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Vietnamese businesses wait for new rescue package

Most enterprises say they are still experiencing a sharp decrease in revenue, cash flow imbalance and decline in confidence.

Chu Tien Dung, chair of the HCM City Business Association, said a recent survey by the association found that only 5 percent of businesses have regained the normal situation and 9 percent have initially overcome difficulties, while 84 percent of businesses are still in big difficulties because of the lack of capital, supply chain disruption, market narrowing and labor layoffs.

 

 

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A survey by the Vietnam Chamber of Commerce and Industry (VCCI) on the impact of Covid-19 found that 68 percent of businesses have seen their revenue decrease, and 50 percent face problems with cash flow.

They are also having problems seeking input materials (28.6 percent), and in maintaining production to fulfill signed contracts (23.1 percent)

Meanwhile, the third survey by the Private Economic Development Research Board (Board IV) conducted in August found that the health of businesses became worse after the second epidemic outbreak.

Twenty percent of businesses have had to suspend operation, 76 percent cannot balance receipts and expenditures, 2 percent have become dissolved and only 2 percent have temporarily not been hit by the pandemic.

Meanwhile, bailouts are out of reach of the majority of enterprises. According to the HCM City Business Association, 76 percent of polled businesses said they cannot access the state’s support packages.

Only 10 percent said their debts have been restructured by banks and enjoyed lower interest rate reductions, while only 5 percent of businesses have been allowed to temporarily stop paying retirement funds. No business has borrowed money at the zero percent interest rate to pay workers.

VCCI commented that social security packages are being implemented slowly, only 20-25 percent of the plan. The figure is just 50 percent for the credit package.

Businesses complain that the support packages set unreasonable requirements (businesses must not have bad debts, and have to prove they have run out of money), which makes it impossible for them to access the packages.

A businessman said it is even more difficult to access the zero percent preferential loans to pay workers than to access normal loans.

According to the General Statistics Office (GSO), in the first nine months of the year, 78,306 businesses left the market. Of this, 38,629 businesses suspended operation, an increase of 81.8 percent compared with the same period 2019, or 3.7 times higher than the average increase of 21.9 percent in 2015-2019.

Regarding the news that the government is considering launching the second bailout, economists said the support should be delivered to businesses soon via effective measures.

Some businessmen have proposed providing loans at interest rates of 0-3 percent to help businesses overcome current difficulties.

Can Van Luc, chief economist of BIDV, also said it is necessary to launch an additional bailout, which is equal to 2.5 percent of GDP. 

Tran Thuy

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