Vietnam Update: August 9

Vietnam is battling major Covid-19 outbreaks throughout the country as the Delta variant unleashes its havoc on a country that up until a few months ago  had been mostly spared from the pandemic. Here is Access Asia’s Monday update in collaboration with Vietnam Weekly, a subscription-based publication covering current affairs in Vietnam.

The latest data

Last Thursday night, this outbreak had accounted for 185,004 cases of community transmission, a figure that is now 206,439 (135,462 of which are active). In a concerning development yesterday set a new single-day case record, 9,684. Vietnam had gone over a week without breaking any records.

Graph from VnExpress. The grey line is the rolling 7-day average.

Ho Chi Minh City had a relatively good day yesterday, with 3,898 case reported, but neighbouring Binh Duong hit 3,210 and is nearing 30,000 cases in this outbreak, while Long An, Dong Nai, Khanh Hoa and Da Nang are in the middle of growing outbreaks. The good news is that cases appear to be stabilizing in Ho Chi Minh City, the current epicentre of the fourth wave.

Yesterday was a huge new record for Binh Duong.

Thousands more recoveries have been announced (HCMC on its own is averaging 3,300 per day), though they they remain outpaced by new cases, while the death toll has increased again, from 2,720 to 3,397.

In HCMC alone, as of last week, 2,070 patients need respiratory support, while 1,331 are in critical condition. City officials have admitted that even with numerous field hospitals set up, private hospitals brought into the fight, and thousands of medical personnel sent in from other parts of the country, the health system is overloaded. It would be very difficult for Vietnam to handle another province completely exploding, if that were to happen.

Vaccinations have maintained a solid clip, with well over 300,000 doses administered each of the last three days, but there remains a huge gap between the number of doses Vietnam has received, and the number that have gone into arms: according to VnExpress data, 17.6 million doses have arrived, and 8 million – mostly AstraZeneca and Moderna – have been administered (7.1 million partially vaccinated, 888,500 fully vaccinated).

This gap has not gone unnoticed, and over the weekend the Ministry of Health threatened to transfer doses from provinces with slow rollouts to areas which are moving faster, in addition to not allocating future doses.

Officials in Ho Chi Minh City, meanwhile, have warned that the city could run out of doses by the end of today, and asked the health ministry to immediately allocate more to it. (Some wards have already announced that they are temporarily suspending vaccinations.)

It’s not clear what the holdup is here, both for the city and nationally, when it comes to distributing delivered doses. Yet, we believe this bottleneck will be corrected swiftly as Vietnam has made it clear that the vaccination route will be the critical factor in defeating the pandemic and that time is of essence. It also looks like a home-grown vaccine, Nanocovax (produced by Nanogen Pharmaceutical Biotechnology JSC) will be ready for roll-out in the fourth quarter as the company declared over the weekend that its product has an efficacy rate of 90%. Phase three trials of the vaccine are still ongoing but it’s clear that the government desperately wants to get Nanocovax out there to reduce dependency on imported vaccines. Meanwhile, the country’s biggest conglomerate Vingroup is partnering with US-based Arcturus to trial the latter’s mRNA COVID-19 vaccine candidate. The conglomerate’s Vinbiotech arm received special permission to begin construction of a vaccine plant in Hanoi with expected  capacity of 200 million doses per year upon completion.

The state of restrictions 

HCMC is now in its fifth week of strict Directive 16 regulations, with the most recent extension set to expire this coming weekend. Even with ongoing signs of stabilization in terms of case numbers here, the hard lockdown will almost certainly be extended again.City officials are aiming to have at least one vaccine dose in 70% of adults by the end of this month (a goal that will be threatened by any vaccine supply disruption) in order to achieve theoretical herd immunity. Logic would follow a loosening of restrictions at the same time, but it’s hard to see much relaxing for quite some time.

In Hanoi extended its strict social distancing rules until August 22. It has been averaging 50-70 new cases per day (a jump to 114 yesterday), with clusters linked to high-traffic areas like wholesale markets and supermarkets.

The Civil Aviation Authority of Vietnam (CVAA) has proposed that all flights between Hanoi and HCMC are stopped and it has also asked the Ministry of Transport to freeze all regular flights between localities that are under social distancing orders, including Hanoi and HCMC. Clearly Vietnam’s once booming aviation industry is taking a major blow (three Vietnamese banks recently pledged to lend 4 trillion dong (US$173.8 million) to Vietnam Airlines to help the carrier survive the pandemic).

Looking ahead

According to the Ministry of Industry and Trade, millions of tons of rice, four million tons of produce, 400 million eggs, 600,000 tons of chicken, 120,000 tons of seafood and 80,000 tons of pork are stuck throughout southern Vietnam. Beyond the obvious threat of much-needed food spoiling, this is also a huge problem for farmers who rely on selling their goods to survive. Vietnam’s seafood sector is also being hit hard, with a reported 70% of firms in the south having suspended operations as they couldn’t meet government requirements for staff to live on site due to higher costs. Seafood production has plunged to about 50% of pre-pandemic levels and will likely drop further.

The industrial sector is still struggling as well. Many companies in Dong Nai Province have asked to stop following the ‘three on the spot’ model, under which factory workers live, eat and work in one facility, since this has led to numerous COVID-19 clusters and factory disruptions/shutdowns.

Overall, it is still too early to tell the full economic impact of the current lock-downs, yet it is difficult to see how Q3 growth will be positive. The good news is that Vietnam was still able to post growth of 5.64% in the first six months of this year – much higher than the 1.82% rate reported for the same period last year, while the macroeconomy appears stable and inflation is under control.  Foreign investors remain upbeat on Vietnam: As of June 20, 2021, foreign investment projects were estimated to disburse US$9.24 billion, an increase of 6.8 percent compared to the same period in 2020. Even as economic activity is getting hammered by the current lock-downs affecting many parts of the country including Hanoi and Ho Chi Minh City, Vietnam’s benchmark VN-Index has posted nine straight days of gains through last Thursday with foreign investors being net buyers for most of those sessions – indicative the investors remain upbeat on Vietnam’s growth prospects over the medium and long term.


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