The respiratory epidemic caused by the novel coronavirus (COVID-19) has highlighted an urgent need for Vietnam to boost its economic restructuring and diversify its markets.

Carrots are processed for export at Hung Viet Argricultural Joint Stock Company,
Hai Duong Province. Vietnam needs to boost its economic restructuring and diversify
markets to increase resilience against external shocks. - VNA/VNS Photo Vu Sinh 

“The epidemic is an opportunity for Vietnam to look at its strong points and weak points, and to accelerate the restructuring process,” Minister of Planning and Investment Nguyen Chi Dung said during a recent interview with zing.vn. “It is time for Vietnam to built an economy more independent and resilient to adapt to changes,” Dung stressed.

The epidemic has been taking its toll on the Vietnamese economy. The ministry pointed out that a number of sectors would be affected such as travel, transportation, agricultural, forestry and fishery production, industrial production, trade and investment.

The ministry also forecast lower economic growth rates in 2020 than the Government’s targets.

According to the ministry’s latest report, if the epidemic was brought under control in the first quarter, GDP growth rate for 2020 would reach 6.25 per cent, 0.55 percentage points lower than the Government’s target. The Vietnamese economy would grow just 5.96 per cent this year if the epidemic continued until the second quarter.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said the epidemic was seriously affecting production and business operations, urging firms to take action to minimise the economic damage caused by COVID-19, not just wait for Government support.

The Ministry of Planning and Investment predicted that if the epidemic prolonged to the end of the first quarter, revenue from international tourists would decrease by US$2.3 billion in 2020 and $5 billion if the epidemic lasted to the end of June.

Agricultural production has also suffered heavily. China is the largest market for Vietnam’s agricultural produce, accounting for 22-24 per cent of the country’s agro-forestry-fisheries exports.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong was quoted by Vietnam News Agency as saying that challenges must be turned into opportunities. Cuong stressed that the ministry would focus on pushing agricultural restructuring and developing markets for agricultural products.

Farmers must cooperate with firms to build value chains for sustainable development, he stressed.

Researchers from the Training and Research Institute st the Bank for Investment and Development of Vietnam recently pointed out that developing and implementing a strategy to diversify markets and trade partners was needed for Vietnam to reduce dependence on single markets.

Economic restructuring must also be strengthened, researchers said, adding that the focus should be on quality, creativeness, inclusiveness and sustainable development.

It was also necessary to enhance the economy’s resilience to external shocks by enhancing competitiveness, improving production capacity and developing domestic markets.

To cope with the COVID-19 epidemic, Prime Minister Nguyen Xuan Phuc has asked ministries to reorganise production and take advantage of trade deals to diversify and expand international markets. Developing the domestic market and improving domestic purchasing power were also important, he said.