The fourth wave of the pandemic in Vietnam has had a significant impact on Vietnam's economic growth goals. A reporter from Customs News spoke with Dr. Le Duy Binh, Director of Economica Vietnam on this issue.

Dr. Le Duy Binh, Director of Economica Vietnam

The report of the General Statistics Department on the socio-economic situation in the first five months of the year shows that the economic growth rate of Vietnam has been maintained at a good growth rate, with quite positive indicators.How has the return of the fourth wave of the Covid-19 pandemic in Vietnam affected Vietnam's economic growth in the first months of 2021?

However, in the second quarter, the impact of the Covid-19 pandemic returned, slowing down the economic growth rate that we had partly recovered in the first quarter.

Notably, the outbreak directly affects the production capacity of Vietnam when it spreads to some industrial zones and major economic centers. Although the pandemic is under control in these areas, the risk of a re-outbreak is still present at any time.

In your opinion, will the pandemic narrow the room for economic growth in the context of this fourth outbreak that is much more complicated than previous ones?

- It can be seen clearly that when the disease spreads, it will narrow the development space, not only for factories and workshops of enterprises inside and outside the export processing zones and industrial zones, but also with individual household businesses and the informal economic sector.

The pandemic also affects the speed of implementing business ideas of private enterprises, implementing FDI projects, disbursing public investment capital and the recovery of service sectors.

Achieving the goal of economic development depends on the ability of pandemic control and the effectiveness of disease control, it also partly depends on the resources obtained from the results of the economic development process. Thus, the implementation of dual goals is reciprocal and complementary.

The Government has implemented many support policies on taxes and fees for enterprises, which support policies ensure economic growth in a sustainable and stable manner?

- It is true that the support policies for enterprises are only short-term, and not radical and long-term.

For the sustainable development of the economy, first of all, it is necessary to improve the competitiveness of enterprises as well as the resilience of enterprises so that they will have a stronger and more durable resistance in any situation.

Support measures are needed to improve competitiveness, so that enterprises can access the global market with a higher position in the global value chain. Vietnam's export goods will have higher added value, with higher content of knowledge, gray matter and technology.

To do that, the Government needs to continue to vigorously implement long-term measures such as institutional reform, improving the investment environment, promoting fair competition, cutting administrative procedures and legal compliance costs, creating a favorable and safe business environment, and encouraging innovation and creativity.

What do you think about the growth motivation from public investment and attracting FDI?

- Public investment remains a significant motivation for economic growth this year. However, the total capital for public investment in 2021 has decreased compared to 2020, which is the first year that Vietnam was affected by the outbreak of the Covid-19 pandemic.

In the context of declining public investment capital, the disbursement rate for development investment in the first five months of 2021 is just over 22.12% compared to the estimate, lower than the 25.98% in the same period of 2020.

Thus, this year, despite favorable conditions in the first quarters of the year, the disbursement speed is lower, which will affect the contribution of the driving force called public investment capital to economic development. The Ministry of Finance plays an important role in promoting the disbursement of public investment capital, but it is necessary to have stronger and more drastic participation of ministries, branches, localities and investors of public investment projects.

Public investment should play a supporting and guiding role in attracting and implementing FDI and private investment. In fact, the increase in FDI and private capital into the economy is partly due to the improvement of infrastructure, telecommunications network, utility works from public investment capital in recent years, even during the period when Vietnam was affected by the pandemic.

In the current context, public investment can play a more important role if it is used as a catalyst to stimulate private investment and attract foreign investment.

The Covid-19 pandemic also shows that public investment is also important to upgrade the capacity of health systems, research & development in medicine, health care, and disease control. Public investment in these areas will clearly not only bring immediate benefits in terms of people's welfare, but also have a direct impact on ensuring Vietnam's sustainable economic growth and prosperity in the long-term.

Thank you, Sir!