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Logistics bright spot 2021

(VLR) Global trade growth is showing no sign of stability due to the fact that the pandemic of COVID-19 has not yet fully been controllable: many regional and international supply chains are likely to be interrupted. In Vietnam, logistics infrastructure policies have been consider an important link for breakthroughs in Vietnam’s logistics sector in particular and in Vietnam’s business environment in general.

Vietnam’s economy is forecast to have good growth in 2021 by experts thanks to existing potentials and impacts from new-generation free trade agreements

Vietnam’s economy is forecast to have good growth in 2021 by experts thanks to existing potentials and impacts from new-generation free trade agreements

The year of 2020 is a difficult year to all the fields of the economy. We have witnessed the global economic crisis and the logistics sector has also been badly affected as well. However, in the gloomy picture, Vietnam’s foreign trade activities have had remarkable results. The import-export has been a bright spot and an important premise for the economy to enter the year of 2021. For these targets, the Government and all ministries, departments and sectors had ontime participations.

Currently, with more than 1,700 businesses, Vietnam's supply capacity is considered to be a large one, up to more than 1.1 billion pairs of shoes and nearly 400 million backpacks and bags per year with a high localization rate of up to 50%. The Vietnam - EU Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are expected to continue to be the driving force for the growth of the footwear and handbag industry in 2021.

On January 1, 2020, the Government issued Resolution No. 01/NQ-CP on key tasks and solutions to implement the socio-economic development plan and the State budget estimate for 2020 with policies on logistics infrastructures as accelerating the project of North South Expressway, making decision to invest in the project of Long Thanh International Airport and implementing important regional projects; performing well works of management, repair, and frequent maintenance of road and railroad transport systems; promoting roles of large cities, removing bottlenecks, attracting resources for modern urban development in connecting with rural developments; renovating and improving IT infrastructures, developing synchronous and modern digital infrastructure, developing Vietnam’s digital ecosystem with shared platforms, services and new business models; gradually mastering foundation technology for digital economic shifting.

In the last months of 2020, logistics and importexport activities were affected by the shortage of empty containers, rising charges and surcharges globally, especially in the Asia- Europe routes, and trans- Pacific routes. The Ministry of IndustryTrade had cooperation with other ministries, departments, sectors and the Vietnam Logistics Business Associations to discuss options that ensure harmonizing benefits among ship owners and shippers for a stable development in logistics market.

Logistics infrastructure policies have been consider an important link for breakthroughs in Vietnam’s logistics sector in particular and in Vietnam’s business environment in general

Logistics infrastructure policies have been consider an important link for breakthroughs in Vietnam’s logistics sector in particular and in Vietnam’s business environment in general

In the export picture of 2020, many industries have successfully overcome difficulties. For example, the rice sector had a victory in 2020 when farmers had a good harvest. The rice export surpassed those of Thailand and India, taking the first world position in term of price. Or after 3 months of implementing EVFTA, there were changes in many Vietnam’s export products, for example, footwear products. Currently, with more than 1,700 businesses, Vietnam's supply capacity is considered to be a large one, up to more than 1.1 billion pairs of shoes and nearly 400 million backpacks and bags per year with a high localization rate of up to 50%. The Vietnam - EU Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are expected to continue to be the driving force for the growth of the footwear and handbag industry in 2021. According to estimates from the Ministry of Industry and Trade, in 2020, the export turnover of goods was estimatedly at USD 281.5bn, an increase of 6.5% year-over-year.

After a speed-up in the fourth quarter of 2020, Vietnam’s economy is forecast to have good growth in 2021 by experts thanks to existing potentials and impacts from new-generation free trade agreements. According to Vietnam’s UOB Bank’s evaluation, Vietnam’s economy growth in 2020 was 2.91% - 2.7% higher than UOB’s estimates. Vietnam is one of a few countries that had positive growth in the widespread of the pandemic of COVID-19- a painting with brighter colors compared to those of neighbor countries. Singapore’s Ministry of IndustryTrade said Singapore’s GDP decreased around 6%- 6.5% in 2020 and would increase around 4.0% - 6.0% in 2021. And according to a report on Malaysia by the WB in December 2020, the country’s GDP was forecast to increase 6.7% in 2021, after it decreased 5.8% in 2020 due to the pandemic of COVID-19. ADB predicted Thai’s economy would decrease 7.8%- a reverse of the increase of 2.4% in 2019. ADB’s branch in Indonesia said it lowered Indonesia economic growth forecast in 2020 and 2021 to -2.2% and 5.6% respectively instead of the previous ones of -1% and 5.3%.

Vietnam is one of a few countries that had positive growth in the widespread of the pandemic of COVID-19- a painting with brighter colors compared to those of neighbor countries

Vietnam is one of a few countries that had positive growth in the widespread of the pandemic of COVID-19- a painting with brighter colors compared to those of neighbor countries

In 2020, the world and Vietnam economies will have many changes, in that context, the Government, ministries, localities have promptly issued many logistics related policies, on one side, to ensure logistics roles in maintaining goods supply chains and services; on the other side, to find new directions, even ones with breakthrough characteristics for the Vietnam’s logistics sector. The law policy system on logistics has been much improved, logistics infrastructures has had remarkable changes with large modern works being put into operation and then proving their efficieny.

It is expected the determination from the Government, ministries and sectors will be a useful support to the logistics fighting against impacts from the pandemic of COVID-19 in Vietnam and in the world and also a premise to Vietnam’s breakthroughs in 2021.

Hoang Ngan

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