Dangers of Reopening the Economy Too Soon for Vietnam

Experts caution that while reopening the economy is vital, any decision made too soon, given poor vaccination rates and high transmission risks, might hinder the country’s attempts to defeat Covid-19.

The economy and people’s lives may be jeopardized even more by prematurely removing the lockdown and reopening the economy while the full vaccination rate remains low, new illnesses and fatality rates are still rising, and the health system is overworked.

Experts caution that while reopening the economy is vital, any decision made too soon, given poor vaccination rates and high transmission risks, might hinder the country’s attempts to defeat Covid-19.

The economy and people’s lives may be jeopardized even more by prematurely removing the lockdown and reopening the economy while the full vaccination rate remains low, new illnesses and fatality rates are still rising, and the health system is overworked.

Prime Minister Pham Minh Chinh and officials in Ho Chi Minh City have spoken about progressively resuming business operations and how the lockdown “cannot go on forever”.

Since the end of April, when a fourth wave infected approximately 609,000 people and killed over 15,000, Vietnam has been fighting Covid-19.

Despite the fact that HCMC, the country’s largest metropolis and a major manufacturing and exporting hub, has maintained stringent social distance for more than two months, thousands of new instances are discovered every day.

This is why economists are hesitant to resume economic activity at this time.

Finding the ideal time to restart the economy is difficult. The hazards of doing so too soon, when vaccination rates aren’t as high as they should be and the medical system is already overburdened, could result in more Covid cases and higher fatality rates. It’s a dangerous move to reopen the economy, especially at the core of HCMC.

In Vietnam, the incidence of full vaccination is low, and reopening before the outbreak is under control could provoke a chilly response from customers.

Only 5.2 percent of Vietnam’s population has got two doses of the vaccine, despite the fact that the country has vaccinated 24 percent of its population. The country has only received 29.8 million vaccine doses or one-fifth of the 150 million doses needed to vaccinate 70% of the population.

Despite the apparent challenges, economists are optimistic about the post-pandemic recovery prospects.

In a recent statement, analysts indicated that, despite near-term concerns, Vietnam’s medium-term economic prospects remain bright.

As a result, a premature opening risks an outbreak of illnesses, which would overwhelm the healthcare system and prompt the government to tighten restrictions once more.

Businesses are not selling goods or services while enduring various costs, and people who are unemployed for a short period of time are unable to earn a living and, in some cases, are exhausting their savings. There are significant societal costs associated with this, particularly for women, households in the bottom 20% of the welfare distribution, and unemployed employees. Many businesses have declared that they have reached the end of their tether.

But, as much as businesses want the economy to recover quickly, experts say any choice must first consider people’s safety. A gradual and staggered reopening could be contemplated after a considerably greater high vaccination rate is achieved.

The most important objective should be to restore the food supply chain, as wholesale market closures and distribution outlet restrictions have seriously disrupted the food supply, affecting not just food availability but also people’s resilience and trust. Transportation services and hubs should be the next priority for reopening, followed by shops, restaurants, bars, and hotels.

The World Bank’s Madani stated that government support for low-income individuals is critical to reopening. According to World Bank data, Covid-19 has had a greater impact on households in the bottom 20% of the welfare distribution, women, and informal workers than on other categories.

Experts highlighted the need for focused medical investment, citing examples from other nations that show how this helps the economy recover swiftly despite pent-up demand.

The government should continue to invest in vaccines since a third booster dose may be required in the fight against the pandemic at some point in the future. Because cash is the lubricant of the economy, banks should be allowed to lend more, and concessions such as lower tax rates for corporations, individuals, and banks should be considered.

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