Economic problem in the post - pandemic time

Ngo Duc Hanh|12/11/2021 09:05

(VLR) Promoting public investment and supporting the export sector is one of important solutions to create a driving force for the country’s economic recovery and development after the COVID-19 epidemic has been basically controlled. However, let’s have a direct look at the truth with more focus and determination and with more specific solutions…

Promoting public investment and supporting the export sector is one of important solutions to create a driving force for the country’s economic recovery and development after the COVID-19 epidemic has been basically controlled

Promoting public investment and supporting the export sector is one of important solutions to create a driving force for the country’s economic recovery and development after the COVID-19 epidemic has been basically controlled

Health status of the wear-out economy

The 4th outbreak- from April 27 - with the Delta variant spreading rapidly and strongly, has a very complicated and prolonged happenings in many localities; the number of infections increased rapidly in a short time, much more than expected. The epidemic has given serious impacts to people’s lives and health and to all socioeconomic aspects nationwide. It has also stagnated production activities, interrupted supply chains, given serious impacts to laborers’ lives and pushed enterprises to a difficult situation. The centers of the epidemic have been at large industrial centers as HCMC, Binh Duong and Dong Nai, which affected to the country’s growth.

The epidemic lasted for a long time, but the socio-economic situation in the first 9 months of 2021 still had remarkable results. The macro-economy was basically stable, inflation was under control, major balances of the economy continued to be secured. However, the health of the economy was seriously “eroded”. Accordingly, GDP in the first 9 months of 2021 only increased by 1.42% over the same period last year.

The COVID-19 epidemic is complicated, seriously affecting commercial activities and services. Negative growth in the first 9 months of 2021 of some service industries accounting for a large proportion reduced the overall growth of the service sector and the entire economy. The wholesale and retail sector decreased by 3.1% over the same period last year, reducing 0.3 percentage points in the growth rate of total added value of the whole economy; the transportation and warehousing industry decreased by 7.79%, reducing 0.47 percentage points; accommodation and food service industry decreased by 23.18%, reducing 0.57 percentage points…

From a value chain perspective, the prolonged COVID-19 epidemic has caused many enterprises to face risks of bankruptcy; in September 2021, the number of newly registered enterprises only reached 3,899- a decrease of 62.2% compared to the same period in 2020. Registered capital was only 62.4 trillion dong- a decrease 69.3%. In the first nine months of 2021, the total number of newly-established enterprises decreased by 13.6% over the same period last year; the average registered capital size of a newly-established enterprise decreased by 3.1%; the number of enterprises withdrawing from the market was 90.3 thousand- an increase of 15.3%.

In the number one economic center of the country-HCMCmany enterprises are in shortage of cash flows, potentially at risk of liquidity loss and of labor market disruption.

Pillars that need to be recovered

Currently, when the country has basically controlled the epidemic, the number one task in the Government’s direction and administration is to support enterprises to restore production and business, and create livelihood for people. In the immediate future it is necessary to restore production and business; repair disruption of production and supply chains, help businesses that have been temporarily suspended to re-enter the market; promoting the process of growth recovery associated with the program of “digitization” and restructuring the economy.

In the immediate future it is necessary to restore production and business

In the immediate future it is necessary to restore production and business

It is necessary improve public investment mechanisms and policies, to clear institutional bottlenecks, to promote decentralization associated with capacity and implementation responsibilities … We must frankly look at the truth about our weaknesses, with high concentration, with more drastic, with more specific solutions.

Prime Minister Pham Minh Chinh

At the national level as well as in major economic centers of the country, it is necessary to identify pillars to promote growth, including 4 key industrial groups, in which more focus is on manufacturing and exporting enterprises. Sectors as construction sector need a breakthrough to create pervasive development; tourism and trade also need strong support. In support solutions, it is necessary to choose according to 3 criteria: contributing a lot to GRDP structure of the province/city, having high pervasive effects and having little self-healing ability.

According to administration experts, public administration and public management are the least expensive but the most effective groups of solution to help enterprises to self-recover in the direction of market relation and to help people create their own livelihood.

The challenge for Vietnam in the coming time will be increased import prices, increased logistics costs, and broken supply chains. Therefore, policies to support enterprises should focus on the export sector; solving the problem of seaport cargo circulation, logistics... Strong recovery of many major economies worldwide has had strong impacts on Vietnam, and Vietnam’s exports increased sharply in recent years in the first quarter of 2021. After the appearance of the Delta variant, the International Monetary Fund reduced its global growth forecast for 2021 to 5.9%, but the outlook for 2022 remains the same (4.9%), especially countries with high vaccine coverage, opening their COVID-19-adapted economies. Therefore, the current problem for exporters is to support them to recover and maintain their supply chains to meet the increasing demand of major export markets in the coming time. This is considered as one of the important solutions to help recover and develop the domestic economy.

In particular, it is necessary to strongly stimulate public investment, to build infrastructure, and quickly to have disbursement to attract private investment. In the 4th outbreak of the COVID-19 epidemic, in May 2021, Prime Minister Pham Minh Chinh chaired a meeting on medium-term public investment, and in September 2021, the Government held a nationwide online conference with ministries and sectors, localities on the disbursement of public investment capital in 2021.

Obviously, to recover the economy, it is necessary to promote the attraction of social resources, continue to restructure public investment to play a leading role and mobilize non-state investment. Furthermore, it is necessary improve public investment mechanisms and policies, to clear institutional bottlenecks, to promote decentralization associated with capacity and implementation responsibilities… We must frankly look at the truth about our weaknesses, with high concentration, with more drastic, with more specific solutions as Prime Minister Pham Minh Chinh affirmed many times.

The total number of public investment projects to be implemented in 2021 is about 2,511 projects, of which 2,021 projects are transferred from previous years, only 490 projects have started new construction.

According reports from the Ministry of Finance, disbursement in the first 8 months of the year reached VND 183,320 billion, reaching 39.74% of the plan assigned by the Prime Minister (VND 461,300 billion); expected disbursement until September 30, 2021 is 218,550 billion dong, reaching 47.38% of the plan.

Only 04 ministries and 11 localities have a disbursement rate of more than 60%. There are 76/114 departments, ministries, central and local agencies with disbursement rate below the national average (47%), some agencies have not yet had any disbursement. From October to December, more than 50% of public investment capital have to be disbursed.

General Statistics Office


(0) Bình luận
Nổi bật Tạp chí Vietnam Logistics Review
Đừng bỏ lỡ
Economic problem in the post - pandemic time
POWERED BY ONECMS - A PRODUCT OF NEKO