SMEs need supporting policies that work: forum

SMEs need supporting policies that work: forum

The double impact of the COVID-19 pandemic’s spread and prevention measures has had far-reaching effects on the production and business activities of Vietnamese enterprises, heard the forum.

To support businesses during this challenging period, the Government has issued many policies to help them overcome difficulties and restore operations.

To promote the effective implementation of support policies and strengthen businesses’ capacity to access supportive policy packages, the Viet Nam Chamber of Commerce and Industry (VCCI) worked with the United Nations Development Programme (UNDP) to organise the forum.

Speaking at the event, VCCI chairman Vu Tien Loc said if the COVID-19 pandemic lasts until the end of 2020, about 39.3 per cent of enterprises will go bankrupt. By the end of October, more than 70,000 enterprises had to stop operations, mainly SMEs and business households, affecting more than 31 million workers.

According to Loc, the Government, ministries, sectors and the local business community must assess the impact of COVID-19 on the economy, each industry and sector.

“Policies should be more realistic, the procedures should be simpler, and classifying and the classification of the subjects needs to be correct; that is, what mechanisms we should have for improving businesses’ capacity to access these policies in the coming time and how we can quickly put good policies into practice,” Loc said.

Dau Anh Tuan, head of the VCCI’s Legal Affair Department, said 95 documents supporting businesses affected by COVID-19 were issued by the Government to localities to remove difficulties in enjoying preferential policies in finance, tax, commerce and electronic payment.

At the same time, they have reduced administrative procedures and costs for businesses, facilitated production and business and recovered industries such as tourism and aviation, he said.

However, many enterprises have complained about difficulties accessing information about supportive policies and the usefulness of those policies, Tuan said.

Meanwhile, the UNDP’s rapid assessment in April and May showed that COVID-19 substantially reduced revenue for micro, small and medium enterprises, forcing most to cut business operations and reduce their payrolls due to the serious decrease in output demand and supply disruptions, said Caitlin Wiesen, UNDP Resident Representative in Viet Nam.

Another UNDP study to be published in January indicates that co-operatives have also faced disproportionate impacts from the pandemic, however, they have not been directly included in key national support policies, Wiesen said.

“Building on UNDP’s ongoing support and based on our finding that SMEs in Bac Kan and Dak Nong provinces that were already applying e-payments and e-commerce have fared better during the pandemic, UNDP is supporting additional enterprises in these provinces on the digital transformation of their business activities. UNDP is currently providing training on business continuity for SMEs and cooperatives," Wiesen said.

“We are also providing direct support to cooperatives on green recovery and building forward better, for example with dragon fruit co-operatives in Binh Thuan and handicrafts co-operatives in Ha Giang. These are among the groups of household businesses and co-operatives that fell outside the support provided by Government,” she added.

“This policy forum today brings together government, business, and the UN to better understand how to support SMEs impacted by the complex and overlaying crises of COVID-19, unprecedented floods, and droughts. Government has a key role to play in enabling policies and incentives to boost SMEs as a driving force in building forward a more robust and resilient economy,” said Wiesen.

Local enterprises were heavily affected by the COVID-19 pandemic, especially firms in the private sector, said Luong Minh Huan, general director of the VCCI’s Enterprise Development Foundation.

They expect the Government to expand the scale and coverage of fiscal, monetary and labour support packages and the implementation must guarantee effectiveness and transparency, he said.

Supporting enterprises is a way to support employees and create more jobs and promoting economic reforms and simplifying administrative procedures remain the most important ways to help enterprises amid the pandemic, according to Huan.

The COVID-19 pandemic has also pushed enterprises to acknowledge the superiority of the digital economy, highlighting the urgent need for business support measures in the process of digital transformation, he said.

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