Asia Times: Vietnam a rising global and economic star during COVID-19

According to the report, the Vietnamese economy has been struggling after months of fighting against the pandemic, a similar situation that can be seen in neighbouring countries. Despite its challenges, the local economy has still recorded impressive growth, making it as an outlier given its effective response to the COVID-19 outbreak. 

The economy is expected to witness positive signals once the pandemic is fully brought under control, something which is highly unlikely for countries that are seriously plagued by COVID-19.

The article outlines that the nation’s GDP growth in the second quarter of the year stood at about 0.4% on-year. Although this marked the economy’s worst performance in 35 years, it can be considered exceptional in comparison with its neighbours, some of whom are suffering from negative growth. 

The World Bank forecasts that local GDP growth could reach 2.8% this year before recovering to 6.7% next year, while the S&P Global Ratings expects the country to be the second-best performer among Asian economies this year.

Due to stringent lockdown measures imposed to contain the spread of COVID-19, Vietnam is gradually becoming one of the most attractive destinations for foreign investment.

The Asia Times article notes that its efficiency in bringing the pandemic under control has marked the country as a safe place for international firms to do business during and after the COVID-19 crisis. Indeed, according to a study released by Hong Kong’s Deep Knowledge Group, Vietnam can be considered the ninth-safest place in the Asia-Pacific region amid the pandemic.

The country has gradually began reopening international flights and lifting lockdown measures in pandemic hotspots, which raises concerns about its vulnerability to future COVID-19 waves. Despite this threat, the Government remains fully aware of this risk, as evidenced by its close eye on the situation. 

Moreover, with previous experience in fighting against the pandemic and its adequate preparations, Vietnam could strike the right balance between public health and economic growth, meaning that it will be among the few bright spots in a gloomy picture in terms of the global economy.

In this context, the country’s favourable conditions mean that Vietnam is a good choice for economies seeking alternative destinations in order to reduce their reliance on manufacturing from China.

Despite Vietnam still being a long way off replacing China as a global workshop, it has an unprecedented chance to develop into a manufacturing hub, if it is able to fully utilise the upcoming waves of investment.

The article offers an insight into the local economy, which has continued to take firm steps toward further international economic integration, while many countries have been suffering from economic sclerosis due to the COVID-19 crisis.

Vietnam on June 8 ratified a free-trade agreement with the European Union (EVFTA), which took effect from August 1. In addition, it has been working closely with other members of the Regional Comprehensive Economic Partnership (RCEP) in the hope of signing an FTA before 2021.

According to the Asia Times, all of these achievements can be considered exceptional given the current context, which is inimical to global economic activities, whilst the country is expected to enjoy enormous benefits from these FTAs.

The article also points out that as long as it can maintain its current momentum, Vietnam will be a rising star in terms of the global and regional economic landscape, therefore paving the way to become a high-income country in 2045 in line with its current aims.