Timely support packages: not leaving anyone behind

The government's support packages are important to help people and businesses weather the difficulties caused by the COVID-19 epidemic

The online meeting had set forth the "dual targets" of the government, authorised management agencies, and localities in the current context: giving priority to the fight against the coronavirus (COVID-19) outbreak while maintaining production, business, and ensuring social order and stability. When setting a dual task, it is important to clarify what task will hold the top priority to avoid confusion in implementation by policy execution units.

Analyses from many local experts and experience from the UK and Italy show that for countries like Vietnam, the top priority must be taking measures to prevent and bring the pandemic threat under control – and the sooner the better.

In this regard, I fully agree with the opinion of Dr. Vu Thanh Tu Anh from Fulbright University Vietnam, who said, “Maintaining the pace of growth is not the key target at this point of time. The top target now should be conserving our resources to have the necessary fundaments ready for the economic rebound once the pandemic is over.”

The resources here mean people’s life, the health of businesses, of the local finance-banking sector, and people’s trust in the state. Lessening or stopping the execution of measures to combat COVID-19 too early might come at a cost too dear later on.

The UK, where I am living, is paying for their decision. Renowned newswire Reuters recently posted an insightful article pointing out "inner motives" behind the slow action against COVID-19 in the UK. The UK government is facing increasing pressure from the public for their initial faults in assessing the magnitude of COVID-19 implications. Such a failure leads to a situation that is hard to navigate out from.

Some people may bring up the example of Sweeden which did not close its economy and is trying its best to maintain normal functioning, or the case of Singapore which has not closed schools and non-essential trading units until recently. Some may say that we can both maintain normal production and take measures to combat the pandemic. This is not wrong, if we have perfect social organisation and production management skills in place like Sweeden and Singapore. It is, however, unlikely on a national scale.

Reality shows that the utmost priority in this "dual task" is fighting COVID-19 pandemic. Retaining "zero dong" production and business activities means saving the necessary resources to serve as the fundaments for a rebound when the pandemic is over. A single fault dragging out the pandemic might result in more drastic consequences to the country’s development at a later time.

Not leaving anyone behind

I have seen remarkable improvements in the government’s efforts to support local people and businesses that would pave the way for the "economic spring" to bounce back strongly in the post-pandemic time.

First are the diverse support packages, including the VND300 trillion ($13 billion) monetary support package, besides the fiscal support package worth around VND180 trillion ($7.83 billion), the VND62 trillion ($2.7 billion) package to aid social welfare, the VND12 trillion ($521.74 million) power bill support package, or the VND15 trillion ($652.17 million) telecom charge support package, just to name a few.

Second are the undertakings for tax and fee reduction in favour of businesses and inviduals, and the proposals to increase the deductible sum to support dependants when calculating personal income tax, and the provision of preferential loans for businesses of all size.

Third is the plan to disburse the entire state capital allocated for investment projects that has been carried forward from 2018 and 2019 to 2020, finalising the investment procedures of major projects right in April or May to be able to put essential infrastructure works into operation and creating spillover effects for socio-economic development.

These are clear orientations, yet there are concerns regarding execution as it is unclear who and what sectors would be given support priority. In the recent past, big state groups and corporations submitted proposals to soon be given access to a supportive credit pakage (valued at VND250 trillion [$10.87 million] at the time) with duration of at least three years and zero per cent interest rate to serve production and business. So who will lend a helping hand to private firms which are of micro, small, or medium size?

A senior journalist of Financial Times has observed the way American companies are rescued, pointing to the necessity of providing aid packages and the three targets that are important to ensure the efficiency of rescue efforts: simplicity, clarity, and consistency.

To ensure fairnes in deciding who and what sectors would be given prioirty for support, the establishment of a task force consisting of veteran experts and economists with long-term vision migh be the smart answer.

In a nutshell, among the rescue proposals there needs to be a support package tailored to those most vulnerable to difficulties in the current tough circumstances. They are street vendors, shoes polishers, and the like. The media have posted warm stories about the kind-hearted lending a hand to help underprivilaged people to survive the current times, but this is still insufficient. A support policy tailored to those people is a necessity right now. We must not leave anyone behind in our fight against the COVID-19 pandemic.