angling for solutions to solve its transport cost issue and has resorted to accelerating shipping through air routes. However, the expense has still ballooned by 10 per cent compared to last year.

Hoe from VASEP said that local seafood exporters are still looking for solutions.

Meanwhile, local rice exporters have been lowering prices for their products in an attempt to enhance the items’ competitiveness against Thai and Indian components. Moreover, they have been attempting to negotiate with overseas partners to extend the shipping timeline, according to the Vietnam Food Association.

The wave of importing goods from Asia to the United States is causing congestion at ports on the latter’s west coast, deepening the global shortage of containers and accumulating shipping costs. The number of containers at the ports of Los Angeles and Long Beach in February increased by 45 per cent on-year, an eighth consecutive month of growth. In March, the sum was estimated to have grown by 80 per cent. Dozens of other container ships are anchored and waiting offshore. The two ports have received about 40 per cent of imports but still fail to keep pace with the expenditure demand of the US consumer, according to Gene Seroka, managing director at Los Angeles Port.

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

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

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

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

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

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

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

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

Source: VNA