Friday, July 24, 2020

Can Vietnam leverage its COVID-19 success for economic growth?

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Inshiya Nalawala

Article Title

Can Vietnam leverage its COVID-19 success for economic growth?

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Global Views 360

Publication Date

July 24, 2020

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A policeman helping a rider fix their mask

A policeman helping a rider fix their mask | Source: Đài Truyền Thanh TPST via Wikimedia

While the entire world is battling with COVID-19, Vietnam, in a country of over 100 million recorded just 330 cases as of early June 2020 and zero death in May 2020.

A professor at Nagasaki University’s Institute of Tropical Medicine Vietnam Research Station said that "Vietnam has no special test kits or drugs to treat the disease, but the government decided to do what it had to do at an early stage and put that plan straight into practice."

Vietnam was quick in its action. As soon as the first case was confirmed, the government had called upon measures for serious quarantine, implemented strict border control measures, and curbed unnecessary local movement. Close to a million people were isolated to halt the spread of further infections.

The strict measures helped Vietnam to quickly control the COVID situation and put the focus back on the economy. The mainstay of Vietnam's economy, garment export and tourism witnessed steep fall resulting in loss of employment to over 3.5 million people in the first half of 2020. Still Vietnam’s economy has expanded by 0.36% over last year in the same period unlike other countries in the region where it contracted as compared to last year. The annual GDP growth for Vietnam in 2020 is expected to be around 2.7% to 3% which again is the best in the region.

Vietnam , today is the safest country in the region to travel, work, or stay amidst the worldwide COVID pandemic. It is being favourably considered as an alternative destination by many companies who are looking to cut down their reliance on China in their supply chain.  The Free Trade Agreement (FTA) between the European Union and Vietnam which will be operational in August, may help Vietnam grow its exports.

Apart from export led growth, the tourism sector may also grow significantly as the other major tourist destinations in the region, Singapore and Thailand, are still battling with the pandemic, while Vietnam has successfully overcome the same.

The government is also looking to support the local business by slashing the corporate income tax to 30 percent which increased the liquidity for some sectors of economy. Special tax benefits and deferred tax payments(in some cases) are also in  line for small and medium enterprises (SMEs) which constitutes almost 97% of all the businesses in Vietnam. All these measures are expected to lead to a 7% GDP growth for Vietnam in 2021.

The miraculous recovery from the pandemic, government incentives to industry, and the willingness of many companies to relocate from China present such a perfect mix of opportunities for Vietnam to leap ahead and become the fastest-growing economies in SouthAsia. What remains is to see how fast and how effectively the country is able to act while this window of opportunity is open.

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February 4, 2021 5:06 PM

Italian Mafia make merry amidst the COVID-19 pandemic

Italy was the first European nation to encounter the coronavirus and it still is one of the worst hit nations in Europe. The country has been battling with an economic decline and rising unemployment for a few years now. However, the COVID-19 pandemic hitting the country was like rubbing salt in Italy’s wounds.

The strict lockdown imposed by the government in Italy has had an adverse effect on a lot of people particularly the small scale and the medium scale business owners. Thus, a lot of people in Italy have resorted to desperate measures. The Italian mafia have made merry of the situation by providing these people with the much-needed aid they have been looking for.

Even as the country struggles to pull itself together, the mafia have made inroads in acquiring influence over the locals by distributing food packets to poor families with no source of income. There have been videos surfacing from the southern regions which suggest that the mafia have been actively involved in delivering essential items to the people.

In Palermo, a mafia gang member, who has been distributing food to the poor, says "People ring me and they cry over the phone,". He further tells, "They say their children can't eat. A young woman has been calling me every single day. She has five kids and doesn't know how to feed them."

However, the Italian mafia has been employing the tactics of exploiting vulnerability of the locals in the face of economic crisis for a long time. The COVID-19 pandemic was yet another opportune moment for them to capitalise.

"The mafia has never done anything out of generosity. That concept doesn't exist for them," says Enza Rando who works for an anti-mafia organisation. "All they know is I'll scratch your back if you scratch mine."

A report by  the Global Initiative Against Transnational Organized Crime (GI-TOC), based on virtual round table discussion between top anti mafia officials and activists suggests that the healthcare sector as well as the manual laborers and service staff who work mostly cash jobs are the most vulnerable to the mafia influence during the COVID-19 pandemic.

As per the national anti-corruption authority ANAC the mafia corruption has been a big setback to the COVID-hit Italian economy. "They are taking advantage of the emergency situations like the current one, with devastating effects on the economic system and on healthy businesses, already hard hit by the crisis," said ANAC President Francesco Merlon.

Sergio Nazzaro, a journalist, writer and adviser to the Parliamentary Anti-Mafia Commission says, ”The people who are jobless don’t care about the mafia, corruption or anything, but they see the state only talking, and from the mafia (they see) money, and I fear that at the end of all this we are going to see how much the mafia managed to buy while we were in crisis.” He stresses that the state will have to provide economic stability to the people if it hopes to eliminate the mafia influence.

Father Luigi Ciotti, an Italian priest and well-known anti-mafia activist pointed out three key areas that need to be monitored for mafia activity during the pandemic. The first is the increase in drug trafficking. The second one is new products like face masks, disinfectants etc which are suddenly in demand and provide heavy profits and third the predatory money lending.

It is quite clear that the Italian government needs to come up with strong economic reforms that ensure stability and security for its people if it hopes to counter the mafia influence. Otherwise, the mafia will always be there to trap vulnerable people by proving to be their benefactors in the short run only to exploit at a later stage.

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