SGGP Newspaper reporter had an interview with Dr. Vu Tien Loc, member of the National Assembly's Economic Committee, former Chairman of the Vietnam Federation of Commerce and Industry (VCCI), Chairman of the Vietnam International Arbitration Center (VIAC), about solutions to create more bright spots in the current economic picture.
- Reporter: What is your opinion on the current economic situation in Vietnam and especially on the general operations of enterprises?
- Dr. VU TIEN LOC : The picture of our country's economy has two bright and dark colors. Although in 2022, our country's economy was a rare bright spot in the global economy, in the first 5 months of 2023, Vietnam's economy was very difficult, the growth rate decreased and business confidence of enterprises and people dropped to a low level.
" The government needs to implement stronger fiscal and monetary measures. Because this is the right time to implement the national policy of easing people's burdens and supporting businesses, we should not increase any taxes, fees and procedures" - Dr. VU TIEN LOC
According to statistics, in the first 5 months of the year, the number of newly established and re-operated enterprises only reached about 95,000 enterprises, down 3.7% compared to the same period. Meanwhile, 88,000 enterprises withdrew from the market, up 22.6% compared to the same period. It is a fact that the number of enterprises withdrawing from the market that we have counted is just the tip of the iceberg. The general situation is that enterprises are facing mounting difficulties, having to reduce the scale of production and business. Many enterprises have "clinically died", the private economic sector is weakening and this is the hidden part of the iceberg.
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| Dr. Vu Tien Loc, Member of the National Assembly 's Economic Committee |
The main reason for the above gloomy situation is partly due to the narrowing of the main export market of our country's enterprises. The real estate market and corporate bond market are frozen, causing a chain reaction. The consequences are increasing debt, stagnant production, and declining income of the people.
- What is your assessment of the solutions to support businesses in recent times?
The difficulties of the business community are also the difficulties of tens of millions of workers and their families. In that context, the solution to impact and stimulate the domestic market is an extremely important solution. We have reduced value added tax - a solution to ease the burden on the people, making them less difficult and immediately impacting the business market.
Therefore, I agree to continue reducing VAT by 2% but for all goods and services and extending it until at least the end of 2024. After that, we will stipulate some conditions for automatic extension without having to submit to the National Assembly. However, these solutions are only temporary measures to reduce costs, ease liquidity difficulties, and help businesses survive for a short time, but are not enough for the economy to recover sustainably in the long term.
“Iron discipline” in determining responsibility
- How do you observe and perceive the Prime Minister's inspection and urging of the progress of projects and works?
The efforts of the Government and the Prime Minister as a foreman to find ways to remove difficulties and obstacles and promote public investment, including breaking through the iceberg of “avoiding responsibility and fear of injustice” of authorities at all levels. But in reality, the fact that the National Assembly has to issue many exceptional, special, and specific mechanisms… shows that our general institutions and policies are having problems. These shortcomings need to be focused on and effectively overcome.
- So what solutions will help the economy overcome difficulties and recover sustainably?
According to the report, up to 70% of basic construction investment projects are facing legal difficulties, which is a warning of serious stagnation. Therefore, legal and administrative problems need to be resolved more quickly. This will help real estate projects and other production and business projects to be implemented, create jobs for workers, generate revenue and increase the ability of enterprises to repay debts.
In addition, in order for the Vietnamese economy to overcome current difficulties, the Government needs to have stronger policies, clearly define the responsibilities of all levels and sectors and consider this as an "iron discipline". This will contribute to further promoting public investment disbursement, thereby increasing aggregate demand and creating a spillover effect in the economy. The Government also needs to restore the annual issuance of separate resolutions on improving the business environment and enhancing national competitiveness to create pressure and motivation for the reform programs of ministries, sectors and localities in the new context.
- National Assembly Delegate Trinh Xuan An, full-time member of the National Assembly's Defense and Security Committee:
Unprecedented solutions needed to rescue businesses
The government needs to have urgent solutions, even beyond precedent, to rescue and support businesses. Along with credit, it is necessary to continue to open up other capital channels such as bonds and securities, and at the same time, it is necessary to continue reviewing to simplify administrative procedures in a more substantial way.
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In particular, it is necessary to change the corporate culture of "begging and running". The government and managers need to show an attitude of serving businesses, proactively, sincerely, and wholeheartedly coming to businesses to solve difficulties.
- National Assembly Delegate Le Huu Tri, Deputy Head of the National Assembly Delegation of Khanh Hoa province:
Immediately correct the working style of the staff
The stagnation in the administrative apparatus’s operations at many levels and places has caused difficulties and congestion in handling administrative procedures. This makes it even more difficult for businesses and people who are already facing difficulties, wasting time, increasing unofficial costs, and losing opportunities.
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Therefore, it is necessary to immediately rectify the working style of officials, especially the situation where officials avoid, fear responsibility or cause prolonged congestion when handling administrative procedures of people and businesses.
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