New Vietnamese startups on the rise

The number of new business startups in the three months leading up to April jumped by 3.8% compared to the same period last year to 19,049, according to the Ministry of Planning and Investment (MPI).

The companies listed startup capital of VND111,218 billion on their registration forms, which is a reported increase of 13.5% compared to a year earlier.

For the three month period, another 4,741 companies reported supplementary capital of VND172,918 billion in total.

If these businesses turn out to be successful they would hypothetically add 265,167 new jobs to the economy. During the same period, the MPI said another 2,565 businesses were dissolved while 16,175 other either stopped or temporarily ceased operations.

Ford brings the new Ranger T6 to Vietnam

Sales of new cars in Vietnam are set for another milestone year of continuous growth, highlighting the strength of the auto industry in the Southeast Asian nation if automobile manufacturers are on target with their forecasts.

At the recent annual Bangkok International Motor Show (BIMS), Ford Motor Company touted its latest model flagship pickup, the Ford Ranger, which the company boasts will top Southeast Asia and Vietnam in sales for 2015.

According to a Ford representative, the formation of ASEAN in 2015 is expected to drive the vehicle manufacturer’s sales in the pickup truck segment, having contributed to over 50 per cent of its total regional sales last year.

The global premier of the Ranger T6 also aims to leverage the company’s sales in ASEAN by taking advantage of its production facilities located in Thailand and Indonesia.

Thailand constituted the largest market for the company in the Southeast Asian region in 2014, with sales exceeding 40,000 units the representative said, adding that the Philippines and Vietnam trailed in second and third place, respectively.

Other manufactures at this year’s BIMS suggested the four top sellers this year for Vietnam will be the Honda HR-V, Mazda 2, Ford Ranger and the Ford Everest, all of which were introduced at the event.

Brett Wheatley, Vice President in charge of Marketing, Sales & Service, Ford Asia Pacific, said the Vietnamese market for automobiles is coming off a record high growth rate for last year and this year Ford is bullish on the nation’s potential, expecting big things to happen.

Removing trade barriers for Vietnam agriculture

Deputy Head of the Vietnam Competition Authority (VCA) Nguyen Phuong Nam recently said that businesses in the agriculture sector need to be more diligent in opening new markets and breaking down non-tariff barriers.

Doing so will enable these businesses to improve their incomes, better support their families, grow the Vietnamese economy and elevate the national Made-in-Vietnam brand, said Nam.

The largest proportion of non-tariff barriers encountered by agro businesses to date have related to phytosanitary measures dealing with adherence to regulations ensuring food security and preventing the spread of disease.

“The number one problem agriculture and seafood businesses faced resulted from the failure to pay sufficient attention to the quarantine process and food hygiene and safety regulations,” Nam said at a recent interview with a VOV reporter.

Businesses need to clearly understand that if they do not comply with these regulations; their products will not be allowed to be sold in foreign markets, he said, adding that they must innovate and bring their cultivation and breeding methods in compliance.

Nam said the second biggest proportion of non-tariff barriers businesses have experienced involved technical matters related to compliance with often complex product labelling requirements.

Even more significant is the fact that agriculture businesses have failed to fully grasp the World Trade Organisation (WTO) dispute resolution process for matters related to alleged violations of the phytosanitary or product labelling requirements.

Thus when lawsuits were filed they failed to realise that time was of the essence and that they were required to file a timely response in order to protect their rights.

Most often the failure to timely respond has resulted in a preliminary presumption that the complaint lodged against them was valid.

If these businesses do not raise their awareness of the legal requirements to do business in foreign markets and initiate policies and procedures to assure they are in full compliance with them, then they stand to lose their right to do business in those markets, Nam underscored.

They will lose the right because the foreign market will impose substantial tariffs on their exports making it cost prohibitive to do business at a profit.  It will also reflect negatively on and destroy the international reputation of the Made-in-Vietnam brand, Nam said.

First and foremost before carrying on any business in foreign markets, agricultural businesses should establish an in house legal department staffed with high first rate lawyers and legal clerks who understand the laws of the proposed market.

Secondly they should seek the assistance of outside counsel in the foreign market to insure they understand the intricacies of the law as it relates to their business and put in place a management control system to ensure those requirements are fully communicated to the businesses management team.

Lastly, Nam said that businesses must be proactive and take the initiative to work with relevant governmental agencies, particularly the VCA, and other non-profit organisations to ensure they have met all the necessary requirements to conduct business in the foreign market.

Da Nang records strong increase in tourist arrivals

Around 878,000 travellers visited the central coastal city of Da Nang in the first three months of 2015, up 17.3 percent against the same period last year, according to the municipal Department of Culture, Sport and Tourism.

Of them, 313,000 were foreigners, an increase of 14.7 percent and 565,000 were domestic holiday-makers, up 18.9 percent compared to the same period last year.

The revenue from tourism also rose 30.9 percent to 2.62 trillion VND (123 million USD), accounting for 22.2 percent of the yearly plan.

In March alone, the city greeted 332,000 vacationers, including 105,000 foreigners.

In order to promote the tourism sector in the coming time, Da Nang is focusing on dealing with the beggar issue in its key tourism sites.

The city has been ranked sixth in the list of the world’s 10 most improved cities that tourists should visit in 2015 published by the website ‘The Richest’.

The expansion and upgrade of its international airports, the unique and newly developed hotels and resorts along the coast, and numerous direct flights from Hong Kong (China) to Vietnam have created favourable conditions for tourism development in Da Nang, cited the travel website.

In 2014, Da Nang hosted 4 million tourists, including 1 million foreigners.-

Jetstar Pacific launches new air routes from Hanoi

Low-cost carrier Jetstar Pacific on March 30 officially opened a direct air route between Hanoi and the Thai capital of Bangkok.

The daily flights using Airbus 320 take off at 11:10am from the Noi Bai International Airport and 2:35pm from the Suvarnabhumi International Airport.

The flight takes 1 hour and 50 minutes each way.

This is the second route linking Vietnam and Thailand opened by Jetstar Pacific.

Previously, the carrier inaugurated its service between Ho Chi Minh City and Bangkok, which officially operated last year.

The airline has also announced it will operate one daily return flight between Hanoi and the southern resort island of Phu Quoc from June 1 to September 6 in anticipation of rising demand during the summer.

Successful real estate transactions sees strong surge in Q1

The volume of successful real estate transactions in Hanoi and Ho Chi Minh City during the first quarter of 2015 increased nearly three times from the figures recorded in the same period of last year, hitting 4,250 and 3,950 transactions, respectively, according to statistics from the Ministry of Construction.

Hanoi has recorded 1,500 successful trades so far this month, up 25 percent from February, while Ho Chi Minh City reported 1,400 transactions, a 30 percent increase.

Thanks to high liquidity, property inventory nationwide continued to drop, valuing at around 70.7 trillion VND (3.25 billion USD) as of late March, a 45 percent reduction or a 57.8 trillion VND drop from the first quarter of 2013.

At the same time, nearly 11 trillion VND worth of loan contracts have been sign under the 30 trillion VND social housing credit package, up 15.8 percent from the figure at the end of 2014. Of the loans, 6.28 trillion VND has been disbursed, a 33.3 percent increase after three months.

Deputy Minister of Construction Nguyen Tran Nam said production and business activities in construction and property showed signs of recovery during the reviewed period, while housing prices remained stable.

Property trading floors across the country are bustling with a series of new offered projects.

Experts said Vietnam’s real estate will be an attractive investment channel for foreign investors this year, especially as Vietnam joins the Trans-Pacific Partnership agreement and signs other free trade agreements which are expected to open additional opportunities in the field.

Hau Giang plants king orange trees

The Mekong Delta province of Hau Giang has begun growing seedless king oranges on a pilot basis in Chau Thanh District.

Farmers have received support to grow 4,000 seedless king orange trees from the province's Agriculture Extension Centre and the Chau Thanh District Agriculture and Rural Development Bureau. All of the seedlings are expected to be planted by the end of July.

The seedlings were multiplied from first-line seedless king-orange trees created by the Southern Fruit Research Institute.

Seedless king oranges are not new to the country, as they have been grown in a few other provinces.

Nguyen Van Truong, deputy head of the bureau, said the district looked forward to exporting the seedless oranges.

Over the past few years, farmers in Hau Giang have earned high profits up to 700 million VND (33,300 USD) to 1 billion VND (47,600 USD) per ha a year from growing seeded king oranges.

In Phung Hiep District's Hoa My Commune, for instance, all 19 farming households in Hamlet 3 switched from growing other crops to seeded king oranges. Trinh Thanh Sang, head of Hamlet 3, turned his 1 ha of banana trees into a king orange orchard, earning profits 20 times higher. Previously, all families in Hamlet 3 planted mostly banana or sugarcane plants.

However, the rapid switch to king orange cultivation while farmers lack proper farming techniques and high-quality seedlings have contributed to outbreaks of citrus-greening disease.

The province has nearly 10,000ha of seeded king orange trees, mostly in Nga Bay Town and Chau Thanh District.

Growing trade deficit sparked by input demand

Low export growth and rising imports by foreign-invested firms have contributed to Vietnam’s first quarter trade deficit.

The Ministry of Planning and Investment (MPI) last week reported that trade deficit topped US$1.8 billion in Q1, equivalent to 5% of the total export turnover of US$35.7 billion.

While export grew just 6.9% on-year in Q1 compared to 14.1% one year earlier, import rose 16.3% to US$37.5 billion against the 12.4% in Q1 last year.

Experts at last week’s MPI meeting on Vietnam’s Q1 economic situation said that Vietnam’s trade deficit reflected low export growth, in addition to production rebound primarily characterised by an increase in imports by foreign enterprises.

According to a Ministry of Industry and Trade representative, one of the major reasons behind such a deficit was that Vietnam’s first quarter export growth was hindered by an average 30% drop in export prices of about 15 export-oriented staples.

For example, Vietnam exported more than one million tonnes of crude oil, up 34.8% in quantity but down 31.2% in value.

Meanwhile, coffee export value fell 37.3%, aquatic products 20.6%, and coal 64.3%. Garment and textile exports, which are Vietnam’s second biggest export earner, increased only 8.9% in value term but far lower than 16.6% in Q1, 2014.

Meanwhile, according to the MPI, foreign invested enterprises (FIEs) spent US$23.1 billion on imports in Q1, up 24.1% on-year and accounting for 61.1% of the country’s total import turnover.

Domestic enterprises registered import turnover of US$14.4 billion, showing just a 5.7% rise.

The potential positive effects of free trade agreements with the EU, the Republic of Korea (RoK), Customs Union (Russia, Belarus and Kazakhstan) and the Trans-Pacific Partnership (TPP) have also been cited as a reason behind the trade deficit.

“During our recent meetings with investors from the US, EU, the RoK and Japan, they said they would shift their investments from China to Vietnam to benefit from these FTAs, which are characterised by slashed import tariffs,” said Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign-invested Enterprises.

“More imports will be seen from FIEs. There will be more disbursed and committed foreign direct investment this year. Many major foreign groups have also come to Vietnam to expand production in anticipation of the FTAs, contributing to a rise in Vietnam’s import volume,” he explained.

Vina Kraft Paper attains FSC

Thai-backed Vina Kraft Paper, a subsidiary of ASEAN’s leading conglomerate SCG, has attained the globally prestigious Forest Stewardship Council (FSC) certificate.

The FSC certificate  is considered the most rigorous and credible forest certification recognised globally and is expected to help the company fly to the position of a leading green producer in Vietnam’s packaging industry.

This FSC means the company has made great efforts to minimise impact on the environment by applying the 3Gs concept (a focus on Green Product, Green Process and Green Mind) and deploying an environmental friendly management system.

The kraft paper and packaging industry largely depends on forests to provide the raw material for production. About 11 per cent of the woods extracted around the world are used by the paper industry.

The FSC chain-of-custody certification system traces the path of products from forests through every stage of the supply chain, verifying that FSC-certified materials are identified or kept separately from non-certified materials throughout production.

Any company in this supply chain, including harvesters, processors, manufacturers, distributors, printers, retailers or anyone who takes ownership of the forest product before the end user, needs to be FSC certified to be able to label or promote their products as FSC certified.

Although currently in Vietnam compliance with environmental regulations is still a challenge, many other markets have regulations and targets set in place to minimise the environmental impact of production and consumption and to increase recycling rates of waste from packaging.

Packaging companies therefore are under pressure to demonstrate the highest environmental credentials. The FSC label on packaging shows that the paper and board used are responsibly sourced. Compared to other packaging materials, the paper and board have the advantage of being renewable, reusable and recyclable.

“In Vietnam, the need for forest preservation is increasing as the country has faced many environmental challenges while boosting its development course. Following SCG’s sustainability principle, Vina Kraft Paper is making our best effort to contribute to the country’s development in a sustainable manner,” said Vina Kraft Paper general director Sangchai Wiriyaumpaiwong.

The company’s kraft paper products are environmentally-friendly in their raw materials and do not cause pollution during and after usage. The company has used over 95 per cent of its fibrous raw material intake from recycled or waste paper which helps reduce the waste and impact to the environment, he added.

Alongside green products, the company is also implementing a green production process to ensure low levels of consumption, high level of recycling and the optimal management of by-products and waste from production.

The company has invested over $10 million into the effluence treatment plant which can treat wastewater to achieve a level A Standard before discharging. Combined with other big investments into high efficiency paper machines and a power plan to optimise the usage of natural resources, Vina Kraft does its utmost to satisfy the most rigorous environmental requirements.

Vina Kraft Paper is one of the 21 subsidiaries of SCG in Vietnam and is part of SCG Paper - the leading paper manufacturer in the ASEAN with the total production capacity of up to 2.7 million tonnes per year.

The factory was established in 2007 and went into production in 2009, with a production capacity of about 250.000 tonnes per year, with over 95 per cent of the products being consumed domestically and five per cent being exported.

Vietnam premier wants to finish privatizing 289 state-run firms by 2015

Transforming state-run enterprises into joint stock companies is now a top priority of the government and it should be done by the end of this year, Vietnamese Prime Minister Nguyen Tan Dung requested Thursday.

Vietnam has targeted to transfer the state ownership in 432 businesses to private investors between 2014 and 2015, and finished doing so at 143 firms last year.

This means there is nine months left for 289 businesses to complete their privatization, the premier said as he chaired a meeting on the country’s plan for reforming state-owned enterprises in Hanoi.

“We should try to reach the target without making any mistakes or hasty decisions,” Dung said, adding that the state-run businesses “should not be bargained away.”

The prime minister said the state-owned enterprise reform plan has been going on the right track, even though there are still issues to solve.

“The performance of some state-run enterprises is still behind their potential, while some others are making losses and have poor productivity,” he elaborated.

The premier used mobile network operator MobiFone and beverage producer Sabeco as good examples of strong companies that will easily find buyers for their stakes.

“Investors are interested in MobiFone and Sabeco even though they were only allowed to acquire small stakes in them, whereas there are companies for which investors are hesitant to open their pockets due to their poor performance,” Dung said.

The Vietnamese government still holds stakes in many businesses which some industry insiders say do not need to be owned by the state.

“We should be brave enough to surmount this obstacle,” the premier said.

He also emphasized that no matter whether a company is owned by the state or private investors, it is in the end a Vietnamese firm.

“So did we lose anything [from the privatization]?” he said. “Everyone should join in developing the economy otherwise we will never be able to achieve victory.”

The premier said the private sector should be considered motivation for economic development and the government’s job is to “create conditions, develop infrastructure, and set the rules” for businesses operating in it.

Transport Minister Dinh La Thang also told the meeting that some positive results have been gained from privatization in the transportation sector.

Some transport businesses, and even hospitals, have improved performance after privatization, he said.

“Some chief officials worried that they would lose their managerial positions following the privatization, but the results have proven them otherwise,” the minister said.

The transport ministry is considering privatizing the country’s two largest seaports, the Hai Phong Port in the north and Saigon Port in the south.

The plan faces objections from some insiders that these facilities could become privately-owned ports, but Minister Thang said it is not an issue.

“What matters is whether we can have bigger and stronger ports, not whether they belong to the state or private investors,” he said.

Besides the Hai Phong and Saigon ports, the privatization plan for MobiFone, the country’s second largest mobile service supplier, is also receiving special attention from investors.

“The plan will be completed up to five months earlier than expected,” said Minister of Information and Communications Nguyen Bac Son.

The ministry-run MobiFone is slated to work with a consultant agency about the plan next month and will finish the evaluation task by the end of the third quarter of this year, according to the minister.

“Nearly ten foreign investors have shown interest in acquiring a stake in MobiFone,” Minister Son said.

Tackling bottlenecks to boost bailout package

The VND30 trillion ($1.4 billion) bailout package to support the real estate market has achieved little progress against the ambitious targets set  at its launching.

After nearly two years of implementation, the $1.4 billion property-oriented bailout package could only disburse more than 16 per cent of the total  value, whereas the initial ambitious goal was to finalise disbursement at the end of June 2016, three years after launching.

State Bank of Vietnam (SBV) figures show that by mid-January this year, relevant banks have only disbursed nearly VND4.9 trillion ($229 million).

To bolster disbursement, early this year the SBV has authorised ten more joint stock commercial banks to act as lenders to join the programme,  increasing the number of banks involved to a total of 15 (the first five banks being state commercial banks).

However, so far many banks have not been able to provide loans to any customers from the bailout package.

Explaining the delay for such lending, Dinh Van Chien, head of the Retail Banking section at TP-Bank, one of the new lenders joining the  programme, said, “Applications are still modest, maybe because we are at an early period of the year, when people are reluctant to take up  loans.”

Chien said their bank has received 13 applications and has disbursed capital for two of them in total.

Meanwhile, it took until early this month that Saigon-Hanoi Bank (SHB) has officially deployed lending under the programme whereas several  other banks still keep silent about their plans to boost lending under this $1.4 billion bailout package.

Head of the SBV’s Credit Department Nguyen Tien Dong has attributed the low capital disbursement to insufficient social housing supply  sources and the fact that only a few customers have qualified to borrow under the programme.

While the $1.4 billion incentive credit package is reported to have low efficiency rates, the SBV has recently submitted to the government another  request of a VND50 trillion ($2.3 billion) credit package to support the property market based on a Ministry of Construction proposal.

Earlier, another VND50 trillion credit package to stimulate the property sector, which was marketed massively by the Vietnam Construction Bank  (VNCB) and the Thien Thanh Group, has reported failure.

Since its launching until recently (about a year ago), when the VNCB was acquired by the SBV at zero dong, the package was yet to be  disbursed.

According to senior economist Nguyen Tri Hieu, the poor outcome of the $1.4 trillion bailout package arose from the strict lending requirements  and the short lending period compared to the average income of most prospective buyers of social housing.

Accordingly, with the current average income it may take 20-30 years for buyers to complete payments on debts instead of the 10-15 years as  proposed.

“The new $2.3 billion credit package might incur the same fate unless these two obstacles are properly tackled,” Hieu commented.

Executives at many property firms have assumed that the current 5 per cent annual interest rate on the $1.4 billion incentive package is attractive,  but carries little meaning because only a handful of businesses could satisfy the lending requirements and they would willingly accept higher (7-8  per cent) interest rates if borrowing conditions were relaxed.

An official at state-owned VietinBank, which was regarded as the most active player in the programme, said, “It has proven rather hard to procure  sufficient documents to become eligible for borrowing under the $1.4 billion bailout package. In fact, many customers had retreated and shifted  into commercial lending with higher borrowing costs to meet their needs.”

HCMC leaders inspect key infrastructure projects

Ho Chi Minh City Party Committee Secretary Le Thanh Hai, People’s Committee Deputy Chairman Nguyen Huu Tin and relevant agencies on  

March 28 inspected the construction progress of Nguyen Hue Street upgrading and Tan Hoa-Lo Gom cleanup projects.

Reporting to Secretary Hai, Mr. Tin said that the people’s committee has instructed relevant sides to speed up construction and complete  upgrading Nguyen Hue Street before April 20.

Basically, the road face and alongside pavements have been paved, drainage system has been built and underground technical infrastructures  have been installed. Trees have been planted along the street.

Execution units are rushing to build final phases at Uncle Ho Statue and fountain system in Nguyen Hue-Le Loi crossroads.

After hearing reports, Secretary Hai instructed the investor and execution units not to run after the project’s progress and reduce the work’s  quality.

The city people’s committee and district 1 authorities should work together to issue management regulations for the street to ensure urban  beauty.

The Department of Transport and relevant units should study to build an automatic water spaying system to cool Nguyen Hue Street when outside  

temperatures highly increase. They should grow trees with suitable height and diameter and good figure.

Director of Tan Hoa-Lo Gom Canal cleanup project management board Le Thanh Liem said that the project was began in 2010 with a total  capital of US$162 million. Of these World Bank has financed US$129 million.

Many items have been done and reduced pollution and flooding for 19 square kilometers of the canal valley area in Districts 6, 11, Tan Binh and  Tan Phu.

Box drain system has been installed and roads above them have been accomplished. Other items such as pavements, tree plantation and  lightning system has also been done.

However the project’s pumping station item has run after schedule with only 62 percent of the work volume having been built. This is attributed to  complicated geological conditions. The canal’s dredging has also run slowly in the upper reaches because of narrow canal bed.

The project would improve not only environment and drainage in the canal area but also the living quality of local residents, said Mr. Hai.

He prompted relevant sides to learn from experience in Nhieu Loc-Thi Nghe Canal cleanup project to better implement the Tan Hoa-Lo Gom  project, especially in urban environmental hygiene.

The city People’s Committee should order districts to well manage the work after all items are put into service, preventing people from infringing  pavements and parks along the canal to do business, he asked. Urban designs in the area should be sped up for good urban landscape.

In conclusion, the Tan Hoa-Lo Gom Canal project must be carried out better than Nhieu Loc-Thi Nghe Canal, he said.

Quang Binh seeks more investors

The Department of Culture, Sports and Tourism of Quang Binh, the provincial Tourism Association and travel firms held a conference in HCM  City on Tuesday to promote tourism in the central province and seek investment in the sector.

Tran Tien Dung, deputy chairman of the province People's Committee, said Quang Binh had outstanding sightseeing and relaxation spots like  Phong Nha Cave, Thien Duong Cave, Nhat Le Beach, and Son Doong Cave.

It was also an ideal destination for adventure tourism activities like cave exploration, mountain climbing and kayaking, he said.

Transportation was also a strong point since the province was situated on the north-south national highway and railway and Vietnam Airlines had  for long been flying from HCM City to the provincial capital Dong Hoi, he said.

"Jetstar Pacific launched flights from HCM City to Dong Hoi earlier this month, and VietJet will start its HCM City- Dong Hoi service next month."

Pham Thanh Binh, deputy director of the department, said the province's 4,000 hotel rooms could only meet 60 per cent of the demand, and tour  operators therefore took their customers to spend the night near Hai Van Pass [situated between Thua Thien-Hue and Da Nang]. To turn tourism  

into its main industry, Quang Binh is looking for experienced investors in high-end hotels, restaurants, amusement parks, supermarkets, and rest  stops for tourists.

BIDV offered US$500 million on-lending grid development project

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has been approved by the Ministry of Finance to access the on-lending US$500 million transmission efficiency project (TEP) provided by the World Bank for electricity development in Vietnam.

TEP is the biggest World Bank power project in the country, aiming to assist Vietnam’s transmission network growth during the 2015-2020 period.

The project targets to improve capacity, efficiency and stability of electricity transmission systems in key economic areas and major cities including Hanoi, Ho Chi Minh City, Mekong Delta and the central region.

Also in the framework of TEP, the National Power Transmission Corporation under Electricity of Vietnam (EVNNPT) will develop a smart grid by upgrading control systems of five 500kV and eleven 220kV stations in order to protect equipment, enhance stability and reduce outages.

In addition, the project will also help strengthen EVNNPT capacity through support measures enhancing self-operating and financial self-management frameworks under power sector reform programmes.

With experiences in ODA and preferential foreign on-lending projects, BIDV is entrusted by the Ministry of Finance to be in charge of on-lending loans from international institutions like the World Bank, the Asian Development Bank, European Investment Bank, the French Development Agency, and the Nordic Investment Bank.

Especially in the field of power management on-lending, BIDV is in charge of signing a large number of credit contracts with the power sector, including the US$321 million power sector reform phase one development policy operation programme funded by the World Bank, the US$120 million power transmission in the northern region provided by ADB, and the power transmission in the northern region expansion worth US$360 million from ADB loans.

HCM City remains upbeat about economic growth

Ho Chi Minh City saw strong results in total retail sales and service revenues while successfully curbing its inflation rate in the first quarter, figures which are likely to trigger economic growth in the city over the next few months, said the municipal People’s Committee at a late March meeting.

According to municipal reports given at the meeting, the city’s gross domestic product (GDP) posted an 8 percent rise in the first quarter against the same period last year with 202 billion VND (9.4 billion USD).

Meanwhile, total retail sales and service revenues increased by 11.5 percent to 159.4 trillion VND (7.4 billion USD).

The city has carried out a number of programmes to tackle challenges for enterprises, said Thai Van Re, Director of the municipal Department of Planning and Investment.

He added that business loans for five prioritised groups—agricultural and rural development, export production, SMEs, support industry and hi-tech enterprises—reached 137.6 trillion VND (6.4 billion USD), up 0.86 percent from 2014.

The industrial production index expanded 5.6 percent year-on-year in the reviewed period.

The municipal budget also recorded positive figures; the city raked in 68.3 trillion VND (3.2 billion USD) during January, accounting for 25.7 percent of the total revenue estimate in the first quarter alone.

Le Hoang Quan, Chairman of the municipal People’s Committee, highlighted that in a bid to fulfil the yearly economic targets, the city will improve its investment climate while fostering economic restructuring, renewing economic models and enhancing growth quality.

Furthermore, the city will create linkages among banks, enterprises and farmers as well as facilitate capital access for enterprises.

The city is also making necessary preparations to support domestic enterprises ahead of the finalisation of the Trans-Pacific Partnership (TPP) agreement and the establishment of the ASEAN Economic Community (AEC).

Vietnam, Morocco bolster economic cooperation

The Vietnam-Morocco business forum was held in Hanoi on March 30 by the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Industry and Trade and the Moroccan Embassy.

Moroccan business delegates at the event represented various fields including metallurgy, chemistry, information technology, telecommunications and pharmaceutical manufacturing.

In recent years, bilateral trade revenue has grown about 55 percent annually. In 2014, Morocco imported 147 million USD worth of goods from Vietnam including industrial equipment, printers, apparel, and consumer goods.

Mohamed Abbou, Minister Delegate to the Minister of Industry, Trade, Investment and the Digital Economy of Morocco, said Vietnam will be a gateway for Moroccan enterprises to enter other Asian markets.

The African country will create favourable conditions for the two countries’ enterprises to develop trade, investment and cooperation relations towards promoting their potential, Mohamed added.

Deputy Minister of Industry and Trade Tran Tuan Anh said Vietnam considers Morocco a significant partner and the ministry will support enterprises to expand business activities.

A cooperation Memorandum of Understanding (MoU) was signed by the Morocco’s export promotion agency and the Vietnam Trade Promotion Agency (Vietrade) at the event.

Retail, service sectors post encouraging growth in Q1

The total retail sales and service revenue earned in the first quarter this year was 790.8 trillion VND (37.13 billion USD), according to data from the General Statistics Office (GSO).

The figure represents a 10 percent year-on-year rise, GSO said, adding that the increase would be 9.2 percent if inflation was excluded.

The increase, however, is lower than the 10.7 percent for the first two months, but it is fairly high compared to the 5-6 percent growth in the final months of last year.

GSO statistician Vu Manh Ha attributed the high growth at the start of the year to the sliding consumer price index (CPI).

The average CPI growth for the first three months was minus 0.03 percent.

The CPI saw four consecutive months of reduction with minus growth from November in 2014 to February this year. It rose again by 0.15 percent this month.

Retail sales accounted for three fourths of total revenue, reaching 604.5 trillion VND (28.38 billion USD) in the first quarter this year, a rise of 10 percent compared to the same period last year, said Ha.

Meanwhile, the hotel-restaurant sector's total revenue increased by only 8.8 percent, lower than the average. The total revenue for tourism was down by 22.8 percent.

The gap between the increase in total revenue when inflation was included and excluded was narrowed.

The gaps between the increase in total revenue when inflation is included and excluded in the first two months were 11.4 percent and 10.7 percent, while that of the first three months were 10 percent and 9.2 percent.

The gap was often double or nearly double that of last year. The gaps between the increase in total revenue when inflation is included and excluded in 2014 were 10.6 percent and 5.5 percent and that for the first six months of last year were 10.7 percent and 5.7 percent.

Binh Duong records strong growth in Q1

The trade surplus in the southern province of Binh Duong reached 591 million USD in the first quarter.

Exported goods totalled 4.219 billion USD in value, an annual increase of 15.6 percent. The foreign-invested sector contributed 81.8 percent to the sum, up 16 percent from 2014.

Major exports maintained momentum, including woodwork products, apparel, footwear, handicrafts and electronic devices.

Meanwhile, Binh Duong imported 3.628 billion USD worth of commodities, a 15.5 percent rise compared to the same period last year. The foreign sector accounted for 79.2 percent of the total import value.

According to the provincial People’s Committee, State initiatives to clear business hurdles took effect in Q1, with enterprises recording strong and stable operations.

Most businesses have already signed goods contracts for the second quarter, while some larger companies have completed deals for the third quarter.

Binh Duong recorded Q1 industrial production value of almost 50 trillion VND (235.3 million USD), up 11.2 percent year on year.

Binh Duong, together with Dong Nai, Tay Ninh, Ba Ria-Vung Tau, Binh Phuoc, Long An, and Tien Giang provinces, and Ho Chi Minh City, form Vietnam’s southern economic region.

Vietnam’s FDI disbursement surges in Q1

Disbursement of foreign direct investment (FDI) increased 7 percent to end at 3.05 billion USD in the first quarter of the year, according to the Ministry of Planning and Investment's Foreign Investment Agency.

The amount attracted compared to last year fell significantly however. As of March 20, the country licensed more than 1.83 billion USD in FDI, equivalent to just 55.1 percent of the same period in 2014. Of the total, 1.21 billion USD was poured into 267 newly licensed projects and the remainder was added to 102 operating projects.

The agency's newest report noted that the first quarter saw newly-registered FDI drop by 40.6 percent, while the amount of capital added to existing projects fell by 51.8 percent.

Manufacturing and processing remained the most attractive sector to foreign investors during the period, as it absorbed 1.4 billion USD, accounting for 76.6 percent of the total capital registered in the country. Estate trading ranked second, luring approximately 202 million USD, and the wholesale and retail industry came third, attracting 123.4 million USD.

From January to March, the Republic of Korea surpassed 32 countries and territories to become Vietnam's leading source of FDI with 491 million USD. It was followed by the British Virgin Islands (351.6 million USD) and Japan (294.4 million USD).

The southern economic hub of Ho Chi Minh City attracted the largest share of FDI with 540.2 million USD, following by the northern port city of Hai Phong with 235.2 million USD and the southern province of Binh Duong with 140 million USD.

According to the agency, the foreign-invested sector recorded a trade surplus of 1.98 billion USD in the first quarter of this year. It exported 25.08 billion USD in goods, up 12.9 percent year-on-year, while its imports saw an annual rise of 24 percent to 23.09 billion USD.

VN aviation sector moves to bolster security following Germanwings tragedy

The Civil Aviation Authority of Vietnam (CAAV) has urged domestic airlines to continue their strict monitoring and supervision of pilots in order to ensure the security and safety of all flights.

The authority has now officially requested stakeholders to regularly review all physical and mental tests of pilots, and to ensure that at least two crew members are always present in the cockpit of an airborne aircraft.

The CAV has also demanded that the Departments of Flight Safety Standards and Aviation Security review their regulations on these matters.

The move follows the tragedy of Flight 9525, belonging to German budget airline Germanwings, which crashed in the French Alps on March 24, killing all 150 people on board. Details from investigation suggest that the co-pilot, Andreas Lubitz, intentionally caused the plane to go down after locking the pilot out of the cockpit.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR