Vietnam News

Nimble Vietnam reaping gains from success against Covid-19

Schools have reopened and buses are running as usual in Vietnam, which has gone for almost a month without seeing community transmission of the Covid-19 virus.

Having staved off a wider outbreak, Hanoi is now reaping strategic gains from its nimble response.

Investor interest – which shrivelled up early this year – is picking up again as the pandemic heightens the urgency of shifting production away from China, say business consultants.

Meanwhile, Vietnam’s export of face masks and test kits could help cushion the larger economic impact of the pandemic.

“For the first month or two of the coronavirus outbreak everything was put on hold,” said Mr Trent Davies, the Vietnam-based international business advisory manager at Dezan Shira & Associates consultancy.

“But already we are starting to see more and more e-mails from interested companies asking about investing in Vietnam.”

The country reported its first coronavirus case on Jan 23. It began easing its fortnight-long lockdown from mid-April, and extended those freedoms to Hanoi and Ho Chi Minh City a week later.

On May 9, Ho Chi Minh City officials also lifted restrictions on bars.

Compared to other well-connected regional countries like Thailand, Malaysia and Singapore, which have logged thousands of Covid-19 infections, Vietnam has managed to keep its count below 300 so far through a combination of early travel restrictions and aggressive quarantine, testing and contact tracing.

This was helped in part by its own test kits, which are now being mass produced for export to countries like Iran, Finland and Malaysia.

Developed by researchers from state-run Military Medical University and private company Viet A Corp, the kits use the gold-standard reverse transcription polymerase chain reaction process and deliver results in about an hour.

They received the seal of approval from the World Health Organisation and Britain last month, which allowed them to be sold in Europe.

Meanwhile, state-run vaccine firm Vabiotech, working in collaboration with the University of Bristol, has started testing a potential coronavirus vaccine on mice.

Mask production has received a fillip from the pandemic, bringing some cheer to a garment industry decimated by the plunge in demand from Western buyers.

Even before export limits were lifted late last month, the country had shipped over 80 million face masks in the first half of April to countries like Japan and South Korea.

Large-scale demand is coming from France, which has made the use of masks mandatory for public transport and secondary schools as it eased a nationwide lockdown.

Vietnam has also donated over a million masks to neighbours like Cambodia and Laos, as well as countries further afield like the United States and Russia.

Being ahead of the curve, the Asean chair is in good stead to lead and shape regional responses on the pandemic, says Dr Huong Le Thu, senior analyst at the Australian Strategic Policy Institute.

“No country can recover on its own, but those in a better shape and emerge from this crisis relatively earlier will be in a better position to – and also have strategic bandwidth – to take some leadership initiative,” she told The Straits Times.

Speaking at an online business conference on May 9, Prime Minister Nguyen Xuan Phuc set a 2020 economic growth target of over 5 per cent, in spite of the International Monetary Fund’s projection of 2.7 per cent last month.

“Vietnam’s economy is like a compressed spring waiting to be stretched out,” he said.

The pandemic-induced investment lull has bought Vietnam time to develop its infrastructure, which was facing bottlenecks before the crisis, said Mr Davies.

Just before the crisis struck, Vietnam could not build facilities fast enough to cater to investors, he said.

“The amount of available ready-built factory space, the amount of industrial land or roads, ports and train network important to industrial development was actually lacking,” he said.

“If there is a six-month window where there is perhaps less investment than it otherwise would have been, that certainly means there’s going to be more ready-built factories and a better road network to support the industrial development later this year,” he said.

By Tan Hui Yee – The Straits Times – May 12, 2020

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