Log in
Business

Second stimulus package needs to focus on most affected sectors

Mass support for the business community, including too ailing businesses, could lead to unnecessary debt burden for the economy.

As the government is planning for a second stimulus package for enterprises and people affected by the Covid-19 pandemic, a selective approach is required to ensure such support go directly to those in key economic sectors and high potential for development.

The statement was released by Nguyen Hong Son, deputy head of the Party Central Committee’s Economic Commission, at a workshop held to discuss the Covid-19 economic impacts and government responses on December 3.

 Overview of the workshop. Photo: Ngoc Thuy. 

“Covid-19 is a public health crisis which later creates severe consequences to the economy. A mass support in this case would not be feasible, given the limited resources at disposal,” Mr. Son said.

The government has so far rolled out the first stimulus package consisting of a credit aid package worth VND300 trillion (US$12.87 billion), including a VND180-trillion (US$7.63 billion) fiscal stimulus package in forms of the payment delay of value-added tax and corporate income tax, and a financial support package for vulnerable people worth VND62 trillion (US$2.7 billion).

While Vietnam continues to pursue the dual target of both containing the pandemic and boosting economic recovery, the utmost priority remains the effective control of Covid-19, he added.

“A positive economic growth for this year would not happen without successful Covid-19 fight,” Mr. Son stated.

Echoing Mr. Son’s view, Former Director of the Central Institute for Economic Management (CIEM) Le Xuan Ba said it is vital to support enterprises with high growth prospect in the post-Covid-19 era, not the struggling businesses even since the time before the pandemic.

“This could lead to subsequent debt burden, while the goal should be to lay a solid foundation for strong economic rebound in the post-Covid-19 period,” he suggested.

Mr. Ba, however, noted government’s support at the moment, including both fiscal and financial means, are only for short-term.

“What they need most is a favorable business environment for development, for which more reforms are required to ensure greater transparency and fairness among different economic sectors,” Mr. Ba asserted.

As many experts shared their views that the pandemic would accelerate the digital transformation in Vietnam, Mr. Ba warned pressure to digital transformation could be faded or even disappear when the country puts the pandemic under control.

“A long-term support should also consist of measures to boost digital technology businesses,” he stated. 

Tailor-made support

Le Xuan Sang, deputy director of the Vietnam Economic Institute (VEI), referred to a recent survey conducted by the VEI from late September to early November that only 22% of local enterprises get access to existing supporting programs. 

According to Mr. Sang, major issues that led to such a low rate include complicated administrative procedures to apply for fiscal or credit aid packages; lack of specialized support for different groups of enterprises; and short period of support, among others.

Mr. Sang said as the stimulus package is not a “magic wand” that can save all businesses hit by the pandemic, “only a number of enterprises can be saved according to the reasonable economic and practical criteria, ensuring transparency, fairness and high enforcement. “

"The coverage and amount of finance of the rescuing packages should be determined depending on the volume of benefits and losses of the industry caused by the pandemic. 

For large domestic enterprises, Mr. Sang suggested that they will receive an amount of financial support, that depends on the function or level of their social activities, the severity in doing business, potentials and level of economic influence, especially the number of employees.

“Efforts to achieve the dual goal during the pandemic can hardly be effective without flexible and effective legal provisions as those applicable to "wartime",” he noted.

Reactions:
Share:
Trending
Most Viewed
Related news
MPI mulls second stimulus package

MPI mulls second stimulus package

02 Dec, 09:23

The focus of the government’s support this time would be for enterprises with high spillover effects to the economy, especially in fields of aviation, tourism and consumer products.

Green logistics becomes a must for Vietnamese firms

Green logistics becomes a must for Vietnamese firms

Experts have called for greater policy dialogue, technology transfer and investment collaboration to enable Vietnamese logistics companies to implement green transformations effectively.

Coca-Cola inaugurates US$136 million green-certified plant in Vietnam

Coca-Cola inaugurates US$136 million green-certified plant in Vietnam

The new plant is the company’s largest of its three production facilities in Vietnam.

Vietnam pledges deeper reforms: Prime Minister

Vietnam pledges deeper reforms: Prime Minister

The government is transitioning from a passive management approach to an active service delivery model to optimize conditions for both citizens and enterprises.

Hoa Phat to build US$130-million industrial park in northern Vietnam

Hoa Phat to build US$130-million industrial park in northern Vietnam

The Hoang Dieu Industrial Park is poised to become a premier destination for domestic and international investors in northern Vietnam.

Vietnamese firms seek to export to South Korea

Vietnamese firms seek to export to South Korea

The goal of Vietnamese businesses aims to seek buyers and connect with strategic partners at the fair.

No eco-industrial parks certified in Vietnam

No eco-industrial parks certified in Vietnam

High costs, technological limitations, and a lack of regulatory policies prevent industrial parks from going green.

iTech Expo 2025 opens in Ho Chi Minh City

iTech Expo 2025 opens in Ho Chi Minh City

The event fosters networking and innovation amid global market shifts.

Hanoi decides on US$17 million aid package for local farmers

Hanoi decides on US$17 million aid package for local farmers

The financial package will support Hanoi's farmers and producers in the face of natural disasters and diseases.