Vietnam revs up economy to race ahead of rivals

Vietnam revs up economy to race ahead of rivals
A farmer stands amidst lettuce crops at the Cat Lai Co-op fresh vegetable farm near Hanoi. Vietnam has a growth target of 6 percent for this year. (AFP file photo)
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Updated 08 January 2021

Vietnam revs up economy to race ahead of rivals

Vietnam revs up economy to race ahead of rivals
  • Vietnam was one of the world’s few countries to record growth last year

HANOI: Vietnam’s success in curbing the coronavirus so far, while its Southeast Asia neighbors struggle, is helping the country power ahead in economic growth and attracting funds, foreign investors, experts and analysts say.

Its strength in containing the pandemic saw it build on the foundations of two free trade agreements signed in 2020, also outpacing peers in luring manufacturers moving production out of China because of the Beijing-Washington trade war.

Vietnam was one of the world’s few countries to record growth last year — well down on 2019, but still a 2.9 percent expansion.

Vietnam watchers expect the country to ride high as long as it keeps the virus — resurgent in many countries — at bay. Thanks to rigorously targeted testing, a centralized quarantine program and early border closures, Vietnam’s coronavirus tally stands at just over 1,500 cases and 35 deaths to date — far fewer than any comparable country given its population of nearly 98 million.

“The successful management of the pandemic to date has already enabled the country to capture a larger share of global trade and FDI (foreign direct investment) during 2020,” said Carolyn Turk, the World Bank’s country director in Vietnam.

Parliament has set an economic growth target of 6 percent for this year, but Prime Minister Nguyen Xuan Phuc, looking to extend his term or rise up the Communist Party of Vietnam’s ranks, said last month that Vietnam would target 6.5 percent.

At WHA Group, a Thai logistics firm which has expanded its industrial estate business in Vietnam, chairwoman Jareeporn Jarukornsakul said investors who had wanted to relocate operations to Thailand from China had not been able to do so because the coronavirus had spread in Thailand.

While infrastructure and regulatory issues are worse in Vietnam than in Thailand, she said: “Costs are cheap in Vietnam and its government is very quick with investment, allowing provinces to issue their own regulations and investment incentives.”

Still, there is much work to be done, even if the country does retain its prowess in handling the coronavirus: Vietnam suffers from a lack of highly-skilled labor, its dated bureaucracy is in need of digitization and there is an over-reliance on polluting coal imports to fuel development.

But the cocktail of positives flowing through the economy currently has left foreign-invested asset managers in Vietnam able to raise significant amounts, for example, with some reporting oversubscribed funds.

On Monday, Ho Chi Minh City-based Mekong Capital said it had raised $246 million for its largest-ever fund — nearly 25 percent more than the original target of $200 million.

Dominic Scriven, chairman of Vietnamese asset manager Dragon Capital said a combination of the country’s trade deals, more cash in the economy and political stability had underpinned better-than-expected interest across three new funds launched by his firm.

“We were very pleasantly surprised by the market uptake,” said Scriven.

That extra cash, along with savings accounts offering declining interest rates after three cuts in the central bank’s policy rate since March, has created a surge in local stock market investors.

The number of new investors has increased so much that the benchmark Ho Chi Minh City Stock Exchange has been forced to halt afternoon trading in order to process the surge.

Development was also boosted by the two free trade deals signed last year: the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trading block, and an agreement with Britain modeled on the EU-Vietnam Free Trade Agreement (EVFTA), which Vietnam ratified in June.

Hanoi also has bilateral trade deals with both South Korea and Japan, its largest sources of foreign direct investment, and is a signatory to the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The trade deal push has given it an advantage over some of its regional competitors. The EVFTA in particular has “put Vietnam clearly on the map,” said Sven Schneider, CEO of the EU-Malaysian Chamber of Commerce.

“Malaysia, on the other hand, is only waking up to this missed opportunity now,” said Schneider.

WHA Group’s Jareeporn also said the EVFTA had given Vietnam an advantage. “If an industry needs cheap labor, it’s definitely going to Vietnam,” Jareeporn said.

In the short term, Vietnam is well placed to pull ahead of its regional rivals in 2021, just as it holds a massive Communist Party meeting to select a new leadership later this month.

“It’s safe, the government functions smoothly, and in face of impediments like COVID the country rises to the challenge without hesitation and wins,” Chad Ovel, partner at Mekong Capital, said.

“Vietnam has clearly earned its position as the most attractive investment destination in Southeast Asia.”


UK medical tech firm reveals Saudi expansion plans

UK medical tech firm reveals Saudi expansion plans
Updated 13 May 2021

UK medical tech firm reveals Saudi expansion plans

UK medical tech firm reveals Saudi expansion plans
  • Nemaura Medical has developed a diabetes-tracking wearable device
  • Product launches are planned for Germany, the UAE, and Saudi Arabia

RIYADH: A British medical technology company behind an innovative diabetes monitoring system has identified Saudi Arabia as one of its key target markets.

Nemaura Medical has developed a wearables device which can help diabetics track their blood glucose levels, and the Kingdom is high on the firm’s international expansion plans list.

Its sugarBEAT continuous glucose monitoring (CGM) product was recently launched in the UK and is targeted at people suffering from conditions such as diabetes who want a needle-free alternative.

Initially the company recorded orders of 200,000 sugarBEAT sensors in the UK and has forecast total sales of 2.1 million this year.

Following positive feedback in the UK, it has announced plans to expand internationally and is lining up product launches in Germany, the UAE, and Saudi Arabia.

Dr. Faz Chowdhury, the chief executive officer of Nemaura Medical, said: “We believe our technology is ground-breaking and represents a paradigm shift in the way people with diabetes can manage their condition.

“We believe we have a critical first-mover advantage with a product that is easier to use, more flexible, and more cost-effective than existing technologies. We are not aware of any product of a similar nature in clinical studies or that has been submitted for regulatory approval.”

Nemaura Medical was founded in 2011 and recently expanded into the wearables market to develop and commercialize devices which can help to monitor chronic diseases and health conditions without the need for needles.

The CGM market is a growing sector and according to the Allied Market Research company will be worth around $9 billion by 2027.

The potential market for devices such as sugerBEAT in the Middle East and North Africa (MENA) region is considered strong with data from the International Diabetes Federation (IDF) showing more than 39 million 20 to 79-year-olds in the region having the condition in 2019. The figure is expected to increase to 108 million by 2045.

The IDF has estimated that in Saudi Arabia 15 percent of the adult population has diabetes.


UAE, Seychelles create travel corridor for vaccinated travelers

UAE, Seychelles create travel corridor for vaccinated travelers
Updated 13 May 2021

UAE, Seychelles create travel corridor for vaccinated travelers

UAE, Seychelles create travel corridor for vaccinated travelers

ABU DHABI: The UAE and the Seychelles said that vaccinated people can travel freely between the two countries following the mutual recognition of vaccine certificates issued by their respective authorities.
Quarantine-free travel between the two nations is possible from May 13 as they look to boost tourism in the wake of the COVID-19 pandemic.
Travelers must show they have received both doses of a COVID-19 vaccine through a valid certificate from the relevant health authority.


UAE and Saudi Arabia among biggest sources of remittances in 2020

UAE and Saudi Arabia among biggest sources of remittances in 2020
Updated 25 min 31 sec ago

UAE and Saudi Arabia among biggest sources of remittances in 2020

UAE and Saudi Arabia among biggest sources of remittances in 2020
  • Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated

DUBAI: The UAE was the second largest source of remittances globally in 2020, followed by Saudi Arabia, according to the latest report from the World Bank.

The US was the biggest source country, sending $68 billion abroad last year, while the foreign workers in the UAE sent home $43 billion and those in Saudi Arabia transferred $35 billion, said the report, published Thursday. Among middle-income countries, immigrants to Russia were the biggest remitters, sending $17 billion.

Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated and the government has encouraged hiring of nationals. For instance, foreign workers sent $1.8 billion to the Philippines in 2020, down 36 percent from 2015.

Despite the large drop in foreign workers in the GCC, remittances from Saudi Arabia held up in 2020 thanks in part to the cancelation of travel to Saudi Arabia, which diverted funds set aside for the Haj pilgrimage to remittances to Bangladesh and Pakistan, according to the report. Both of those countries offered tax incentives last year to boost remittances from migrant workers abroad, while a devastating flood in July 2020 also led to an increase in payments.

Remittances to the Middle East and North Africa rose by 2.3 percent to about $56 billion in 2020, following a 3.4 percent increase in 2019, the report said. The gains came amid unexpectedly strong inflows to Egypt (up 11 percent to a record $30 billion), the fifth-largest recipient of remittances globally, and to Morocco (6.5 percent to $7.4 billion). Tunisia saw a 2.5 percent increase, while other countries, including Lebanon, Iraq, Jordan, and West Bank and Gaza all experienced double-digit declines.

Globally, remittances to low- and middle-income countries fell 1.6 percent to $540 billion, a smaller decline than expected, the World Bank said. The figure is forecast to increase to $553 billion this year and to $565 billion in 2022.


Turkish lira falls to weakest level this year

Turkish lira falls to weakest level this year
Updated 13 May 2021

Turkish lira falls to weakest level this year

Turkish lira falls to weakest level this year
  • Turkish currency weakens on inflation data
  • Latest losses focus attention on forex reserves

BENGALURU:Turkey’s lira fell to a six-month low on Thursday as risks of tighter US monetary policy after strong inflation data weighed on most emerging market assets, with stocks set for their worst day since late March.
The lira fell around 0.8 percent to 8.4968 against the dollar, just a few points shy of its 8.5789 record low. The currency was likely subject to offshore selling on Thursday, given that Turkish markets were closed for a holiday.
Recent losses in the lira have brought the focus back to Turkey’s shrinking foreign exchange reserves, as well as its central bank, which is hesitant to tighten policy even as inflation surges.
Data on Wednesday showed US consumer prices increased the most in nearly 12 years in April, raising expectations that the US Federal Reserve will tighten its monetary policy sooner than signalled.
The MSCI’s index of emerging market currencies fell 0.2 percent, its third day of declines, as the dollar advanced and yields on 10-year Treasuries marked their biggest daily rise in two months.
The MSCI’s index of emerging market stocks plunged 1.3 percent to a seven-week low.
“With yields moving higher and inflation expectations becoming increasingly un-anchored from 2 percent, expectations grew that the Fed might have to start normalizing monetary policy earlier than previously expected,” said Marshall Gittler, Head of Investment Research at BDSwiss Holding.
“There’s going to be a real struggle for control of the narrative between the Fed and the market for the next few months,” added Gittler.
The Russian rouble strengthened on Thursday, up 0.2 percent, recovering some losses sustained on Wednesday. Bloomberg reported that the country was planning bond buybacks to fix its COVID-ravaged debt market. (https://bloom.bg/33BhvxY)
South Africa’s rand held steady as higher gold prices outweighed interest rate risks and a stronger dollar.
Most Central European currencies gained on Thursday with the Czech crown, Hungarian forint and Polish zloty gaining between 0.2 percent and 0.3 percent.
Still, JPMorgan reiterated its underweight position in Central and Eastern European local bonds and currencies, warning of “taper tantrum” risk as central banks tighten monetary policy.
Central bank bond purchase programs in Hungary and Poland — to support their economies through the coronavirus crisis — have been among the largest in emerging markets over the past year.
Asian currencies and stocks declined, while Taiwan stocks dropped 1.5 percent and the dollar eased 0.2 percent on fears of a COVID-19 resurgence and as the island started a rotational electricity blackout after a major outage at a coal plant.


Carlos Ghosn says he cut salary because of public opinion, court hears

Carlos Ghosn says he cut salary because of public opinion, court hears
Updated 13 May 2021

Carlos Ghosn says he cut salary because of public opinion, court hears

Carlos Ghosn says he cut salary because of public opinion, court hears
  • Ghosn’s testimony was presented as evidence by Kelly’s defense attorney

RIYADH: Carlos Ghosn told prosecutors during his detention in late 2018 that there was no legal obligation for Nissan to pay any deferred compensation that was voluntarily waived, according to statements read aloud in court during the trial of former director Greg Kelly, Asharq Business reported.
“The reason I cut my salary was because of public opinion, and to preserve the motivation of Nissan employees,” Ghosn told prosecutors at the time, according to testimony read by Kelly’s attorney in Tokyo District Court last Tuesday. Kelly has denied charges that he helped Ghosn not report his wages at more than 9 billion yen ($ 83 million), the news site said.
Actions against Kelly, 64, is about to enter its final stage. Kelly is due to stand in front of the podium, eight months after hearing testimonies from current and former carmaker executives, experts and other witnesses. Although Ghosn fled Japan from what he called an unfair legal system at the end of December 2019, his presence loomed large on the horizon during the trial, Asharq Business reported.
In comments translated into Japanese and then into English, Ghosn said: “As a businessman, I had hoped that Nissan, or through the alliance, would legally compensate me. People around me wanted to find ways to legally compensate me. They wanted me to stay in April.”
Ghosn’s testimony was presented as evidence by Kelly’s defense attorney, as well as by prosecutors, and Nissan, who was also accused of providing false information about Ghosn’s compensation. Despite the presence of Nissan’s defense attorney in court, the company has not actually appealed any dispute.
The arrest of Ghosn and Kelly in November 2018 caused a major uproar in companies and in the legal community, and its resonance continues to this day. Nissan has recorded low profits for a decade and has embarked on a cost-cutting plan to transform itself. The carmaker’s alliance with Renault SA and Mitsubishi Motors has also collapsed. The Americans, Michael and Peter Taylor, were extradited to Japan to face accusations of helping Ghosn flee the country, and the first hearing will take place next month.
Ghosn is now in Beirut, and he’s trying to restore his reputation. Besides conducting interviews, Ghosn has also launched a website, published a book, and is working on a documentary. Tuesday’s court testimony is a rare glimpse of what the former auto company’s CEO told prosecutors while in detention in Tokyo.
Ghosn, who was arrested twice in 2019, spent around 130 days in prison before being released for the last time in April of that year.
Ghosn told the prosecution office during his detention: “What I revealed was the amount I received, and if the deferred compensation was conditional, then this means that I understood that it is in a gray area. The reward will not be paid if the conditions are not met, and the amount should not be paid if it is not met. Disclose it. Compensation determined to be payable must be disclosed. “
Ghosn criticized the Japanese legal system, describing it as “a system of justice that violates basic principles of humanity.” The Japanese government described these allegations as unfounded, and accused the former CEO of spreading false information about the legal system in the country. The Justice Ministry also pledged to return Ghosn to Japan for trial, although this is unlikely, given that Japan does not have an extradition treaty with Lebanon.