A strong step toward economic recovery . . .
Vietnam has begun the slow resumption of international commercial flights. The first outbound commercial flight, operated by Vietnam Airlines from Hanoi to Tokyo on September 19, carried more than 100 passengers and was followed by an inbound commercial flight from Seoul to Hanoi. Non-Vietnamese passengers on inbound flights are restricted to diplomats, investors, experts, and their family members, although the government is still working on loosening restrictions. Vietnam has imposed stringent requirements including certificates for testing ‘COVID-negative’ three days before boarding, the installation of Vietnam’s COVID contact-tracing app (called Bluezone) on the traveller’s phone, and undertaking a 14-day quarantine upon arrival at a centralized quarantine facility.
New growth incentives . . .
Beyond resuming more routine international flights, Hanoi has rolled out a suite of growth incentives to achieve its GDP growth target of 2-2.5 per cent, a target it revised downward after the country’s resurgent COVID-19 outbreak in July. The latest incentives focus on attracting innovative startups to set up offices in tech parks, and include exemptions from land-leasing costs for up to 50 years, access to preferential loans, and eligibility for tax incentives for 30 years. The latest measures are seen as a government effort to facilitate the rebound of Vietnam’s startup ecosystem, which received the second-highest level of foreign investment in Southeast Asia, after Indonesia, in 2019.
Becoming a cashless society . . .
The COVID-19 pandemic has accelerated Vietnam’s transition to a cashless society, in which only 40 per cent of the population has bank accounts. Amid a boom of e-commerce and contactless payments due to COVID-19, Vietnamese people are increasingly adopting e-payments, with a number of traditional banks and e-wallet providers reporting a significant increase of online transactions on their digital platforms. While Vietnam’s fintech landscape is becoming more competitive as digital-payment players continue to upgrade their existing services and launch new offerings, weak legal frameworks governing digital banking in the country are a concern. Perhaps addressing these will be the next phase of Hanoi’s economic rebound policy.
- Nikkei Asian Review: Vietnam digital bank relaunches as e-commerce booms
- Nikkei Asian Review: Vietnam receives flight from Seoul amid hopes for business rebound
- Vietnam Investment Review: New incentives to favour innovative startups in Vietnam