Why is the economic recovery support package under Resolution No. 43 not effective?

Difficult due to procedural regulations

Resolution No. 43/2022/QH15 on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program (SEDP) is expected to increase investment in economic recovery, including projects such as transportation projects, key projects and interest rate support programs for priority recovery areas.

By the end of 2023, the 2% interest rate support package has only disbursed 3.05% of the package size (Illustration photo)

However, in the report sent to the National Assembly on the implementation of Resolution 43/2022/QH15 on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program, the Government summarized the implementation of the policy of supporting interest rates of 2%/year (maximum VND 40,000 billion) from the state budget through the system of commercial banks for a number of important sectors and fields, enterprises, cooperatives, business households...

Accordingly, by the end of 2023, this package will only disburse about VND 1,218 billion to nearly 2,300 customers, equivalent to about 3.05% of the package size. Thus, about VND 38,782 billion will remain unused.

Sharing with reporters on the sidelines of the National Assembly on the morning of May 21, National Assembly Delegate Hoang Van Cuong - Hanoi City Delegation said that many projects in other fields that are not key areas, such as healthcare, education, investment and procurement, etc., are still stuck with administrative procedures. Therefore, by the time the monitoring program is implemented, many capital sources have not been disbursed, and are only in the stage of reviewing projects to complete procedures and only when the procedures are completed can the funds be disbursed.

" The problem here is that we need to look at the procedural regulations for implementing investment projects that are still taking a long time ," said delegate Hoang Van Cuong.

According to the delegate, the main problems with procurement and investment projects for healthcare and education are due to many factors such as technical and economic norms and unit prices for equipment that have not been specifically regulated, while the decision-making authority has not been given to those investment agencies. Therefore, the decision-making process pushes the responsibility to agencies, ministries and branches, prolonging the time very long.

In particular, the 2% interest rate support package is a great expectation of Resolution 43, hoping that with the support of 40,000 billion VND, about 2 million billion VND of credit will be put into the economy for recovery. However, the implementation results are very low, almost insignificant.

" Obviously, the 2% support package is not feasible, so of course we have to change, we should not continue to maintain it but should support the programs that have been effectively supported. We have quite good fiscal space, so we should continue to implement the reverse fiscal policy, through continuing to maintain reductions in taxes, contribution obligations or even reducing some contributions for those in difficulty ." - delegate Hoang Van Cuong emphasized.

According to delegate Hoang Van Cuong, it is necessary to transfer the 40,000 billion package to support according to clear goals. Typically, in the past, there were support packages such as loans to build houses for low-income people and transferred to the Social Policy Bank. This support package was completed by the bank very early, targeted the right people, and brought high efficiency.

Currently, there are many industries and fields that need continued support such as: Support for low-income housing, support for transformation programs, green transformation, digital transformation and programs to approach and attract new investors such as training, preparing human resources, preparing factors to welcome investors in the semiconductor industry... Delegate Hoang Van Cuong said that these are the programs we need to have or the support policies are truly incentives from the Government.

Delegates also pointed out that procedural policies are "barriers" to businesses accessing capital, because the support package is accompanied by the condition that businesses must have the ability to recover. Meanwhile, during the COVID-19 pandemic, many difficulties of businesses and the ability to recover in the short term are not clear, especially for businesses that are still stuck with old loans that have not been repaid. Therefore, the conditions for businesses to access this source of capital are not high. Moreover, the support interest rate is only 2% but the inspection procedures, after the disbursement process, businesses are also hesitant, so both the conditions for access and the need to access are limited, leading to very low results.

Delegate Hoang Van Cuong answers reporters on the sidelines of the National Assembly corridor (Photo: Thu Huong)

" We have introduced a support program, but we have introduced some regulations that are too strict and unfeasible, leading to low policy implementation efficiency ." - said the Hanoi delegate.

Mr. Cuong cited an example, such as the 120,000 billion package, the target must be low-income housing and social housing investment projects. However, in the recent past, most projects did not meet the conditions for investment implementation, so of course the investors could not borrow this source of money.

Along with that, the preferential interest rate of more than 8%, this level is not really preferential, especially in the current context, bank interest rates in general are decreasing quite low and the loan period is not long, so it is not really attractive.

Policies must include goals and measurement criteria.

Participating in the monitoring process of Resolution 43, Mr. Hoang Van Cuong said that although there are specific mechanisms to allow the implementation of this support program to be the fastest and most effective for the sectors and fields that need to recover. However, the process of applying those specific mechanisms or available policy mechanisms for project implementation is sometimes still timid, not decisive, and there are also signs of not daring to take responsibility, not daring to think and dare to do. Therefore, many projects are slow.

Delegate Hoang Van Cuong said that it is necessary to change the promulgation of mechanisms and policies. Policies should not be issued with overly specific binding conditions, which sometimes will not be suitable for reality.

" The most important thing when making a policy is to set out goals and measurement criteria. The implementation process should be assigned to the implementing agencies so that these agencies can come up with implementation methods. However, this must be accompanied by a requirement to implement a mechanism for public and transparent accountability and responsibility for their decision-making power. The most important thing to measure is whether the output results achieve the policy's goals or not ." - Mr. Cuong commented.

According to the program, on the morning of May 25, 2024, the National Assembly will listen to a report and discuss in the hall the Report of the Supervisory Delegation and the draft Resolution of the National Assembly on the results of the thematic supervision "Implementation of Resolution No. 43/2022/QH15 dated January 11, 2022 of the National Assembly on fiscal and monetary policies to support the Socio-economic Recovery and Development Program and the National Assembly's resolutions on a number of important national projects until the end of 2023".

Source: https://congthuong.vn/vi-sao-goi-ho-tro-phuc-hoi-kinh-te-theo-nghi-quyet-so-43-khong-phat-huy-hieu-qua-321738.html