Families battle through pandemic uncertainties

While the pandemic’s most obvious threat seems to have passed in Vietnam, its economic aftermath still troubles locals

In a small, dark room of nearly eight square metres in Hanoi’s Dong Anh district, Le Van Quy washes some water spinach that will be boiled for lunch. He had never cooked before, but in March the 30-year-old became unemployed from Japanese bathroom product manufacturer ToTo, as the workplace was temporarily closed due to COVID-19.

His family is enduring some dark days, as his wife Minh also lost her job as a nanny. Before the current pandemic, life was already tough as the couple only earned VND12 million ($520) to cover living costs for a family of five. Now life has become much harder as they live day-by-day without money and jobs. All that they can do is to hope that the pandemic will end soon while waiting for fresh government measures that could keep their three children from starving.

Like Quy’s family, many families living in Thang Long Industrial Park and other industrial zones in the city and beyond have suffered from the pandemic as they lost jobs while working for foreign-invested enterprises (FIEs).

The coronavirus crisis has caused temporary factory closures including well-known names such as Panasonic, Honda, Toyota, Ford, and the aforementioned ToTo. Meanwhile, the textile and garment sector complained that it is experiencing its hardest troubles since the Asian economic crisis of 1997 and the global financial crisis 12 years ago.

The same situation can be seen in the country’s craft villages. In Bat Trang, about 15km from Hanoi’s centre, life has become quiet with few visitors and little trade. Dinh Van Phuc, owner of a workshop in the village, said before the outbreak Bat Trang was attracting hundreds of visitors a day and it was especially busy in the first months of the year.

However, production became paralysed, and there are no domestic buyers or orders from other countries. Ha Van Lam, deputy head of the representative board of Bat Trang Traditional Ceramics Village, explained that at present almost all ceramics shops were closed with only a few production facilities maintaining operation to ensure export orders for other countries.

Meanwhile, Dong Ky woodwork village in the northern province of Bac Ninh, which houses 1,500 households making products to serve domestic and international demand, has reported a sharp fall of 80 per cent in production. Ha Thai lacquer craft village in Hanoi’s Thuong Tin district is also suffering. Due to the complicated COVID-19 pandemic, domestic and foreign partners requested production facilities here to suspend production.

Do Hung Chieu, chairman of the Ha Thai Lacquer Association, said he had received a request letter from European and American businesses asking his own workshop to suspend production of signed orders, as the business system in their own countries was also closed due to lockdowns. Only a few domestic orders still maintain production but at a small scale.

At an online conference on sustainable business held on June 3, Le Van Thanh, Deputy Minister of Labour, Invalids and Social Affairs, said that due to the impact of COVID-19 on the labour market, more than five million employees nationwide lost jobs or were forced to endure reduced working hours and incomes over the first five months of 2020.

According to Thanh, nearly 85 per cent of businesses in Vietnam are affected by the crisis, and must request their employees to suspend contracts, take time off work or work alternately, especially in jobs in the processing, manufacturing, wholesale, retail, warehousing, accommodation, and catering services.

Thanh also said that in May, the number of employees returning to work has increased. Around 80,000 employees who had previously lost their jobs have returned to work. However, the employment of many labourers and the activities of many businesses continue to face difficulties due to the stagnant export markets.

With the aim of leaving no-one behind in fighting the global health crisis, the government has been taking swift action to protect investors, businesses, and people via relief measures at a time when major economic sectors have had to send workers into temporary unemployment.

In April, Minister of Planning and Investment Nguyen Chi Dung said, “While great difficulties are hitting people and enterprises, a bowl of rice for the poor at times like this is worth thousands of times more than discussions.” Looking at the suffering of people across the country during the crisis, ministers have done their utmost to craft measures as soon as possible to help people and businesses overcome the strife.

Thanh from the Ministry of Labour, Invalids and Social Affairs said on June 3 that the government would allow the use of VND 3-5 trillion ($130-215 million) from the Unemployment Insurance Fund to support employers and help retrain employees to improve their skills.

The government officially adopted a support package worth VND62 trillion ($2.7 billion) to ensure social security, contribute to maintaining social stability, and demonstrate the government’s commitments. The package has been delivered to people with meritorious services, contracted employees, part-time workers, and those on unpaid leave or with reduced income as a result of the pandemic. It has also been applied to freelancers let go without eligibility for unemployment benefits, and those who have no labour contract.

Meanwhile, companies could borrow money at a zero lending rate from the Vietnam Bank for Social Policies to ensure they have enough funds to pay affected workers.

Prime Minister Nguyen Xuan Phuc reaffirmed that mobilising resources from the private sector and through foreign direct investment is most essential now.