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Chairman’s Insights

2018 saw Vietnam achieve or exceed all socio economic forecasts for the year and this accompanied by the high level of business confidence, maybe with the exception of the construction industry, augers extremely well for 2019. GDP growth exceeded the target of 6.8% recording an 11 year high of 7.08% putting Vietnam as one of the strongest growth economies in Asia and the world. The strongest driver for GDP growth were the manufacturing industries with a growth figure of 12.98% . At the same time inflation remained at under 4%.

This was the theme of the semi-annual plenary session of the Vietnam Business Forum (“VBF”) held in Hanoi, on Tuesday December 4th, which was attended in full by the Prime Minister Nguyen Xuan Phuc. This was also the 21st year of the VBF which was established under the auspices of the Wortld Bank and IFC together with the Vietnam Chamber of Industry and Commerce to provide a platform for dialogue between the private sector and Government.

Chairman’s Insights

Chairman's Insights

Chairman's Insights

In October, I attended a celebration of 30 years of Foreign Investment in Vietnam, which started with “Doi Moi” in 1986 and the passing of the first Foreign Investment Law in December 1987. Sadly former Party Leader Do Muoi passed away last week at the age of 101, but he has to take a lot of the credit for the initial success of Vietnam’s Doi Moi or renovation policy.

In 2017 global travel industry gross bookings reached US$1.6 trillion, making it one of the largest and fastest growing sectors in the world. The developing trend is expected to continue in 2018 thanks to increasing disposable incomes of citizens and a newfound ability to experience the world.

Vietnam among the economic outperformers

Condotels friend or foe for the tourism industry?

The Government is currently in discussions with employers and the Molisa and the National Wages Council on the increase in the minimum wage for 2019. In 2018 Vietnamese employees received the highest regional salary increases at 10% compared to Thailand at 5% and a regional average of 8% In fact it has been a trend for many years that the Government, at the request and through the lobbying of the Trade Unions and support from Molisa, has raised the minimum wage way higher than the increase in inflation and in fact far more than the increase in productivity.

There is currently a lot of interest in renewables, in Vietnam, and in particular Solar energy projects. There have been over 70 licenses issued recently for solar energy projects and many of these are in Ninh Thuan Province, where there are over 140 projects licensed.. The interest has been generated by the Feed in tariff incentive granted by the Vietnamese Government approved some time ago setting a tariff of US$ 9.35 cents per KWH for those projects operational by June 2019, with a 20 year term.

The companies subject to the Cyber Security Law are domestic and foreign companies providing services to customers in Vietnam over telecom networks or the internet such as social networks, search engines, online advertising, online steaming/broadcasting, e-commerce websites/marketplaces, internet-based voice/text services (OTT services), cloud services, online games, and online applications.

Explore the opportunities to trade beyond domestic markets and identify current and future trends.

Explore the opportunities to trade beyond domestic markets and identify current and future trends.

Gambling has long been a taboo with the Communist Party in Vietnam and the licensing of Casinos has been very strictly controlled and to date are only open to foreigners, as are electronic gaming centres, which generally operate from 5 star hotels.