Covid-19 - catalyst for Vietnam to reap benefits from global digital economy

The Covid-19 pandemic is no doubt a catalyst for both the Vietnamese government and business community to rebound, transform, and get the most dividends of the global fast-moving digital economy, according to Ousmane Dione, the World Bank’s country director for Vietnam.

Overview of the online conference. Source: VGP.

“Vietnam’s success in containing the Covid-19 has been recognized globally. But if there is one thing that needs highlighting as a lesson learnt, it is the need for governments to go digital, and fast with their public services,” Dione said at an online conference introducing the national e-service portal on May 19.

The value of the national e-service portal has been proved during the Covid-19 pandemic, Dione added.

According to Dione, while physical and social distancing orders were in place to contain the pandemic, service users and government employees were able to access and provide essential public services remotely, for the safety of all parties involved.

Dione referred to a statement of Minister - Chairman of the Government Office Mai Tien Dung that after five months since the launch of the portal, there have been nearly 37 million visits, and hundreds of services that are available to firms and citizens via the portal.

Notably, Dione proposed three measures, one to the business community and two to the government, as ways forwards for deepening the on-going digital government reforms.

For the business community, Dione said it is the right time to step up with digitalization.

“The Covid-19 is also a wake-up call for business leaders,” he said, adding business continuity today seems impossible without the right technology in place, with online businesses experiencing less severe disruption than offline businesses as seen during the crisis.

A study performed in Singapore in 2019 showed that the use of digital technologies such as e-commerce, electronic payments, artificial intelligence/machine learning and big data analytics can increase SME’s value add and productivity by 26% and 17% percent, respectively.

From a macroeconomic perspective, the digitalization of enterprises can also enhance a country’s economic activity. It is estimated that the digitalization of SMEs in the ASEAN region could add US$1.1 trillion of GDP value across the region by 2025.

For the government, the first proposal would be to begin with simplification of business processes via e-services.

“Regardless of how many services are available online, if those services do not reduce time and transaction costs for businesses, the online services will mean little to them,” Dione said.

Thus, it is important for the government to understand where more time and cost incur during the whole service delivery chains in order to optimize the business processes and to make the services more flexible and convenient, he continued.

Other databases, such as business registration, investment licensing, construction permits, tax payments will also be useful pointers if being analyzed for e-Service optimization purposes. 

Secondly, the government can serve as a launching platform for the private sector to go digital more quickly. Pointing to various government-led initiatives that have supported firms in the respective countries to adopt new business models, Dione said all these resulted in significant increase in firms productivity and profitability in their countries.

While the world is moving fast with growing uncertainties, Vietnam should be fully prepared to act against any potential shock. In this regard, digitalization should be key measures for Vietnam to go forward, Dione stated.