IMPLICATIONS
Enterprises are heavily affected by the COVID-19, especially in the fields of industry - construction; agriculture, forestry, seafood; air; accommodation and catering services; activities of travel agents, education-training, textile; leather, leather products, electronic products, car manufacturing...
Many businesses were not able to withstand, suspended operations or went bankrupt, dissolved, or narrowed the scale of production and business. Only in the first 10 months of 2020, there were 41.8K enterprises temporarily suspending their business, up 58.7% over the same period in 2019; 13.5K enterprises completed dissolution procedures, up 0.1%. Enterprises with large capital resources still struggle, but for those small and micro enterprises, small business households, with limited capital, this is a big challenge.
COVID-19 pandemic affects material input and consumption markets of products and services. According to research by economic experts, many manufacturing sectors of Vietnam depend heavily on imported raw materials and fuel, mainly from
China, Korea, Japan, U.S., EU... When COVID-19 appeared, the restriction on traveling and trade affected the raw materials and material input of enterprises, including enterprises producing agricultural chemicals such as fertilizers, plant protection drugs; enterprises of textile, garment, footwear, paper production, wood products, steel production and trading; construction and mining enterprises... The shortage of input materials has affected production and business activities, the completeness of pre-orders, thereby affecting the revenue and reputation of enterprises.
The COVID-19 also affects the purchasing power of the global economy, limits trading activities, leading to the extension, cancellation, and postponement of orders, a decrease in export turnover, production and sales revenue of enterprises. This affects many enterprises in many different industries and fields. The percentage of enterprises facing difficulties due to narrowing export markets is quite high. The larger the scale of exporters, the higher the proportion of firms facing difficulties due to narrowed export markets. The decrease of export orders and the difficulty in goods circulation are the biggest challenge of the majority of enterprises; increased transportation and storage costs are also of concern.
“FIRE TESTS GOLD, CHALLENGE TESTS ENDURANCE”
According to economic experts, in order to help businesses overcome difficult times, the Government needs drastic solutions such as supporting businesses to clear the source of imported raw materials; solve logistics problems, minimize border congestion caused by epidemic prevention; encourage the development of supporting industries to serve key export areas; support domestic material supplying enterprises to ensure domestic sources of raw material.
In particular, it is necessary to restructure enterprises in private sector to limit the negative impact of the COVID-19 epidemic, focusing on industries and fields heavily affected by the epidemic; supporting enterprises to access information channels on import and export in search of new markets for importing raw materials, input materials and product consumption markets; support businesses to promote digital e-commerce, digital economy.
As soon as the first case was detected (January 23, 2020) and experienced three outbreaks, the Party and the Government promptly directed the implementation of measures to isolate, trace, monitor and limit people coming from epidemic areas ... thus achieving important results in epidemic prevention. In addition, the Government also promptly introduced support packages, monetary policy, fiscal policy, social security to support businesses and people such as the monetary and credit policy package to restructure and expand - deferred debt and considered to reduce interest on the total outstanding debt; New loan package with a total committed limit of about 300,000 billion VND with preferential interest rates from 1% - 2.5%/year; Fiscal package (deferred taxes and land rent, reduced some taxes and fees) with a total value of 180,000 billion VND; Social security package of 62,000 billion VND for more than 20 million workers and disadvantaged people.
In particular, the Government has issued Resolution No. 68/NQ-CP on the Program to reduce and simplify regulations related to business activities in the period of 2020 - 2025 with the aim of reducing and simplifying at least 20% of regulations and at least 20% reduction in business compliance expenses. This is considered the reform program with the widest coverage ever, demonstrating the strong determination of the Government to promote regulatory reform and the implementation of regulations related to economic activities, creating a driving force for socio-economic development of the country.
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