Source: Socialist Republic of Vietnam
Similarly, many reputable research organisations in the country have also recently conducted surveys and assessed the impact of the COVID-19 epidemic on socio-economic development, from which suggestions arose regarding the Government issuing support policies for domestic enterprises.
One of the most important factors which helped Vietnam to control the COVID-19 epidemic so effectively as well as successfully realising the dual goals set out in 2020 has been the Government’s quick administrative response.
Specifically, as soon as it was determined the Covid-19 epidemic would break out with negative and comprehensive impacts across all socio-economic aspects, the Government proactively issued appropriate economic stimulus packages in line with disease developments and market fluctuations while remaining consistent with State budget capacity.
Through its fiscal and monetary policies, the Government has also proactively used state resources to support enterprises and workers negatively affected by the epidemic as well as ensuring social security; while at the same time flexibly proposing to convert investment projects in the form of public-private partnerships (PPP) to public investment in order to boost resources and compensate for growth.
Depending on the anti-epidemic results on the “medical front”, the Government also promptly loosened social distancing, open the domestic market, preventing production from stagnating and becoming paralysed. This was an unprecedented and comprehensive set of solutions for Vietnam, helping the economy improve its overall resilience to the crisis.
However, limitations in policy design and implementation have limited the impact of the support policies. For example, the package of VND16 trillion loans to enterprises with a 0% interest rate to pay salaries for employees was issued in April, but until October, businesses could not access to it.
After the amendment, by the end of November, only 75 enterprises were allowed to borrow to pay salaries for about 3,800 workers. This number was like “a drop in the ocean” as an average of 5,000 enterprises had to leave the market each month and in the first three quarters of the year, the employment and income of nearly 32 million workers was affected.
According to a survey conducted by the National Economics University, about 80% of enterprises surveyed said they did not receive the Government’s support package. The reason is that the process and procedures for receiving assistance were too complicated; and information was not transparent. Enterprises also assessed that the support was still moderate; the level of support was much less than their actual need; and the time to avail of the support was too short compared to the needs and operation of businesses.
In order to promote the effectiveness of support packages in the context of complicated developments of the pandemic around the world, economists have recommended the Government narrow the gap between promulgating supportive policies and implementation.
Accordingly, it is necessary to independently review and re-evaluate the true effectiveness of the support policies; while at the same time promote consultation with those impacted as well as related agencies, organisations and individuals to ensure the feasibility of policies. Policy design needs to be more practical with simple procedures and more attention should be paid to classification to increase the disbursement rate.
In addition, it is also necessary to build a form of support suitable for each sector and enterprise, in which priority should be given to innovative enterprises, enterprises that are directly affected but are able to recover rapidly after the pandemic. More importantly, support solutions need to be systematic and long-term, having a big enough impact for businesses to grasp opportunities and recover in the near future.