Stimulus packages could aid digital transformation and business restructuring

Dr. Le Xuan Sang, deputy director of the Vietnam Institute of Economic addresses the event

This information was released during a launching workshop held on December 2 in Hanoi to unveil a report that provides an assessment of the economic impact of the COVID-19 pandemic and the Government's economic stimulus packages for the local economy.

The workshop, co-hosted by the Vietnam Institute of Economics and German foundation Konrad-Adenauer-Stiftung, was held for the purpose of putting forward proposals to increase the efficiency of economic stimulus packages. These are being done with the aim of helping local firms overcome the challenges caused by COVID-19, accelerate digital transformation, and enhance the competitiveness of businesses in the new context.

Upon addressing the event, Dr. Le Xuan Sang, deputy director of the Vietnam Institute of Economic, emphasized that the country recorded a growth rate of 2.12% over the first nine months of the year in comparison to the same period from last year. This exceeds the figure of 1.81% seen during the first half of the year, largely due to the country’s success in COVID-19 containment efforts.

He therefore pointed out that the FDI sector has become the most crucial factor in helping to accelerate the nation’s import-export activities, noting that FDI enterprises operating in the local electronic manufacturing sector such as Samsung Electronics Vietnam have made a significant contribution to export growth.

Despite these positives, Sang assessed that the aviation industry, especially the international tourism, hotel, restaurant, and service sectors have been hardest hit by the impact of the pandemic.

During the course of the workshop, experts agreed that although preferential credit and electric bill reduction packages have served to reap positive results, other packages related to tax exemptions for businesses and support for local laborers have not been disbursed in an effective manner in line with expectations.

Experts therefore attributed these inadequacies to a short period of support, a lack of information and complicated administrative procedures that make it tough for enterprises to gain access to stimulus packages.

Furthermore, experts emphasised the need to boost public investment disbursement, a factor which is considered to be an important channel for the country’s future socio-economic growth.

With regard to recommendations put forward to support businesses and labourers to overcome the challenges caused by COVID-19, experts believe the Government should continue to direct relevant ministries to provide tax breaks or delayed payments of personal income tax and value-added taxes during the next six months to 12 months.

Moreover, they stressed the need to reform administrative procedures, reduce costs for businesses, and fine-tune legal regulations related to the transformation of the traditional economy to the digital economy.

Moving forward, localities and cities will be encouraged to come up with concrete plans to support tourism firms to attract greater levels of domestic tourism, remove bottlenecks in real estate projects, and speed up the implementation of public investment projects.

Speakers at the event also discussed the shift of economic restructuring to the green economy and improvements that could be made to the local business climate to help firms enhance their overall competitiveness.