The sudden outbreak of the Covid-19 pandemic, followed by the uncontrollable and rapid spread of the deadly virus, has hit the entire world like a tsunami. This has had a disastrous ripple effect across all economies and all signs are showing that this crisis will not end very soon, and Vietnam best be better prepared for it in days to come.
Catastrophic economic losses
Immediately after the outbreak and spread of the Covid-19 pandemic in China, many forecast catastrophic economic losses for China, which is Vietnam’s main trading partner and has a harmonious business relation with our country. As predicted, many manufacturing, export and service sectors in Vietnam suffered severe losses soon after the outbreak began to spread, especially industries that depended on raw materials from China.
This crisis is new to mankind, and we are seeing new developments every day, and new measures to tackle and cope with the spread of this deadly virus. The day to day impact is becoming more evident with serious economic losses across all fields. With the economy reeling under the strain, unprecedented anti-pandemic measures are being sort and applied. Vietnam has now taken the drastic action of stopping the issuing of visas to foreign travelers until the end of April and grounding all incoming international flights as well. This dire and stringent action has put all tourism on hold.
According to a forecast by the Civil Aviation Administration of Vietnam, the current complicated and unpredictable situation caused by the Covid-19 pandemic will cost the airlines a revenue loss of about VND 30,000 bn in 2020, higher by VND 5,000 bn to a previous forecast. Road transport, including passenger and freight transport will see a 40-80% decline as compared to 2019 or the time before the pandemic broke out. As for damage to the tourism industry, in the next three months the financial losses will surely surpass USD 7 bn.
The economy is expected to see more catastrophic falls in coming months, when companies will run out of raw material reserves and will be unable to procure new stocks from any other source. According to the Business Registration Management Department in the Ministry of Planning and Investment, in the first two months of the year, almost 16,151 enterprises saw temporary business suspension, up 19.5% over the same period last year. Along with that, 2,807 enterprises completed dissolution procedures.
As per the latest survey by the Private Economic Development Research Board, if the Covid-19 pandemic lasts for six months, 74% of businesses will declare bankruptcy. Due to this pandemic outbreak, production is at a standstill, trade is limited, agriculture and retail businesses have slowed and international investment has been seriously affected. Specifically, in the first two months of the year, the capital to implement foreign direct investment projects estimated at USD 2.45 bn, came down by 5%, from the same period last year.
The country's economy has entered the last month of the first quarter of 2020 with a red tornado sweeping over 55 points in the first week of March on the stock market. Commercial businesses like bars, cinemas, and discotheques have been shut to control the spread of the deadly virus in many cities. Ho Chi Minh City lost revenue of around VND 1,600 bn in the first two months of 2020, and investment capital plummeted by 42.1%. According to the Vietnam Association of Realtors (VARs), more than 300 to 1,000 real estate trading floors across the country have been closed and 500 floors are operating moderately due to fear of the Covid-19 pandemic.
Drastic actions to save lives
In such difficult, confusing and critical times every Vietnamese has understood the relevance of protecting the health and lives of the people, and the Government has been extremely sensitive to embrace all efforts to protect the people first. Natural disasters and pandemics are unexpected catastrophic occurrences that are not manmade, but can cause havoc to human life. To be able to cope with such situations, every country adopts its own policy, suitable to its own socio-economic circumstances and thereby shows its ability to manage and resolve all related crisis issues in real life.
- Prime Minister Nguyen Xuan Phuc.
The urgent and humane actions of the Vietnamese Government have brought out a solidarity among the people and the nation as a whole is feeling the responsibility to protect the people, the community, businesses, organizations, individuals and their elderly, in this time of need and caution. On 17 March, the all-people campaign to support the efforts for prevention of the Covid-19 pandemic was organized on an online forum that connected 63 provinces and cities nationwide.
To overcome the damage to the economy and minimize losses during this very unprecedented attack of an unknown virus, the government is working hard at containing and controlling the spread of Covid-19 so that people can get back to daily working lives soon. However, even though the economy is continuing to take a serious hit the government is giving top priority to resolutely fight this pandemic to save lives and provide all necessary support to the affected people, especially its citizens.