Covid-19 leaves 35% of Vietnam firms struggling for survival in 3 months: Survey

Thirty five percent of enterprises in a survey conducted by the Vietnam Young Entrepreneurs Association (VYEA) said they could only survive for three more months if the Covid-19 pandemic persists, Thanh Nien newspaper reported.

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Meanwhile, 38% said they could survive for six months, 13% for one year and 14% for over a year.

The survey, which took place from March 17 to 26, included companies operating in major cities  such as Hanoi, Ho Chi Minh City, Binh Duong, Quang Ninh, Lang Son, among others, 93% of which are focusing on the domestic market. 348 companies participated in the survey.

According to the VYEA, enterprises operating in tourism, hospitality and catering services are hit hardest by the pandemic with zero revenue, while they are still having to cover operational expenses.

Transportation companies are scaling down operations due to limited travel demand while those in the industrial and construction sectors face uncertainties from shortage of input materials to low demand from export markets.

Amid stagnating production and businesses, a number of enterprises are forced to lay off employees while others fall short of workers due to anti-virus measures or on fear of the spread of the pandemic.

The lack of workers has directly affected companies’ capabilities in fulfilling contract obligations and their business prospects.

The VYEA expressed concern that despite the urgency of the central government in providing supports for the business community, companies are still facing administrative hurdles in receiving such supports from local authorities. For examples, enterprises looking for delaying  debt payment are required to submit evidences of financial damages, or report of business performances, among others.

VYEA Chairman Dang Hong Anh said the organization has submitted a number of recommendations to Prime Minister Nguyen Xuan Phuc to help prevent enterprises on the brink of bankruptcy.

Anh added the key priority would be to quickly adopt tax breaks or waiver of tax payment for companies affected by the pandemic until the end of 2020; reducing, exonerating interest rates and delaying of payment of insurance to the end of 2020.

According to Anh, those operating in fields less affected by the pandemic could be subject to a reduction of interest rates by one to two percentage points, or restructuring of debt payment.

Supporting programs by the government must be clear and specific for each economic groups, Anh said. 

On April 3, the Ministry of Finance decided to more than double the fiscal stimulus package in the second draft of a government decree from VND80.2 trillion (US$3.42 billion) to VND180 trillion (US$7.64 billion).

Besides the fiscal stimulus package, Prime Minister Nguyen Xuan Phuc on March 6 requested the State Bank of Vietnam to instruct banks to provide a monetary aid package worth a total of VND250 trillion (US$10.86 billion) in forms of simplification of lending procedures, rescheduling of debt payment, reduction and waiver of interest rates for customers affected by the Covid-19 pandemic.