Minister of Planning and Investment explains why the 2% interest rate support package for businesses is 'stuck'

Late in the afternoon of November 1, Minister of Planning and Investment Nguyen Chi Dung explained after National Assembly deputies discussed in the hall the assessment of the results of the implementation of the 2023 socio-economic development plan and the expected 2024 socio-economic development plan.

Clarifying the growth issue, Minister Nguyen Chi Dung said that the world situation is difficult, with many rapid, unpredictable, and unprecedented developments. The domestic economy is highly open, resilient, and self-reliant, and is in transition, so it is subject to many external impacts.

"The results have not met the set plan but are still very valuable and positive, while other countries such as Thailand forecast growth of 2.7%, Malaysia 4%, Indonesia 5%, China 5%. These numbers show that our results are also a great effort of the entire political system," said Mr. Dung.

Regarding the socio-economic recovery and development program, the Minister of Planning and Investment acknowledged that a number of policies of Resolution 43 on fiscal and monetary policies supporting the socio-economic recovery and development program to directly support businesses, people and workers have been effective, contributing to high results in the first 9 months of this year.

“In addition to these supports, we have also allocated more than 50% of the program’s resources to socio-economic infrastructure investment. All important projects, key projects of national strategic significance are currently being implemented very actively.

For these projects, we have allocated 176,000 billion VND out of 337,000 billion VND of the entire program for infrastructure investment, in addition to supporting businesses, people, and workers," the Minister of Planning and Investment added.

However, Mr. Dung also admitted that some policies have not achieved the desired results. In explaining the slow disbursement of the 2% interest rate support package, Mr. Dung said there were two reasons.

Firstly, due to economic difficulties, many businesses that are eligible for loans do not borrow due to orders and production situations, but some businesses that want to borrow do not qualify for loans.

Second, the support program is designed very cautiously, including the provision on "resilient projects". This provision makes borrowers and lenders "hesitant" in understanding what a resilient enterprise is. Therefore, the program's expectations have not been met.

"Currently, only 873 billion VND has been disbursed, nearly 2% of the plan," Mr. Dung said, adding, "The Government has submitted to the National Assembly permission to continue implementing this program until the end of 2023. If it is not achieved, we will cancel the budget.

This is an amount that we have not issued or mobilized, so it does not affect the deficit. Instead of this 2% interest rate support policy, we will move on to request a deferral of VAT and other taxes in the coming time to support businesses."

Regarding the low labor productivity, the Minister of Planning and Investment said that the reason is that the growth model has not changed much, the economic structure and labor structure between industries and fields are slow to shift; science and technology innovation, digital transformation, and the quality of human resources have not met the requirements.

" In 2023 alone, there is another reason: economic growth is lower than the target. Industrial production, construction and real estate are difficult. A part of the workforce is moving to the service sector, mainly in informal occupations and with lower labor productivity. A part of the workforce is moving to new jobs, so it also needs time to study and retrain to adapt," Mr. Dung explained.

The Commander of the Science and Technology Sector said that the Prime Minister has assigned the Ministry of Science and Technology to develop a project to increase labor productivity based on innovative science and technology; assigned the Ministry of Planning and Investment to develop a project on a national program to increase labor productivity in order to make labor productivity an important driving force for rapid and sustainable growth, taking advantage of the opportunities of the Fourth Industrial Revolution.

Cam Tu (vov.vn)

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