Employees work at a smartphone factory in Hai Phong City, northern Vietnam. Photo: VnExpress

Vietnam’s successful integration into the Association of Southeast Asian Nations (ASEAN) was key to igniting its trade engine, economists Shirley Shen and Aidan Yao from the Singaporean-based AXA Investment Managers Asia said, cited by Nhan dan (People) newspaper.

In a research & strategy insight, the pair said Vietnam’s membership in the bloc since 1995 has allowed it to enjoy zero tariffs when trading with other ASEAN member states.

Vietnam also signed free trade agreements with other major economies including China, the European Union, the UK, and Japan, creating a fertile environment for trade relations to grow.

In addition, a rapid increase in manufacturing competitiveness has also contributed to Vietnam’s rise as a regional export powerhouse, with manufacturing value-added increasing by the most in the past decade.

The economists noted Vietnam has also been very successful in attracting foreign direct investment (FDI), thanks to favourable government policies. By 2020, the number of industrial parks in the country had grown to 369, an increase of 180 percent from 2005.

According to the insight, the Vietnamese government offers a variety of tax benefits and streamlines regulations for foreign entities. This has been reflected in an impressive gain in Vietnam’s ranking in the World Bank’s “ease of doing business” index – up 23 places to 70 from a decade ago.

Economist: Vietnam's economic growth to recover from Q4

A production line of a foreign invested firm in Thai Nguyen province. Photo: VNA

According to Nguyen Bich Lam, former Director General of the General Statistics Office, the Vietnamese economy is likely to gradually recover from the fourth quarter of 2021 and escape the minus growth seen in the third quarter thanks to the activeness of the business community and the Government’s efforts to remove obstacles facing enterprises.

Talking to the Vietnam News Agency, Lam noted that the fourth resurgence of Covid-19 in several northern industrial hubs such as Bac Ninh and Bac Giang, and later in southern localities including Ho Chi Minh City, Binh Duong and Dong Nai, as well as the capital city of Hanoi in the third quarter has caused numerous difficulties to the business sector which generates 60% of the country’s GDP.

He, however, underlined that despite a reduction of 6.17% in GDP of Vietnam in the third quarter of this year due to Covid-19 impacts, the Asian Development Bank (ADB) and other financial institutions still remain optimistic about the Vietnamese economic prospects in the medium and long term.

Lam held that the optimism is based on the recovery of domestic demand, coupled with the strong consumption power of the nearly 100-million strong market, the country’s stable macro-economic situation and the dynamism of the economy.

Moreover, Vietnam is also a member of many large-scale multilateral and bilateral trade agreements, said the economist.

A corner of HCM City. Photo: Getty Images

At the same time, the Government has rolled out measures to speed up the disbursement of public investment capital, thus improving the capacity of the economy and the infrastructure system.

Investors have shown confidence in the Vietnamese investment environment, which can be seen in a rise in foreign direct investment (FDI) inflows into Vietnam despite a drop of 30% in FDI flows around the globe, said Lam.

Lam highlighted the Government and localities’ efforts to accompany the business community in difficult times.

On September 9, the Prime Minister issued Resolution No. 105/NQ-CP on support for enterprises, cooperatives and business households hit by COVID-19, aiming to help them recover and develop production in a safe manner amid the pandemic, he noted.

The expert held that the resolution is a great help in removing difficulties facing enterprises.

Regarding the economic outlook in the fourth quarter, Lam predicted an expansion of 2-3 percent, resulting in 1.6-2.1 percent GDP growth for the whole year./.

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