The fastest way for the economy to recover from the COVID-19 pandemic is for people to get vaccinated, RMIT’s School of Business and Management lecturers and researchers Dr Greeni Maheshwari and Dr Daniel Borer have said.
"Vaccination is key to return to full economic activities,” Borer said. "Vietnam would be at a disadvantage if supply chains are disrupted and the country remains closed to foreign businesses as a measure to prevent the virus spread, while other countries in the region open up thanks to successful vaccination.”
He did however cede that the COVID-19 pandemic has already adversely affected productivity in Viet Nam.
"The rapid COVID-19 outbreak returning has reduced productivity and left factories operating below capacity in the manufacturing industry in Viet Nam, where suppliers for many global firms are located."
Greeni Maheshwari noted that hundreds of thousands of manufacturing workers getting vaccinated would help maintain production.
“Vaccination will be beneficial for the factories where thousands of workers are working in close proximity,” Maheshwari added. “This vaccination drive will help to fight the virus and ensure the good health of workers which will enhance production, and boost the economy in general.”
“Many countries including Europe and the United States have put a huge effort into vaccination programs and are now starting to enjoy dramatically decreasing infection rates, and the gradual normalisation of life.”
Last week, data from the EuroCham Chamber of Commerce (EuroCham) Business Climate Index (BCI) also showed the urgent need for Viet Nam to roll out a mass vaccination programme. Of business leaders surveyed 58 per cent predicted that their companies would see a significant, negative impact if their staff could not be vaccinated in 2021.
EuroCham Chairman Alain Cany noted that local lockdowns, social distancing, and travel restrictions are not permanent solutions and will cause significant economic harm over the long term.
He added most of EuroCham and its business associations would be willing to cover the cost of vaccinating their own staff in Viet Nam.
During times of chaos and uncertainty, Maheshwari praised the Vietnamese community for coming together with the Government to fight against the outbreak by funding vaccination programs.
Meanwhile, Borer said a key challenge Vietnam now faces was to rekindle the economy gradually but safely.
“Herd immunity is said to be reached at 60-80 per cent of the fully vaccinated population. If Vietnam waits to achieve herd immunity before restoring the economy, valuable months are lost and more companies might go bankrupt,” Borer said.
“The Vietnamese Government could implement a system where businesses having 60 per cent of their staff fully vaccinated, could return to regular operations,” he added. “This micro-management at a business level, would allow the re-establishment of operations for an increasing number of companies and reviving the economy while keeping those sectors still restricted where the vaccinated population is known to be lower.”
According to RMIT, although most businesses were facing big obstacles, Vietnam’s trade surplus was recorded at about US$370 million in the first five months of 2021.
Maheshwari believes the country still remain attractive to foreign investors and its economy is set to return to growth once the acceleration of vaccination campaigns has been completed.
He added that the country had been successful in recovering from the third outbreak and when the fourth wave is controlled, it would not have much future impact on the economy.
“The vaccination drive will also help some of the industries like manufacturing and tourism sectors resume their operations and this will bring a positive impact to Vietnam’s GDP growth rate in the future.”
“To attract foreign investment in infrastructure some developments like improving sea-port facilities, developing new seaports, continuing the construction of roads, highways, and establishing new economic zones can be enhanced or undertaken.”
“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,” he added.
As planned, Viet Nam was set to receive up to 150 million doses of COVID-19 vaccine this year, both from assistance and through deals with manufacturers including AstraZeneca and Pfizer.
Nguyen Xuan Thanh, manager of the Fulbright Economics Teaching Programme told local media when the Government of Viet Nam could fulfil a vaccine commitment of about 150 million doses for local people with priority injections for industrial zones and tourist centres by year-end and reaching 70 per cent of the population vaccinated by mid-2022, the country could fight the pandemic and maintain production activities for export, main drive for the development. — VNS