Nearly two years after the emergence of COVID-19, particularly following the unpredictable impact of the fourth wave of the pandemic, the sustainability of the social security system and the resilience of the economy have been placed on high alert. What solutions are available to address this situation and avoid the economy being “frozen”? Mr. Nguyễn Quang Huân – 15th National Assembly Deputy, Vice Chairman of the Vietnam Private Business Association, Chairman of the Board of Directors of Halcom Vietnam Joint Stock Company, and economic expert Dr. Võ Trí Thành discussed and proposed solutions on the “Sunday Forum” program broadcast live on VOV1 on the morning of September 12, 2021.
BTV Thu Trang (VOV1) interviews the two guests of the program: Mr. Nguyễn Quang Huân – 15th National Assembly Deputy, Vice Chairman of the Vietnam Private Business Association, Chairman of the Board of Directors of Halcom Vietnam Joint Stock Company, and economic expert Dr. Võ Trí Thành.
Please listen to the full program broadcast on VOV1 HERE
According to Mr. Huân, at the beginning of 2020, it was difficult to imagine that the pandemic would have such a major impact on businesses and the economy. According to statistics from the State Audit Office, State budget revenues declined in recent months, particularly from April onward. During the first four months of the year, the figures were relatively better thanks to the economic recovery at the end of last year, but the outbreak in April made the situation truly severe. Reducing the production workforce and restructuring could no longer be sustained. Within the supply chain, when one business shuts down, it affects other businesses through a domino effect. The resilience of businesses has clearly weakened.
Mr. Thành added that the domestic economy was forecast to experience negative growth in the third quarter, with Vietnam’s growth rate during the recent period being the lowest in the country’s 30 years of reform. The number of businesses withdrawing from the market was approximately 11,000 per month, peaking in July and August. For businesses in pandemic-hit areas, everything had reached the limits of their capacity to endure. According to VCCI surveys conducted at the beginning of 2021 and at the end of 2020, the hardest-hit sectors were services such as aviation, tourism, and restaurants…, followed by some sectors related to essential products and supply and value chains. Except for certain sectors such as finance, technology, essential goods serving social welfare, sports and fitness…, almost all other sectors have been severely affected. Maintaining minimum operations to avoid having to recruit employees again and resume operations after the pandemic were also difficulties faced by businesses.
How can we ease the pain for the economy in the coming period and limit negative impacts?
According to Mr. Huân, the pandemic does not affect only one country but will have interconnected impacts: “If we impose restrictions that are too strict, it will not work, but we must still maintain the principle that people’s lives and safety come first. In the long term, we cannot think only about safe pandemic prevention; we must also think about economic development and recovery after the pandemic. If Vietnam fails to seize opportunities in time and supply chains are disrupted, FDI businesses will move to other countries, and it will be very difficult to invite them back. For domestic businesses, if they cannot maintain operations, it will be difficult for them to restructure after the pandemic. In industrial parks, many businesses recruit workers from all over the country; if workers are forced to stay home for a long time with subsidies, they will become a burden.” Mr. Huân proposed that instead of maintaining lockdowns as currently implemented, authorities should establish epidemiological maps and identify areas with F0 cases. In other areas classified as “safe,” policies should be developed to allow businesses to operate under safe conditions, with business owners prepared to take responsibility.
Regarding the management of population and traffic flows, Mr. Thành said that in recent times, the press had mainly discussed the “green channel” for transportation and how to control it in a way that ensures pandemic safety without creating obstacles; however, there were actually many more issues related to supply chains. Mr. Thành also emphasized the State’s approach to support measures, the need to delegate authority, and the importance of acting quickly, decisively, and at the right time.
Government Resolution 105, issued on September 9, aims to remove difficulties in production and business activities through four specific groups of solutions
Mr. Huân emphasized the importance of specific guidance from the central government in implementing policies: “Resolution 105 has just been issued and is very new, so specific guidance needs to be provided to localities. An important feature of Resolution 105 is that it gives local authorities greater initiative. This will be very positive for dynamic localities, but for localities that have traditionally been accustomed to relying on the central government, they may not apply the resolution properly without specific guidance.”
Discussing cash flow, which falls under the third group of solutions in Resolution 105 (financial solutions), Mr. Huân expressed his view: “Vietnam is not a rich country. When businesses stop or restrict their operations, State budget revenues decline, making it difficult for the Government to have sufficient resources for support. There are many domestic issues that require budget funding, so we should not pour money into supporting businesses. If taxes are deferred or postponed, there will be no revenue available to support poor and vulnerable people. This group of solutions is very good, but in practice, we need to carefully consider the feasibility of each individual measure.”
In addition to Resolution 105, which provides immediate support to businesses, the State is also preparing a new resolution for 2022–2023 to support economic recovery and business development. Hopefully, these policies will provide greater support to the business community.