Vietnam News

Reopening in Vietnam needs to be more quickly accelerated

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Vietnamese leaders have made a clear message for reopening but some obstacles in vaccination, quarantine, and traveling regulation still exist and need to be rapidly solved.

After several months of stringent lockdown due to Covid, Vietnam is gradually reopening. It is a result of the fact that the pandemic has been brought back under control, thanks to the swift action of the government, the heroic efforts of front-line medical professionals, and the resilience of the Vietnamese people.

I saw that Vietnam is moving in the right direction.

The improved situation gave European companies doing business in Vietnam renewed cause for optimism. It was reflected in the EuroCham Business Climate Index (BCI), our regular barometer of the sentiment of business leaders, which was done at the end of October, showing a small but encouraging rise from 15 points to 18.3 points in the third quarter.

The main reason is the central guidelines issued by the Vietnamese Prime Minister, addressing most of our concerns, giving a clear message on the new policy to live with Covid rather than fight for zero Covid. It immediately gave confidence to the business. Besides, the percentage of vaccination in Hanoi and HCMC is high now, compared with other big cities in the region.

I believe if we do the survey in mid-November, the sentiment will be even better because though reopening for business has not been back to 100 percent, people can see the light at the end of the tunnel.

However, business leaders remain cautious about their recruitment, investment, and profit projections.

At present, around half of our companies are operating at reduced levels compared to before the fourth wave struck. They are optimistic about the future but realistic about the short-term challenges still to be overcome before we can return to pre-pandemic levels of trade, investment, and commercial operation. I could say companies are taking a “wait-and-see” approach.

The first big issue today is human resources.

Following migrant workers’ large-scale home return after lockdown, two thirds of Eurocham members reported staff shortages. This scarcity is affecting 10 to 20 percent of their activity.

Companies are trying to convince laborers to come back but they have not done it. Consequently, enterprises could not fulfill orders they are receiving, especially in this busy season, before Christmas.

The second big issue is the quarantine requirement of cities and provinces.

I, myself had an unpleasant experience. When Hanoi asked to quarantine visitors from high-risk areas, who had been fully vaccinated, I did not attend some important meetings there. I could not quarantine for seven days because I had many things to do. One event that I missed was the very important meeting on the new energy program for Vietnam in the coming years following Vietnam’s commitment at the COP26 hosted by the U.K. recently.

It is good since Hanoi has rapidly scrapped this rule, but I still look forward to seeing if major locations will apply reasonable regulations to facilitate companies’ operation.

That comes to the third big issue: the paperwork is too difficult and too long for foreign businessmen to come back to Vietnam.

At this moment, three of my businesspeople who have their work in Vietnam are still “stuck” in Europe as they went back home during the lockdown in Vietnam. One of them, submitted a paper to return to Vietnam since early September but has not got the permit yet. I was told that around 20 percent of the expat community in HCMC is absent due to this regulation.

I checked and found that if I want to leave Vietnam to spend Christmas with my family in another country, it will take me six weeks again to get the approval for returning to Vietnam, with a lot of papers for someone like me who made Vietnam his home for 20 years.

To have a faster reopening in Vietnam, I’d like to suggest some recommendations as follows:

First and foremost, the country needs to accelerate its vaccination rollout. While major cities like Hanoi and HCMC and industrial zones have high rates of vaccination, other provinces are not so advanced in their vaccination drive. This could create issues when companies seek to recruit staff back to work in industries essential for production and economic growth. For example, I understand that in the Mekong Delta, there are still a lot of people not being vaccinated since the pandemic is growing now in this region.

I think workers should be prioritized as people in the priority group such as medical workers, the elderly, have been vaccinated. Besides, their teenagers should have vaccines to ensure the high rate of safety in their family.

Secondly, the authorities need to allow people who had two shots of vaccine to freely travel in the country, especially for business, with regular tests every two or three days.

Notably, changing decisions back and forth in several days will make businessmen hesitant to foster their plans. During Covid, we understand that they must be adjusted depending on the situation, but we need a clear guideline.

Thirdly, Vietnam should simplify regulations for businessmen who want to come back because they have resident cards and working permits here. As for me, I have been living in Vietnam for 20 years, so this is my home, I’m not a stranger visitor. Fast track and simplified procedure for us is a must and as soon as possible.

Vietnam has made good progress on the mutual recognition of vaccine passports with some major markets. This is a positive step towards easing the return of foreign business leaders, investors, and experts. This will be essential not just to attract new foreign direct investment but also to ensure that the thousands of international enterprises based here are able to contribute to Vietnam’s economic growth in the post-pandemic period.

Over and above these short-term issues, Vietnam should continue its positive path of reform. Together, a further simplification of administrative procedures, greater streamlining of conditional business sectors, further logistics and infrastructure investment, and an acceleration of digitalization and e-government procedures would help to attract new foreign investment. This, in turn, would help to speed up Vietnam’s economic growth in 2022 and unlock its full potential as a leading trade and investment destination in Asia.

I could say I fully sympathize with the government, because it is a very difficult situation that we are facing during Covid. It’s not easy to decide today. I love this country so much and I want it to recover quickly.

If we can gradually go back to 100 percent towards the first quarter of next year, that would be great.

By Alain Cany – November 22, 2021

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