Tag Archives: Vietnam energy

A Parallel Between Vietnam and Ukraine

One of the consequences of today’s crisis in Eastern Europe is the escalation of anxieties elsewhere in the world.  The situation in Ukraine has reverberated at least two ways in faraway Vietnam: (1) disrupting economic stability, and (2) raising the spectre of armed conflict in Southeast Asia.    

Vietnam’s stock market, world’s best performing in the first part of 2014, has been in a nosedive since the Ukraine crisis.  That’s partly because of conflicting views within Vietnam’s ruling party about economic health of the country; but it also reflects concern about both fragile export markets in Europe and the reliability of Russia as a long-time economic and diplomatic ally.  

Meanwhile,  people who have been watching developments in the South China Sea are wondering if Vietnam is on a path to become China’s Ukraine.  That’s not surprising considering the centuries of Chinese aggression toward its southern neighbor.

The latest Chinese assertiveness is its construction of an oil and gas exploration rig near the Vietnamese coast in South China (or East) Sea territory claimed by both nations.  State-owned PetroVietnam asked China National Offshore Oil Corp. to remove the rig — situated 120 miles East of the Vietnamese coast and within what Vietnam considers its exclusive economic zone.  China responded by repeatedly ramming Vietnamese military boats.

Until now, conflict between China and Vietnam in the sea has been limited mostly to verbal sparring over who owns the Paracel and Spratly Islands, and  Chinese harassment of Vietnamese fishing fleets.

The latest dispute highlights the increasing potential for military aggression in Vietnam’s East Sea, as Southeast Asia worries about parallels between Eastern Europe and its own region of 600 million people.

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Rescuing Vietnam’s 882 Endangered Species

While Vietnam cultivates its industry and agribusiness, one arm of the government is looking to rescue economic development’s innocent bystanders:  882 endangered species of floral and fauna.  That number is up from 161 species 20 years ago even though some of those have become extinct, including nine kinds of animals.

Coming to the aid of non-human forms of life, Vietnam’s environment department this week introduced a national strategy to create 41 new nature reserves.  When and if that happens, 9% of Vietnam’s land mass and 45% of its forests will be protected — and there will be 10 biosphere reserves and 10 ASEAN heritage parks.  The agency’s biodiversity master plan also calls for 23 reserves by 2030 in addition to the 148 existing ones and the 41 to be established by 2020 (accounting for nearly 3,000 square miles of land).

Vietnam does not have a good reputation with organizations like the World Wildlife Fund, partly because the country — as one of the world’s most diverse — has so much to protect.  WWF and others have criticized Vietnam for not being more aggressive in combatting illegal trading of wild animals and habitat fragmentation that results from hydropower and other trappings of economic growth.

Even so, Vietnam has a passionate population of environmentalists who see biodiversity as the foundation of a green economy, a key to dealing with climate change, and a significant contributor to quality of life.  They want to balance the economic dreams of Homo sapiens with the needs of other species.

 

10 Dark Hours For Vietnam’s Infrastructure

Garment factories, fish processing facilities, traffic signals and everything else that runs on electricity in 22 Vietnamese provinces shut down this week for half a day when a crane operator accidentally knocked down a tree — and cut the power supply for a third of the country.

Accidents happen, but this one heightened investors’ anxieties about Vietnam.  As global manufacturers rush to Vietnam as an otherwise stable, lower-cost alternative to almost every other country in Asia, some of them wonder if Vietnam can keep with the surging demands on its transportation and energy infrastructure.

The country has been rapidly modernizing roads, seaports, airports, and energy supply — including oil refineries, hydroelectric facilities, and planning for two nuclear power plants — much to the chagrin of environmentalists concerned this is happening at the expense of Vietnam’s health and culture.  They may have considered the brief delay in economic expansion a breath of fresh air.

For a few hours, restaurants served tourists by candlelight.  Water supplies began to dry up.  Factories shut down.  Traffic jammed, especially near nonfunctional traffic lights.

When a tree falls in a developing country, the sound you hear is usually called progress. But when this particular tree fell on the nation’s main high voltage transmission line, the air conditioners stopped.  And the sound the government heard was sweaty criticism of the state-owned electricity company.

Stopping the Extinction of Vietnam’s Wild Elephants

Voice of America this week highlights the plight of Vietnam’s wild elephants, now down to 50 survivors of poaching and habitat destruction from a population of 2,000 in 1975.  The only place they have a chance is said to be in Vietnam’s Yok Don National Park.

Israeli tourists on a Dak Lak elephant

That’s hard to read for someone who last month was on the back of one of those elephants — as the animal walked through a remote ethnic village and then through a river in the highlands province of Dak Lak.  Not far from the national park where elephants still roam, the Vietnamese are constructing a large hydroelectric power plant, and the Chinese are working on a huge bauxite mine.  The mine has been the site of controversy over the past two years as Dak Lak’s native minorities highlighted the potential for environmental damage — and questioned the wisdom of allowing the Chinese to inflict it on their province.Powershot 1174The Vietnamese are far from oblivious to the dangers of destroying the environment on the road to economic development.  They’ve witnessed the imbalance in China and are vowing to not let it happen in Vietnam.  Environmental protections are on the books; enforcing the laws is another matter — as is preventing a Chinese company with deep pockets from bribing the right people to ignore them.

Dak Lak puts to the test Vietnam’s ability to regulate its growth.  Its well-organized museum in downtown Buon Me Thuot makes a clear and compelling case for the appropriate balance between industry and nature.  Photos like thaose of the monkey above and the trapped elephant below encourage wildlife preservation.

Illegal trapping, photo from Dak Lak museum

Illegal trapping, photo from Dak Lak museum

But even under stringent rules and enforcement, elephants in Vietnam face an uphill struggle.  Farmers hate them (and sometimes shoot them because elephants like eating sweet crops like bananas and dragon fruit.  And the 1989 global ban on illicit ivory hasn’t stopped poachers, who killed six wild elephants in Dak Lak this year alone.In any case, Dak Lak’s elephants may be the canaries in the coal mine; their extinction could signal a passion for economic growth out of balance with environmental sustainability.

A captive monkey, a new eco-resort, and the entrance to Yok Don National Park.

The Top Ten Beaches in Vietnam (Part 2)

Last week the Vietnomics blog posted Vietnam’s top three shoreline areas that appear to be good places to invest for the long-term — including top_site_international_businessbeaches that have yet to get much notice from by foreign visitors.  They are Phan Rang, Quy Nhon, and Phu Quoc Island.

Here are the remaining seven of Vietnam’s top 10 beaches, ranked in order starting with the most attractive investment opportunity:

4. Ha Tinh.  Out of sight and out of mind, the North Central province of Ha Tinh knows its strengths and emphasizes agribusiness and industry, not tourism — and why not?  The province is quietly reaching its potential for exports of rice, nuts, fruit, vegetables, livestock, rubber, wood and seafood — and beneath some of this agribusiness lies $60 billion of iron ore soon to be mined; it has infrastructure, including an emerging port, to transport exports from Thailand, Laos and Vietnam; and Ha Tinh will soon be one of Asia’s biggest steel producers.   One of Vietnam’s poorest provinces, Ha Tinh is catching up — with economic growth of 10% and 11% the past two years and a competitiveness ranking of 7th out of the 63 provinces.  The province has nearly 100 miles of shoreline and four seasons to enjoy some fine, unspoiled beaches — and a mountain range in the north to block storms from the East.  It rains a lot and can be cold, as is the case with other refreshing alternatives from southern heat — such as San Francisco and Seattle.  Below are Ha Tinh City and beach.

Ha Tinh CityHa Tinh City and beach

5. Da Nang.  International travelers usually go to one of two resort cities (Hoi An or Hue) that flank the largest and most dynamic city in central Vietnam but tend to skip Da Nang itself.  That’s like touring the US and bypassing Chicago.  Near downtown Da Nang is where you find one of Vietnam’s best beaches:  China Beach (below), the legendary site chosen for the movie Apocalypse Now and a former American television series of that name.  Most of the 19-mile strip of sand from Da Nang to Hoi An is now developed with high-end resorts, but there’s still room for investment on Da Nang’s end of the beach.

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6. Nha Trang.  A well-established and popular resort city for domestic vacationers, Nha Trang remains relatively unknown to foreigners.  That is changing fast and the pace of development is accelerating in this picturesque region of islands and sand.

7. Mui Ne.  Not long ago considered one of Vietnam’s best kept secrets, this beach, one of the most beautiful in Vietnam, is now on the beaten path of tourists and well-developed with a wide range of resort options and, coupled with neighboring Phan Thiet, is also becoming a mecca for golfers.Mui Ne

8. Hoi An.  Probably Vietnam’s most popular seacoast destination for international travelers, Hoi An has a balanced combination of great beaches, a historic and beautiful village, and high-end resorts.  It will always be an attractive investment opportunity, but much of the region is developed already.  The photo below is from the pool at one of Asia’s finest resorts, the American-owned Nam Hai.

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9. Vung Tau.  For years the resort city of choice for Saigon weekenders, Vung Tau is well established and highly developed.  It’s not as nice a beach as you can find elsewhere in Vietnam, though, partly because the province is also a major energy producer for Vietnam, with sailboats competing with oil barges.  Even so, Vung Tau is a good investment destination because Vietnam’s first major casino complex is soon to open nearby — the MGM/Asian Coast Development Ho Tram project that includes 504 rooms, convention facilities, shopping and a Las Vegas style  casino to open early next year.

Vung Tau

10. Ha Long.   Vietnam’s most famous tourist attraction because of its spectacular rock formations that jut out of the sea, Ha Long is a highly developed region teeming with tourists from neighboring China and has nice views but not a great beach, too many people and too much pollution.  Investment opportunities here are as likely to be related to environmental remediation as economic development.  Foreigners continue to invest there, though, and Ha Long’s province recently added foreign-invested projects worth $412 million to its portfolio of 93 projects worth $4.2 billion, with American companies leading the charge.  Below is a view of Ha Long Bay from the nearby island resort that co-hosted the Miss Universe pageant five years ago.

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Miles of Underdeveloped Beach in Vietnam

At six this morning, the beach at Phan Rang was a beehive of activity — joggers, fishers, volleyballers, swimmers, sunrise worshipers — but certainly not crowded.  By far this was the busiest time of day; by seven, the miles of underdeveloped beach were pretty much abandoned.

Competitive beach volleyball began before six this morning in Phan Rang, Vietnam, where miles of beach are undeveloped

The scene captured one of the reasons Phan Rang may be among the best investment opportunities in Vietnam — and perhaps the world — today.  This beach is destined to change radically over the next decade.

Many global businesses know Vietnam is an energetic, enterprising, hard-working  nation of tens of millions of early risers who work out at the beach or the park before starting the workday.

In this regard, Phan Rang is no exception.  It is an exceptional opportunity because its miles of beaches, though trashy in spots, rise to the level of quality of the Vietnam’s most popular seacoast resort areas (Mui Ne, Hoi An, Phu Quoc, Nha Trang, and Vung Tau) — yet Phan Rang remains largely unknown and therefore undeveloped.   Where one visitor sees a blank canvas, an entrepreneur sees hordes of Chinese consumers desperate to get away from China’s crowded beaches.

But that’s just a small part of the Phan Rang investment story.  The rest includes these elements:

  • The best weather in Vietnam; the most sunny days and least rain.  Today is the middle of the monsoon season, and it has rained for five minutes in four days.
  • Two national parks  that include spectacular rock formations that I call God’s sculpture garden (more on that in a future post).
  • Provincial leadership that was the first in Vietnam with the wisdom to hire international consultants — including Michael Porter’s consultancy from Harvard — to help them create a plan for Ninh Thuan Province (of which Phan Rang is the center).
  • Vietnam’s first Economic Development Office, a one-stop shop for international investors that has the clout and capacity to cut through the red tape that has been driving global businesses crazy elsewhere in Vietnam.

The final element is good or bad, depending on your point of view:  Ninh Thuan Province is aiming at becoming a global clean energy center, and that includes nuclear power. The Vietnamese government selected the province for its first nuclear power plant — and also its second.  The two plants will flank Phan Rang, each about 25 miles away from the city.  The first, with Russian assistance, is scheduled to begin construction in 2014; the second, a partnership with Japan, in 2020.

That decision promises to bring massive amounts of economic activity to Phan Rang and provide jobs for an international workforce of 20,000 people, including hundreds of highly trained professionals.

Also, the reasons the province has been selected are instructive because they coincide in part with attributes that attract residents and tourists:  The province is considered the most stable in Vietnam — least likely to experience earthquakes, typhoons, and other natural disasters.  And, obviously, the Vietnamese, with the help of Russia and Japan, are engineering the plants with avoidance of another Japanese tsunami in mind.

Vietnam Adds Geothermal to its Energy Future

Vietnam is planning its first geothermal power plant in the central province of Quang Tri.  Vietnamese engineers are high on the project because it could operate 24 hours a day without being influenced by weather conditions — and could result in similar projects in most of Vietnam’s provinces and cities that would supply a meaningful portion of the country’s fast-growing energy needs.

Geothermal electricity generation, regarded as sustainable and environmentally friendly, will use hot dry rock heat mining technology to mine heat from beneath the earth’s surface.  Water pumped into hot rock becomes superheated and is extracted to generate power.

The technology is used in US, Germany and Iceland, and the US accounts for one-third of geothermal power produced in the world.  That means the Vietnam aspirations are another opportunity to bridge American technology with Vietnam needs.

More on geothermal energy in Vietnam