11/28/2022, 18.35
VIETNAM
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Some 630,000 Vietnamese workers affected by drop in exports

Tens of thousands have been laid off and many more have had their working hours reduced due to the slowdown in the global economy. For some experts, the number of factories affected is unprecedented. The situation could get even worse following a government anti-corruption campaign.

Hanoi (AsiaNews/Agencies) – Tens of thousands of Vietnamese workers are losing their jobs following a drop in exports in recent months; as a result, local companies fear that the number of layoffs could increase in the coming weeks.

According to the Vietnam General Confederation of Labour, more than 630,000 workers in 28 provinces and cities have been affected between September to November, VnExpress reported citing national and provincial data.

Vietnam's economy is largely export-oriented and highly dependent on foreign markets and investment.

In early September, Ho Chi Minh City-based SK Vina garment factory, which employed 900 workers, had to close its doors at the request of its South Korean parent company after a fashion brand cancelled all its orders.

The company, which plans to completely shut down its Vietnamese division, will give out about US$ 1.2 million in severance pay to its former employees.

A similar fate befell An Giang Samho, which is 200 km away, a footwear and leather goods supplier for big clothing brands.

By December, 5,300 workers, or 53 per cent of its workforce, will be laid off after its main partner, which guaranteed 40 per cent of its production, stopped placing orders.

For company bosses, the priority will be to retain workers in vulnerable situations, like pregnant women, those with children under 12, and low-income families.

According to the Vietnam General Confederation of Labour, nearly 570,000 workers have had their working hours reduced, while more than 34,000 have been laid off, and more than 31,000 have been placed on unpaid leave or suspended contracts.

The most affected industries are wood processing, textiles, footwear, electronics, food, services, and tourism.

Pham Xuan Hong, chairman of the Ho Chi Minh City Textile and Apparel-Embroidery Association, has more than 30 years of experience in the sector; since he started in this industry, he has never seen this number of layoffs.

The situation is more difficult now than at the start of the pandemic because it will be more difficult to find new markets.

The drop in orders comes at an already difficult time for Vietnam's economy after a recent government-led anti-corruption campaign paralysed transactions, causing a shortage of essential goods and cuts in investment.

A series of scandals triggered wide-ranging investigations within the administration and now government officials are reluctant to make procurement decisions.

For this reason, in recent months almost 65 per cent of hospitals have experienced drug shortages, but many fear that bureaucratic paralysis could also have a negative impact on the already suffering textile and electronics industries.

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