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Celebrations a muted affair as country prays for a New Year recovery

Economic gloom takes sparkle out of Tet festivities

Many people are working as street vendors following the closures of thousands of businesses Many people are working as street vendors following the closures of thousands of businesses
  • ucanews.com reporter, Yen Bai City
  • Vietnam
  • February 20, 2013
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Nguyen Thi Thuy rides an old bicycle to villages as far as 50km away to sell second-hand goods to make a meager living.

“I earn 17,000 dong [US$0.8] a day and am just trying to survive because I have had no real work for seven months,” says the 35-year-old mother of two from northern Yen Bai city. She says she lost her job at a local tea processing factory.

Her husband works as a security guard for a local guesthouse and is supposed to earn two million dong a month, but his employer has not paid him for three months as there have been few visitors staying at the guesthouse.

“We spent only 500,000 dong on food for this year’s Tet festival for the first time for years,” Thuy says.

The nine-day festival marking the Lunar New Year of the Snake, ended on Sunday. In better times, they would spend at least five million dong buying new clothes, food as well as gifts for their relatives.

This year’s festival has been an economic burden on many. Hardship is becoming all too common as a stagnant economy, high inflation and a weak currency results in job losses trapping families in a vicious circle of poverty.

When the communist government adopted doi moi, (economic reforms) and attracted foreign investment in the early 1990s, Vietnam became one of the most vibrant economies in Southeast Asia. Per capita income reached US$1,260 in 2011and the country joined the ranks of middle-income countries.

But boom turned to bust last year with Vietnam’s economy growing just 5.03 percent in 2012, the lowest growth rate in 13 years and the inflation rate stood at nearly 7 percent. There are no signs yet that things will get any better. Last month, inflation rose 7.07 percent, up from 6.81 percent in December.

Some 55,000 businesses reportedly closed and 2,353,000 people were registered as unemployed.

There was not much to celebrate during this year’s Tet festival, with many companies reducing or offering no Tet bonuses, while others even laid off their workers. Some 4,287 businesses reportedly went bankrupt during the first 20 days of January. Thousands of workers from many companies stopped work to demand their salaries and bonus.

Yen Bai city with a population of 100,000 saw 126 among a total of 400 local enterprises go under last year. The hardest hit has been the poor.

“I did not return home for the Tet festival as I had no money,” says Francis Tran Van Canh, who works at a soft drinks factory in Ho Chi Minh City. The 28-year-old man from northern Nghe An province earns three million dong a month. He worked and earned 2.7 million dong during the festival and intends to send it to his family.

According to official figures, 20.7 percent of Vietnam’s population of 90 million lives on or under the national poverty line with an average daily income of US$1.29-$1.61 a day.  However, more than 40 percent of the population is struggling under the international poverty mark of US$2.

Local economists say recorded increases in gross national income are unreal and deceptive. They say 50 percent of average earnings per capita during 2007-2011 was the result of currency devaluation.

The government warns of more pain to come. President Truong Tan Sang recently said the country should accept a slower growth rate of about 5.5 percent this year.

Thuy wonders when her factory will resume operations and if her husband will be paid what he is owed next month as his employer has promised.

“I pray that we will have stable jobs this year to support our children,” she says.

The Year of the Snake might not be as prosperous as many Vietnamese might hope.

 

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