Restarting the economy

29-Apr-2020 Intellasia | Nhan Dan | 6:02 AM Print This Post

After nearly three months of persistent application of drastic measures to fight the COVID-19 pandemic, Vietnam has achieved sufficient initial successes to move to a new anti-pandemic period. The country has gradually loosened social distancing measures and now seeks to live safely with the pandemic while restoring business activities, creating jobs and ensuring socio-economic development. Several economic experts and representatives from enterprises have made comments on some urgent solutions to restart the economy.

Fiscal policy creates cash flow and liquidity for enterprises: Dr Nguyen Duc Kien, head of the prime minister’s Economic Advisory Group

Right from the beginning of the coronavirus pandemic, the prime minister presented the dual task of combating the pandemic while stabilising the economy. Disease prevention and control currently sees positive developments, so the PM decided to take measures to prevent economic downturn and restore the growth pace.

In particular, the government will facilitate the circulation of goods, production, and services aligned with the prevention and control of the pandemic. Relief packages are being implemented in order of priority: social welfare support, fiscal support and credit support.

First of all, we must support the labourers, the poor and those directly affected by the pandemic. After ensuring social welfare, we will focus on implementing measures to support enterprises.

From May to October, priority will be given to fiscal policy to create cash flow and liquidity so that enterprises can survive. Monetary measures will be strengthened in the fourth quarter of 2020. Fiscal policy should go ahead as it relates to the revenue and cash flow of businesses.

At this time the main export markets of Vietnam have seen decline due to the pandemic, so we should focus on two main things including restoring the domestic market and assisting enterprises in finding new markets.

The pandemic has broken the world’s supply-demand chain with the form of a new chain, thus, we should use fiscal policy to support enterprises to explore new markets and partners. Then, the monetary policy will be used to assist enterprises in investing in technology to establish a stable market and participate in a new production chain formed after the pandemic is controlled.

Opening the domestic market is the best stimulus package: Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI)

While the international market’s health has yet to be restored due to the complicated developments of the coronavirus, opening the domestic market will create favourable conditions for businesses and be the best economic stimulus package to restart the economy.

This is also the “golden” time to ease and proceed to remove social distancing measures while ensuring safe conditions for doing business. Business bottlenecks need to be cleared quickly to return trade to normal soon.

To help enterprises overcome this tough time, the government should have solutions to use the budget to support affected people, loosen money, accelerate public investment and promote institutions. The process of restarting and restoring the economy will be fostered when the whole political system gets involved in supporting enterprises.

Creating the best conditions to support enterprises: Mac Quoc Anh, vice Chair and general Secretary of Hanoi Association of Small and Medium Enterprises

Mac Quoc Anh, vice Chair and general Secretary of Hanoi Association of Small and Medium Enterprises

Due to the impact of the COVID-19 pandemic, thousands of enterprises have had to cut down their production scale, reduce working hours and lay off workers. Most enterprises, regardless of size and economic sector, are facing many challenges in terms of output, materials and inventory.

Therefore, the business community is in urgent need of practical and quick support to be able to cope with immediate difficulties as well as restore production and growth in the future. The government has taken measures to remove difficulties for production and business, cut administrative procedures, and boosts import and export activities.

It is also critical to create favourable conditions for enterprises to access capital and enjoy preferential policies on taxes and insurance as well as streamlined administrative procedures and optimal costs.

In addition, inadequacies in the implementation of investment projects must be resolved resolutely, especially compensation and land clearance of big projects to help investors accelerate the progress as planned.

There is room for monetary policy: Dr Vo Tri Thanh, former deputy director of the Centre Institute for Economic Management

To date, the government’s support measures, including monetary policy, are appropriate and there is now room to restart the economy after the pandemic. The State Bank of Vietnam has quickly lowered benchmark interest rates to gradually create lower lending interest rates and will possibly further cut down benchmark interest rates.

Commercial banks have also launched credit packages up to VND285 trillion (US$12.2 billion) accompanied with preferential interest rates which are also expected to increase in the near future. This is an extremely difficult time for businesses and the problem is how to bring the support packages to the right subjects at the right time. Meanwhile, enterprises should also find information to make effective use of the support packages.

In the post-pandemic period, the economy still needs to be strengthened in accordance with reform and development trends.

Through the pandemic, we have learned a very profound lesson about crisis, settlement, the way to restart the post-pandemic economy and also new trends and perceptions that will change our way of living and doing business. These new trends are also an opportunity for enterprises to look back, not only to hold out, but to change their situation and reform.


Category: Economy, Vietnam

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