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Local businesses in need of their own support package
Ngoc Mai - Nguyen Duong 12:00, 2021/07/19
Under the latest support program, only enterprises without bad debts could apply for loans at a 0% interest rate. In reality, however, not many have a healthy credit record at the moment.

While the Government’s latest relief package worth VND26 trillion (US$1.13 billion) has given much-needed assistance to the workforce, Vice Chairman of the Hanoi Association of Small and Medium Enterprises (Hanoisme) Mac Quoc Anh told The Hanoi Times a similar one for the business community would ease their current hardship.

 Vice Chairman of the Hanoi Association of Small and Medium Enterprises (Hanoisme) Mac Quoc Anh

What is your view on the latest support package from the Government?

I think the Government’s decision came at the right timing. Compared to the previous one, this program’s procedures are simplified for workers and employers to receive benefits, which are significant amid the current fourth Covid-19 outbreak.

For example, enterprises could access loans at a 0% interest rate from the Vietnam Bank for Social Policies to resume operation and pay salaries for workers without having to prove their financial conditions. However, there remain concerns over the implementation process.

Could you be more specific about the program’s shortcomings?

While requirements to access the program have been relaxed, it remains difficult for enterprises to benefit from it. Under the program, only enterprises without bad debts could apply for loans at a 0% interest rate. In reality, however, not many have a healthy credit record at the moment. The prolonged Covid-19 pandemic has battered the economy, leaving businesses in a difficult financial situation with no income and huge debts.

Not to mention only VND7.5 trillion ($326 million) in this latest program that is earmarked for enterprises and business households, which amount to millions, so the chance for micro, small and medium enterprises to get access to this program is rather slim.

What is your expectation during the implementation process of this program?

There should be a focal point for enterprises to contact regarding this VND26-trillion package program. Meanwhile, what they really need at the moment is payment deferral of corporate income and value-added taxes.

Therefore, a tailor-made package for the businesses is essential, which includes measures to waive and reduce taxes and expenses.

The Government should set a priority order for enterprises in getting access to the program, with a focus on those in manufacturing and processing, followed by firms in the tourism sector.

Since the Covid-19 outbreak, they are one of the most affected groups that continue to stay afloat despite having no revenue in a long period of time.

What should be the long-term solutions to stimulate economic growth?

In addition to short-term measures, long-term ones are expected to lay the foundation for sustainable development in the post-pandemic period.

From my view, Industry 4.0 is offering both opportunities and challenges for Vietnam. During this process, Vietnam should gradually shift its growth model towards innovation and technologies.

Meanwhile, substantial reforms in the market mechanism are necessary to create new driving forces for growth and ensure effective utilization of resources in this regard, while creating incentives for the public to take part in the development process.

There should be a legal framework to promote innovation, but as risk is part of this process, there would be no innovation without a strong will to pursue and accept new changes.

I suppose Vietnam to take advantage of a latecomer should push for technology transfer from foreign-invested sectors and prioritize innovative startups; create a favorable environment for priority economic fields and nurture enterprises capable of competing with regional peers.

On the other hand, the government is expected to perfect existing legislation to ensure a fair environment for different economic components that are in line with market principles.

This should be the focus for Vietnam in the next ten years, especially as traditional driving forces have been exhausted and diminished.

Thank you for your time!

TAG: local business Covid-19 pandemic support program Innovation innovative startups Vietnam
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