The year 2017 has witnessed a series of M&A deals in the banking sector, including Shinhan Bank Vietnam’s purchase of ANZ Vietnam’s personal banking division and the transfer of HCM City branch from Commonwealth Bank of Australia (CBA) to VIB.
The year 2017 has witnessed a series of M&A deals in the banking sector, including Shinhan Bank Vietnam’s purchase of ANZ Vietnam’s personal banking division and the transfer of HCM City branch from Commonwealth Bank of Australia (CBA) to VIB.
The latter, in which VIB bought a division of a foreign bank, was unprecedented in Vietnam. CBA HCM City Branch began its operation in 2008, and now has 22,000 clients.
Meanwhile, Techcombank bought a stake from HSBC, a big shareholder of Techcombank in the last 11 years.
Standard Chartered Bank is considering the divestment from Asia Commercial Bank (ACB).
There have been many M&A deals that some analysts thought were signs of foreign banks leaving Vietnam. However, the deals are just moves to adjust their business strategies.
HSBC’s CEO Pham Hong Hai commented that the finance market in Vietnam is very competitive and some foreign banks have to reconsider their strategies and use investment capital in the most effective way.
Retail banking
In July 2017, United Overseas Bank Ltd from Singapore officially established its 100 percent foreign owned bank in Vietnam after an unsuccessful attempt to take over GP Bank.
HSBC Vietnam has strong retail banking division
There are 9 wholly-owned foreign banks operational in Vietnam under licenses granted by the State Bank. In addition, there are 41 foreign credit institutions, most of which are foreign bank branches, set up to serve businesses from their home countries, and some of them are paying attention to retail banking.
Shinhan Bank Vietnam is from South Korea, one of the biggest foreign direct investors in Vietnam, with relations with South Korean invested enterprises. Shinhan Bank wants to join the retail banking market and the quickest way to do this is to take over an existing network.
Shin Dong Min, CEO of Shinhan Bank, said the personal banking sector in Vietnam would develop strongly in the time to come amid the strong support of fintech and the strong recovery of the economy.
Digital banking services with high security technologies will be the key products of banks.
In personal banking, according to Hai, Vietnamese banks have the advantage in large networks and long-lasting relationships with local communities. Meanwhile, foreign banks’ advantage lies in diverse products and international relations.
‘Sex workers should have the right to make a living, contribute to society, and enjoy welfare in terms of healthcare and education.’
Vietnamese officials have expressed their concerns about the complicated nature of recognizing prostitution as a job.
Despite being illegal in Vietnam, prostitutes can still be found all over the country’s biggest cities, and the rackets controlling them have come up with countless ways to dodge the law with authorities seemingly helpless to stop the industry’s unchecked development.
Data may vary, but figures from the International Labor Organization (ILO) suggest that there are nearly 101,300 sex workers, including 72,000 women, in Vietnam.
“We must recognize that prostitution is an existing issue in our society. Sex workers should have the right to make a living, contribute to society, and enjoy welfare in terms of healthcare and education,” said Cao Van Thanh, vice head of the Social Evil Prevention Department under the labor ministry at a recent meeting in Hanoi.
A new law on prostitution is necessary to help ensure social security, he said, adding that the law should focus on ensuring sex workers’ access to social security.
Echoing Thanh, Tran Van Dat, vice head of the Department of General Affairs on Legislative Development under the Ministry of Justice, said prostitution should be considered a legitimate profession. “The state should legalize prostitution and allow sex workers to operate in certain areas to manage the industry and minimize the transmission of sexual diseases,” he said.
An ILO study in 2016 said sex workers were some of the most vulnerable people in Vietnam as they have to deal with regular police raids and persistent fear of theft and violence.
A full-time worker usually works 10 to 12 hours each day, and women provide services to between six to 10 clients on average, but sometimes up to 30 per day. Male workers serve between three and 10 clients each day, a workload considered “heavy” by many pimps interviewed by the ILO.
Legislators should start working on the law in 2019 and it should and come into effect in 2021, Dat said.
Agreeing with the legalization of prostitution, Nguyen Xuan Lap, head of the Social Evil Prevention Department, said local authorities are collecting opinions on establishing regulated red-light districts in certain special economic zones.
However, it is very difficult to recognize prostitution as a profession, he said.
“Under the law on vocational education, local authorities would have to build standards for the profession, including a vocational training curriculum and salary levels for workers,” Lap said. “It is very complicated.”
But others have expressed reservations. Tran Chi Dung, the director of the Kien Giang Province’s tourism department, said: “This is a sensitive matter.” Vietnam is planning three special economic zones including one in Kien Giang’s resort island Phu Quoc.
Gambling and prostitution have long been considered forbidden vices in Vietnam, but the government has adopted a more lax attitude towards them in recent years.
In 2013, Vietnam abolished compulsory rehabilitation for sex workers in favor of fines no higher than $100.
Some 70 countries in the world have legalized prostitution outright, including Australia and Germany. According to a report by the United Nations Development Program, sex work has been decriminalized in many Southeast Asian countries as police turn their focus on arresting pimps and brothel owners instead of the prostitutes themselves.
Uber, Grab and Easy Taxi spent big money to fight for market share in Vietnam. But after five years, two of them have left the playing field.
On April 21, Thai An would have been working as a taxi driver for Uber Vietnam for two years. He was the head of Bitex Pro, a team of UberMoto drivers in the Bitexco Tower area in district 1, HCM City.
Six months ago, Bitex Pro merged with another team to form a community of 186 members, called ‘Driver Team’ with the aim of supporting and protecting each other from rivals.
However, the two-year anniversary will never come, because Uber notified drivers that from April 8, the service will run on Grab’s technology platform.
Uber has sold its business in Southeast Asia to the Singaporean rival Grab. Following the deal, Grab will take over Uber’s operations and assets in eight countries: Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Prior to that, Grab Vietnam had sent a message to the community of users, informing them about the successful deal.
The ride hailing app market was first exploited five years ago, in December 2013, Easy Taxi, a well known app in Brazil at that time, came to Vietnam.
However, Easy Taxi came to Vietnam too soon, when the e-hailing and shared economy remained unfamiliar concepts for Vietnamese.
In February 2014, Grab arrived in Vietnam. And in June 2014, Uber came.
When the market heated up in 2015, when the competition between traditional taxi and Grab and Uber became stiff, Easy Taxi unexpectedly left the market.
The failure of Easy Taxi was attributed to a lack of money. Analysts commented that money will determine the result of the game.
Alexander Le, who was managing director of Easy Taxi in Vietnam, said in August 2014, that Easy Taxi had spent nearly $1 million by that time just to run sale promotions.
Spending $1 million after nine months of operation, Easy Taxi was optimistic about its business in Vietnam. It planned to expand after it successfully called for $40 million worth of capital from the Russian Phenomen Ventures and German Tengelmann Ventures.
According to the General Department of Taxation, by October 2017, both Grab and Uber had taken a loss in Vietnam. Grab, which has VND20 billion in legal capital, had incurred a loss of VND1 billion.
Tien Phong Commercial Joint Stock Bank (TP Bank) expects its market capitalization to rise to least $1 billion in the fourth quarter after the scheduled listing this month, according to Chairman Do Minh Phu.
The Hanoi-based lender, known as TPBank, plans to sell about a 15 percent stake to investors via a private placement and issue 28 percent of dividend and bonus shares during the last three months of the year, Phu said in an interview in his office Monday. TPBank expects to raise its registered capital to 8.5 trillion dong ($372 million), up from its current 5.84 trillion dong, this year through the shares issuances, he said.
Tien Phong Bank will list 555 million shares at an initial price of 32,000 dong on April 19 on the Ho Chi Minh City Stock Exchange, which will value the lender at about $781 million. The benchmark VN Index has risen 21 percent this year, the best performer in Asia, prompting companies to sell shares to the public or start trading on the exchanges.
“We think the market will continue rising,” Phu said. Vietnam’s bank stocks have been the VN Index’s best performing sector, rising 37 percent this year through March 30, according to data compiled by Bloomberg.
“As the market conditions are very favorable now and bank stocks are also running very well, listing at this time is good,” said Dang Tran Hai Dang, head of research at Vietinbank Securities JSC.
TPBank expects pretax profit to double this year to 2.2 trillion dong with total assets increasing 17 percent to 140 trillion dong, according to the chairman. The lender aims to keep non-performing loans below 1 percent this year, compared with the government’s sector-wide target of below 3 percent.
Muong Hoa, Vietnam’s longest mountain rail route developed by Sun Group, opens on March 31, connecting Sa Pa Town and the existing cable station to Fansipan Peak.
The 2km rail route starts from MGallery Hotel in Sa Pa Town and ends at the cable station to Fansipan Peak, promising a spectacular journey for tourists.
The two-carriage train can travel at a maximum speed of 10m per second and serve up to 2,000 guests per hour.
It will shorten tourists’ travel time from 20 minutes by car over risky mountainous roads to four minutes by train through valleys, viaducts and tunnels offering beautiful views of surrounding villages as well as nature.
The two carriages were designed and produced by Swiss company Garaventa. Each carriage is 20m in length and 3m wide, weighs 25 tonnes and can carry 200 passengers at once.
The carriage has classic European interiors with antique lights, ceiling fans and huge glass windows.
At the Muong Hoa Cable Station, tourists will continue to take the cable route over Hoang Lien Son range to reach Fansipan Peak, the top of Indochina, at a height of 3,143m.
The new rail route and the world’s most modern three-rope cable car system, Fansipan Sapa, measuring 6,292.5m in length – which was opened to the public on February 2, 2016 – will complete service at the Sun World Fansipan Legend tourism complex.
Located 350km northwest of Hanoi, Sa Pa town in the northern mountainous province of Lao Cai is 1,600m above sea level. The town is dominated by the Hoang Lien Son mountain range which features Indochina’s highest mountain of Fansipan at 3,142 m above sea level.
Sa Pa has many natural scenic sites such as Ham Rong Mountain, Thac Bac (Silver Waterfall), Cau May (Rattan Bridge), Bamboo Forest and Ta Phin Cave. The hill town is home to six main ethnic minority groups, including Kinh, Hmong, Dao, Tay, Day and Xa Pho with various traditional festivals and unique cultural practices, especially the Bac Ha market and Sa Pa love market.
The resort town was recognised as a national tourism site in December 2017.
Vietnam shares ended at an all-time high on Monday, while most other Southeast Asian markets posted gains as broader Asian stocks climbed on the first trading day of the quarter.
Vietnam stocks rose 1.9 percent to close at an all-time high of 1,196.61, helped by financials and real estate stocks.
Joint Stock Commercial Bank for Foreign Trade of Viet Nam and real estate firm Vingroup JSC climbed 5 percent each, with Vingroup setting a fresh closing record.
Vietnam’s steep 21.6 percent rise this year, building on last year’s 48 percent gain, has made it Asia’s most expensive market in price-to-earnings terms.
Philippine shares recovered from early losses, closing up 0.8 percent, on strength in industrials, as trading resumed after the holidays on Thursday and Friday.
Financial stocks fell after a rights issue of Bank of the Philippine Islands was priced at a 23.5 percent discount to the stock’s close on Wednesday. The stock ended 1.7 percent lower in the session.
However, the Philippine market turnover was weak as investors and traders continue to return from the Easter break, said Luis Limlingan, managing director, Regina Capital Development Corp.
Thai shares gained about 0.3 percent as PTT Global Chemical PCL rose 2.1 percent and Kasikornbank ended 1.4 percent higher.
Thailand’s annual headline inflation rate picked up in March, but missed forecasts and was below the central bank’s target range, giving policymakers leeway to keep monetary policy loose to help economic growth.
Singapore shares edged 0.1 percent higher on real estate and industrials, with Jardine Matheson Holdings Ltd climbing 0.9 percent.
Indonesian shares also rose, boosted by consumer staples and consumer discretionary stocks.
Data showed Indonesia’s annual inflation rate accelerated in March compared with a month earlier, but remained well within the central bank’s target range.
Astra International Tbk PT climbed 3.4 percent, while Telekomunikasi Indonesia (Persero) rose 1.9 percent.
The index of the country’s 45 most liquid stocks gained 1.4 percent.
Meanwhile, Malaysian shares slipped 0.3 percent on losses in telecom stocks and financials, with Malayan Banking Bhd shedding 0.8 percent.
Itochu has increased its ownership of a Vietnam state-owned textile company with an eye toward turning the country into a textile export hub for Europe amid rising labor costs in China.
The Japanese trading house spent about 5 billion yen ($46.9 million) to lift its stake in Vietnam National Textile and Garment Group, or Vinatex, to nearly 15%, becoming the second-largest stakeholder after the Vietnamese government. The company already had a roughly 5% interest, acquired in 2015. It is rare for a foreign company to own more than 10% of a state enterprise in Vietnam.
Vinatex operates about 200 sewing factories in Vietnam. It invested nearly $200 million over the past three years to add facilities for thread and cloth production. The company now handles everything from material production to sewing.
Since its 2015 investment, Itochu has collaborated with Vinatex on suits, shirts and functional undergarments for cold weather, for instance. It plans to boost production of high-performance apparel in Vietnam and export the output to Japan, Europe and the U.S. Itochu may have Vinatex produce such items as sportswear through collaboration with materials makers.
Itochu exports a little over 60 billion yen worth of apparel from Vietnam a year, with half of that produced by Vinatex. The company aims to increase outsourced production and raise exports to 100 billion yen by 2021.
Vietnam has a free trade agreement with the European Union, and is also participating in the Trans-Pacific Partnership, making it a suitable alternative as a manufacturing hub to China, where labor costs are climbing.
Exports to Vietnam soar as firms such as Samsung shift output
Vietnam set to become Korea’s second-biggest export market
Facing persistent trade tensions with China and the U.S., South Korea is deepening ties with Vietnam, which is on course to surpass the U.S. as Korean companies’ second-biggest export market.
South Korean President Moon Jae-in is looking to expand trade with Southeast Asia as one way for corporate giants such as Samsung Electronics Co. to diversify production bases and export markets. Seoul sees the U.S. under President Donald Trump as an increasingly demanding and unreliable trade partner, while tensions with China over the U.S. Thaad missile-defense system have dragged on for more than a year.
Korean companies have long built factories in Vietnam but the Thaad dispute has made Vietnam more attractive as a production base and an export market, said Kim Ill-san, a director at the Ho Chi Minh City branch of the Korea International Trade Association.
One result is that South Korea’s exports to Vietnam rose by nearly half in 2017 alone, and have more than doubled over the past three years. Vietnam is now expected to become South Korea’s No. 2 export market by 2020, according to the trade association.
“Korea mostly sells intermediary and capital goods to Vietnam, but as Vietnam’s economy grows, there will be bigger room to sell consumption products,” Kim said.
Growing Profile
Vietnam expected to overtake U.S. as destination for South Korean exports
Vietnam Growing Profile
In a meeting on Monday explaining his March visit to Vietnam, Moon said growing trade protectionism and trade conflict between U.S. and China could hurt the Korean economy, and he urged the country to prepare. Finance chiefs from Korea and Vietnam agreed to meet annually to expand economic cooperation, the Korean ministry said in a separate statement.
Companies like Samsung and Lotte Group are leading the way as Korean investment in Vietnam, once focused on labor-intensive sectors such as textiles, increasingly goes into electronics manufacturing, services and retail.
South Korea is now the biggest foreign investor in Vietnam, with total direct investment reaching a record-high $7.4 billion through the first 11 months of last year, according to the Korea Trade-Investment Promotion Agency. And it overtook the U.S. as Vietnam’s second-largest trading partner last year. About a third of Korea’s shipments to Vietnam are semiconductors and displays destined for electronics production lines, the trade-promotion agency said.
With a fast-growing economy and a young population, Vietnam also offers an attractive market for retailers. Its economy expanded 7.4 percent in the first quarter from the same period a year earlier, and a third of its population is aged 15 to 34.
In the retail sector, Lotte Group, which came under fire in China over its role in the Thaad deployment, is seeking to sell its hypermarket stores there, yet plans to increase the number of retail stores in Vietnam by more than six-fold by 2020 — to 87 from 13. E-mart Inc., Korea’s largest operator of discount stores, is building a second store in Vietnam after withdrawing from China due to poor sales.
Shock Absorber
South Korea’s investment is helping fuel growth and prosperity in Vietnam. Samsung says it employs 100,000 people at its plant in Hanoi, while the number of its affiliate companies and suppliers is estimated to be around 300.
A Samsung Electronics plant in Bac Ninh Province, Vietnam.Photographer: Linh Luong Thai/Bloomberg
Speaking in Hanoi last month, Moon described the growing relationship with Vietnam as a win-win deal.
“About 5,500 Korean companies are now doing business in Vietnam,” Moon said. “One million Vietnamese workers have good jobs, and Korean companies are growing fast thanks to competent and diligent Vietnamese workers.”
Those ties look set to deepen. During Moon’s visit to Vietnam, the two countries and their companies signed 18 memoranda of understanding. It’s part of what Moon calls his New Southern Policy, strengthening connections with members of the Association of Southeast Asian Nations while reducing economic and diplomatic reliance on China and the U.S.
To be sure, expanding trade and production in Vietnam will only provide a limited buffer against Trump and Beijing, particularly if trade tensions worsen further. Many of the products South Korean companies are making in Vietnam are destined for the U.S. and China.
“Vietnam and Asean can’t be alternatives for the U.S. and China, but they are new, complementary markets to prepare against shocks in the two big economies,” said Kwak Sungil, a director at the Korea Institute for International Economic Policy, a government-affiliated think tank.
The Chinese-funded project has just had its launch date postponed for the fifth time.
Experts in Vietnam have called for a government inspection into an infamous Chinese-funded urban railway line in Hanoi, after the project manager last week asked to have its launch date delayed for another three years.
Since construction of the 13-kilometer Cat Linh – Ha Dong line began in 2011, its completion has been put off five times, totaling six years of delay.
Dr. Pham Sy Liem, vice president of Vietnam Construction Association, put the repeated delays down to a lack of capital, which in turn could be attributed to erroneous initial estimates or mismanagement during the project’s development.
Either way, Liem said, the Ministry of Transport must take charge of launching a thorough inspection into the project to determine how its development capital went off the roof and who are to blame for such inefficient use of funds.
The Cat Linh – Ha Dong urban railway line commenced construction in October 2011 with an initially approved capital investment of US$552.86 million, partially funded by China’s official development assistance (ODA).
In early 2014, the project’s capital investment was raised to $868.04 million, forcing Vietnam to take an additional ODA loan of $250.62 million from China.
The Vietnam Railway Authority, under the transport ministry, is the project developer, whereas the China Railway Sixth Group, a subsidiary of construction conglomerate China Railway Group, is the EPC (engineering, procurement, and construction) contractor.
Under an EPC contract, the contractor designs the installation, procures the necessary materials, and builds the project.
A worker works on the construction site of the Cat Linh – Ha Dong urban railway line in Hanoi. Photo: Tuoi Tre
According to Liem, the project developer must take the highest responsibility in making sure things go on schedule, as the Chinese contractor can’t keep putting off finishing the railway line without permission from Vietnamese management authorities.
Dr. Tran Dinh Thien, president of the Vietnam Institute of Economics, said it was important that the cause for repeated delays of the urban rail line be determined, instead of allowing such absurdity to happen time and time again.
“Postponements of such key projects only lead to cost overruns and many other immeasurable damages to the economy, and slow down our country’s economic growth as a whole,” Thien said.
Fifth time’s not a charm
The Cat Linh – Ha Dong line had been scheduled for official launch in June 2015, meaning construction was initially expected to less than four years.
However, in 2014 it was announced that the project’s launch would be delayed until 2016 with an additional cost of over $315 million.
In early 2016, the transport ministry and its Chinese contractor agreed on a new launch date in December the same year, before correcting themselves that the line would not be launched until early 2017.
In February 2017, the urban railway line’s completion was postponed for another year, with a new launch set for February 2018.
Last week, the project manager submitted a proposal for the line to begin a test run in September, setting the date for an official launch to be in 2021.
The test runs would include both no-load and loaded tests, according to a transport ministry report submitted to the government for approval.
Authorities would rely on test results to make necessary technical adjustments and determine a specific launch date for the entire line.
There is no knowing whether this postponement would be the last.
Workers work on the construction site of the Cat Linh – Ha Dong urban railway line in Hanoi. Photo: Tuoi Tre
According to calculations made in May last year by the project manager, the rail line project was already paying at least VND1.2 billion ($53,000) in loan interests for each day of delay from the initial schedule.
But there could be less visible economic damages as well, experts say.
If the line had been put to use in 2015, residents in Hanoi could have gotten used to the public transport by now and traffic pressure on the Vietnamese capital could have already been relieved.
The saying that ‘third time’s a charm’ seems to have lost its charm on the people of Vietnam, who deserve an answer from responsible authorities for the continuous delays.
The Facebook data scandal was a wake-up call to Viet Nam’s booming internet growth as experts voiced concerns over the often neglected threat of personal information leaks.
A conference on the digital economy and cybersecurity policy was held in Ha Noi on Thursday, just weeks after Facebook was accused of providing personal information of up to 50 millions users to UK-based data firm Cambridge Analytica.
They allegedly used it to target swing voters in the US 2016 presidential election.
Among all the discussions co-organised by the Viet Nam Digital Communications Association and the American Chamber of Commerce, privacy issues were high on the agenda.
According to Internet Live Stats report 2018, the number of internet users in Viet Nam last year reached 64 million people, thrusting the country into the top 20 internet users worldwide.
He said e-commerce, where people have to provide personal information like bank details when shopping online, was booming in Viet Nam.
Vietnamese e-commerce total revenue in 2016 shot up to more than US$5 billion while billions of dollars kept pouring into e-commerce start-ups and mergers and acquisitions deals.
The risk, however, was not minimal.
Public policy expert Nguyen Quang Dong from the Institute for Policy Studies and Media Development said what mattered now was how the data protection was practised in Viet Nam.
“I believe many have gone through the same situation, when you received an SMS advertising the airport taxi service the moment you just landed at Noi Bai (airport) and walked off the plane without even knowing how and why,” Dong said.
Viet Nam’s legal framework was still short of regulations on the purchase or hand-over of users’ personal data from one company to another, Dong said, adding the role of the justice system to handle dispute regarding data privacy was yet to be made clear by the law.
CMC digital corporation CEO Trieu Tran Duc acknowledged that companies would not reject the opportunity to make money from selling data if the law is made too easy for them to do so.
“The Government, meanwhile, could not resist the trend of digitalising data, especially in the time of the fourth industrial revolution,” Duc said. “And such data will be at a much larger scale than that of Facebook.”
National Assembly Deputy Chief of Staff Nguyen Si Dung admitted data privacy was often neglected in Viet Nam.
“The role of the Government in managing data privacy will be protecting the customers’ rights and handling compensation when a dispute breaks out between the customers and a company over data privacy,” he said.
“The Government should also pay attention to force businesses into proper privacy practices, but not to pour too much resource to do so. The businesses know themselves they can’t grow if they fail to protect their customers.”
New Facebook shops halted
Facebook’s move to shut down the application programming interface (API) in Viet Nam following its biggest data scandal which wiped more than $100 billion from its stock market value has interrupted the business of a number of online shops opened on the social media network.
API is a software intermediary that lets two applications connect. Applications developed based on Facebook and Facebook Messenger platforms like chatbot – a computer programme that conducts conversations with the customers – are no longer available without the API.
Facebook recently announced a series of changes to give its users more power over their data as well as more protective measures to prevent misuse of personal data without consent of the users.
Independent security specialist Nguyen Hong Phuc told Thanh Nien (Young People) newspaper that the affected API during this time of change will include the API used for monitoring pages, feeds, comments and posts.
Facebook Shop in the meantime will temporarily stop verifying new sign-ups, which means that no more online shops can be opened on Facebook in Viet Nam.
Phu Quoc Island has become one of the hottest holiday spots in the country in recent years as the local and central governments have gone ahead with ambitious plans to develop it into an international hub for eco-tourism, resort tourism and amusement and a regional financial centre.
Phu Quoc, dubbed pearl island, is the biggest island in the country at around 600 square kilometres.
With white sandy beaches and balmy weather almost all year round — since two-thirds of the island is covered in forests — Phu Quoc is a holiday-goers’ paradise.
“What attracts tourists the most are the island’s wild beaches, its warm weather which allows tourists to bathe in the sea almost all year round, and its diverse landscapes from mountain to forest and sea,” Huynh Quang Hung, deputy chairman of the Phu Quoc District People’s Committee, said.
Night markets in Phu Quoc are a paradise for seafood lovers.—VNS Photo Thien Ly
Since the island was connected to the national electrical grid and a visa waiver policy which gives foreigners a 30-day visa-free stay was adopted in 2014, foreigners have been flocking to the island.
According to figures from the local administration, last year the island received 1.96 million visitors, a 35 per cent year-on-year increase.
It included more than 360,000 foreign visitors, up 72 per cent.
The island’s accommodation and food services sector earned more than VND11.6 trillion (US$510 million), up 30 per cent.
In the first quarter of this year the number of visitors zoomed to 760,000, a 37 per cent rise over the same period last year. Foreign arrivals doubled to 286,000.
Wild beaches are one of Phu Quoc Island’s biggest draws for visitors.—VNS Photo Thien Ly
Tourists from countries such as Thailand, Singapore, Cambodia, China, and South Korea, but also from faraway places like Sweden, Russia, the UK, and Italy, travel here more often now thanks to direct flights from many countries to Phu Quoc International Airport.
Some 70-80 flights arrive and depart from the airport every day, including eight to 10 international flights.
During the high travel season such as summer and national holidays, the number can reach 100, according to Hung.
Authorities are upgrading the airport to handle five million visitors a year by 2020 and seven million by 2030, including 40 per cent foreigners.
Soon domestic flights to Da Nang, Vinh, and Lam Dong and international flights to Japan and European countries are expected to start.
Phu Quoc International Airport is being upgraded to serve five million tourists by 2020 and seven million by 2030.—VNS Photo Thien Ly
Big investors
Apart from its natural beauty, Phu Quoc Island also attracts visitors with its luxury resorts, golf courses, the animal safari, and casinos.
Under the master plan to develop Phu Quoc into a special administrative economic zone, many incentives have been offered to investors to help the island achieve its full potential.
“Phu Quoc has the best mechanisms and incentives in the whole country,” Hung said.
Its corporate and personal income taxes are the lowest in the country; land rents are waived for the first four years and cut by 50 per cent for the next nine.
The island is seeking approval to offer 99-year land leases to investors.
These incentives have drawn big investments from local and international firms.
CEO Group, which is among the three biggest investors in the island, understood about Phu Quoc’s tourism potential and began investing at a very early stage.
“Back then Phu Quoc had all kinds of advantages — nice weather, beautiful and warm beaches [for tourism] — but lacked technical or tourism infrastructure,” Tran Dao Duc, deputy general director of CEO group, said.
The world’s longest cable car route over sea connecting An Thoi Town and Hon Thom Island in Phu Quoc Island was inaugurated in February. — Photo courtesy of Sun Group
“We have met many foreigners who said they had wanted to know about Phu Quoc for quite a while, but did not know how to get there.
“It is fortunate the Government has paid close attention to investing in the island to build the international airport, bring electricity and upgrade roads.”
Duc said his company started work on the Sonasea Villa & Resort complex in 2013 immediately after the island set up technical infrastructure.
Covering nearly 80 hectares in the Bai Truong area, the partly finished five-star complex serves the demands of high-class tourism and offers many other services such as eco-tourism and leisure and amusement activities.
Novotel Phu Quoc resort, part of the complex, has been popular with European tourists since 2015 and has an average occupancy rate of 70 per cent.
The Vinpearl Phu Quoc complex, developed by Vingroup in the north of the island and consisting of a five-star hotel and villas, a modern amusement area, a golf course, and the world’s second biggest wildlife safari, has also become popular with foreign and domestic tourists.
In the south, the Sun Group has built a resort and hotel complex of five- to six-star quality with over 1,000 rooms.
Last month Sun Group inaugurated the world’s longest cable car route over the sea connecting An Thoi Town and Hon Thom Islet, cutting the time for travel, until then by speed boat, by half.
The cable car system is part of the Sun World Hon Thom Nature Park in the south of the island.
“These big local investors are the ones who are changing the face of the island,” Hung said.
Thanks to large projects like these, the island now has a large number of hotel rooms to meet the rising needs of visitors in future.
There are around 15,000 rooms rated three-star and above, including 6,000 rated five-star.
This large number means the human resource requirement in the service sector is also huge, but Phu Quoc faces a shortage of trained workers.
“Since the island’s tourism sector is booming, we have worked with vocational colleges and schools to provide short training courses to meet the rising demand for human resources,” Hung said.
“Some resorts on the island have also partnered with vocational schools to offer apprenticeships and internships to students to give them hands-on experience.”
Many projects are under development on Phu Quoc Island by local and international investors.—VNS Photo Thien Ly
Duc of CEO Group said it used to be very hard to hire employees in Phu Quoc a few years ago.
But now “more and more people from the mainland come to the island to seek opportunities,” he said.
His company offers accommodation and regular training for staff as a way to retain employees.
Apart from the employment issue, Phu Quoc also has environmental concerns as a result of its rapid economic growth.
Waste treatment in residential areas is not ideal, which affects the appearance of the island.
“Waste and water treatment is one of our top priorities at the moment. We are seeking support from the provincial and central governments to solicit investment in waste treatment plants,” Hung said.
Besides seeking investment, local authorities have also sought residents and businesses’ co-operation in protecting the environment and preserve the beautiful image of the island.
With a draft law on special administrative-economic zones expected to be passed by the National Assembly in May, Phu Quoc and Kien Giang Province authorities are working to improve tourism services and eliminate problems like cheating and gouging of foreigners.
They closely monitored all tourism activities on the island to ensure food safety and hygiene at traditional markets and prevent cheating of tourists, Hung said.
He advised foreigners not to ride motorbikes on the island but instead rent a taxi or motorbike taxi for their own safety, saying there had been cases of foreigners not obeying traffic rules and getting into accidents as a result.
He said to assist tourists the island was planning to set up booths at tourists sites.
Cat Linh-Ha Dong metro line, the first of its kind in the capital Hanoi, is slated for the trial run on September 2 after failing to meet last year’s plan.
The test run is expected to last between three and six months. Construction will be completed in the fourth quarter of this year.
The day for the official operation will be decided following the results of these runs.
The trial operation was originally scheduled for April this year.
Cat Linh-Ha Dong metro route has a total investment of USD868 million which is official development assistance loans from China. China Railway Sixth Group Co, Ltd is the project EPC.
The 13-kilometre line has 12 stations and one depot area. It has 12 trains, including 48 carriages. Each train with four carriages can carry 1,200 passengers.
Trains will be operated every two minutes with a maximum speed of 80 kilometres per hour.
He had trekked for 20 kilometres through the thick jungle of the Phong Nha-Kebang National Park in Quang Binh province and was searching for shelter from impending rain when the mysterious mist caught his eyes.
“I kept following it until I saw an enormous entrance of a cave. It was scary.”
Yet, curiosity soon replaced fear. The logger braved the deep, intimidating darkness and stepped through the large opening into the unknown space. As he went deeper, Ho Khanh picked up the sound of a river and felt a strong wind blowing out of the dark.
“The cave just got bigger and bigger,” he recalled. “But since I didn’t have enough lighting with me, I left.”
Son Dong Cave is located in Phong Nha, Quang Binh province. It was first discovered by accident in 1990. (Photo: Gregg Jaden, Instagram @greggjaden_ )
When he turned back, 28 years ago, the logger had no idea he had just stumbled upon Son Doong, the largest cave in the world. All he knew then was hardship and grinding poverty that drove him and other villagers into the forest to harvest timber and poach wild animals.
Their lives did not change until nearly 20 years later. Researchers from the British Cave Research Association came to the national park – a UNESCO World Heritage site – to explore its cave systems. They learnt about the enormous cave Ho Khan sighted in 1990 and asked him to find it again.
It took many failed attempts before the cave was rediscovered in 2008. In the following year, Ho Khanh led a team of researchers on an unprecedented expedition to the site.
SON DOONG: THE MOUNTAIN RIVER CAVE
The world’s largest cave is 5 kilometres long and consists of sections rising up to 200 metres. According to Oxalis Adventure Tours, a local company that provides exclusive four-day expedition tours to Son Doong, it is big enough to “house an entire New York City block, complete with 40-storey skyscrapers”.
Visitors explore Son Doong Cave on kayaks. The size of the cave is so massive a Boeing 747 can fly through its biggest cavern. (Photo: Gregg Jaden, Instagram @greggjaden_)
Meaning ‘Mountain River Cave’, Son Doong was recognised as the world’s largest cave in 2010, when the end of the passage was found. However it was not open to the public until 2013.
After a 90-metre descent through the cave’s entrance, visitors enter a whole new world of ancient fossils, underground river and lush tropical jungle. Rising from the ground and hanging from the ceiling are huge columns of stalagmites and stalactites formed of calcium salts deposited by dripping water over millions of years.
In the picture is Loong Coong cave, located on top of Son Doong Cave. The only way to reach the cave is to hang down with a rope for around 0.05 miles. (Photo courtesy of Howard Limbert)
“Son Doong Cave is a masterpiece of nature with otherworldly landscapes – a space so mesmerising that it forces you to question whether you are still on this planet at all,” the company says on its website.
PHONG NHA TRANSFORMED
Since the rediscovery, Son Doong’s global recognition has drawn millions of adventurous tourists to Phong Nha and helped lift many local families out of poverty. Today, the once underdeveloped region has emerged as one of the main hubs for adventure tourism in Asia.
“Each year, about 600,000 people travel to Phong Nha to see its caves,” said Chau A Nguyen, founder of Oxalis Adventure Tours. His company was granted an exclusive licence to operate tours at 12 caves in Phong Nha.
“Oxalis alone brings about 12,000 tourists to the caves. Other companies send about 8,000 more tourists to others.”
Thanks to the continual growth in tourism, many loggers and poachers have ceased their illegal operations in the Phong Nha-Kebang National Park and welcomed new career opportunities.
A large number of locals have secured jobs in the tourism sector, from expedition tour guides to photographers, porters and business owners. In downtown Phong Nha the main street is dotted with restaurants, cafes, shops and small hotels. Further away, home-stays are cropping up near golden paddy fields and lush green vegetable farms.
“Phong Nha has changed so much but in a sustainable way,” said Dzung Le, owner of local home-stay Jungle Boss – the name by which he is known locally.
“Phong Nha is getting busy but not damaged. Its nature is pristine. The landscape is beautiful. Local people still go to the jungle but not to hunt; they’re porters carrying equipment and food for tourists.”
SUSTAINABLE ECO-TOURISM
Dzung moved to Phong Nha in 2008 for a job with a German environmental organisation. As he worked to rescue the local wildlife and preserve the forest in the national park, he fell in love with Phong Nha’s stunning landscape, serenity and pristine nature. So after his contract ended, he stayed on, got married and started his own business.
British divers Jason Mallinson, Rick Stanton and Chris Jewell — who helped rescue the trapped soccer team in Thailand in 2018 — recently dived in Vietnam’s Son Doon Cave. courtesy Oxalis Adventure
Now a father of two, Dzung runs an eco-friendly homestay that offers tourists a truly local experience of the place he calls home. Besides joining his adventure tours, visitors can also explore the local village and try their hand at organic farming in his vegetable garden where his family sources fresh ingredients for cooking – from aromatic Vietnamese mints to crisp lettuce and plump aubergines.
While important for generating income for his family, Dzung said the homestay business also allows him to help locals improve their livelihoods, providing them with sustainable jobs and protecting the untouched nature from mass tourism.
“We create a niche and sustainable product. We try to attract people who like exploring rural Vietnam, experiencing its jungle and nature. We don’t want to have millions and millions of people coming here to spend just two hours going to the caves and then leave,” he explained.
“If you have mass tourism, it means you need to build big hotels, reduce farmland, produce a lot of rubbish and use a lot of water.”
HOMESTAYS VS BIG HOTELS
Dzung believes the best way to create jobs without destroying Phong Nha’s pristine condition or local livelihoods is for its residents to embrace the idea of homestays, develop more adventure tours and offer visitors an enriching experience of traditional farming.
Besides keeping tourism-generated income to the local residents, he believes a sustainable long-term homestay programme can also stop them from selling their land to big investors, which could expose Phong Nha to big development projects and jeopardise its natural beauty.
“People here are smart enough to see they can earn sustainable money from the homestay business,” Dzung said.
Deep inside Phong Nha’s national park, Ho Khanh leads a group of tourists on an hours-long expedition tour to Hang Tien, the largest cave of the Tulan cave system.
A tropical jungle grows outside Hang Tien, the largest cave of Phang Nha’s Tulan cave system. (Photo: Pichayada PRomchertchoo)
With his simple flat plastic shoes, the ex-logger – who now heads Oxalis’ porter operations and owns a busy homestay on the banks of the Son River – climbs on sharp rocks and penetrates the thick jungle with ease.
He feels like home in the embrace of nature, whose creations continue to allow him and the people of Phong Nha to show the world its majestic beauty.
“I’m the son of Phong Nha and I’m very happy it’s known to the world.”
Authorities in Ho Chi Minh City do not encourage the offering of any additional drinking services along a downtown pedestrian street amid complaints of its deterioration into a giant booze hub.
Local officials envision Bui Vien Walking Street in District 1 to be more of a tourism destination hospitable to both expats and foreign tourists.
But the pedestrian zone has attracted much infamy in recent times, with alcoholic-serving restaurants and bars crowding up the sidewalks and street fights having escalated into a daily occurrence here.
A fight erupted at Bui Vien when a Vietnamese actor brawled with a security guard on June 11, 2017.
On March 18, 2018, another scuffle broke out between a foreigner and a waiter at a roadside bar.
All this has thus unnerved residents and officials alike.
“We do not approve of any more beer and alcohol places along Bui Vien but we need more souvenir shops and convenience stores,” Tran The Thuan, chairman of the People’s Committee of District 1, said at a meeting on Thursday.
Thuan said that local authorities have started taking ample measures to address the drinking-related problem on the street, including sudden checks on restaurants and bars, compelling their relevant owners and employees to take part in workshops and training sessions, and putting a cap on beverage consumption along the pedestrian street.
Two more police forces will be stationed along the street to reinforce order, the chairman said, adding that this is only deemed a precaution, as there have merely been two petty thieveries there in recent times, both of which were quickly dealt with.
Bui Vien is a famous street in Pham Ngu Lao Ward, District 1, where there is a vibrant community of expats and foreigners.
On April 30, 2017, the street was officially turned into a pedestrian zone, seen as an alluring and must-go tourist attraction.
