High hopes for market and business recovery facilitation

October 05, 2021 | 16:49
While the business community is expressing a little more confidence with markets reopening and facilitation of business recovery, concerns over the practical results of such actions may drag out for a while yet.
Businesses are being guided by cities and provinces to carry out their operations in a safe manner, photo Le Toan
Businesses are being guided by cities and provinces to carry out their operations in a safe manner. Photo: Le Toan

Hong Sun, vice chairman of the Korean Chamber of Business in Vietnam, felt more at ease after the September 26 meeting with Prime Minister Pham Minh Chinh and others when the new approach to the COVID-19 fight was announced and more commitments made to further facilitate business recovery.

“We highly appreciate the Vietnamese government’s recent moves to support businesses,” he told VIR. “All issues cannot not be solved comprehensively at once, but we expect the supporting policies to be brought into play in the upcoming time.”

What Sun and more than 9,300 South Korean enterprises in Vietnam are expecting is real action from cities and provinces to loosen rules on COVID-19 prevention and fight to facilitate travelling and transportation. “The effectiveness of the government’s supporting policies depends on the enforcement by cities and provinces. And consistency and flexibility in their implementation is a decisive factor,” Sun noted.

Along with South Korean investors, those from the EU, Japan, and Singapore are also waiting for changes in action from localities to adapt to the new landscape and living on some level with COVID-19.

Nguyen Hai Minh, vice chairman of the European Chamber of Commerce in Vietnam said, “The government is determined to open the market and many cities and provinces are moving to make this happen.”

European businesses approach a newly-issued draft on the guidance for safe and flexible response and effective control of the pandemic with the new approach as mentioned by the prime minister, Minh added. “They are satisfied with this, and expected it will be put into force soon. However, the minimum rate of COVID-19 vaccination coverage for the elderly remains high in the draft, which may affect the market opening.”

A number of bold and concrete policies were announced last week, including a decision on reduction of land rental by 30 per cent in 2021 for pandemic-hit subjects. Moreover, the government also announced the recognition of a vaccine passport between Vietnam and other countries, which is a long-awaited move among the business community.

“EU businesses highly support the government’s announcement of a vaccine passport. This will facilitate movement of experts, investors and high-skilled workforce,” Minh elaborated. “Many EU investors are waiting for the recognition in order to carry out business and investment in Vietnam.”

At the September 26 meeting, PM Chinh showed his strong determination to increase business facilitation, requesting local authorities to work more closely with the business community.

The new approach of safe and flexible response and effective control of the pandemic focuses on six principles – healthcare as the backbone; economy as the foundation; science and technology data; essential socio-political stablisation; prerequisite awareness of vaccines and medicines; and safety in terms of production.

“If we focused on only the COVID-19 battle, we would be out of resources, and vice versa – if we focused only on economic development without solutions to the pandemic fight, we could not protect people’s health,” the PM noted.

Comprehensive and consistent

The government is working on a scenario for a safe and flexible response to COVID-19 as well as a draft law on amending many laws to continue helping businesses solve their difficulties in business and production activities.

An adjustment of overtime in line with the development of COVID-19 towards ensuring maximum overtime to be no higher than 300 hours per year is expected to be submitted to the National Assembly Standing Committee for approval soon.

The Ministry of Labour, Invalids and Social Affairs is also working with and guiding cities and provinces on granting and extending work permits for foreign labourers in line with Resolution No.105/NQ-CP dated September 9.

Meanwhile, the Ministry of Transport along with relevant ministries and localities are giving guidance for comprehensive and consistent implementation of a “green” path for road and waterway transportation nationwide to ensure safe and smooth transportation of goods.

Cities and provinces are guiding businesses to carry out safe activities to adapt to the pandemic situation; to deal with interruption of the supply chain and goods transportation; and to support enterprises in trade promotion and consumption of products, among others.

The prime minister noted that the government will devolve works and decentralise so that local authorities can get closer to businesses.

Following the establishment of the prime minister’s special working group in charge of solving challenges facing businesses and people hit by COVID-19, in late September he requested the establishment of special working groups at ministries, agencies, and localities to speed up the efforts.

Pros and cons

The latest moves join a long list of actions the government has taken this year to help business and production activities.

According to the Ministry of Planning and Investment, the performance of the government’s long-awaited Resolution No. 105/NQ-CP dated September 9 this year on supporting enterprises, co-operatives and business households in the context of COVID-19 pandemic in Vietnam has already brought about some results, in the form of cuts in electricity prices worth nearly VND17 trillion ($739.13 million), as well as cuts in telecoms service fees worth VND4 trillion ($173.91 million).

Moreover is a supporting package for labourers and employers hit by the pandemic from the unemployment insurance fund, approved by the National Assembly Standing Committee and the government on September 24 with a total amount of VND38 trillion ($1.65 billion) for around 12.8 million labourers.

In addition, policies related to cuts in corporate income tax in 2021; VAT slashes for certain groups of goods and services; and tax exemption for household businesses and individual businesses, among others were approved by the National Assembly Standing Committee recently.

In terms of credit supporting policies, the State Bank of Vietnam issued Circular No.14/2021/TT-NHNN dated September 7 towards extending the time applicable for debt rescheduling, giving exemption from or reduction of loan interests and charges, and maintaining classified loan groups until June 30, 2022. As a result, since January 23, 2020, the total debt rescheduling value reached about VND520 trillion ($22.6 billion), benefiting more than 215,000 clients affected by the pandemic, while total loan interests in reduction hit VND26 trillion ($1.13 billion).

However, there are still some shortcomings in the implementation of the supporting policies in cities and provinces raised by the business community. The performance of some measures and policies remains inflexible and inconsistent in some localities, causing difficulties for the beneficiaries. Also, the number of businesses getting access to the supporting policies on tax, credit, preferential loans remains low due to complicated procedures, and inappropriate conditions.

Nguyen Chi Dung - Minister of Planning and Investment

High hopes for market and business recovery facilitation

As the government’s general advisory agency and the standing agency of the prime minister’s special working group, the Ministry of Planning and Investment makes some proposals to continue helping the business community ease difficulties.

Ministries, agencies, and localities uphold the sense of responsibility in implementing the tasks assigned in Resolution 105 in the spirit of close public-private partnership to bring into full play resources of the state and enterprises; quicken check and amend the conditions, process and procedures to further facilitate businesses’ access to the government’s supporting policies; accelerate activities to promote digital transformation among businesses.

The Ministry of Health quickens issuance of guidance with specific conditions for safe production and business activities in the new normal for businesses and localities to apply.

Accelerating activities of the prime minister’s special working group to help businesses and people hit by the pandemic ease difficulties; promoting the implementation of investment projects by ministries, agencies, and localities.

The Ministry of Planning and Investment accelerates the submission to the government for approval of a sustainable economic recovery programme by 2023, including measures and solutions to support businesses in recovery.

Cities and provinces fast-track building and announcement of economic recovery plans/market opening plans in the new normal. Also, they work with businesses on the conditions for safe production and business activities to adapt to the pandemic situation in each locality and businesses’ practical situation, and limit the shutdown of factories.

They should study and propose solutions for a sustainable economic recovery programme by 2023, and increase dialogue with businesses.

By Bich Thuy

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