High vaccination rates have given Vietnam some latitude in opening up its economy — and some optimism for better GDP growth in 2022.
Vietnam will resume commercial flights with nine international destinations from 1 January 2022, with plans to expand the list in subsequent phases. Under the new guidelines, fully vaccinated travellers with negative pre-departure Covid-19 tests or those who have recovered from the disease are only required to self-isolate for three days. The move to ease international air travel restrictions takes place as Vietnam has been trying to adapt safely to the pandemic and promote economic recovery. This will bring hope particularly to the aviation and tourism industries, which play important roles in the national economy but have been on life support for nearly two years due to border closures and domestic travel restrictions.
Despite a false start with its vaccination programme, Vietnam has managed to significantly increase its vaccination coverage in the past six months. As of 29 December 2021, 80.4 million people (or 83.3 per cent of the population) had received at least one dose of vaccine, while the number of fully vaccinated people had reached 66.9 million (69.3 per cent of the population). This is remarkable progress, considering that in early June, only 1.3 per cent of the population had received at least one dose of vaccine, the lowest rate among the ten ASEAN member countries at that time. The high vaccination rate is therefore a key factor that makes Vietnam confident about reopening its borders.
Three major factors have enabled Vietnam to significantly speed up its vaccination drive within the past six months.
First, Vietnam’s active diplomatic efforts have enabled the country to secure a large supply of vaccines through both donations and commercial deals. In August 2021, Vietnam established a high-level working group on vaccine diplomacy headed by Foreign Minister Bui Thanh Son. The working group’s main task was to lobby for international assistance and collaboration to secure Covid-19 vaccine supply and production technology transfer. During their bilateral and multilateral meetings with foreign counterparts, Vietnamese leaders also actively asked for support in securing vaccine supplies for Vietnam. Thanks to these efforts, Vietnam’s vaccine stock reached around 150 million doses as of 9 December, sufficient to fully immunise 75 per cent of the population.
Second, European and American businesses in Vietnam have lobbied their respective governments to supply vaccines to Vietnam. As Vietnam is becoming an important link in global supply chains, the foreign business community has an interest in boosting Vietnam’s vaccination rate to facilitate its economic recovery, especially following prolonged lockdowns and factory closures due to the fourth wave of Covid-19 from June to September.
In July 2021, for example, the Vietnamese European Chamber of Commerce (EuroCham) urged European Union ambassadors to give Vietnam more vaccine doses. Likewise, in September 2021, the Vietnamese American Chamber of Commerce (AmCham) wrote a letter to United States President Joseph Biden, asking for more vaccine donations to Vietnam. Before that, 90 chief executive officers of leading American firms, including Nike, Adidas, and GAP, sent a similar request to President Biden. The United States is now Vietnam’s biggest single donor of Covid-19 vaccines, providing the country with more than 20 million doses.
As Vietnam is becoming an important link in global supply chains, the foreign business community has an interest in boosting Vietnam’s vaccination rate to facilitate its economic recovery, especially following prolonged lockdowns and factory closures due to the fourth wave of Covid-19 from June to September.
Finally, the public’s willingness to be inoculated has resulted in a relatively smooth vaccination programme. Generally, the rate of Covid-19 vaccine acceptance in Vietnam has remained consistently high compared to other Southeast Asian countries. Initially, there was some hesitancy towards Chinese vaccines due to quality concerns and entrenched anti-China sentiments. However, faced with infection spikes caused by the Delta variant and limited global vaccine supplies, Vietnam could not afford to be choosy. Starting from June 2021, Vietnam began to purchase and accept donations of Vero Cell vaccines from China, which now account for roughly 32.4 per cent (48.7 million) of all doses in the country. To dispel the public’s scepticism of the vaccine, the authorities repeatedly affirmed its safety and effectiveness. Subsequently, the media reported that hesitant attitudes towards Chinese vaccines had dissipated, helping to speed up the vaccination rate across the country to a significant extent.
Determined to push ahead with its border reopening plan, the Vietnamese government has urged local authorities to further accelerate the vaccination programme to complete the inoculation of all adults by 31 December and those from 12 to 18 years old by January 2022. Vietnam is also progressively rolling out a campaign to administer booster shots to all adults, which is scheduled to be completed within the first quarter of 2022. Vietnam has also issued its own Covid-19 vaccine passport and is actively negotiating the mutual recognition of vaccine passports with other countries to further facilitate its border reopening.
However, the evolving threats from Covid-19 still loom large. As of late December, Vietnam still recorded a seven-day average of nearly 16,000 new cases and more than 200 daily deaths. Concerns over the new Omicron variant have also resulted in tightened immigration control. Strict local lockdown measures could be re-imposed if the ongoing outbreak overwhelms the healthcare system.
While Vietnam is still facing a rather uncertain economic outlook in 2022, the vaccination progress obviously provides a cause for optimism. Due to extensive lockdowns between June and September, the third quarter of 2021 saw a 6.2 per cent drop in Vietnam’s GDP growth, the largest quarterly decline on record. The government now aims for a 6-6.5 per cent GDP growth rate in 2022 as the high vaccination rate has allowed Vietnam to restore most of its economic activities since early October, with annualised GDP growth rate in the fourth quarter bouncing back to 5.2 per cent. The resumption of international flights will add further momentum to this recovery process. For now, however, the most pressing challenge is for government authorities to issue timely guidelines and protocols to ensure a smooth reopening of the borders as planned.