Vietnam’s tough policies to control COVID-19, which have shuttered factories and stunted output, are being criticized by overseas industries and within the government as a threat to exports and investment.
The growing concerns come as the export-dependent economy battles its worst outbreak. The nation’s commercial hub of Ho Chi Minh City has enacted tough lockdown restrictions, including ordering factories in pandemic-hit areas to shut if they cannot provide sleeping accommodations for workers.
The European Chamber of Commerce (EuroCham) in Vietnam vice chairman Nguyen Hai Minh said that the group estimates 18 percent of its members have relocated some production to other countries to protect their supply chains.
Another 16 percent are considering similar moves, he said during a briefing on Thursday evening.
“There is no disguising the fact that this fourth wave outbreak is having a dire impact on business,” EuroCham chairman Alain Cany said in a statement. “If lockdowns, social distancing and travel restrictions continue for much longer, new investment projects could be put at risk and companies could consider relocating elsewhere in the region.”
Even the Vietnamese Ministry of Trade and Industry earlier this week said that the nation is at risk of losing export customers, and needs to revise some disease prevention measures to ensure production at factories while containing the pandemic.
Exporters could face difficulties restoring lost international business after the pandemic is contained, it said.
Eighty percent of shoe factories in the south have halted operations after failing to meet government directives for on-site sleeping accommodations and designated transportation routes to shuttle workers to plants, the ministry said. Shoe factories in the central and northern regions have cut production by 30 to 50 percent due to COVID-19 social distancing curbs and a shortage of workers.
Vietnam has been the second-largest supplier of apparel and footwear to the US for many years, according to the American Apparel & Footwear Association, which represents more than 1,000 brands, including Gap Inc, J Crew Group Inc and Levi Strauss & Co.
EuroCham urged the government to accelerate the vaccination process, especially for workers, to ensure production.
More than 571,000 domestic virus patients have been reported since the latest outbreak began in late April, with more than 14,400 fatalities, according to the Vietnamese Ministry of Health.
Most infections and deaths have been recorded in the south.
The nation of 98 million has administered nearly 25 million COVID-19 vaccine doses, with 4.3 percent of the population fully vaccinated, the health ministry said.
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