2020 started with COVID-19 crisis which led to the stagnation of a series of industries around the world, limited travel, disruption of global supply chains, and an increase in unemployment rate, followed by the weakening and losses of the global economic sector. The major countries with top developed economies all have deep decrease and widespread recession. According to economic experts, most of the major global economies will lose at least 2.4 percent of the value of their gross domestic product (GDP) in 2020. The United Nations reported that the COVID-19 pandemic will cost the global economy at least $ 1 trillion only in 2020. Financial markets around the world are always on the brink of collapse. Above all, as long as the epidemic continues, it will cause a global recession that will dramatically change the landscape of the world economy and it will take countries many years to recover back to its original state.
Vietnam is also in the same situation when research data shows that the country's GDP only reached 1.81 percent in the first half of 2020, compared with the initially projected GDP of 6.8 percent. According to Dr. Vo Tri Thanh, director of the Institute for Branding and Competition Strategy Research, the COVID-19 translation has had a serious and multidimensional impact on all sectors of the Vietnamese economy. The first reason lies in the current economic growth around the world that is decelerating, the epidemic has not been controlled even there has been signs of a rebound in some countries and territories. According to calculations by the Ministry of Planning and Investment, sectors significantly affected by COVID-19 in Vietnam are service tourism, transportation, food production and processing, electronics and textiles, etc. Particularly, in the tourism sector which has recently become one of the spearheads of economic development in Vietnam, could cost international visitors more than 5 billion USD.
As for the response to the epidemic, Vietnam is one of the first countries to have applied border closures with a series of social isolation measures as well as suspending international flights and restricting domestic flights. By having early infections, Viet Nam has taken measures to thoroughly prevent the source of infection.
However, looking at Vietnam's economic outlook, we can see that we have been doing quite well to maintain a safe state, prevent epidemics and gradually recover the economy. The Asian Development Bank still forecasts Vietnam to be one of the fastest growing economies in Southeast Asia. Vietnam has been seen as a "bright spot" for economic recovery and development in the context that COVID-19 pandemic is still complicated around the world. Retail sales, export revenue and industrial production all showed signs of rebound in June, better than many other countries in the region. According to economic analyst Nguyen Duc Hung Linh, based on analysis of disease developments and government measures, the Vietnamese economy in 2020 will likely be in the form of a V-chart, meaning that we will restore the economy strongly by the end of COVID-19 crisis. Currently, because the epidemic is not completely controlled in the world, import and export activities, tourism and trade are still facing many difficulties. However, the Vietnamese government has also introduced many measures to encourage consumption for domestic population to boost the economy, and has agreements with some countries to open flights and ensure an effective disease prevention.
The Vietnamese government and agencies have generally done well in supporting the economy, making good decisions and reacting quickly. Recently, a series of economic bailout packages have been launched by the government to partly reduce the burden on domestic businesses. By quickly bringing the economy back to operation and demonstrating our determination to keep positive growth, we have successfully demonstrated to foreign investors that Vietnam is now a trustworthy environment and full of potential. In addition, we have also quickly promoted diplomatic relations with countries in the region to negotiate border opening, open flights for tourism or import and export activities. With high unemployment rate in the context of the COVID-19 epidemic, the Vietnamese government has been striving to promote the operation of a wide range of economic sectors, using a combination of active and passive labor market policies. Passive policies includes insurance benefits to help employees who have lost their jobs ensure their lives while waiting for a new job. Active policies are to provide them with training courses on skills to improve the quality of labor, making it easier for them to find suitable new jobs. In general, it can be seen that Vietnam is having an open economy and whether the success of development recovery or not depends partly on other countries in the world because if governments of other countries do not have similar measures to open the economy, the chances for us will be significantly less. Besides the specific small scale measures as above, public investment is also a good solution in the current period for Vietnamese economy. Undeniably, the economic downturn is followed by the economic recession largely because foreign investors have lost their confidence and hesitate to invest into the market. The government is fully able to solve these problems by being more flexible with the country's investment laws or using public investment to build infrastructure to meet the needs of foreign investors, improving labor skills and creating a healthy environment to attract FDI.
With the expert's reviews on economic policies of the Vietnamese government in the context of COVID-19 pandemic, our economic outlook shows signs of prosperity and will gradually become stable when the epidemic is thoroughly controlled worldwide and the economies are reopened.
References :
Thuy Le. “Vietnam’s economic outlook after COVID-19”. RMIT Vietnam Business & Management. May 20, 2020.
Dezan Shira & Associates. “Assessing Vietnam’s Economic Prospects for Foreign Investors After COVID-19 – Latest Issue of Vietnam Briefing Magazine”. Vietnam Briefing. August 13, 2020.
Erin Duffin. “Impact of the coronavirus pandemic on the global economy - Statistics & Facts”. Economy & Politics. Statista. Sep 21, 2020.
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