Vietnam 20240620: Transformational, Evolving, Juxtaposed

Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.

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Headlines:

Putin Visit Underscores Deep-Rooted Ties

Political Shift Emphasizes Loyalty Over Expertise

Balancing Growth and Inflation Risks

E-Commerce Boom Prompts Regulatory Changes

Exports Thrive

Real Estate Prices Surge, Attracting New Investments

Renewable Energy Growth Faces Hurdles

Airlines Expand Despite Haze of Uncertainty

Infrastructure Development (Mostly) Accelerates

Global Trade and Investment: US, CU, TW

AU and NZ Grow Education Opportunities

SCB Collapse Exposes Banking Sector Faults

Silver Economy Offers Billion-Dollar Opportunity

Ascetic Monk vs. Elite Scandals

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Putin Visit Underscores Deep-Rooted Ties

Russian President Vladimir Putin's visit is an opportunity to see the deep-rooted relations between the two nations set out in broad daylight, as the countries mark 30 years of their Treaty on Principles of Friendly Relations. Discussions during Putin’s visit are expected to enhance economic ties and address cooperation barriers. The media was keen to showcase Vietnamese residents expressing admiration for Putin, especially talking-up longstanding communist solidarity and shared history. There was also an interesting article presented this week on security preparations for the delegation's safety.

Read more: Reuters (Expected Visit), Times of India (State Visit), Vietnam News (Strengthening Ties), Vietnam News (Friendship Treaty), Tuoi Tre News (Security Preparations), SCMP (Residents' Praise)

Political Shift Emphasizes Loyalty Over Expertise

The political landscape continues undergoing big changes with new Politburo and Secretariat appointments seemingly favoring loyalty over technocratic expertise. Recent promotions boost the military's influence in top institutions, a strategy to try and balance power. The reduction in technocratic leaders is making some wonder about the government’s future ability to address complex economic and policy challenges that are going to need to be addressed if Vietnam is to see its potential.

Read more: Fulcrum

Balancing Growth and Inflation Risks

The economic landscape is presenting a mixed outlook as experts weigh growth and inflation risks. HSBC is warning about inflationary pressures, urging tighter monetary policies. Conversely, a Bank of America economist views the country as a regional economic standout, citing strong GDP growth, a good manufacturing base, and rising foreign direct investment.

Read more: The Investor (Inflation Risks), The Investor (Economic Growth)

E-Commerce Boom Prompts Regulatory Changes

The e-commerce market is set to reach nearly $15 billion in 2024, supported by increased internet availability and rising consumer demand. To regulate the sector, the government is considering implementing a value-added tax on imported goods sold through e-commerce platforms. This change would level the playing field for domestic and international sellers while adding to the tax-man’s bottom line.

Read more: VnEconomy (Market Growth), Tech in Asia (VAT Regulation)