HANOI: A strong response to the COVID-19 pandemic, surging exports, and wholesome public spending have helped Vietnam buck a world recession in 2020 and fast-track its restoration, with analysts predicting it’s going to doubtless take pleasure in one of the highest progress rates on the earth.
However, the pain is just not over for some sectors with containment measures and border disruptions hammering the nation’s tourism business and leaving the once-booming aviation sector limping.
Whereas many nations have suffered from excessive infection and mortality charges, Vietnam has recorded fewer than 1,500 coronavirus cases and 35 deaths thanks to mass quarantines, expansive contact-tracing, and strict controls on movement, permitting factories to largely stay open and other people to swiftly get again to work.
“The serious lockdown lasted for less than three months, so domestic activity was quickly again to normal by June,” Nguyen Xuan Thanh, a public policy lecturer at Fulbright University Vietnam, told AFP.
While many Western nations had been imploring residents to stay home mid-year, Vietnamese people had been able to flock to scenic beaches as the government tried to offer the domestic tourism business a much-needed shot in the arm.
There have been grave fears for Vietnam’s export-reliant economy as demand for clothes, footwear and smartphones slumped in some of its greatest markets including the European Union, Japan, and South Korea.
“However it turned out that exports still helped promote progress this yr,” Thanh mentioned.
“That is because Vietnam has a really diversified export market – it is not depending on any single export destination.”
Shipments to China grew greater than 15 percent on-year within the first 9 months, according to the Vietnam General Customs Administration.
Demand for lots of the objects made in Vietnam – comparable to home electronics, office furniture, computer systems, and televisions – soared during the pandemic as people had been pressured to remain residence during lockdowns.
That has meant that whereas it’s going to fall in need of its goal of 6.8 percent growth this yr, the economy is expected to expand 2.4 percent, which the International Financial Fund mentioned could be among the many best in the world.
The Fund has forecast a global contraction of 4.4 percent.
‘TOURISM HAS DIED’
Observers mentioned Vietnam had also benefited from the US-China commerce war as firms comparable to Apple look to shift their supply chains to avoid tariffs. The nation’s exports to America rose by a few quarters to US$54.7 billion within the first 9 months of the yr.
However, the absence of international travelers has dealt a severe blow to the tourism sector.
The UNESCO-recognised ancient imperial city of Hue – which is popular with international visitors – now resembles a ghost city, with Thua Thien Hue province’s tourism division saying 80 percent of hotels had been closed whereas 8,000 people had lost their jobs.
“We’re struggling heavily from the pandemic,” the deputy head of the provincial tourism department Nguyen Van Phuc told AFP.
It’s an equally grim story in Hanoi, where hotel owner Nguyen Dinh Toi mentioned merely that “tourism has died”.
“We survived the SARS (Severe Acute Respiratory Syndrome) epidemic, the financial storm of 2009-2010 … however now the situation is unbelievable,” mentioned Toi, who runs hotels in Hanoi’s old quarter, Halong Bay and Sapa.
Still, Vietnam’s economy is much less exposed than different tourism-dependent countries within the area such as Thailand, the place the IMF predicts the economy to stop by 7.1 percent this yr.
The government has also helped cushion the financial blow by pouring cash into infrastructure projects such as roads and bridges, mentioned Thanh.
“This creates further demand, compensating for Covid and a decline in family consumption and it additionally creates jobs,” he mentioned.
Public funding within the first eleven months of 2020 rose 34 percent, the best in 9 years, the government mentioned.
Vietnam’s relative triumph this yr might result in benefits in years to return, said Adam McCarty, chief economist at Hanoi-based Mekong Economics.
The way the coronavirus has been handled has “almost made Vietnam famous around the world”, he mentioned, adding it’s signaling to big foreign firms overseas that they need to have another look at Vietnam.
