While much of the world has been reeling from the impact of Covid19, and focussed on dramas like the US presidential elections and Brexit, a remarkable success story has been written in southeast Asia.<\/p>\n\n\n\n
Vietnam\u2019s GDP was up by a remarkable 2.91% in 2020, according to its own government figures (NB. China grew by 2.3%), making it one of the few countries in the world to see positive economic growth despite the pandemic.<\/p>\n\n\n\n
CONTAINING COVID19<\/strong><\/p>\n\n\n\n A major contributor to this glowing economic health has undoubtably been the way the country has handled Covid19.\u00a0 Despite being densely populated, Vietnam has reported less than 35 Covid19-related deaths (Johns Hopkins University data, 3 March 2021) \u2013 a remarkable performance for a nation of more than 97 million!\u00a0 Contact tracing, strategic testing, mask wearing, and clear central messaging all mitigated the need for mass lockdowns \u2013 and much of the economy was protected as a result.<\/p>\n\n\n\n However, economic growth in 2020 was far from evenly spread across all sectors.<\/p>\n\n\n\n ASYMMETRIC GROWTH<\/strong><\/p>\n\n\n\n Export-driven manufacturing has powered Vietnam\u2019s success for years, with international businesses investing heavily in order to diversify their global supply chains, developing lower-cost alternatives to China\u2019s factories in particular, or a so-called \u201cChina +1\u201d arrangement.\u00a0 \u00a0As a result, FDI in Vietnam is now estimated to be worth a whopping US$382 billion, 48% of which is in manufacturing and processing.\u00a0<\/p>\n\n\n\n This well-oiled manufacturing machine kept running impressively through 2020, with industrial activity expanding by 3.3%, and exports of goods up by 5% in value. Such healthy growth was more than enough to offset pandemic-related shrinkage in other parts of the economy \u2013 the hospitality sector, for instance, which contracted by 14.6%.\u00a0\u00a0<\/p>\n\n\n\n There are, however, good reasons to be optimistic that service sectors and domestic consumer demand will return to growth in 2021.<\/p>\n\n\n\n