With up to 70% of enterprises in Vietnam being affected by the Covid-19 pandemic, the number of workers forced to take unpaid leave or lower working hours could be around 3.5 – 5 million in the third quarter this year, according to Le Van Thanh, deputy minister of Labor, Invalids and Social Affairs.

The number of workers losing their jobs could increase by 60,000 – 70,000 per month.

Several cities and provinces in Vietnam have reported new local coronavirus infections, forcing some to impose social distancing measures, Thanh told VnExpress in an interview.

In the worst-case scenario, the number of workers losing their jobs could increase by 60,000 – 70,000 per month, mostly those working in the sectors of tourism, hospitality and catering services, construction, transportation and manufacturing.

Moreover, the fact that Vietnam’s major trading partners, including China, South Korea, Japan, the US and the EU are being hit hard by the Covid-19 pandemic has significantly affected Vietnam’s exports and disrupted supply chains during this period, Thanh added.

Meanwhile, input materials for domestic production are running out, he stated.

In the first six months of 2020, the number of enterprises temporarily suspending operation surged 38% year-on-year to 29,000. The number of unemployed peple among the working-age population in the second quarter stood at 1.3 million, representing increases of 192,800 against the previous quarter and 221,000 year-on-year.

Notably, the unemployment rate in urban areas in the April – June period was 4.46%, up 1.28 percentage points against the first quarter and 1.36 percentage points year-on-year, making it the highest unemployment rate in urban areas in the last 10 years.

At the end of June 2020, the number of employed people from 15 years of age and above declined to 51.8 million from 54.5 million a year earlier. Such sectors as manufacturing, hospitality and catering services, education and training, have seen a sharp unemployment increase.

In this difficult period, Thanh said the government would give priority to supporting both enterprises and workers.

On one hand, government agencies accelerate administrative reforms for more convenience in doing business. The State Bank of Vietnam (SBV), the country’s central bank, should also cut interest rates, along with other supporting programs.

The Ministry of Labor, Invalids and Social Affairs has proposed the government ease conditions for enterprises to access soft bank loans so that they could pay their workers’ wages.

The suspension of contribution to pension and death gratuity funds, set to end in June, is likely to be extended by another six months, Thanh stated.

In the long term, the government would provide funds to support workers to retrain and change jobs to adopt to new circumstances.