Youth Migration from Rural Areas Sparks Alarm: A Call for Targeted Industrial Policies

Economic

Summary:

Vietnam’s impressive economic growth has yet to resolve persistent rural employme...nt gaps. Lawmakers warn that youth outmigration is hollowing out the countryside

Vietnam’s Rural Paradox Amid Economic Resilience

Despite navigating a tumultuous global period, Vietnam has recorded strong economic indicators. Between 2021 and 2025, GDP growth is expected to average 6.3% annually outpacing the previous term. The national economy has expanded to 510 billion USD, placing it 32nd globally, with per capita income reaching 5,000 USD. Significant progress in strategic infrastructure has reshaped the transportation network, particularly with 3,245 kilometers of expressways now operational. Social welfare programs have also succeeded in eradicating dilapidated housing ahead of schedule.

However, this broad national progress has not resolved a fundamental imbalance: the lack of sustainable employment and income opportunities in rural and mountainous areas. While 79.3% of communes now meet the criteria for "new rural areas," and essential infrastructure has improved, rural youth are increasingly leaving their hometowns to seek employment in major urban industrial zones. This pattern reflects a causal relationship between the absence of localized economic opportunities and the rise of labor migration.

The Unintended Consequences of Rural Depopulation

The migration of young laborers to urban centers has created serious consequences for both the places they leave and the cities they flock to. Rural regions particularly those in remote, border, and highland areas are increasingly characterized by a demographic vacuum, where only the elderly and children remain. These “empty villages” face not only socioeconomic stagnation but also heightened security vulnerabilities.

This depopulation has a ripple effect: urban areas are becoming strained by growing demands on infrastructure, social services, and public resources. At the same time, depopulated rural zones become more susceptible to criminal infiltration and influence from hostile groups, raising concerns about national security in strategic frontier regions. The pattern demonstrates a causal chain where lack of rural employment leads to migration, which in turn generates urban overload and rural exposure to instability.

Proposed Strategic Interventions for Rural Revitalization

To address this rural exodus, National Assembly delegate Trần Thị Thu Phước argues for a systemic transformation in how Vietnam approaches rural development. General encouragement is insufficient. Instead, bold, targeted policies are needed to attract investment directly into rural communities.

One key intervention is land-use planning. Provinces must allocate priority land for the development of satellite industrial clusters and simplify procedures for converting low-productivity rice fields into non-agricultural industrial zones. This reform aims to facilitate capital inflows and provide a foundation for rural job creation.

Tax and credit incentives also play a critical role. Delegate Phước proposes offering maximum corporate income tax incentives equivalent to those found in economic zones for all businesses investing in border or mountainous regions, regardless of their size. This reflects a cause-effect strategy: financial incentives will directly reduce investment barriers, stimulating local employment.

In terms of industry focus, policymakers are encouraged to support deep-processing industries tied to local OCOP (One Commune One Product) goods. By industrializing artisanal and agricultural products, these policies can elevate the economic value of local goods, creating branded, export-ready commodities. This transition would allow farmers to become factory workers while remaining in their hometowns, achieving the goal of "leaving farming without leaving the homeland."

From Rural Exodus to Regional Revival

Vietnam’s economic narrative is one of impressive resilience, but its rural reality is still marked by disconnection and demographic imbalance. The current youth outmigration is not a coincidental trend but a direct consequence of unaddressed structural deficits in rural employment. Bridging this gap requires a holistic and bold approach from infrastructure and land reform to fiscal policy and industrial transformation.

The road to sustainable growth lies not only in cities and export zones but also in empowering rural communities. By creating opportunities where people live, Vietnam can protect its socio-economic fabric, reinforce national security, and ensure that development is not just fast but inclusive and lasting.

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Gerik

Economic

Commodity

Global Metal Prices Rally on Rate Cut Anticipation

At the end of November, both gold and silver posted impressive gains, with silver reaching a new historic high. The international spot price for gold climbed to approximately 4,220 USD per ounce, a 1.5% increase or 62 USD in just one session. Silver outperformed with a jump of 5.6%, rising by 3 USD to hit 56.4 USD per ounce.

Domestically, the surge was equally significant. On November 29, SJC gold bars were priced between 152.9 million and 154.9 million VND per tael, up by 700,000 VND from the previous day. Bảo Tín Minh Châu adjusted their prices to 151.5 million – 154.5 million VND, marking a sharp increase of 1.2 million VND per tael. For silver, Phú Quý listed prices between 2.123 and 2.184 million VND per tael, or approximately 56.48 to 58.24 million VND per kilogram, with the highest selling price peaking at 58.6 million VND per kg—a record high.

This movement reflects a monthly rise of 13% for domestic silver, while the yearly increase hit 86.3%, nearly identical to global silver’s 87% surge.

Monetary Policy Shift: Cause of Precious Metal Momentum

The surge in gold and silver is closely tied to expectations surrounding U.S. monetary policy. According to CME FedWatch data, the probability of the Fed reducing its benchmark interest rate by 25 basis points at the December meeting exceeds 80%. Statements by key Fed officials, including New York Fed President John Williams and San Francisco Fed President Mary Daly, have reinforced these expectations, suggesting institutional alignment on easing monetary conditions.

This anticipated rate cut is expected to weaken the U.S. dollar and lower real interest rates, both of which historically contribute to bullish trends in precious metals. The causal relationship here is direct: lower rates reduce the opportunity cost of holding non-yielding assets like gold and silver, thus fueling demand.

Silver Faces Tight Supply and Strategic Demand Growth

Beyond rate speculation, silver’s performance is being driven by structural supply issues and strategic demand. Chu Phương, a market analyst at Giavang.net, notes that physical silver availability has dropped sharply in major markets. The London OTC silver inventory is significantly depleted, while the Shanghai Gold Exchange (SGE) has recorded its lowest silver reserves in over a decade.

These developments signal more than short-term volatility. The ongoing imbalance between supply and industrial demand is expected to last until at least 2026, especially as demand from sectors like clean energy and electrification grows faster than mining output. This imbalance is more than a coincidence, it reflects a causal gap that may sustain silver prices at or above the 50 USD/ounce level, potentially leading to new price records.

Furthermore, the United States Geological Survey (USGS) recently classified silver as a "Strategic Mineral" in its 2025 list. As explained by Dr. Nguyễn Quang Huy, head of the Finance-Banking Department at Nguyễn Trãi University, this designation underscores silver’s critical role in national security and economic infrastructure. The expansion of renewable energy and electric mobility solutions is expected to anchor long-term silver demand, intertwining financial and industrial drivers in a way that may allow silver to outperform gold in percentage gains during favorable market cycles.

Market Volatility and Investor Caution Remain Key

Despite the bullish narrative, analysts warn that precious metal markets do not move in linear trajectories. Periodic corrections are natural and necessary for price consolidation. Investors are advised to avoid emotional decision-making and linear expectations, instead maintaining a disciplined approach to portfolio construction.

Dr. Huy recommends enhancing analytical capacity, risk management skills, and emotional control to maintain composure during volatile periods. A diversified, well-structured portfolio can help weather short-term shocks.

Christopher Lewis of FX Empire emphasizes another point: while silver continues to break records, its rally is being accompanied by reduced trading volumes. This divergence between price movement and market participation may reflect structural fragility. Moreover, disparities between spot and futures prices, storage bottlenecks at the London Metal Exchange (LME), and short-covering dynamics are contributing to sudden reversals and heightened intraday volatility.

Lewis warns that silver prices could experience abrupt pullbacks, making it crucial for investors to implement strict position management protocols. Appropriate trade sizing and protective stop-loss strategies are vital to protect capital.

In summary, silver and gold are navigating a confluence of monetary and structural forces that support continued upward momentum. The likelihood of a December rate cut, coupled with industrial-driven demand and tightening supply for silver, suggests a favorable outlook for precious metals. However, the market’s volatile nature necessitates prudent strategy, data-based decisions, and emotional discipline. Investors who combine long-term vision with short-term risk management will be best positioned to capitalize on this evolving landscape.

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Warren Takunda

Economic

ECB President Christine Lagarde has warned Italy against a proposal to declare the country’s gold as property of the people.

The move comes in response to a budget amendment, proposed by the ruling Brothers of Italy party, which seeks to change the way reserves are managed.

Questioned by Italian MEP Pasquale Tridico of the Five Star Movement, Lagarde clarified that, according to European law, the holding and management of reserves is the exclusive responsibility of the national central bank of each member state.

“The Bank of Italy is no different from any other national central bank,” Lagarde said. "This is not a trivial issue, because Italy is the third largest holder of gold among the central banks.”

Such a statement reiterates the ECB’s position last set out in 2019, when the League party in Italy raised the same issue.

“We go full circle since 2019, it hasn’t changed at all,” ECB President Christine Lagarde said on Wednesday.

What does European law say?

Statements on the ownership of gold reserves are not simple regulatory changes, but they touch on the fundamental principles governing central bank independence in the eurozone.

The ECB said in a legal opinion on Tuesday: “The Italian authorities are invited to reconsider the draft provision, also with a view to preserving the independent performance of the basic ESCB-related tasks of the Banca d’Italia under the Treaty.”

According to European treaties, the holding and management of reserves are the responsibility of the national central banks. No mention is made of formal ownership, but it is very clear who is to exercise operational and accounting control.

Central bank autonomy is the guarantee that reserves, especially gold reserves, remain safe from political pressure or attempts to use them for budgetary purposes. A transfer of ownership or an ambiguous rewording of the rule could open the way for the political use of gold, setting a dangerous precedent across the eurozone.

Stability in the eurozone at risk

The ECB noted that it does not see the “concrete purpose” of Italy’s proposal, one that risks calling into question the balance that has ensured the credibility of the euro and the financial stability of individual member states over the years.

Robust national gold reserves can boost investor confidence in a country, meaning a sudden change in management could undermine the perceived stability of Italy and the wider eurozone ecosystem.

With more than 2,450 tonnes of gold, Italy outflanks many other countries with its bullion reserves, meaning it has every interest in preserving transparent management.

In a sensitive market like Italy, the misuse of gold could undermine investor confidence and in turn increase the cost of national debt.

The ECB also wants to avoid setting a precedent. If one country unilaterally changes the framework for its reserves, others could feel entitled to do the same, with potentially dangerous impacts on eurozone stability.

The original amendment from the Brothers of Italy party stated: “The gold reserves, managed and held by the Bank of Italy, belong to the State, on behalf of the Italian people”.

In recent days, the proposal has nonetheless been reworded to soften the message.

According to the new text, the provision “shall be interpreted to mean that the gold reserves managed and held by the Bank of Italy belong to the Italian people”.

Source: Euronews

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Adam

Commodity

Oil edged up as investors weighed a muddled outlook for a ceasefire in Ukraine and escalating tensions between the US and Venezuela.

Brent traded around $63 a barrel after inching 0.4% higher on Wednesday, while West Texas Intermediate was above $59. US President Donald Trump said a meeting between his envoy and President Vladimir Putin was “reasonably good” but acknowledged the outcome for a peace deal was uncertain.

“High-level negotiations between US and Russian officials have failed to produce a diplomatic breakthrough in ending the nearly four-year war in Ukraine, leaving the prospects of a near-term end to the conflict remote,” RBC Capital Markets analysts including Helima Croft wrote. “We would caution against overexcitement about future peace talks that do not include all the relevant stakeholders at the table.”

Separately, Trump reiterated the US will start striking drug cartels on land in Venezuela very soon. American forces have been massing in the region, with the situation adding some risk premium to oil prices, partially offsetting concerns around a surplus that’s expected to swell to a record next year.

Oil is on track for an annual loss as OPEC+ brings back idled output and other producers boost supply. Earlier this year, Chinese buying helped to prop up the market, but Hengli Petrochemical International Pte. Chief Executive Officer Janet Hong sees the nation’s demand subdued until at least mid-2026.

“No matter how much demand is going to come in, you just have a lot of supply,” Trafigura Group’s Chief Economist Saad Rahim said at the Financial Times Commodities Asia Summit in Singapore on Wednesday. “The path of least resistance for prices is likely down.”

Source: Bloomberg

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Warren Takunda

Economic

Treasury Secretary Scott Bessent said Wednesday he would push a new requirement that the Federal Reserve’s regional bank presidents live in their districts for at least three years before taking office, a move that could give the White House more power over the independent agency.

In comments at the New York Times’ DealBook Summit, Bessent criticized several presidents of the Fed’s regional banks, saying that they were not from the districts that they now represent, “a disconnect from the original framing” of the Fed.

Bessent said that three of the 12 regional presidents have ties to New York: Two previously worked at the New York Federal Reserve, while a third worked at a New York investment bank.

“So, do they represent their district?” he asked. “I am going to start advocating, going forward, not retroactively, that regional Fed presidents must have lived in their district for at least three years.”

Bessent added that he wasn’t sure if Congress would need to weigh in on such a change. Under current law, the Fed’s Washington, D.C.-based board can block the appointment of regional Fed presidents.

“I believe that you would just say, unless someone’s lived in the district for three years, we’re going to veto them,” Bessent said.

Bessent has stepped up his criticism of the Fed’s 12 regional bank presidents in recent weeks after several of them made clear in a series of speeches that they opposed cutting the Fed’s key rate at its next meeting in December. President Donald Trump has sharply criticized the Fed for not lowering its short-term interest rate more quickly. When the Fed reduces its rate it can over time lower borrowing costs for mortgages, auto loans, and credit cards.

Adding a residency requirement for regional bank presidents would represent another effort by the White House to exert more control over the Fed, an institution that has traditionally been independent from day-to-day politics.

The Federal Reserve seeks to keep prices in check and support hiring by setting a short-term interest rate that influences borrowing costs across the economy. It has a complicated structure that includes a seven-member board of governors based in Washington as well as 12 regional banks that cover specific districts across the United States.

The seven governors and the president of the New York Fed vote on every interest-rate decision, while four of the remaining 11 presidents vote on a rotating basis. But all the presidents participate in meetings of the Fed’s interest-rate setting committee.

The regional Fed presidents are appointed by boards made up of local and business community leaders.

Three of the seven members of the Fed’s board were appointed by Trump, and the president is seeking to fire Governor Lisa Cook, which would give him a fourth seat and a majority. Yet Cook has sued to keep her job, and the Supreme Court has ruled she can stay in her seat as the court battle plays out.

Trump is also weighing a pick to replace Chair Jerome Powell when he finishes his term in May. Trump said over the weekend that “I know who I am going to pick,” but at a Cabinet meeting Tuesday said he wouldn’t announce his choice until early next year. Kevin Hassett, a top economic adviser to Trump, is widely considered Trump’s most likely choice.

The three regional presidents cited by Bessent are all relatively recent appointees. Lorie Logan was named president of the Dallas Fed in August 2022, after holding a senior position at the New York Fed as the manager of the Fed’s multitrillion dollar portfolio of mostly government securities. Alberto Musalem became president of the St. Louis Fed in April 2024, and from 2014-2017 was an executive vice president at the New York Fed.

Beth Hammack was appointed president of the Cleveland Fed in August 2024, after an extended career at Goldman Sachs.

Musalem is the only one of the three that currently votes on policy and he supported the Fed’s rate cuts in September and October. But last month he suggested that with inflation elevated, the Fed likely wouldn’t be able to cut much more.

Logan has said she would have voted against October’s rate cut if she had a vote, while Hammack has said that the Fed’s key rate should remain high to combat inflation. Both Hammack and Logan will vote on rate decisions next year.

Bessent argued last month in an interview on CNBC that the reason for the regional Fed banks was to bring the perspective of their districts to the Fed’s interest rate decisions and “break the New York hold” on the setting of interest rates.

Source: AP

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Adam

Forex

The pound steadied against the dollar on Thursday after rising over 1% the day before, its biggest daily jump since April, as an upward revision of business activity data painted a brighter picture of the economy.

The pound was last down less than 0.1% at $1.3348 after earlier touching its highest level in over five weeks at $1.33585.

November's S&P Global UK Composite Purchasing Managers' Index, which incorporates both services and manufacturing activity, was revised upwards on Wednesday, supporting the pound.

"The growth outlook doesn't look as muted as it was initially assumed," said Kirstine Kundby-Nielsen, analyst at Danske Bank.

BUDGET WORRIES RECEDE

The pound has jumped in the last week after British finance minister Rachel Reeves's long-awaited budget passed the bond market's test without too much fuss.

Investors had been concerned that Reeves's announcements, which included tax rises and large-scale spending, could have spooked bond investors, pushing yields higher.

But British borrowing costs have fallen since last week's announcement.

"The Labour government didn't really stir markets that significantly," said Danske Bank's Kundby-Nielsen.

"What we've been seeing over the past week is some of that budget risk being priced out."

Analysts also said the budget measures were unlikely to cause a rise in inflation, allowing the Bank of England to lower interest rates in the near term.

Markets are pricing in a 90% chance of a rate cut when the central bank meets later this month.

Against the euro, the pound was little changed at 87.44 pence.

Source: reuters

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Glendon

Forex

Economic

Brazil's economy lost momentum in the third quarter, reinforcing expectations that the central bank will lower borrowing costs as cooling economic activity helps to rein in stubborn inflation.

Official data released Thursday showed that gross domestic product rose 0.1% in the July-September period versus the prior quarter, lower the 0.2% median estimate from analysts in a Bloomberg survey. Compared to the same quarter last year, GDP grew 1.8%.

The GDP reading adds to growing evidence that the central bank's tight monetary stance is finally cooling the goods and services sector. With interest rates at their highest level in nearly two decades, Latin America's top economy is beginning to lose speed, even as the bank's Governor Gabriel Galipolo has repeatedly cautioned that the economic slowdown remains gradual.

The shift comes on the heels of October's sharp drop in formal job creation, a turning point for a labor market that had long resisted the effects of monetary tightening. A resilient job market had been one of the monetary authority's biggest challenges in its effort to tap the brakes on economic activity to steer inflation toward its target.

The bank's has raised borrowing costs by 4.5 percentage points between September 2024 and June of this year.

"This cooling of the economy is good news for the Central Bank," said Rafaela Vitoria, chief-economist at Inter. "It is a sign that rates had a positive effect on reducing consumption."

Policymakers meet next week for their last monetary policy committee session of this year, with investors widely expecting that its official statement will include a clear hint that rate cuts will begin in January.

Although agriculture and industry posted modest gains, the services sector — by far the largest driver of Brazil's economy — was virtually flat, expanding just 0.1% from the previous quarter.

In nominal terms, Brazil's GDP totaled 3.2 trillion reais in the third quarter.

Exports of goods and services accounted for 18% of the economy in 2024. The 50% US tariffs on Brazilian exports ordered by President Donald Trump initially took effect in August, fueling concerns that Brazil's economy could lose nearly 1% of growth.

However, significant carve-outs on the US levies plus the redirection of Brazilian goods to other markets helped keep Brazil's overall export levels broadly unchanged.

Economists, however, remain concerned about the potential long-term fallout from Washington's tariff offensive.

"So far, the tariffs are creating a deflationary shock abroad — pushing down commodity prices and cooling global activity. However, Brazil benefits of higher commodities prices," added Vitoria.