Despite the unpredictable outbreak of the Covid-19 pandemic in 2020, Vietnam's export growth this year has been impressive thanks to the signing and approving of many free trade agreements (FTAs), reflecting the success of the steady and flexible international integration process. Foreign investors have continued investing and/or shifting production activities to Vietnam in the last months of 2020, demonstrating investors’ confidence in the country’s success at controlling the pandemic. For the last week of 2020, let’s look back 10 outstanding economic events of Vietnam after a turbulent year.
The past week spotlight
Outstanding economic events of Vietnam in 2020
Vietnam among very few countries to post GDP growth rate of 2.5-3 percent, and the signing of RCEP agreement in 2020 when Vietnam assumes ASEAN Chairmanship are among the top 10 domestic economic events in the year.
Vietnam is among very few countries to post GDP growth, estimated at 2.5-3 percent. (Photo: VNA)
The following are the ten outstanding events as selected by the VNA: GDP growth amidst severe global economic downturn; Vietnam – founding member of the world’s largest free trade agreement area; Huge losses caused by natural disasters; Programme on national digital transformation approved; Trade surplus hits record high despite COVID-19; Public investment disbursement grows strongest in decade; Central bank cuts cut policy rates for three times; Number of dissolving firms surge; Stock market – an important channel for capital mobilization; Aviation, tourism suffer heavy losses.
Let’s look at some other related financial and business news during the past week:
1. Vietnam's customs revenue set to hit over $13 billion in 2020
By the end of 2020, Vietnam’s customs revenue is set to reach VND315 trillion (US$13.62 billion), down 6.8% against the year’s estimate.
Director of the Import-Export Tax Department under the General Department of Vietnam Customs (GDVC) Le Nhu Quynh revealed the figure at a conference discussing the performance of Vietnam’s customs in 2020 and its objectives for 2021 on December 24.
“In 2020, growing global uncertainties, including trade tensions among superpowers and the Covid-19 pandemic, have create both challenges and opportunities for Vietnam,” added Mrs. Quynh.
Meanwhile, the fact that the country continues to join new-generation free trade agreements such as the EVFTA and RCEP with high commitment levels in both import duty, market access and intellectual property rights, have been affecting Vietnam’s trading activities, she noted.
2. 2021 is a year to boost Vietnam technology development: ICT Minister
2021 is a year of strong development for Vietnam's technology, and the "Make in Vietnam" strategy will help the country develop further, Information and Communications Minister Nguyen Manh Hung has said.
Mr. Hung was speaking at the national forum entitled "Digital Technology Enterprises: The Driving Force for the Development of Vietnam's Digital Economy" held in Hanoi on December 23.
One year after the governmental Directive on the development of digital technology enterprises came into force, over 13,000 digital technology enterprises have been established in Vietnam. So far the digital business community totals nearly 60,000 members who serve as an important driving force for Vietnam’s economic development.
The launch was attended by Deputy Prime Minister and Foreign Minister Pham Binh Minh, World Bank Country Director for Vietnam Carolyn Turk, and Ambassador of Australia to Vietnam Robyn Mudie.
The portal, at fta.moit.gov.vn, the first of its kind in Vietnam, has been developed by the MoIT and the World Bank, with support from the Government of Australia, since February 2019.
It provides a smart online look-up tool for enterprises and others who wish to explore various FTA commitments regarding import duties, rules of origin, and services and investment. It also offers information and knowledge essential to foreign traders, such as market updates and local regulations on imports and exports as well as sustainable development.
The Japan International Cooperation Agency (JICA) will assist Vietnam’s Ministry of Finance (MOF) in improving capacity for the application of international financial reporting standards (IFRS) with an aim to boost transparency of financial information.
Under the Record of Discussions (R/D) signed on December 22, JICA will support the MOF’s Accounting and Auditing Policies Department (AAPD) in the implementation of a project on IFRS application, which might be conducted from April g 2021 to March 2024.
AAPD Director Vu Duc Chinh said the ministry is aware of benefits brought about by applying IFRS and the feasibility of the application in Vietnam. The JICA’s support is crucial for the ministry in the process.
5. Vietnam's economy to grow 6.8 percent in 2021: World Bank
This projection assumes that the COVID-19 crisis will be brought gradually under control, notably through the introduction of an effective vaccine.
The report emphasises that Vietnam might be exposed to fiscal, financial, and social risks that should require greater attention from the authorities.
“Vietnam is standing at a crossroads of post-COVID-19 recovery. It has an opportunity to set itself on a greener, smarter, and more inclusive development path that will bolster resilience to future shocks from both pandemics and climate-related disasters,” said Carolyn Turk, World Bank Country Director for Vietnam.
7. Vietnam brand value skyrockets 29% in 2020: Brand Finance
While the world’s top 100 nation brands lose US$13.1 trillion of value in 2020 amid the Covid-19 crisis, Vietnam has defied global trend with its brand value skyrocketing 29% year-on-year to $319 billion.
“The country is the fastest-growing nation brand in this year’s ranking,” noted the London-based independent brand valuation and strategy consultancy Brand Finance in its latest report.
Vietnam moved up nine ranks to 33rd with $319 billion in the world’s top 100 nation brands from its previous 42nd in 2019, up 29% year-on-year in value or $72 billion.
According to Brand Finance, 2020 has put the nations of the world to the test – from the economic impacts of COVID-19 on nations’ GDP forecasts, inflation rates, and general economic uncertainty, to diminished long term prospects.
8. Vietnam agro-forestry-fisheries exports record impressive growth
Vietnam’s export turnover of agricultural, forestry and fishery products is forecast to reach US$41.25 billion in 2020, an impressive growth despite the diffiuclties caused by Covid-19 pandemic, according to local experts.
Speaking at the online seminar entitled “Looking back the struggling year of Vietnam’s agriculture against Covid-19”, Dr. Dao The Anh, Deputy Director of the Vietnam Academy of Agricultural Sciences said that the figure exceeds expectations. “In such a serious situation of the pandemic, thanks to the diversified export structure, we have achieved positive results in the agro-forestry-fisheries exports such as rice and rubber gloves for medical services,” he said.
In addition, the fruit and vegetable sector has made progress in investing in post-harvest processing, in particular, some processing factories will come into operation in the coming time, added Mr. The Anh.
9. Vietnam trade ministry calls for US fair treatment
Vietnam’s Ministry of Industry and Trade (MoIT) urged fair treatment from the US regarding its review process on Vietnamese currency policies and practices to avoid damaging the bilateral relations.
The MoIT statement came shortly after Reuters reported that the US government is likely to impose tariffs on Vietnamese goods in December after branding Vietnam as currency manipulator.
“Vietnam regrets the US Trade Representative (USTR)’s decision to launch two investigations of Vietnam under Section 301 of the Trade Act of 1974 regarding currency undervaluation and wood products at a time when the two countries’ cooperation in foreign affairs, trade, and investment is growing strongly,” stated the MoIT.
10. Vietnam banks required to issue chip cards from March 2021
As of the end of the third quarter, Vietnam has around 93.78 million bank cards in circulation, in which the majority are magnetic cards.
Banks in Vietnam are required to issue chip cards instead of the current magnetic ones from March 31, 2021.
The move was stipulated in a recent revised circular issued by the State Bank of Vietnam (SBV), the country’s central bank, aiming to ensure greater payment security and promoting non-cash payment methods.
On 14 December 2020, the Government promulgated Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code regarding labor conditions and labor relation (“Decree 145”). Such Decree provides for labor management, labor contract, labor outsourcing, dialogue at workplace, salary, working hour & rest hour, labor discipline & material liability, female employees & gender equality, domestic worker and labor dispute.
For the upcoming 2021, we are delighted to offer this “Compliance Calendar 2021” in English and Vietnamese with the hope to help enterprises not missing any important deadlines. The issues include periodic requirements of tax and labour compliance as stipulated in the latest legal documents. Please kindly find the bilingual calendar in the Downloads section below and let us know if you have any questions about the deadlines or would like assistance in meeting them.