Vietnamese Businesses Stay Resilient to Covid-19 Pandemic

Vietnam is having a good opportunity to restart the economy and make a stronger return as it has contained the Covid-19 pandemic and returned to its normal state earlier than other countries. In the coming time, the Government will continue to work on the implementation of the “double goal” of fighting pandemic cases imported from other countries and reviving the economy. Vietnam Business Forum has an interview with Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), on this issue.

The survey, released by VCCI in early May, showed a much better business performance than that in the survey conducted one month earlier. However, businesses are still struggling with outstanding difficulties needing to be addressed soon. Could you please share about this?

Once again, the resilience of Vietnamese businesses in difficult conditions and crisis was demonstrated. Respectably, despite having no profit, even suffering loss or revenue decline, many businesses are still trying with their greatest effort to take care of their employees. The very high employment rate is showing the social responsibility of enterprises and entrepreneurs - the job generators of the economy - who dare to sacrifice their own and their family’s peace to enrich the nation and improve people's livelihoods.
Immediately after the Covid-19 pandemic broke out, evolved rapidly, and directly impacted economic and business performances, the Vietnam Chamber of Commerce and Industry conducted several surveys and organized online briefings with businesses and trade associations to capture their business hardship.
To date, VCCI has collected more than 200 proposals and recommendations from enterprises, of which more than 50 were reported very early to the Prime Minister and reflected in the Prime Minister’s Directive 11/CT-TTg. Nearly 150 new recommendations were gathered after the Prime Minister issued Directives 11,15 and 16; Decree 41/2020/ND-CP, and Resolution 42/NQ-CP.
These new proposals and recommendations are mainly about supplementing and amending business support mechanisms and policies to adapt to new contexts post-Covid-19.
Although business performance has picked up, companies are still in difficulty. Thus, timely support measures from the Government are extremely important. Given tight State budget, the Government has spent unprecedented fiscal and credit packages to support businesses. What the business community wants is the Government and the National Assembly to consider reducing and exempting more taxes and fees; extending the deadline for payables to be settled; and loosening room and lifting the cap on credit growth.
But most importantly, what enterprises need is relevant agencies promote the quick, effective, transparent and fair implementation of the support packages. A little support in a hard time is like a giant help in the good time. A day sooner may help a company survive, one day later may kill it and then support measures are useless.
After the Covid-19 pandemic, the world will witness a major change in business operations to adapt to the current situation. There is a likely shift in investment flows and there are signals and Vietnam will likely have a lot of opportunities to receive these investments. What do you think about this?
Regarding more radical and longer-term solutions in the coming time, Vietnam must understand and grasp the opportunity from the largest relocation of global supply chains in human history, currently targeting Vietnam as a safe destination.
To seize this opportunity, Vietnam needs to accelerate institutional reforms, realize the goal of bringing Vietnam to the Top 3 - 4 ASEAN by competitiveness and business environment. Transparency and simplicity of administrative procedures to reduce time and compliance costs are sustainable solutions for businesses.
The Government needs to persist in this goal and regard it as a measure of political performance of leaders at all levels, sectors and localities to improve competitiveness of Vietnamese enterprises, especially small and medium-sized enterprises, to become potential partners for giant transnational corporations. This is also the decisive factor for the success or failure of Vietnam’s economy.
The Government has established a legal diligence taskforce to work out plans to submit to the National Assembly and the Government to eliminate overlaps and irrationalities, ensure the transparency and consistency in the current legal system, especially laws on investment and construction to facilitate the rapid deployment of business projects and infrastructure development.
The very transparency and simplicity of administrative procedures to minimize the time and compliance costs is a sustainable solution for businesses. The quick settlement of procedures and the disbursement of financial aid this year could generate an important boost for the economy. If promoting institutional roles and mobilizing all social capital sources in this way, Vietnam can achieve a GDP growth of over 5% this year.
VCCI kindly requested the Government to assign ministries and agencies to coordinate with VCCI, localities and the business community to soon deploy a national strategic investment promotion campaign to contact businesses in global supply chains to convince them to bring their appropriate, higher value-added manufacturing into Vietnam rather than passively waiting for them to come.
To enhance the competitiveness of Vietnamese enterprises, especially SMEs, helping them to become potential partners of transnational corporations, what does Vietnam need to do?
VCCI has proposed building and implementing the supporting industry development strategy and the national program for governance capacity improvement for the business community, enabling enterprises to invest in improving human resource quality, fulfil internationalization and digitalization requirements, adopt sustainable, innovative and responsible business approaches. An enabling government together with a creative and socially responsible business community will be the dual wings for Vietnam's economy to fly high. VCCI is willing to work with ministries and trade associations to develop and implement this important program.
For the time being, the biggest difficulty for Vietnamese businesses comes from the consumption market. We need to launch movements to encourage Vietnamese people to buy Vietnamese goods and make Vietnamese people proud to use Vietnamese goods in high-demand months, at least from now to the end of this year, to support Vietnamese enterprises.
In order to carry out consistent solutions to restart the economy and support enterprises to restore business operations after the Covid-19 period, we have proposed the Prime Minister set up a steering committee and a taskforce for economic recovery, led by the Prime Minister, to coordinate efforts of relevant agencies, from central to local levels. Representatives of trade associations may be installed into the steering committee and the taskforce to scale the program in the business community. The steering committee has the right to make specific decisions as in the wartime to ensure that decisions are enforced immediately on the front of recovery to prevent economic recession and unemployment.
Thank you very much!