International media has praised Vietnam’s effective COVID-19 response. Economists say Vietnam’s small number of COVID-19 infections and no deaths will enable it to recover the economy before most other countries.
Vietnam attractive in the eyes of investors
Frederick Burke, Managing Partner of the international law firm Baker McKenzie, says Vietnam’s response to the epidemic has made foreign enterprises feel safer doing business in Vietnam.
Michael Sieburg, a partner at Asia-focused consultancy firm YCP Solidiance, reveals there is a sense in many of his discussions that Vietnam, relative to many other countries, will move on the investors’ radar.
A representative of the Kizuna Joint Development Corp, which builds factories in Vietnam, says given its fast response to the virus, they expect foreign investment to pour into Vietnam after the pandemic. The company is speeding up plans to finish a 100,000-square-metre factory in southern Vietnam in July in anticipation of an increase in post-pandemic demand.
Before the epidemic, many businesses with factories in China had eyed Vietnam and other ASEAN countries.
Nguyen Anh Van, an official of the Van Trung 2 Industrial Park in Bac Giang province, says they have heard from a growing number of foreign investors wishing to invest in the industrial park.
“The first thing foreign investors ask about is the provincial investment policies, whether they’re favorable or not. The second matter of their concern is the location and infrastructure of the industrial park. Third, they want to know about labour quality and availability,” Van explains.
Taking advantage of opportunities
Successful containment of the COVID-19 epidemic has confirmed Vietnam’s ability to ensure a stable, safe environment.
Nikkei Asian Review reports shifting of investment is inevitable after the COVID-19 pandemic and ASEAN countries like Vietnam will be favored destinations. The IMF’s World Economic Outlook report for 2020 agrees Vietnam has the best growth prospect in ASEAN. Meanwhile, the World Bank concludes Vietnam’s economy was resilient to external shocks in the first few months of this year and its economy will rebound.
Director of the American Chamber of Commerce Adam Sitkoff says Vietnam is a lucrative investment destination in Asia.
According to Hirai Shinji, Chief Representative of Japan’s External Trade Organization in Ho Chi Minh City, Vietnam has successfully contained the epidemic and will now receive more foreign direct investment.
ChosunBiz, an economic newspaper published by the Republic of Korea’s Chosun Group, points out that the Vietnamese government’s determination to fight the epidemic received strong support from foreign investors. It gives as example Samsung’s closure of factories elsewhere in the world, but not in Vietnam.
Bloomberg predicts the Vietnamese economy will bounce back because Vietnam is a favored destination for foreign investors. It says US$12 billion was registered in Vietnam in the first four months of this year.
The Vietnamese government has set a GDP growth target of 5%. Fitch Ratings has kept the outlook for Vietnam at “stable” as they expect a strong recovery in 2021, with growth forecast at 7.3%.