Will a big boost in vaccination help HCMC to gradually reopen?

Quicker vaccination progress

According to the Plan No. 2715/KH-UBND for COVID-19 Prevention and Control issued on 15 August, HCMC’s authorities aimed to control this pandemic with two phases. 

In the first phase (from 15 August to 31 August, 2021), the city will focus on reducing the mortality rate, ensuring that all serve cases are treated, expanding “green zone” and striving to control the pandemic in Can Gio, Nha Be, Cu Chi, Phu Nhuan, 5, 7 and 11 districts. 

In the second phase (from 1 September to 15 September, 2021), HCMC will strive to reduce fatalities and the number of severe cases by 20%, the number of hospitalized patients per day should not exceed the number of discharged patients per day and the number of hospitalized patients should not exceed 2,000 per day. In addition, the city set the target that until 15 September, 70% of the population (over 18 years old) receives the first dose of vaccination, and 15% of the people with the second dose of vaccination.

The vaccination progress in HCMC is more encouraging, as of 25 August, nearly 5.6m people, or 76% of adults in HCMC have been received at least one dose while 3% of them have been fully vaccinated. A total of 16.1m doses of vaccines have been administered compared to a total of 23.9m doses of vaccines that have been received. Accelerating vaccine delivery is expected in Sep 2021 and 4Q21. Therefore, VDSC expected that a continued ramp-up in vaccination progress would help the city to gradually reopen economic activities in 4Q21.

As of 25 August, nearly 5.6m people, or 76% of adults in HCMC have been received at least one dose while 3% of them have been fully vaccinated. 

Uneven reopening across different provinces

Until now, more than 60% of enterprises in HCMC’s industrial parks and exporting processing zones have suspended their operations due to Covid-19 restrictions. Meanwhile, around 30-40% of enterprises in industrial zones of nearby provinces (Long An, Binh Duong, and Dong Nai) had to halt operations. In addition, following more than a month of conducting “three on-site” production model, many businesses in the Southern region have faced challenges implementing this model due to high risks of Covid-19 infections spreading in their factories as well as a rising cost burden. 

The latest trade data in the first half of Aug 2021 showed a worrying deterioration with a sharp contraction in exports of fishery (-30.1% yoy), vegetables (-21.5%), rice (-24.8%), textile (-16.5%), wooden products (-31.5%), handbag (-42.7%), footwear (-42.2%) and tech products (-10.5%).

Currently, vaccine holds the key to the resumption of business activities. According to HCMC’s authorities, the city has vaccinated about 85% of workers in industrial parks and export processing zones. It also plans to give the first dose to the remaining 15% of workers by 15 September, 2021. The vaccination coverage for workers in industrial zones of nearby provinces is much lower compared to HCMC, about 30-40% of the total labor force. Other provinces in the Mekong Delta also have a lower vaccination rate, implying that the reopening will be uneven across different provinces in the South of Vietnam.

Besides uneven vaccination rates across provinces, there are some setbacks triggered by the pandemic that could impact the recovery outlook. According to Nikkei Asia, the intensified Covid-19 situation and government measures are disrupting plans by tech giants and their key suppliers to shift production from China to Vietnam. 

VDSC said, although a slowdown in production shift is likely to be temporary, it would impact the economic recovery in the near term. It has also concerns about the labor shortages and increasing labor cost when the pandemic is brought under control in the coming months. Due to the fourth outbreak, many businesses have shut down or stopped operation, resulting in millions of workers losing their jobs. However, even when the government gradually relaxes restriction measures, there are still many factors that could affect negatively the labor supply such as Covid-19 vaccination mandatory for work, labor skills gap, continuing health concerns, or the lack of affordable childcare.