Joint efforts needed to surmount COVID-19 challenges

16:42 04/09/2021

Local economists have underlined the need to reach consensus, share difficulties and seize upon opportunities among the State, businesses, and workers amid the national economy facing several challenges caused by the fourth wave of the COVID-19 pandemic.

Joint efforts needed to surmount COVID-19 challenges -0

Dr. Nguyen Duc Kien made this assessment when analysing the resilience of domestic firms over the past seven months, making projections, and discussing solutions aimed at overcoming the challenges caused by the pandemic from now until the end of the year.

Despite social distancing measures being applied across several localities due to the complicated developments relating to the COVID-19 pandemic, the country’s total additional registered capital during the seven-month period hit VND2,432.1 trillion, representing a rise of 16.1% against the same period last year.

Of the figure, the registered capital of newly-established enterprises enjoyed a surge of 13.8% to VND1,065.4 trillion. Dr. Kien therefore attributed these encouraging results during the reviewed period to the recovery of production activities by businesses and COVID-19 containments efforts, particularly as the six-month GDP increased by 5.64%.

However, there continues to be a number of difficulties relating to the adverse impacts of the fourth wave of the COVID-19 pandemic.

In line with this, the number of newly-established enterprises has endured a decline of 22.8% compared to the previous month, along with a drop of 33.8% against the same period last year.

Furthermore, the registered capital of newly-established businesses has also decreased by 25.3% compared to the previous month with a fall of 48.7% in relation to last year’s corresponding period.

Most notably, the bankruptcy rate in July saw an increase of 17%, while the number of newly-established firms rose only between 1.6% and 2%, an issue which is anticipated to pose numerous challenges ahead in the remaining months of the year.

In this context, Kien emphasised the need to reach a consensus, gain understanding and share difficulties among the State, enterprises, and employees. Indeed, the Government has already made decisions aimed at supporting residents and businesses, including bailout packages such as tax exemptions and reductions.

He also underlined the necessity to effectively implementing the government's support policies from now until the end of the year.

Moreover, local firms continue to face several hurdles, including supply chain disruptions, high transportation costs and a shortage of workers, while factories have been forced to reduce their capacity, according to Kien.

Dau Anh Tuan, director general of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI), expressed his hope that these negative impacts will be minimised in the near future due to prevention and control activities being carried out in a drastic manner.

According to the VCCI, despite facing a limited state budget, the National Assembly and the Government have issued several policies which can support negatively-affected businesses.

Sharing this viewpoint, Kien revealed that the VND 26,000 billion bailout package is expected to bring about a range of practical benefits to residents and businesses. Indeed, through the aid package, businesses will be able to pay basic wages for workers and keep them in order to maintain production activities,  he added.

Experts also highlighted the flexible method of fighting the pandemic whilst simultaneously maintaining production in some localities, noting that despite the social distancing order in several provinces in July, a total of 29,600 businesses were able to resume operations, an annual increase of 3.6%.

Both Tuan and Dr. Kien note that these moves have been consistent with the Government's policy by containing the pandemic and simultaneously maintaining economic development, adding that these support policies should be promoted in a timely manner in the near future.