Metro, coronavirus, and

It’s Friday, and I am tired! It really hasn’t been that long of a week, but I’ve been careening from one end to the other, and I am ready for the weekend. But before, I wanted to update you on a few stories:

Source; Justin Main, @photified

Shrimp: An industry publication seconds my opinion that shrimp farmers should greatly benefit from the new EU-Vietnam trade deal. This is some positive news for Minh Phu (see yesterday’s post).

Saigon metro: The metro is progressing! I am very excited about this, because I think it is important for:

• Traffic: HCMC traffic is already bad. This should help. Also, it should lower traffic accidents, which improves health outcomes.

• Environment: Getting people out of cars and off mopeds is a good thing for pollution and climate change.

• Energy conservation: Again, getting people out of cars and mopeds helps reduce petrol use. That’s a good thing for a country that needs to massively increase power generation (see my final story below).

We still have more than a year to wait - it isn’t expected to be operational until year end 2021, but at least there is something to see.

COVID-19, tourism and stimulus: As I have talked about a fair amount, COVID-19 is hurting tourism in Vietnam. Flights have been cancelled, cruise ships have been turned away, and tourists are generally shunning Asia. This has resulted in a drastic drop off in bookings:

The number of bookings at three- to five-star hotels in HCMC has fallen by 50 percent after Tet (Lunar New Year) in late January, according to its Department of Tourism. Hotels serving Chinese-speaking tourists saw a drop of 70 percent, it said.

The government, at least in HCMC, is finally committing to stimulus. It’s hard to say what form the stimulus will take. It looks like it might just be marketing promotions, but I would prefer if the government just gave out cash payments in exchange for keeping people employed. That would probably be the most efficient stimulus, rather than tax abatements or whatever.

Lower airline fares (which have already happened) will probably help boost bookings, once (if) COVID-19 starts to dissipate. But until people no longer fear getting sick, there’s very little the government can do. If people are scared for their lives, they just aren’t going to make the trip. It’s not worth it. I was in Egypt after terrorist attacks, and the dearth of visitors at the pyramids was shocking.

Investments in energy needed: This is now a few days old, but since I write about energy a fair amount, I thought I should highlight it. The Politburo has committed to more than double power generation capacity this decade.

The Southeast Asian nation aims to boost capacity to 125-130 gigawatts (GW) by 2030, from about 54 GW now, the Communist Party’s powerful decision-making politburo said in a document this month.

In mixed news, it wants to increase renewables to 15-20% of total generation by 2030. I view this as mixed, because it is just so low. Renewables are arguably less expensive than other types of electricity generation, and they will only get better. Natural gas is inexpensive now, but Vietnam doesn’t have enough, so it will have to import lots of LNG, which ultimately may be more expensive than renewables.

Coal accounts for 38% of capacity now, and the government wants that percentage to fall.

Let’s hope that ultimately the government chooses to focus on renewables.

No matter which direction it goes in, the country will need massive investments in power generation over the next 10 years. If policy is calibrated correctly, the investment should be there. And by correct calibration, I mean reasonable feed-in tariffs!