Month: August 2023

First appearance since the 1960s, now there are 3500 Free Trade Zone (FTZ) in 130 countries and territories. FTZ plays a role as a closed special economic zone in which goods can be stored unlimited of time, displayed, assembled, manufactured and handled, and traded between companies… under specific regulations with limited intervention by the Customs Government. Understanding these potential benefits, countries have developed many Free Trade Zone to attract export/import goods, especially capital and technology, from which to develop their industry and national economy.

An inspirative story of Costa Rica

The Republic of Costa Rica has many economic similarities with Vietnam, but the country has enjoyed a remarkable growth in GDP and FDI attraction since the late 1990s. That development is due to the emergence as well as the focus on the Free Trade Zones of the Costa Rican government.

According to the statistics from the chart above, it is not difficult to see that the GPD per capital in Costa Rica has been on an upward trend since the late 90s. This is due to the establishment and development of FTZs not only attracts an amount import goods contributing to the GDP growth, but also creates new job opportunities for the local labor forces. Moreover, with the trend of scientific and technical development, the demand for new technology, equipment or materials related to chemistry, physics or applied medicine is extremely great. However, if there are no Free Trade Zones, the establishment of research centers or simply importing goods for related activities also faces many difficulties from traditional management mechanism.

Vietnam has the advantages of a 3,200km coastline and a favorable location in the East- West economic corridor, many locations that can be developed into international seaports, which can help Vietnam fully meet the factors of become a major logistics center. However, facing the current inadequacies in the supervision of export/ import goods, transit cargo, domestic import/ export by the State management agencies. It is possible that we need a new mechanism to restore the current declining output of goods, contribute to attracting investment as well as turning Vietnam into the focus of commodity production in the region.

The reason why Vietnam is behindhand in developing Free Trade Zones.

 The first reason is that the legal corridor for the formation and development of Free Trade Zones has not been regulated yet. The fact that society does not properly understand and clearly distinguish terms such as Non-Tariff Zone, Economic Zone, Industrial Park, Export Processing Zone, Bonded Warehouse or Free Trade Zone according to international definition is also a barrier. This is also the reason why the Free Trade Zone has not been properly recognized in terms of the benefits that come from their impacts from an economic as well as a demographic perspective.

Global minimum tax policy and WTO commitments
The establishment and operation of Free Trade Zones is not only about attracting import and export goods, but also related to the tariff policies of each country and international regulations. The term Global Minimum Tax (GMT) is coined by the Organization for Economic Co-operation and Development (OECD) and is currently an opportunity as well as a challenge for developing economies in general and Vietnam in particular.

Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc remarked that in response to the global minimum tax policy, Vietnam is studying and adjusting investment policies to adapt to this tax rate and attract new foreign investors. If the global minimum tax policy is applied, all previous and current incentives that Vietnam offers to businesses such as tax exemption, preferential tax rate below 15% will no longer be effective. And obviously this will significantly affect Vietnam’s policies and means of attracting investment.

According to the provisions of the global minimum tax (GMT) policy, any corporation or company with a turnover of 750 million Euros or more will be subject to a tax rate of 15% regardless of whether it does business in any country.

According to KPMG, there have been actions of support from the US Treasury Department for the global minimum tax policy, including raising the federal interest rate to 28% and redesigning the GILTI regime (applied global minimum tax policy in the US).

However, whether the application of the above policy is contrary to the commitments of members when joining the World Trade Organization (WTO) is still an open question. In addition, bilateral and multilateral trade agreements (FTAs – Free Trade Agreements) as well as priority business programs such as (CTPAT, CFS, WLP…) are also aiming to eliminate tariff, non- tariff barrier and compliance processes throughout the global supply chain. Thus, we think that the application of global policies should also be considered from many different perspectives in order to create a balanced and effective international business environment.

Source: vlr.vn

Vietnam’s gross domestic product (GDP) grew about 3.72% year on year in the first half of this year, according to the General Statistics Office (GSO).

The expansion is only higher than the 1.74% recorded in the first half of 2020 during the 2011 – 2023 period, the GSO told a press conference on March 29.
In particular, the agro-forestry-fishery sector expanded by 3.07%; and the industry and construction sector, 1.13%.

Notably, the services sector secured the highest growth, at 6.33%, fueled by domestic consumption stimulation and tourism promotion policies. It was largely contributed by wholesale and retail sales (up 8.49%), transport and logistics (up 7.18%), finance-banking services (7.18%), and lodging and catering services (up 15.14%).

In the agro-forestry-fishery sector, agriculture saw a year-on-year increase of 3.14% in added value, forestry 3.43%, and fisheries 2.77%.

GSO General Director Nguyen Thi Huong said that the growth that the country posted in the first half is not high but major economic balances are ensured, the macroeconomy stable, and inflation controlled at an appropriate level in the context that Vietnam faces many difficulties and challenges both at home and abroad. 

In addition, the supply of essential goods is guaranteed, and goods procurement and domestic consumption promoted. The agriculture, forestry, and fishery sector maintained a stable growth rate, ensuring the supply of food and essential goods. 

The progress of disbursement of public investment capital has been improved markedly, the trade surplus maintained, and social welfare ensured, she said.

Huong added that policies to stimulate domestic consumption and promote tourism have contributed to maintaining the growth of the service sector. Accordingly, the added value of the service sector in the first six months of 2023 increased by 6.33% compared to the same period last year, higher than the increases of 1.18% and 4.53% in the same period in 2020 and 2021, respectively.

She also said that entering the third quarter of 2023, Vietnam will continue to face many difficulties and challenges, including changes in the world’s economy and politics, energy security, food security, natural disasters, climate change, and diseases.

This will pose a big challenge for Vietnam to achieve the growth target [of 6.5%] for 2023, she said./.

Source: vietnamplus.vn

The airline has been named the Best Low-Cost Carrier by various renowned platforms, including Skytrax.

SUMMARY

•  Vietjet Air is celebrating Vietnam National Day by offering two million free seats in a week-long promotion from August 16 to August 22, 2023.
•  The promotional tickets are applicable to domestic and international flights.
•  Vietjet Air is focused on expanding its flight network, offering affordable fares, and using modern and environmentally friendly aircraft.

Vietnamese low-cost airline, Vietjet, is celebrating Vietnam National Day in style. The airline is giving out two million free seats to commemorate the country’s 78th Independence Day, held on September 2nd. The week-long promotion begins August 16 and offers tickets starting at VND0, excluding taxes and fees.

The extraordinary offer

The airline wowed potential travelers with yet another exciting offer to celebrate Vietnam’s Independence Day. The carrier advertised that it is pleased to offer two million tickets from only VND0 in a week-long promotion from August 16 to August 22, 2023, at its website or the Vietjet mobile app. According to the carrier’s website,

Welcoming Vietnam National Day 2/9, expressing the gratitude to all passengers, Vietjet opens sale of 2 million tickets from only VND0 (*) in seven golden days from August 16 to August 22, 2023. Especially, this promotion applies to all Vietjet’s domestic and international flights.

The promotional tickets are applicable to the carrier’s entire network, including Australia, India, Kazakhstan, Japan, South Korea, Taiwan, Hong Kong, Indonesia, Malaysia, Singapore, Thailand, and more. Travelers purchasing promotional tickets can travel between September 6, 2023, and March 31, 2024.

Vietjet has been adding new domestic and international destinations to its network. In August alone, the airline added new routes from Ho Chi Minh City (SGN) to Jakarta, Indonesia, and Kochi, India. The airline’s Hanoi – Bangkok route and various services between Vietnam and the paradise island of Bali have seen increased frequencies. The airline aims to bring more international travelers into the country while also offering a wide range of domestic flights.

The airline takes pride in its growing flight network, affordable fares, and the use of modern and environmentally friendly aircraft. Vietjet also offers its passengers complimentary Sky Care insurance that provides comprehensive protection from medical expenses and flight-related issues. The insurance plans are available on select flights, and some terms and conditions apply.

About Vietjet Air

The low-cost airline commenced operations in December 2011 after receiving approval to operate from the Vietnamese Minister of Finance. At the time of its launch, it became the second private airline to offer domestic service in Vietnam, as well as the fifth airline overall to offer civil domestic flights. The airline has a healthy fleet of 84 narrowbody and widebody aircraft, offering more than 60 domestic and international operations.

On the narrowbody side, the airline operates a mix of Airbus A320 and A320neo family aircraft. The airline has 200 Boeing 737 MAX family aircraft on order, with deliveries starting in 2024. The airline exclusively operates a fleet of six widebody Airbus A330-300 aircraft, with an additional three on order. The airline aims to keep its fleet young to provide a better customer experience in all classes.

As a fully-fledged member of the International Air Transport Association (IATA), the airline holds the IATA Operational Safety Audit (IOSA) certificate. The airline has been awarded the highest ranking for safety with seven stars by the world’s only safety and product rating website airlineratings.com

What are your thoughts on the exciting promotional offer by Vietjet? Tell us in the comments section.

Source: simpleflying.com

China, India, Indonesia, Uganda, and Vietnam are projected to be among the fastest-growing economies for the coming decade, according to researchers at the Growth Lab at Harvard University. The new growth projections presented in the Atlas of Economic Complexity include the first detailed look at 2021 trade data, which reveal continued disruptions from the uneven economic recovery from the global pandemic. China is expected to be the fastest-growing economy per capita, although its growth rate is smaller than gains seen over the past decade.

Growth over the coming decade is projected to take off in three growth poles, East Asia, Eastern Europe and East Africa. Several Asian economies already hold the necessary economic complexity to drive the fastest growth over the coming decade to 2031. They are led by China, Cambodia, Vietnam, Indonesia, Malaysia and India. In East Africa, several economies are expected to experience rapid growth, though driven more by population growth than gains in economic complexity, which include Uganda, Tanzania and Mozambique. Eastern Europe holds strong growth potential for its continued advances in economic complexity, with Georgia, Lithuania, Belarus, Armenia, Latvia, Bosnia and Herzegovina, Romania and Albania all ranking in the projected top 15 economies on a per capita basis. Outside these growth poles, the projections also show potential for Egypt to achieve more rapid growth. Other developing regions face more challenging growth prospects by making fewer gains in their economic complexity, including Latin America and the Caribbean and West Africa.

“Countries that have diversified their production into more complex sectors, like Vietnam and China, are those that will lead global growth in the coming decade,” said Ricardo Hausmann, professor at the Harvard Kennedy School (HKS), director of the Growth Lab and the leading researcher of the Atlas of Economic Complexity. “China and Vietnam already realized many of the income gains from their increased complexity. Nevertheless, they remain more complex than expected for their income level so will remain global growth poles.”

The Economic Complexity Index (ECI) captures the diversity and sophistication of the productive capabilities embedded in the exports of each country. The researchers place the diversity of productive knowledge — or knowhow — that a society has at the heart of the economic development process. Economic growth requires the accumulation of new knowhow and its use to diversify production into more sophisticated — aka complex — activities. ECI is able to closely explain differences in country incomes and predict future growth.

The Growth Lab researchers also released new 2021 ECI rankings, which show remarkable stability despite uneven economic recovery and lingering pandemic effects in 2021. The ECI ranking finds the most complex countries in the world are, in order, Japan, Switzerland, South Korea, Germany and Singapore.

Source: news.harvard.edu

HANOI: Vietnam is expected to have two regional hubs for international air transit by 2050 – Hanoi and Ho Chi Minh City, according to the national airport master plan of the Transport Ministry.

Under the plan, Vietnam would have 30 airports by 2030 and 33 by 2050 with Hanoi and Ho Chi Minh City being the two major hubs.

By 2050, Cat Bi International Airport will be replaced by Hai Phong International Airport, and three new domestic airports will be developed, including Cao Bang, Cat Bi and Nam Hanoi, bringing the total across the country to 33.

The Transport Ministry said that 95% of the population will be within 100km of an airport by 2030 and 97% by 2050, higher than the current world average of 75% and equivalent to other countries in the region.

Director of the Civil Aviation Authority of Vietnam (CAAV) Dinh Viet Thang said that many localities want airport access to promote socio-economic development.

However, ensuring efficient investment and operations is the most important factor in planning.

“Airports considered to be efficient and have resources for investment will be included in the planning while inefficient ones will be removed,” said Thang.

Thang added that the announcement last week of the airport planning also aimed to prevent rumours which could inflate real estate prices.

Deputy Transport Minister Le Anh Tuan said that there were currently 22 airports in the country, which play an important role in ensuring national defence and security and promoting socio-economic development.

The transport ministry worked with the National Defence Ministry and localities to review each airport and come up with a set of criteria to evaluate the demand and efficiency.

If there is strong demand for an airport for socio-economic development, the Transport Ministry will report to the government to adjust the plan, Tuan said, adding that a project on raising capital for investing in airports was being completed and would be proposed to the Prime Minister.

The planning target is that by 2030, airports will handle around 276 million passengers per annum, accounting for a 1.5% to 2% share of the market worldwide, and handle 4.1 million tonnes of cargo, or 0.05 to 0.1% of the global cargo transportation market.

Vietnam has huge demand and potential for air transport development, thus, the airport planning will be based on attracting investment into this sector and paving the way for private investors to participate in developing aviation infrastructure.

Investing in aviation infrastructure is a difficult field, Pham Ngoc Sau from Sovico said, adding that it is necessary to develop a mechanism to attract private investment in airport development.

In the latest proposal for the project on raising capital for airport development, the CAAV noted that a public-private partnership was proposed, in which the government can decide its capital contribution to each project.

To date, five master plans of the transportation sector, including roads, railway networks, seaports, airports and inland waterways have been approved, which will form the base of attractive projects to investors. — Viet Nam News/ANN

Source: thestar.com.my

At the ceremony to announce “Top 100 most valuable brands in Vietnam” on August 15, Vietjet Aviation Joint Stock Company was honored as one of the 100 most valuable brands in Vietnam in 2023.

The announcement ceremony of “Top 100 most valuable brands in Vietnam” was organized by Brand Finance, the world’s leading organization in brand valuation, in collaboration with Mibrand Vietnam. The 2023 list gathers most of the key enterprises of the Vietnamese economy.

According to the report, in the aviation sector, Vietjet has the highest growth in brand value at 11%, reaching a value of 361.58 million USD. Vietjet’s brand revenue recorded an increase of 15% to 11,355 billion VND, equivalent to about 483 million USD.

Brand Finance assessed that airline brands contributed the 9th most in the ranking, with a total brand value of 738 million USD (about 2% of the total value of all brands on the list). In addition, the total brand value of airline brands improved by 8%.

Vietjet maintains its brand strength rating at AA+. As one of the most valuable brands in Vietnam, Vietjet actively contributes to the recovery and development of the country’s economy after the Covid-19 pandemic.

On the basis of actual operations, Vietjet’s brand value recorded impressive growth this year. In the first 6 months of the year alone, the airline operated 65,900 flights, transported over 12.1 million passengers (including 3.5 million international passengers), up 26% and 30% over the same period.

In the first 6 months, Vietjet recorded a consolidated revenue of VND 29,770 billion, up 87% and completing 60% of the year plan. The ancillary revenue segment maintained a high growth rate, reaching VND9,000 billion, double the same period and contributing 40% of total revenue. Consolidated profit after tax reached VND 387 billion, up 167% over the same period.

In the first 6 months of the year, Vietjet contributed VND 2,795 billion in direct and indirect taxes and fees to the budget.

Thanks to its ability to flexibly exploit multiple revenue sources outside of its main business and maintain positive profits during the Covid-19 pandemic, Vietjet received a BB+ credit rating from Saigon Ratings with a Stable outlook (VnBB+).

In particular, Vietjet affirms its position as one of the leading global low-cost airline service providers with two awards “Best Low-Cost Airline with Best In-flight Service in 2023” and “Airline of the Year 2023” world’s best super-saving airline in 2023” voted by AirlineRatings.

Stable exploitation of the domestic market, pioneering in opening international routes, meeting the needs of trade between Vietnam and other countries, Vietjet has gradually affirmed its position as one of the most efficient airlines in the world and strong financial foundation.
Currently, Vietjet has become a multinational airline, contributing to expanding trade, developing tourism and enhancing cultural exchanges at all destinations.

The success in the international market helps Vietjet become an “aviation ambassador” – pioneering and actively connecting Vietnam in particular as well as Southeast Asian countries in general with nearly 100 global destinations.

Source: markettimes.vn

SUMMARY

•  Vietjet has introduced a new service between Cochin, India and Ho Chi Minh City, Vietnam, with four flights a week on offer.
•  The carrier is optimistic about expanding the route and introducing additional flights from other cities in Vietnam to Kochi.
•  Vietjet has seen significant growth in its network, now operating seven routes to India and launching new routes to major Australian cities.

The first direct service touched down on August 12th.

Traveling between Cochin and Vietnam just got easier. Vietjet’s aggressive expansion this year facilitated a new service between the Indian region of Kerala and Vietnam’s largest city, with an initial four flights a week on offer.

Vietjet has deployed the Airbus A320 on the service, which will take off from Ho Chi Minh City, Tan Son Nhat International Airport (SGN) to Cochin International Airport (COK) on Mondays, Wednesdays, Fridays, and Saturdays; return flights take off just before midnight on the same day.

Optimistics about more Vietnamese services

In a statement from Jay L Lingeswara, Vice President (Commercial) of Vietjet, as reported by NDTV, the VP noted the possibilities from Cochin International Airport and Southern India:

“The inaugural flights on this momentous day operated at full capacity. It signifies the growing demand for direct connectivity between Kochi and Vietnam. I am also optimistic about expanding this connectivity by introducing additional flights from other Vietnam cities to the Kochi route, thereby fostering stronger ties and facilitating seamless travel.”

Having only announced the new route a month ago, on July 11th, the carrier has been swift in aggressive marketing to get travelers onboard. Last month, the Vietnamese Ambassador, Nguyen Thanh Hai, met with Kerala Chief Minister Pinarayi Vijayan, encouraging the launch of other services between Kochi and Vietnam soon.

Evening flight times

As noted above, the connection will be served four times a week, with the outbound flight VJ1811 pushing back from Ho Chi Minh City at 19:20 for a four-hour and 30-minute flight time to the region of Kerala. It touches down at Cochin International Airport at 22:50.

The return journey will be overnight, departing the city of Kochi just before midnight at 23:50, bound for Ho Chi Minh City as VJ1812. It has a scheduled arrival time back to Tan Son Nhat International Airport by 06:40 the following morning.

With the inaugural service taking off on August 12th, the carrier deployed its Airbus A320, registration VN-A656 (serial number 06584), an eight-year-old A320.

Plenty of Indian and Australian growth

The Vietnamese carrier now operates seven routes to India from its Hanoi and Ho Chi Minh City bases and flies to four Indian destinations – Ahmedabad, Kochi, Mumbai, and New Delhi.

Since April, Vietjet has launched three new routes from Ho Chi Minh City to the three largest cities in Australia – Brisbane, Melbourne, and Sydney – and will add a fourth – Perth – in November. The airline noted that, before 2023, an average of 500,000 annual passengers flew between Vietnam and Australia. Since launching its new routes, weekly passenger numbers have doubled, with traffic likely to hit the one-million mark by the end of the year.

Sources: simpleflying.com

Huge growth has been seen across Vietjet’s international network following a major expansion drive.

Vietjet’s international expansion over the last year has paid off the carrier, particularly in the Indian market. The airline has more than quadrupled the number of passengers carried between Vietnam and India compared to last year.

Vietjet sees huge India traffic boost

Vietjet launched 11 new international routes in the second quarter of 2023 to Australia, Indonesia and India. As a result, it has overseen a massive increase in international traffic over the first half of 2023, carrying 3.5 million passengers.

In particular, its rapid expansion in India has led to remarkable results in this market – the airline served over 300,000 passengers in the first half of this year, almost five times more than the 70,000 during the same period last year. In all, the low-cost carrier flew over 50% of the 6.9 million international passengers going to and from Vietnam between January and June.

The airline said, “Vietjet’s international routes, with reasonable fares and high-quality services, have contributed to connecting cultures, bridging the geographical distance between Vietnam and Asian-Pacific countries and bringing people in the region closer. They have also promoted tourism and strengthened bilateral investment and trade, further facilitating the economic recovery and development of the countries.”

Inside Vietjet’s Indian network

The Vietnamese carrier now operates seven routes to India from its Hanoi and Ho Chi Minh City bases and flies to four Indian destinations – Ahmedabad, Kochi, Mumbai and New Delhi.

Its entire network now consists of 120 routes – 75 international and 45 domestic – to almost 100 destinations worldwide. At the beginning of the year, the airline launched its ‘SkyBoss Business’ class onboard its Airbus A330 fleet, which now conducts flights to Australia, India, Kazakhstan, Japan, and South Korea.

Australia growth

Since April, Vietjet has launched three new routes from Ho Chi Minh City to the three largest cities in Australia – Brisbane, Melbourne and Sydney – and will add a fourth – Perth – in November. As it has done several times on other routes, the carrier recently announced it would offer $0 fares for the launch of its Perth flights.

Since launching its new routes, weekly passenger numbers have doubled, with traffic likely to hit the one-million mark by the end of the year. From December, the airline will offer 70% more A330 capacity on its Australian routes, further bolstering capacity in a market where there is clearly a lot of demand.

Have you flown with Vietjet recently? How does the airline compare to other low-cost carriers? Let us know in the comments.

Source: simpleflying.com