Accompanying, Assisting Businesses to Overcome Difficulties

Addressing the opening, Ho Chi Minh City People’s Committee Chairman Le Hoang Quan stressed that the meeting between the city’s leaders with businesses took place when the city and the country as a whole are preparing plans for celebrating major events. In 2015, the Party congresses are held at all levels, preparing for the National Party Congress. Also this year, Vietnam will join the ASEAN Economic Community, sign and implement commitments to 7 FTAs and many important regional agreements like TPP and Vietnam - EU FTA. In that context, businesses are the key force to give major contributions to national construction and modernisation and the vanguard force in the process of world economic integration. This is an opportunity for businesses to speak up their specific difficulties and problems for the government to seek best solutions.

 

Mr Huynh Van Minh, Chairman of Ho Chi Minh City Business Association, said Ho Chi Minh City saw 22,423 business closures in the first 11 months of 2014, averagely 2,038 companies going to wall a month, compared with 1,871 units a month in 2013. This showed that many companies are yet to escape from difficulty and the bailout package of VND30 trillion (US$1.4 billion) for real estate companies has not worked.

 

He added that a company needs three sufficient factors to develop, namely personnel, capital and friendly policies. For the time being, many companies are unable to access bank loans because of their bad debts. Thus, they need more reasonable supports like debt freezing, debt rollovers, interest rate cut and debenture purchases are not recommended. Projects need low-rate and stable loans, with the maturity depending on their life cycles. Soft loans are also headed for exporters, support industries, four spearhead economic sectors and two traditional sectors.

 

Nguyen Xuan Han, Chairman and CEO of Maseco Joint Stock Company, said his company has struggled very hard in both domestic and foreign markets over the past years. Many companies have to go bankrupt reluctantly. Many famous names have been recently acquired by foreign businesses. Businesses must accept a severe selection and the law of elimination. The matter is whether they have enough energy and conditions to exist, restore and develop production and business or not. And, this will depend primarily on State mechanisms and policies. Particularly, administrative procedures are very troublesome for businesses. "Taking the reissue of APEC cards for businesspeople as example, we have to spend more than four months and visit 7-8 agencies for verification and signature," he added.

 

Besides, legal documents are so many while businesses do not have enough time to read and study. Even, there are unrealistic regulations and a company will easily violate them without thorough understanding. In the past three years, we have suffered a lot from the accusation of “falsified income tax declaration” in three years and we were only vindicated when we filed the case to the court.

 

Looking from a broader perspective, Mr Hang Van Chi, CEO of Viet Huong Joint Stock Company, said that 2015 will be a challenging year. Vietnam is heading for a deeper and broader integration into the global economy. With 35 years’ experience in production industry, he felt more worried than happy because the time of joining the ASEAN Economic Community, a market of 600 million people, is very close but industries and businesses seemed to be unprepared for the new phase of competition. Without good preparation, Vietnam will find it hard to keep its market with 90 million people and leave it to other countries in the region.

 

In addition, businesses asked the city and central authorities to review long-term interest rates and interest-support rates basing on actual situations. Ongoing or unimplemented projects will have longer duration of support and receive a greater value of financial support. Land rent, which is 4-5 times higher than in 2010, will deplete reinvestment resources of enterprises.

 

Before difficulties and recommendations from businesses, Mayor Le Hoang Quan answered every question and told relevant bodies to review them. “We will not delay amending policies and mechanisms within our authority,” he stressed. Regarding recommendation for increasing capital sources according to the stimulus programme and VAT refund procedures, he assigned the Department of Planning and Investment and the Taxation Department to give answers to businesses after the meeting.

 

Party Secretary Le Thanh Hai appreciated efforts of businesses to overcome difficulties and hailed the spirit of the meeting.

 

The economy will surely see difficulties and challenges in 2015 and beyond. Integration is inevitable and we should not argue about it too much. The matter is businesses must stand firm in the home market, proactively integrate and reach out the region in the world. To do this, the city will balance and spend more of its budget for stimulus programmes and support enterprises to upgrade equipment and factories. The total budget of VND27 trillion in 10 years is much below the demand. In March 2015, the city will definitely review its lending level and interest rates to encourage businesses to boost investments and gradually raise the localisation rate in their products. Administrative procedure reform is the key issue in the process of economic restructuring but the results fail to meet expectations.

 

In 2015, the city will focus strongly on improving administrative procedures and raising up the level of civil servants by applying IT to surveillance. This will not be carried out in all fields but selectively pick up specific areas to lay the groundwork for breakthroughs. The city will speed up human resource training to meet its demand by reviewing local schools and universities and adding new training subjects.

 

“The business and citizen satisfaction will be used as the gauge for the success of administrative apparatus. The city government will have drastic measures to help businesses deal with their difficulties and problems. The city will hold more regular meetings and contacts with businesses to support them better,” Party Secretary Hai concluded.