In this webinar, Dr Vo Tri Thanh assesses the Vietnam’s efforts in restoring the country’s economic growth momentum as it grapples with the task of restructuring and upgrading its economy.
VIETNAM STUDIES PROGRAMME WEBINAR
Friday, 3 July 2020 – The ISEAS – Yusof Ishak Institute, in conjunction with the Konrad Adenauer Stiftung in Singapore, organised a webinar on “Vietnam’s Economy Post COVID: Poised for Growth?” on Friday, delivered by Dr Vo Tri Thanh. Dr Thanh is currently chairman of the Vietnam National Committee for Pacific Economic Cooperation (VNCPEC), and a member of the National Financial and Monetary Policy Advisory Council that advises the Vietnamese government. He was formerly Vice President of the Central Institute for Economic Management, a leading economic and strategic think-tank under Vietnam’s Ministry of Planning and Investment.
Dr Thanh began his presentation by outlining the economic repercussions of the COVID-19 pandemic on Vietnam. As an open economy dependent on trade, FDI, and foreign tourism, Vietnam has been negatively impacted by the viral pandemic. Sectors such as textile and footwear production, which are deeply integrated in global value chains, have been severely disrupted – a survey of 126,000 firms, conducted in May by the General Statistics Office of Vietnam, revealed that 86 per cent were considerably affected by the pandemic. Nevertheless, Vietnam was among the first countries in the world to effectively contain the virus and reopen its society and economy. It has been 77 days since the country reported any new locally transmitted COVID-19 cases.
The Vietnamese government has announced a slate of policies to aid the social and economic recovery of the country. These include social insurance measures, with US$3 billion earmarked for social aid; monetary measures, by offering credit lines to banks; as well as fiscal measures, such as the rescheduling of tax and land rental payments. The government has also announced plans to accelerate public investments, as well as promote its tourism and agricultural export sectors. To this end, the government has accepted the need for budget deficits and higher public debt ratios. The implementation of the abovementioned measures, however, has been less than ideal – Dr Thanh pointed out that the prime minister had met with his cabinet and provincial authorities just a day before to discuss the need to accelerate the implementation process.
Nonetheless, the Vietnamese economy has shown promising signs of recovery. The country’s 1H2020 GDP growth of 1.81 per cent, while low for Vietnam’s fast-growing economy, is one of the highest in the world. Domestic air travel has also returned to pre-COVID levels. Looking forward, Dr Thanh stressed the need for Vietnam to accelerate its structural reforms and take advantage of FTAs such as the CPTPP and EVFTA.
The webinar was attended by some 70 participants from both Singapore and abroad. Issues that were discussed during the virtual Q&A session included the upcoming 13th VCP Congress, the importance of attracting ‘quality’ foreign investment, assessment on inflation, household debt and unemployment rates, the burgeoning fintech sector in Vietnam, as well as other infrastructure bottlenecks that may further constrain Vietnam’s growth.