Private Enterprises: Strong and Proactive Response to Covid-19 Pandemic

9:25:36 AM | 6/30/2020

The Covid-19 pandemic has seriously affected Vietnam’s economy in general and the private economy in particular. Therefore, it is extremely necessary to restart the economy and support businesses to stabilize and stimulate growth after the Covid-19 epidemic, said Mr. Nguyen Quang Huan, Vice Chairman of the Vietnam Private Business Association (VPBA), Chairman of Halcom Vietnam Joint Stock Company. Nguyen Mai reports.

Could you tell us the effect of the Covid-19 pandemic on enterprises, especially for private enterprises?

The Covid-19 pandemic has affected every aspect of social life. For businesses, social distancing or trade restrictions have disrupted some global supply chains and obviously reduced the production output of one group of companies and the input of another one. Import and export stalled, production stagnated, unemployment increased in all countries, especially worst affected countries. That is the overall picture of businesses across the globe after the pandemic.

In Vietnam, private enterprises are mainly small and medium in size, even micro. These companies are little integrated into the world economy and less dependent on supply chains, but importing and exporting firms are obviously affected, for example, manufacturers of apparels and home appliances and importers and exporters of agricultural and aquatic products. When countries are ravaged by the pandemic, their shrinking demand and weakening consumption reduce our exports. Worse still, specialists from foreign partners are not allowed to enter Vietnam and the inspection of goods before export is also stuck.

Some domestic manufacturers and suppliers also had shrinking markets and reduced revenue. Many laid off workers or even closed their operations. Companies are supported with a VND62 trillion credit package but they have difficulty accessing this loan for many reasons.

Before this reality, they must find a way out. It may be necessary to change the way of working, meet online more, find alternative raw materials or localize supply chains, focus on the Vietnamese market, reduce payrolls or adjust revenue plans.

What is the most effective measure to support private enterprises?

Government support measures such as unemployment benefits, tax rescheduling and debt postponement will help businesses in the tough time to a certain extent but they must essentially act on their own.

The support must come in time, transparently and fairly. Every company needs to be informed well of this support and has procedures simplified to access the government support package more quickly and effectively. As the Government lacks database about businesses, it will be harder to review, evaluate and decide support measures while the time is a deciding matter to survival of businesses. At the same time, setting too many criteria or increasing oversight and supervision will discourage businesses and slow support.

Could you please reveal some bright spots of private enterprises in this tough time?

Optimistically, in the current tough period, the private business community has strongly upheld solidarity and shared difficulties with the Government in the fight against the Covid-19 pandemic. Unquestionably, in the present time, businesses are quite active to seek ways to overcome obstacles in the way. Although no business has so far been able to borrow anything from the VND62 trillion package, they are still managing to stay alive on the market. The number of 36,000 businesses leaving the market is too large but we must accept and hope that the rest will be more resilient and grow. New businesses will enter the market, with lessons learned from old ones to develop more sustainably.

Thank you very much!