Vietnam, the world’s factory that is not reactivated due to lack of workers

After overcoming his worst crisis of COVID-19 Until now, Vietnam, one of the world’s factories, is having trouble reviving the industry around its economic capital, from which hundreds of thousands of workers have fled in recent months who no longer want to leave their home provinces for fear of the virus.

Teo is one of the 1.3 million workers who, according to government data, left the megacity of Ho Chi Minh (formerly Saigon) between July and September, when the most populous city in the country suffered the worst wave of coronavirus that Vietnam has known.

He could not leave until September, after enduring four months without salary (4.7 million Vietnamese lost their jobs in the summer), but he does not want to return to the big city from his rural province of An Giang until he is certain that the pandemic has lagged behind.

“I will dedicate myself to agriculture and other tasks. I will wait until February or March (after the big Lunar New Year celebration) to see if the situation has improved. Right now in the city anything can happen ”, he says.

Summer break

After a forced stoppage between July and September in the largest factories around Ho Chi Minh (some of the smaller ones managed to operate for a few weeks with the workers sleeping in the workplace), activity was resumed in October, but the backlog in production seems irrecoverable for Christmas.

The situation largely affects textiles and footwear, but also other sectors in which Vietnam is at the forefront, such as furniture or electronics, with the addition that in recent years many foreign companies had transferred part of their production from China for lower wage costs and the trade war between China and the United States.

Millions of sports shoes and other products from brands such as Nike and Adidas or furniture are manufactured in the surroundings of Ho Chi Minh that end up being sold in Europe and the United States, while the country has become an important productive center for brands such as Samsung and Manzana.

“The new normal is going to be to have 70% or 80% workers. Those who have left directly say that they do not return, that they stay with the family and growing rice, and we are having serious problems finding employees, “a footwear entrepreneur who prefers to remain anonymous tells Efe.

The textile and footwear entrepreneurs, two of the great motors of the Vietnamese industry hope, hopefully, to have 80% of the jobs filled in the next few weeks and they already assume that between 15% and 20% will not return.

“I doubt that most migrant workers will go back to work in urban areas before the Lunar New Year holidays (in February),” said Nguyen Hong Ha, head of the International Labor Organization (ILO) in a recent article on VnExpress. ) in Vietnam.

Among the reasons for this resignation, Ha highlights the feeling of insecurity regarding the pandemic -especially in provinces surrounding Ho Chi Minh where the vaccination rate is still low-, the psychological damage suffered during the months of forced confinement and the high cost of living in the city compared to the countryside.

Pandemic restrictions

Even those residing in the city’s industrial belt (especially Binh Duong and Dong Nai provinces) are not always available due to restrictions related to the pandemic.

If a worker lives in an area where there has been a contagion in the last seven days, they will not be able to go to work, as well as the unvaccinated, still abundant among the youth of those provinces, with inoculation rates much lower than in the city due to lack of supply.

On the other hand, production costs are increasing because many workers who are willing to continue have seen in this situation an opportunity to demand higher wages (the minimum wage is around US $ 200 per month in Ho Chi Minh, but an experienced technician you can earn around US $ 600).

Lost production

Despite this problem, the businessman does not believe that this affects the position of Vietnam as a productive center, as it is a specific problem that will be resolved in the coming months as vaccination advances and the population’s fear of the virus decreases. .

During the first year of the pandemic, the country had barely 35 deaths and a few hundred infections thanks to the rapid adoption of measures such as the closure of the borders and managed to achieve a GDP increase of 2.9%.

Forecasts spoke of exceeding 6% growth this year, but the irruption of the delta variant changed the landscape in 2021, with more than a million infections in total and more than 23,000 deaths, more than 75% in Ho Chi Minh and its surroundings, which has multiplied the economic impact.