Year in review: Events that shaped Vietnam in 2022

After opening up to the world post-Covid, Vietnam has been grappling with its aftermath but there were also some silver linings like hosting the SEA Games and diplomatic accomplishments.

Post-Covid reopening

After two years of closing its borders due to the Covid-19 pandemic, Vietnam reopened to international visitors on March 15.

Two months later the country scrapped testing requirements for all entrants, becoming one of the first countries to do so.

In May it received 172,900 visitors, a 70.6% jump from April.

However, after 11 months only 2.95 million visitors came, or just 60% of the target, according to the Vietnam National Administration of Tourism. The reasons included that China, a major tourism market that sent over 32% of all foreign visitors to Vietnam before the pandemic, had yet to reopen its borders. The conflict between Russia and Ukraine also affected the number of visitors from Russia and Europe, the second largest market for Vietnamese tourism before the pandemic hit.

Experts and insiders have been calling for the government to relax visa policy to attract more visitors outside the traditional markets.

Diplomatic achievements

2022 was a year of many diplomatic achievements for Vietnam following numerous visits by its leaders to other countries.

In November Vietnam and China issued a joint statement saying cooperation between the two countries need to be bolstered for the mutual interests of their peoples during a three-day official visit by Party General Secretary Nguyen Phu Trong to China.

As the first foreign leader to visit China after its 20th Party Congress, Trong was welcomed with a 21-gun salute. He was also awarded China's Friendship Medal at a meeting with his Chinese counterpart Xi Jinping.

The two leaders pledged to promote strategic development, hastening exchanges regarding the connectivity between the "Two Corridors, One Belt" framework and the "Belt and Road" initiative, and completing the evaluation for the planning of the Lao Cai-Hanoi-Hai Phong railway, which connects Vietnam capital Hanoi, port city Hai Phong with China border.

They also agreed to provide opportunities for cooperation in e-commerce, logistics, aviation, road and railway traffic to promote trade and reduce trade imbalance.

On December 5 Vietnam and South Korea upgraded their bilateral relationship to a comprehensive strategic partnership during President Nguyen Xuan Phuc’s visit. Elevating Vietnam-South Korea relations to a comprehensive strategic partnership would usher in a new chapter in bilateral cooperation, Phuc’s South Korean counterpart Yoon Suk-yeol said. Both leaders reaffirmed the goals of increasing bilateral trade, strengthening technology transfer, and investing in electronics and infrastructure, among others.

Prime Minister Pham Minh Chinh just had a week-long official visit to Europe, from December 9 to 15, which included trips to Luxembourg, the Netherlands and Belgium, as well as attending an ASEAN-EU summit to commemorate 45 years of the ASEAN-EU relations.

The European countries' leaders supported the comprehensive and effective deployment of the EU-Vietnam Free Trade Agreement and hoped the EU-Vietnam Investment Protection Agreement would be ratified soon to bolster Europe's investments in Vietnam, especially in new, hi-tech and strategic fields.

Thirty cooperation agreements with research institutes and businesses were signed during the visit.

Economic records

Vietnam’s GDP growth is forecast to reach 8% this year, surpassing the 6-6.5% target and the highest among major countries in the Asia Pacific region.

Foreign trade is also set to exceed US$700 billion this year, the highest ever, according to the General Department of Vietnam Customs, while disbursed foreign direct investment in the first 11 months surged 15.1% year-on-year to $19.68 billion, the highest increase in five years, and the government’s revenues for the year reached a record VND1,690 trillion ($71.20 billion) as of December 15, exceeding forecasts by 20%.

However the picture is not all rosy, as Vietnam has not been immune by risks of a global recession. Manufacturers have suffered from falling orders from the second half of the year, and the problem is expected to last until the middle of 2023.

Hosting SEA Games 31

Around 10,000 athletes, coaches and referees from 11 Southeast Asian countries gathered in Vietnam for SEA Games 31 in May. The second SEA Games hosted in Vietnam was different from the first (2003) in many ways.

This year’s games were a more anxiously-anticipated event than in previous years due to a yearlong Covid-19 postponement. It was also Vietnam’s largest public even since the prolonged pandemic lockdowns.

As a way to promote local tourism and boost the community’s morale, the Games were held in over 12 northern cities and provinces, including the capital Hanoi. The SEA Games traditionally takes place at only one venue.

Men’s football matches required entrance tickets, but all other events were free and open to the public. This meant that each event was packed with cheering spectators, whether it was a bicycle race in the middle of the mountains, or a boxing match in the middle of the night.

Vietnam set a new SEA Games record and finished at the top of the medal heap with 205 gold medals.

Party issues resolution on land use

The Central Committee of the Communist Party issued a new resolution on land use in June this year, which states that a more open, market-based mechanism should be set up to determine land prices.

It also states that authorities can only appropriate land after compensation and relocation plans are in place.

Those with multiple houses and lands who fail to utilize them properly also have to pay more taxes, according to the resolution.

The resolution also serves as a guideline for the Ministry of Natural Resources and Environment to amend the Land Law in order to resolve various issues related to the property market and land prices.

Fighting Covid-19 corruption

Even as the pandemic was raging, two high-profile corruption cases were busted in Vietnam. One had to do with bribery related to Covid-19 repatriation flights and the other with bidding for supply of Covid-19 test kits.

When the pandemic broke out globally, the government organized around 800 flights to bring back over 200,000 people from over 60 countries and territories. Many had to buy very expensive tickets and undergo troublesome procedures to catch a flight home.

In January this year a police investigation into bribery involving approvals for repatriation flights came to light starting with the arrests of several officials in the Ministry of Foreign Affairs’ consular department.

Since then 34 people in a number of ministries have either been arrested or are being investigated for possible involvement, including senior officials like To Anh Dung, the deputy foreign minister, and Nguyen Quang Linh, an aide to Deputy Prime Minister Pham Binh Minh.

The other high-profile corruption case was a Covid-19 test kit scandal involving Viet A Technology Corporation: Phan Quoc Viet, general director of Viet A, admitted in January that he had inflated the price of kits by 45% and paid around VND800 billion (US$35.2 million) as "bonuses" to the company’s partners and bribed certain individuals.

Nearly 100 officials have either been arrested or placed under investigation, including Minister of Health Nguyen Thanh Long and former Hanoi chairman Chu Ngoc Anh.

Drug shortage

Hospitals across the country, including biggest ones in Hanoi and HCMC, have been suffering from drug and equipment shortages since early this year.

Official statistics by July showed 82% of medical facilities and 57% of central hospitals, or 12 out of 21, lack medicine and equipment, forcing patients and their families to buy everything outside, from the most basic tools like needles or bandages.

In HCMC, hospitals treating dengue fever that lack certain kinds of medicine have had to resort to alternatives that are less effective, or to some that are not covered by public health insurance, meaning higher treatment costs for patients.

Several health officials and hospital leaders said complicated bidding procedures and low financial capacity after two years of Covid-19 were major reasons for the poor medical supply situation.

Gasoline shortage

Vietnam hit a gasoline supply crisis in August when a series of gas stations in HCMC and southern provinces shut down or sell at limited amounts. Queues of people could be seen at stations from early morning to late at night waiting to refill their tanks.

The situation also happened in Hanoi later, where buyers had to queue for up to half an hour every time they bought fuel.

One reason for the problem was tight global supplies, forcing businesses to import when the prices were high and sell at a loss. Also, increasing costs were not taken into account in the government-controlled retail price, prompting many retailers to suspend distribution.

Businesses in the fuel supply chain blamed the Ministry of Industry and Trade and the Ministry of Finance for "problematic" management, saying that the more they sold, the bigger their loss.

Prime Minister Pham Minh Chinh then ordered government bodies to quickly resolve the issue, including taking into account transportation costs for fuel in retail price, and told the central bank to provide suppliers with easy credit access so they could import more fuel.

The gasoline supply has been more stable in recent weeks, and the Ministry and Industry and Trade is seeking approval from the government to amend several regulations in gasoline trade to establish long-term order for the market.

Mass layoffs of workers

With factories seeing a drop in orders towards the end of the year amid plummeting demand in major markets like the U.S., Europe and Japan and difficulties in securing raw materials, workers around the country are being laid off or furloughed in the thousands or have their working hours cut to reduce costs, leaving them with low incomes just before Tet.

At a conference on job cuts on November 28, the Vietnam General Confederation of Labor said some 1,235 businesses in 44 cities and provinces have faced challenges, which has affected 472,000 workers, of whom 41,500 have been sacked.

The job cuts and reduction of working hours have happened mainly in labor-intensive industries like leather, textile, woodworking, and seafood processing.

Labor officials in southern manufacturing hubs including Ho Chi Minh City since last month have been gathering information of laid off workers to connect them with possible recruiters.

According to HCMC Department of Labor, Invalids, and Social Affairs, the city businesses need to hire more than 43,000 workers in the last two months this year.

Recently 1,500 out of 1,800 laid-off workers in HCMC's Cu Chi District have found new jobs thanks to coordination by local authorities.

Some businesses with tens of thousands of workers, meanwhile, have tried to retain their workforce, eyeing order recovery next year. Pou Chen in HCMC and Pousung in its neighbor Dong Nai, both suppliers for giants like Nike, Adidas and Puma, have pledged to hand out generous Tet bonuses, equal to pre-pandemic levels, to share burdens with workers and persuade them to stay after the holiday.