Vietnam – a rising star in the world post COVID-19: Asia Times

Hanoi (VNA) –  As long as it can maintain the current momentum, Vietnam will be a rising star in the global and regional economy, paving the way to becoming a high-income country in 2045 as it is aiming to do, according to Asia Times.

A banner celebrates Vietnam's 75th National Day on Dien Bien Phu street, Hanoi (Photo: VNA)

In its article posted on October 1, Asia Times said that Vietnam should re-emerge quickly in the post-pandemic period, making it one of the best performers in the global economy.

“Like its neighboring countries, Vietnam’s economy has been struggling after months of fighting against the pandemic. It is nonetheless still an outlier given its effective response to the COVID-19 outbreak, with impressive growth. Therefore, its economy is expected to witness positive signals soon after the pandemic is brought under control, which is highly unlikely for those countries that are seriously plagued by COVID-19,” according to the article.

It cited the data as showing that Vietnam’s GDP growth in the second quarter of 2020 was about 0.4 percent year on year. Although this was the economy’s worst performance in 35 years, it was exceptional compared with its neighbors, some suffering from negative growth. 

The World Bank forecasts that Vietnam’s GDP growth could reach 2.8 percent in 2020 and will recover to 6.7 percent next year, while S&P Global Ratings expects that Vietnam will be the second-best performer among Asian economies this year.

The article noted all this indicates that the country is well able to bounce back soon from the crisis. Thus Vietnam should re-emerge quickly in the post-pandemic period, making it one of the best performers in the global economy, as it has been over the past decade.

“Thanks to its stringent lockdown measures to contain COVID-19’s spread months, Vietnam is now gradually becoming one of the most attractive destinations for foreign investment,” it said.

A flashmob dance marks the 75th National Day (Photo: VNA)

As noted previously, its efficiency in getting the pandemic under control has turned it into a safe place for international firms to do business during and after the COVID-19 crisis. According to a study released by Hong Kong’s Deep Knowledge Group, Vietnam is the ninth-safest place in the Asia-Pacific region amid the pandemic.

Recently, Vietnam began gradually reopening its international flights and lifting the lockdowns in pandemic hotspots, which raises a concern over its vulnerability to the next COVID-19 wave. However, the government is cognizant of this risk as well, as evidenced by its close eye on the situation. 

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

Against this backdrop, Vietnam, with its favourable conditions, is a good choice for those economies seeking alternative destinations, said the article.

It gave an example that the Japanese government has subsidised 15 companies to move their factories to Vietnam, paving the way for a wave of Japanese foreign direct investment. Also noteworthy, according to a report by Goldman Sachs, for many US firms “when asked about top locations for moving out of mainland China, Vietnam and India are the most mentioned destinations.

Vietnam has an unprecedented chance to become a manufacturing hub, provided that it can utilise the upcoming waves of investment well.

According to the article, during the COVID-19 crisis, while many countries have been suffering from economic sclerosis, Vietnam’s economy has continued to take firm steps toward international economic integration.

Workers produce garment products for export to the EU (Photo: VNA)

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

All of these achievements could be considered exceptional under the current situation, which is inimical to global economic activities, and Vietnam is expected to gain enormously from these FTAs.

For instance, the EVFTA decreases tariffs for Vietnamese exports of seafood, textiles, and wood products to the EU, which are ones in which Vietnam has a significant competitive advantage. This would catalyze Vietnam’s economic modernization, transforming it into a more competitive economy in the global value chain.

“As long as it can maintain the current momentum, Vietnam will be a rising star in the global and regional economy, paving the way to becoming a high-income country in 2045 as it is aiming to do,” according to the article./.