Update: 11:16 | 04/09/2021
Phyllis Papadavid, Head of Research and Advisory at Asia House, a consulting organisation based in London, the United Kingdom, in her research, pointed out that Vietnam should promote investment to revive its economy and strengthen its ability to respond to new risks despite its success in dealing with a crisis caused by the Covid-19 pandemic.
According to Papadavid - an expert in economics and financial strategy, Vietnam has been an economic success story and has shown resilience during past crises, including the current Covid-19 pandemic.
Workers produce shoes for exports.
The economist cited data from the World Bank that the value of trade exchange (including goods and services) of Vietnam with foreign countries was equivalent to 209% of its gross domestic product (GDP) last year - second only to Singapore in the region. This reflected the openness and deep international integration of the Vietnamese economy.
Trade liberalisation has played an important role in Vietnam's success. Vietnam joined the World Trade Organisation (WTO) in 2007 and signed free trade agreements with countries of the Association of Southeast Asian Nations (ASEAN), the US, and the UK. Last year, Vietnam also signed the Regional Comprehensive Economic Partnership (RCEP) - the world's largest free trade agreement.
According to the expert, the openness of the economy has made Vietnam resilient during the Covid-19 pandemic. Despite production disruptions from the temporary closure of some factories due to the impact of the Covid-19 pandemic, Vietnam is one of the few countries with positive economic growth last year, showing the country's ability to withstand and recover economic growth during the crisis.
However, she said, Vietnam also faced many challenges namely the climate change risks, a decline in foreign direct investment (FDI) and exports due to the Covid-19 pandemic which has disrupted the supply chain.
The expert said that it was necessary for Vietnam to promote new policies to deal with these challenges. She also highlighted the importance of investments to build resilience to climate change and economic shocks.
According to Papadavid, given the important role of FDI in the country's economic growth, Vietnam should promote FDI attraction in response to the impact of climate change, prioritise investment in the field of agricultural technology, biotechnology, automation and information technology, which are the foundation for Vietnam's green economy.
To build resilience, she said it was essential for the country to attract FDI that promotes the spatial re-patterning of the economy through creating new economic clusters in non-coastal areas and generating employment opportunities.
The expert believed that the success of reform in the past would serve as a basis for Vietnam to confidently cope with challenges in the future.