ADB’s Country Director for Vietnam Andrew Jeffries

ADB’s Country Director for Vietnam Andrew Jeffries told The Hanoi Times his impression on Vietnam’s efforts against the Covid-19 pandemic, in which the people’s solidarity has been shining throughout.

The fourth Covid-19 outbreak in Vietnam has been seen as the most serious yet, what is your thought on the efforts from the Government and people in pursuing the dual goals of both containing the pandemic and boosting growth? 

It is very commendable. Vietnam set an exemplary success of the pandemic containment since early 2020 by imposing lockdowns when and where necessary, effectively tracking new cases, and applying comprehensive quarantine restrictions. We highly commended the Government of Vietnam’s swift and effective response at the very beginning of the outbreak of the Covid-19 pandemic. The Government and people of Vietnam have proven that containing the pandemic and economic growth are not a complete trade-off relationship.

We share the government’s continued priority in controlling the current wave of the Covid-19 pandemic, putting the protection of people’s health first and foremost, and accelerating the national vaccination strategy, while maintaining production where feasible.

Currently, the fourth wave of Covid-19 by new, more transmissible virus variants, is increasing new cases rapidly in Vietnam, affecting almost all the industrial heartlands throughout the country. The extended lockdown in Hanoi, Ho Chi Minh City, and the southern provinces further restricts mobility and limits economic activity. We note Da Nang has recently been locked down. Therefore, achieving the dual goals of pandemic containment and economic growth may become more difficult. Therefore, it may be time for Vietnam to consider a more flexible approach on policy actions towards the dual goals.

Under the new approach, the Government’s commitment to dual goals may not necessarily focus on a numerical growth target. Rather, it would be important to prioritize the protection of the key economic drivers, such as upholding the growth poles in the large cities, safety and health of millions of workers in the industrial zones as well as the informal labor force in urban areas. Ensuring the food supply for people and areas under extended lockdown is of utmost importance to avoid people fleeing from the “red zones” to other zones searching for food. Accelerating implementation of the government’s announced fiscal support, considering additional fiscal support, including cash transfer to the unemployed in the cities under lockdown, can safeguard the labor force for the post-Covid economic recovery. In the medium term, expedited disbursement of public investments would be critical to maintaining economic activity and the growth momentum.

Last year, Vietnam successfully contained the Covid-19 pandemic and maintained positive growth compared to many economies in the region and the world. Also, Vietnam had a stronger economic performance the first half of this year with 5.6% annualized GDP growth as compared to the first half of last year which experienced 1.8% growth. The Government and people of Vietnam have gained valuable experiences and built a more resilient capacity to control the Covid-19 pandemic and strengthen strong economic foundations. This is the basis for us to believe that once again, the country will successfully contain the pandemic and continue its path to achieving high economic growth in 2021 and the coming years.

Looking back in history, Vietnam had faced great challenges, and succeeded, such as the fight for freedom and subsequent economic reforms. From your standpoint, what are the key factors that could help Vietnam overcome this pandemic?

In my view, there are three main factors leading to Vietnam’s success in the prevention and control of the Covid-19 pandemic, including the role of the Government, the people’s awareness and compliance, and the success of the public media campaign.

Being aware of its limited resources, the Government has reacted swiftly and decisively in tracing and containing the Covid-19 virus. Within nearly two months, the pandemic in Bac Ninh and Bac Giang, the two largest manufacturing centers in the north has been rapidly quelled and production has been restored to normalcy. In addition, the Government has quickly launched a fiscal support package of VND26,000 trillion (about $1 billion) to support affected households and businesses.

Along with strong policies and measures to prevent the spread of the coronavirus and contain the pandemic, the Government has requested all ministries, sectors, and local authorities to accelerate the vaccination rollout, which was rather slow before April 2021 due to vaccine shortages worldwide. The Government has made great efforts in obtaining vaccines from public procurement, donations, and from the COVAX Facility. By the end of July, Vietnam has secured 105 million doses from various sources. The Government also pushed local vaccine producers to complete vaccine testing by the third quarter of 2021 with the intention of starting mass production by the last quarter of 2021.

The Vietnamese people play a significant role in the fight against the pandemic. As the Covid-19 pandemic has progressed worldwide, and how it has been handled and mishandled in various parts of the world, it is important for all societies to acknowledge and find the right balance in the trade-off between individual freedoms and the public good. Here in Vietnam, there is a high level of public awareness for social distancing, mask-wearing, and vaccinations, which can be credited to the whole-of-Government approach to effectively communicate with the people and conduct successful awareness-raising programs.

As you mention, Vietnam’s people have overcome major challenges in the past. There is a long history of uniting in times of crisis and external threats. Vietnam’s remarkable achievements were due to extraordinary levels of cooperation and unity. This tradition of solidarity is once again a bright spot in the fight against the pandemic in Vietnam.

The first three waves of outbreaks were very well managed, and the government takes very seriously the current wave and its vaccination program. I am optimistic and confident that based on the experiences and lessons from the past waves, the Government, together with the Vietnamese people, can contain the pandemic as it did with the earlier outbreaks.

2021 is the first year of the new Government and also the first of the 5-year socio-economic plan (2021-2025). How do you see the chance for Vietnam to realize its development goals to become an industrialized country by 2030 and escaped from the low-middle income country group? What challenges and solutions that the country should focus on?

First, as for the most immediate and urgent measures, Vietnam needs to continue with strong measures to contain the pandemic and accelerate the vaccination program. Vaccinations are critical to help contain the virus and allow for a full return to economic activity and recovery. The Government is seeking to speed up vaccinations for 70 million out of the country’s nearly 100 million people in 2022. In addition to the vulnerable and those most at risk, vaccinating manufacturing workers who work in crowded conditions will protect their health and those around them, and avoid supply chain disruptions, keeping the economy going.

In the medium and long term, Vietnam would prioritize building an economy that is more resilient to internal and external shocks that have become more frequent in recent decades. The country needs to reset the growth momentum to achieve a green recovery in the medium term and green growth in the long term, given the daunting impact of climate change on Vietnam in the decades to come.

Strengthening institutional efficiency is the key to unlock the private sector’s potential to support growth. Accomplishing unfinished business reforms (including financial sector reform, and SOE reforms), improving the quality, transparency, and enforcement of laws and regulations, and simplifying businesses conditions are all critical to improving institutional efficiency for private sector development and broad-based economic growth.

It is also important for Vietnam to maximize the benefits of the free trade agreements that the country participates in. Vietnam remains one of the most attractive destinations for foreign investors. The country became even more attractive due to ongoing shifts in global supply chains, and Vietnam has controlled the pandemic better than many other economies.

Favorable conditions need to be created for Vietnamese enterprises to participate more deeply in the supply chains of foreign-invested enterprises in Vietnam. In addition, it is very important to promote vocational training to have a high-quality and skilled workforce meeting the labor market’s increasingly sophisticated demands. I know that these are the priorities of the Government’s agenda.

Vietnam’s rapid growth also needs continued infrastructure investment. Vietnam is considered as one of the countries with the highest logistics costs in the region, at about 20% of GDP. In the medium and long term, priority should be given to infrastructure development and logistics cost reduction to improve Vietnam’s competitiveness.

Lastly, Vietnam’s promotion of a digital transformation is important to improve productivity by investing in education, technology, and innovation. Taking this opportunity to make a breakthrough, Vietnam can become a digital economy in the future.

Source: Hanoitimes

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