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How did the Private Sector Help Vietnam’s Economy During the Pandemic

The COVID-19 pandemic was a reality check for the healthcare system of many countries.

stock exchange, financial crisis, covid-19
Photo by geralt on Pixabay

The COVID-19 pandemic was a reality check for the healthcare system of many countries. Even the healthcare systems of developed countries collapsed as the number of COVID-19 cases increased.

While most developing nations were eager to follow the healthcare system models of developed countries, Vietnam stood as an exception. It was one of the few countries to take swift action and get things under control.

Vietnam has a population of approximately 97 million.It already has experiences of outbreaks of various infectious diseases, such as dengue, measles, MERS, and SARS. But what surprised everyone is how quickly the country adapted to the situation and got things under control. From providing support to local industries to securing enough food during the lockdown, the government did an excellent job.

The Role of the Private Sector in Beating the Pandemic

Like most countries, COVID-19 took a toll on Vietnam’s economy. But it still managed to record as much as 1.8% growth in GDP in the first half of 2020, thanks to domestic consumption and export demand. The country recorded a 13% surge with its trading partners like Japan, China, and the United States from January to mid-April.

But post-April, domestic consumption subdued due to lockdowns and social distancing norms. This was the time when many businesses had to shut down because of the financial crisis. 

However, many companies started contributing in various ways to ease the situation. For example, Ru9 donated 1500 mattresses so that frontline workers could sleep comfortably. With healthcare workers toiling hard to keep thousands of patients alive, a contribution of 1500 nệm was a welcome change for them as they could get some much-needed rest during their free time. 

The period between mid-April and the end of June was crucial for the country’s economy. Vietnam’s domestic economy went into recovery mode as manufacturing grew by as much as 30%. But merchandise exports, which also contributed significantly to the country’s economy, collapsed.

According to the reports published by the World Bank, Vietnam saw an annual growth rate of approximately 2.8 to 3% in 2020. But it had a 6.8% pre-crisis growth in 2021. 

How was this possible when developed nations recorded negative economic growth? It was a joint effort of the private sector and the government’s fiscal policies that weathered the economic crisis successfully.

The private sector started making PPE kits, masks, gloves, and sanitizers so that Vietnam didn’t have to import them from other countries. 

As already mentioned, manufacturing grew rapidly between April and June. Garment companies who didn’t have a lot of sales started making PPE kits so that they could utilize their resources without going out of business. This not only helped them stay afloat but also supported the country’s economy during tough times. 

On the other hand, the government ramped up its public investment program. It was the ideal time for investors as it opened doors to receive high ROI. The strategic implementation of fiscal measures and the private sector’s quick adaptability to the pandemic ensured that Vietnam didn’t face the kind of economic crisis that developed countries went through.

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Written by Brand News

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