Things that caught my eye in the news
/A few things that caught my eyes in the news recently were:
Mangrove forests: Here is a large article on mangrove forests and the impact they have on combating floods and rising seas causes by climate change. Vietnam appears to be a bright spot in South East Asia (another country that surprised me was Abu Dhabi in the UAE, where mangrove forests are being preserved). One of the reasons is that the country has provided electricity to 99% of the population, so there is little need to gather mangrove wood for fuel. Also,
“Several years ago, Vietnam began carrying out several programs for the rehabilitation of mangroves for coastal protection, while at the same time improving awareness among local people,” Pham Trong Thinh, director of the Southern Sub-Forest Inventory and Planning Institute in Ho Chi Minh City, said in an email. “Illegal logging in mangrove forests and wetlands is not a big problem in Vietnam at the moment.”
Over the past few years there have been significant flooding in Ho Chi Minh City (HCMC), and it seems like the government may be trying to deal with some of those issues. One way would be to continue to preserve and expand mangrove forests.
Positive news for Vietnamese airlines: The US Federal Aviation Administration (FAA) is expected to grant a category 1 rating to Vietnam soon, according to US officials (lots of stories say the same thing, here is one). This would allow direct flights between the US and Vietnam - there are none currently. It also should help boost the Vietnamese airline industry as it is seen as safer. We could also see things like corporate jets increase as well. There are only 4 corporate jets registered in Vietnam currently! Although, there is this study, which I love, because I hate fat cats, that says: “For firms that have disclosed this managerial benefit, average shareholder returns underperform market benchmarks by more than 4 percent annually.” That’s a crazy high number. So maybe this is not the best news to come out!
Gas-to-power with Exxon: Siapem, a JV between Exxon and Production Vietnam Limited, won a front-end engineering design (FEED) for a gas-to-power project, according to Saipem. This usually takes about a year, and the end result is used as the basis for bidding to execute the project.
Should the “Blue Whale” project advance beyond the FEED stage, ExxonMobil will lead its construction and operation, the supermajor noted.
Exxon is saying that it could produce up to USD20bn to the Vietnamese government. The gas would be used for power generation, which is severely needed in Vietnam. One issue is that lots of the gas and oil are found in the north or central parts of Vietnam (mostly offshore), but lots of demand comes from HCMC in the south. Somehow that power needs to be sent to the south. It will be interesting how Vietnam deals with that, either through better investments in the grid or through investment in power generation in the south.
Corruption trial ends: Two big police ministers and a business tycoon were jailed by a Vietnamese court Wednesday, according to Reuters. This is one of a string of convictions, including earlier convictions of the tycoon, “Aluminum Vu.” The ministers will be jailed for 30 and 36 months as they were found guilty of “lack of responsibility.”
A lot of government watchers have been skeptical of the corruption crackdown, seeing it potentially as a consolidation of power by the new president (who was previously and still is the Communist party chairman). But there have been quite a few ministers, important officials and business men that have gone to jail. Many of them quite high up, at least from my outsider’s perspective. I need to start tracking this more. As I do, I will try to put it together for readers what’s happening.