The Australian Financial Review (AFR) in its recent article suggested Vietnam’s economy would continue to recover in the post-Covid-19 pandemic and remains an attractive investment destination for foreign investors.
|Production at Ha Long Plastic Company in Soc Son Industrial Park. Photo: Thanh Hai|
According to the AFR, while strict restriction measures are being adopted in Ho Chi Minh City, the country’s major economic hub, at a time when the number of Covid-19 cases has been on the rise at a rapid rate, there are no changes to investors’ perception to the country’s economic outlook.
The article noted for the past decades, Vietnam has been outstanding in attracting multinationals to come and invest for the long-term in the country in fields of electronics, footwear, and garment.
Low labor cost, adequate infrastructure quality, and simplified administrative procedures are seen as Vietnam’s pull factors for investors like Samsung, Foxconn, Nike, Adidas, Gap, or Levis.
For the past months, the flare-up of the fourth Covid-19 outbreak has forced many provinces/cities to adopt social distancing orders. In this context, many manufacturing factories are compelled to operate under the “3 on-site principles” (on-site production, on-site eating, on-site rest).
Simon Fraser, CEO of the Australian Chamber of Commerce Vietnam (AusCham), told the ARF many foreigners left Vietnam in face of the current outbreak, but others decide to stay on, including owners of small and medium enterprises (SMEs).
Most of them are calm and want to help their companies recover as soon as possible, Fraser added.
Despite current challenges, the ARF said in long term, the country is still among foreign investors’ short-list for favorite investment destinations.
The pandemic has no doubt affected Vietnam’s economic performance, as many international organizations have revised down the country’s GDP growth forecast.
HSBC in its report lowered Vietnam’s GDP growth forecast from 6.1% to 5.1% for this year, but economist Yun Liu from HSBC said the country’s recovery prospect remains bright as economic fundamentals stay intact.
Addressing the Covid-19 situation in Vietnam, the ARF noted the incidence of Covid-19 cases to one million people in Vietnam is still lower than that of Malaysia or Thailand. But as the number is rising fast, it called for the country to speed up vaccination rollout to soon contain the pandemic.
The Australian Government has provided financial aid for a group of Vietnamese scholars at the University of Technology Sydney (UTS) to realize a project on facilitating linkage for innovation between SMEs in Vietnam and Australia.
The aid, estimated at AUD200,000 (US$146,271), is under the Australia-Vietnam Enhanced Economic Engagement Grant (AVEG) Program, with the aim of bolstering bilateral trade and investment cooperation.
For two years from September 2021 to July 2023, UTS and other Vietnamese partners, including the Office of Vietnam’s Ministry of Science and Technology in Sydney, Saigon Innovation Hub, the University of Information Technology-Vietnam National University HCMC, would carry out activities to strengthen cooperation between the two business communities in fields of Industry 4.0, artificial intelligence, internet of things, big data and environmental technologies.
Professor Nghiem Duc Long, a member of the project, said, for the time being, an online portal would be set up to provide information on investment opportunities in Vietnam in the fields of IT or renewables.