The figure for June was 700,446, down 7.5 per cent from the previous month but up 29.8 per cent from one year ago.

Foreign arrivals by air reached over 3.92 million, up 26 per cent year-on-year while arrivals by road saw a yearly rise of 31.3 per cent to 710,000. However, arrivals by sea declined 27.8 per cent to 75,000.

The number of tourists visiting Vietnam from several Asian countries and territories saw strong growth: mainland China, up 48 per cent; Thailand, up 35 per cent; South Korea, up 34 per cent; Hong Kong, up 28 per cent and Laos, up 21 per cent.

Growth was also recorded in the number of tourists from Italy, the UK, Spain, the Netherlands, as well as Russia, Germany and France.

According to the General Statistics Office, the local tourism sector also served some 32.4 million domestic travellers in the six-month period. Total revenue for the period was estimated at 200.3 trillion dong, up 22.1 per cent year-on-year.

This year, Vietnam has set a goal of 8.5 million foreign and 60 million domestic travellers, which is expected to bring in 370 trillion dong for the sector. Vietnam is considered one of the fastest growing tourism destinations in Southeast Asia, driven by the entrance of international hoteliers, an improved visa policy and investment in key infrastructure.

Concern in Thailand

The Tourism Authority of Thailand (TAT) is concerned that Vietnam, a rising star in Asean, will draw more South Korean tourists away from the Kingdom,The Bangkokpost reports.

South Korea is a top-five East Asian tourist market for Thailand, while Thai tourists are ranked fourth among outbound tourists to South Korea.

In 2015, South Korean tourist arrivals to Thailand grew 22 per cent to 1.37 million, while Vietnam welcomed 114,740 South Korean travellers, a surge of 131 per cent.

Siriges-a-nong Trirattanasongpol, director of the TAT’s Seoul office, said the average hotel room rate in Vietnam was higher than in Thailand because of limited supply.

“Vietnam will be Thailand’s key rival for the South Korean tourist market in the next five years. Its tourism infrastructure is developing so fast, its products are fresh and tourist safety is good. Moreover, Vietnam is an investment destination for South Koreans,” she told The Bangkokpost.

(US$1 = 22,145 dong via oanda.com as of June 30, 2016)

He told a news conference on Wednesday in Hanoi that Formosa had released toxic wastewater into the sea along these provinces.

“Based on the result of careful inspections and consultancy with international scientists, we came to the conclusion that violations in the construction and testing operation of the Formosa Ha Tinh Steel plant are the cause for serious pollution killing a massive amount of fish in these central provinces,” he said.

He also said that Formosa had admitted responsibility for the fish deaths and committed to publicly apologising for such violations.

Dung said Formosa Ha Tinh would also have to pay US$500 million to compensate affected people, help fishermen find new jobs as well as to pay for clean-up works and to recover the sea environment.

The company’s chairman, Chen Yuan Cheng, apologised in a film clip shown at the news conference and said he accepted full responsibility.

“We take responsibility for the incident and deeply apologise to the people of Vietnam, particularly the residents of Ha Tinh, Quang Binh, Quang Tri and Thua Thien – Hue provinces. We would also like to apologise to the Party, the Government, the National Assembly and the Prime Minister of Vietnam for causing such an environment incident which has seriously affected the livelihood of these residents,” Chen said.

Chen also said that Formosa had committed to improve its wastewater treatment system and ensure proper treatment of toxic waste before discharging to the environment in line with Vietnam’s requirements.

“We will co-operate with Vietnamese authorities and the central provinces to develop a solution to monitor the central region’s sea environment and to make sure that there will be no environmental incidents similar to what happened,” he said.

“We commit to not repeat violations regarding environmental protection and water resources in Vietnam.”

“We deeply hope the Vietnamese people can forgive us”.

In a letter sent to his staff, which was written in Vietnamese and published just hours before the press conference, Chen said that the investigation led by Vietnam’s environment ministry found that subcontractors’ faults during the trial phase of operation had killed the fish.

“We respect the Government’s investigation results and are co-operating with the authorities to handle and mitigate the consequences,” he said in the letter.

Why $500 million?

Minister of Natural Resources and Environment Tran Hong Ha said the amount of $500 million was calculated based only on economic damages.

“Much more damage has been done to the sea environment, while emotional damage to local residents and other consequences can’t be put on the scale,” he said.

“But what we want is not money, we want Formosa and their stakeholders to understand that they have to be responsible for what they cause in Vietnam,” he added.

The Vietnamese Government, however, did not provide figures on the exact number of fish dead and economic losses of the four provinces affected in the disaster.

The Ministry of Science and Technology led the investigation work in collaboration with the Vietnam Academy of Science and Technology, joined by more than 100 Vietnamese and international scientists, analysts and experts over the last three months. They managed to identify a big source of wastewater in Vung Ang.

“The wastewater moved along the sea current, taking the oxygen out of the water and causing toxicity wherever it went,” Ha said.

“The conclusion was reached via images taken from the seabed and satellites”.

Lawsuit against Formosa?

Dung said in the press conference that the Vietnamese Government still had to consider whether to bring Formosa to court.

“Vietnam is determined to investigate and find the real culprit, Formosa, in this case,” he said.

Dung, however, added that Formosa “has apologised to the Vietnamese people and committed to compensate” for its actions, and Vietnam has a tolerance-oriented policy towards law-breaking foreign companies which readily admit their violations.

Media access

Confronted by the media on whether or not the Government had intentionally blocked information access to the mass fish death after the incident happened, Information and Communication Minister Truong Minh Tuan said that media investigation could not replace a comprehensive one by scientists and law enforcement forces in such a complicated case.

Since the incident took place, only three press conferences – including yesterday’s to announce the final cause – were held by the Government in response to the fish death. The media had little access to what had happened and what the Government was doing to handle the environmental crisis.

“There were times the Government asked the media to stop reporting unproven news lest it hindered the investigation work,” Tuan said.

Ha added that if the Government provided all the information they had, there would be no “weapons” left to battle the culprit.

The mass fish death first started on April 6 in Ky Anh Town in Ha Tinh Province – the place where Formosa Ha Tinh is located. Within the next nine days, fishermen and local residents along the central coast found themselves panicking when tonnes of dead fish continuously washed up ashore southwards, from Quang Binh to Quang Tri and later down to Thua Thien-Hue, just dozens of kilometres away from the famous tourism city of Da Nang.

Initial statistics from the four provinces reported some 277 tonnes of dead fish – both washed up on the beaches and farmed fish from the sea, causing estimated economic losses totaling more than 260 billion dong ($11.5 million). Further, at least 123,000 fishermen and locals who rely on the sea for a living or who work in the tourism industry were severely affected by the incident. This has not taken into account the damages to the local environment.

Soon after the fish death happened, suspicions for what caused such an environmental catastrophe instantly fell on Formosa – a subsidiary of the conglomerate Taiwanese Formosa Plastics Group – when fisherman Nguyen Xuan Thanh in Ha Tinh’s Ky Anh Town informed of a colossal wastepipe running under the sea that directly discharged “yellowish and foul-smelling water”. One end of the pipe was out to the open sea, and another end was connected to the Formosa factories.

Formosa then acknowledged having imported 296 tonnes of some 40 different types of chemicals in the first quarter this year, many of which experts said to be “poisonous and very poisonous” to human and animal beings.

Formosa Ha Tinh, the biggest project in Vietnam, comprises the Son Duong deep-water port and an industrial complex producing cast steel. Formosa kicked off the project in 2008 with a total investment of nearly $10 billion and is considering to up the ante to $27 billion.

High logistics costs have been blamed for the lack of competitiveness of local products as a result of the cost of transportation between islands. Frequently imported products can be much cheaper.

“The challenges in distributing goods in Indonesia are infrastructure bottlenecks and security issues,” said Nur Rahman, corporate communications general manager of major retail chain Alfamart, which distributes to 11,000 outlets from its 32 warehouses across the country.

Initially, the company handled distribution by itself, but challenging conditions on the ground led the company to outsource its distribution to a logistics company. Now, distribution costs account for more than 15 percent of total operating costs, which are passed on to consumers. Overall, Indonesia’s logistics costs account for 26 percent of its gross domestic product (GDP), double those of Singapore and Malaysia.

Logistics have long been high on President Joko “Jokowi” Widodo’s agenda, having launched many policies to tackle the problem, from streamlining export-import permits, incentivizing bonded logistics centers and easing the domestic flow of goods through scheduled freightliners. The President himself has sunk his teeth into making sure Indonesia fares much better in global competitiveness and dwell times, the wait time for goods at seaports.

But these have been no guarantee of success. Indonesia has slipped 10 places in the latest World Bank 2016 Logistics Performance Index (LPI), to 63rd out of 160 countries surveyed. The country declined in almost all categories, except for “tracking and tracing” and “international shipment”.

Measures that fell the steepest were “infrastructure”, which tracks the quality of trade- and transport-related facilities and infrastructure such as ports and roads, and “logistics competence”, which measures the ease of arranging competitively priced shipments.

The efficiency of the clearance process, or “customs”, and the “timeliness” of shipments in reaching their destination also dropped.

“Supply chain reliability continues to be a major concern among traders and logistics providers. In a global environment, consignees require a high degree of certainty of when and how deliveries will take place. This is much more important than the speed of the delivery,” the report reads.

The report has come as no surprise to the Indonesian Logistics and Forwarders Association (ALFI).

“It’s the reality,” ALFI chairman Yukki Hanafi said. “Like with dwell times, for other countries, it means that clearance is finished when goods are out of the port. But in Indonesia, when goods are out of the port, paperwork and costs are still ongoing.”

The World Bank has urged the Indonesian government to draft a clearer, more comprehensive strategy on improving the country’s overall logistics performance, instead of obsessing about dwell time figures.

“When you try to reduce the dwell time from six days to four days, the intervention should be well aimed. I haven’t seen a clear strategy from the government,” World Bank ports and waterborne transportation specialist Daniel van Tuijl said recently.

Transportation Minister Ignasius Jonan said improvements would take time.

“It has only been a year since 2014 to 2015, when we started building the infrastructure, so it’s not possible to achieve national-scale improvements that quickly,” he said, stating that it would take at least five years for the government’s policies to bear fruit.

The government has established as many as 11 bonded logistics centres (PLB) across the country, functioning as warehouses for imported goods exempted from import duty, to ease the flow of basic materials in and out of the country. Indonesia will also introduce the “Indonesia Single Risk Management” program, which will enable business players to process business permits related to export and import activities under one roof with a single identity.

State port operator Pelindo II director Presetyadi said infrastructure improvements were also underway. For its part, it is developing several seaports, including Kuala Tanjung in North Sumatra and the expansion of the country’s main port Tanjung Priok in Jakarta.

Nguyen Thanh Phong spoke at a conference in HCM City on Wednesday. He said the city will create favourable conditions and develop a sound investment environment by amending or creating policies to help businesses overcome challenges and take advantage of new opportunities.

At the conference which discussed local companies’ competitiveness, Phong said startup activity and improvement of competitiveness will be strongly supported by the city.

“Enterprises and investors have made huge contributions to the country’s development and modernisation. In HCM City, we don’t just consider businesses something to manage. They need support and conditions to develop. Their growth corresponds to the city’s development,” Phong said.

He said ideas from enterprises and investors are welcome, as “this will help the city and its departments solve social and economic issues.”

At the conference, companies in different sectors spoke about ways to help the business community.

Vu Duc Giang, chairman of the Vietnam Garment and Textile Association, said the city lacks skilled textile and dye workers, creating challenges for the industry.

The shortage of raw material suppliers in the city is another obstacle.

Giang proposed that the city create a stable regulatory system to help businesses develop.

Vu Kim Hanh, chairwoman of the Association of High-Quality Vietnamese Goods, suggested the city enhance companies’ knowledge about international integration. “They should help companies adapt to market change,” she said.

To create strong national brands, connections must be developed among managers, big companies, banks and small- and medium-sized enterprises, Hanh said.

In recent years, HCM City has worked to create a more favourable investment environment.

At present, 180,000 are operating, accounting for 31.7 per cent of the total number of companies in the country.

Indonesian Trade Minister Thomas Lembong said the border trade agreement in Nunukan and Entikong, both in Kalimantan, had been established since 1970. Both governments intended to update the agreement to better suit recent developments.

“We target to submit the renewal of the 30-year-old border trade agreement before the leaders’ meeting at the beginning of August,” Thomas said after the meeting in Jakarta on Thursday.

The reinstatement of both the JICT and the BTA, Thomas added, was important because Malaysia is Indonesia’s biggest trading partner in ASEAN, with a total trade of US$16 billion in 2015, while Malaysia’s total investment in the country during 2010 to 2015 reached $8.9 billion.

“During the latest meeting between President Joko “Jokowi” Widodo and Malaysian Prime Minister Najib Razak, both Indonesia and Malaysia agreed to increase trade with an aim to reach $30 billion in the near future. It’s quite a big target set by our respected leaders,” he asserted.

Malaysian Minister of International Trade and Industry Datuk Seri Mustapa Mohamed added that aside from BTA modernization, both countries also agreed to enhance their cooperation in herbal product-trade facilitation, crude palm oil (CPO) standardiSation and halal certification.

The report ‘Lifting the Barriers to E-Commerce in Asean’ by A.T. Kearney and CIMB Asean Research Institute said Asean still lags when it comes to the e-commerce market. The six major Aseaneconomies collectively account for less than one per cent of global online retail.

The report provides an overview of retail e-commerce across the six major Asean economies of Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam along with proposals to lift the barriers to unlock the region’s full potential.

According to the report, the retail e-commerce market offers the region an opportunity for cross-border trading particularly with the formation of the Asean Economic Community.

“E-commerce remains relatively underdeveloped in Southeast Asia, accounting for less than one percent of total retail sales, compared to rates of six to eight per cent in Europe, China, and the United States,” said the report.

On the other hand, the US, Germany, France, Italy, Spain, the UK, China and Japan combined accounts for 76 per cent of global retail e-commerce.

With the exception of Singapore, of which online retail comprises four to five per cent of retail sales, online retail in five other Asean economies accounted for only one per cent of retail sales.

But as the region’s growth is expected to boost purchasing power, improved Internet penetration and varied online retail options, the online retail market in Asean could grow as much as 25 per cent annually.

Annual gross domestic product (GDP) per capita is expected to grow at 6.2 per cent and this level of growth should create a young middle class that is more prone to shopping online. This will also be supported by increased access to the Internet.

“As mobile broadband spreads, consumers may shop online more and thus we can expect that channel to play a significant role in future e-commerce growth,” the report said.

The report said banks and telcos are developing innovative payment methods to make it easier for consumers to pay with their smartphones.

Increased offerings in the online retail space will boost online spending with major retail players having recently extended their positions into Southeast Asia.

In 2013, Rakuten launched a mobile marketplace in Singapore called Carousell and had been making substantial investments in Indonesia and Malaysia since 2011 and 2012.

In Singapore, local players such as HipVan, a specialised e-commerce site for design products such as home furnishings and fashion accessories, has expanded to Malaysia.

PublicInvest Research (PIVB) said in a note that while export growth had been steady this year on a ringgit-translated basis, a different story emerges if the figures are put in US dollar-denominated terms.

Malaysia’s total exports averaged about US$50 billion per quarter last year. However, the figure has tapered off to US$44 billion during the first quarter of 2016 (1Q16).

Malaysia’s gross domestic product (GDP) moderated to 4.2 per cent in 1Q16, or a sixth consecutive quarterly decrease in growth.

“There is a notable decline in amounts exported suggesting that even less is being sold, unit-wise, outside. “We had initially anticipated gradual improvements in global macroeconomic conditions by the second half of this year, but this view now takes a backseat in light of current developments,” it said.

In light of the recent Brexit vote, global growth prospects are now less positive due to the economic fallout of a fractured Europe, the research house added.

Additionally, Malaysia’s exports to its four major destinations have seen marked reductions. The impact to trade with China is most evident due to the country’s own economic challenges.

However, PIVB said the chances of a twin deficit situation due to lacklustre commodity prices is still remote as it does not foresee any structural shifts in the interim.

“The country has gone through leaner commodity-related spells but had emerged relatively unscathed.

“While numbers are unsurprisingly weak currently, we still see sufficient inertia in global trade keeping our trade balances on even keel though the recovery may now be slightly prolonged,” it explained.

In a separate note, Maybank IB Research said it is reviewing its full-year GDP target of 4.3 per cent as the index of leading economic indicators points to further contraction in the GDP.

“The indicators lead the GDP growth by two to three months. It fell by 2.6 per cent on a year-on-year basis in April, reflecting a decline in components that are both export oriented and domestic oriented. The data suggests a further slowing of real GDP growth during the second quarter.” it said.

According to Maybank, the impact of Brexit could see other countries switch to economic policies that trend towards anti-globalisation and inward-looking politics, which would be a substantial blow to the already fragile global economy and world trade.

One of the initiatives under this plan is to improve the retail experience of passengers and public at the airport. A range of retail shops were recently opened at the transit hall which is hoped to further enhance services to passengers.

Local company MS Titanstar Enterprise recently launched several shops in the newly revamped transit hall of the Brunei International Airport.

MS Titanstar Enterprise Managing Director Hj Abd Rahman Hj Metasim said having been granted the tender to operate and sublet the retail stores in the airport’s transit hall, they are working towards making the transit hall a more attractive place for travelers to shop.

“After the airport renovations were done, there were only a few shops in the transit hall and when we were awarded the tender, the airport authorities wanted us to create a new retail environment,” he said.

The launch, which was held on June 5, were for four stores in the transit hall – Paloma which sells branded perfumes and cosmetics; Aewon Garment and Embroidery, which sells tourist souvenirs; Mubarak Book Emporium, which is a convenience store and a book store and Wellmart store, which sells imported chocolates and local products.

Hj Abd Rahman said apart from travelers having better choices when shopping, the availability of local products such as cookies and prawn crackers can help small businesses as their products will be exposed to other countries.

Existing stores in the transit hall include Sunju which sells handicrafts and Kipling bags and accessories. More stores will be opened in the transit hall in the coming months.

“The existing stores will be moving into the revamped shops and there will be a few more international brands coming sometime in September,” he said.

He said there are two brands that are in the pipeline which they are already processing. However, they still cannot disclose the brands as they are still awaiting legal confirmation.

MS Titanstar wants to bring in more brands in the future to enhance the transit hall as there is still more space to fit in other shops. However, they need to look at the brands carefully to ensure that they are selling quality products and unique items.

Despite having a small market, Hj Abd Rahman is positive that there will be better business in the next few months as Royal Brunei will be adding more flights and this will hopefully boost the retail business.

In an earlier report, RB Chief Executive Officer Karam Chand told The Brunei Times they are planning to fly to new destinations by collaborating with international airlines and improving its fleet as well as flight schedules.

“We (RB) are always looking for new markets. Recently we have found two and introduced flights to Saigon (Ho Chi Minh City) and Bali,” he said.