Break down bidding packages to allow businesses to participate more in public investment projects

Mr. Nguyen Van Than, Chairman of Vietnam Association of Small and Medium Enterprises

At the Prime Minister's Conference with enterprises held over the weekend, the Prime Minister pointed out fivekey targets to restore the economy. How do you rate these five breakthroughs?

First of all, it must be affirmed that until now, we have had great victories in the prevention of the Covid-19 pandemic thanks to the right scenario in each period, thereby saving thousands ofbillions of VND for pandemic prevention, creating confidence for people, business communities and overseas Vietnamese.

Regarding the recovery of the economy, the five breakthroughs to restore the economy mentioned by the Prime Minister include: attracting investment in domestic economic sectors, firstly private investment; attracting FDI; boosting exports; promoting public investment andencouraging domestic consumption.

The selection of the five breakthroughs is, in my opinion, absolutely correct.The role of these five areas is more evident in the context of the economy heavily affected by the Covid-19pandemic. In these defenses, I think that the role of domestic consumption stands out. However, to develop domestic goods, there must be a financial amount for businesses. At present, the bank has committed to arrange credit support packages for lending, together with VND62 trillion for social security and fiscal support package of the Ministry of Finance. The ministries have entered in to it very quickly, but because these are solutions to save businesses, nourish the revenue, proposals will be submitted to deploy faster and then carry out the post-inspection, basically it is sure that there will be nocorruption.

Public investment is an important solution to boost GDP in the current context. In your opinion, what should be done to make enterprises more involved in big public investment projects?

Disbursing public investment is a very difficult task, involving many laws and ministries. The disbursement rate has been higher than the same period last year. Proposing the Government to promptly remove difficulties to urgently disburse all public investment capital of VND700,000 billion by 2020, in order to soon achieve the set goals and create jobs for businesses and workers. Projects should be participated inby many economic sectors, including SMEs, to increase the efficiency and flexibility in project implementation. In order for ordinary businesses to be able to participate in projects, not just large enterprises, in my opinion, the bidding packages should be divided. Besides, the proportion of counterpart money of businesses should be reducedbyabout 10-20% instead of 40% as today.

Ministries and branches should advise the Prime Minister to deploy, because if they resolve these two issues, it will disburse a lot of public investment. In addition, administrative procedures need to be reformed so that when businesses complete the project; they must pay immediately, avoiding prolonged periods of financial difficulties for businesses, because they also have to borrow bank capital to deploy.

How do you assess the ability to mobilize capital from the private sector?

Vietnamese people have a habit of accumulating; therefore, it is suggested that the Government propose effective solutions to attract short-term and long-term idle resources among people and businesses.

Firstly, the Government should approve the form of issuing more bonds related to public investment projects to mobilize foreign currencies and precious assets such as gold, silver and gems. It should be noted that the mobilization of capital in the population will be many times greater than the mobilization of money from banks and budgets.

Secondly, to soon issue a supervised pilot mechanism for fintech activities, including peer lending. Implementing this form will mobilize a great deal of long-term and short-term resources among the population. To do so, the Government's administration must be flexible.