Nguyễn Kim Hùng, deputy head of the Science Institute on Small-and-medium Enterprises Management (SISME) cum Chairman of the Board of Kim Nam Group. VNS Photo Linh Anh
The COVID-19 pandemic constitutes an unprecedented challenge with severe socio-economic consequences. Nguyễn Kim Hùng, deputy head of the Science Institute on Small-and-medium Enterprises Management (SISME), Chairman of the Board of Kim Nam Group, speaks to Việt Nam News reporter Nguyễn Linh Anh about institutional difficulties confronting businesses and recommendations for administrative reforms to support post-COVID-19 business recovery.
What institutional barriers is the business community encountering?
The COVID-19 pandemic has severely affected the global economy, including Việt Nam. The immediate financial impacts are undermining both big and small businesses, they need to raise capital during this tough time to maintain operations and overcome difficulties. But micro, small- and medium-sized enterprises as well as household businesses are confronting many obstacles in access to capital from credit institutions. The current high lending interest rates are a burden for businesses while banks are wary of lending due to risk concerns.
This is the period when businesses have to depend a lot on internal resources. To control costs, they must invest in technology and digital transformation. However, they face many hurdles in getting permission to apply digital payments, electronic invoices and digital signatures. Why do we have to limit businesses in such a competitive market as nowadays? We need to give businesses access to all the economic resources available to them.
Our legal system is overlapping, resulting in conflicting legal documents, especially land-related regulations. Many companies have to delay their projects due to failures to get necessary certificates, just because of conflicts between different planning documents and land dispute-related issues.
Can you elaborate on the difficulties your organisation (Kim Nam Group) has faced during COVID-19?
Kim Nam is an economic corporation operating in mining, trade, import-export and financial technology. The biggest difficulty we have faced is the disruption of the global supply chain due to the damage caused by the pandemic. This has led to a sharp drop in our revenue, roughly 60 per cent, depending on specific areas.
As revenue declines, the debts we owe to credit institutions have become a huge burden for us, hindering us from ensuring dividend payments for shareholders.
The State Bank has issued Directive 01/2020/TT-NHNN dated March 13 to provide guidance for commercial banks to extend their credit lines, reduce interest rates and restructure debt for firms affected by the outbreak. But in my opinion, this is not yet a thorough and long-term solution because it only helps firms temporarily postpone the debt payment period but they still have to pay it later. The banks themselves have no funding to support suffering firms.
What institutional measures should the Government implement to help businesses in response to COVID-19?
Governmental policies should combine short, medium and long-term initiatives, taking account of the spillovers and interlinkages between our economies and the need to preserve confidence and stability, so that businesses can restructure their activities and restore production soon or can even establish a new business model in the post-COVID-19 era.
We need to build a digital ecosystem for the business community, enhancing awareness of digital training and transformation, building an e-commerce site where enterprises can utilise varied digital solutions such as creating selling channels, e-logistics, e-payments and e-signatures.
Small and medium enterprises should be encouraged to get involved in public investment projects. This plays a key role in the realisation of the Government’s GDP growth target of more than 5 per cent in 2020.
What should businesses do to revitalise after COVID-19?
To grow in this era, businesses have to rapidly digitise. They must be proactive in integrating new technologies into their businesses and production networks. Only by changing their mindset and embracing digital transformation can they survive in this digital age.
The National Public Service Portal has been in operation for nearly six months with 408 online public services launched. When businesses confront any difficulties in public administration-related issues, they should raise them on the portal so the Government can settle the problems in a timely fashion and effectively communicate with businesses via this useful platform. — VNS