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Prolonged pandemic issues cloud recovery

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Following the new coronavirus outbreaks in a number of localities, Vietnam’s economy could face yet another difficult phase in the early days of the new lunar year as production and services are hindered in several sectors.

 Nevertheless, economists expect the impact to be less severe compared to the previous year.

Dinh Quang Hinh, analyst at VNDIRECT Securities JSC, noted that the local economy’s recovery “will slow down”, especially in the next two months. According to Hinh, the tourism industry may still be the most affected by the new COVID-19 wave.

Reports from travel and airline businesses showed that many travellers cancelled flights and hotel reservations, and postponed their plans. In addition, the blockade in some localities such as Hai Duong Province and the closure of a number of non-essential services in other cities and provinces may reduce the growth rate of several service sub-sectors, especially accommodation, catering, tourism, and entertainment.

Prolonged pandemic issues cloud recovery
At a cocentrated quarantine area. Photo: VNA

Unfeasible policies 

Facing the serious impact of COVID-19 on the economy, Assoc. Prof. Dr. Pham The Anh, chief economist of the Institute for Economic and Policy Research (VEPR), said that the country could not pursue macro policies in the same way other countries would do, for example through large-scale monetary easing, due to limited financial resources after years of deficits, coupled with constraints to inflation and exchange rate targets.

Vietnam was one of the few countries in the world with positive economic growth in 2020. But this year, according to Anh’s observation, “the policy space is no longer wide” to support economic growth and social security.

Last year, the State Bank of Vietnam lowered interest rates three times and supported commercial banks with a VND250-trillion package ($10.87 billion), which is still being deployed. In addition, pandemic prevention and social backup subsidies to ease the impacts of the crisis are also putting great pressure on the budget balance.

In 2021, monetary policy, particularly interest rate tools, will see a significantly reduced effectiveness, according to the VEPR’s chief economist.

Anh also warned about an asset bubble that is forming in the stock and real estate markets. Last year, property market saw significant growth, mainly because real estate represented a haven for investors’ idle money.

When price increases on asset markets are large enough to create a wealth effect, consumption increases on non-essential goods could lead to a spillover of increased prices from the asset to the consumer market and, albeit slowly, manifest a rise in prices as the loosening policy is pursued for a long enough time.

The latest VEPR report from February 9 also identifies that the top priority at this time is ensuring social security, keeping macroeconomic stability, and reducing the burden for businesses. Policies to support these also need to continue to be implemented with a higher concentration and more substance, aiming for the right audience and their actual needs.

As such, the report suggested that financial burdens for businesses like loan interests and land rents should be frozen or suspended for the time being, in addition to considering cutting trade union fees to support businesses.

According to the VEPR, the group of businesses that was not affected by the disease or had seen an effective transformation should be encouraged with credit, the right institutional environment, and sectoral policy. These policies should be driven in a way that stimulates demand and assists consumers to pay for products and services, instead of directly sponsoring the company.

“We believe that tax extensions and reductions, if any, should only be applied to VAT instead of corporate income tax (CIT),” Anh said, further explaining that the reduction of CIT only supports a small number of businesses that is either not affected or even benefits from the pandemic. The CIT reduction also risks creating deeper inequality in the business environment, adversely affecting the economic recovery.

Cautious optimism 

This year will be the first of the new leadership of the Party and government and is expected to see many new steps, policies, and specific actions for the socioeconomic development. International developments such as the new US president and possibly more predictable policies could make the international environment less uncertain.

However, the continued competition between the United States and China does not protect from new risks that could appear. In this context, the chief economist of VEPR said that supply-side policies could be the most useful for Vietnam to reinforce fundamental elements of the economy.

“Macroeconomic stability, particularly inflation, interest rates, and exchange rates, need to be kept stable, which is essential to prepare for the post-pandemic recovery period. The Vietnamese economy is currently in a difficult time, while the return of a tightened monetary policy could lead to further difficulties for businesses,” Anh said.

At this point, even with the pandemic in the country fully controlled, many export-oriented sectors could face long-term difficulties as COVID-19 remains present throughout the world. Anh found that accelerating public investment, especially for key national projects, is a must to support economic growth.

“The division of multiple bidding packages and a more scattered implementation in many localities could create better spread,” he suggested.

At the same time, a reduction of the recurrent spending from the state budget by at least 10 per cent could be done to devote resources and overcome the consequences caused by the pandemic.

According to experts, many shortcomings in operating economic policies have been revealed, so efforts to improve administrative procedures and the business environment should continue to be maintained.

The diversification of import-export markets also needs more attention to avoid heavy dependence on several major economic partners. Despite delays, Vietnam could step-by-step build up fiscal buffers to prevent further economic shocks in the coming years.

On the bright side, Vietnam’s industrial production seems to expand in the first months of the new year. According to the General Statistics Office, although the industrial production index in January decreased by 3.2 per cent compared to the previous month, it increased by 22.2 per cent over the same period last year.

Meanwhile, the purchasing managers’ index in January decreased slightly to 51.3 from 51.7 points in December but remained above the 50 points level.

Optimistic but cautious, VNDIRECT’s Hinh expected that the manufacturing sector will be less affected by this COVID-19 surge as the global economy could recover stronger in the coming months, thanks to vaccines and more incoming orders for products made in Vietnam.

More time will be needed to observe and quantify the potential impact on the economic outlook, but Vietnam’s macroeconomic foundation may continue to be strengthened backed by current account and trade surpluses, rising foreign exchange reserves, and decreasing inflationary pressure. 

At last week’s government meeting on deploying key tasks and activities against COVID-19 after Lunar New Year, Prime Minister Nguyen Xuan Phuc encouraged the public to use the Bluezone app and implement the 5K principles, as well as ensure safety and prevent disease transmission in schools, markets and supermarkets, hospitals, and business establishments, especially those with large numbers of people.

“We need to be fully determined, more and stronger than ever before. We must be determined to organise the effective implementation of the resolution of the 13th National Party Congress in each and every locality,” the prime minister said, emphasising the success in the past five years, especially in 2020, when the power and will of the Party were convincingly demonstrated.

He stated that focus must lie on directing and handling the five major balances in national development in the next five years.

Firstly, there must be a balance between opening up, innovating, and promoting socioeconomic development while strengthening and enhancing the leadership of the Party and a stable development between market laws and socialist orientation, as well as between state, market, and society, between economic growth and human development, between social progress and environmental protection, and between independence and integration.

Secondly, it is necessary is to balance rapid economic development with socially equitable progress, including preserving the environment and protecting the national cultural identity. “For example, like with our pandemic prevention efforts, development must be associated with the lives of the people and balanced and harmonious, letting no person and no locality fall behind, and possibly lose development opportunities,” the PM emphasised.

Thirdly, there must be a balance between internal and external forces, between domestic and foreign economies, between internal and foreign trade, between building an independent and autonomous economy with openness and international economic integration.

Fourthly, short-term priorities must be weighed against long-term goals. “We must not be subjective and avoid pursuing unsustainable short-term goals,” PM Phuc noted, suggesting that ministries and agencies maintain and firmly believe in the ideals and principles of building a socialist-oriented market economy.

Fifthly, national financial resources, public debt, and many other macroeconomic figures must be kept in balance. “Today, we have a good system of macro indicators, but we must ensure it is getting stronger and let next year be even better than last year,” said the prime minister.

By Van Nguyen/VIR

Source: https://vietnamnet.vn/en/society/prolonged-pandemic-issues-cloud-recovery-715635.html

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Four returnees diagnosed with Covid-19

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Medical workers of the National Hospital for Tropical Diseases in Hanoi take care of a Covid-19 patient. The Ministry of Health has reported four new imported Covid-19 cases – PHOTO: VNA

HCMC – The Ministry of Health has confirmed four fresh imported Covid-19 cases, including one in Kien Giang and three in Khanh Hoa, taking the country’s Covid-19 tally to 2,737 as of this morning, April 15.

Specifically, the case in Kien Giang is a 25-year-old man residing in Duong Kinh District, Haiphong City. On April 10, he entered Vietnam through the Ha Tien international border gate in Kien Giang and was quarantined in the province.

On April 13, he tested positive for Covid-19 and is being treated at the medical center of Ha Tien City.

The remaining patients include a woman and two men, aged 27, 32 and 26, respectively. The woman is a resident of Thua Thien-Hue Province, while the two men are from Ha Tinh Province.

They flew back to Vietnam from Japan through the Cam Ranh International Airport in Khanh Hoa on April 11 and were quarantined in the province. The three tested positive for Covid-19 on April 14 and are receiving treatment at the Khanh Hoa Hospital for Tropical Diseases.

Source: https://english.thesaigontimes.vn/81456/four-returnees-diagnosed-with-covid-19.html

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Breakfast @ Tien Phong News — April 15

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Read what is in the news today:

COVID-19 Updates

— Vietnam reported 20 imported cases of COVID-19 on Wednesday afternoon and Thursday morning, raising the national tally to 2,737 patients, with 2,445 recoveries and 35 virus-related deaths, according to the Ministry of Health

— Ho Chi Minh City medical authorities said on Wednesday that the city had yet to receive the protocol of ‘vaccine passports,’ which are COVID-19 vaccination certificates to be granted for international visitors and stranded Vietnamese to enter the country, from the National Steering Committee for COVID-19 Prevention and Control.

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— It is forecast to rain in the evening from Friday to April 23 in the southern Vietnamese region, according to the National Center for Hydro-meteorological Forecasting.

— More than 14 metric tons of fish died en masse due to an unknown reason on the section of the Ma River passing through Cam Thuy District in the north-central Vietnamese province of Thanh Hoa on Wednesday.

— Police in Ho Chi Minh City said on Wednesday that they had recently arrested a group of seven people for staging motorbike accidents on the streets to steal properties from commuters.

— One student has been successfully rescued from drowning while two others remain missing after a group of nine students went swimming at a local river in northern Phu Tho Province on Wednesday afternoon.

— An eighth-grade student critically knifed a seventh grader after being reprimanded by their school administrators for hitting the latter in southern Vinh Long Province on Wednesday afternoon.

— Two workers were dead and another was injured after a personnel lift overturned at a shipbuilding company in central Quang Ngai Province on Wednesday morning.

Business

— The 2021 Vietnam International Trade Fair (Vietnam Expo), the 30th edition of its kind, opened at the Hanoi International Exhibition Center on Wednesday.

— E-stamping, a computer-based application with product information that can be retrieved on state agencies’ websites, must be used for imported tobacco and alcohol products from July 2022, according to the Ministry of Finance’s new instruction.

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Source: https://tuoitrenews.vn/news/society/20210415/breakfast-tuoi-tre-news-april-15/60369.html

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Vietnam tightens security along southwestern border amidst rising COVID-19 risk

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Localities in southwest Vietnam are tightening border management and security to minimize risk of COVID-19 spread as the pandemic situation in Cambodia becomes increasingly complicated.

In Long An Province, the provincial People’s Committee has ordered competent authorities to carry out regular inspection at local hotels and accommodation facilities, as well as patroling along border trails and ports to promptly detect any border jumpers.

Multiple quarantine centers have been reactivated with the capacity of up to 1,000 people, according to Huynh Minh Phuc, director of the Long An Department of Health.

Local authorities have been in regular contact with their counterparts in the neighboring country to stay updated on the pandemic developments.

A total of 36 checkpoints have been established along the 133-kilometer borderline in the province.

The administration in Dong Thap Province has been advising Vietnamese people living in Cambodia to refrain from returning home during this period.

Local authorities have also provided essential goods and medicine to overseas Vietnamese in difficult conditions.

An officer is on duty along the Vietnam-Cambodia border. Photo: Khoa Nam / Tien Phong

An officer is on duty along the Vietnam-Cambodia border. Photo: Khoa Nam / Tien Phong

Twenty-one checkpoints and 18 patrol units with the participation of more than 220 officers have been set up to tighten security along the border.

The province has administered 600 COVID-19 vaccine shots to medical staff and officers working in border areas.

In An Giang Province, 187 working groups have been on duty to prevent the spread of COVID-19 via the Vietnam-Cambodia border.

About 16 to 20 people travel from Cambodia to An Giang on a daily basis and all of them are quarantined upon arrival in accordance with regulations, said Colonel Bui Trung Dung, deputy commander of the provincial Border Guard Command.

In Kien Giang Province, which shares a 56-kilometer border with Cambodia, thousands of officers have been mobilized to maximize border management efforts.

Many patrol ships and speedboats have been tasked with managing the maritime border off Kien Hai, Phu Quoc, and Tho Chau Islands.

Local fishermen have agreed to assist the task force by reporting to competent authorities when they detect a suspicious boat.

A border guard officer talks with local residents in An Giang Province, Vietnam. Photo: Buu Dau / Tien Phong

A border guard officer talks with local residents in An Giang Province, Vietnam. Photo: Buu Dau / Tien Phong

Authorities in An Giang and Kien Giang have advised residents of the Khmer ethnic group to celebrate the Choul Chnam Thmey (Khmer New Year), which takes place from April 14 to 16, in a safe manner.

Residents were asked to avoid traveling across the border to visit their relatives, wear face masks during ceremonies and rituals, and limit crowded activities.

Vietnam has recorded 2,737 COVID-19 cases as of Thursday morning, with 2,445 recoveries and 35 deaths, according to the Ministry of Health.

The country has not recorded any community-based infections for nearly 40 days.

Meanwhile, the World Health Organization has recently warned that Cambodia is standing on the brink of a national tragedy following a sudden and huge surge in community transmissions and COVID-19-related deaths.

Cambodia has documented 4,874 COVID-19 cases so far, with 2,544 recoveries and 35 fatalities, according to the Khmer Times.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!

Source: https://tuoitrenews.vn/news/society/20210414/vietnam-tightens-security-along-southwestern-border-amidst-rising-covid19-risk/60364.html

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