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European investors warn of shift away from Vietnam over restrictions

European investors warn of shift away from Vietnam over restrictions

FILE PHOTO: Labourers work at Hung Viet garment export factory in Hung Yen province, Vietnam December 30, 2020. REUTERS/Kham

HANOI : More European investors in Vietnam are considering relocating projects elsewhere if the country's coronavirus restrictions continued for much longer, the European Chamber of Commerce (EuroCham) said.

A sharp rise in coronavirus cases since late April has seen movement restrictions imposed widely, affecting workers and forcing many companies to suspend operations, which resulted in falls in August exports, industrial output and retail sales.

"What our members need now is a clear roadmap out of these current measures, one which resolves the roadblocks to their commercial operations and gives them a predictable path on which to plan the reopening of their businesses," EuroCham chairman Alain Cany said in a statement.

Up to 18per cent of respondents of an Eurocham September survey said they had already shifted some production to other countries and 16per cent were considering their options.

Manufacturing, particularly electronics, garments and footwear for major global brands, is a vital part of Vietnam's economy and a source of several million jobs.

EuroCham met with government officials on Thursday.

The European businesses urged authorities to accelerate vaccinations, ensure free-flow of goods, ease movement of workers and expedite the processes for vaccinated business leaders and investors to enter the country.

Vietnam has one of Asia's lowest vaccination rates, with only 4.3per cent of its 98 million population inoculated.

Prime Minister Pham Minh Chinh said Vietnam's difficulties were temporary.

"Vietnam will continue to listen to the opinions and proposals of the European businesses ... and is willing to meet their demands under permissible conditions," Chinh said in a statement.

Separately, the government said on Friday the southern industrial province of Binh Duong has started easing its restrictions.

(Editing by Martin Petty)

Source: Reuters

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