Although rapidly increasing Delta Covid-19 infections have affected manufacturing in Ho Chi Minh City, Vietnam’s trade hub, the overall history of Vietnam being a prime destination for foreign investment is unlikely to change, a declared the daily. Even if the forecast is revised down, economists are confident the nation will rebound.
“Over the past decades, Vietnam has excelled in reeling big fish in electronics, shoes and clothing,” he said. “Low labor costs, a reliable infrastructure and a smooth bureaucratic process have attracted people like Samsung, Foxconn, Nike, Adidas, Gap and Levis.” Many factories that are still open are trying to maintain production under the “3 in 1” policy whereby employees eat, sleep and work on site.
While some expats left, many more stayed. “The owners of small and medium-sized businesses who have investments here have stayed. Most don’t panic. They want to be here, so their businesses can recover as quickly as possible, ”said Simon Fraser, executive director of the Australian Chamber of Commerce (AustCham) in Vietnam.
HSBC has cut its economic growth forecast for Vietnam from 6.1% this year to 5.1%. “Despite the short-term challenges, Vietnam’s recovery prospects still look bright with strong fundamentals,” wrote HSBC economist Yun Liu.
“Vietnam is going to rebound because it has such a competitive advantage in terms of labor costs,” she said.