Good morning! Welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski.
On Tuesday, I published an article for paying subscribers about the Thuận An Group scandal and its implications for at least one top national leader. You can become a supporter of the newsletter for US$8/month or US$90/year through the link below.
Don’t miss the latest episode of The Vietnam Weekly Podcast, featuring
of ASEAN Wonk - I enjoyed our conversation on Vietnam’s ‘bamboo diplomacy,’ the situation in the South China Sea, semiconductor ambitions, overly optimistic American hopes, and much more. There won’t be a new episode next week due to the Reunification Day/Labor Day break.I’m also trying to find someone who can speak on Vietnam’s gold market, which has been all over domestic media recently but is a topic I don’t understand. If you know anyone, please put them in touch!
On to the news.
Delta Emergency
Last week, Long An became the third Mekong Delta province to declare a state of emergency amid a prolonged drought and dangerous saltwater intrusion, following Tiền Giang and Cà Mau.
Long An officials found that saline levels of up to 4 parts per 1,000 were present as far as 80 kilometers inland, while normal levels are 0.25/1,000. This means water can’t even be used for cleaning, let alone cooking.
In response, about 7 million cubic meters of water will be released from the massive Dầu Tiếng Reservoir in Tây Ninh into the Vàm Cỏ Đông River, which flows through Long An.
Companies and communities from other regions have sent trucks and barges full of fresh water to these provinces, and a Coast Guard vessel delivered 350,000 liters of water to an island in Cà Mau.
Saltwater intrusion, which damages crops while disrupting daily life, is expected to remain widespread this month before subsiding in May.
Hopefully, some rain will arrive by then.
Meanwhile, Vietnam is turning its attention to the proposed Funan Techo Canal in Cambodia, with scientists and experts delivering stark warnings at a recent conference in Cần Thơ.
VnExpress quoted Lê Anh Tuấn, a Senior Lecturer at the College of Environment and Natural Resources and the Research Institute for Climate Change at Cần Thơ University, as saying: “When the Funan Techo Canal is operational, the Mekong Delta in Vietnam will experience an increase in the shortage of fresh water for daily life, agriculture, production, aside from deeper and more frequent saltwater intrusion, and the ecosystems will be disrupted.”
The Vietnamese government has requested more information on the canal, while Chasambath Bong argued in Fulcrum that this canal “will be the first foreign policy litmus test facing [Cambodian Prime Minister] Hun Manet.”
(For more on the canal, check out my podcast interview with Brian Eyler.)
The delta is not alone in facing water problems: government agencies are also delivering fresh water to communities in the Central Highlands, where drought is killing coffee crops.
More Apple on the way?
Apple CEO Tim Cook visited Hanoi last week, drinking egg coffee and strolling around Hoan Kiem Lake while allowing local media to enjoy one of their favorite pastimes: gawking at the expensive hotel suites where rich, powerful people stay.
On the business side, Cook said the tech giant wants to invest further in Vietnam - Apple has already invested almost US$16 billion here, a figure that surprised me.
Vietnam is already home to the most Apple suppliers in Southeast Asia and fourth-most globally, behind China, Taiwan, and Japan.
Prime Minister Phạm Minh Chính, for his part, “requested” Cook to make Vietnam the global manufacturing hub for Apple while promising government support.
This calls to mind the December visit by Nvidia CEO Jensen Huang, who called Vietnam a potential “second home” for the tech company.
That hasn’t quite happened yet, but FPT announced this week that it will build a US$200 million AI factory using Nvidia chips and software, while a delegation from the California-based corporation is visiting Ho Chi Minh City, Đà Nẵng, and Hanoi to scope out potential investment locations.
These visits come within the broader context of Vietnam struggling to finalize the types of high-profile tech investments embodied by Apple and Nvidia. The US, EU, Korean, and Japanese business chambers have all expressed ongoing concerns about stable power supply (more on that next) and inconsistent tax policies.
The Energy Push
Power has been a frequent topic in the Vietnam Weekly, and that won’t change anytime soon.
Electricity consumption here in HCMC has broken records, and the heat index is 43 C as I write this with little relief in sight. I’m not expecting any sympathy - this is a nationwide problem.
This weather is driving intense electricity demand everywhere, and PM Chính has asked all ministries, provinces, and cities to ensure sufficient power supply “under any circumstances.”
Unfortunately for Vietnam’s climate commitments and air quality, this means enormous amounts of coal: according to Bloomberg, the government has ordered domestic coal companies to maximize production, while coal imports in Q1 roughly doubled the same period last year
EVN is borrowing thousands of diesel generators from customers to stabilize power supply while urging manufacturing businesses to stagger work shifts and operate during off-peak hours.
The government is scrambling to avoid a repeat of last year’s widespread outages and load shedding across northern provinces, which infuriated key investors (see the business chamber concerns above).
But the fundamentals haven’t significantly changed: hydropower reservoirs are low again due to lack of rain, and the grid hasn’t been upgraded to send renewable supplies from southern provinces to the north - all while intense heat spurs massive demand.
The development of LNG - a key plank of Power Development Plan 8 - is at a standstill due to pricing issues and disagreements between investors, suppliers, and EVN.
At this stage, it will be something of a miracle if the northern region manages to avoid energy shortages over the next two months.
Extra Links:
All Things Considered (Parallax)
Cry Me a River (LiCAS.news)
In Vietnam, farmers reduce methane emissions by changing how they grow rice (AP)
The Case for Vietnam’s Mekong Energy Diplomacy (Fulcrum)
Forests in Vietnam’s Central Highlands at risk as development projects take priority (Mongabay)
Have a great weekend - and a great holiday, for those in Vietnam!
So sorry about dear Vi
Michael - Was Vi your dog? I'm so sorry to read his passing...