Experts warn of risks to premature economic reopening

Reopening the economy is necessary but any untimely decision amid low vaccination rates and high contagion risks could stymie the country’s efforts to defeat Covid-19, experts warn.

“The premature lifting of the lockdown and reopening the economy while the full vaccination rate remains low, new infections and fatality rates are still soaring and the health system is overburdened may even endanger the economy and people’s lives more badly,” Nguyen Minh Cuong, principal country economist at the Asian Development Bank said.

But the country stands at a crossroads since lengthening strict social distancing is likely to inflict further socio-economic costs and endanger its medium- and long-term growth prospects, he told VnExpress International in an emailed statement.

Prime Minister Pham Minh Chinh and Ho Chi Minh City leaders have spoken about letting economic activities resume gradually and how the lockdown “cannot go on forever.”

Vietnam has been struggling in its Covid-19 fight since the end of April when a fourth wave began and infected nearly 609,000 people and killed over 15,000.

HCMC, the largest city and major manufacturing and exporting hub, has imposed strict social distancing for over two months but still thousands of new cases are being found every day.

This is why analysts are reluctant about resuming economic activities now.

“It is complicated to find the perfect moment to reopen the economy,” Tim Evans, CEO of HSBC Vietnam, said.

The risks of doing this too early at a time when vaccination is not up to optimum speed and the medical system is overwhelmed could lead to additional Covid cases resulting in a further increase in mortality rates, he said.

Other experts concurred.

“In our view, reopening the economy, especially in the epicenter HCMC, is a risky move,” Jason Yek, senior Asia country risk analyst at market research company Fitch Solutions, said.

The rate of full vaccination in Vietnam is low, and reopening before the outbreak has been suppressed would possibly elicit a lukewarm response from consumers, he said.

Vietnam has vaccinated 24 percent of its population, but only 5.2 percent have received two doses.

The country has received 29.8 million doses of vaccine, or only one-fifth of its target of 150 million doses to vaccinate 70 percent of the population.

This is why a premature opening risks a surge in infections which would overwhelm the healthcare system and could force the government to tighten restrictions again, Yek said.