Vietnam economic recovery depends on vaccination drive

Vietnam still remains attractive to foreign investors and its economy is expected to grow again once the vaccination campaign is accelerated and completed, RMIT University’s lecturers and researchers said.

Two RMIT’s School of Business and Management lecturers and researchers Dr. Greeni Maheshwari and Dr. Daniel Borer stressed that vaccination is the best answer for Vietnam to reignite the suffering economy and return to a normal life.

A local worker is taking a shot for Covid-19 vaccine at Me Linh Industrial Park. Photo: Pham Hung

Dr. Greeni Maheshwari said although foreign-direct investment has dropped significantly due to the severe global recession, Vietnam is still an attractive country for investors.

As Vietnam has been successful in showing recovery from the third outbreak and hence given that the fourth wave is being put under control, it will not have much future impact on the economy, she said.

“The vaccination drive will also help some of the industries like manufacturing and tourism sectors to resume their operations and bring positive impact to Vietnam’s GDP growth rate in the coming time.” 

Vaccination - the best way to return to normal

While the fourth Covid-19 wave in Vietnam is affecting many areas of the economy, vaccination is vital and a long-term solution for a healthy economic recovery, said experts in economics and finance from RMIT University.

Dr. Daniel Borer emphasized vaccination can help minimize the risks of supply disruptions in industrial parks.

“The rapid Covid-19 resurgence has reduced productivity and left factories in the manufacturing industry operating below capacity in Vietnam, where suppliers for many global firms are located,” he said.

Dr. Maheshwari said hundreds of thousands of manufacturing workers getting vaccinated will help maintain production.

She added vaccination will be beneficial for the factories where thousands of workers are working in close proximity. “This vaccination drive will help to fight the virus and ensure the good health of workers which will enhance the production, and boost the economy in general,” she said. 

“Many countries including Europe and the US have put their greatest effort into vaccination, and are now starting to enjoy dramatically decreasing infection rates, and gradual normalization of life.”

Dr. Greeni Maheshwari (L) and Dr. Daniel Borer (R). Photo: RMIT University

During Covid-19 vaccination drive, Dr. Borer assessed Vietnam now faces a challenge which is to gradually but safely revive the economy while vaccinating increasing numbers of people.

“Herd immunity is said to be achieved when 60-80% of the population is fully vaccinated. If Vietnam waits to achieve herd immunity before restoring the economy, valuable months will be lost and more companies could go bankrupt,” Dr. Borer said.

He suggested the Vietnamese government could implement a system under which businesses having 60% of their staff fully vaccinated, could return to regular operations. 

“This micro-management at business level would allow the re-establishment of operations for an increasing number of companies and reviving the economy while still keeping those sectors restricted where the vaccinated population is known to be less.”

Measures to lure investors

Moving forward to post Covid-19, Dr. Maheshwari outlined some measures that will help Vietnam remain the world’s production center and attract foreign investment.

“To attract foreign investment in infrastructure, some developments like improving sea-port facilities, building new seaports, continuing the construction of roads, highways, and establishing new economic zones can be enhanced or undertaken,” she said.

“Besides, adopting friendly investor policies with reduced bureaucratic hurdles to lessen the time to start a business might boost investors’ intentions to invest in Vietnam,” Dr. Maheshwari concluded.