Submit Your Work

Support the
Free-Press

English | Hindi | Urdu

Bring the
World Closer

Friday, July 24, 2020

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

This article is by

Inshiya Nalawala

Share this article

Download as PDF

Cite this Article

Article Contributor(s)

Inshiya Nalawala

Article Title

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

Publisher

Global Views 360

Publication Date

July 24, 2020

URL

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.

Support us to bring the world closer

To keep our content accessible we don't charge anything from our readers and rely on donations to continue working. Your support is critical in keeping Global Views 360 independent and helps us to present a well-rounded world view on different international issues for you. Every contribution, however big or small, is valuable for us to keep on delivering in future as well.

Share this article

Read More

February 4, 2021 4:54 PM

Relaxed Immigration: The key to rejuvenate aging workforce of Japan

Late in 2018, a bill was passed in Japan to widen the entry of immigrant workers. The bill was to mitigate severe shortage of labor amidst an aging population and falling birth-rates. Prime Minister Shinzo Abe described the bill as a much-needed reform to ensure the smooth functioning of Japanese economy. The bill makes it easier for immigrants to work for longer duration in Japan.

More than 20% of Japan’s population is over 65 years old which is the highest proportion in the world. It is projected that by 2030, one in every three people will be above 65 years or older and one in every five will be 75 years or older.

The fertility rate has fallen to 1.4 children per woman in Japan which has been attributed to a host of factors including changing lifestyles, people marrying late, not marrying at all, and the economic insecurity of the younger generation. It is projected that by 2050, Japan’s population will decline by twenty million while the world population is expected to increase by two billion.

Japan has traditionally been quite homogenous with very little diversity to show. This trend now appears to be changing as today nearly three million migrants live in Japan which is three times more than the figures of 1990. As the country struggles with a rapidly aging population and severely declining domestic labor, the number in all likelihood is only going to increase.

Conservative Prime Minister Shinzo Abe based his support for the reforms in immigration policy on demographic arguments.The conservative section of the parliament has been a staunch supporter but the left opposition has been critical of the bill citing concerns about a lack of regulation on the employers which could lead to over-exploitation of the workers. Prime Minister Shinzo Abe’s government promised to set up a hundred consultation centers nationwide for dealing with issues related to workplace abuse specifically for the migrant workers.

However, that’s as far as those resisting the bill have gone. Nationalist and xenophobic voices protesting the bill have failed to gather steam. In fact, according to a survey by Nikkei in January 2020, almost 70 percent of Japanese said it is “good” to see more foreigners in the country.

Japan’s aging population has made it difficult to find the workers and some companies have more than 120 job openings for every 100 job seekers nationwide. Quite evidently, immigration now appears to be the most feasible solution for Japan- a country that has traditionally been restrictive with its borders when it comes to ethnic diversity.