Ten notable economic and management issues of Vietnam in 2018

By Hung Nguyen - Jan 12, 2019 | 05:17 PM GMT+7

TheLEADERHere are ten eye-catching events related to the national economy and management in 2018 from TheLEADER's specs.

Ten notable economic and management issues of Vietnam in 2018
The main export products of Vietnam witnessed high growth.

1. Vietnam’s GDP growth reaching 7.08 per cent, peaking the decade

This has been the highest increase since 2008, bringing Vietnam’s GDP per capita index in 2018 to $2,587. Notably, Vietnam’s investment efficiency in 2018 was improved with new production capacities for the economy.

2. Rising exports

Vietnam’s total export and import turnover in 2018 reached about $482 billion, a strong year-on-year increase. The main export products of Vietnam witnessed high growth, while crude oil exports decreased in both volume and value compared to last year.

3. The World Economic Forum on ASEAN (WEF ASEAN 2018) successfully organised in Vietnam

10 notable economic and management issues of Vietnam in 2018
ASEAN's head of states and WEF's representatives at the opening ceremony of WEF ASEAN 2018

Despite being the 27th regional forum, WEF ASEAN 2018 is considered to be the most successful, attracting international communication the most strongly ever to a WEF event. Apart from all ASEAN's heads of state and many other countries, representatives of 500 world-leading groups and dozens of Vietnamese corporations also joined this event. Practical topics of the regional and global economy were discussed in depth here.

Thereby, the image of Vietnam and the achievements of the forum were spread, posing important impacts on the socio-economic development and the Vietnamese business community.

4. Vietnam approving CPTPP

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was ratified by Vietnam’s National Assembly on November 12th, 2018 and took effect on January 14th, 2019.

CPTPP originates from the Trans-Pacific Partnership Agreement (TPP). In early 2017, the US decided to withdraw from TPP and with the remaining 11 members, the agreement was renamed CPTPP.

According to official research results in 2017, commitments in CPTPP on services and investment were expected to have positive effects in improving Vietnam’s investment environment, attracting foreign investment, creating jobs, increasing income and promoting poverty reduction.

Nevertheless, CPTPP also poses challenges for Vietnam. Opening up economic activities was accompanied by stricter regulations on labour, transparency and anti-corruption, which requires proactive and innovative efforts of Vietnamese leaders.

5. Major projects coming into operation

10 notable economic and management issues of Vietnam in 2018 1
Ha Long International Cruise Port

On September 1st, 2018, the Ha Long - Hai Phong Expressway and Bach Dang Bridge connecting Quang Ninh, Hai Phong and Hanoi were inaugurated. This leads the series of transportation projects invested in the form of public-private partnership (PPP) of Vietnam.

Right on September 2nd, the Da Nang - Quang Ngai Expressway with the total investment of about $1.5 billion was inaugurated.

Especially on December 30th, Quang Ninh has inaugurated three key transportation projects: the $518.3-million Ha Long - Van Don Expressway; the $322.3-million Van Don International Airport – Vietnam’s most modern airport in Vietnam, and the $43.2-million Ha Long International Cruise Port.

Apart from transportation projects, major economic projects were also inaugurated last year, such as Nghi Son Refinery (Thanh Hoa province).

A series of key projects coming into operation is great news for Vietnam's economy in 2018. These projects are making a breakthrough in infrastructure, thereby promoting domestic socio-economic development and business opportunities for provinces and regions.

6. Automotive industry entering the domestic race

A Vinfast car debuting in Paris Motoshow 2018 strongly attracted the attention of local and international consumers. In 2018, Vinfast, a Vingroup company, invested over $3 billion to produce key automobile components, including body, chassis and engine.

Earlier in 2018, Truong Hai Group inaugurated the Mazda automobile assembly plant in Chu Lai economic zone (Quang Nam). This plant was equipped with modern technology, reaching global standards of Mazda Japan.

Also from the beginning of 2018, Korea’s Hyundai Motor Group and Thanh Cong Group jointly started to build the second Hyundai automobile factory in Ninh Binh province, which is expected to operate in 2019.

7. Vietnam becoming the largest IPO market in Southeast Asia

2018 is a quiet year for IPO activities globally. Economic instability, trade tension and especially the US-China trade war have greatly influenced the regional capital market, as all Southeast Asian countries have strong trade ties with China.

In Singapore, the most developed market in Southeast Asia, there were only 13 IPO deals last year, mobilising a total of about $500 million. The global IPO market was also quite bleak in 2018 as many companies postponed business-expanding plans due to economic and geopolitical uncertainty.

However, contrary to the trend, Vietnam suddenly shone. The total amount of capital mobilised from the IPO deals of the Vietnam stock market in 2018 was $2.6 billion, helping Vietnam surpass Singapore and Thailand to lead the Southeast Asian market.

Particularly, Vietnam's IPO value sharp increase did not come from the state sector but from private firms. In the coming years, Vietnam is still expected to be a potential market for foreign capital, thanks to the private sector and the equitisation process of state-owned enterprises.

8. Extraordinary achievements of Vietnamese football

10 notable economic and management issues of Vietnam in 2018 2
Vietnam - the champion of AFF Suzuki Cup 2018

2018 is an unforgettable year for football lovers in Vietnam, because of not only its unprecedented achievements but also the professional, passionate and fair game that players gifted to spectators. This willingness to fight also inspired entrepreneurs.

Without the investment and passion of entrepreneurs for Vietnamese football since decades ago, there would not have been any miracles, football stars or coach Park Hang Seo as today.

9. The banking sector striving for BASEL II standards

By the end of 2018, the first three names in the banking system, Vietcombank, VIB and OCB, were recognised as having achieved risk management on the BASEL II standards by the State Bank of Vietnam after nearly three years of piloting this method.

According to the plan, 10 pilot banks will officially apply BASEL II standards from January 1st, 2020. Apart from the three mentioned banks that have reached this goal, the remaining seven banks will have to speed up as the deadline is approaching.

10. Thu Thiem and the issue of land and public property management

Ho Chi Minh City People's Committee made unauthorised adjustments in Thu Thiem urban area, causing 4.3 hectares of land in Quarter 1, Binh An ward to be cleared when in fact this area is outside the planning boundary. Hundreds of households there have been severely affected and they kept complaining for decades.

Under the drastic direction of the Prime Minister, a number of officials of the city government have been prosecuted. Ho Chi Minh city leaders also publicly apologised to the people and promised to put all its efforts into compensating for the mistake.

This case is a lesson for loose state management leading to major public property losses and prolonged pressure on the people. Since that case, the Government has reviewed the current state of public asset management across the country. Many scandals related to land management have been revealed.