News Bulletin 28 - Week 4 August, 2020

As expected, we are starting to see some of the impacts of the COVID-19 pandemic as foreign direct investment (FDI) inflows are declining compared to previous years. However, the EU-Vietnam Free Trade Agreement (EVFTA) has come into force from the outset of August, with a draft of new laws and policies will help mobilise high-quality foreign investment into large-scale projects in Vietnam.

On August 27, 2020 Prime Minister Nguyen Xuan Phuc asked ministries and agencies to closely monitor and accelerate granting of visas to foreign experts and investors.

The past week spotlight

PM orders accelerating visa grant to foreign experts, investors

Prime Minister Nguyen Xuan Phuc on August 27 asked ministries and agencies to closely monitor and accelerate granting of visas to foreign experts and investors. (Photo: VNA)

At a meeting with representatives from a number of ministries, agencies and localities, the Government leader proposed resuming commercial flights to certain countries with high COVID-19 safety indexes, stressing the need to seek all possible ways to support the national economy.

He urged the Ministry of Finance to coordinate with the Ministry of Health in devising a plan on COVID-19 treatment fee collection.

Meanwhile, the Ministry of Foreign Affairs will continue to fly home Vietnamese stranded abroad, and bring foreign experts and investors to Vietnam in an appropriate and flexible manner.

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

1. Business formations in Vietnam up 1.5% in August amid Covid-19 resurgence

The number of newly-established enterprises in Vietnam in the first eight months of 2020, however, was down 2% year-on-year to 88,700.

Despite the Covid-19 resurgence in July, new business formations in August increased by 1.5% month-on-month to 13,400, according to the General Statistics Office.

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2. Vietnam PM targets positive economic growth for 2020

As Covid-19 vaccines are being developed, Vietnam requires the right strategy for both short- and long-term needs in a new normalcy, said the prime minister.

As the health crisis continues to rage, achieving positive economic growth for this year and shielding the economy from negative effects of the pandemic would require huge efforts, according to Prime Minister Nguyen Xuan Phuc.

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3. PM orders improvement of legal environment for e-government building

Prime Minister Nguyen Xuan Phuc requested ministries and localities to soon address shortcomings in legal environment for building the e-government, while chairing an online meeting on August 26.

He noted that the rate of online public services remains low, which is unlikely to reach 30 percent at the year’s end without new ways of implementation. Some ministries and provinces could only reach less than 10 percent, an alarming level, he added.

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4. Ministers endorse CLMV Action Plan 2021-2022

The Twelfth Cambodia – Lao PDR – Myanmar – Vietnam (CLMV) Economic Ministers’ Meeting (EMM) was held on August 24 via videoconference, endorsing five areas for the CLMV Action Plan 2021-2022.

This is a major event within the framework of the 52nd ASEAN Economic Ministers Meeting (AEM 52) and related conferences held on August 22-30 in Hanoi.

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5. Labor Ministry proposes second support package for people affected by COVID-19 pandemic

The Ministry of Labour, War Valids and Social Affairs (MoLISA) has proposed a VND18.6 trillion (US$798 million) package for those affected by the COVID-19 pandemic, helping them promote production and maintain employment.

The proposal has been sent to the Ministry of Planning and Investment. The beneficiaries are small and medium enterprises, cooperatives, business households in which small and micro enterprises (under ten employees) are given priority, and workers in rural areas. Production and business units can borrow up to VND2 billion, while employees are entitled to VND100 million.

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6. ASEAN + 5 expect to sign RCEP Agreement in November

The Regional Comprehensive Economic Partnership (RCEP) is expected to be signed in November this year.

The information was released at the RCEP Ministerial Meeting hosted by Vietnam Minister of Industry and Trade Tran Tuan Anh via a video conference held on Thursday.

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7. Vietnam opens seaports to receive new FDI 'wave'

Development of coastal industrial zones appears to be the right move to take advantage of incoming FDI.

BW Industrial, a joint venture between Warburg Pincus and Becamex IDC, has followed famous realtors’ moves to set up an IZ on Dinh Vu Peninsula in Hai Phong City. The project is hoped to open this September.

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8. More than 90% of Vietnamese travel firms suspend operations

Around 90%-95% of travel companies in HCM City have suspended operations due to the Covid-19 pandemic.

According to the municipal Department of Culture, Sports and Tourism, only 5% of travel firms in HCM City are still operational to settle debts with their partners and customers. Their staff have to work online at home on rotation without salary.

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9. Surpassing Thailand, Vietnam becomes No 2 rice exporter in the world

With a bumper crop and good export prices, Vietnam’s rice export volume and turnover have exceeded Thailand’s, making the former the second largest exporter amid the Covid-19 crisis.

While the exports of many farm produce items have fallen dramatically because of the epidemic, exports of rice have been high.

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10. FDI hits four-year low as Covid-19 continues to rampage

Registered foreign direct investment so far this year has fallen to a four-year low as the coronavirus continues to hit economic activity.

It fell 13.7 percent year-on-year to $19.54 billion in the first eight months, according to the Foreign Investment Agency.

Of this, $9.73 billion went into new projects, a 6.6 percent increase, including $4 billion in a 3,200-MW liquefied natural gas-fired power plant in the Mekong Delta province of Bac Lieu invested by a Singaporean company.

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