This was the conclusion of an economic forum on domestic enterprises’ adaptation capability in a changing economic environment, held in Hanoi last week by the Vietnam Chamber of Commerce and Industry (VCCI).

At the forum, Hoang Quang Phong, VCCI’s Vice Chairman, said the government has determined to reduce costs for businesses from 2018 onwards, cutting up to 50 per cent of unnecessary business licences.

Nguyen Hong Long, deputy head of the Government’s Steering Committee for Enterprise Innovation and Development, stated that the private sector has grown strongly, with nearly 620,000 operating enterprises, contributing to 40 per cent of GDP.

It attracts some 51 per cent of the nation’s labour force and generates about 1.2 million jobs per year, Long added.

Still, he warned of issues related to the economic model, mainly based on cheap labour and low technology level; which had gradually exhausted natural resources, although efficiency and productivity had still increased significantly.

Doan Trong Ly, director of the Animal Production Processing and Import-Export Jsc, stressed that the private sector had been identified by the government as the focus of support and favourable policies with firm actions taken, including significant tax reforms and customs clearance changes in 2017.

Do Van Ve, deputy general director of Huong Sen Group Jsc, was optimistic about 2018’s positive business trend as he believed the national business environment was on the rise.

Many Vietnamese enterprises have recovered with positive signals for a 2018 breakthrough, such as increases in oil and gas exports, textile and garment services and agricultural products, he said.

Statistics from the VCCI showed that Vietnam’s economic targets set by the government for 2017 are plausible, although forecasts for 2018 highlight issues faced by domestic enterprises that are still limited in capacity and competitiveness, Phong said.

Vietnam has advanced in ranking on several business environment and global competitiveness indexes, Phong emphasised.

Dam Quang Tng, chairman of the Hanoi Agricultural Chemicals Association, said Vietnamese businesses need to be aware of the current world situation, lest they become exploited when Vietnam participates in bilateral or multilateral free trade agreements.

Vietnamese businesses need to readjust their business and work ethics to avoid litigation or penalties upon entering important markets such as Japan and the European Union.

Phan Quay Thang , deputy director of the Central Institute for Economic Research, said private enterprises must take the initiative to improve competitiveness.

According to Phan Duc Hieu, Vietnam is ranked 93 out of 128 countries in terms of technology absorption capacity. The quality of Vietnamese suppliers is especially weak, with limited number of registered patents, ranking only 91 from 128 countries.

A survey by VCCI showed that 116,000 new businesses were set up from January to December 2017. However, out of all enterprises currently operating, more than 60 per cent have reported unprofitable business, which could be either due to incompetence or tax fraud, Hieu added.

According to Ly, domestic enterprises still face many difficulties, including lack of capital, obstructing policies and unresponsive market.

He argued that there is a need to further strengthen risk management and oversight functions within the private sector.

The long-term challenge for Vietnam is to maintain high growth rate coupled with sustainable poverty reduction while continuing to accelerate the process of state-owned enterprises restructuring, improve business environment and remove barriers to productivity improvement, Phong said.

According to VCCI’s report, so far, the 2017 GDP growth target of 6.7 per cent is within reach, while all 13 targets set by the Central and National Assembly have been exceeded.

Within the framework of the event, VCCI and the Vietnam Accounting-Audit Association announced the launch of a new enterprise capacity assessment programme, focusing on businesses Key Result Indicators and Performance Indicators.

The 2018 Business Forum featured talks from economic experts, business representatives and corresponding authorities, with forecasts, discussions, recommendations and consultations to help businesses identify challenges and seek development opportunities in 2018 and beyond.

This news come more than three months after a possible alliance with Uber was first announced in August, ending speculation about the nature of the deal.

Lion City Holdings operates Lion City Rentals, which has a fleet of about 14,000 vehicles, that accounts for the bulk of Uber’s supply of cars in Singapore. Uber will retain the remaining 49 per cent in Lion City Holdings.

With the joint venture, ComfortDelGro’s taxis and Lion City Rental’s private-hire cars will come under a centralised fleet management system, which will handle the dispatching of vehicles to customers.

ComfortDelGro said its cabbies will have an increased earning potential, as they will be able to receive ride requests through the Uber driver app. Uber drivers can likewise get bookings from ComfortDelGro’s customers. More details will be announced later.

ComfortDelGro said in a statement that the deal, which is subject to regulatory approval, is valued at about S$642 million, with a cash consideration of $295 million.

It ranks as ComfortDelGro’s single largest deal to-date, said the firm, topping the $203.7 million to buy out the remaining 49 per cent stake in its Australian venture, ComfortDelGro Cabcharge earlier this year.

ComfortDelGro chief executive Yang Ban Seng called the partnership a “win-win”.

“Uber will benefit from our fleet maintenance and management capabilities while we will benefit from Uber’s world class technology. At the same time, consumers will have even more choice with either taxis or private hire vehicles, shorter waiting times and greater reliability,” Yang said.

Singapore Management University Associate Professor Terence Fan, who specialises in transport, called ComfortDelGro’s acquisition of a majority stake in Lion City Holdings a “shrewd move”, as it now has more control in how Uber will grow in Singapore.

Prof Fan said this can help ComfortDelGro stem the loss of revenue from its taxi rentals, which has come under stiff competition from the private-hire car sector.

ComfortDelGro’s taxi fleet has shrunk by more than 14 per cent. As of October this year, it had 14,306 cabs across its Comfort and CityCab brands, down from 16,722 cabs in the same time last year.

Assistant Professor Yang Nan, of the National University of Singapore Business School’s strategy and policy department, said the alliance will help ComfortDelGro and Uber compete against rival Grab, which itself has partnered the other five taxi companies.

In the past months, Grab has also been aggressively wooing ComfortDelGro’s taxi drivers to join them, by dangling guaranteed fare earnings and rental rebates.

Prof Yang said the point-to-point, on-demand transport industry is moving to a duopoly with two major consortium, Grab with its partners and Uber with ComfortDelGro.

“Regulators should be cautious in approving this and further acquisition deals. When the market consolidates, the firms’ power in pricing generally increases, which often hurts consumers and drivers,” he added.

Li Jianggan, founder of Singapore-based Momentum Works, a tech investment company, said the implementation of a licensing regime in July (2017) for the private-hire car industry meant that new drivers are harder to come by. By adding ComfortDelGro’s taxis, Uber increases its supply on the roads.

“ComfortDelGro is also more experienced than Uber in the running and maintaining of assets over its life-cycle,” Li added.

Ruby Chan, 43, a Comfort relief driver, said being able to take Uber bookings can help increase business. “But we do not know yet how much levy Uber will take from such jobs or whether the fares will be lower,” she said.

Millennium & Copthorne Hotels has agreed to a sweetened takeover offer from its majority shareholder that values the London-listed company at about 2 billion pounds (S$3.63 billion) after an earlier bid was heavily criticised by minority investors.

Singapore’s City Developments Limited (CDL), a vehicle of billionaire Kwek Leng Beng, who is also chairman of M&C, has offered 620 pence per share in cash to acquire the 34.8 per cent of the FTSE 250 hotelier that it does not already own, the companies said in a statement.

The offer, which was declared final, has been recommended by M&C’s independent directors. It was announced 75 minutes before a Takeover Panel deadline for CDL to make a firm offer or walk away.

CDL’s earlier 552.5 pence per share cash proposal, disclosed to the stock market on October 9, ran into opposition from some of M&C’s smaller shareholders, who argued that it put too low a price on the business because it did not reflect the value of its extensive property portfolio.

M&C owns, runs, invests in or franchises 137 hotels around the world. – The Straits Times

BDO raises $150m from ‘green’ bond

Philippines’ biggest lender BDO Unibank has raised $150 million from a pioneering “green” bond issuance, boosting private sector funding for climate change mitigating initiatives.

This funding deal marks the first green bond issued by a commercial bank in the Philippines.

International Finance Corp (IFC), the private sector investment arm of the World Bank, is the sole investor in the bond. This is also IFC’s first green bond investment in a financial institution in East Asia and the Pacific.

The funds will be used exclusively to finance climatesmart projects, including renewable energy, green buildings and energyefficient equipment.

The pioneering green bond is seen to provide an alternative source of longterm green finance in the country and contribute to the Philippines’ target of reducing carbon emissions by 70 percent by 2030 relative to its “Business As Usual” (BAU) scenario.

“Climate change is a very real concern in the Philippines. It is one of the most vulnerable countries globally to the impacts of such change,” BDO president Nestor Tan said on Friday. “This bond demonstrates our corporate commitment to come up with business solutions to address the challenges of sustainability.”

“This also aligns with our goal of growing BDO’s climate business and, ultimately, fostering the nascent climate finance market in the country. We are glad to partner with IFC, a global expert in green finance,” Tan added. – Philippine Daily Inquirer

Garuda still targets $3.1 bn revenue despite cancellations

Indonesia’s national flag carrier Garuda Indonesia still appears confident it can collect between US$3.1 and $3.2 billion in revenue this year, despite having canceled about 100 flights because of the eruption of Mount Agung in Bali.

“I think the flight cancellations during the four days [of the volcanic eruption] did not significantly affect [our revenue]. So I hope in this peak season, we can reach our sales target,” Garuda Indonesia president director Pahala Mansury said on Friday. The eruption of Mount Agung prompted the temporary closure of I Gusti Ngurah Rai International Airport in Denpasar, Bali, and of Lombok International Airport in West Nusa Tenggara last week.

Pahala said the airport closures affected the schedules of 700 Garuda crew members, because 30 percent of Garuda’s flights were from or to the airport in Denpasar. He declined to reveal the financial losses due to the flight cancellations. – The Jakarta Post

In a letter dated November 23, the ministry calls on several government institutions to stop serving mining companies – regardless of whether they have the clean and clear (CnC) status or not – that have failed to honor their tax obligations.

“The relevant institutions will block the companies and refuse to serve them,” said Bambang, as reported by kontan.co.id. He cited as an example that those companies would not get export recommendations.

The letter was addressed, among other institutions, to the Law and Human Rights Ministry’s General Law Administration Directorate General, the Corruption Eradication Commission (KPK), the Customs and Excise Office and the Transportation Ministry’s Sea Transportation Directorate General.

Bambang said tough punishment was needed, because many holders of mining permits (IUP) had not paid their taxes, with unpaid taxes totaling 4.3 trillion rupiah (US$301 million).

The government has issued 9,704 mining permits – 6,565 for companies assessed as CnC and the others for companies that have not achieved CnC status.

Law and Human Rights Ministry General Law Administration Director General Fredi Haris expressed his support for move of the Energy and Mineral Resources Ministry and his readiness to stop serving companies that failed to pay taxes.