COVID-19: Challenges, Opportunities and the Road Ahead for Vietnam’s (Digital) Economy
Fears of the COVID-19 impact on the global economy have rocked markets worldwide, Vietnam is no exception. The impacts of the COVID-19 pandemic are unfolding in real time. If the pandemic turns out to be more acute and lasts longer, the economic impacts may be significantly greater than anticipated.
Vietnam is no exception
74% of enterprises in a survey of 1,200 conducted by the Private Economic Development Research Board (Board IV) said they would go bankrupt if the COVID-19 pandemic persists for six months or longer.
The survey also revealed nearly 30% of enterprises have lost 20 – 50% of the revenue, and 60% have faced a dire situation as their revenues were shaved by half.
The sectors hardest hit by COVID-19 are tourism, education, textile and garment, footwear, and wood production.
Technology comes in play to help fight the pandemic
Two applications including NCOVI application for Vietnamese people and Vietnam Health declaration application for people entering Vietnam have been officially launched on March 9 by the Ministry of Information and Communications.
NCOVI application (researched and developed by VNPT Group and major ICT companies in Vietnam) includes many functions such as the function of reporting risk factors and universal health notification function.
The second application is Vietnam Health declaration (developed by Viettel Solutions). People entering Vietnam can declare by scanning a QR code via a smartphone to receive full information to be declared.
Hanoi City has also recently activated the community monitoring system with GPS. Residents can install the Hanoi Smart City app to track the exact locations in Hanoi that COVID-19 patients have been to.
Map showing locations of infected and suspected cases in Hanoi in the Hanoi Smart City app. Credits: news.zing.vn
“The biggest opportunity right now is to accelerate digital transformation” – Minister Nguyen Manh Hung
Every cloud has a silver lining. New challenges can be turned into opportunities. This resonates with Information and Communications Minister Nguyen Manh Hung’s point of view in his recent speech.
“The biggest opportunity right now for Vietnam is to accelerate digital transformation, to create digital applications and to bring all business activities into the digital environment”, he said.
The Ministry of Information and Communications has submitted the National Digital Transformation Draft to the Prime Minister. Once it is signed and approved, it will be promulgated and applied nationwide.
Institutionalizing, promoting the provision of online public services
To promote digital transformation, the Government and regulatory agencies will review and make a quick decision on a number of policies under consideration such as cashless payment, mobile money, recognition and issuance of online learning certificates, banning the import of 2G old technologies, promoting the production of cheap smartphones, investment in e-government and ensuring cyber security.
The rising trend of “home-based economy”
Many economists have brought up the idea of “home-based economy”. This may not be an entirely new concept, but the COVID-19 pandemic can be a launch pad for “home-based economy” to be fully realised.
For example, e-learning can take over traditional education. E-learning does not merely refer to lectures being delivered online. Virtual reality and augmented reality can make e-lessons even more vivid.
For the healthcare sector, through the COVID-19 pandemic, we have seen many advantages from remote healthcare or health monitoring such as reduced pressure on hospitals and reduced likelihood of cross-contamination for patients.
Minister Nguyen Manh Hung called upon the Vietnamese digital technology businesses to be creative and provide a variety of services on the online platforms, from education to healthcare, shopping and entertainment..
COVID-19 spurs the growth of e-commerce
Amid the complicated situation of COVID-19, online shopping became the choice of many Vietnamese people. This demand is expected to increase further when recently, the People's Committee of Ho Chi Minh City sent a message encouraging citizens to opt for online shopping to minimize big gatherings and avoid crowds.
Many e-commerce platforms have incorporated solutions to meet the rising demand of online consumption while ensuring safety and speedy delivery for customers.
Lazada Vietnam recently launched the automatic pick-up points through Smart Locker, which is considered as a "contactless delivery" solution to help reduce the risk of virus infection. Shoppers unlock the lockers with OTP and the last 4 digits of their phone numbers to pick up goods without having to meet the shipper in person. This model is being implemented in 20 locations in Hanoi and Ho Chi Minh City.
Other threats – Cyberattacks
Several hacker groups have capitalised on the COVID-19 pandemic to launch cyberattacks against organisations in different countries including Viet Nam.
The warning was given on 19 March by the Ministry of Public Security (MPS).
The Department of Cyber Security and Hi-tech Crime Prevention under the MPS has detected a cyberattack campaign, in which malicious code is spread via email. It uses information related to the COVID-19 pandemic to attract people’s attention. The government and cyber security agencies definitely need to step up their efforts to mitigate similar incidents and prevent public panic amid the pandemic.
If you have any other insights that you would like to share, please comment below.