GDP still grows in midst of tribulations among the poor, businesses

Do GDP calculations take into account the fact that a taxi driver gets poorer by 10 times more as he has to spend VND100,000 on nCoV testing a day, and informal workers have no access to cheap meals in HCM City?

GDP still grows in midst of tribulations among the poor, businesses

People get free meals

Journalist and Facebooker Hoang Hai Van writes below about his views on HCM City’s way of fighting Covid-19 and the paradox between the high GDP growth rate and the difficult situation of the socio-economic life.

The article posted on his Facebook page is the the opinion of the author.

A 4-seat taxi driver who carries passengers in the eastern localities of the southern region told me that if he wants to get out of the province, he has to show a certificate for a negative nCoV-19 test. The certificate is valid for three days only, and the test costs VND300,000.

However, to reach the province’s medical unit where he can get tested, more than 100 kilometers from his home, he has to spend VND600,000 on petrol and other expenses. So, the total cost for testing and travel is VND900,000, and he has to spend VND300,000 a day to be able to provide taxi service.

Very few people travel these days amid social distancing. As such, while expenses have increased, his income has fallen to 1/10 of that in the past.

The same is occurring with other jobs.

Tan Son Nhat Airport is an example. The busiest airport in the country is deserted nowadays, which is unprecedented. It has fallen to ‘the bottom of the bottom’ as a headline of a newspaper article says. Behind the image of the deserted airport are businesses in distress, poor people who are nearly falling into hunger, well-off people who are getting poorer and rich people becoming less rich.

The most afflicted people are those who work to live from hand to mouth in HCM City and other urban areas, and farmers whose farm produce gets stuck in circulation. The municipal authorities have decided to give every seasonal worker VND50,000 a day, but the amount of money is just a ‘grain of salt in the ocean’.

There has been no person starving to death so far, thanks to the Vietnamese tradition ‘the leaves protect tattered ones'. Free meals have been delivered to people in need.

Where will seasonal workers, lottery ticket sellers, street vendors, hawkers and those who work part time at service establishments get food if they cannot work?

Fighting the pandemic with 5K principle to prevent the virus spread is a necessity. But ‘fighting the pandemic like fighting enemies’ with extreme measures will not only bring inefficiency but also cause tragedy in life.

The requirement for a negative test certificate as a passport to localities, markets and some other places is an example. This measure brings little efficiency in preventing and controlling the pandemic, but it will cause economic disaster.

The cost for the testing of tens of thousands of workers is huge. If workers bear this expense, they will get poorer. If businesses pay for this expense, their operation costs will be higher and their profits will decrease sharply.

The taxi driver sees his income decreasing, but he can provide services in the inner province if he doesn’t want to have a test.

 

However, tens of thousands of workers in HCM City and neighboring provinces work for enterprises in Dong Nai province and Di An City in Binh Duong province. They have to show the certificate every three days (the requirement is applied in some other provinces as well).

The cost for the testing of tens of thousands of workers is huge. If workers bear this expense, they will get poorer. If businesses pay for this expense, their operation costs will be higher and their profits will decrease sharply.

Petty merchants and all the workers associated with Binh Dien Market, the largest wholesale market in HCM City, have to rush to get tested because they need the certificate every four days, or they won’t be able to enter the market.

About 14,000 people have to get tested to get a ‘passport’ to the market. Such a gathering not only puts a heavy burden on petty merchants, but also is contrary to the 5K principle, bringing a counterproductive influence to the fight against the pandemic.

In such conditions, Vietnam’s GDP in the first half of the year grew by 5.64 percent, which was much higher than the 1.82 percent of the same period last year, according to reports.

What is noteworthy is that the state budget collection in the first half of the year was equal to 57.8 percent of the yearly plan and higher by 15.3 percent than the same period last year. So, in the next two quarters, no matter which scenario occurs, the Government will surely fulfill the plan set for the whole year of 2021. This means that the economy will continue growing.

I think that the GDP, under the current calculation method, cannot show the real nature of the incomes of enterprises and people. Has the increased poverty of the taxi driver and the interruption of cheap meals for seasonal workers in HCM City been taken into account when calculating GDP?

Are the expenses on fighting the pandemic and on testing counted when calculating GDP? How can the state budget collection increase if people and businesses are getting poorer?

In conclusion, if looking at the figures about economic growth and then feeling secure and going ahead with extreme decisions in fighting the pandemic, this may lead to wrong decisions.

“Weighing benefits against costs is the way most people make decisions — and the way most businesses make decisions, if they want to stay in business. Only in government is any benefit, however small, considered to be worth any cost, however large." This is what Thomas Sowell, American economist and social theorist, said about the US Government and other governments in the world.

The message he wants to give is that a government for the people does what the people used to do.

The Binh Dien Market has closed. It is unclear how the tens of thousands of people affected by the closure will live.

I think that city leaders should go to the places where free meals are delivered in HCM City and ask the people receiving the food where they would eat if there were no such free meals? 

Hoang Hai Van

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