Illustrative image (Source: VNA) Sydney (VNA) – Vietnam has adopted a good policy amid the COVID-19pandemic, which is also crucial in ensuring the country’s long-term economicgrowth, said an Australian scholar.
Suiwah Leung, Honorary Associate Professor of Economics at the Crawford Schoolof Public Policy under the Australian National University, made the remark inhis recent article posted on the East Asia Forum.
In his article named “Vietnam’s economy weathers theCOVID-19 storm - good policy or luck?”, Suiwah Leung said that “Vietnam’seconomy and people are often described as ‘resilient’. Nowhere is this morebefitting than in relation to the COVID-19 pandemic.
After successfully tackling the pandemic, the country stillrecorded 1.8 percent GDP growth during the first half of 2020 despite negativefigures in most parts of the world.
He cited the World Bank’s July 2020 Taking Stock report assaying that Vietnam’s recent economic performance is a result of its twinengines of growth: export demand and domestic consumption.
According to this report, from January to mid-April,Vietnam’s exports recorded a 13 percent per month increase before its tradingpartners, such as the United States, Japan and China, began contracting. Duringthis period, domestic consumption was subdued because of strict socialdistancing and lockdowns. Then from mid-April to the end of June, the domesticeconomy was in recovery mode with manufacturing growing at 30 percent whilemerchandise exports collapsed, he wrote.
He added that the World Bank forecasts an annual growth rateof 2.8–3 percent for Vietnam in 2020, and a return to pre-crisis growth of 6.8percent in 2021.
This forecast is subject to the Government actively usingfiscal policy to support growth in the very short-term, and the economycontinuing to benefit from the trade and investment diversion in the medium termthrough participation in regional free trade agreements like the EU–VietnamFree Trade Agreement concluded in June 2020, the author said.
One of the immediate measures to support growth is to easemobility restrictions given tourism contributes around 10 percent to GDPgrowth. Other fiscal measures include ramping up spending on the approvedpublic investment programme, in particular spending on Official DevelopmentAssistance (ODA) projects in the pipeline. Strategic support from the privatesector, such as investment in the country’s digital infrastructure, is alsobeing implemented.
In mid-August, the Ministry of Information and Communications announced thelaunch of the akaChain blockchain platform, which helps companies shorten thetime spent on tasks like electronic Know Your Customer procedures, creditscoring and customer loyalty programmes. Improved security and transparency arealso possible in future developments of this technology. In a country with arelatively young demographic, remote teaching and learning, as well astelemedicine, are advancements that have been given impetus by COVID-19, hesaid.
“While there might have been an element of luck in theshort-term trade and investment diversion as well as in timing for handling thepandemic, good policy has generally been adopted and will continue to becrucial in ensuring Vietnam’s long-term economic growth,” Saiwah Leungconcluded./.
VNA
