Coronavirus pandemic

Nimble Vietnam reaping gains from success against virus

Schools have reopened and buses are running as usual in Vietnam, which has gone for a month without seeing community transmission of the Covid-19 virus.

Having staved off a wider outbreak, Hanoi is now reaping strategic gains from its nimble response.

Investor interest - which shrivelled up early this year - is picking up again as the pandemic heightens the urgency of shifting production away from China, say business consultants.

Meanwhile, Vietnam's export of face masks and test kits could help cushion the larger economic impact of the pandemic.

"For the first month or two of the coronavirus outbreak, everything was put on hold," said Mr Trent Davies, a Vietnam-based international business advisory manager at consultancy Dezan Shira & Associates. "But already we are starting to see more and more e-mails from interested companies asking about investing in Vietnam."

Vietnam reported its first coronavirus case on Jan 23. It imposed a lockdown at the start of April, before easing it two weeks later and extending the freedoms to Hanoi and Ho Chi Minh City a week later.

A week ago, Ho Chi Minh City officials lifted restrictions on bars.

Compared with other well-connected regional countries like Thailand, Malaysia and Singapore, which have logged thousands of Covid-19 infections, Vietnam has so far managed to keep its count to 320 through a combination of early travel restrictions and aggressive quarantine, testing and contact tracing.

This was helped in part by its own test kits, which are now being produced for export to countries like Iran, Finland and Malaysia. They received the seal of approval from the World Health Organisation and Britain last month. Meanwhile, state-run vaccine firm Vabiotech has started testing a potential coronavirus vaccine on mice.

Mask production has brought some cheer to a garment industry decimated by the plunge in demand from Western buyers.

Even before export limits were lifted late last month, Vietnam had shipped more than 80 million face masks in the first half of the month to countries such as Japan and South Korea and also donated over a million masks to countries like Cambodia and Russia.

Being ahead of the curve, the Asean chair is in good stead to lead and shape regional responses to the pandemic, said Dr Huong Le Thu, senior analyst at the Australian Strategic Policy Institute.

"No country can recover on its own, but those in a better shape and which emerge from this crisis relatively earlier will be in a better position - and also have strategic bandwidth - to take some leadership initiative," she said.

Speaking at an online business conference on May 9, Vietnamese Prime Minister Nguyen Xuan Phuc set a full-year economic growth target of over 5 per cent, in spite of the International Monetary Fund's projection of 2.7 per cent last month. "Vietnam's economy is like a compressed spring waiting to be stretched out," he said.

The pandemic-induced investment lull has bought Vietnam time to develop its infrastructure, which was facing bottlenecks before the crisis, said Mr Davies.

"If there is a six-month window where there is perhaps less investment than it otherwise would have been, that certainly means there's going to be more ready-built factories and a better road network to support the industrial development later this year," he said.

A version of this article appeared in the print edition of The Straits Times on May 18, 2020, with the headline 'Nimble Vietnam reaping gains from success against virus'. Print Edition | Subscribe