Economic Growth During a Pandemic: An Oxymoron or a Reality?

by: Anonymous
Image Credit: Samurai Spy

Let’s play a modified game of ‘Two Truths and a Lie’, except in this version of the game, identify two lies and one truth.

Statement 1: Vietnam is currently regarded as one of the most dangerous and COVID-19 case abundant countries in the world.

Statement 2: Every country in Asia is handling the COVID-19 pandemic well and has a rising GDP. 

Statement 3: Vietnam has minimised the economic damage from COVID-19 and is the only country in South-East Asia on track for growth this year.

Statement 1 is false. In actuality, Vietnam is considered to be a – nearly – coronavirus free country, with one of the lowest number of cases and deaths worldwide: 1,351 confirmed cases, 1,195 recoveries, and 35 deaths (as of December 1st, 2020). Vietnam successfully managed its first wave of coronavirus infections in April; after that, the country went nearly 100 days without local transmission until the virus re-emerged in the central city of Danang in July, where it was quickly contained and eliminated.  

Statement 2 is also a “lie”. For instance, while governments of Vietnam, Singapore and Taiwan have eradicated pandemic outbreaks efficiently in their respective regions, preventing second or even third waves / lockdowns, many other Asian countries face daily rises in cases and deaths. Although countries in Asia largely have the spread of coronavirus under control, many are suffering from economic drawbacks. 

By the process of elimination, it can be concluded that Statement 3 is the single truthful statement. Vietnam has struck the bullseye – the equilibrium between public health and economic growth. Vietnam stands out in the region and its economic growth this year is second after China’s. What makes China’s growth less impressive than that of Vietnam’s is that China’s economy, despite having gradually recovered, continues to suffer after increased tensions with the US. China’s economic recovery is nowhere near its pre-COVID achievements due to this sour economic relationship. 

This article aims to examine the story behind Vietnam’s successful battle with COVID-19 and highlight some of the techniques employed by Vietnam’s government in mitigating the economic and social effects of the pandemic and other hardships.   

According to figures from the International Monetary Fund and the World Bank, Vietnam’s economy and GDP growth are expected to grow 2.4% and 2.8%, respectively. It may come as a surprise to some that Vietnam is experiencing economic growth during the strenuous times of a pandemic, considering that the social and demographic issues of the LMIC were regarded as a recipe for disaster. The dense population of 97 million people, a 1300 km border with China, an undocumented trade through mountain trails and a lack of healthcare infrastructure compared to wealthier neighbours are factors that contribute to Vietnam being set up for failure from the beginning. These factors make the way that the Vietnamese government dealt with coronavirus an extraordinary case in world history. 

Vietnam’s public health measures – A perfect plan or draconian forces?

From the very early stages of the developing pandemic in winter 2020, Vietnam’s government chose to fight the emergence and spread of the virus head-on, which proved to be quite effective in the future. After the first coronavirus deaths in Wuhan in January, Vietnam tightened its border and air control of Chinese visitors. Given that trade with China contributes significantly to the Vietnamese economy, this necessary decision was a difficult one. When the first cases were identified in Vietnam, the country took precautionary measures, going above and beyond the World Health Organization’s recommendations at the time. Flights from / to Wuhan were cancelled and screening, including temperature checks, at the border was established. The immediate actions taken by the government were attributed to Vietnam’s better accustomization to virus outbreaks and mask-wearing compared to European countries. Vietnam had anticipated a downplay of the virus by Chinese authorities; the country’s previous experience with the 2003 SARS outbreak allowed for an “early” implementation of pandemic preparations a month before the public health emergency of international concern escalated to an official declaration of a pandemic.  

Vietnam was quick to develop testing kits and used a combination of strategic testing and aggressive contact tracing to get coronavirus infections under control. With such measures in place, the government managed to promptly prevent any transmission. During the initial wave, those infected were hospitalised; though the medical attention was not at European standards, this nonetheless prevented many deaths. Furthermore, their contacts were traced and placed in isolation. Another preventative measure involved mini local lockdowns in neighbourhoods and individual homes, all of which were thoroughly sanitised by the army.       

The Southeast Asian nation held a 3-month-long streak without recording a locally transmitted COVID-19 case until July, when a small outbreak erupted in Danang, a beach city popular with local tourists. Cases were brought down sharply with a swift lockdown of Danang, travel restrictions to the city, and widespread, targeted testing and contact tracing. The government also evacuated all tourists, closed non-essential businesses and even put entire streets into quarantine. Those who failed to respect the rules were fined. Such remedial approaches may have appeared harsh, but life is now “back to normal” with only limited constraints.

It is important to note that much of the success was only possible due to Vietnam’s Communist Party government. It would be difficult to replicate the thorough track-and-trace system and the immediate, unhesitant lockdown orders imposed by the authoritarian regime in democratic countries. This seemingly harsh and explicit control over the lives of citizens has not been normalized in Western countries – yet. Aside from public health policies created by the government, the regime also employed several other tactics to halt the spread of the virus due to the fact that mass testing equipment was inaccessible at the emergence of coronavirus. Vietnam’s authoritarian government used the country’s history and cultural memory to encourage solidarity and relied on the collective action of its citizens. This type of cooperation is nowhere to be seen in the US for example, where there is a great divide concerning the efficacy of masks and the existence of the virus itself. 

Heavy propaganda is used in government messaging and is present in citizens’ everyday lives through posters, slogans, mass media, campaigns, and loudspeaker systems. The pandemic propaganda echoes Vietnam’s past military conflicts. COVID-19 has been personified and actively compared to / characterized as a military adversary. Examples of this include: Public official vowing to “beat the pandemic like beating invaders” and a daily newscaster announcing “We will prevail over this virus, as we’ve prevailed over many previous enemies.”. Loudspeakers, previously used during the Vietnam War to alert citizens of attacks and bombings are now utilized for COVID-19 related updates. Audio and video public service announcements, promoting hand washing and social distancing, have been produced in the form of war songs. Although it may seem as if these methods can only instill fear in the population, the authoritarian rule’s larger goal of using military history and common identity to curb the spread of the virus was achieved.    

Finding the golden mean 

Vietnam’s management of the coronavirus pandemic within its own borders has helped loosen restrictions and resume economic activity. After mitigating the detrimental effects of coronavirus on the public, the Vietnamese government has refocused its priorities and anti-COVID strategy on the economy. The tactics for the second wave are more sophisticated: Contact tracing is still prompt and strict, but lockdowns and isolations are more selective and international flights were opened for foreign workers, such as engineers from South Korea’s LG, who are needed to keep the economy functioning. Special economic protocols are in place, for example, allowing business people, diplomats and specialized workers to enter the country. 

Making a profit off of online employment and E-learning   

As of October, Vietnamese exports have grown 9.9% since last year, to $26.7 billion. Vietnam’s manufacturing sector has also grown enormously over the past decade. These rising exports have driven economic growth in Vietnam, as companies and businesses relocate production from China. In some cases, production is moved to Vietnam and India out of financial means / increasing labour costs; labour conditions for factory workers have improved in China, making manufacturing in poorer nations cheaper – thus a more attractive – option. In other cases, this relocation can be attributed to the worsening political relationship between the US and China. The ongoing US-China trade war has made China a less attractive manufacturing destination, with a number of tariffs imposed on exports. Many multinationals have started operating in Vietnam, including global technology leaders such as Apple and Samsung. Apple now has plans to manufacture its high-end Airpods studio earphone in Vietnam. 

Vietnam was one of the only countries in the region that reopened factories and resumed manufacturing activity after a three week lockdown in April. Strict health measures were implemented and lockdowns were saved for dangerous coronavirus hotspots. The fast rebound resulted in few job losses for the population whereas in other countries, unemployment skyrocketed.  

Perhaps the most unexpected economic gain has come from the huge global increase in the number of people working from home. This urgent and great demand for technology, in combination with the manufacturing relocation from China, worked in Vietnam’s favour. More and more people had to / have to purchase furniture and electronics such as new laptops, computers and office supplies, for both working and spending more time at home. An increase of 20% was recorded in Vietnam’s exports of personal computers to meet a growing demand, as students worldwide attend online classes and large parts of the global workforce continue to work from home. Many of those products are made in Vietnam, and consequently,Vietnam’s exports to the US have increased by 23% while electronic exports increased by 26% in the first three quarters compared to the same period in 2019.

In summary, with its strict quarantine and tracking measures, Vietnam proved itself to be an outlier through its quick actions to contain the coronavirus outbreaks, allowing the country to resume its economic activities earlier than much of Asia. The country has seen slower growth this year and this year’s events took a particularly negative toll on the once-thriving tourism sector, but all in all, Vietnam has avoided the worst economic effects of the pandemic. These achievements deserve international attention. Vietnam’s unique example and its greater gain than loss from the global health crisis should be used for future reference in other developing countries. The government’s handling of the pandemic should be taught in history classes of future generations to show that economic growth amidst a pandemic is in fact a possibility. Nevertheless, Vietnam continues to face socio-economic instability: Recent typhoons have caused 192 deaths and cost the country $1.3 billion in damage, putting the country’s COVID-19 success story at risk of retraction in the long term.

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