Government solutions for the recovery Vietnam’s economy after Covid-19 epidemic

The Covid-19 epidemic has slowed developments, disỉupted socio-economic activities of countries around the world. And it has had a negative effect on the Vietnamese economy, especially on the results of economic growth (GDP) of the whole country. The prolonged epidemics caused social distancing in major provinces and cities such as Hanoi, Ho Chi Minh, Binh Duong, …, where densely populated areas, industrial parks, export processing zones and large enterprises in the global value chain are located, contributing serious issue to economic development and revenue collection. This causes GDP in the third quarter of 2021 to decrease by 6.17% compared to the same period in 2020.

 When the pandemic broke out, prolonged social distancing led to a disruption in circulation, and stalled production and business. Many businesses that wish to maintain production have had to choose the “3-on-the-spot” production option to prevent the spread of the disease, otherwise they will have to suspend operations until there is a new announcement from the central government or province or city. Even with such operations, businesses also have to bear huge operating costs, shortage of labor force due to layoffs, and disruption of raw material supply, hence many exporting enterprises have not been able to complete the work, order on time, have to extend or cancel the contract. Many businesses went bankrupt, dissolved due to exhaustion, lack of strength to endure the epidemic for a long time. Some enterprises had to suspend their business or conduct business in moderation, delaying production due to inefficiencies or losses in very difficult conditions. That fact requires the Vietnam to come up with appropriate solutions to remove difficulties, promote production, business development and recover the economy.

 To remove difficulties, promote production and business development and economic recovery, the Politburo, National Assembly, National Assembly Standing Committee, Government, Prime Minister, ministries and branches have issued many guidelines, policies, overall solutions to promptly respond to the epidemic such as: reducing interest rates; debt restructuring; reduction, extension of tax payment, social insurance; exemption or reduction of fees for some public services; reduced, delayed payment of land rent, etc., and especially launched an unprecedented 62 thousands of billions dong social security package. However, in addition to the effectiveness and positivity of the policies and solutions that have been issued, in the implementation process, there are also some limitations, obstacles such as: (i) The regulation of expenses Details and guidance on the implementation of a number of measures promulgated by the National Assembly, National Assembly’s Standing Committee are not timely, the implementation of a number of mechanisms, policies is still slow, the effectiveness of organizing the implementation of a number of policy is not high; (ii) Disbursement rate of public investment is low because the initial stage of applying conditions, standards is too high, processes, procedures are cumbersome, inflexible; (iii) Information, instructions are not timely to enterprises, especially small and micro enterprises, cooperatives that are difficult to access, not suitable to the needs of enterprises; (iv) Many difficulties accumulated up to now are not only problems of enterprises but have become common problems of industries and fields.

 Therefore, in order to effectively implement the dual goals of disease prevention, recovery, socio-economic development, in addition to continuing to promote the vaccination campaign for the entire population, it is necessary to organize well implement some of the following key solutions for economic development:

 Firstly, continue to review, perfect and improve the feasibility of legal documents. Improving the efficiency of the inspection, review of legal documents to detect conflicting, overlapping, inadequate, contents that are no longer consistent with reality, thereby expeditiously handling them according to their competence, propose competent agencies to handle according to the provisions of law, meet the requirements of clearing bottlenecks, support and promote investment, production – business activities.

 Second, improving the business environment promotes economic recovery and increases resilience after the Covid-19 pandemic. A favorable business environment is important for the long-term resilience of the economy and for a rapid recovery from the crisis. In the context of the current Covid-19 pandemic, creating a healthy business environment is important to ensure economic recovery and restore investor confidence. Over the medium and long term, the business environment will affect how businesses weather the pandemic and how well they take advantage of opportunities as they begin the recovery process. The quality of the business environment is also important for foreign investment and the connection of domestic firms to global supply chains. In fact, improving the efficiency of commodity market regulations and facilitating business will strongly support economic recovery after the crisis.

 Third, be proactive, flexible in management, administration of budget revenue and expenditure. It is necessary to regularly review budget revenues, especially tax, fee, mineral extraction, current, land use levy for unpaid projects. Thoroughly implement savings in recurrent expenditures to prioritize spending sources for development investment, saving administrative expenses, meetings, business trips; at the same time, ensure resources for epidemic prevention, control and increase spending on social security.

 Fourth, speed up the completion of investment procedures, implementation and disbursement of public investment capital. Synchronously implementing measures to speed up disbursement of public investment capital is the most important measure to promote economic growth, especially key projects and new construction projects. Therefore, it is necessary to urgently allocate and assign details of state budget investment plans to tasks, projects in accordance with regulations, in accordance with the implementation schedule and disbursement capacity, ensuring the focus, focus, not spread, fragmented, prolonged. In implementation, it is necessary to proactively have specific plans and solutions to remove difficulties, obstacles, speed up the construction progress; to pay capital for the project as soon as there is a pre-acceptance test volume as prescribed; proactively transfer capital plans from projects that are slow to be disbursed to projects with good disbursement progress and lacking capital.

 Fifth, increase spending on social security and job support for workers. It is necessary to review and have appropriate support policies for people in difficult circumstances due to the impact of the epidemic, especially to strengthen direct support for vulnerable groups such as informal workers and the unemployed. Support housing rental costs for employees working in enterprises in economic zones, industrial parks, export processing zones; Providing preferential loans to employees through the Bank for Social Policies;… The implementation of supports needs to be more flexible to ensure that the support money is transferred quickly and timely to the target groups. enjoy. Besides, it is also necessary to have a policy to support training, retraining of employees; Improve the efficiency of labor supply and demand connection; Improve the capacity of employment service centers, high-quality vocational schools, etc. to contribute to supporting job creation for workers.

 Sixth, support to restore production – business activities of enterprises, cooperatives, business households. Support the recovery of production – business activities of enterprises (especially small and micro enterprises), cooperatives, business households by continuing to implement tax exemption, tax reduction, tax deadlines, fees, charges, debt restructuring policies; Managing credit growth appropriately, continuing to restructure debt, keeping the debt group unchanged; Continue to reduce operating costs of commercial banks to have room to reduce lending interest rates, especially in prioritized sectors, fields; Having appropriate policies for a number of priority industries, fields to support the setting up business in production and processing of agriculture, forestry, fishery, processing industry, manufacturing, transport services, tourism, start-up promotion. , create, develop industrial parks, high-tech parks, export sustainably.

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