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 5:09 PM

Beirut Port Blast: What lies ahead for Lebanon?

The year 2020 will be remembered as the year of disasters in the history of humankind. A devastating tragedy struck Beirut, the capital of Lebanon on August 4, 2020, in the form of a massive explosion which occurred in the port area and ripped a large part of the town .

As per initial estimate the death toll stands at 157 with more than 5000 people severely bruised and thousands displaced from their homes. The incredible force of the blast could be felt as far as Cyprus, which is at a distance of 250 kms from the explosion site.

A giant red cloud of smoke erupted in the clear skies followed by a deafening ‘bang’ and smashing of windows. "First we heard one sound. Seconds later there was a big explosion. All hell broke loose and I saw people thrown five or six metres" said Ibrahim Zoobi, who worked near the port. Satellite images show that warehouses and buildings within a radius of 2km from the site of the blast were completely destroyed, ending up in debris.

The intensity of the blast was equivalent to almost ‘2.2 kilotons of TNT’, according to an analyst and weapons expert. The aftermath included scenes of jam-packed hospitals, running without proper electricity connection, increased demand of blood donations and generators and agonized cries of people searching for their loved ones amongst the rubble filled roads.

Michel Aoun, the President of Lebanon | Source: Wikimedia

American President Donald Trump was quick to tweet about calling the blast a ‘terrible attack’. However, according to Michel Aoun, the President of Lebanon, the actual culprit of the blast was the 2,750 tonnes of fertilizer, ammonium nitrate, stored in one of the warehouses in the port area which caught fire. This explosive material was reportedly confiscated from a Russian cargo ship, back in 2014, when it made an uninformed stop at the Lebanese port.

Ammonium nitrate is a white substance used as a fertilizer as well as an explosive. It cannot explode on coming in contact with air but can detonate immediately as it encounters a flammable substance like oil or fire. Being an oxidiser, it will accelerate the severity of the explosion and also lead to release of toxic gases like nitrogen dioxide.

Boaz Hayoun, one of the top bomb experts of Israel, states “Before the big explosion, in the center of the fire, you can see sparks, you can hear sounds like popcorn and you can hear whistles”, which is a strong indication of fireworks. This might point towards seemingly inadequate warehouse management issues in Beirut, as such substances might have come across the explosive nitrates and instigated the blast. The safety protocols were simply not followed, despite being aware about the presence of a ‘ticking time bomb’ in the warehouse.

As Beirut is fighting the COVID-19 pandemic and a financial crisis, it was definitely not ready for another blow. Beirut’s grain storage tower, the largest in Lebanon, was also engulfed in the flames, hampering the entire country’s food security. "It's an economic crisis, a financial crisis, a political crisis, a health crisis, and now this horrible explosion” says Tamara Alrifai, spokesperson for the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

France, the US, Italy, Turkey, Iran, EU, and OIC came up with the offer of help and show support for the people of Beirut.  Emmanuel Macron, the President of France, was the first foreign leader to visit the crisis-hit Beirut. While he consoled the citizens, their grief turned into anger as they chanted the word ‘Revolution’.

There is great anger among the citizens against the government, whom they accuse of being corrupt, sectarian, unaccountable, and out of touch with the common people. The intense protest by the people on the street forced the Prime Minister Hassan Diab to resign along with his cabinet on August 10, 2020.

The economic cost of the Beirut blast, where over 300,000 people have become homeless after their homes get destroyed, is estimated to be $15 Billion. Lebanon, which was already on the verge of economic collapse before this disaster struck, may find it impossible to withstand such a blow to the economy. It will need the support from the world over to rebuild Beirut.

A donor conference for rebuilding Beirut received a total pledge of about $300 million. Though it is a minuscule figure as compared to the destruction in Beirut, it will help to tide over the immediate humanitarian crisis. Apart from this Turkey has offered to help rebuild the port of Beirut and many countries are sending relief supplies.

The days ahead for the citizens of Beirut are going to be challenging as the country navigates the sectarian divide during the formation of a new government. It will be keenly watched by the citizens as well as the international community, whether Lebanon will discard its entrenched ruling elite and reject the toxic sectarian divide to elect an inclusive government or continue to perpetuate the misery on the common citizens.

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