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Halal food could be big business for Vietnam: conference



Non-Muslim nations around the world, including Thailand, South Korea, and Brazil, have been eyeing the potential of the trillion-dollar global Halal market, yet despite the upsides, Vietnam has to take its shot at entering the industry, attendees said at a recent conference in Hanoi.

Halal refers to food products and services that adhere to Muslim law.

The food is processed, manufactured and transported under stringent Islamic rules.

Speaking at the conference held to promote international cooperation in the development of Vietnam’s Halal industry in Hanoi City on Tuesday, Deputy Minister of Foreign Affairs Pham Quang Hieu said that, in spite of the country’s material and geographical advantages in the market, Vietnam is modestly placed in the global rankings of Halal food producers.   

Approximately 60 cities and provinces in Vietnam contribute to the global Halal market, but just 1,000 firms are certificated for export, said the deputy minister.

Due to strict Halal standards on animal food products, Vietnam’s Halal exports are primarily farm produce and input materials for certain food sectors. 

Rigorous Halal standards

Halal certification is regarded as a passport for products to enter Muslim countries, helping simplify several procedures related to transport to storage.

Canned lychee grown in Vietnam's Bac Giang Province awaits Halal certification. The province’s lychee products were on display at the conference. Photo: Duy Linh/ Tuoi Tre
Canned lychee grown in Vietnam’s Bac Giang Province awaits Halal certification. The province’s lychee products were on display at the conference on June 28, 2022. Photo: Duy Linh / Tuoi Tre

Enterprises which meet stringent Halal standards are able to reap the benefit of this lucrative industry.

Muslims account for about 24 percent of the world’s population, a number which is expected to increase by 3 percentage points by 2050.

A recent global Islamic economy report showed that spending on Halal food is expected to increase from US$1.4 trillion in 2020 to $1.9 trillion in 2030, and some $5 trillion in 2050.

Not only is the rising Muslim population expected to contribute to market growth, but so is the general belief that Halal food is safer and of higher quality than non-Halal products.

Vietnam has great potential for Halal production and export as the country holds abundant sources of raw material and sits in Asia, which is home to some 62 percent of the world’s Muslims.

Focal point needed in Vietnam

The conference featured discussions from leaders of several embassies of Muslim and non-Muslim countries on their experiences with and knowledge of the Halal industry.

Representatives of South Korea and Brazil noted that the Halal food market has great upsides for non-Muslim countries.

Halal-certified sugar products manufactured by a firm in Thanh Hoa Province, northern Vietnam, on display. The firm plans to produce Halal beverages. Photo: Duy Linh/ Tuoi Tre
Halal-certified sugar products manufactured by a firm in Thanh Hoa Province, northern Vietnam, on display. The firm plans to produce Halal beverages. Photo: Duy Linh /  Tuoi Tre

Vietnamese firms, however, are wary of entering a market with no global standards, whereas each of importers has created its own requirements.

Furthermore, Vietnam has yet to sign any agreements on Halal products with other countries and is yet to form a government-level agency charged with managing the Halal industry.

Tran Thi Minh Thu, head of the Department of Belief and Other Religions under the Government Committee for Religious Affairs, said that only a few Vietnamese firms owned by Muslims and Islamic organizations have been granted Halal certification.

Not having any focal points or management agencies for the Halal industry in Vietnam will make life tougher for Vietnamese firms and their foreign partners.

Therefore, many participating enterprises proposed that State agencies offer guidelines on the procedures to get Halal certifications, provide information about trade barriers and import standards to help them access the Halal market, and support local firms with trade promotions.

Experience from South Korea

Dr. James Noh, president of the Korea Institute of Halal Industry and chairman of the Korea Halal Export Association, told the conference that the South Korean Halal industry had once faced the same challenges as Vietnam.

The East Asian country entered the Halal food industry in 1994.

However, the small number of Muslims in the country (accounting for less than 0.4 percent of its population) and the high demand for prestige made it hard for South Korea to build a solid position among Halal food suppliers. 

To overcome these challenges and develop the industry, the non-Muslim nation learned from the world’s leading Halal food providers and cooperated with Muslim countries.

In addition, the government allowed the establishment of the Korea Institute of Halal Industry (KIHI) to conduct in-depth research, train a workforce, and offer advice to firms active in the Halal industry.

Nowadays, the South Korean Halal industry is taking off, with all sorts of products securing Halal certifications including instant noodles, kimchi, functional foods and shampoo.

The country has also expanded its Halal industry to factor in logistics and lodging services.

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Vietnam’s coffee culture survives 10 years of Starbucks

Deep history, popularity of local brews make country hard for global brands to crack.



 On a recent Sunday, a pink-breasted parrot escaped from its cage at Mindfully Cafe and hopped around the shop. Nguyen Kim Ngan, owner of the Ho Chi Minh City cafe, alternated between frothing drinks and trying to coax the emerald bird back into its cage.

Cafes like hers have retained their quirks and held their ground even after a coffee shop with another green mascot hopped onto the scene: Starbucks.

Coffee is steeped in the local identity in Vietnam, which boasts more cafes than almost any place on earth. So when Starbucks entered the market in 2013, it faced a different set of expectations than other U.S. brands like McDonald’s and Subway, which also debuted in the 2010s.

People wondered how the world’s biggest coffee chain would fare in a country that is the world’s largest exporter of robusta beans.

The Seattle-based chain itself has been quiet about its progress. The company told Nikkei Asia it will mark 10 years in Vietnam by opening its 100th location but declined to answer a question about whether it is profitable in the country.

And while Vietnam has Southeast Asia’s biggest cafe market by value and number of shops, it has just 0.9 Starbucks for every 1 million people — the smallest number among the region’s six main economies.


“Starbucks is not something people can afford every day,” Ngan said at her shop, where the roof is a canopy of grape leaves. “I want to bring quality and something people can afford.”

Price is one of three factors that explain local rivals’ ability to defend their share of the $1 billion market. Taste and a distinct drinking culture are the two others.

While Starbucks offers a cup of mild arabica for as much as $5, often mixed with syrup, competitors sell every possible alternative from specialty coffee to $1 robusta, which tends to be bitter but also cheaper and higher in caffeine than arabica varieties.

Vietnam has 87 Starbucks cafes, the least among big Southeast Asian economies and less than a fifth of the Philippines' despite similar income levels. Photo by Lien Hoang.
Vietnam has 87 Starbucks cafes, the least among big Southeast Asian economies and less than a fifth of the Philippines’ despite similar income levels. Photo by Lien Hoang.

For Enma Bui, another figure in the local coffee market, Starbucks is bittersweet. On one hand, she said the global giant generated more curiosity about coffee after it arrived in Vietnam; on the other, its sugary concoctions flatten palates.

“I had a customer come to me and ask if they could have a Starbucks caramel macchiato,” said Bui, the brand ambassador at cafe and wholesaler Lacaph. “How do you convince someone to drink black coffee and enjoy its beautiful notes if they’re used to that?”

Vietnam’s coffee tastes date to the 19th century, when French colonizers planted the seeds of what would become the world’s biggest robusta grower. Through the 2000s, coffee drinking developed into a national habit, dominated by domestic chains Highlands Coffee and Trung Nguyen. Thousands of tiny cafes sprouted up, with low barriers to entry that made it possible for a single location to change owners three times in as many months.

Coffee devotees bring pets and watch street life at Mindfully Cafe in Ho Chi Minh City. Photo by Lien Hoang.
Coffee devotees bring pets and watch street life at Mindfully Cafe in Ho Chi Minh City. Photo by Lien Hoang.

But in the 2010s two trends emerged. Vietnamese chains led by The Coffee House and Phuc Long embraced young customers with a hipper aesthetic — and free WiFi. And the communist country’s opening economy brought international influences, such as “third-wave” coffee, with its focus on distilling a bean’s natural flavors.

These newer shops added to the existing sea of coffee kiosks and family shops, many operated out of people’s homes, resulting in a market of 19,000 cafes. Only the U.S., China and South Korea have more, according to Euromonitor data.

Despite this scale, foreign brands have carved out a relatively small slice of the market.

“I guess it’s something to do with the demographics and the consumer profile in Vietnam that could explain why the international cafe chains have not been doing as well as expected,” Euromonitor Asia beverage insights manager Nathanael Lim told Nikkei. “Because they have done well in other markets in Asia, they think of using the same strategy, by positioning themselves as boutique and premium.”


Among early international movers, Coffee Bean & Tea Leaf has just 15 stores after about 15 years in the country, while Gloria Jeans exited Vietnam in 2017, though it is attempting a comeback.

“We will take a thoughtful and locally relevant approach to drive sustainable growth,” Starbucks Asia Pacific president Emmy Kan said without addressing Nikkei’s question about its limited presence in the country of 100 million. Vietnam has fewer than 90 Starbucks outlets, while the region’s next-smallest market, Singapore, has 146, Euromonitor said.

Local relevance, say those who know, is key.

Coffee in Vietnam is social, said Mindfully Cafe’s Ngan. Friends like to dine at a restaurant, then move to a coffeehouse for a drink — relocating is part of the routine. Or they like to watch the street from a cafe, at times on the street itself — a feature that sets sidewalk vendors apart from Starbucks.

Some patrons like to go where somebody knows their name. During a joint interview Ngan’s wife, Nguyen Thi Ngoc Yen, jumped up to brew lemon-soda espresso for a regular who had walked in.

“See you tomorrow,” the customer said on his way out.

“If he’s not here, it’s not a normal day,” Ngan joked.

Vietnam's Lacaph decorates its coffeeshop with an iconic motorbike toting a bag of beans. Photo by Lien Hoang.
Vietnam’s Lacaph decorates its coffeeshop with an iconic motorbike toting a bag of beans. Photo by Lien Hoang.

Bui of Lacaph likewise sees independent cafes as serving quintessential local needs.

“Coffee is an excuse,” she said, describing the desire for community that draws Vietnamese to cafes.

“It’s really magical, this one small thing, but everyone can talk about it,” she said.

And talk about it people do, discussing fruity aromas and filter methods in Facebook groups. Two decades ago, coffee was important to Vietnam as a profitable export and as a daily ritual. Only in recent years has it taken on the cachet of a dedicated craft, with imbibers more aware of the contents swirling about in their cups and aware they’re partaking in a culture.

It remains a lucrative export. Vietnam ships out 25 million bags of beans a year, behind only Brazil, U.S. Department of Agriculture data shows. Those are 60 kilogram bags, mostly of robusta.

Domestic demand is also, in a word, robust. The tropical country’s cafe market grew 13% from 2021 to 2022, according to Euromonitor data.

How far Starbucks Vietnam, or any other international chain, can tap into that growth remains to be seen.

“As customer preferences evolve, we continue to meet them where they are through ongoing partnerships,” Kan told Nikkei.

Taste for the little auburn beans is indeed evolving, even among the brewers.

“I didn’t even drink coffee before,” Bui said. But once she entered the sector, “It charmed me somehow.”

Source: Nikkei Asia


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Public debt poised to stay safe

With the economy gradually bouncing back, Vietnam is expected to see its public debt stay within permissible limits, ensuring national financial security.



The government has set the target that GDP will grow by 5.6% in Q1 of this year, 6.7% in Q2, 6.5% for Q3, and 7.1% in Q4. The rate for the whole year will be 6.5%.

Tim Leelahaphan, an economist for Thailand and Vietnam at Standard Chartered Bank, said he believed the Vietnamese economic situation is gradually getting better in Q1 of 2023. He also cited Standard Chartered’s forecast that the nation’s GDP growth could reach 7.2% this year and 6.7% next year.

“Although the economy still faces some macro risks such as inflation, public debt, and confidence regarding economic recovery, the recovery outlook is positive for the second half of 2023,” Leelahaphan said. “Vietnam continues to be an important link in the global supply chain and an attractive destination for many businesses.”

To monitor the economy and spur its growth, the government has and will have to use various resources including loans, with sturdy solutions employed to ensure national financial health.

According to the Ministry of Finance (MoF), from now until the year’s end, it will “continue to strictly control the state budget deficit, public debt, the provisional debt obligations of the state budget, and localities’ debts in order to ensure national financial safety and improve the effective use of loans.”

Specifically, the government will continue to control the state budget deficit within the permissible limits as set out by the National Assembly and strive to gradually reduce public debt. New loans with official development assistance (ODA) and concessional loans from foreign donors are only to be used for development investment expenditure, not for recurrent expenditure. In addition, the government will arrange all payments of principal and interest in full and on time.

In addition, the government will also ensure all expenditure is within the debt safety limit, while closely abiding by the resolutions and guidelines of the Party, the National Assembly, and the government on the national financial plan and borrowing and repaying public debt every five years. 

The MoF will have to coordinate with ministries, sectors, and localities to strengthen the inspection and close supervision of borrowing and use of loan capital and debt repayment, especially for new loan agreements, foreign loans, and loans guaranteed by the government. In addition, the MoF will also have to continue to implement solutions to restructure the public debt portfolio towards safety and sustainability.

Staying safe

The MoF reported that in February 2023, the government’s total debt repayment was about 431.82 million USD, of which direct debt repayment was about 397 million USD, and on-lending debt was around 32.1 million USD. 

Cumulatively in the first two months of this year, the government’s total debt repayment was as much as 2.16 billion USD, of which direct debt repayment was over 2 billion USD, and on-lending debt was 153.9 million USD.

When it comes to the mobilisation of domestic loans by the government, the total volume of government bonds issued in February 2023 was 1.59 billion USD. Cumulatively in the first two months of this year, the figure sat at 3.01 billion USD, equivalent to 64.28% of the plan for Q1 of 2023 (4.69 billion USD) and 17.36% of the plan in 2023 (17.39 billion USD).

In February 2023, the government signed two foreign loan agreements with the International Fund for Agricultural Development with a total value of about 43 million USD.

Total domestic and foreign government loans in the January-February 20 period reached 1.53 billion USD. Cumulatively in the first two months, total domestic and foreign loans hit 3.17 billion USD (tantamount to 11.3% of the approved plan), of which loans for the central budget stood at 3.06 billion USD (equivalent to 11.3% of the plan), and on-lending loans sat at 116.7 million USD (11.4% of the plan).

It is estimated that last year, the government had loans worth a total of 29.3 billion USD. This includes loans for central budget balancing of up to 28.1 billion USD, of which borrowing to offset the central budget deficit is estimated to have been 19.6 billion USD, borrowing to repay the principal was estimated to have been about 8.52 billion USD, and on-lending was as much as 1.16 billion USD.

Such loans will come from government bond issuance instruments, with an average issuance term of less than nine years; from official development assistance loans and foreign preferential loans; and from other lawful financial sources or from the issuance of government bonds directly to the State Bank of Vietnam.

Also, according to the MoF, the government’s debt repayment was about 14.6 billion USD, of which the government’s direct debt payment was a maximum of 13 billion USD and the repayment of on-lending projects is 1.56 billion USD.

When it comes to the loan and repayment plan of localities, borrowing from the government’s foreign loans and other domestic loans last year was as much as 1.24 billion USD. Localities’ debt repayment was 265.7 billion USD, including principal payments of 158.1 million USD and interest payments of 107.56 million USD.

As for foreign commercial loans of businesses not guaranteed by the government, the limit of medium and long-term foreign commercial loans of enterprises and credit institutions by self-borrowing and self-payment method was up to 7.3 billion USD; and the growth rate of short-term foreign debt balance was about 25% as compared to the outstanding balance as of December 31, 2021.

The government has reported to the National Assembly (NA) that based on the country’s borrowing scheme, Vietnam’s public debt at the end of this year was about 44% of GDP; the government’s debt was 41% of GDP; while the nation’s foreign debt was 40% of GDP, and the government’s direct debt repayment obligation sat at 19% of total state budget revenue.

All these rates were still lower than the limits set by the NA.

According to The Economist’s Global Debt Clock, on March 15, Vietnam’s public debt to GDP sat at 45.6%, and per capita public debt was 1,039 USD, while total public debt was almost 94.85 billion USD.

Last year, the MoF reported, the total state budget recorded a surplus of 9.67 billion USD. The total budget spending is estimated to have been over 67.93 billion USD, up 8.1% year-on-year. 

Meanwhile, the state budget revenue is estimated to touch 77.6 billion USD, up 13.8% year-on-year. All kinds of revenues have registered a year-on-year increase, reflecting a recovery in almost all sectors in the economy.

Fresh expectations

The MoF also expects that the total central budget revenues in 2023 will be about 37.52 billion USD and total local budget revenues will stand at 32.92 billion USD.

Meanwhile, it is estimated that Vietnam’s total state budget spending this year will be around 90.26 billion USD. Of which, spending for development investment will be 31.6 billion USD, and recurrent expenditure will be 50.96 billion USD. Other expenditure will also cover debt service of 4.47 billion USD; expenditure for salary reforms, retired salaries, and adjustments of some schemes of subsidies, allowances, and social security pertaining to basic salaries (543.47 million USD); and other sums of expenditures (2.68 billion USD).

It is expected that by late 2023, the economy’s public debt will be as much as 44-45% of GDP, the government’s debt around 41-42% of GDP, foreign debt 41-42% of GDP – these levels are also lower than the NA’s permissible limits.

However, according to German provider of market and consumer data Statista, the national debt of Vietnam is projected to continuously increase between 2022 and 2027 by about 115.9 billion USD (+77.28%). After consecutive increasing years, the national debt is estimated to reach 265.83 billion USD and therefore a new peak in 2027.

According to Trading Economics global macro models and analyst expectations, the government debt to GDP in Vietnam is estimated to hit 40% of GDP by late last year. In the long-term, the ratio is projected to trend around 41% of GDP in 2023.

Vietnam’s national debt from 2017 to 2027 (unit: USD) – (*) Forecast

2017: 116.61

2018: 122

2019: 125.78

2020: 132.77

2021: 133.41

2022: 149.97 (*)

2023: 171 (*)

2024: 192.98 (*)

2025: 216.52 (*)

2026: 241.18 (*)

2027: 265.83 (*)

Source: Statista

Source: Nhân Dân


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Singapore’s CapitaLand in talks to buy Vietnam property assets from Vinhomes

Asian real estate giant CapitaLand Group is in talks to acquire assets worth roughly $1.5 billion from Vietnam’s biggest listed property firm Vinhomes JSC, two sources familiar with the matter told Reuters.



A deal of that size would mark one of the largest real estate transactions in Southeast Asia in the last few years.

The talks come as Vietnam’s property sector is struggling with a cash crunch following an anti-graft campaign launched by the government last year.

Discussions between CapitaLand, majority owned by Singapore state investor Temasek Holdings, and Vinhomes, which has a market value of $8 billion – have taken place for some projects owned by Vinhomes, four sources told Reuters.

Vinhomes, Vietnam’s biggest real estate developer by market capitalization, is part of Vingroup, the country’s largest conglomerate.

One of the sources said CapitaLand is considering buying part of Vinhomes’ Ocean Park 3 project, a 294-hectare resort city style development near the Vietnamese capital city of Hanoi, or another project in the northern city of Haiphong.

The value of the deal was still being negotiated, the person said, adding the talks reached advanced stage.

The sources declined to be identified due to the sensitivity of the matter.

When contacted by Reuters, CapitaLand Development did not directly comment on any potential deal with Vinhomes but said: “Vietnam is one of CapitaLand Development’s core markets. We constantly evaluate investment opportunities to grow our presence in the country.”

CapitaLand Development, part of CapitaLand Group – which has a presence in 40 countries – develops retail, office, residential, business parks and data centres among other businesses. It already has a portfolio of residential projects, including luxury condominiums, in four cities in Vietnam.

Vingroup declined to comment on any discussions with CapitaLand, but said that as a listed company it would disclose information if any transactions happen.

Vingroup, which is involved in real estate, automobiles and retail, is investing billions of dollars to develop VinFast, its fledgling electric vehicle car maker.

Vinhomes develops and owns residential and commercial real estate projects in Vietnam, a country which has a population of 100 million and was Asia’s fastest growing economy last year.

The economy expanded by 8% last year, the fastest pace in 25 years, backed by strong retail sales and exports, but is facing headwinds from a global slowdown.

A property crisis that started last year, sparked by problems at one of the country’s largest property groups No Va Land, has battered investor confidence as authorities arrested high-level individuals and overhauled the country’s bond sector.

Vinhomes was spun off and listed on the local stock exchange in 2018.

Vinhomes’ net profit dropped 26% to 29 trillion dong ($1.23 billion) in 2022 from a year earlier, while total revenue declined 27% to 62 trillion dong.

Shares of Vinhomes have lost 10% so far this year, after tumbling 40% in 2022 as the property crisis deepened.

Source: Reuters


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