Vietnam's Economic Hopes Fade as COVID-19 Takes Away Business
2020-10-05
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1Vietnamese officials have lowered expectations for their country's normally fast-growing economy in 2020.
2The officials noted that weakness in the international economy has reduced demand for exports and international travel.
3Vietnam's $260 billion economy has grown 6 percent or more each year since 2012 because of an increase in manufactured exports.
4Vietnamese officials say the economy will grow just 2 percent in 2020.
5That is down from an earlier target of 2.5 percent.
6The Asian Development Bank estimates that the economy will expand at a rate of just 1.8 percent this year.
7Experts say measures taken around the world to contain COVID-19 have reduced orders to Vietnamese factories that make shoes, clothing and furniture.
8Stay-at-home rules in Western countries are keeping people away from physical stores.
9Business closures in those countries have left people out of work and less likely to buy non-essential goods.
10Frederick Burke is a partner with the law office Baker McKenzie in Ho Chi Minh City.
11He told VOA, "The rule is that those light industrial goods are weak, the exports orders are down and there's reports of a lot of unemployment in the factory sector in the [Vietnamese] provinces."
12Vietnamese factories that make electronic products still get orders from companies that sell overseas to people working or studying at home.
13However, most factories that make non-essential goods are failing, Burke said.
14For example, one Vietnamese factory operated by a Taiwan-based company dismissed 150 workers earlier this year.
15That information comes from the nonprofit Business & Human Rights Resource Centre.
16Vietnam has closed its borders to limit the spread of COVID-19.
17The border closure is stopping investors from making trips that would help them expand.
18They would normally travel to Vietnam from Japan, Singapore, South Korea and Taiwan to search for new places to manufacture goods.
19Jack Nguyen is a partner with Mazars, a business advisory service, in Ho Chi Minh City.
20He said that Vietnam's tourism industry has also been badly affected by the restrictions on travel.
21Foreign tourism usually makes up 6 percent of the Vietnamese economy.
22"Things will only pick up only when the borders are open and there's no quarantine requirements," Nguyen said.
23"Who knows when that's going to be."
24Experts say a COVID-19 outbreak earlier in Danang, followed by the start of the school year, has reduced travel within Vietnam.
25Some of the country's hotels are up for sale as a result, Nguyen noted.
26The Ministry of Planning and Investment says it could take as long as four years for the world economy to recover from the effects of COVID-19.
27The ministry set a 2021 growth target of 6 percent to 6.5 percent, down from an earlier goal of 7 percent.
28However, foreign investors in the country are not looking elsewhere.
29Frederick Burke said that those investors believe Vietnam's economy will survive the effects of the coronavirus health crisis.
30Ralf Matthaes is founder of the Infocus Mekong Research group in Ho Chi Minh City.
31He says Vietnam's government "has proven to the world thus far that it can protect its borders from the invasion of a pandemic and create a desirable atmosphere for investment."
32He added that that is something most other Asian nations cannot say.
33I'm Jonathan Evans.
1Vietnamese officials have lowered expectations for their country's normally fast-growing economy in 2020. The officials noted that weakness in the international economy has reduced demand for exports and international travel. 2Vietnam's $260 billion economy has grown 6 percent or more each year since 2012 because of an increase in manufactured exports. Vietnamese officials say the economy will grow just 2 percent in 2020. That is down from an earlier target of 2.5 percent. The Asian Development Bank estimates that the economy will expand at a rate of just 1.8 percent this year. 3Experts say measures taken around the world to contain COVID-19 have reduced orders to Vietnamese factories that make shoes, clothing and furniture. 4Stay-at-home rules in Western countries are keeping people away from physical stores. Business closures in those countries have left people out of work and less likely to buy non-essential goods. 5Frederick Burke is a partner with the law office Baker McKenzie in Ho Chi Minh City. He told VOA, "The rule is that those light industrial goods are weak, the exports orders are down and there's reports of a lot of unemployment in the factory sector in the [Vietnamese] provinces." 6Vietnamese factories that make electronic products still get orders from companies that sell overseas to people working or studying at home. However, most factories that make non-essential goods are failing, Burke said. 7For example, one Vietnamese factory operated by a Taiwan-based company dismissed 150 workers earlier this year. That information comes from the nonprofit Business & Human Rights Resource Centre. 8Vietnam has closed its borders to limit the spread of COVID-19. The border closure is stopping investors from making trips that would help them expand. They would normally travel to Vietnam from Japan, Singapore, South Korea and Taiwan to search for new places to manufacture goods. 9Jack Nguyen is a partner with Mazars, a business advisory service, in Ho Chi Minh City. He said that Vietnam's tourism industry has also been badly affected by the restrictions on travel. Foreign tourism usually makes up 6 percent of the Vietnamese economy. 10"Things will only pick up only when the borders are open and there's no quarantine requirements," Nguyen said. "Who knows when that's going to be." 11Experts say a COVID-19 outbreak earlier in Danang, followed by the start of the school year, has reduced travel within Vietnam. Some of the country's hotels are up for sale as a result, Nguyen noted. 12The Ministry of Planning and Investment says it could take as long as four years for the world economy to recover from the effects of COVID-19. The ministry set a 2021 growth target of 6 percent to 6.5 percent, down from an earlier goal of 7 percent. 13However, foreign investors in the country are not looking elsewhere. Frederick Burke said that those investors believe Vietnam's economy will survive the effects of the coronavirus health crisis. 14Ralf Matthaes is founder of the Infocus Mekong Research group in Ho Chi Minh City. He says Vietnam's government "has proven to the world thus far that it can protect its borders from the invasion of a pandemic and create a desirable atmosphere for investment." He added that that is something most other Asian nations cannot say. 15I'm Jonathan Evans. 16Ralph Jennings reported on this story for VOANews.com. Jonathan Evans adapted his story for Learning English. George Grow was the editor. 17________________________________________________________________ 18Words in This Story 19furniture - n. chairs, tables, beds, etc., that are used to make a room ready for use 20non-essential - adj. not necessary 21outbreak - n. a sudden start or increase of fighting or disease 22quarantine - n. the period of time during which a person or animal that has a disease or that might have a disease is kept away from others to prevent the disease from spreading 23sector - n. an area of an economy; a part of an economy that includes certain kinds of jobs 24tourism - n. the business of providing hotels, restaurants, entertainment, etc., for people who are traveling