More effective pandemic bailout actions urged to avoid further trickling support

Local charity groups mobilised their members to distribute money and food. Photo: Le Toan

In early June, the government adopted Resolution No.68/NQ-CP to offer VND26 trillion ($1.13 billion) financial support to employees and employers facing difficulties amid the pandemic. However, there is a dire need for detailed directions and guidelines to accelerate the actual implementation of the policies and disburse support to as many workers as possible.

Le Van Phat, the owner of a spa in Tay Ho district of Hanoi, had to close the business for almost a month during the latest outbreak. During this time, Phat still had to pay around VND10 million ($435) for rent as well as other overheads, without actually generating revenue.

“Last year, when I heard that the state will provide financial support for those affected by the pandemic, the whole neighbourhood was excited and hopeful. However, we were being sent back and forth between the authorities where we live and our hometown where we were registered and they were asking for a great deal. We also had to prove that our income was below the poverty threshold. We eventually gave up as there seemed no end to all the procedures and running around,” Phat told VIR, adding he has little faith things will be different this time around.

Since last year, the state and government have been pushing out support packages for the unemployed and informal workers. In addition to the largest, VND62 trillion ($2.7 billion) package released in April 2020, big cities like Hanoi and Ho Chi Minh City have come out with their own assistance during social distancing. While these confirm the political will at all levels to ensure the welfare of the people, there have been major issues with implementation.

Specifically, only VND13 trillion ($565.2 million), or 21 per cent, of the VND62 trillion support package was disbursed to over 13 million people by the time the funds were closed in January 2021, according to the Vietnam State Treasury. This support included VND1.16 trillion ($50.5 million) for unemployed workers and super-small businesses, and the rest for people in families eligible for preference treatment, poor households, and those eligible for social protection. Of this, over VND78 billion ($3.4 million) reached more than 58,000 employees who have postponed contracts or taken unpaid leave, and VND903 billion ($39.26 million) went to more than 947,000 informal workers who lost their jobs.

Issued on July 1 this year, the $1.13 billion bailout package in Resolution 68 directed improvements in implementation, including timely support for those truly in need; cutting two-thirds of administrative procedures in Resolution 42; and instructing a person can only access one benefit policy (except for pregnant women, people raising children, and children who are infected with COVID-19 or have to be isolated).

The resolution outlines 12 groups of support policies, including cash support, exemption and postponement of payment of social insurance, and loans to pay employees. It also has a policy of supporting skills training for employees with funding from the Unemployment Insurance Fund.

Pham Minh Huan, former chairman of the National Wage Council, promoted the support packages but said most affected workers are in the informal sector and small businesses, and many of them have not registered for temporary residence in the big cities they work. This makes it difficult for them to access the support.

“It is quite hard for governments, both in their hometown or in the big cities to confirm the status of these employees. They are confused and afraid of taking responsibility because they cannot pinpoint where the workers are living and what they are doing. This is a weakness in the management of the labour market, even though informal workers make up the majority of the labour force,” said Huan.

Nguyen Thi Lan Huong, former director of the Institute of Labour Science and Social Affairs, said the support Vietnam provides has as much coverage as those in developed countries, but they are not easily accessible for businesses and employees, especially informal workers. “We need a database on labour and employment for the entire country. The local governments are worried about mistakenly disbursing money to those ineligible, and it is not easy for people to have their unemployed status confirmed to receive assistance,” Huong said.

She brought up the example of the US, where they issued support to all citizens, giving those not in need of the option not to access the funds. The same was seen with rice ATMs deployed across Vietnam last year, where those who were really in woes would come.

Following Resolution 68, Decision No. 23/QD-TTg was adopted last week to provide regulations on implementation of policies to support employees and employers hit by the pandemic. Employees who have their labour contracts terminated but are not eligible for unemployment benefits shall be entitled to support if they participate in the compulsory social insurance in the month preceding the time of terminating their contracts and have it terminated between May 1, 2021 and the end of the year but are not eligible for unemployment benefits.

Exceptions are made in the cases of employees unilaterally terminating their labour contracts in contravention of law, or if they are entitled to pensions or monthly working capacity loss allowance.

An employee who has to stop working shall be supported if he/she is working under labour contracts and has to stop working in accordance with Clause 3, Article 99 of the Labour Code and subject to quarantine or isolation in lockdown areas at the request of the competent s state agency within 14 days or more from May 1 to the end of December 31.