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Vietnam to reach new heights in 2019

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2018 was a great year for Vietnam’s economy.

The country’s business environment grew tremendously at the start of the year with over 26,000 new enterprises established. In addition to that, the government there highlighted that foreign direct investment (FDI) disbursement reached over US$3.8 billion in the first three months of the year, up 7.2 percent from 2017. Overall, the socialist state’s gross domestic product (GDP) grew by 7.1 percent year on year in the first six months of 2018 – the fastest growth recorded since 2011.

Among the best performing sectors was manufacturing, with an output growth of 13 percent in the first half of the year. Despite the ongoing trade war between the United States (US) and China, Vietnam’s exports soared. The Communist state recorded export revenues estimated at US$244 billion, an increase of 13.8 percent from the previous year.

Rapid growth

Vietnam’s rapid growth over the past decade is mostly due to the country’s move away from a strict controlled economy to a more liberal system. For the past decade, the country has taken on reforms like deregulation which has seen an influx of private enterprises and foreign investment.

The economic reforms carried out by the Communist Party has made Vietnam one of the region’s fastest growing economies. The World Bank also pointed out in its Global Economic Prospects report that Vietnam is one of six countries in East Asia with real GDP growth of more than six percent.

imageSource: Vietnam Briefing

In 2018, the government announced further reforms to Vietnam’s economy. Earlier in the year, in an effort to make Vietnam more regionally competitive, Prime Minister Nguyen Xuan Phuc revealed that the country would cut corporate income tax rates from between 20 to 22 percent to 15 to 17 percent. Furthermore, in March, the Ministry of Transport proposed to enhance services in maritime areas and multi-modal transportation by easing business conditions and regulations. If the ministry’s proposal goes through, 314 out of the current 500 regulations will be cut.

Another notable step Vietnam has taken to open up its economy is by signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the World Bank has estimated will increase Vietnam’s GDP by as much as 3.5 percent.

New targets for 2019

The Communist Party’s General Secretary, Nguyen Phu Trong has called for increased efforts to meet a higher growth rate than 2018. “This will be a heavy task, and all of us must do our utmost to realise this target,” he said.

The targets for 2019 will not just revolve around the country’s GDP, the government has also set various socio-economic goals. For example, it has set a target of reducing poverty by one to 1.5 percent. Last year, the target was between one and 1.3 percent, which the government exceeded at 1.5 percent. Other targets include keeping unemployment below four percent and to increase the percentage of the population with health insurance coverage to 88.1 percent.

Poor political reforms

Despite stellar growth, Vietnam’s political reforms have not really matched the reforms seen in its economy. Rights groups have often criticised Vietnam for its treatment of bloggers and dissidents. According to Human Rights Watch (HRW), the government there convicted and imprisoned at least 27 rights bloggers and activists under various abusive laws in the first six months of 2018.

“Vietnam seems to be contending for the title of one of Asia’s most repressive governments,” said Phil Robertson, deputy Asia director of HRW.

Vietnam has also introduced a new law which came into effect on New Year’s Day which observers say effectively criminalises criticising the government online. The law also allows the government to force internet providers to give them user data when demanded.

Vietnam may be enjoying its highest economic growth in modern times, but reforms are needed to ensure the Communist Party stays accountable. The state has taken great strides to increase the nation’s wealth, but what’s the point of prosperity if its citizens are not free to exercise their rights?

posted Jan 5 by Sanjay Rawat

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Chea Serey, NBC’s director general, speaks to reporters in Phnom Penh. KT

In 2019 the Kingdom’s economy will grow at a rate of 7 percent, according to the nation’s Central Bank, who noted in its latest report that such growth may be weakened by a number of internal and external factors, including the potential cancellation of the Everything-but-arms (EBA) scheme with the European Union.

The National Bank of Cambodia (NBC) has forecasted robust economic growth in 2019, just marginally lower than last year, when, according to the government, it reached 7.3 percent.

Its report on the state of the Kingdom’s economy and the local banking sector in 2018 and 2019, released Wednesday, said this year the inflation rate will remain at 2.6 percent, while foreign reserves are expected to reach $11.3 billion.

Uncertainty regarding Cambodia’s EBA scheme with the EU and the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are listed by NBC as possible risks to achieving 7 percent growth.

The report also mentions the possibility of new free trade agreements between with the United States or the EU and countries that directly compete with Cambodia in trade, which would also limit the Kingdom’s economic expansion in 2019.

As for internal risks, one of the biggest worries is an overreliance on the construction sector for growth, which is also burdened by high credit growth. By the end of the year, credit in the construction sector is expected to grow at 31 percent.

Other internal factors are high production costs, small economies of scale, limited access to power, the high cost of electricity and a minimum wage in the garment sector that continues to increase every year.

“To face these threats, the Central Bank will work alongside the government to reform and diversify the economy, provide a favorable investment environment, and develop the economic sector efficiently,” the report noted.

“NBC will work to strengthen trust and develop the banking system efficiently while stabilising prices in line with our development strategy for the financial sector for the years 2016–2025.”

Aun Pornmoniroth, the Minister of Economy and Finance, told Khmer Times that trade has been instrumental in achieving a 7.3 economic growth rate in 2018.

He said Cambodia now exports to 147 countries, with international shipments representing more than 60 percent of the country’s gross domestic product (GDP). At the same time, Cambodia now buys from 135 countries, with exports last year valued at $13 billion.

“We hope to see more cooperation among key actors, including ministries, officials at all levels, and the private sector to enable the fourth phase of the government’s Rectangular Strategy to be a success in the sixth mandate, and to have a very productive 2019,” Mr Pornmoniroth said.

In its report, NBC projects credit growth in the banking sector to reach 17.1 percent, adding that financial inclusion will continue to grow, helping to reduce poverty.

In Channy, president of Acleda Bank, one of the largest commercial banks in the Kingdom, told Khmer Times he expects 2019 to be a great year for Cambodia’s financial sector.

“We still have the three most important factors: economic, social and political stability, which are fundamental for growth in the financial sector.

“2019 will be one of the best years for Acleda Bank since, according to government and World Bank projections, the economy will continue to grow at a very fast pace,” said Mr Channy.

According to the Central Bank’s six-page analysis, in 2018, the garment, construction, and tourism sectors experienced double-digit growth, while foreign direct investment expanded by 12 percent, mostly, going into the banking, real estate, and garment sectors. This contributed to expanding the balance of payment surplus to 4.5 percent of GDP.

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                                                          VERIME AND MARITIME BANK

VeriMe is a Singaporean blockchain based verification-as-a-service platform that facilitates other organizations in easy and fast user authentication. The platform relies on the secure, high speed working of blockchain to give its clients a cheaper and unparalleled service, allowing them to concentrate on their core services and let VeriMe take care of the working behind the verification of customers or other services.

VeriME offers two types of services, namely D-KYC and D-Secure. D-KYC is a digital identity verification system that performs Know Your Customer background checks for institutions, requiring no hectic and tedious form filling and document submission. D-Secure is a payment authentication service designed form merchants and banks, allowing them to process customer requests with ease. D-Secure, like the KYC counterpart, does not require face to face meetings or heavy document filing.

Maritime Bank, as one of the largest banks in Vietnam, has a broad base of clients and handles a lot of transactions and new customers in a day. By partnering up with VeriMe, the bank’s user and payment verification system load is transferred to VeriMe. The quick services of VeriMe ensure that no matter how much the processing load from Maritime is, it can deliver the quickest of verification services. Maritime benefits a lot as verification time for its services will drop significantly.

Maritime Bank is not the first Vietnamese bank that has partnered with VeriMe. Previous partnerships with Military Bank and CFC exist, giving their combines 5,000,000 plus users an easy way to verify themselves and the online purchasing done by them.

WHY VERIME?

VeriMe, as a blockchain platform, offers a many-fold increase in speed of verification of individuals and payment services by providing a cost effective, high level of data protection, document free and third party free system. Traditional procedures are slow and tedious, involving a lot of paperwork, inflexible rules, unsecure and money intensive. VeriMe does away with all the clutter and smoothes the experience.

VeriMe has already partnered with more than 30 organization around the world, providing services to more than 300,000 merchants and their respective consumers. The platform is in talks with ASEAN member country partners for expanding in other geographical locations.

VERIME’S VME

The authentication and the verification process of the VeriMe platform is paid for through its its internal token, the VME. It has recently completed a successful token generation event with more than 106,500,000 VME grabbed by early investors. The event saw 1 ETH being traded for 3000 VME.

For more information about the Verification as a Service platform, visit their websitehttps://www.verime.mobi/home

+1 vote

FE CREDIT launches MPlus+, a unique digital credit card delivery solution which allows card holders to commence their cashless journey before the physical card is delivered

Vietnams VPBank Finance Company Limited (FE CREDIT) starts with the MPlus+ Card, a unique digital credit card solution as an extension to the existing range of physical card products focused on category entrants.

Issuing to first-time card users across Vietnam, FE CREDIT has a unique challenge where cardholders in far-flung provinces sometimes receive the physical card almost 15 days post-approval.

To bridge this, FE CREDIT has created this unique digital card solution – ‘MPlus+ Card‘. Securely delivered to the cardholder’s registered mobile immediately upon card approval, MPlus+ enables cardholders to commence their cashless journey for e-commerce and card not present transactions instantly.

Mr. Kalidas Ghose, CEO of FE CREDIT said,

“As a market leader FE CREDIT aims to be the issuer of choice for mass-market customers. MPlus+ Card is another example of this endeavour.”

Mr. Arn Vogels, Country Manager, MasterCard, said,

“We are very excited with the launch of the MPlus+ program, the first digital delivery of a credit card in Vietnam.  The key benefit is that consumers will be able to start making online purchases and enjoy MasterCard offers immediately, whilst the delivery of the card will take several days.”

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Vietnam Technological and Commercial Joint Stock Bank (Techcombank), which raised $922 million via an IPO last month, has announced that it has completed the sale of 64.4 million treasury shares to investors, equivalent to 5.58 per cent of charter capital. The bank told local media that the second treasury share sale was conducted between April 27 and May 7 through the State Securities Committee. At an average transaction price of VND 128,000 ($5.6) apiece, Techcombank is said to have earned VND8.43 trillion ($370.9 million) from the sale of treasury shares. The Hanoi-based bank had earlier completed the first sale of 93.2 million treasury shares at the average price of VND91,000 ($4) to investors, following its plan to sell over 158 million treasury shares to investors announced by chairman Ho Hung Anh at the firm’s annual shareholders’ meeting on March 3. Warburg-backed Techcombank had successfully sold more than 164 million shares, equivalent to 14 per cent of its charter capital, to institutional investors via its IPO. At the final price of VND128,000 ($5.62) per share, the bank mopped up VND21 trillion ($922 million) and was valued at $6.5 billion. At this valuation, Techcombank’s market capitalization is even greater than that of The Bank for Investment and Development of Vietnam (BIDV) and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), whose charter capital is three times higher in comparison. Techcombank’s IPO had attracted many foreign investors, including Singapore’s GIC, Dragon Capital and Fidelity Management. Global private equity major Warburg Pincus had in March agreed to invest over $370 million in the bank, marking the largest ever PE investment in Vietnam to date. The transaction brought Warburg’s total commitment in the country to over $1 billion. The 25-year-old Vietnamese bank provides a broad range of banking products and services to more than 5.4 million customers in the country. It is poised to commence trading on the Ho Chi Minh City Stock Exchange (HoSE) on June 4.
 

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