Existential crisis bearing down on Ho Chi Minh City

Professor Tran Ngoc Tho University of Economics Ho Chi Minh City

This moment is nothing less than an existential crisis, Danielle Allen, head of Harvard’s Safra Center for Ethics wrote in Politico. “It is a moment where societies are forced to answer the question of who they are.”

From an economic point of view, the dual health and existential crisis will have a profound impact on the real economy. Detailed calculations are being made to deal with budget balancing problems for macro stability. Meanwhile, the existential factors of the human condition in crisis management have been inadvertently ignored with delays and little support for workers and the poor.

The pandemic will pass sooner or later, but the crisis will significantly weaken the workforce. There have been many studies proving that a decline in labour productivity, with a large proportion of workers leaving their jobs and changing careers during an existential crisis will significantly slow down the economic recovery process in countries.

Many major economies around the world are facing severe labour shortages after showing signs of economic recovery. Solving these problems is therefore not only about caring for the human condition but also about preserving the labour force for the economy, which will help mitigate the impacts of the crisis on the economy. Above all, it is also demonstrating the legitimacy of the government to take care of the material and spiritual life of the people in the most practical way.

Existential crises can happen to anyone, but those with a decent income can pass the time relatively unscathed. Psychological education on television has only a partial effect on people with a good income. For anyone who has lost income due to lockdowns, the only way to help them is to spend a relatively large amount of money and cover minimum living expenses, alleviating some pain and loss. Some poor people living in hostels and alleys have not only lost their income but also their closest relatives. Material support for them also only partially alleviates the overwhelming pain they are suffering.

The government has had practical policies with many economic support packages under way. However, delivering these packages in a timely manner remains tricky. In Ho Chi Minh City, leaders showed that this is a city of gratitude as it pioneered launching these packages to support the poor and homeless people. However, it’s time for us to ask the serious question: will they arrive in time and at the right address? For poor workers, just one day off from work means they and their families will face enormous difficulties.

Looking at the images of local leaders visiting, giving gifts, and donating money to some families on TV, if we were the recipients, it would be very heartwarming. Surely all of us would like to have the honour of becoming one of those to visit and share materially and spiritually with people who are suffering. But then what? Dealing with a long-term existential crisis requires the government to take a more effective and practical approach.

In recent years, many local authorities announced that they strive to develop smart cities. By simply integrating a database and the application of digital financial platforms, the local authorities could send money directly to the people via smartphones instead of directing a large force of officials to visit each alley.

Especially, e-wallets can transfer money to those in need quickly and accurately. For example, the Aadhaar initiative is the world’s largest ID system for Indians based on biometric and geographical data to make digital payments, The e-Tunai Rakyat initiative is a government initiative designed to encourage Malaysians to increase their use of e-wallets. During this pandemic, such financial platforms and e-wallets in the form of various public-private partnerships have helped governments support money and food for the people very timely.

In Vietnam, statistical data shows that most workers have bank accounts and payment cards. However, the government has yet to use them to transfer support packages to employees. There is hardly any connection of employee data with bank account information, social insurance accounts, personal income tax declarations, and digital identities which are all scattered across relevant departments from central to city.

In the immediate future, the municipal authority needs urgent solutions to take advantage of existing digital platforms in the public and private sectors, combined with digital IDs to transfer money to people instantly. The SARS pandemic and social isolation measures in 2003 spurred China to rapidly develop digital finances and e-commerce to become a digital powerhouse with global brands such as Alipay and WeChat. The pandemic in Ho Chi Minh City has so far lasted nearly half a year. Even in the city’s latest two-phase anti-pandemic plan, it doesn’t mention the technology solutions, especially fintech, to bring support packages to the beneficiaries immediately and accurately.

Ho Chi Minh City authorities have the desire to become a smart city. But this is not just about modern urban transport systems and smart buildings that are far away from the lives of workers.