The Ministry of Industry and Trade has proposed that the State Bank of Vietnam guarantee credit to small-and medium-sized enterprises (SMEs) as well as potential markets. In addition, the government should institute flexible tax policies to reduce costs for businesses.
The ministry proposed these initiatives at a meeting to review the first eight months of the year held in Hanoi yesterday.
Vo Van Quyen, head of the ministry’s Domestic Market Department, said the government has put in place several policies to help businesses improve their operations.
“However, weak purchasing power in combination with high inventories must be resolved to help enterprises overcome the economic crisis,” Quyen said.
He said MoIT has asked groups, corporations and industry and trade departments to take measures towards accelerating disbursement. Management agencies should also encourage business components to invest in production.
The ministry has implemented several programmes to stimulate consumption, including stabilising prices to keep them low.
He added that the ministry has several solutions in hand to increase buying of agricultural products and improve connections between businesses and regions.
‘The department has implemented pilot models of agricultural product consumption in a chain in 12 cities and provinces. The model would be widened to cover the whole country”.
Nguyen Tien Nghi, vice chair of the Vietnam Steel Association, said the steel sector increasingly did not make high enough profits on the goods it exported. It saw targeting new markets instead of traditional ones as one way the steel companies can reduce high inventories, retain their businesses and limit job losses.
“The association proposed that the government should create favourable conditions for trade promotion activities of steel exporters and reduce value-added tax from 10 to 5 per cent to reduce inventory,” Nghi said.
He said steel businesses have had to reduce prices by VND200,000-300,000 per tonne to compete in the stagnant market. However, inventory was still high.
“Our biggest difficulty is that a market exists for steel products but not capital,” he said, adding that Vietnamese steel has had to compete with cheap imported steel from China and Asean countries.
The ministry’s planning department said coal production output for the Vietnam Coal and Mineral Industries Group (Vinacomin) in the eight-month period was nearly 28.3 million tonnes, representing a 5.9 per cent decrease over the same period last year.
Vinacomin also reported low coal consumption in the domestic market because of high inventories, while exports sharply decreased. By the end of last month, the coal inventory was 6.9 million tonnes.
Petrol importer plans to raise retail prices
A petroleum importer in HCM City said it has submitted a proposal to the finance ministry to increase retail petrol prices by VND1,000 per litre and oil prices by VND1,300 per litre.
This was the fifth consecutive time that petroleum importers proposed a price increase to the ministry. If it is approved, the new retail price will set a new record of more than VND24,000 per litre.
The importer said the petrol price in the Singapore market has remained high at $122.39 a barrel while diezen price was $136 a barrel.
The importer also said that it had experienced losses, and that this was what led it to propose that the ministry increase retail prices after 10 days of the previous rise.
On August 28, petroleum importers raised retail prices of petrol by VND650 per litre and said that they still suffered losses of VND450-760 per litre.
Asked about the petroleum importers’ move at the meeting yesterday, Quyen said the market management would follow Decree 84, which allows businesses to decide prices themselves based on the world prices.
“The petroleum management has recently attempted three solutions: reducing taxes, increasing retail prices and using stabilising funds to share benefits between people and businesses.
If there is an adjustment in the upcoming time, the ministry would carry out both price increases and tax reductions,” Quyen said.