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60,000 enterprises suspend operations: a warning

Behind the good news that in the first quarter of 2022, for the first time in history, the number of newly registered businesses in a month exceeded 15,000, there were still worries about the "health" of many others.

“In some articles, I mentioned the slow implementation of support packages. Vietnamese enterprises are still struggling. Within four months, up to 60,000 enterprises suspended production or waited for dissolution. Therefore, it is very important for our country's economy to implement support packages and ensure energy security," said Dr. Nguyen Bich Lam, former head of the General Statistics Office.

In fact, behind the good news that in the first quarter of 2022, for the first time in history, the number of newly registered businesses in a month exceeded 15,000, there were still worries about the "health" of many others.

According to the Business Registration Administration, in the first four months of 2022, up to 61,536 enterprises temporarily suspended operation to wait for dissolution procedures or were dissolved, an increase of 19.5% compared to the same period of 2021.

Although 90% of them were small-sized enterprises with a short operating time, this is an indicator of the difficulties of Vietnamese enterprises.

In addition, the number of businesses suspending business in the first four months of 2022 reached 41,001, up 44.6% year on year.

Therefore, the implementation of the Economic Recovery and Development Program will be the key to energizing businesses after a difficult period. National Assembly Chairman Vuong Dinh Hue emphasized that the support package worth nearly VND350 trillion, if used incorrectly, will cause a waste of resources.

This program is expected to speed up the process of socio-economic recovery and development. If it is implemented quickly, it will help businesses and people soon overcome challenges and difficulties during and after the pandemic. If there is a delay, as Mr. Nguyen Bich Lam said, "policy is just policy".

Rapid implementation: the only solution

Mr. Nguyen Quang Thuan, Chairman of Fiin Group, said that Vietnam’s GDP is expected to grow at 6%-7% in 2022-2023 thanks to the recovery of domestic consumption, exports, and investment activities of the private and public sectors, as well as the Government's VND350 trillion economic recovery and development program.

The International Monetary Fund (IMF) lowered its forecast for global economic growth in 2022 to 3.6%, but it believed that the economic recovery process in Vietnam will be strengthened from the implementation of the Economic Recovery and Development Program. Vietnam’s GDP will grow at 6% in 2022 and 7.2% in 2023.

Mr. Phan Duc Hieu, standing member of the Economic Committee of the National Assembly, said that Vietnam’s Economic Recovery and Development Program is relatively large compared with similar programs of other countries in the region and the world. This program is suitable for the local situation and the requirements of the country in controlling macro-level risks.

But the subjects for support is wide, with different support needs. So, how to give businesses equitable access to interest-supported loans as well as a reasonable selection of infrastructure investment project portfolios is not an easy task.

Up to now, a number of supports have been implemented, such as: VAT reduction, automobile registration tax slash, but there is also support that is in the process of institutionalizing, developing guidelines, and have not yet been implemented. This includes interest rate support, housing rental support for workers, tax and land lease extension, infrastructure investment project portfolio, etc.

Therefore, early completion of specific instructions on procedures and support conditions is both a requirement but also a challenge.

"The urgent, drastic and active action of the relevant agencies and organizations is the only solution," Mr. Phan Duc Hieu said.

Luong Bang

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