In order to open the economy and recover production and business, supporting policies (already and about to be issued) must be fully utilized, in order to create resilience and avoid wasting resources.

Illustration. Source: VNA

Big risk from orders leaving

The results of a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) in September 2021 on nearly 3,000 businesses showed that nearly 94% of businesses are impacted by the pandemic to a “totally negative” and “mostly negative” degree.

Therefore, on average, each month, the whole country has more than 10,000 enterprises withdrawing from the market. It is ominous that the above figures may be even higher, because in the past 1-2 months, many localities have implemented social distancing, causing business information and procedures to be suspended.

The VCCI survey also shows that the pandemic is making it difficult for about 61.8% of businesses to access domestic and international customers.

The Vietnam Leather - Footwear - Handbag Association recently shared about the situation of orders being withdrawn from the Vietnamese market, if in August this rate is 20%, then after only a month, it has increased to 40-50%. Many famous brands have left Vietnam to go to China, Indonesia.

Meanwhile, according to a survey of four foreign business associations in Vietnam, AmCham, EuroCham, Kocham and the US-ASEAN Business Council, at least 20% of member enterprises have moved some production activities to other countries.

Obviously, the question for opening the economy and restoring production is no longer "yes or no", but "how?"

Speaking at a recent conference with businesses, Prime Minister Pham Minh Chinh affirmed that businesses and the Government are in high agreement with the policy of changing the state from "no Covid" to safe, flexible adaptation and effective control to recover and develop the economy, stabilize, and promote production and business in the new context.

However, this is a new issue, so the Prime Minister requested that the issuance of new guidelines must be cautious, consult many parties, work and learn from experience, supplement and improve gradually.

Before the impact of the pandemic, Vietnam did well in supporting businesses, with policies to restore production. The Government has issued Resolution 105/NQ-CP dated September 9, 2021 on supporting enterprises, cooperatives and business households with 12 requirements that ministries and branches must implement in September.

In order to facilitate customs clearance procedures for businesses, the General Department of Customs (Ministry of Finance) has drafted a Circular stipulating customs procedures for imported goods serving urgent requirements to fight the Covid-19 pandemic; submit documents in customs dossiers and conduct physical inspection of exported and imported goods in the context of the Covid-19 pandemic. The draft Circular is being finalized for submission to the Ministry of Justice for comments.

For localities, after a long time of control of goods circulation, there have been many improvements. Over the past week, Hanoi has loosened restrictions, not implementing the green-red zoning as before, so "life" has returned to the capital's businesses.

Hoang Van Linh, Chairman of the Board of Directors of Aligro Joint Stock Company, said that the company has taken advantage of the policy to come up with innovative solutions to ensure labor safety is maintained in a sustainable way. Thanks to the supportive solutions to restore production that the city offers, businesses are always ready to return to normal operations, focusing on both business development and safe pandemic prevention.

In the context that the cash flow of many businesses has been interrupted, "a precious dong" is saved. Many businesses also reflect on the situation of coping with the "cost forest". Therefore, the management agencies have continuously directed and implemented many solutions to reduce costs such as: five times electricity price reduction; reduce lending interest rates many times with general accumulation up to 1.55%; reduce telecommunications charges; reduce social insurance premiums; exemption from fines for late payment of social insurance.

Recently, the National Assembly Standing Committee considered a number of solutions to support businesses and people affected by the pandemic, including reducing corporate income tax in 2021; reduce value-added tax rates for a number of groups of goods and services; tax exemption for business households and individuals, exemption of late payment interest.

In need of rhythm

The above policies show that businesses are not "alone". Dau Anh Tuan, Head of the Legal Department (VCCI), said that the behavior of the Government and localities towards businesses will be like timely "vaccines". Whether this is fast or slow, equal or not should be noted. In addition, how to take advantage of policies and mechanisms to recover quickly and strongly is still a question, because there is still a huge gap from policy to practical action.

Therefore, according to the recommendation of VCCI, the development of solutions to remove problems should be determined according to the appropriate implementation level and roadmap. Policies to support enterprises to restore production and business, stabilize and develop in the "new normal" conditions should aim at stably reconnecting supply chains, strengthening regional linkages; liquidity support, low-cost credit; share the burden of costs incurred by the reorganization of production; to stimulate investment, stimulate consumption demand, etc.

Policies related to the reduction and exemption of some taxes and fees, debt rescheduling, supply chain recovery, expansion of mechanisms to stimulate investment, and consumer demand. These are urgent policies that need to be implemented immediately. Moreover, in policies to support businesses, it is necessary to focus on priority industries and fields to promote efficiency in the shortest time. At the same time, promote the disbursement of public investment, especially in the field of transport infrastructure construction to take advantage of opportunities to increase the connectivity of the economic region.

In addition, businesses also made recommendations on solutions for effective support policies such as increasing the inspection of the progress and effectiveness of the implementation of support policies; establish a loan guarantee fund to increase access to concessional capital; consider supplementing the interest rate support package for businesses, especially small and medium-sized enterprises with the rate of about 4%/year; increase at least 30% of the number of administrative procedures related to the business carried out by electronic, contactless methods; shortening by one third the prescribed time limit for administrative procedures; support labor training, job introduction.

Along with making effective use of policies, businesses must also actively innovate their production and business models, restructure businesses through digital transformation, as well as improve productivity and competitiveness.

These issues need the harmonious and integrated participation of many parties with the highest spirit and responsibility for the common development of the economy.