Vietnam will be missing out on investment opportunities if social distancing prolongs

AmCham Vietnam, EuroCham Vietnam, KoCham, U.S.-ASEAN Business Council's surveys showed that at least 20 percent of their manufacturing members already have shifted some production to another country, with more discussions underway. Illustrative photo: Le Toan

The said Associations said it would be important that Vietnam takes action now to maintain its regional and global competitiveness, and not lag in economic recovery. They are committed to supporting the Central Government's COVID-19 dual goals of protecting lives and livelihoods, ensuring the health and safety of the people, and enabling economic growth and recovery. They are optimistic about the future of Vietnam. They believe in the strength and resiliency of the Vietnamese people – and the Vietnamese economy. And they are committed to Vietnam and invested in the future.

“We support your strategic policy direction to adapt to "living with the virus safely". We want to join hands together with you and provincial leaders throughout the country, particularly in HCMC and the Southern Economic Region and Da Nang, to reopen the economy safely, enabling economic recovery and a “new normal”. That will mean moving away from Directive 15 or 16 soon, and avoiding returning to similar restrictive measures in the future”, these Associations said.

Surveys that these associations have conducted show that at least 20 percent of their manufacturing members already have shifted some production to another country, with more discussions underway. Many of their members have calls every night with regional and global headquarters deciding what customers to honor, which to turn away, and what production to shift. Once production shifts, it is difficult to return, especially once production lines have been expanded elsewhere.

Vietnam is missing out on investment opportunities that may not return. Investment will not increase without a clear plan for reopening and recovery. Even existing businesses have most investment plans on hold, given current uncertainties. Potential new investors cannot visit without streamlined policies for entry of foreigners. Vietnam will miss out on a huge opportunity to capitalize on diversification of supply chains away from China if it cannot demonstrate it is a reliable alternative. To maintain regional and global competitiveness, including compared to Malaysia, Indonesia, and Thailand, Vietnam must take action now.

Stressing vaccines are key, these business associations have been strong advocates of vaccine diplomacy for Vietnam. They have welcomed donations of nearly 10 million doses of vaccines from our member countries, and support a transparent, equitable, efficient, and safe distribution of vaccines, according to priority risk groups. They hope these priority groups can focus on frontline healthcare workers, elderly and those with pre-existing conditions, shippers and frontline sellers of essential food and medical products, and workers in industrial parks, ports, and logistics, particularly in HCMC and the southern region, both for the first and second doses.

Meanwhile, the proposed vaccine passports and “Green and Yellow Card” system may be useful parts of a reopening strategy, but raise lots of questions. Chief among these Associations are questions about what the app or tracking system is, and how it will be coordinated among departments or ministries and provinces to allow consistent recognition, access, and travel. There also needs to be a mechanism for recording vaccinations and granting “Green Cards” for foreigners, many of whom were fullyvaccinated abroad. “We welcome your commitment to streamline the return and entry of foreign experts, managers, and investors, as was reaffirmed last week by the Ministry of Foreign Affairs. And we welcome more acceptance of digital documents, both to facilitate trade and investment during COVID, and to enable innovation and the growth of the digital economy. These procedures and implementation must happen soon to enable economic recovery and a return to a “new normal”, they said.

These Association proposed that manufacturing needs to reopen to a “new normal” now. “Businesses with proven track records and clear plans need to be enabled to take on more responsibility for their operations and worker safety and reopen as they are able, with post-implementation monitoring. Overtime caps need to be lifted to allow for the unique requirements of the manufacturing bubble models, and the need to meet pent-up demand when more normal manufacturing operations resumes. The manufacturing bubble models created in HCMC and in other provinces to allow continuity of operations during COVID have been extremely useful as an interim measure. But the models don’t work well for large, labor-intensive factories, such as in the footwear and apparel sector. And they are not sustainable long-term, from a cost, logistical and worker health, safety, and morale perspective”, these Association stressed.

In addition, these Association said now would be the time to plan a safe reopening for tourism. Vietnam again will be a top destination for tourism, both domestic and international. “We welcome the Phu Quoc sandbox and Ba RiaVung Tau green corridor proposals and look forward to working with you to reopen tourism safely, and sustainably”, they said.