“Working together, overcoming challenges, seizing opportunities and recovering the economy”

11:30:41 AM | 11/5/2020

This was the theme of the conference chaired by Prime Minister Nguyen Xuan Phuc on May 9. The economy is now like a “compressed spring” and is expecting a strong bounce-back as Vietnam has basically contained the pandemic.

This meeting was broadcast online with the largest access ever, with 63 local points, 30 ministerial points and aired live on Vietnam Television. Therefore, about 800,000 businesses nationwide, over 5 million business households and people nationwide could watch the event.

Aggressively adopting the V-shaped economic recovery

According to Prime Minister Nguyen Xuan Phuc, the crisis caused by the Covid-19 pandemic has influenced all economic aspects, e.g supply - demand, production - consumption, internal trade - foreign trade, aviation - tourism, technology intensive manufacturing, labor intensive manufacturing, developed countries - developing countries, small-scale enterprises - large-scale enterprises among other things.

However, he said that Vietnam has the highest growth prospects in ASEAN. The nation is pursuing a dual-goal strategy: Preventing the epidemic and maintaining economic activity, accompanied by reforms and restructuring, to soon blow up the flame of growth when the epidemic has been well controlled.

He affirmed that the endogenous capacity of Vietnam’s economy and Vietnamese enterprises is extremely large. Vietnam has accumulated resources after many years of growth. This means that Vietnam is not too dependent on outsiders.

PM Phuc suggested, “Enterprises also need to work together, share and generate jobs. This spirit must be spread and productive. The conference will not be “words without action” but seek actions and solutions to remove difficulties against businesses.

He wanted businesses to do six basic things: (1), love the country, think of the nation, respect the rule of law, and uphold the spirit of sharing when doing anything. He appreciated the sharing spirit of many companies with the government amid the epidemic outbreak; (2) be united to get stronger; (3) never be discouraged because discouragement means surrendering; (4), be dynamic and assertive because being passive and hesitant is losing opportunities; (5), be creative because lack of creativity means moving backwards; and (6), have faith.

He also asked central and local authorities and agencies to take action to remove hardships for enterprises. “There must be acceleration policies and leverage policies. We must uphold the spirit of anti-stagnation as in the fight against the epidemic. Stagnant virus lies right in organizations, businesses and localities.

To realize these requirements, the Prime Minister asked businesses to adopt V-shaped development rather than the U shape or the W shape.

Turning risk into opportunity

Minister of Planning and Investment Nguyen Chi Dung said that, according to surveys conducted by the Ministry of Planning and Investment, one of the biggest difficulties to enterprises is capital shortage, especially working capital. Over 45% of enterprises lack capital for production and business. Market, revenue and cash-flow shrinkage forced many businesses to use measures to cut wages and labor.

Business registrations in the first four months of 2020 showed that the complicated evolution of the Covid-19 epidemic greatly affected business development. The number of newly established enterprises plummeted; the scale of enterprises was narrowed; and the number of enterprises registered for temporary operational cessation increased sharply by 33.6% over the same period in 2019.

However, according to Minister Dung, Vietnamese enterprises have been very active to seek ways out. Many initiatives have been adopted to address adverse impacts of the epidemic, such as applying flexible working hours, cutting production costs, sourcing alternative material supplies, seeking consumer markets, especially focusing on the domestic market, quickly seizing new business opportunities, applying digital technology to production and business operations.

Always standing side by side and supporting businesses, heads of the cabinet, ministries, branches and localities have regularly met, exchanged and timely grasped hardships faced by enterprises to direct the radical execution of many policies and solutions to clear difficulties for them. For example, the Prime Minister's Directive 11/CT-TTg dated March 4, 2020 on urgent tasks and solutions to remove business difficulties and to ensure social security in response to the Covid-19 epidemic is the foundation for orienting subsequent specific policies such as Government’s Resolution 42/NQ-CP dated April 9, 2020 on measures to support people in difficulty caused by the Covid-19 pandemic, and Government’s Decree N 41/2020/ND-CP dated April 8, 2020 on extended deadline for payment of taxes and land rents.

Minister Nguyen Chi Dung said recent policies have partly helped companies to ease losses they suffered. 88% of the surveyed enterprises said that solutions issued under the Government’s Directive No. 11/CT-TTg are appropriate and timely. But, the business community still strongly expected that more powerful policies and actions will be introduced by authorities to support enterprises to overcome challenges and seize opportunities.

Among their recommendations, enterprises want the Government to thoroughly simplify administrative procedures, ensure transparency, clarity and consistency of regulations and policies, and uphold the fairness and attitude of service of enforcement staff to enterprises. This is what they want most from governmental agencies rather than financial support, he emphasized.

From an international perspective, the prestige and position of Vietnam is now highly appreciated for the success achieved in the prevention and control of the Covid-19 pandemic, he added. This is an opportunity for the world to know that Vietnam, with a special advantage of ‘strategic trust’, is safe for investment and ready to receive capital flows. This advantage can give momentum for Vietnam to go one step ahead to revive the economy and establish a new position in the international arena.

In addition, the impact from Covid-19 created new awareness, new consumer trends, new business models, and new market opportunities to form new value chains and links to make breakthroughs. This is really an opportunity for Vietnamese businesses to recognize and test their true capacity, resilience and adaptability to market events, restructure production and change strategies.

Moreover, new free trade agreements like CPTPP and EVFTA will provide great advantages for Vietnamese businesses to engage in global value chains, innovate equipment and technology with more effective cost to improve capacity and competitiveness.

Minister Nguyen Chi Dung emphasized that, with the above viewpoint, the Ministry of Planning and Investment proposed some important approaches: Restoring disrupted supply chains and value chains, building and developing new value chains, forming and developing Vietnamese supply chains and link chains of goods; launching stimulus solutions in the domestic market; promoting tourism and investment; immediately building and carrying out a communication strategy to promote Vietnam's image to the world; supporting the restoration and renewal of production and business activities in association with employment and increased revenue for the state budget; further carrying out incentive policies and solutions to encourage businesses to accelerate digital transformation and develop digital economy; supporting the development of e-commerce platforms, electronic payment technology applications; consistently and thoroughly reforming administrative procedures, improving the business investment environment, focusing on addressing bottlenecks and inadequacies that hinder business development.

Source: Vietnam Business Forum