Plan needed to ensure livelihoods for people and businesses in economic rebound

Nguyen Dinh Cung, former director of the Central Institute for Economic Management

Hanoi, Ho Chi Minh City, and Binh Duong have just announced plans to gradually resume economic activities in COVID-19 safe areas (so-called "blue areas"). What do you think of the move?

One bright point at present is that the world economy has resumed relatively swiftly, particularly in Vietnam’s big trade partners. In the home market, COVID-19 vaccine coverage is expanding and the pandemic is gradually brought under control. These are essential requirements to come back to the "new normal".

Candidly speaking, however, the economy is still facing mounting hardships, and we would have to accept that not all businesses will be able to resume operations at all or at the same production capacity as before the pandemic. Surveys made by many business associations reflected that many businesses have been negatively affected.

Particularly, the threat of labour shortage is real as labourers have been retuning to their homes due to suspended production. Not a few firms have been losing export orders, or even partners, making it hard to resume normal operation.

In the meantime, the domestic market has been severely affected and demand remains feeble. Recovery would be slow and painstaking unless we had in place a comprehensive plan to spur economic recovery and development.

The government has tasked the Ministry of Planning and Investment to pen out a plan on economic recovery and development. What should be the centrepiece of this plan in your view?

First, it must be a programme of national significance, with the involvement of the whole political system – the Politburo, the National Assembly, and the government –- as it might entail several changes to the 5-year national socioeconomic development plan for 2021-2025.

In addition, as the economy, businesses and people have been suffering unprecedented critical impacts due to the pandemic, we need the attention and guidance of the whole political system and the country’s supreme bodies. In my view, it is necessary to soon establish a committee to work on economic recovery and development to craft important policies and laws paving the way for a rebound.

Second, the programme’s top targets are beefing up economic recovery, and the livelihoods of people and businesses, and the next step will be pushing up growth. The targets in the five-year socioeconomic development plan would be kept intact, but the measures to be taken need to be more drastic and need to be altered at times.

Third, setting the duration is important. It would last at most for three years and no more, as it will lay the bedrock for implementing the 5-year development plan for 2021-2025 and the next five years.

What do we need to make our top priority in the current context?

We would need to perform the dual task of pandemic containment and economic rebound set by the government. The first priority now is promoting vaccination and reopening the economy, creating the most favourable conditions for people and businesses, while minimising administrative mandates.

To open the economy, detailed guidance for safe production and business is important, along with having in place a supervisory mechanism to ensure the efficiency of policies on supporting production and business activities.

Businesses need incremental support from the government as the losses they have suffered are unprecedented. The government, localities, ministries, and sectors would accompany businesses in fields and sectors to help them resolve roadblocks, remove regulations holding up business operations, minimise charges and fees, and more. Supportive measures may run until the end of 2023, and even 2024 to uphold business rebound.

Giving priority to essential sectors, industrial zones, and export production, along with considering VAT reduction and exemption to support firms and stimulate consumptions are also a must.