Quick updates

Sorry, but I don’t have much time today. Friday’s are great (the weekend!) but always tough to make enough time. On Monday, I want to talk about some bank capital issues, but today, I am going to run through a few stories that caught my eye.

First, a suspicious story caught my eye, saying that middle managers have been hurt specifically in this pandemic. This was a surprise to me, because you think those people would be better positioned both to stay in their current jobs and to get new jobs. Particularly, since Vietnam generally faces a shortage of skilled workers. As a reminder, 5 million people lost jobs due to COVID-19.

But let’s make sure we aren’t jumping the gun. The specific numbers cited were:

Data from recruitment firm Navigos Search shows that among 1,200 candidates who applied for its coronavirus career support program in April, nearly half were managers, supervisors and team leaders. As many as 41 percent of the candidates had more than eight years of experience, showing that experienced mid-level employees are having difficulty finding new opportunities, the report said.

That’s pretty crazy, if half of all the unemployed were managers! And 4 out of 10 had 8 years of experience! I think it is much more likely that the only people who applied to the program were higher level people, and this is a clear indication of selection bias.

It is important to remember when reading stories like these that the vast majority of people hurt by recessions are lower-income and low-skilled workers. Not highly skilled workers. The latter usually land on their feet.

Second, Vietnam’s PMI fell again in April to 32.7 from 41.9 in March. Anything above 50 is seen as positive/growth, while below is negative. And this is a survey, so it does reflect some data, it is mostly a confidence measure.

While this story is a few days old, I thought it was interesting because it talked to the pessimism of companies right now, which is a pretty big contrast to the optimism of the stock market. Since pre-Tet the market is down just 13%, and it has rebounded 23% since its bottom on March 24.

Third, testing is going to be a burden on countries. Vietnam is going to test international arrivals 4 times after arriving. This is going to take a lot of manpower, especially once large numbers of visitors start arriving. It looks like there will be some international flights starting June 1 (they have mostly been banned except for a few repatriation flights). But it really seems like the biggest threat to Vietnam’s success over the coronavirus is international arrivals, as can be seen in the 17 new cases yesterday from repatriated Vietnamese from the UAE.

I wonder if limit to international travel will be longer and more onerous than we currently expect. International arrivals to Vietnam are required to quarantine for 2 weeks, along with these 4 tests. No short-term (less than 2 month) visitor is going to go through that. It will only be people that are coming for long-term work. Hotels and such will be hard pressed to survive 6 months without visitors, and that seems very likely given how the virus is raging through the rest of the world (read: the US) right now.

Or maybe countries will just start banning Americans. Treat Trump right.

Fourth, the construction ministry is balking at HCMC’s city-within-a-city. This was a big plan to join up 3 eastern districts (we talked about the different districts and how the east was rising on Monday).

As HCMC planned it, the "Eastern Town" would be spread over more than 22,000 hectares (54,300 acres) with a population of over 1.1 million. The city expected that this innovative and highly interactive hub would thrive from already existing pillars – the hi-tech park where 13 groups are operating on an area of more than 1,000 hectares, the university precinct with 18 universities, and the Thu Thiem new urban area and financial center, which is being built on an area of 657 hectares.

I don’t know what the politics are about this, but I wonder if maybe it means something larger about the politics of the central government versus the city.

Generally I am skeptical of these “smart city” ventures, but there is something to be said about the government helping promote what were called “innovative clusters” (ala Michael Porter") back in the 1990s. Everyone wants to create their own Silicon Valley. But it does make sense for companies to be grouped near each other, so that they can play off each other….and steal each other’s employees. This is not seen as a good thing, but it really does help spread knowledge throughout the economy.

Anyway, that’s all I got time for today. Talk later.