MOIT’s business rescue plan turns out of date before it comes out

Jul 30th at 12:57

30-07-2012 12:57:20+07:00

Built up to rescue businesses, but the Ministry of Industry and Trade’s (MOIT) plan on helping businesses overcome difficulties is believed to be helpless, because it is “behind the times.”

The big rescue campaign initiated by MOIT

Understanding that the biggest problem for businesses at this moment is the high inventory volume, MOIT’s plan focuses on the measures to help stimulate the demand and boost sales.

The plan prioritizes the organization of the trade promotion activities on the domestic market, especially the programs of the “buy Vietnamese” campaigns. The trade promotion activities would include the organization of trade fairs, exhibitions, the campaigns of bringing goods to rural areas, islands and industrial parks.

MOIT also plans to help enterprises develop their distribution networks, so that the networks can reach out to remote markets, to rural areas and the markets which shares mainland boundaries with Vietnam.

The ministry has vowed to take drastic measures to manage the market, prevent trade frauds in order to help Vietnamese authentic enterprises expand their domestic market shares.

However, the plan has not been highly appreciated by experts, who say the solutions suggested by MOIT are very old and vague.

Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang said that the business rescue plan should be designed in the way to help businesses overcome difficulties. However, in fact, only big enterprises can access preferential loans, while the loans remain out of reach of small and medium enterprises.

The “health” of enterprises can be reflected in the two indicators, the unemployment rate and the purchasing power index.

According to HSBC, Vietnamese people’s purchases have been on the decrease. This shows that in the first three months of the year, enterprises mostly tried to sell inventories, while the production did not increase.

Chair of the Vietnam Association of Foreign Invested Enterprises VAFIE Nguyen Mai, also believes that what the businesses most want now is the capital. Therefore, MOIT just needs to draw up a rescue campaign which allows businesses access the bank loans with reasonable costs.

“Businesses need to be able to access bank loans in August or September, so that they can have working capital to organize the production in the fourth quarter and prepare for the next year’s business plan,” Mai said.

“It’s obvious that businesses are now in danger. Meanwhile, the ministries are too late in putting forward reasonable solutions,” Mai added.

He went on to say that figure about 55,000 dissolved businesses released by the Ministry of Planning and Investment may not be true. At least 100,000 businesses have been in very difficult conditions. The industrial production growth rate in Hanoi and HCM City has been staying at 4-5 percent over the last few months, which demonstrate the sharp falls if compared with the last year’s growth rates of 17-18 percent.

The plan turns out of date before it comes out

Nguyen Viet Manh, Director of the Credit Department under the State Bank of Vietnam, said the information in the MOIT’s plan has not been updated.

“All the suggested measures in the plan about the credit policies have been taken in reality already,” Manh noted.

MOIT wanted the interest rate to decrease to 11 percent. Meanwhile, in fact, the ceiling deposit interest rate has been lowered to nine percent already. The banking sector has also carried out the plan on funding the agricultural mechanical engineering projects and the rural development.