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Vietnam is the most resilient economy during the Covid-19 crisis

Vietnam is the most resilient economy during the Covid-19 crisis

Wednesday 20, 05 2020
“To take advantage of this, Vietnam needs to improve its legal framework and administrative procedures to help the domestic sector address current challenges.

In addition, it needs to monitor economic reforms to attract FDI, along with promoting the development of high technology and modern infrastructure "- experts from the ASEAN-Japan Center commented.

The most resilient economy

According to Business Times, Vietnam is considered the most resilient economy in the context of the COVID-19 crisis. Rabobank economists - Raphie Hayat and Ralph van Mechelen - wrote in a report on May 18 that Vietnam could benefit from further tensions between the US and China.

"Vietnam may emerge from the Covid-19 crisis with the strongest growth in Southeast Asia, but the risk of falling is also very high, the Dutch financial group Rabobank has warned. The Vietnamese economy is still expected to grow positively by 2020, "the report said.

However, according to a recently published study by the ASEAN-Japan Center called "The Global Value Chain in ASEAN: Vietnam", Vietnam's export activities have not created much-added value, for example, this value was only 69 billion USD, equivalent to a quarter of the nominal goods and service exports of 260 billion USD. This poses many strategic challenges for development.

Although Vietnam's total export turnover is increasing, the contribution of the added value to the economy accounts for only 12% of the GDP, which is lower than the ASEAN average of 33%.

However, in recent times, foreign direct investment has been pouring into Vietnam, especially FDI export, which means that Vietnam has become a favorite destination for production, processing, and export – the Asean-Japan Center commented.

Vietnam is the most resilient economy during the Covid-19 crisis

According to experts of this Center, the impact of FDI, as well as exports, on the economy will depend on the added value structure of the Vietnamese economy, which is particularly demonstrated via the secondary sectors, including the food and beverage industry.

For nearly 3 decades, the contribution of the foreign sector to the added export value of Vietnam has ranged from 23-42%, then been stabilized at 32% - 33%.

>> 
What workers need to do to overcome the COVID-19 crisis​

What should the country do?

"There is a relationship between the growth rate of FDI inflows and the increasing participation of Vietnam in the global value chain, and both of these create benefits for the economy," the experts said. "To take advantage of this, Vietnam needs to improve its legal framework and administrative procedures to help the domestic sector address current challenges. In addition, it needs to monitor economic reforms to attract FDI, along with promoting the development of high technology and modern infrastructure.”

Source: https://cafef.vn/viet-nam-la-nen-kinh-te-kien-cuong-nhat-truoc-khung-hoang-covid-19-20200519165906994.chn

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