Chairman of the Vietnam Chamber of Commerce and Industry Vũ Tiến Lộc. — Photo qdnd.vn

Chairman of the Vietnam Chamber of Commerce and Industry Vũ Tiến Lộc talks to Quân đội Nhân dân (People’s Army) newspaper about solutions to help businesses overcome difficulties caused by the COVID-19 pandemic

The Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank have recently announced a report on the impacts of the COVID-19 pandemic on Vietnamese businesses. What are key points of this report?

This report was built based on a survey of more than 10,000 businesses in 63 cities and provinces in 2020, providing specific perspectives on the impacts of the COVID-19 pandemic. The survey showed that the year 2020 was a year full of difficulties when nearly 90 per cent of surveyed firms were adversely affected by the pandemic with many consequences such as influencing firms' access to customers, imbalance of cash flow and interruption of supply chains. Many businesses had to reduce their workforce, stop operations or go bankrupt.

Small- and super small-size businesses and young businesses of less than three years old suffered the most. The pandemic seriously affected turnover of businesses in 2020. 65 per cent of private enterprises and 62 per cent of Foreign Direct Investment (FDI) businesses said their revenue dropped in comparison with 2019. Due to COVID-19, the year 2020 witnessed a record number of businesses withdrawing from the market, exceeding 100,000 firms.

However, the year 2020 also recorded the efforts of the business community in overcoming difficulties. Many businesses have changed their strategies, carried out restructuring, retrained human resources, paid more attention to the domestic market and diversifying the consumption market and supply sources. The digital transformation process has gradually been implemented.

These are valuable lessons and experience that the COVID-19 pandemic has offered Vietnamese businesses.

How do you valuate the resilience of Vietnamese businesses in the current context?

In the serious medical crisis caused by the COVID-19 pandemic, businesses have suffered great losses and the resilience of the business community is facing limits.

How have Government support packages helped businesses?

Businesses highly valued Government support packages, particularly fiscal policies such as relaxation or deferment of value added taxes, corporate income tax and land hiring fees. 

Seventy five per cent of businesses said Government support policies are helpful.

In the current context, what support do businesses need?

If solutions about tax, fees and support relating to access to finance and credits are limited due to limited State budget, measures relating to administrative procedures are easier to implement and have been promoted in recent years but still need to be accelerated. And that is the basic foundation for the recovery and development of businesses.

But it needs to be noted that implementation is often the weakest step. I still say that the earlier policies are put into practice, the better it would support businesses. So it is necessary to give priority to improve the implementation capacity.

Relevant ministries, agencies and authorities of localities need to increase information dissemination about support policies to create conditions for businesses to get access to support packages. It requires specific, detailed and full guidance about implementation procedures and processes to make it simple and easy for businesses to implement.  

It also needs policies to create favourable conditions for private enterprises to help them stand firm and able to recover after the pandemic, particularly policies relating to innovation and qualified human resources training to be ready for a new competition.

Businesses must change, so what do State management agencies need to do?

Relevant ministries and agencies need to study and give recommendations to the Government to issue support packages to help businesses recover and expand investment and operation for the new period of 2021-2025.

The COVID-19 pandemic is forecast to continue having adverse impacts across the globe and it could only be completely eliminated in the next four to five years. So in the future, it is essential to have long-term policies.

Finally, it needs to spread or multiple models that effectively cope with COVID-19. For ministries, agencies and localities, that is experience in effectively implementing support packages for businesses. For enterprise associations, that is the sharing of ways to cope with COVID-19 effectively from those firms that have existed and developed in the context of COVID-19, particularly lessons about choosing markets, partners, business relationship and about investing in building core internal driving force of businesses to increase their resilience to deal with shocks. — VNS