Countries throughout the world have been suffering from the economic devastation brought about by the Covid-19 pandemic. Even as the world recovers, new waves of the coronavirus has begun threatening nations that have only just begun to get back on their feet.
However, Vietnam is shaping up to be Southeast Asia’s sole economic success story amidst the pandemic, maintaining steady positive growth as other economies struggle to recover.
Vietnam’s real GDP expanded by about 2.6 percent on the year in the third quarter, marking a second straight quarter of growth amid the pandemic. The International Monetary Fund anticipates the country rising to fourth in nominal GDP in the Association of Southeast Asian Nations this year, passing Singapore and Malaysia and gaining on the Philippines.
Vietnam has been rather successful in containing the spread of the coronavirus compare to other ASEAN economies. Rising exports have also helped to drive growth, as companies relocate production from China. Exports grew 9.9 percent on the year in October to US$26.7 billion, and the Ministry of Industry and Trade projects a full-year rise of 3 percent to 4 percent.
Interestingly enough, the trade friction between the US and China has worked in Vietnam’s favour, as manufacturers have begun relocating their factories out of China in order to avoid American tariffs.
Both multinational corporations and Chinese businesses have moved production to Vietnam to take advantage of its skilled, low-cost workers. Samsung Electronics, which has manufactured smartphones in the country for over a decade, also looks to move personal computer production there as it shuts down a plant in China.
Due to the country’s effective containment of the coronavirus, Vietnam was able to lift it’s mass lockdown a mere three weeks after it began, allowing normal manufacturing activity to resume faster than any other nation in the region.
Meanwhile, other ASEAN countries have yet to emerge from virus-induced slumps. The IMF’s full-year GDP forecast shows a 1.6 percent rise in Vietnam, but drops of 6 percent in Singapore and Malaysia and a 7.1 percent slump in Thailand.
Though some ASEAN countries predict a sharp rebound next year, Vietnam could remain the sole economy to see actual growth into the first half of 2021, depending on how the outbreak progresses.