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 4:43 PM

Sweden’s No Lockdown Policy: How That Changed The Outcome

Sweden has gone against conventional wisdom in its response to the COVID-19 situation. While the neighbouring countries like Denmark, Finland and Norway imposed strict lockdown on the places and services frequented by the public, Sweden has chosen to not do so at all during the initial phases when COVID-19 started taking the shape of a worldwide pandemic. The public places like Cafes, restaurants, gyms, malls, playgrounds, ski slopes and some of the schools were kept open all across Sweden.

The country’s fight against the threat of pandemic was handled exclusively by the Public Health Authority, with no political interference. They believed that a lockdown only serves to delay the virus, which is not necessary since the health services are equipped to deal with the cases. They also made it clear that achieving herd immunity is also not their aim. The public authorities in Sweden instead relied on the public's sense of responsibility, and appealed to them to do frequent hand washing, observe social distancing and keep people over 70 years old from going out.

The state epidemiologist, Anders Tegnell, made multiple statements about the state’s unusual approach, such as 1) “Once you get into a lockdown, it’s difficult to get out of it,”, “How do you reopen?  When?” 2) “There is no evidence whatsoever that doing more at this stage would make

any difference. It’s far better to introduce stringent measures at very specific intervals, and keep them running for as little time as possible” , 3) " As long as the healthcare system reasonably can cope with and give good care to the ones that need care, it's not clear that having the cases later in time is better”.

The assumption of public responsibility did not work for Sweden and there were people out on the streets, in cafes, restaurants and playgrounds. Not wearing a mask was the social norm instead of the reverse. The models for charting the virus spread given by the concerned authorities also turned out to be faulty forcing them to rescind it. Over 2000 Swedish researchers and doctors signed a petition which claimed that there was not enough testing,tracking or isolation in the country. They believed that the authority has clearly not planned their response and that the authority’s claim for herd immunity has very little scientific basis, even though the government has repeatedly claimed that herd immunity is not what they were aiming for.

Sweden’s lax approach to the combating of coronavirus forced its neighbouring Scandinavian countries to close the border for the Swedish citizens. Some of the Swedish officials were worried for the possible harm to the long term relations between Sweden and its neighbours.  Also, the plan of letting life go on as usual to avoid the economic recession occurring due to a lockdown also failed as it didn’t shield  the country from economic slowdown.

Here comes the question; was the lockdown successful or not? There are some comparisons that have been drawn which indicate more deaths per 100,000 people than in nearby countries with homogenous population, even though it is significantly lesser than some of the European countries. While the infections rates are double that of Denmark, the death rates in comparison are much higher. This difference has been attributed to the fact that approximately half of these deaths have occurred in old care homes despite the stated priority of the officials to protect the elderly. This has been in part to the volunteer program, which replaced symptomatic old age home cares with new volunteers, hence increasing exposure. Another factor is the lack of protective equipment in such homes, along with laws preventing administration of medical procedures without the presence of doctors. There were reports of people threatened with lawsuits for banning visitors.

All of this led to Mr.Tegnell claiming that the ideal policy would have been something between what Sweden adopted and what the other countries did, in the light of what they know now. However this claim of Mr.Tegnell will be put to test when the second wave comes, later in time.

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