Reform measures prepare for post-pandemic period

When the pandemic ends, demand will increase and the economy will recover. To prepare for this, it’s necessary to carry out strong reform and create the most favorable business environment for enterprises.

Reform measures prepare for post-pandemic period

The Ministry of Planning and Investment (MPI) reported that there are 870,000 enterprises in Vietnam, 96 percent of which are medium, small and micro size. The enterprises are facing difficulties after a long period of struggling with the pandemic.

The production cost has increased because of higher material prices, and transportation and logistics costs are higher. Meanwhile, market demand has decreased significantly, so revenue has also decreased.

Many enterprises are facing the risks of insolvency, operation interruption or suspension.

A report found that private enterprises that made a profit in 2020 accounted for 33.86 percent, a decrease of 4.61 percent compared with 2019. In H1 2021, only 60 percent of private enterprises had revenue, while the number of enterprises leaving the market increased by 24.9 percent over the same period last year. On average, 11,700 enterprises left the market each month, mostly small ones.

The pandemic developments remain complex, while backup resources are getting exhausted and there has been no sign of market recovery.

According to Vietnam Chamber of Commerce and Investment Chair Vu Tien Loc, the total goods and service retail turnover in H1 was nearly the same as the same period last year. The growth rate in the service sector was just equal to the low growth rate in agriculture, forestry and fisheries, and less than half of the industry and construction sector. This is a worrying sign, because Vietnam’s economy has high expectations for the growth of the service sector.

Meanwhile, social distancing measures have been strengthened, putting enterprises in a more serious situation, especially SMEs. Service companies, including travel, restaurant, hotel and transportation, are suffering and many of them are not likely to be revived after the pandemic.

According to To Hoai Nam from the Vietnam Association of SMEs, enterprises complain they are facing many problems. Material collection and product distribution have been interrupted. Many suppliers have shut down, laid off workers, or have suspended operation because of relations with infected Covid-19 patients. Enterprises have to pay additional expenses for staff in charge of collecting materials, drivers and technicians. The supply chain has been disrupted and the number of orders and output have decreased, so enterprises have slackened production pace.

Reform is leverage

 

In addition to the measures that give direct support to enterprises, analysts said it’s necessary to accelerate reform to facilitate enterprises’ operation.

Nam said administrative procedures need to be cut in order to cut costs and shorten the time enterprises have to spend to make transactions, so that they can focus on production and business, and seek solutions in the difficult period.

When traditional trade is interrupted, state management agencies need to give support by simplifying administrative procedures for export companies. Customs and tax procedures need to be simpler for enterprises’ compliance, while post-customs clearance measures need to be implemented more frequently so as to help enterprises import input materials for production.

Loc of VCCI also stressed the need for institutional reform. The Government needs to check procedures to amend unreasonable ones.

Phan Duc Hieu from Central Institute of Economic Management has proposed that the National Assembly remove regulations that prevent innovation, and adjust regulations to pave the way for enterprises to restructure, thus becoming more competitive.

MPI said it is considering policies to support enterprises, especially SMEs, to help them survive the pandemic.

A PM special taskforce will be set up to identify problems in administrative procedures. It plans to propose tax and fee payment delay, and create a ‘green passage’ mechanism to support SMEs. 

Tran Thuy

SOE performance during the Covid-19 pandemic

SOE performance during the Covid-19 pandemic

Many state-owned enterprises (SOES) experienced a turbulent year in 2020. In the first half of 2021, many businesses escaped the crisis and gained impressive results.

 
 

Other News

.
Latest drastic moves in Vietnam’s vaccine diplomacy strategy
Latest drastic moves in Vietnam’s vaccine diplomacy strategy
FEATUREicon  26/08/2021 

Through vaccine diplomacy, Vietnam has so far received millions of vaccine doses from the support of the international community.

Vietnam-US relationship: comprehensive and strategic
Vietnam-US relationship: comprehensive and strategic
FEATUREicon  26/08/2021 

This is the time to review the relationship between Vietnam and the US, 

Hotels, private hospitals join fight against Covid-19
Hotels, private hospitals join fight against Covid-19
FEATUREicon  26/08/2021 

Many resources in society have been mobilized for testing, vaccination and medical quarantine, which has improved service quality and helped businesses earn revenue.

Teachers explain ’10.0 GPA phenomenon’ among primary school students
Teachers explain ’10.0 GPA phenomenon’ among primary school students
FEATUREicon  25/08/2021 

Two famous secondary schools for the gifted in Hanoi and HCM City have found it difficult to enroll students for the 2021-2022 academic year because there are too many students with a perfect 10.0 GPA (grade point average).

Directorate of Market Surveillance officials arrested for abuse of power
Directorate of Market Surveillance officials arrested for abuse of power
FEATUREicon  25/08/2021 

While many officials have been honored for their excellent fulfillment of official duties, many others have been prosecuted for their involvement in trade fraud.

Experts warn of high risks from real estate firms' corporate bond issuance
Experts warn of high risks from real estate firms' corporate bond issuance
FEATUREicon  25/08/2021 

Corporate bonds issued by real estate firms account for a high proportion of securities that mature in three years. Experts warn of high risks if the real estate market cannot recover by that time.

State revenue from registration fees increases
State revenue from registration fees increases
FEATUREicon  24/08/2021 

The registration fees collected for the state budget increased from VND11,816 billion in 2012 to VND40,194 billion in 2019, up by 240% or VND28,378 billion.

Hanoi protects green zones from the core
Hanoi protects green zones from the core
FEATUREicon  25/08/2021 

Each residential area, commune and ward are considered the core level – the ‘cell’ that needs to be protected. Many places in Hanoi are effectively promoting the "green zone" model for safe residential areas.

More medical data needed to fight Covid-19
More medical data needed to fight Covid-19
FEATUREicon  24/08/2021 

Data from epidemiological studies using antibody tests to measure the proportion of the population who have acquired protective immunity will help to make more accurate assessments about the epidemic situation.

Street-front high-rise owners incur losses as renters leave
Street-front high-rise owners incur losses as renters leave
FEATUREicon  24/08/2021 

The long fourth Covid-19 outbreak and social distancing regulations have posed great challenges to the office leasing market.

Businesses seek interest rate cuts, banks worry about declining profits
Businesses seek interest rate cuts, banks worry about declining profits
FEATUREicon  24/08/2021 

Business associations and industries have repeatedly asked commercial banks to ease lending interest rates to share difficulties with them in the Covid-19 pandemic.

Six production options offered to companies amid pandemic
Six production options offered to companies amid pandemic
FEATUREicon  23/08/2021 

The HCM City Department of Industry and Trade has released guidance on safe production in the conditions of the fight against Covid-19 pandemic. There are six options:

Four-day campaign suceeds in stopping vegetable price chaos in HCM City
Four-day campaign suceeds in stopping vegetable price chaos in HCM City
FEATUREicon  21/08/2021 

A campaign deployed within four days helped rescue the vegetable distribution network in HCM City and stop price fluctuations during social distancing.

A breath of fresh air in literature textbooks for sixth graders
A breath of fresh air in literature textbooks for sixth graders
FEATUREicon  21/08/2021 

Teachers say sixth graders this year will be able to access literature works that their parents and grandparents did not have in their textbooks.

Highly contagious Delta variant lengthens outbreak in Vietnam
Highly contagious Delta variant lengthens outbreak in Vietnam
FEATUREicon  20/08/2021 

The Delta variant of the SARS-CoV-2 virus, with its rapid and strong spread in a very short time, has put huge pressure on the health system.

A midnight call from a pregnant woman, and return trips to hometowns
A midnight call from a pregnant woman, and return trips to hometowns
FEATUREicon  20/08/2021 

On the evening of August 15, Pham Thi Minh Hien, deputy director of the Phu Yen Department of Labor, War Invalids and Social Affairs, received a call for help from a young couple.

Joining forces with VietNamNet to stamp out the pandemic
Joining forces with VietNamNet to stamp out the pandemic
FEATUREicon  19/08/2021 

In order to make a contribution to the country’s fight against Covid-19, VietNamNet has launched the "Joining forces with VietNamNet to stamp out the pandemic" program.

It’s time for Vietnam to begin pilot study on cryptocurrency: expert
It’s time for Vietnam to begin pilot study on cryptocurrency: expert
FEATUREicon  22/08/2021 

The Prime Minister has assigned the State Bank of Vietnam (SBV) to study and try to use a cryptocurrency based on blockchain technology as a part of a strategy on e-government in 2021-2025.

Vietnamese graduate wins full scholarship to attend medical school in the US
Vietnamese graduate wins full scholarship to attend medical school in the US
FEATUREicon  22/08/2021 

After graduating from Wellesley College majoring in biochemistry, Trinh Mai Chi, with impressive research achievements, has won a full scholarship to study at Johns Hopkins, the world’s leading medical university.

After restructuring, banks gear up, ready for big deals
After restructuring, banks gear up, ready for big deals
FEATUREicon  19/08/2021 

After many years of undergoing restructuring, joint stock banks have expanded operation scale and profits.

 
 
 
Leave your comment on an article

OR QUICK LOGIN