Urgent support for businesses after storms and floods

Solutions to support businesses in recovering production and business are becoming urgent after storm No. 3 left serious consequences for localities.

Applying modern technology to production to help Tay Ninh rice paper reach new heights and aim for export. Photo: Giang Phuong/VNA

Businesses need support

According to the Ministry of Planning and Investment, storm No. 3, floods and landslides in localities have caused estimated damage of more than 60,000 billion VND so far, and GDP in 2024 may decrease by 0.15% compared to the growth scenario of 6.8 - 7% set for the whole year.

Mr. Hong Sun, Chairman of the Korean Business Association in Vietnam (Kocham), said: Many Korean businesses investing in Vietnam have suffered serious damage due to storm No. 3, especially in Quang Ninh and Hai Phong. Many goods were damaged, factories, warehouses... collapsed, and machinery was flooded and could not operate. For example, the factory in Hai Phong is near the sea, both the basement and the first floor were flooded, the business is expected to take several months to repair, order and import machinery to operate. To help businesses recover after the storm, State agencies and the Government need to actively support emergency loans for people and businesses that suffered damage, so that the reconstruction process can be faster.

According to the Hai Phong Economic Zone Management Board, up to now, enterprises in the local Industrial Parks and Economic Zones have resumed production, but it will take at least 3 months to recover. For enterprises in the logistics industry, according to a survey by Supply Chain Management Consulting Company (CEL), thanks to the rapid mobilization of resources, nearly 45% of surveyed enterprises said they expected to recover within about 1 month...

The Vietnam Confederation of Commerce and Industry (VCCI) analyzed that a series of businesses damaged by storms and floods are facing the risk of closing, stopping or reducing production because equipment, factories, etc. serving production are all damaged. The restoration of production and business of many businesses is in a difficult situation, seriously affecting economic growth and the livelihoods of people and workers.

Regarding this issue, the Standing Vice President of the Vietnam Association of Small and Medium Enterprises (VINASME) To Hoai Nam commented that businesses need about 3-6 months to fully recover. The issue of concern is what support policies from ministries, branches, and localities are like and how to prioritize support for economic sectors that are simultaneously affected?... Even, in addition to extending, deferring, exempting debt, lowering interest rates on bank loans... the prices of electricity, water, healthcare, education... also need to be adjusted to minimize costs.

On the other hand, according to the report of the Ministry of Agriculture and Rural Development, storms and floods have so far inundated about 190,358 hectares of rice and 48,720 hectares of crops; 3,269 aquaculture cages were damaged and swept away... this reality has exhausted thousands of farming households. This is an important area that creates sustainable livelihoods, attracts a large number of workers, and many poor households participate. Therefore, the Government needs to allocate a large budget for relief, followed by livelihood restoration.

Therefore, VINASME hopes that the State will support land rent for 3-5 years for affected agricultural and aquatic enterprises; encourage FDI enterprises to buy raw materials from damaged areas. Meanwhile, VCCI proposed to increase support money for aquaculture enterprises, exempt water surface rent, seaport entrance fees, use of anchorage locations... for up to one year, or the State will support 50-70% of insurance fees for fishing and tourist vessels until the end of 2025.

In addition, the banking system and financial institutions will soon have low-interest or 0% loan packages for businesses and people on a specific basis to defer debt. A series of other policies on the market, labor... are also expected to be supported by the business community soon, such as: The Government reduces VAT on gasoline from 10% to 8% in the last 3 months of 2024 for local gasoline retail businesses that have suffered losses, or the Government can consider cash support packages for people and businesses, instead of just exempting or reducing taxes...

Advice to support businesses

Mr. Jung Hyeok, General Director of LS Metal Vina Company, representing a group of manufacturing enterprises in DEEP C Industrial Park (Hai Phong) suggested: Social insurance will pay a part of the salary of workers due to the enterprises having to stop production, in order to retain workers. Customs, tax, fire prevention and fighting agencies... also need to postpone inspections so that enterprises can focus on recovery.

Similarly, according to Mr. Vu Huy Khue, Deputy Director of Hai Phong City Tax Department, businesses affected by storms and floods need to be granted tax payment extensions, tax declaration deadline extensions; exemptions and reductions in personal income tax, special consumption tax, resource tax, non-agricultural land use tax, late payment fees, and administrative violation fines... Procedures and implementation documents need to be made public on information pages and directly guided to taxpayers...

On the banking side, State Bank Governor Nguyen Thi Hong affirmed that 32/40 commercial banks have registered and implemented new credit packages with interest rates 0.5-2% lower to provide credit to businesses and people affected by storms and floods. For example, BIDV has implemented a program to reduce lending interest rates to support individuals and businesses damaged by storm No. 3, with a total outstanding loan balance subject to interest rate reduction of VND 100,000 billion, with a maximum interest rate reduction of up to 2%/year depending on the level of damage and the customer's loan term. The interest rate reduction support period is from September 20, 2024 to December 31, 2024.

Or Agribank will base on the level of damage of customers affected by storms and floods to adjust the interest rate down from 0.5 - 2%/year and waive 100% of overdue interest and late payment interest from now until December 31, 2024; reduce 0.5%/year of lending interest compared to lending interest for loans arising from September 6, 2024 to December 31, 2024.

ABBank reduces interest rates by up to 0.7% for customers borrowing short-term production and business loans and reduces interest rates by up to 1.5% for customers borrowing medium/long-term production and business loans.

ABBank applies a reduction in lending interest rates of up to 1.5%/year for individual customers with business production loans, a reduction of up to 1.5% interest rate within 6 months from the time of application for customers with medium/long-term business production loans; customers with short-term business production loans, depending on the level of damage, will apply a reduction of up to 0.7%/year interest rate for the remaining period of the existing loan until the maturity date...

At a recent Government meeting with 12 leading private economic groups in Vietnam, with total assets estimated at over 70 billion USD, contributing 45% of GDP, 40% of total social investment capital... but facing many difficulties in recovering production and business, Prime Minister Pham Minh Chinh affirmed: The Government is committed to always accompanying and protecting the legitimate and legal rights and interests of enterprises in any circumstances.

The Prime Minister requested Deputy Prime Ministers, ministers, and heads of sectors, if they receive feedback on difficulties of enterprises, to directly listen and resolve them thoroughly according to their functions and authority; promptly study and abolish sub-licenses and barriers that increase compliance costs for enterprises; promptly remove institutional obstacles so that enterprises can operate smoothly in accordance with the law, feel secure in production and business, and contribute to the economy.

In addition, the Prime Minister also requested large enterprises to promote 6 pioneers: Promoting the application of science and technology, innovation; participating in global value chains, production chains, and supply chains to build corporate and national brands; creating jobs and livelihoods for people, ensuring social security, leaving no one behind; developing digital infrastructure, transport infrastructure, cultural infrastructure, responding to climate change, green transformation; training high-quality human resources, reforming administrative procedures and improving smart governance capacity; linking to support business development and national development.

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