Both short- and long-term solutions are needed for enterprises to avoid severe consequences of the pandemic, said VCCI Chairman Vu Tien Loc.
Eighty two percent of Vietnamese enterprises have anticipated losses in revenue in 2020 compared to the previous year, of them 30% expect a decline of 30 – 50% and other 22% expect losses of over 50%, according to Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI).
VCCI Chairman Vu Tien Loc. Source: VGP. |
The Covid-19 pandemic has caused severe consequences for businesses, Loc said, referring to a recent survey conducted by the VCCI on impacts of the pandemic on the business community from late March to early April.
Around 85% of the respondents said their markets significantly narrowed while nearly 60% said they are short of working capital. Additionally, over 40% said they are lacking input materials for production and 43% are forced to scale down their operations due to declining demand.
In response to the pandemic, 73% have provided supporting policies for their employees, over 60% adopted flexible working hours for employees, 46% chose to reduce working hours instead of laying off, 42% took this opportunity to retrain workers, and 41% allowed workers to work from home.
The survey revealed only 20% enterprises furloughed staff and 21% reduced salaries so that they can keep their employees.
In need of both short- and long -term solutions
Loc said enterprises have shown their flexibility and responsibilities in a time of crisis, but warned as the pandemic impacts persist, they need both short- and long-term solutions to fully recover.
The VCCI suggested the government should encourage resumption of production on the condition that companies fully comply with anti-virus measures, in addition to a number of companies that have been forced to suspend operation.
The move is necessary for enterprises to survive and ensure social security, Loc said.
Loc recommended the government finalize the list of essential services and products during the Covid-19 pandemic. The government has imposed a social distancing period within two weeks until April 15 and only essential businesses are allowed to open.
As enterprises are taking part in production chains, it is not feasible to allow the production and commercialization of end products or services.
Additionally, Loc urged the soon implementation of the government's fiscal stimulus package that enables delay in payment of value-added tax, corporate tax, income tax, social insurance, among others. Enterprises could go bankrupt before such the policy becomes effective, Loc warned.
Meanwhile, enterprises are looking for a further cut of 2-3 percentage points in interest rates for new and existing loans so that lending rates for loans in local currency would be lowered to 4-5% per annum and those for USD-denominated loans go down to 2 – 3%.
In the long term, Loc said the situation would present unprecedented challenges and opportunities for the business community. Vietnam would receive a new wave of high quality capital inflows as part of a decentralized investment strategy and diversification of supply sources, and this would help Vietnam become less dependent on a few markets.
Loc expected Vietnam to continue to improve its institutional capacity, quality of human resources and infrastructure system to absorb the capital inflows.
There should be more solutions to help enhance capacity of enterprises, particularly micro, small and medium ones, so that they could survive the pandemic and thrive afterwards, Loc concluded.
Other News
- Hanoi Great Souvenir Fair 2024 to take place next week
- As orders rise, Vietnamese textile firms see better prospects in 2024
- C.bank to auction nearly 17,000 gold taels on April 22
- Trade ministry proposes purchasing renewable electricity mechanisms without EVN’s involvement
- Australia and Vietnam develop competitive electricity markets
- Vietnam, Thailand advance realization of “Three Connections” strategy
- Vietnamese Gov’t to expand list of electricity buyers under direct power agreement scheme
- Viettel opens largest data center in Vietnam to support AI development
- Vietnam’s economy expected to grow at solid pace in 2024-2025: ADB
- Apartment prices in Hanoi are closing in on those in Ho Chi Minh City
Trending
-
Vietnamese PM outlines five 'reinforcements' at ASEAN Future Forum
-
Vietnam news in brief - April 23
-
3,400 taels of gold purchased at the first-in-11-year auction
-
Voluntary social security should cover larger part of informal sector: Experts
-
ASEAN Future Forum 2024: Promoting regional centrality
-
Central bank moves gold auction to tomorrow
-
[Video]Hanoi beauty spots featured in saxophone legend Kenny G's music video
-
Colorful stage shows in Hoan Kiem Lake pedestrian area
-
It happened as it had to happen