Can Vietnam parlay its Covid-19 success into bigger victories?

By Minh Nga   June 2, 2020 | 07:30 am GMT+7
Can Vietnam parlay its Covid-19 success into bigger victories?
Doctors take samples from workers at an industrial zone in HCMC for Covid-19 tests, April 20, 2020. Photo by VnExpress/Quynh Tran.
Vietnam’s impressive handling of the coronavirus pandemic has boosted its international standing, and this can deliver greater political and economic gains, experts say.

The country image as a winner does not just pertain to its Covid-19 control, but also to how it has outperformed other countries, including more developed, better equipped nations. And it can use this achievement to target success in other arenas, they said.

"Vietnam's vigilance and diligence in anticipating and controlling the spread of the pandemic has given it that opportunity," said Jay Batongbacal, director of the UP Institute for Maritime Affairs and Law of the Sea at the University of the Philippines.

"It is one of only a handful of countries that have done so, and thus it may be seen by other states as someone to emulate and learn from," he said.

It is a view shared by Gregory Poling, director of the Asia Maritime Transparency Initiative and a fellow with the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in the U.S.

"It is important to avoid complacency, but so far it seems like Vietnam is a real success story in mitigating the spread of the virus.

"Hanoi’s relative transparency and effectiveness in the fight provides a positive contrast with both China, which was definitely not transparent, and the U.S. and much of Europe, which was slow and ineffective in its early response," he said.

The world has acclaimed and applauded Vietnam’s effective response to the novel coronavirus, especially considering the fact that it shares a large border with China, where the pandemic broke out first.

The nation has recorded 328 Covid-19 cases since it confirmed the first one in late January, when a Chinese man became infected and transmitted it to his son in Ho Chi Minh City. Among them, the number of discharges is now eight times higher than the active ones and the country is yet to report a single death.

This record compares very favorably with other countries with hundreds of thousands of infections and several thousand deaths each.

No time lost

Vietnam sprung into action against the pandemic very early, as soon as reports of the outbreak came from China last December.

Almost a month before the World Health Organization came up with the name "Covid-19" for the respiratory disease caused by the virus on February 11, Vietnam began checking the body temperature of all arrivals from China.

In late January, it suspended all flights to and from coronavirus-hit areas in China, stopped receiving visitors from China and sending Vietnamese tourists there, alongside quarantining all Chinese returning to Vietnam to work.

Later, as the virus spread outside China to other countries, Vietnam continued to expand its restrictions, allowing no entries from all virus-hit areas, isolating those coming from such areas in centralized facilities, and quarantining anyone showing the Covid-19 symptoms of cough, fever, sore throat in hospitals, where they were all tested for the virus.

It kept exhorting the public to report themselves immediately if they had come into contact with those suspected of carrying the virus or they had any symptom related to the disease. The Health Ministry provided hotlines and guidance on social media, TV and newspapers for people to follow in case they got into such a situation.

A medical staff sprays disinfectant on a motorbike at a checkpoint in Son Loi Commune, Vinh Phuc Province when the entire commune was put under lockdown in 28 days for being a Covid-19 cluster, February 20, 2020. Photo by VnExpress/Ngoc Thanh.

A medical staff sprays disinfectant on a motorbike at a checkpoint in Son Loi Commune, Vinh Phuc Province, which was put under lockdown for 28 days for being a Covid-19 cluster, February 20, 2020. Photo by VnExpress/Ngoc Thanh.

As the transmission went from infection detected among those returning or coming from abroad to cases caused by community transmission, Vietnam engaged in intense contact tracing, isolated whole neighborhoods including villages and imposed lockdowns of 28 days in several cases.

All addresses that a patient had been to during the incubation time, treated generally as 14 days, were made public. Samples of everyone in contact with the patient were taken for testing, even if they were asymptomatic.

Bonus benefits

Analysts feel Vietnam’s performance will enhance its credibility among the international community, which could help it win more support on East Sea (South China Sea) issues while making it more attractive to investors.

As Vietnam chairs the Association of Southeast Asian Nations (ASEAN), it should use this opportunity to rally the bloc members to its side and lead the way toward making ASEAN a truly significant player in the South China Sea and Southeast Asia, said Batongbacal.

"Vietnam should transform ASEAN from a mere talk-shop to a fully-blown regional organization capable of quickly responding to the needs of the member countries. As chair, Vietnam controls the agenda of ASEAN meetings and can suggest new projects or initiatives for the bloc," he said.

Poling of the CSIS also said that the current moment was a strategic opportunity for Hanoi "since it occupies both the ASEAN chair and a seat on the U.N. Security Council," Poling said.

"The fact that China continues to kick its Southeast Asian neighbors around in the South China Sea despite the pandemic is creating a lot of bad press and could provide more opportunity for Hanoi to leverage its leadership roles in international institutions," he said.

Economically, if Vietnam continues to keep up its good work, it could "reinforce the notion among many foreign investors that Vietnam is a relatively stable and safe place to invest, particularly for mid to high-end manufacturing."

Vietnam's performance thus far "certainly burnishes its credibility abroad," though how much of that will translate into regional and international diplomatic success is unclear, he added.

Leveraging Covid-19 success

While many parts of the world are now still in lockdown or social distancing restrictions, life in Vietnam is now back to normalcy: people have got back to work, students back in classes, restaurants and coffee shops have reopened and traffic jams have returned on streets. Some tourist attractions, especially beaches, have been crowded with visitors.

Vietnam's ability to put Covid-19 under control has enabled it to reopen the economy much earlier than most others in the region.

"That will obviously help enhance Vietnam's reputation as a safe destination for international businesses and travelers. It will also highlight the efficiency of the Vietnamese bureaucracy and health system," said Le Hong Hiep, a fellow at the Singapore-based ISEAS-Yusof Ishak Institute.

Such a good international profile can contribute to Vietnam's efforts in attracting new investors, especially those planning to move their manufacturing facilities out of China, he said.

Batongbacal also said Vietnam could leverage its success in controlling the spread of the coronavirus in several ways as its impact on the Vietnamese economy has been minimized, allowing the nation to spring ahead of other regional states in terms of economic growth.

"Weathering the pandemic with its economy substantially intact while others suffer severe setbacks naturally gives Vietnam a competitive edge and comparative advantage in comparison with her regional neighbors and encourages external economic powers like the EU and U.S. to invest more heavily in Vietnam because it can provide the needed political and economic stability necessary for growth," he said.

There have been reports of major foreign companies considering starting production in Vietnam as a new manufacturing hub as they seek to shift away from China.

Taiwan’s Pegatron, which manufactures Apple iPhones, has announced plans to set up a factory in Vietnam by the end of the year. Google is set to begin production of its low-cost smart phones with Vietnamese partners this year, while Microsoft is scheduled to produce notebooks and desktop computers in the northern region in the second quarter. Japan’s Nintendo has also made plans to shift a part of its Switch gaming consoles production from China to Vietnam.

Furthermore, foreign investors have been seeking real estate to set up their factories. Despite Covid-19 impacts, industrial land prices in the first quarter rose 6.5 percent in the north and 12 percent in the south, according to a report by real estate service firm Jones Lang LaSalle (JLL).

On May 22, Prime Minister Nguyen Xuan Phuc gave the nod to establish a special working group headed by the Minister of Planning and Investment to prepare Vietnam to catch capital inflows from foreign investors who are diversifying investment locations and repositioning manufacturing facilities after the Covid-19 pandemic.

Murray Hiebert, a senior associate of the CSIS, said Vietnam's advantage is that, since it shares a land boundary with China, it is relatively much easier to pack up from China and cross into Vietnam.

When this is over, many companies will re-evaluate the risks of their investments remaining in China and seek other safe harbor.

"Given its demonstrated abilities to handle the Covid-19 crisis, Vietnam would be in the best position to offer those companies the kind of diligent governance and stable economic policies that they need to swiftly recover from the economic impact of this pandemic," he said.

No guarantees

Despite what Vietnam has achieved so far, Deputy Prime Minister Vu Duc Dam, who heads the National Steering Committee for Covid-19 Prevention and Fighting, said on May 22 that "we have controlled the disease well, but we have not won the war."

Hiebert seconded this. "It's too early for Vietnam to declare victory, although so far it has done well.

"It is possible that as Vietnam relaxes some of its control on population movement and re-opens its economy that we could see a second wave of infection as happened in Singapore, for example," he said.

A primary school boy in HCMC has his hands disinfected and his body temperature checked before entering the school, May 8, 2020. Photo by VnExpress/Quynh Tran.

A primary school boy in HCMC has his hands disinfected and his body temperature checked before entering the school, May 8, 2020. Photo by VnExpress/Quynh Tran.

Hiep of the ISEAS-Yusof Ishak Institute, said that apart from the risks posed by the possible infections, the Vietnamese economy is far from recovery as many countries in the region have not fully restored their economic activities and international travel is still restricted.

He said although "Vietnam has done its part," its recovery still depends on how early other countries can contain the virus. If the pandemic prolongs, Vietnam will be able to mitigate its impacts somewhat, but it wouldn’t be a winner.

"We are all in this together, and there will be no real winner if most other countries aren't out of the woods and international trade, investment and tourism isn't fully restored yet," he said.

There are also worries that even after the pandemic, Vietnam might not be attractive enough for investors.

Hiebert said it is likely that more companies will move some of their manufacturing out of China and some of it will come to Vietnam, but some may also move closer to the U.S. and the EU.

"Even before the Covid-19 outbreak, companies found that the supply chain in Vietnam lacked many components they needed and the country did not have enough skilled workers that would facilitate many more manufacturing operations moving to Vietnam."

Vietnam will benefit somewhat but there are limits to what the country can absorb, he said.

Much of the developed world is totally preoccupied with controlling the virus, so it will most likely be hard for Vietnam to garner much international support against China's operations in the South China Sea, Hiebert said.

He added: "Even last year long before the pandemic, a few U.S. officials spoke out against the moves by China's survey vessel but most other countries were worried that calling out China could hurt their economic relations, so they avoided criticizing Beijing. This year it will be even harder to get the international community to speak out."

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