Academic writing

ASSESS THE IMPACT OF THE COVID-19 PANDEMIC

ON THE VIETNAM ECONOMY

Student: Nguyễn Ngọc Minh Accessor: Hoàng Văn Dũng

Student ID: BH00343

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Contents
1. Introduction ..................................................................................... 3
2. The impacts of the COVID-19 ........................................................... 3
2.1 Overview of COVID-19 .................................................................. 3
2.2 Vietnam’s economy before COVID-19 .......................................... 4
2.3 Negative impact ............................................................................ 5
2.3.1 The impacts of COVID-19 to the GDP Growth ........................ 5
2.3.2 The impacts of COVID-19 to the inflation ............................... 6
2.3.3 The impacts of COVID-19 to the importing and exporting
goods…………………………………………………………………..7
2.4 Positive impact.............................................................................. 9
Deliver services ................................................................................ 9
Game Streaming ............................................................................. 11
3. Conclusion ...................................................................................... 15
References ........................................................................................... 16

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 1. Introduction
The outbreak of Covid-19 has brought to the world an unprecedented status of
economy, and is expected to have a significant impact to the Vietnam’s economic
development of 2020. According to a July 2020 report by the Vietnamese General
Statistics Office (GSO), 30.8 million individuals across the whole country were
directly and seriously harmed by COVID-19. The service sector was hardest hit by
COVID-19, accounting for 72% of affected employees, followed by manufacturing
and construction at 67.8%; agriculture, forestry, and fishery accounted for 25.1%
of affected workers. These epidemic effects resulted the highest of the
unemployment rate in Vietnam in ten years. Furthermore, the economy of
worldwide has also been impacted due to the indefinite lockdown in various
countries, equally the negative effects to the Vietnam’s economy, because of the
trading market has locked down. The research of the COVID-19 is significant to the
human being and must be concerned, not only does it support to overcome the
situation, but also a means to improve the Vietnam’s economic development.
Therefore, I am choosing this topic.

2. The impacts of the COVID-19

2.1 Overview of COVID-19
We have to be concerned that the COVID-19 situation must be declared as a global
emergency. “The global number of confirmed COVID-19 cases and deaths reported
to WHO has passed over 220 million cases and 4.5 million deaths” (WHO, 2022). As
we have known, the current population of the world is about 8 billions. In other
words, almost 3% global citizens has suffered from the virus up to now. The
patients have not only health suffered seriously even brought the death but also
their ability and stability to work has reduced a lot. This resulted in a shortage of
human resources and a sharp drop in commodities demand.
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Vietnam is one of the nations most vulnerable to COVID-19 from an economical
perspective. Since China is currently Vietnam's second-largest export market and
production in Vietnam is always dependent on imported raw materials, largely
from China, China plays a significant role in the Vietnamese economy
(VietnamCredit, 2019). Despite there being few confirmed cases of COVID-19 and
no deaths associated with that as well, the Vietnamese government decided to
enforce a nationwide partial lockdown at an early stage, beginning on April 1st,
2020. According to Vu and Tran (2020), this approach has proven effective at
preventing the spread of COVID-19, although it has adverse effects on the lives of
the populace and freezes the economy.

2.2 Vietnam’s economy before COVID-19

Table 1: Vietnam's Economy status from 2010-2021

Vietnam
8

6
GDP Growth (Annual %)

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Vietnam

Source image: data.worldbank.org

According to the World Bank Data, the economy of Vietnam in the COVID-19
pandemic has a history of gradual growth every year and has been mostly constant
for the past ten years. Due to the 23% inflation in 2011, the economy's growth rate
dropped to 5.5% in 2012. Along with the growth, inflation was decreased to 7% in
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November 2012. In 2014, the economy's growth rate increased to 6.4%. With an
estimated GDP growth rate of 7.4% in 2019, the Vietnamese economy experienced
achievement. The main drivers of economic growth in 2019 were the processing
and manufacturing sector (up 11.29%) and market service sectors, such as
transportation and warehousing (up 9.12%); wholesale and retail sales (up 8.82%);
financial, banking, and insurance activities (up 8.62%)

2.3 Negative impact

The negative impacts of COVID-19 to the world and particularly in Vietnam are
uncoutable. Significant economic harm has already happened around the world as
a result of decreased productivity, loss of life, business closures, trade disruption,
and tourism industry destruction.

The world economy entered a severe recession, causing Vietnam's economy, with
its high degree of openness and deep international integration, to suffer from a
variety of consequences that have had a significant influence on all economic
sectors. - social, resulting in disruption of supply chains and trade flows, stagnation
of production, business, and service activities; has directly impacted the import and
export industries, air transport, tourism, accommodation services, catering, health
care, education, labor, and employment; many businesses went bankrupt,
dissolved, suspended operations, or downsized; GDP increased by 3.82% in the first
quarter of 2020, the lowest level in the last ten years.

2.3.1 The impacts of COVID-19 to the GDP Growth

GDP increased by 2.12% in the first nine months of 2020, and the entire year is
expected to expand by 2-3%, far less than the 6.8% target and 7.02% increase in
2019. Because China is Vietnam's principal export market for agricultural and
aquatic products, the outbreak of the Covid-19 epidemic in early February had a
considerable effect on our country's agricultural and aquatic exports. In particular,
the value of seafood exports to China declined by 57.21% over the same period in

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February 2020; vegetables and fruits decreased by 24.79%; cashew nuts decreased
by 69.26%; coffee decreased by 14.34%; tea decreased by 78.39% etc.

Vietnam's GDP growth rate in 2021 was 2.58%, lower than the 2.91% growth rate
in 2020 and also below than the 6.5% target. This is also the lowest increase in
recent years.

Table 2: VIetnam's GDP growth in between 2020 and 2021

Vietnam
8

6
GDP Growth (Annual %)

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Vietnam

Source image: data.worldbank.org

2.3.2 The impacts of COVID-19 to the inflation

The impact of the Covid-19 epidemic has made the prices of many commodities
tend to fluctuate differently from usual in recent times. In January 2020, when the
Covid-19 epidemic showed signs of rapid increase in China, the prices of
Vietnamese goods still increased strongly in most commodity groups, Vietnam's
inflation increased by 1.23% compared to the previous year. In December 2019,
the highest increase in January since 2014, was mainly due to high consumer
demand during Tet holiday, typically the high price increase of three groups of food
- food services. , housing - construction materials and transportation. However, in
February 2020, inflation decreased by 0.17% compared to January 2020, due to the
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outbreak and spread of the Covid-19 epidemic in many countries, affecting
domestic consumption demand and growth prospects. world economy declines.

Table 3: Vietnam's inflation rate (The World Bank Data)

Inflation rate
4

3,5

2,5

1,5

0,5

0
2016 2017 2018 2019 2020 2021

Inflation rate

Source image: data.worldbank.org

2.3.3 The impacts of COVID-19 to the importing and exporting goods

2.3.3.1 Achivement
In 2020, the overall amount of the country's import-export turnover exceeded 500
billion USD, reaching 545.4 billion USD, a 5.4% increase over 2019. Total export
turnover was 282.66 billion USD, up 7.0% from 2019, and total import turnover
reached 262.7 billion USD, up 3.7% from 2019. Export turnover remained in the
context of the Covid-19 epidemic. a 7% rise over the previous year, which is the aim
set by the National Assembly for the Government in 2020. This is a very positive
result considering that overall export turnover only increased in the first two
quarters of the year compared to the same period last year.

In comparison to other major economies and countries in the region, Vietnam's

export growth of 7% is remarkable. According to the General Administration of

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Customs of China, China's exports will reach 2,590 billion USD in 2020, up 3.6%
from the previous year; according to WTO data, Japan's exports decreased by 9.1%
year on year, Korea's decreased by 5.4%, India's decreased by 14.8%, Singapore's
decreased by 7.2%, Thailand's decreased by 6.0%, Indonesia's decreased by 2.3%,
and Malaysia's decreased by 1.7%.

Export and import turnover remained positive, demonstrating the efforts of the
government, ministries, and branches in developing solutions to deal with the
Covid-19 pandemic situation, ensuring growth while maintaining the effectiveness
of epidemic prevention and control, owing largely to the efforts of the business
community. Covid-19 is a problem to the Vietnamese economy in general, and to
the import-export industry in particular. And the results obtained in 2020
demonstrate that the resistance of import and export activities to the negative and
widespread effects of the Covid-19 outbreak is extremely impressive. This creates
a solid platform for Vietnam's import and export activity to grow in the next years.

2.3.3.2 Remaining problem

Aside from the bright aspects, export activities still have some flaws that must be
addressed, carefully considered, and appropriate import and export management
solutions proposed.

For starters, the trade surplus was maintained for the fifth straight year,
contributing significantly to economic growth and macroeconomic stability.
However, the government's management of monetary and exchange rate policy is
put under strain by the increasingly large and fast growing surplus (the trade
surplus is about 20 billion USD in 2020, up 84% from 2019).

Secondly, the supporting industry is still in its early stages of development, unable
to generate products of adequate quality and size to participate in the supply chain
of products and components for export firms. As a result, firms must import a wide
range of raw materials, semi-finished goods, components, and equipment to

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support production and export activities, particularly from China, which creates
issues when the supply chain is disrupted. Indeed, when the Covid-19 epidemic
came out in China at the end of the first quarter, the export of various Vietnamese
products faced difficulties due to a lack of input supplies.

2.4 Positive impact

It is undeniable that the pandemic has changed many things and the humanity has
been suffering through the lost of economy, family, and freedom. Having said that,
among a numerous negative impacts of COVID-19 mentioned above, there are still
various positive impacts on several aspects.

The Covid-19 pandemic has a positive impact on some citizens in the world, many
countries in the world impose lockdowns or restrictions on community activities so
that all activities ranging from work, school, shopping, to other activities become
more at home, it makes us become spending more time with family, people in
various circles are also competing to donate to help people in need. This is social
solidarity that is unconsciously embedded in society.

Importantly, the COVID-19 pandemic has affected the business growth in various
sectors, big enterprises and several important businesses with former developed
has lost billion of their profits and even gone bankrupt, but several small and
medium businesses take this as an opportunity to growth in a period of crisis. Sean
Ludwig has written a journal about twenty small business thriving during COVID-
19, below are various sectors that has a sucessfully growth in the pandemic.

Deliver services
With many consumers are frightened to leave their home and being advised by the
government to shelter in during the COVID-19 pandemic, many delivery services
company has stepped up to make sure consumer goods can be delivered anywhere

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in states to homes and businesses. Many big companies of delivery has been greatly
beneficiary with high demand of delivering.

The F&B industry plays a significant role in daily life of the citizens. According to
National Restaurants Association, when the COVID-19 started, many restaurants
worldwide lost a billion of dollar, and even faced business closures, the industry of
F&B has lost approximately $240 billion by 2020. Brewer and Shebby has answered
by their research, restaurants that remained in business found it essential to adapt
to recent changes in the industry and offer online food delivery (OFD) services for
their survival. According to Statista, Food delivering is young but a fast growing
industry in Vietnam, since the COVID-19 is concerned, the lockdown ordered by the
government, dining out is no longer an option. Therefore, online food delivery
stepped up and make sure the citizens can order food at home.

GrabFood, held a 45 percent share of the market in 2022, fellow Singapore tech
giant Sea Group recently acquired the Vietnamese app Now, rebranded it into
ShopeeFood and inherited a 41 percent. In the same year, the rest of the market
was shared between two unicorn startups, South Korea’s Baemin and Indonesia’s
Gojek. Meanwhile, Loship, a homegrown delivery startup, has recently joined the
race

Table 4: Food delivering market shares in Vietnam

Grab Food Shopee Food Unicorn Starup (Baemin, Gojek) Loship

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 Source image: Statista

Table 5: Revenue of the food delivery market in Vietnam from 2016 to 2021

Revenue in trillion Vietnamese Dong

22,23
13,89
10,05
6,04
3,09
0,93

2016 2017 2018 2019 2020 2021

Source image: Statista

Game Streaming
Play games while online streaming is considered top one entertainment platform
in COVID-19 pandemic. The lockdown command by the government has affected
entertaining industry, various entertainment plaforms are restricted. In other
words, The sector of online entertainment has been growing significantly,
especially video games. One could say that livestreaming in general and game
streaming in particular are at their peak. Up to 80% of the community observed
that they watched gaming creators more frequently throughout the outbreak,
according to Appota's report. Only traditional sports are watched and played for
longer by the average audience of 3 hours per day.

There are no particular estimates on the profitability of content makers during the
epidemic. On the one hand, streamers make money from booking and promoting
products from other businesses, who tend to use influencers as a marketing
channel, or thay can make money through donation from the viewers. On the other
hand, one could argue that the online entertainment sector is currently

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experiencing a golden period for streamers and Kols. The number of individuals
watching online entertainment material peaked, with notable streamers like
Mixigaming reaching 242,000 viewers at the same moment. Along with that,
streaming platforms such Cube, Youtube, and Twitch are growing and will earn a
large amount of money in 2021.

Although the online streaming service is renowned for providing free

entertainment and media, the development team can profit by working with
businesses, Kols, and celebrities to promote the product.

Table 6: Twitch annual revenue from 2016 to 2021. Twitch generated approximately $2.6 billion
revenue in 2021, a 41% year-on-year increase

3000

2500

2000

1500

1000

500

0
2016 2017 2018 2019 2020 2021

$million

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 3. Government’s policies to minimize the impacts of COVID-19
Currently, the Covid-19 epidemic is still happening very complicatedly in many
countries around the world and Vietnam. But the results in the prevention work in
the past time in our country have been very impressive, increasing the people's
confidence in the leadership and direction of the Party and the State, enhancing
the prestige and position of the Party. country in the international and regional
arena. This achievement is thanks to the unanimity and solidarity of the whole
Party, the whole people, the efforts of the whole political system; including the
great contribution of the Finance sector.

Under the direction of the Government and the Prime Minister, the Ministry of
Finance has closely coordinated with ministries and sectors to closely monitor the
development of the epidemic, analyze and forecast trends, identify the situation. ,
assess the impact of the epidemic on the economy to develop response scenarios.
On that basis, the Ministry of Finance has proactively proposed fiscal solutions to
support businesses and people to overcome difficulties caused by the impact of the
Covid-19 epidemic.

3.1 Capital support

Right from the time when the epidemic has not been affected as severely as today,
the Prime Minister issued Directive 11/CT-TTg dated March 4, 2020 on urgent tasks
and solutions to remove difficulties for production and business. ensuring social
security to cope with the Covid-19 epidemic. Accordingly, the Government
assigned the State Bank of Vietnam to direct credit institutions to balance, fully and
promptly meet capital needs for production and business, speed up administrative
reform, withdraw shorten the loan application processing time, improve the
customer's ability to access loans; promptly apply support measures such as
restructuring the repayment term, considering loan interest exemption and
reduction, keeping the debt group unchanged, reducing fees, etc. For customers

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facing difficulties due to the impact of the Covid-19 epidemic (first of all, a credit
support package of about VND 250 trillion).

3.2 Find alternative markets, promote import and export

One of the current difficulties of enterprises is that they have not found a suitable
market to import raw materials and output. Therefore, the Prime Minister assigned
the Ministry of Industry and Trade to propose solutions to diversify and ensure
sufficient supply for domestic production; promote official export to China and
other countries.

The Ministry of Industry and Trade has taken measures to boost exports, diversify
export and import markets and find new markets. At the same time, inspect and
strictly handle cases of smuggling, commercial fraud, speculation in goods, causing
artificial scarcity, fake goods and imitation goods on the market.

3.3 Taxes support

Due to the impact of the epidemic, many businesses suffered great damage, had
difficulty in producing and consuming goods and services, and were unable to pay
taxes on time.

To promptly remove difficulties for taxpayers damaged by the Covid-19 epidemic,

contributing to helping taxpayers stabilize production and business, overcome
difficulties; The General Department of Taxation has issued Official Letter 897/TCT-
QLN dated March 3, 2020 on tax payment extension and exemption of late
payment interest due to the impact of the Covid-19 epidemic.

Accordingly, Official Letter 897/TCT-QLN guides the following cases of tax payment
extension: "Having material damage that directly affects production and business
due to natural disasters, fires, unexpected accidents ". Dossier and procedures for
requesting tax payment extension shall comply with Clause 3, Article 31 of Circular
156/2013/TT-BTC.

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The Government promulgates Decree 41/2020/ND-CP on extension of time for tax
payment and land rent.

4. Conclusion
During the COVID-19 period, Vietnam's economic condition changed significantly,
despite the fact that the pandemic had a negative impact on economic growth,
inflation, job losses, reduced incomes, and other factors. Import, export, and
international trade markets are experiencing difficulties, and COVID-19 might be
viewed as a huge challenge for Vietnam's economy. However, a few companies and
sectors saw this as an opportunity and thrived during the pandemic. In other words,
this is the COVID-19 pandemic's positive spot.

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