Vietnam Looks for Economic Rebound After Mass Quarantines

PUBLISHED ON Apr 27, 2020

Vietnam flattened its coronavirus infection curve with a sledgehammer, and after some early success, it’s now starting to open up its economy again.

When two visitors from neighboring China emerged as Vietnam’s first cases in late January, the Communist Party-led government began imposing controls that would have been difficult in many democratic countries. Over subsequent weeks it banned virtually all domestic and international flights, ordered pharmacies to report customers buying cold medicine and quarantined more than 100,000 people in military camps, hotels and closely monitored homes.

Nguyen Duc Hieu, a 22-year-old student, was forced into quarantine when he returned from London in late March. En route to Ho Chi Minh City, the pilot informed passengers the plane was being diverted to the Mekong Delta because all quarantine facilities in the nation’s commercial hub were full.

Passengers were then herded into military vehicles, driven to a military school that had been converted into a quarantine camp and kept there for more than two weeks.

“We had six to eight people in a room with bunk beds and military blankets,” Hieu said. “We were provided some personal stuff at the camp, like a toothbrush, toothpaste, pillow and a mosquito net. Although it was uncomfortable, I think it was necessary.”

Vietnam was already a favored location for foreign investors looking for an alternative manufacturing hub to China following escalating trade tensions between the U.S. and the world’s second-largest economy.

The government’s goal is now to build on that momentum. Pledged foreign direct investment rose 7.2% last year, with $24.6 billion flowing into manufacturing, according to the Ministry of Planning and Investment. That helped spur economic growth to 7.02%, the second-fastest pace since 2007.

“This shows an advantage of our political system, which allows the government to mobilize all resources when needed to fight against an enemy, and this time it is the novel coronavirus,” said Le Dang Doanh, a Hanoi-based economist and former government adviser

The virus’ impact on China — already seen by many foreign companies as getting more expensive with an aging population — makes Vietnam look even more attractive to businesses, said Vu Tu Thanh, senior Vietnam representative of the U.S.-Asean Business Council.

A survey of some of the group’s corporate members indicates they’re still re-evaluating their positions in China, Thanh said.

Source: Bloomberg