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VLA President: Vietnam economy will recover and develop

(VLR) In the happenings of the pandemic of COVID-19, Le Duy Hiep - President of Vietnam Logistics Business Association (VLA) - has shared information about matters the logistics sector are facing, and about assisting policies from the Government. Besides, for enterprises’ recovery and developments, VLA is calling for Government’s assistance, helping logistics enterprises solve difficulties.

Mr Le Duy Hiep - VLA President

Mr Le Duy Hiep - VLA President

Since the outbreak of COVID-19, what impacts have logistics activities suffered from? And what difficulties are logistics enterprises facing?

The pandemic of COVID-19 broke out at the end of January 2020, and it has caused great impacts to all global economies, upsetting global supply chain, including logistics activities.

According to a VLA’s research, 20%- 50% of activities of its members has been affected (both in activities and income), depending on services they provide. Services of air logistics, road and railroad have suffered the most, especially in the time of social distancing. 80% of VLA’s members are small and medium sized enterprises: some had production stagnation and some will have to be disbanded if the pandemic keeps happening longer. The pandemic makes us aware we should not depend on a number of the world’s leading economies, which will make logistics activities affected.

Vietnam’s economy is facing difficulties when GDP growth of the first quarter of 2020 was 3.82%- the lowest one in the past 10 years (2011-2020); inflation pressure is still high, although there were decreasing prices in some product groups; export surplus increased nearly USD 4bn, particularly in FDI zone, import faced difficulties, only USD 122.73bn for the first quarter of 2020; FDI decreased. Besides, trade stagnation with China followed by that with other countries globally due to the outbreak of COVID-19. Serving objects of logistics services are production and import-export. Downturn in these sectors resulted in difficulties for the logistics services as well. And decrease in profit made enterprises face financial liquidity difficulties and problems with employees’ jobs.

According to the Dispatch no.14/VP-HH from VLA to the PM dated March 11 requesting for assisting logistics enterprises affected from COVID-19 outbreak, how do VLA members approach assisting programs by the Government?

The Association has made a survey to collect ideas from its member and then made a request to the PM. A number of requests have been considered by ministries and sectors beside policies and plans for financial year by the Government and the PM that enterprises are having benefits from as petrol and electricity price decreases… However, matters as profit taxes for enterprises, loans from banks, and reducing costs for transport have not been approached or solved. The Government should have more serious moves to help logistics enterprises overcome difficulties to exist and to develop when the pandemic ends.

Any policies by the Government at the time are important to enterprises’ existence. To logistics service providers, it is best to reduce or postpone taxes of all kinds, loan interests and fees that affects logistics costs. Real difficulties of enterprises currently are those of finance and job.

Responding to the call from the PM, enterprises should prepare for plans to recover themselves and develop business in the time of post-COVID-19. What should logistics enterprises should prepare for or should do for a blooming back?

From objective assessment, the pandemic is also an opportunity for logistics enterprises to catch their own opportunities in challenges. The members should take a look at their activity strategies, diversify their providing service markets and innovate their machinery, improve the use of science and technology for better competition abilities and cut their costs at most to streamline their business. Each enterprises should have their production plan with particular targets and solutions, focusing on mobilization, production expansion and cooperation both in the country and abroad to expand their markets…

Crisis is the naturally selective time for enterprises. Logistics service providers should find their own way of cooperation and recovery to overcome the crisis. Vietnam’s geographical political position, after its success in the fight against the pandemic, and the implementation of EVFTA, CPTPP will make development of importexport goods and it will receive capital investment shifts from the U.S, Japan and EU’s countries from China’s markets.

Do you have any predictions on time, ability and speed of recovery of the logistics and transport services?

With the determination of fighting the pandemic of the whole political system, and support from the people, I believe Vietnam will be successful in fighting against the pandemic. The economy will recover and develop again; import-export will also develop when Vietnam’s partners have recovery and develop their economy and trade. Direct investment will increase when industrial countries shift their investments in Vietnam and when we implement free trade agreements, especially CPTPP and EVFTA. As a result, our service sectors of transport and logistic will recover quickly and develop even stronger than they were before the time of the pandemic. It is what I expect.

Thank you!

Quang Anh

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