Vietnam introduces timely support for businesses against COVID-19

Sami Kteily, executive chairman of PEB Steel shared his thoughts on the government's recent support to businesses

What is your view on the government's latest move to facilitate businesses amidst the COVID-19 outbreak?

Yesterday, when I was reading the headlines of one English daily that said “Over 28,000 firms suspend operations within two months amid virus outbreak“, I realised the gravity of the situation and I think the issuance of Directive No.11/CT-TTg comes at the right time.

First, in terms of favourable conditions for access to capital and credit financing, especially loans, I believe what the government is offering is very valuable, loan applications are very time consuming so it is great news for companies that need to borrow to survive during these unusual times.

In relation to exemption and reduction of loan interests, as a matter of fact, PEB Steel has already received interest rate deduction from at least two banks we are working with. I am not sure if this is related to the coronavirus and the PM's directive, but whatever the reason is, this comes at an excellent time.

In relation to extending the time for paying taxes, social insurance dues, and similar payments to the government, this represents a big amount of monthly payments so it is very useful and will definitely ease the cash flow of companies who are in need. I just hope that other companies do not abuse the system and apply for an extension when they don’t need it. I take this opportunity to confirm that, PEB Steel, which is not affected by the coronavirus, will continue to honour all of its dues, if not even speed them up.

I can assure you that Directive 11 which came into effect on March 4 came at a good time and based on the discussions that I had with many colleagues at the various Chambers of Commerce in Vietnam of which we are members, we find that it was very welcome. The business community in Vietnam really welcomes the prime minister's directive. We are very happy to see concrete action.

Is the move in time and efficient enough to help businesses cushion the impacts of the COVID-19 outbreak?

I think the timing is excellent. The government’s move to support businesses in need is very welcome. It is not late because I don’t think the COVID-19 has affected many businesses directly in Vietnam. I am just concerned that COVID-19 is creating negative market sentiment with many people already worried that 2020 is going to be a tough year.

In our steel business, many companies are complaining of the same thing. We at PEB Steel just want to make sure that the supply of raw materials from overseas remains stable. So far, we are still fine, we are signing sales contracts and there has been no significant impact on our business. It is more or less business as usual.

What are your recommendations for Vietnam to mitigate the negative impacts of COVID-19, especially on the business climate and capital disbursement?

I highly appreciate the measures taken by the government to control the COVID-19 pandemic. However, we should not exacerbate the issue even if more new cases arise. So far, we don’t have any fatalities from COVID-19 in Vietnam. It is apparent that the government has done a fantastic job in controlling COVID-19.

However, people still have doubts about what the government says about the exact epidemic situation. So, it’s very important to assure the people and boost transparency around COVID-19. We’ve started preparing ourselves to face the outbreak. Yesterday, we had a meeting to discuss how certain departments will operate from home in the unlikely case that such a measure is necessary. We must take precautions without overdoing it, otherwise, it would create a negative atmosphere which might hurt businesses.

My recommendation is to create a positive atmosphere, share the good news, not only the bad news. There must be a PR campaign to share information and tell people the truth about COVID-19. The main reason is that gossip, rumor, and fake news about COVID-19 tend to hurt. With more information shared, the government would let the people and the business community know the exact situation. Businesses would not have to deal with so much misleading information and would have a clearer picture of how things stand.

All in all, what it comes down to is sharing true information and taking precautions without overdoing it.

One specific recommendation in relation to banks is that banks are asked to extend immediate de facto loans to all customers who require it under LCthat were opened in the past and are due for payment now.