Migrant exodus sparks worries over Ho Chi Minh City labour squeeze


Tens of thousands of migrant workers have left Ho Chi Minh City in the week since it eased a Covid-19 lockdown, stoking fears of a labour shortage in one of Asia’s biggest manufacturing centres.

Companies and analysts have warned that the squeeze on workers will have an adverse effect on operations in the city, which is a global supplier of garments, footwear, home furnishings and other goods to brands ranging from Nike to Ikea.

The exodus of workers will make Vietnam, until recently one of the world’s fastest-growing economies, the latest country to experience the Covid-induced manpower shortages that have bedevilled Europe and the US.

It would also be a setback for a country that has presented itself as an attractive alternative to China for global manufacturers at a time of rising costs and Sino-US trade tensions.

“Factories in Ho Chi Minh City are facing a labour shortage after the lifting of the lockdown,” said Khiem Vu of Global Sources, an ecommerce platform that links Asian suppliers with overseas buyers. “The confidence of foreign investors and buyers shall be lessened if the human resources puzzle can’t be sorted out.” 

Vietnam’s largest city, with 10m residents, is traditionally a magnet for both global brands seeking suppliers and migrants from elsewhere in the country of 98m looking for work.

However, in recent days media and social media have shown images of people on motorbikes jamming roads and checkpoints as they leave the city, whose streets were largely empty during two and a half months of strict lockdown.

Vietnam’s Ministry of Public Security said this week that 3.5m migrants were working in Ho Chi Minh City and the adjoining Binh Duong, Dong Nai, and Long An provinces, of which 2.1m people wanted to return home.

In July, Vietnam imposed draconian lockdown measures in Ho Chi Minh City and neighbouring provinces, prohibiting most movement and erecting internal checkpoints between districts in the sprawling megacity.

Manufacturers who wanted to continue producing had to house and feed workers under a programme called “three on site”. The measures rattled business groups, which complained about the costs and warned Prime Minister Pham Chi Minh that the lockdown was forcing them to turn away orders and relocate some production to other countries.

Migrant workers were either confined to factories or — more often, according to Khiem — unable to reach their jobs. The latter group was forced to subsist on emergency aid from the city or on their savings.

Vietnam’s government last month abandoned its “Zero Covid” strategy of containing new infections at all costs in favour of a more flexible approach.

On Thursday Vu Duc Dam, deputy prime minister, signed a package of measures meant to allow migrant workers to return home “safely and thoughtfully”. The package included transport and Covid-19 testing or treatment for returnees in their home provinces.

Additional reporting by Pham Hai Chung in Hanoi