Counting the cost of Vietnam’s Covid collapse

As daily life in Vietnam returns to some normalcy with the relaxation of months-long lockdown measures, questions are rising about how the ruling Communist Party’s standing has suffered as the country has dramatically shifted from one of Asia’s best to worst pandemic performers.  Vietnamese authorities, who were lauded for overseeing one of the world’s few pandemic success stories in 2020, were caught off-guard by a massive surge in infections in July this year exacerbated by the spread of the more contagious Delta variant.  The country of around 96 million recorded fewer than 1,500 Covid-19 infections in the whole of 2020, resulting in just 35 deaths. Its economy was one of the few in Asia to record positive growth, along with neighboring China. In 2020, the Vietnamese Communist Party (VCP) had whipped the populace into a nationalist fervor, invoking past “all in it together” spirit and impressing even hard-nosed foreign analysts with its uncharacteristic openness and competence. The military, long held in contempt by some sections of the public, were lauded after they converted their barracks into medical centers. “The government’s clumsy handling of the pandemic this year has damaged its reputation, which was boosted enormously by its effective management of the virus outbreaks last year,” said Alexander Vuving, professor at the Daniel K Inouye Asia-Pacific Center for Security Studies in Hawaii.  Cumulative cases have climbed from last year’s 1,500 to nearly 820,000 with almost 20,000 deaths as of October 5. When the latest wave of the pandemic struck in early July, only 3.7% of the population had received one vaccine jab, and just 0.2% were fully vaccinated. “When Delta really began to hit, Vietnam had the lowest vaccine rates in Southeast Asia and the public has every reason to ask why that was the case and to hold the government accountable,” said Zachary Abuza, a professor at the National War College in Washington.  Caught off-guard, Vietnamese authorities imposed harsh lockdowns across much of the country in July, just as they had in early 2020. The military was called in to enforce strict lockdowns in Ho Chi Minh City, the country’s largest city and main business hub, where residents were banned from leaving their homes. Travel between some districts and provinces was banned.   An improvised barricade installed in the middle of a street to restrict residents’ movements in Hanoi, as part of the authorities’ plan to stop the spread of the Covid-19 coronavirus, August 30, 2021. Photo: AFP / Manan Vatsyayana Those measures also closed hundreds of factories while the service sector ground to a halt as employees were unable to leave their homes or travel to their workplaces.  Vietnam’s General Statistics Office announced last week that gross domestic product (GDP) contracted by 6.17% year-on-year between July and September, the first quarterly decline since 2000. The Asian Development Bank recently downgraded its growth forecast to 3.8%. Concerns have also been raised that foreign investors could pull out en masse, denting Vietnam’s only recently earned reputation as a key Asian business hub. Those fears now appear exaggerated, although reports by the American and European Chambers of Commerce have shown that some investors have had to partly move some operations out of Vietnam this year. “Economic performance has long been the most important source of legitimacy of VCP and it is obviously being damaged due to its leaders’ botched response in the recent wave of the pandemic,” said one well-placed source, who asked for anonymity.  Last month, authorities u-turned and announced that they were scrapping their “Covid zero” policy because of the economic and psychological toll it was taking on the residents, as well as the ineffectiveness of the measures to significantly flatten the infection curve.  By late September, many of the lockdown measures were lifted in Hanoi, the capital. On October 1, Ho Chi Minh City’s industrial parks, construction projects, malls, hospitality facilities and restaurants for takeaways were allowed to resume operations While there is currently anger over how the communist authorities have handled the pandemic this year, seen in complaints and grievances posted on social media, not everyone believes that the ruling party’s reputation will suffer much in the long run.  “I don’t have a sense that the VCP has taken a hit in its reputation,” said Abuza.  The lockdowns were very strict but the government proved effective and responsive, he added, and “the past few months have really forced the government to go into overdrive with its vaccine procurement and rollout. Complacent no more.” Indeed, it appears that the worst is over in Vietnam. Daily infection rates have also fallen in recent weeks, down from a peak of 16,083 on August 26 to around 5,300 last weekend.  A health worker (L) wearing personal protective equipment (PPE) colle

Counting the cost of Vietnam’s Covid collapse

As daily life in Vietnam returns to some normalcy with the relaxation of months-long lockdown measures, questions are rising about how the ruling Communist Party’s standing has suffered as the country has dramatically shifted from one of Asia’s best to worst pandemic performers. 

Vietnamese authorities, who were lauded for overseeing one of the world’s few pandemic success stories in 2020, were caught off-guard by a massive surge in infections in July this year exacerbated by the spread of the more contagious Delta variant. 

The country of around 96 million recorded fewer than 1,500 Covid-19 infections in the whole of 2020, resulting in just 35 deaths. Its economy was one of the few in Asia to record positive growth, along with neighboring China.

In 2020, the Vietnamese Communist Party (VCP) had whipped the populace into a nationalist fervor, invoking past “all in it together” spirit and impressing even hard-nosed foreign analysts with its uncharacteristic openness and competence. The military, long held in contempt by some sections of the public, were lauded after they converted their barracks into medical centers.

“The government’s clumsy handling of the pandemic this year has damaged its reputation, which was boosted enormously by its effective management of the virus outbreaks last year,” said Alexander Vuving, professor at the Daniel K Inouye Asia-Pacific Center for Security Studies in Hawaii. 

Cumulative cases have climbed from last year’s 1,500 to nearly 820,000 with almost 20,000 deaths as of October 5. When the latest wave of the pandemic struck in early July, only 3.7% of the population had received one vaccine jab, and just 0.2% were fully vaccinated.

“When Delta really began to hit, Vietnam had the lowest vaccine rates in Southeast Asia and the public has every reason to ask why that was the case and to hold the government accountable,” said Zachary Abuza, a professor at the National War College in Washington. 

Caught off-guard, Vietnamese authorities imposed harsh lockdowns across much of the country in July, just as they had in early 2020. The military was called in to enforce strict lockdowns in Ho Chi Minh City, the country’s largest city and main business hub, where residents were banned from leaving their homes. Travel between some districts and provinces was banned.  

An improvised barricade installed in the middle of a street to restrict residents’ movements in Hanoi, as part of the authorities’ plan to stop the spread of the Covid-19 coronavirus, August 30, 2021. Photo: AFP / Manan Vatsyayana

Those measures also closed hundreds of factories while the service sector ground to a halt as employees were unable to leave their homes or travel to their workplaces. 

Vietnam’s General Statistics Office announced last week that gross domestic product (GDP) contracted by 6.17% year-on-year between July and September, the first quarterly decline since 2000. The Asian Development Bank recently downgraded its growth forecast to 3.8%.

Concerns have also been raised that foreign investors could pull out en masse, denting Vietnam’s only recently earned reputation as a key Asian business hub. Those fears now appear exaggerated, although reports by the American and European Chambers of Commerce have shown that some investors have had to partly move some operations out of Vietnam this year.

“Economic performance has long been the most important source of legitimacy of VCP and it is obviously being damaged due to its leaders’ botched response in the recent wave of the pandemic,” said one well-placed source, who asked for anonymity. 

Last month, authorities u-turned and announced that they were scrapping their “Covid zero” policy because of the economic and psychological toll it was taking on the residents, as well as the ineffectiveness of the measures to significantly flatten the infection curve. 

By late September, many of the lockdown measures were lifted in Hanoi, the capital. On October 1, Ho Chi Minh City’s industrial parks, construction projects, malls, hospitality facilities and restaurants for takeaways were allowed to resume operations

While there is currently anger over how the communist authorities have handled the pandemic this year, seen in complaints and grievances posted on social media, not everyone believes that the ruling party’s reputation will suffer much in the long run. 

“I don’t have a sense that the VCP has taken a hit in its reputation,” said Abuza.  The lockdowns were very strict but the government proved effective and responsive, he added, and “the past few months have really forced the government to go into overdrive with its vaccine procurement and rollout. Complacent no more.”

Indeed, it appears that the worst is over in Vietnam. Daily infection rates have also fallen in recent weeks, down from a peak of 16,083 on August 26 to around 5,300 last weekend. 

A health worker (L) wearing personal protective equipment (PPE) collects a swab sample from a man for Covid-19 coronavirus testing in Hanoi on August 20, 2021. Photo: AFP / Nhac Nguyen

Vietnam still has the worst nationwide vaccination rate in Southeast Asia, barring conflict-torn Myanmar. It has fully vaccinated just 10% of its population, compared to 66% in Cambodia, 22% in Thailand and even 26% in Laos, as of early October. 

However, the vaccination campaign is now gathering steam. The number of daily Covid-19 vaccine doses administered per 100 people is now around 0.91, compared with just 0.26 on August 1. 

The World Bank still reckons the economy will grow by 4.8% this year, much better than most other Southeast Asian states. And most economic forecasters believe it will grow by at least 6% in 2022, back to pre-pandemic levels.

Carl Thayer, an emeritus professor from the University of New South Wales in Australia, said it is more likely that those frustrated at the strict lockdowns would have blamed individual local leaders and institutions, and not central Communist Party leaders. 

Provincial party figures, particularly the party boss in Ho Chi Minh City, Nguyen Van Nen, “would have been aware of public frustrations with severe aspects of the lockdown in Ho Chi Minh City and southern provinces,” said Thayer. 

This is to be expected since the experiences of the Vietnamese over recent months have largely depended on geography. 

The country’s two main cities –  Hanoi, the capital, and the southern business hub Ho Chi Minh City – experienced the worst of lockdowns, while parts of the countryside saw few restrictions imposed despite a nationwide surge in infections. 

Ho Chi Minh City accounts for around a tenth of Vietnam’s total population but an estimated 80% of all fatalities from Covid-19 and half of all infections. Hanoi began lifting its restrictions in the middle of last month, while Ho Chi Minh City authorities have started to roll back the lockdown this week. 

Nationally, Vietnam’s vaccination campaign appears weak. However, the Ministry of Health says that more than 98% of Ho Chi Minh City’s ten million or so residents have received one jab and a third are fully vaccinated, according to recent media reports. 

A woman (L) receives the Sinopharm Covid-19 coronavirus vaccine in Hanoi on September 10, 2021. Photo: AFP / Nhac Nguyen

One key concern going forward will be convincing workers to return to industrial areas, since hundreds of thousands of people reportedly traveled back to their rural hometowns since the lockdowns have been lifted. Local media reports suggest that more than 100,000 people have left Ho Chi Minh City in recent days. 

Pandemic woes have also sown discord within the perennially factious Communist Party. Analysts who spoke to Asia Times say there remains resentment within the party over the leadership decisions made at the quinquennial National Congress in January. 

Party chief Nguyen Phu Trong was able to cling onto power for a rare third-term, which no party general-secretary has done since the 1980s. 

Former Prime Minister Nguyen Xuan Phuc, the spiritual leader of the party’s technocratic wing, was tipped to either stay where he was or win promotion to party chief. Instead, he was moved onto the largely ceremonial role of State President. 

The technocrats expected Phuc to be replaced by someone of the same ilk, but instead, the prime minister role was awarded to Pham Minh Chinh, who had little prior experience in government. 

According to sources, some of Vietnam’s pandemic problems can be blamed on the style of politics that Trong and his factions have sought to instill since 2016 when he outmuscled his factional rival, then-prime minister Nguyen Tan Dung. 

Vietnam was an exception in early 2021 for not rushing to order vaccines from pharmaceutical contractors or other nations. This was because communist officials were afraid of the punishment they might face if they paid over the odds for the vaccines, said a source with knowledge of government discussions who requested anonymity.

A common reason why politicians in Vietnam are arrested and jailed in anti-corruption crackdowns has for decades been because of alleged misuse of state funds, and state investigators are increasingly demanding officials to justify every dong spent, the same source noted. 

Vietnam’s newly elected Communist Party general secretary Nguyen Phu Trong gestures during a press conference after the closing ceremony of the Communist Party of Vietnam (CPV) 13th National Congress at the National Convention Centre in Hanoi on February 1, 2021. Photo: AFP / Nhac Nguyen

This has especially been the case since party chief Trong launched his anti-graft campaign in 2016, which has resulted in the arrest and imprisonment of hundreds of party officials, many for overt corruption but a good number also for financial mismanagement.  

Nguyen Khac Giang, a PhD candidate at Victoria University of Wellington, said that the government’s handling of the pandemic since the fourth wave in the late spring “definitely undermines the regime’s legitimacy, although we do not know to what extent given there’s no polling available.”

“But to regain the people’s trust, it might require much harder work from both local and central leaders in the next one to two years,” he added.