News Bulletin 20 - Week 1 July, 2020

As Vietnam’s post-pandemic recovery continues, the implementation of the EVFTA is key to boosting trade relations between Vietnam and the EU and contributing to Vietnam’s ongoing efforts in global economic integration. Last week, The European Chamber of Commerce in Vietnam (EuroCham) and the Prime Minister’s Advisory Council for Administrative Procedure Reform held the conference in Ha Noi to discuss administrative reform ahead of the implementation of the EVFTA. Accordingly, administrative procedure reform is the key to unlocking the full potential of the Europe-Viet Nam Free Trade Agreement (EVFTA).

The past week spotlight

Administrative reforms would help unlock EVFTA's potential: EuroCham

EuroCham Chairman Nicolas Audier addresses the dialogue, themed “Administrative Reform: A Key Role in EVFTA Implementation”, held by the EuroCham and the Prime Minister’s Advisory Council for Administrative Procedure Reform on Tuesday in Ha Noi.

“With the EU-Viet Nam Free Trade Agreement entering into force in August, it is essential that business and Government work together to ensure its smooth and successful implementation,” said EuroCham Chairman Nicolas Audier.

“One of the most critical factors will be accelerating Viet Nam’s positive progress in administrative reform, streamlining business conditions, strengthening the business environment, and modernising the legal framework.

With solid foundation after 30 years of diplomatic relations, the soon implementation of the EVFTA will create stable and long-term frameworks to maximise co-operation potential, creating a new impetus to strongly promote and deepen economic-trade-investment relations between Viet Nam and the EU."

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Let’s look at some other related financial and business news during the past week:

1. ASEAN needs to collaborate for better tax policy: report

ASEAN and all member states must collaborate to establish a better tax policy system to build sustainability and resilience across the region, found a report launched on Thursday in Ha Noi.

The report 'Towards Sustainable Tax Policies in the ASEAN Region: the Case of Corporate Tax Incentives' by the Viet Nam Institute for Economic and Policy Research (VEPR), Oxfam, Tax and Fiscal Justice Asia (TAFJA), the PRAKARSA and Viet Nam Tax Justice Alliance (VATJ) proposed solutions for ASEAN to improve policies and actions for increasing domestic revenue to fund public goods.

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2. 7.8 million Vietnamese workers' jobs affected by Covid-19

The coronavirus pandemic has caused 7.8 million workers to lose their jobs or have working hours reduced.

Up to 1.4 million lost their jobs, mostly in the processing, retail, logistics, and hospitality sectors, according to data released on Monday by the Ministry of Labor, Invalids and Social Affairs.

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3. CPI must be kept below 4 pct. this year: PM

Vietnam’s CPI this year must be controlled and grow by less than 4 percent, and this is one of the tasks to develop the economy during the remaining months of 2020, Prime Minister Nguyen Xuan Phuc said on July 1.

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4. Vietnam records lowest GDP growth rate in 30 years

Vietnam’s gross domestic product (GDP) increased 1.81 percent during the first six months of 2020, the lowest first-half growth pace since 2011, according to the General Statistics Office (GSO).

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5. Covid-19 slump forces nearly 30,000 businesses to suspend operations

As many as 29,200 businesses in Vietnam registered to temporarily suspend operations in H1, up 38.2 percent year-on-year, according to General Statistics Office.

At 19,600, there was a 10.2 percent year-on-year reduction in the number of businesses waiting to complete dissolution procedures, the GSO says.

Meanwhile, 7,400 companies completed their dissolution procedures, down 5 percent over the same period last year.

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6. CPI up 0.66 percent in June

The June consumer price index (CPI) rose 0.66 percent month-on-month and 3.17 percent year-on-year but was down 0.59 percent against December 2019, the General Statistics Office reported on June 29.

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7. GDP growth to hit 3 pct in 2020: Fitch Solutions

Vietnam’s GDP would expand by 3 percent this year with a recovery in the second half as Covid-19 appears to have been contained in the country, Fitch Solutions forecasts.

The market research company, a unit of credit ratings Fitch Group, said in a recent release this is a revision from its previous forecast of 2.8 percent growth.

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8. Big relief for businesses’ concerns

On May 8, the National Assembly approved the Eurpopean Union-Vietnam Investment Protection Agreement (EVIPA), with 460 out of 461 deputies (95.65%) voting yes for the pact. Once effective, the EVIPA will encourage and protect investment across the board for all EU members and replace 21 out of 67 bilateral investment treaties (BITs) which Vietnam has signed separately with EU members since 1990.

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9. Vietnamese businesses burdened with taxes, FIEs at ease with tax exemptions

Studies have found that Vietnam’s taxation system offers many incentives to foreign invested enterprises (FIEs), but puts an increasingly heavy burden on Vietnamese enterprises and people.

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10. EVFTA a big opportunity for firms after COVID-19 shock: ministry

The European Union Free Trade Agreement (EVFTA) will create significant opportunities for Vietnamese firms to recover and develop after the COVID-19 pandemic, Deputy Minister of Industry and Trade Tran Quoc Khanh said at a conference on Monday in Ha Noi.

[…] Khanh said the EVFTA would soon come in force, boosting bilateral trade and investment relations and accelerating Viet Nam's international economic integration as well as the country’s renovation and modernisation process.

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