More Than 28,500 Businesses Forced To Close In COVID Epicenter HCMC

Ho Chi Minh City, the epicenter of Vietnam’s fourth COVID-19 wave, is also home to a third of the 85,500 businesses that left the market between January and August of this year, according to the General Statistics Office (GSO).

"The fourth coronavirus wave, along with consecutive social distancing orders, has severely disrupted business and production of companies, especially in southern Vietnam," reads the GSO report.

This proves to be true, given that the number of businesses in the country which fizzled out of the market exceeded the number of new startups by 4,000. The number of new businesses dropped 8% from last year’s figures. Furthermore, approximately 10,700 businesses have been forced to leave the market every month this year — a 6.6% increase from last year’s figures.

Among the departures, 43,200 suspended operations indefinitely, 30,000 shut down operations and are heading down the path of dissolution, and 12,200 have finalized dissolution procedures.

The number of businesses that returned to work this year within these first eight months is at 32,400, which is a 0.6% drop from last year. In a report released by the Statistical Department of the City released last year after the first wave of COVID-19 in Vietnam which surveyed 16,300 local firms, the bigger an enterprise’s scale is, the more it was affected.

Given the stringent guidelines on traveling as well as prolonged periods of lockdown, both implemented as part of Vietnam’s COVID-19 response, it is no surprise that many businesses can’t return to operations as usual. Throughout the year, Ho Chi Minh City has undergone many directives and a series of social distancing orders due to rising numbers in the ever-evolving situations of the pandemic, with the latest lockdown expected to last until mid-September.

Many industries, such as those that rely on physical labor, cannot uphold the government’s strict social distancing policies, nor can their workers abide by travel restrictions from district to district. For workers within these industries and businesses, moving to a remote option is not a privilege they have.

This leads to a major problem — high rates of unemployment.

Based on the data from the GSO, Trading Economics has reported an increase in the percentage of those unemployed in the nation. The biggest spike can be observed between the second quarter and third quarter of last year. When cases eased earlier this year, we saw a slight decrease in the employment rate: from 2.5% to 2.37% in the second quarter, however, shows that unemployment is slowly on the rise.

Given the toll that COVID-19 is starting to take on Vietnam’s employment and the stress it has placed on businesses and families alike, HCMC Export Processing Zone and Industrial Zones Authority (HEPZA) has made a number of proposals in June to the municipal People’s Committee to support businesses and workers during this time. Specifically, many have pleaded for a credit support scheme, reducing corporate income tax, reduced bills and accommodations for tenants, and shortened procedures for employees to receive subsidies and aid.

While fighting the pandemic is everyone’s first priority, it is a difficult balancing act to also support citizen’s livelihoods during — and after — this time. Behind these statistics are families who have been holding onto hope, perhaps for much too long. The rising numbers of unemployment and closed businesses mentioned here open up an additional conversation, one that’s been on everyone’s minds: How will the Vietnamese citizens’ livelihoods be supported in a post-pandemic society?