Covid-19 resurgence challenges industrial zone enterprises

Covid-19 resurgence challenges industrial zone enterprises

 Manufacturing enterprises in industrial zones (IZs) and export processing zones (EPZs) are facing numerous difficulties due to the Covid-19 resurgence.

Ensuring two vaccination shots for workers in IZs and EPZs

Financial burden

Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said challenges facing enterprises in IZs, economic zones and high-tech zones include rising costs of input materials, transportation and Covid-19 testing, as well as investment in infrastructure to meet pandemic control conditions.

The resurgence of Covid-19 in Vietnam and similar developments in other countries have hampered trade and production activities. Covid-19 prevention and control measures applied in Vietnam’s provinces and cities have not been unified, while supply chains have been disrupted due to extended social distancing measures and obstacles to the circulation and transportation of goods. In addition, policies to support pandemic-hit businesses have not proven effective.

Overcoming difficulties

Localities have proposed a number of solutions to address the difficulties of manufacturing enterprises in IZs and economic zones. These include allowing enterprises to employ qualified workers who have had two vaccination shots or those who test negative for the virus and extending eligibility for support packages until the end of 2021.

Solutions also consist of allowing manufacturing enterprises in IZs and economic zones to carry out production in line with their conditions, for example to reconsider the “three-on-site” model that requires employers to house and feed workers, cutting input costs by reducing electricity, water and telecommunications prices as well as social and health insurance premiums and union fees, shortening customs clearance time for exports and imports and the processing of foreign experts and workers’ entry to Vietnam, especially those who have had two vaccination shots.

The “three-on-site” model piles increasing costs on employers

According to the Ministry of Planning and Investment, the government, ministries, departments and localities have adopted numerous mechanisms, policies and solutions to overcome business community difficulties. In September, the government issued Resolution 105/NQ-CP on providing support for enterprises, cooperatives and household businesses during the pandemic.

Based on the situation of enterprises in IZs and EPZs as well as their proposals, the Ministry of Planning and Investment has suggested that the prime minister consider and assign relevant ministries, departments, localities and organizations to implement two groups of solutions. These include urgent policies that need to be implemented immediately and long-term policies to facilitate business recovery.

For urgent policies, the Ministry of Planning and Investment has recommended that the government, ministries, departments and localities implement solutions in Resolution 105/NQ-CP with a high sense of responsibility, focusing on removing bottlenecks to minimize negative impacts on businesses.

VietNam Economic News