Businesses need aid to boost resilience against COVID-19

There appears to be pessimistic signs ahead for the Vietnamese business community due to a rise in the number of enterprises that have suspended their operations over the past ten months in comparison to the same period last year.

Economic groups and state-owned corporations have also reported a sharp reduction in revenue and profit during the reviewed period, causing many not to meet annual targets due to the adverse impact brought about by the COVID-19 pandemic.

According to a recent survey conducted among local businesses by the National Economics University (NEU), approximately 80% of respondents could not have access to the Government's first support package as they did not meet the necessary requirements. Indeed, many were unable to grasp much information with regard to the support policies.

Assoc. Prof. & Dr. Bui Duc Tho, vice rector of the NEU, revealed that the proportion of large firms receiving support packages remains much higher compared to small businesses. Moreover, small and medium enterprises (SMEs) that are considered most vulnerable to the COVID-19 crisis were only able to gain access to land rental and tax deferral packages.

According to the expert, the first support package contained several inappropriate policies, barring eligible businesses from enjoying benefits. Several support policies failed to bring about positive effects as expected, including those related to logistics costs and administrative reforms.

Concurring with his viewpoint, Dr. Vo Tri Thanh, a member of the Economic Advisory Group for the Prime Minister, emphasised that the second support package should aim to support businesses in weathering the crisis, while initiating efforts to help them recover and restructure their operation in the post-COVID-19 period. Simultaneously, support should target more vulnerable groups, including labourers, SMEs, as well as large-scale businesses that require effective support in order to rebound.

Dr. Thanh outlined that the second support package must be deployed in a swift manner until the end of next year alongside economic restructuring. The country should strive to take advantage of free trade agreements (FTAs) and opportunities from the shift of foreign investment by many international enterprises to survive the crisis.

To this end, Assoc. Prof. & Dr. Bui Duc Tho suggested that the Government devise appropriate support policies for each sector and period, with priority given to SMEs to help them strengthen their resilience against COVID-19.

With regard to the monetary package, Tho underscored the need to relax credit provisions through offering the exemption and reduction of interest rates. in his opinion, the Government should extend the period of support packages to allow firms enough time to reboot production in a sustainable manner.

He also underlined the importance of transparency, coupled with the simplification of administrative procedures, in order to help businesses enjoy easier access to support packages.