Representatives from EuroCham and RMIT University told The Hanoi Times about short-term challenges and long-term opportunities for Vietnam to achieve the growth targets by 2025.
Alain Cany, Chairman of the European Chamber of Commerce (EuroCham)
Vietnam has been one of the international success stories of preventing and controlling the spread of Covid-19. Throughout the previous three waves in 2020, the government managed to keep cases low while other countries were suffering from more serious outbreaks.
Effective public health measures such as international travel restrictions, social distancing, and localized lockdowns meant that businesses were able to operate with limited controls on their normal commercial operations - other than sectors such as tourism and aviation which took a significant hit.
|Alain Cany, Chairman of the European Chamber of Commerce. Photos: EuroCham|
However, the emergence of new variants and the licensing of vaccines have now changed the situation altogether. The public health measures that were so successful in containing previous outbreaks are no longer a reliable solution.
Firstly, the Delta variant has proven to be much more transmissible and much harder to contain. Secondly, over the long term, these measures will cause economic damage, undermine growth, and reduce foreign direct investment.
There is no route out of this pandemic without an accelerated and ambitious mass vaccination program and this must now be the urgent focus of the government. The sooner a critical mass of people can be vaccinated, the sooner we can get back to business as usual and life as normal.
I have lived and worked in Vietnam since 2002. In that time, I have seen how the Vietnamese people have united to overcome health and economic challenges with resilience and togetherness. Whether it was the Asian financial crisis in 1997 or the SARS pandemic in 2003, Vietnam has weathered each storm in turn and emerged stronger.
Throughout this pandemic, and during the latest outbreak in particular, the Vietnamese people have shown incredible fortitude in the face of rising cases and ever more complicated challenges to normal life. We have seen people eat, sleep, and live in factories and industrial zones in order to keep essential goods moving.
And we have seen healthcare professionals working around the clock in hospitals to treat those most in need. This collective spirit will be essential to realizing the government’s dual goals of protecting health while maintaining economic growth.
|A ventilator has been delivered to Nguyen Tri Phuong Hospital in Ho Chi Minh City.|
EuroCham and our one thousand members stand shoulder-to-shoulder with the Vietnamese people during these difficult times. Last week, we launched an ambitious new fundraising campaign in order to procure essential medical equipment to treat Vietnamese patients and support frontline doctors during this pandemic.
In ten days, we raised more than US$150,000 and we will continue to encourage our members to donate so that vital medical equipment can reach the places where it is most needed. Anyone wishing to make a donation can do so at: https://breatheagain.fund/.
Vietnam - more attractive destination for European investment
Vietnam faces both short-term challenges and long-term opportunities. In the short term, of course, the focus of the government must be on containing the pandemic and vaccinating the population. This is essential if we are to re-start normal commercial operations and resume Vietnam’s positive GDP growth. Once the virus has been brought under control, Vietnam will need to rebound and recover.
The most reliable route to economic growth is free, fair, and rules-based trade. In this respect, Vietnam has significant opportunities on its horizon and a competitive advantage over other countries in the region.
We are just 12 months into the implementation of the EU-Vietnam Free Trade Agreement (EVFTA). Now the EVFTA has entered into force, both companies and consumers are able to benefit from a gradual elimination of tariffs and a mutual opening of markets. From the moment it entered into force, 65% of EU exports to Vietnam and 71% of Vietnamese exports to the EU became tariff-free. Over the next decade, this will rise to almost 99%.
|The EVFTA is expected to make Vietnam a more attractive destination for European investment.|
This will enable European enterprises to compete on an equal footing with companies from other countries with which Vietnam has a free trade agreement. This, in turn, will make Vietnam a more attractive destination for European investment. Meanwhile, Vietnamese goods will get privileged access to the EU’s large and prosperous consumer market of around 450 million people.
In short, the EVFTA will provide a boost to EU-Vietnam trade and, in doing so, support the government to achieve its growth and development goals.
Dr. Greeni Maheshwari, Lecturer, School of Business & Management at RMIT University
More than ever before, Vietnam’s response to the current wave of outbreaks has been characterized by agility and a strong sense of community.
Within a very short time, the government has been able to mobilize massive numbers of health workers and military and police forces to help the hardest-hit areas. Essential aid has been provided in a timely manner to people in need, especially vulnerable low-income groups. The community has also come forward to help the government in funding for vaccination.
Vietnam’s top priority right now is undoubtedly fighting the pandemic, yet economic development continues to be high on the agenda. Together, the government and businesses are coming up with innovative models to continue production in factories, resolve supply chain disruptions, and make bailout packages truly work.
Transparent and effective communication has been the key driving force behind Vietnam’s success in managing the last three waves of the outbreak and continues to play a major role in this fourth wave.
|Dr. Greeni Maheshwari at RMIT University. Photo: RMIT|
As expatriates, our family feels safe staying in a country like Vietnam during this pandemic wherein the people are provided with detailed, up-to-date information and advice. The government is trying to control the situation by taking all the measures right from vaccination to supporting people most hit by Covid-19.
In the past 15 years, my family has called Vietnam our second home. It has been amazing to see that whenever a casualty happened in Vietnam, such as the avian flu in 2016, flooding in central Vietnam in 2020, or the past three Covid-19 waves, the country always bounces back strongly. I'm hopeful that this fourth wave shall pass away soon as well.
Vietnam needs to develop skilled workforces
In terms of short-term goals, Vietnam should focus on job creation, accessing the projects that are durable, and generating stimulus and employment benefits over the short term.
The first and foremost challenge towards achieving the growth goal by 2025 will be to devise the post-Covid-19 economy recovery plans.
It’s important to determine how the government will protect the population and the economy from the pandemic shock, and how the government might need to change some fiscal and monetary support initiatives. Further economic challenges include lack of infrastructure, the time required to start a business, an aging population, and the amount spent on research & development.
To attain the long-term growth goals, Vietnam should continue to work on its human capital to develop skilled workers, foster industrial development, increase investment in new infrastructure, and focus on innovation and technological advancement.
|Vietnam should continue to work on its human capital to develop skilled workers.|
Vietnam can focus on encouraging startups since small-medium enterprises are the economy’s core engine of job creation. This will create a highly conducive ecosystem accelerating the growth of innovation and entrepreneurship within a fast-growing economy.
Overall, it is important that the country builds a plan towards resilience for future shocks, with actions to build capacities for the society and economy to cope with any external shocks, such as Covid-19 at present and any other forms of crises in the future.