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Passengers walk with their luggage at the departure terminal at Noi Bai International Airport in Hanoi on Wednesday. Photo: AFP

Vietnam restarts flights with six cities in Asia for business travellers, citizens

  • Foreigners travelling for business or study from the southern Chinese city of Guangzhou, as well as Seoul, Tokyo and Taipei are included
  • Observers say Vietnam is keen to reopen to ‘safe partners’ to mitigate the pandemic’s economic impact and encourage foreign investment inflows
Vietnam
Vietnam is restarting passenger flights with six Asian cities as it moves to shore up an economy battered by the coronavirus pandemic by boosting business activity.
Foreigners travelling for business or study, along with Vietnamese nationals and their family members, will be allowed in from the southern Chinese city of Guangzhou, South Korea’s Seoul, Japan’s Tokyo, and Taipei, the government said on Tuesday, adding that flights to and from Cambodia’s Phnom Penh and Laos’ Vientiane would start next week. There will be two round trips a week between Vietnam and the selected destinations.

All travellers must test negative for Covid-19 before boarding their flight and again upon landing. Those staying in Vietnam for fewer than 14 days will not need to be quarantined but have to be tested, wear a mask and refrain from shaking hands.

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Others must undergo quarantine at an army-run facility or government-designated hotels but if their second test comes back negative, they could be given a shorter stint of five days rather than 14. They have to pay for all quarantine and testing expenses.

Those who transit through the six cities from a different destination can also enter Vietnam but they will need to be tested and undergo a 14-day quarantine.

People wait inside the departure terminal at Noi Bai International Airport in Hanoi on Wednesday. Photo: AFP

Shin Jee-hoon, a manager at the Korea Trade-Investment Promotion Agency’s office in Ho Chi Minh City welcomed the move, pointing out that Vietnam was a popular destination for Korean investment.

According to Vietnam’s Ministry of Planning and Investment, South Korea was the country’s No 1 source of foreign direct investment as of June 20 with US$68.3 billion in registered capital – or 18.1 per cent of the total, just in front of Japan with 15.9 per cent.

“Unfortunately, at present, many investment projects have been put on hold since high-profile investors cannot enter Vietnam as a result of the country’s adoption of international travel restrictions to limit the spread of the pandemic,” Shin said.

Korean businesspeople and investors with decision-making powers need to visit Vietnam, he said, to survey lots of land for investment projects or for in-person meetings and deal finalisation.

Vietnam’s resumption of international flights coincides with the arrival of South Korea’s Foreign Minister Kang Kyung-wha, who is expected to visit the country on Thursday to discuss a collaborative response to the pandemic and other bilateral issues.

01:06

Vietnam turns Da Nang stadium into field hospital for coronavirus patients

Vietnam turns Da Nang stadium into field hospital for coronavirus patients
Vietnam has among the lowest number of Covid-19 cases in Southeast Asia with 1,063 infections and 35 deaths, having managed to quash a third wave that began in the popular holiday spot of Da Nang in late July after the country had restarted domestic tourism for about two months. No community transmission of the virus has been recorded in 14 consecutive days.

But the economic outlook is grim – the country is bracing for its slowest growth in 20 years, with a projected increase of between 2 and 2.5 per cent this year.

For the eight months through to August, export turnover was estimated at US$174.11 billion – a year-on-year increase of 1.6 per cent, down from 8.1 per cent the year before, according to the General Statistics Office of Vietnam. Over the same period, foreign investment in the country totalled US$19.5 billion, a 13.7 per cent contraction compared to the same period a year before. Tourism revenue has meanwhile plunged some 54.4 per cent to 13.1 trillion dong (US$563 million).

The statistics office attributed this loss of revenue entirely to the pandemic, adding that domestic tourism stimulus initiatives had also been suspended.

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The latest wave of infection has caused nearly half of businesses in Vietnam to downsize, according to a government survey that interviewed 400 companies and 15 business associations across sectors including tourism, agriculture and plastic manufacturing last month. Of those who had to downsize, more than 33 per cent let go over half their staff, with those in tourism being the hardest hit.

Overall, 76 per cent of respondents said they could not manage their expenses, 20 per cent said they had been forced to stop operating and 2 per cent said they had to wind up their business completely. Only 2 per cent said they had been unaffected by the latest outbreak.

Vietnamese economists have said unemployment rates are expected to continue to increase at least until the end of the year. Vietnam, the sole Southeast Asian economy not forecast to tip into recession this year, is keen on becoming one of the first in the region to reopen its borders, which would help improve its international reputation and the government’s domestic popularity, according to Le Hong Hiep, a fellow at the ISEAS – Yusof Ishak Institute in Singapore who works for its Vietnam Studies programme.

“Vietnam is keen to reopen its border to ‘safe partners’ as this can help mitigate the economic impact of Covid-19 and facilitate foreign investment inflows. As mass cross-border travel remains impossible at the moment, this move is not primarily aimed at reviving the tourism industry,” Hiep said.

Focusing on the domestic market, rather than relying on tourism, will still allow the economy to grow
Vu Thanh Tu Anh, economic adviser

He also noted that reopening the borders is “all the more important” given the Vietnamese Communist Party’s 13th National Congress is planned for early next year, as getting the virus under control and reviving the economy could “earn top politicians a better chance for re-election”. The congress which selects Vietnam’s next leaders occurs every five years.

While understanding the pressure on the government to reopen the country’s border, Vu Thanh Tu Anh, a member of the prime minister’s economic advisory group, said it has to be done with strict disease controls because “a public health crisis will lead to an economic crisis, not the other way around”.

“Vietnam depends greatly on public consumption which comprises two-thirds of GDP. Focusing on the domestic market, rather than relying on tourism, will still allow the economy to grow,” said Anh, who is also dean of School of Public Policy Management at Fulbright University Vietnam.

Samuel Pursch, a government affairs adviser to international companies and director at consultancy firm Vriens & Partners’ Hanoi office said he endorsed the government’s plan to resume flights – though many of his associates in Singapore and European Union countries will not benefit from it yet.

“These partners are certainly hoping to see other routes, especially from regional hubs like Singapore and Bangkok added to the government’s [flight] plans,” he said.

For travel bubbles to last longer than their namesakes, protocol is key

Countries across the world have proceeded cautiously with reopening borders to international visitors either through travel bubble arrangements or only allowing in foreigners with residency status.

Dr Kidong Park, the World Health Organisation’s representative in Vietnam, said it was not possible to have “zero risk” when restarting international travel but these risks could be managed to ensure the positive socio-economic gains from reopening borders did not lead to adverse public health consequences.

While Vietnam has been developing its own vaccine and could seek out others through the WHO’s global “Covax” allocation initiative or through bilateral agreements, Park urged caution.

“The vaccine might not be a magic bullet,” he said.

This article appeared in the South China Morning Post print edition as: boost for economy as flights resume
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