With the rise in urbanization from 2004 to 2015, waste generated in Vietnam increased from 15.6 million tons to 27.8 million tons annually, an increase of 78.2 percent. Majority of the waste collected ends up in landfills, which contaminates the ground and surface water, increase pollutants, and affect public health. Waste-to-energy technologies offer a cost-effective solution that has the potential of reducing waste volume by 90 percent and generating energy for the urban areas.
In May 2018, the government issued Decree No. 81/2018/ND-CP (“Decree 81”) relaxing regulations on sales promotion activities. Decree 81 replaced Decree No. 37/2006/ND-CP, and will be in effect from 15 July 2018. Firms that carry out commercial promotion activities, such as direct promotions, or promotions through distributors and companies fall under the scope of Decree 81.
Vietnam currently has around 3,000 startups involved in sectors such as fintech, food tech, healthcare, and e-commerce. In 2017, 92 startups received investments worth US$ 291 million, 42 percent higher compared to 2016, while the number of startups increased by 45 percent. The industry still lags in terms of funding and scale when compared to startups in Southeast Asia, but there is huge room for growth.
The number of coworking spaces in Vietnam rose by 62 percent in 2017, driven by the growth in startups, and the need for cost-effective spaces compared to existing leased office spaces. The growing demand has only attracted domestic firms but also global firms and investment funds in Vietnam. Going forward, such spaces will continue to expand in terms of supply and offerings and will not only attract startups as tenants but also small corporations who are looking to minimize costs and increase flexibility.
The agriculture industry contributes around 20 percent to the GDP while employing 40 percent of the working population in Vietnam. However, both numbers are predicted to decline in the near future. To ensure a sustainable growth going forward, the industry needs to move towards high-tech farming and value chain development to reduce costs, increase production, and achieve better product quality.
The sector continues to suffer from low product quality and climate change which reduces its competitiveness. The government has taken note of these issues and pledged to offer numerous incentives to farmers, cooperatives, and private firms to encourage investments in high-tech farming solutions in Vietnam. Currently, high-tech agricultural products only contribute around a quarter of the total value of agricultural products, leaving significant room for growth.
Vietnam is one of the fastest growing aviation markets in the world, growing by 17.4 percent in the last decade, which was driven by a rise in domestic and foreign travelers as well as the emergence of low-cost carriers. However, this rapid growth has started to put a strain on the airport infrastructure. The government has started to invest in infrastructure but more needs to be done in terms of capital and investment regulations to achieve a sustainable growth.
The Vietnamese government has issued Decree 69/2018/ND-CP (“Decree 69”) to regulate the temporary import and re-export of goods in Vietnam. The two major stipulations focus on Vietnamese traders processing goods for foreign merchants and the time limit for temporary import and re-export of goods. Decree 69 is already in effect.
On March 8, 2018, U.S. imposed a 25 percent tariff on steel imports and a 10 percent tariff of aluminum imports under Section 232 of the Trade Expansion Act of 1962 citing national security issues. In a similar move in December 2017, the U.S. Commerce Department increased import duties on steel products specifically from Vietnam that originated from China as they evaded anti-dumping and anti-subsidy rules. The rise in tariffs will impact the steel industry in Vietnam, but steel companies in Vietnam believe that it will not have a major effect on the overall economy.
The growth in foreign direct investment in Vietnam, driven by its strategic location, low wages, and improvement in the business environment, is the major factor that transformed Vietnam into a manufacturing hub in the region. In the long-term, this trend is expected to continue if Vietnam is able to maintain its competitive advantages. In addition, FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EU-Vietnam FTA (EVFTA) will diversify the export markets for Vietnam.
Hanoi, Ho Chi Minh City, and Da Nang will be joining the ASEAN Smart Cities Network (ASCN), which was proposed earlier in April by Singapore. The ASCN aims to facilitate cooperation in the region on smart cities for sustainable development. A total of 26 cities from member states will be joining the network.