Good morning! Hello to new readers, and welcome to the latest free edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski.
On Wednesday, I published a paid subscriber feature on the prospect of independent unions and how the government may respond to them. Next week’s exclusive story will be on the latest ‘blazing furnace’ developments.
The newsletter is entirely supported by such subscribers - you can become one for US$8/month or US$90/year below. Group subscriptions are also available at a 20% discount per reader.
A new episode of The Vietnam Weekly Podcast drops on Monday and goes deep on the anti-corruption campaign with Nguyen Khac Giang - find it on all major podcast platforms.
Last week, I wrote about the impossible metro system goals of Hanoi and HCMC. Yesterday, the investor of HCMC’s hideously delayed first line announced yet another missed deadline, pushing completion from July to Q4.
On to the news.
The Delta Bakes
This is turning into Mekong Delta month here at the Vietnam Weekly, as I wrote about it two weeks ago and discussed it with Brian Eyler in this week’s river-spanning podcast episode.
But the delta seems to be on the verge of a crisis.
On Tuesday, the government of Bến Tre Province proposed diverting water from the Saigon or Đồng Nai rivers to stem worsening saltwater intrusion. VnExpress quoted the provincial chairman saying “The eastern area has a high terrain, so a channel can be made, or we can use a pipe system to bring water from this area to Long An, Tiền Giang, and then Bến Tre, with the distances between each locality only spanning a few dozen kilometers."
This, then, would not be a short-term solution.
Saltwater has already reached as far inland as it did during the 2016 drought, which set a record that was then broken in 2020. Hot, dry conditions are expected to continue through this month and next.
In Tiền Giang Province, officials had to close a key floodgate a week earlier than planned to stop the saltwater flow.
Across the delta, communities face a lack of fresh water, erosion, and unusually high tides.
At the same time, critical projects face similar delays to those seen across the country: a sluice gate system backed by the Japan International Cooperation Agency is behind schedule, while Deputy Minister of Planning and Investment Trần Quốc Phương “expressed confusion” over 16 climate resilience projects worth US$4 billion that are delayed, reportedly saying “these are projects that the Government wants to do, localities want to have, and donors agree to support.”
Donors continue to try, with the U.S. Agency for International Development announcing a US$48 million climate resilience project for the delta on Wednesday.
The region already faces numerous serious challenges - bureaucratic malaise is an unneeded additional one.
Three great features on the delta were recently published: friend-of-the-letter Aniruddha Ghosal wrote about people moving to cities to avoid climate shocks for AP; Jack Brook analyzed the proposed Funan Techo Canal for Nikkei Asia; and Thanh Hue of Mekong Eye covered efforts by farmers to grow rice and shrimp together in the face of increasing salinity.
Aviation’s Funk
For a country with a growing economy and middle class, Vietnam’s aviation sector faces a strange near-term future.
The Civil Aviation Authority of Vietnam recently said airline fleet sizes will shrink this year and next for a variety of reasons.
Vietnam Airlines (VNA) will ground 12 A321s, or 20% of its aircraft for domestic routes, due to a global issue with Pratt & Whitney engines. It may take up to 300 days for repairs to be completed.
VietJet will also be impacted, though they’ve yet to announce how many planes will be grounded. (But feel free to read this blatant PR about VietJet’s founder.)
Bamboo Airways continues its death spiral (euphemistically called a ‘restructuring’) by suspending its flights to Côn Đảo from Hanoi and HCMC starting April 1. The carrier terminated the lease for three Embraer planes that served those routes.
That will leave Bamboo with eight aircraft.
Last month, Prime Minister Phạm Minh Chính repeated his request for relevant government agencies to support VNA, which continues to bleed money.
The national flag carrier will start operating direct flights from Hanoi/HCMC to Munich from October 2, while VietJet plans to add Melbourne-Hanoi to its extensive Australia connections.
The budget airline is currently holding on to four planes grounded at Nội Bài that a British leasing company is trying to reclaim in a court process spanning London, Singapore, and Hanoi.
AirAsia, meanwhile, is considering launching a Vietnam subsidiary.
Housing Doldrums Continue
In January, I wrote about the passage of the revised Land Law, which is seen as a key step in helping the miserable real estate sector, especially when it comes to residential housing.
The law doesn’t go into effect until January 1, but recent headlines continue to drive home the scale of the challenge.
Last month, the Vietnam Association of Realtors warned that apartment prices won’t drop for years due to the imbalance between supply and demand: units in the ‘affordable’ segment made up 30% of total housing in 2019, and just 6% last year.
This issue is most noticeable here in HCMC, where most apartments coming online over the next two years will cost US$200,000-400,000 (i.e., not affordable). No new apartment projects - not even high-end ones - have been launched in the city this year.
HCMC’s housing supply is an ‘inverted pyramid,’ with the majority of supply in the high-end segment - a scenario Hanoi is expected to follow.
Social housing is an ongoing struggle despite intense government efforts to spur construction.
This week the Ministry of Construction ordered cities and provinces to complete nearly 135,000 such units this year, but I’ll let Tuoi Tre take it from here: “The government had earlier set a target to complete some 130,000 social houses this year, which was deemed unachievable as provinces and cities nationwide later registered to develop only around 47,000 social houses in 2024.”
Extra Links:
Tien Hai reserve saved from development in win for nature in Vietnam (Mongabay)
Anyone for crickets? Vietnam company aims to serve up insects in Singapore (Nikkei Asia)
Our Toxic Relationship With Saigon Traffic: A Diagnosis (Saigoneer)
ARB Architects Founder Nguyễn Hà Wins 2024 Moira Gemmill Prize For Emerging Architecture (World Architecture)
Have a great weekend!