KTFA Members "Iraq and Vietnam News" Wednesday 12-14-2022
KTFA:
Clare: Al-Sudani: The government is determined to implement its program that includes economic reform
12/13/2022
Prime Minister Muhammad Shia Al-Sudani affirmed today, Tuesday, that the government is determined to implement its program that includes economic reform and encourage the private sector.
The Prime Minister's Office stated in a statement received by {Euphrates News}, that "the latter" received the delegation of the International Finance Corporation / IFC, headed by the Regional Director for the Middle East in the Corporation, Aftab Ahmed.
The statement added that during the meeting, they discussed various aspects of financial and economic cooperation between Iraq and the International Finance Corporation.
According to the statement, the Prime Minister assured the Foundation's delegation, "Iraq's openness to everything that would advance the wheel of development, and strengthen regional partnership with countries and organizations, for the benefit of the Iraqi people and friendly peoples."
Al-Sudani indicated that "the government is determined to implement its program that includes economic reform, and to encourage the private sector in order to play its positive role in full, in addition to strengthening the environment that attracts investments in Iraq."
For their part, the Foundation delegation expressed their desire to partner with Iraq, and to complete cooperation in development programs, in a way that enhances the infrastructure and long-term development of the Iraqi economy, according to the statement. LINK
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Clare: PRESS RELEASE
Ishtar Gate company for E-payment (Bluepay) releases a FinTech super app in Iraq and the Middle East
December 8, 2022 - Bluepay announced its latest technology release providing its users the ability to trade US listed stocks through its mobile app, an unprecedented technology solution built and provided locally. This...
Thursday, December 8th 2022, 2:28 PM CST
December 8, 2022 - Bluepay announced its latest technology release providing its users the ability to trade US listed stocks through its mobile app, an unprecedented technology solution built and provided locally. This move followed other Fintech provided services such as the multicurrency solution that unlocked a new horizon of opportunities in the Iraqi market.
Through the multicurrency technology provided for all the app users regardless of the type of cards they possess, help them in topping their accounts by both dollars and Iraqi dinars then use the application to exchange their balances into 10 other currencies.
For instance, exchanging into Turkish lira helped travelers to turkey to possess a Turkish local-like card and helped small businesses that buy products from turkey to access E-Commerce platforms that only deal with turkish issued financial products.
Additionally, and through the app, users can now issue a Bluepay UnionPay card that helps them perform financial transactions to and from China. This opens the China corridor for small and medium businesses in Iraq and MENA to do more business through Chinese companies.
All of this comes a few months after the inauguration of Blue Platinum, the first platinum prepaid card Bluepay launched in Iraq in partnership with Visa International that aims to provide normal consumers with the platinum add-ons in addition to Bluepay other FinTech technologies such as the multicurrency feature and zero fess on online transaction.
Ali Al-Saeed, Blue CEO, mentioned “Our aim is to build the first super financial app in the region that gives freedom to users, also enable regional banks to give unique services using our technology. We have plans to expand our services in the region in Q1 2023, focusing on Saudi Arabia and UAE.
Ishtar Gate Company for E-Payment Systems and Services (Blue Pay) is an Iraq based Fintech company that provides a wide range of tech driven solutions to customers and recently got the central Bank approval to be the first and only company that have international money transfer service.
Media Contact
Company Name: Ishtar Gate Company for E-Payment Systems and Services (Blue Pay)
Contact Person: Marketing
Email: Send Email
City: Bghdad
Country: Iraq
Website: http://www.blue.com.iq LINK
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Henig: Dollar tumbles at banks
By Dat Nguyen December 13, 2022 | 01:11 am PT
The U.S. dollar plunges at commercial banks Tuesday afternoon but gained on the black market.
Vietcombank sold the dollar at VND23,750 Tuesday, down 0.38% from Monday.
Eximbank sold the greenback at VND23,750, down 0.71%. The rate at Techcombank is VND23,770, down 0.71%.
The State Bank of Vietnam maintained its reference rate at VND23,655.
The dollar is sold at VND24,230 on the black market, up 0.04%.
The dollar has gained over the dong by 3.62% since the beginning of the year.
The U.S. dollar has been supported by high and rising interest rate expectations as the Fed has hiked its benchmark funds rate to counter inflation, leaving the currency vulnerable to selling if inflation seems to be cooling, Reuters reported.
The dollar index hovered at 105.01 on Tuesday, down from a 20-year high of 114.78 in late September.
Market projections for the peak in U.S. interest rates have also slipped, with futures pricing indicating the Fed funds rate - currently set between 3.75% and 4% - staying below 5%.
The Fed is widely expected to hike the funds rate by 50 basis points on Wednesday, a step down in pace after four consecutive 75 basis-point hikes. LINK
Henig: VN-Index gains 15 points
By Dat Nguyen December 13, 2022 | 01:12 am PT
Vietnam’s benchmark VN-Index rose 1.49% to 1,047.45 points Tuesday.
The index closed 15.38 points higher after losing 19.74 points on Monday.
Trading on the Ho Chi Minh Stock Exchange (HoSE) fell by 19.29% to VND13.24 trillion ($560.9 million).
The VN-30 basket, comprising the 30 largest capped stocks, saw 24 tickers gain.
SSI of leading brokerage SSI Securities Corporation led with a 6.5% surge, followed by STB of Ho Chi Minh City-based lender Sacombank and TCB of the largest private lender Techcombank, both up 5.9%.
VHM of property giant Vinhomes gained 5% and VRE of retail real estate arm Vincom Retail rose 3.5%.
Four blue chips fell, including VIC of biggest private conglomerate Vingroup with a 2.4% decline.
Foreign investors were net buyers to the tune of VND897.14 billion, mainly buying NVL of property developer Novaland Group and VHM.
The HNX-Index at the Hanoi Stock Exchange, where mid and small caps list, was up 1.45% while the UPCoM-Index at the Unlisted Public Companies Market was up by 0.48%. LINK
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Henig: Hanoi anticipates lower economic growth in 2023
By Vo Hai December 12, 2022 | 03:00 pm PT
Hanoi authorities have targeted GRDP (gross regional domestic product) growth of 7% next year, down from an expected 8.8% this year amid many difficulties.
At a meeting on socioeconomic development plans for 2023 held Monday, the Hanoi People’s Committee also set a target of increasing GRDP per capita to some VND150 million ($6,250) next year, up from an estimated VND142 million this year.
The local government also aims to keep the consumer price index below 4.5% in 2023.Other targets set for next year include increasing investment by 10.5%, and export turnovers by 6% compared to this year.
Hanoi’s public investment in 2023 will stand at nearly VND47 trillion, said director of the municipal Department of Planning and Investment Le Anh Quan.
The capital city will also lower its number of public servants by 5% in the 2022-2026 period, according to director of the municipal Department of International Affairs Vu Thu Ha.
Chairman of the Hanoi People’s Committee Tran Sy Thanh said global turmoil is expected to remain complicated and unpredictable in terms of politics, security, economy and society in 2023. He said forecasts point to growth slowdowns, while the risk of economic recession and downward trends in the fields of finance, currency, energy and food security being likely to increase next year.
The National Assembly has set an economic growth target for 2023 at 6.5% and GDP per capita at $4,400. Vietnam’s GDP is set to expand by 8% this year, but the economy is set to face many global and domestic challenges next year, with some countries set to post declining growth or even fall into recession, chairman of the National Assembly’s Economic Committee Vu Hong Thanh said in November.
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Henig: Vietnam's economic challenges for the year ahead
December 13, 2022 | 04:33 pm PT
Can Van LucEconomist
"Things are pretty difficult these days, aren't they?" This is the most common sentiment I've heard while doing business with both domestic and foreign investors this year.
Online economic forums are crowded with discussions about the economic challenges Vietnam will face next year. An October report by the International Monetary Fund (IMF) highlighted many "headwinds" pushing against both the global and Vietnamese economies. A government report to the Vietnam National Assembly's most recent session repeated the word "difficult" over and over again.
Other utterances I often hear when talking about the future of both the local and global economic landscapes include "recession" and "broken trust."
Meanwhile, reports from various agencies and organizations claim that Vietnam's economy is recovering and strong -- bright spot regionally and globally. They say that Vietnam's credit rating has been upgraded, and that people are looking here as a destination for investment, tourism and settling down after the pandemic.
We need a more comprehensive and multidimensional assessment of Vietnam's place in the global economic situation.
Vietnam's economy recovered well in most fields and localities during 2022. Economic growth for the year is estimated to reach 8%, while average inflation increased by more than 3%, exports increased by about 12%, final consumption increased by over 10% and investment increased by about 9%. The three main reasons for this performance are: 1) Vietnam adjusted quickly to the Covid 19 pandemic, which enabled economic activities to return to normal. 2) The country's economic recovery policies patiently and persistently created macroeconomic stability and controlled inflation. And finally, 3) The growth indicators mentioned above correlate with the relatively low values of the previous year.
Next year, Vietnam’s economic progress should be bolstered by many favorable headwinds blowing from both inside and outside the country.
The favorable external context is clear. The global economy might continue to stumble next year, but this will mainly affect a few specific regions and localities (the U.S., Europe, the U.K., etc.) only mildly and for the short term. Global economic growth of about 2.2% is expected next year (down from 3% in 2022), before returning to pre-epidemic levels of 2.5 to 3%. Global inflation is easing, the price of oil, gasoline and other commodities are decreasing slightly, and the global consumer price index (CPI) is predicted to increase by about 6.5% in 2023 (from an average of 8.5% in 2022) and it might even return to 4% by 2024.
Within this context, countries (especially the U.S.) will tone down the escalation of interest rates, and might even slightly reduce interest rates by the end of 2023. Thus, external pressures on Vietnamese inflation, interest rates and exchange rates will also ease. As a result, risks in the manufacturing, financial-monetary and real estate sectors will also decrease.
Even so, external challenges are still present. The first is that the pandemic has not gone away and different countries are handling it differently. The second is that geopolitical risks and strategic competition between countries are disrupting supply chains, coupled with an increase in trade and investment protectionism. The third is that the global economy minor recession (in which China's growth remains low at about 4.5%) has reduced Vietnam's demand for international trade, investment and tourism. The fourth is that global financial-monetary, liquidity and real estate risks are still high, affecting Vietnam's financial-monetary and real estate markets due to the country's deep integration.
According to the IMF's quantitative model, the latter three challenges caused Vietnam, Singapore and Cambodia to suffer many negative effects (down about 2 percentage points of growth) as they are the three countries with the largest trade and investment openness in Asia.
In that general context, favorable internal winds include Vietnam's 2022 recovery momentum, which has created the foundation and resources for policy management next year. Vietnam's high 2022 growth rate has helped realize the nation's 5-year socio-economic development plan. Well-controlled, prudent and adaptive inflation and monetary policies (rather than just strict tightening across the board), a low budget deficit and meeting state revenue targets have allowed room for expansion in accordance with fiscal policies, etc.
Many medium and long-term development programs and plans have been approved. These include initiatives for public investment disbursement, as well as procedures for packages under the recovery program and national target programs that have been approved. All of the above will allow for the faster implementation of growth policies and projects next year. Some inadequacies in the land, finance, real estate, labor and healthcare markets have also been identified and gradually rectified. With these advantages, Vietnam has a huge opportunity to "overcome difficulties" in the coming year.
But internal headwinds are also numerous. The global economic downturn (albeit local and mild) slowed Vietnamese exports, foreign direct investment (FDI) and the mobilization of external resources. Vietnam's inflation increased due to a lag caused by high imports, resulting in the current larger-than-normal money supply. Next year is also when Vietnam will have to accept increasing some state-managed items such as minimum wages, electricity prices, as well as healthcare and education fees. The pressure of rising interest and exchange rates is still large and a challenge for macroeconomic management. State revenues will also encounter difficulties because businesses are still struggling with profits.
Policies and solutions to make the stock and real estate markets healthier have more or less negatively affected the market and investor sentiment. Legal, capital, market and labor issues for businesses will also take time to be resolved.
Therefore, if Vietnamese management is not serious and clever, achieving a growth target of 6.5%, as well as the average CPI increase target of 4.5% (as well as other goals) will be extremely challenging.
In my opinion, it is necessary to analyze and closely forecast the situation both domestically and abroad, and proactively create both immediate and long-term solutions. Analysis and predictions need to be realistic and ignore fantastical achievement obsessions in order to create these effective solutions. Violations of capital market regulations should be curbed, resolved quickly and fairly, ensuring the legitimate interests of investors.
Other tasks such as harmonizing macroeconomic policies, balancing interest rates and exchange rates, balancing the control of inflation and growth, balancing government support of both individuals and businesses while also balancing immediate and long-term budgets will be key. Removing economic obstacles -- especially in terms of legal red tape surrounding capital -- for businesses and investors will also be crucial. Accelerating the disbursement of public investment and recovery programs while resolving lingering issues will all require a willingness to take responsibility in management.
In 2023, the fight against corruption will continue. The fear of making mistakes, the shying away of taking responsibility may still take place, so we'll need flexible solutions and mechanisms to protect enterprising people. Businesses and investors should also restructure, promote digital transformation, reduce costs, increase openness, transparency, professionalism and employ better risk management.
These policies and solutions should be a crucial therapeutic medicine to help increase the self-reliance and resilience of the Vietnamese economy so we can continue to improve in 2023.
*Can Van Luc is an economist. He currently works as chief economist with state-owned lender BIDV.