Gov’t to boost firms, private investment to accelerate post-pandemic growth

Gov’t to boost firms, private investment to accelerate post-pandemic growth

The COVID-19 pandemic has pushed enterprises into difficulties and the Government’s target of having one million firms by the end of this year might be a long shot, according to the Ministry of Planning and Investment.

The number of new firms set up in the first four months of this year fell by 13.2 per cent against the same period last year while the number of firms temporarily halting operations rose by 33.6 per cent.

The Agency for Business Registration forecast that even in the best scenario, the number of new firms this year would be around 125,000, 13,000 less than 2019.

A survey conducted by the ministry at the end of April found that about 86 per cent of firms suffered negative impacts of the COVID-19 pandemic.

In this landscape, the Government identified domestic private investment among drivers of economic growth, besides strengthening exports, accelerating public investment, encouraging domestic consumption and attracting foreign direct investment.

Unprecedented fiscal and credit packages were really helpful to enterprises to overcome the difficult time, Vu Tien Loc, Chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) said.

VCCI’s survey conducted earlier this month revealed that 55 per cent of firms would maintain their operation scale in the third quarter of this year, 22 per cent planned expansion while only 21 per cent would narrow their business. VCCI said that the trend was better than the findings a month ago.

Besides urgent measures to support firms after the pandemic, the Government was also hastening administrative reforms to create favourable conditions for businesses and attract private investment.

Latest figures showed that some 3,893 out of 6,191 business prerequisites were removed or simplified together with 6,776 out of 9,926 categories of goods subjected to customs checks, which helped save an estimated VND6.3 trillion.

A Prime Minister’s working group was also set up to review the existing legal documents to remove overlaps or inconsistencies as well as the regulations which were infeasible or causing difficulties to enterprises.

In the latest effort, the Government issued Resolution No 68/NQ-CP mid-May, setting targets for the 2021-25 period that at least 20 per cent of the number of regulations would be removed or simplified and at least 20 per cent of compliance costs firms incurred to adhere to Government regulations which were in effect as of May 31 would be reduced.

Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management, said that the resolution was a more comprehensive administrative reform programme than implemented previously.

Under this regulation, any regulations which caused difficulties to enterprises must be removed, this was different, Hieu said.

Tran Dinh Thien, former Director of Viet Nam Institute of Economics, said that the resilience of the post-pandemic economy would largely depend on the ability of enterprises to stand up.

Thien, however, noted that the resources should not be wasted on inefficient businesses, instead, should focus on those which brought efficiencies.

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