Regional update: Deep dive on Vietnam
Vietnam has now largely re-opened for business and is forecast to be the only major Southeast Asian economy to maintain moderate growth in 2020.
- The country has now largely re-opened for business, although restrictions remain on foreign travel to Vietnam.
- Vietnam is forecast to be the only major Southeast Asian economy to maintain moderate growth in 2020.
- Schools and universities have returned, and high school leaving exams are now scheduled for early August.
- Many Vietnamese families are not yet ready to make a decision regarding international study given the ongoing uncertainty due to the virus.
- There appears to be a preference for deferring studies rather than online commencement.
- Coronavirus will leave a positive legacy for online and blended delivery in the Vietnamese market. We also see big upside for those engaged in transnational (in-market) delivery.
Vietnam’s respose to coronavirus (COVID-19)
Vietnam’s response to coronavirus is the subject of increasing, positive international attention. To date, Vietnam has reported around 300 cases in total, and no deaths. Vietnam did this by acting early by shutting off flight routes to China, activating a strong test, trace and isolate policy and establishing medical and quarantine facilities. Anyone travelling to Vietnam is subject to a mandatory 14-day quarantine, and multiple tests, before they are released. Vietnam was also one of the first countries to shut schools and universities, in early February. At the time of writing, foreigners are not currently permitted to enter Vietnam.
The economic impact of the coronavirus is already being felt in Vietnam, as elsewhere. First quarter GDP for 2020 almost halved to 3.82 per cent (compared to pre-virus estimates of 7 per cent), but the country has now largely re-opened for business, with all non-essential businesses able to resume. There is a familiar bustle on the streets and domestic flights have resumed. Vietnam’s Prime Minister is pushing for 5 per cent GDP growth in 2020, which probably lies at the optimistic end of the spectrum. That said, compared to its regional neighbours, Vietnam looks like it will emerge more quickly from the economic impacts of the virus: the IMF forecasts that Vietnam will be the only large Southeast Asian economy to maintain moderate growth, of 2.7 per cent, in 2020. It is expected to strongly rebound in 2021, returning to growth rates of around 7 per cent.
The education sector
All schools and universities in Vietnam have now re-opened. The end of the school year has been pushed back to 15 July 2020, with national high school graduation exams now scheduled for 8 to 11 August 2020. Regular student recruitment activity has been significantly impacted in recent times, with international recruitment teams unable to travel. Until recently face to face meetings were not possible, and many agents have been operating from home. Vietnamese agents have however been quite proactive, partnering with institutions to run virtual fairs and online sessions/webinars. We assess that these online events have drawn limited engagement from families, compared to traditional offline activities. The focus has been more on branding rather than direct recruitment.
A critical reason for this is, faced with the ongoing uncertainty of coronavirus, many parents (and students) have not yet been ready to make application or enrolment decisions. Many Vietnamese students would prefer to defer their studies rather than commence their studies online because of concerns around quality, personal learning styles, support networks for students, and Vietnamese perceptions that online is inferior to face to face learning. This is consistent with recent international surveys by IDP and QS on international study intentions in light of the coronavirus.
Reason for optimism
Despite the challenges of recent months, there is optimism about Vietnam as an education market for the following reasons:
- Vietnam is managing the crisis well – there is little risk of political or social instability.
- Vietnam has re-opened more quickly than many of its regional neighbors, and its economy is set to recover more quickly.
- Underlying demand for international education remains very strong, and local supply of international quality higher education remains limited (aside from RMIT, British University, Swinburne etc).
- We assess that Vietnamese families’ ability to pay for an overseas international education will not be heavily impacted.
- Vietnam is now mentioned as one potential candidate for early travel bubbles involving Australia, NZ and a few other select countries/economies in Asia, such as Korea and Taiwan.
While regular recruitment activities remain challenging, and modes of delivery from semester 2 onwards are still being worked through, Victorian providers will still benefit from remaining engaged and present in the market, including supporting their agent network wherever possible. Those providers who do so will be much better placed when the market rebounds as expected.
Online and in-country delivery
There are also emerging opportunities for Victorian providers to explore new in-country and online modes of delivery in Vietnam. Existing in-market providers such as RMIT are expecting an increase in interest, as parents prefer to keep their children close but want studies to commence.
The prospect of a pathway – where students can begin their study in Vietnam and then transfer to Australia to continue their studies at some later date – is particularly compelling. And despite prevailing attitudes toward online learning as being inferior to traditional delivery, we expect coronavirus will leave a positive legacy for online and blended delivery. Austrade reports big growth in online delivery by local universities – as many as 98 local institutions deploying online/remote learning in recent months. And the government is expected to issue new regulations this month allowing for joint online program delivery between local and foreign institutions.