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Vietnam moves up 13 places on Economic Freedom Index, but remains in the ‘mostly unfree’ class.

the Heritage Foundation, an American conservative public policy thinktank based in Washington, D.C.,Vietnam is ranked 128th out of 180 countries and territories on the 2019 Economic Freedom Index, up 13 places from last year.  

On this index, it fares unfavorably against Southeast Asian peers like Singapore (2nd), Thailand (43rd), Indonesia (56th) and the Philippines (70th).

Its overall score increased by 2.2 points from last year to 55.3 thanks to improvements in fiscal health, investment freedom and judicial effectiveness, according the report. 

However, tax burden, monetary freedom and financial freedom are still inhibited.

Vietnam finished 30th out of 43 countries in the Asia Pacific region, below China and its smaller neighbors Cambodia and Laos.

The U.S. foundation said that Vietnam could improve its economic environment by continuing to reform state-owned enterprises, reducing red tape, increasing transparency in the business and financial sectors, reducing bad debt in the banking sector and increasing recognition of private property rights.

The ranking is based on 12 quantitative and qualitative factors grouped into four broad categories, including rule of law, government size, regulatory efficiency and open markets to measure economic freedom in 180 countries and territories across the world.

The world average score is 60.8, classifying the global economy as "moderately free".

Only six economies are classed as "free" by earning scores of 80 or above. Hong Kong and Singapore finished first and second in the rankings for the 25th consecutive year, followed by New Zealand, Switzerland, Australia and Ireland.

The world’s biggest economy, the U.S. ranked 12th globally, jumping six places from the last year’s ranking while China is far behind in 100th place.

This year, the number of economies ranked as ‘mostly unfree’ stands at 64, while 21 are considered "repressed".

Vietnam’s economy expanded 7.08 percent last year, which helped the country retain its status as one of the best performing economies in the world.

It was the highest growth the country has experienced since 2008 and compared with the median estimate of 6.9 percent in a Bloomberg survey of 12 economists.

Low water levels and threat of a drought in Vietnam’s main coffee growing region would hurt this year’s output in the world’s second-biggest producer of the bean.

The Central Highlands, Vietnam’s main coffee growing region, is in the peak of its dry season, which lasts from November to April, and several provinces have recorded low water levels in both rivers and water reservoirs, local media have reported.

"At the beginning of the dry season, some areas of the Central Highlands severely lacked water and drought is expected to be severe during the dry season," the Vietnam Coffee and Cacao Association said in a statement on Tuesday.

Rain is expected at a lower-than-average level during February-May this year but could pick up to the average level during May-August, the National Center for Hydro-Meteorological Forecasting agency said in its latest forecast on Feb. 15.

Falling coffee prices also discouraged farmers from looking after the coffee trees, the association said, adding that it could affect the beans’ quality and output for the 2018/2019 crop year, for which harvest is due around November or December.

"Coffee output of this crop year and the crop year after that will fall significantly," the association said, adding that the coffee plants are also affected by insects.

Domestic coffee prices COFVN-DAK have fallen much from a six-year high reached in March 2017 of 47,650 dong ($2.05) to hover in between 32,700-38,250 dong so far this crop year, Reuters data showed.

A Reuters poll last month showed Vietnam’s coffee output is expected at 30 million 60-kg bags in the 2018/2019 crop year, up from an earlier estimate of 28.5 million bags.

The United States Department of Agriculture in December also revised up its 2018/2019 coffee output estimate for Vietnam, including both robusta and arabica production, to 30.4 million bags from a 29.9-million-bag forecast earlier.

Vietnam’s Coffee King will manage the Trung Nguyen Group and own 60 percent of shared assets, the court has ruled.

In its divorce settlement ruling, the Ho Chi Minh City People’s Court said Wednesday that the stocks and cash of the Trung Nguyen Coffee group shared by Dang Le Nguyen Vu and Le Hoang Diep Thao will be split 60:40 in Vu’s favor.

Their properties, including land and buildings, will be split equally, the court ruled. 

The value of the couple’s combined stake in the group is estimated at over VND5.7 trillion ($245.14 million).

The court also ruled that since the division of the company’s shares will cause difficulties in managing the company, Vu would buy all of Thao’s shares with cash and the latter will no longer be a Trung Nguyen shareholder.

The court explained its decision saying Vu had contributed more than Thao to establishing and developing the company.

The cash deposits of the couple, valued at VND1.76 trillion ($75.69 million), will also be divided 60:40 in Vu’s favor. 

The court also said that 13 properties (buildings and land) that the couple own will be divided equally. Thao will raise the four children they have had together, and Vu will give them VND10 billion ($431,135) a year starting 2013 until they graduate from college.

Responding to the court’s verdict, Thao said: "This is too unfair to me."

Vu and Thao married in 1998. They started to have conflicts in 2013, and Thao filed for divorce in 2015.

Thao had previously proposed that she gets 51 percent (VND2.11 trillion or $90.7 million) of Trung Nguyen Investment, a company which owns the majority of shares of Trung Nguyen Group.

She had also proposed that Vu and her each own 15 percent (VND814 billion, $35 million) of Trung Nguyen Group and 7.5 percent (VND43 billion, $1.85 million) of Trung Nguyen Instant Coffee. Thao agreed to give Vu her shares in the other four companies under Trung Nguyen brand.

But Vu wanted to have 70 percent of all of companies under the Trung Nguyen brand and to buy the remaining shares from Thao in cash.

Trung Nguyen Group is a leading coffee firm in Vietnam. It earned revenues of VND3.95 trillion ($170.5 million) and pretax profits of VND681 billion ($29.4 million) in 2017. It has 200,000 coffee stores in the country.

By Hai Duyen (vnexpress)

Japan has increased its imports of Vietnamese coffee thanks to low prices and the geographic proximity between the two countries.

In January-November 2018 its imports rose by 15 percent to 94,000 tons, according to the Nikkei Asian Review.

Vietnam mostly produces the robusta variety of coffee, which is somewhat bitter compared to Brazil's arabica.

Industry insiders said Japanese consumers’ preference for good tasting, low-priced coffee is driving robusta's market share there. Robusta beans are currently trading at around 68 cents per pound, more than 30 percent lower than arabica’s $1.03.

Besides, from Vietnam and other regional countries only takes about half as long as from Latin America, which accentuates the price difference.

Last year Vietnam exported 1.89 million tons of coffee worth $3.5 billion, up 20.1 percent in volume and 1.2 percent in value from 2017, according to the General Statistics Office. Its largest markets were Germany, the U.S., Italy, Spain, and Japan.

The country’s coffee output might fall by 20 percent this year because of low water levels and the threat of a drought in its main coffee-growing region, the Vietnam Coffee and Cacao Association has warned.

By Dat Nguyen (vnexpress)