Measures suggested for Vietnam’s economy to navigate pandemic

In its latest update on Vietnam’s economic performance, the World Bank projected the country’s GDP growth rate at about 4.8% in 2021, 2% lower than its previous prediction in December 2020.

Replying to the Vietnam News Agency’s questions, Shimizu Akira, Chief Representative of the JICA Vietnam Office, said it is unfortunate that the disruption of supply chains has occured while Vietnam has gained so much attention and been considered one of the most desirable countries for the global diversification of supply chains since the beginning of the pandemic. 

There are many Japanese suppliers of Japanese assemblers or manufacturers being affected. Although the impacted production items are limited only to those Japanese suppliers, since some of which are global companies, such structure of supply chain have given a significant impact on the global supply chain, including Vietnam.

To the companies which are included in this supply chain, this issue is highly critical, and they have reportedly had to cut down the production as planned on global basis, Shimizu pointed out.

The pandemic has given insights to the importance of the relavant support which has been carried out, he said, noting that firstly, it is important for Vietnam to strengthen its own enterprises so that they enhance their competitiveness by being able to produce high-quality parts, goods, and so forth by themselves.

For this purpose, JICA is working closely with the Agency for Enterprise Development under the Ministry of Planning and Investment to enhance the capacity of local enterprises to be able to participate in the supply chain. 

Secondly, the disruption of corss-border movement shows how important it is for Vietnam to have an enough number of qualified manager/engineers/workers with proper knoweldge and skill without depending on external experts so that they can manage its business without any interruption. 

For this purpose, JICA cotinues its assistance in developing industrial human resources through trainings on Japanese business models and strengthening vocational schools, the Chief Representative said, expressing the belief that such efforts will help create a resilient supply chain in the Vietnamese industry.

Shimizu also held that the Vietnamese Government should accelerate the disbursement of public investment, which is viewed as one of important tools to not only serve economic development but also cope with post-pandemic difficulties in the country.