Hanoi (VNA) – Vietnam’s effective management ofCOVID-19 has boosted confidence and facilitated the easing of restrictions andeconomic recovery, according to an article published by the Australia – VietnamPolicy Institute (AVPI), which highlights several of Vietnam’s domestic andexternal drivers of growth.

This effective management, combined with continued progressin laying the foundations for sustained medium-term growth, provide soundreasons to be optimistic about economic prospects for 2022 and beyond.

“Although the pandemic imposed considerable hardships onmany households, workers and businesses, Vietnamese private businesses havedemonstrated resilience with a continuing appetite to invest in expansion,”said the article, written by Raymond Mallon, an economist and a visiting fellowat AVPI.

Growth in business numbers has accelerated again over thelast six months and increased private investment is becoming increasinglypivotal in generating new employment opportunities, it noted.

Aiming to ameliorate the economic impact of the pandemic,the Vietnamese government has renewed efforts to reduce institutional andinfrastructure bottlenecks and ensuring that all businesses compete on a levelplaying field.

The government has committed to increasing expenditure onhealth, education, and infrastructure, and to sustain limited business support.As the government re-focuses its attention on non-COVID socio-economicdevelopment issues, a recovery in flows of public investment is expected in2022.

Additionally, Vietnam’s domestic middle class continues toexpand, contributing to accelerated growth in domestic consumer demand. Vietnameseenterprises are increasingly integrating into global production chains,boosting investment, technology transfer, productivity growth and incomes.Recently implemented regional economic cooperation agreements are also helpingto further deepen regional supply chain links, boosting trade and foreigninvestment, and providing new opportunities for businesses in Vietnam.

The article recommends to strengthen education and healthoutcomes; facilitate the movement of workers out of declining industries;strengthen social safety nets (especially for informal workers); furtherimproving the business environment; addressing infrastructure bottlenecks; andaccelerating public investment and improving investment efficiency.

There is also a need for a renewed focus on building marketinstitutions to provide an effective and predictable policy and regulatoryenvironment. Vietnamese policy makers also need to continue to monitor andprovide appropriate support to those in Vietnam most adversely impacted by thepandemic, climate change/disaster impacts, and ongoing economic restructuring./.