“Open path” for more investment and development of business

Dr. To Hoai Nam, Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises

How do you assess the recovery momentum of businesses in the first half of 2022?

- Amid the pandemic, the "health" of the majority of businesses was eroded, but the majority remained strong and even maintained a bright spot in creating jobs and incomes for workers and contributing to economic recovery and development.

At the same time, it is also an area that shows a relatively good ability to absorb the Government's support policies which contribute significantly to the growth and recovery of Vietnam's economy in general.

However, businesses are not only severely impacted by the pandemic, many unexpected events in 2022 have made it a double whammy. Particularly, the supply chain reconstruction in the direction of decentralization and not depending on certain countries to limit  the risk of a commodity shortage crisis like in 2021. Along with that, there are geopolitical uncertainties in many markets, making it difficult for businesses.

What recommendations do you have for businesses to keep their recovery momentum and expand investment?

- In order for businesses to boldly expand their investment scale as well as make new business plans, state agencies need to ensure control and management to ensure a stable macroeconomic environment; stable legal policy; reasonable compliance costs and good administrative procedures; as well as well-equipped infrastructure.

Accordingly, given the maintenance of macroeconomic stability, businesses believe that this is an important foundation to create prerequisites for the recovery and development of the business community, especially for investment activities as well as "bold" premises for economic development in 2022 and the following years in the context of continuing to implement measures and policies to adapt safely, flexibly, effectively control the Covid-19 pandemic and its variants.

In addition, regulatory agencies must implement key reforms such as strengthening and improving business institutions and pushing the judiciary and law enforcement. As a matter of fact, businesses long for the certainty of the law so they can anticipate changes in the business environment to be proactive in all situations.

Economic stimulus packages to prevent a decline are necessary for businesses, but not necessarily "one arrow hits many targets". Instead, it is necessary to design more carefully with the motto "one arrow only hits one target", which will be safer for inflation control.

Management agencies also need to focus on prioritizing investment and stimulating investment in the fields of agriculture, fisheries, tourism, processing and manufacturing, and infrastructure for irrigation and rural transport.

Many studies have shown the linkage effects among such fields. Therefore, pushing investment in these sectors will free up the most production capacity for domestic enterprises, mainly small and medium enterprises.

Accounting for 98% of the total number of businesses, what specific support solutions for small and medium businesses in the current period?

- Along with the recommendations mentioned above, the smooth coordination from the central to local levels, and not “pushing responsibility” is a prerequisite for effective programs, projects and schemes to support small and medium enterprises.

Currently, the Law on Supporting Small and Medium Enterprises have been issued, so it is necessary to focus on the rapid promulgation of legal policies and effective enforcement.

Programs, projects and schemes to support small and medium-sized enterprises should prioritize resource allocation at least 10 times higher than in 2021, in order to achieve the necessary "threshold scale" to have a positive impact and spread quickly to the small and medium business community.

In the financial sector, the business community wants reforms in tax procedures for small and micro enterprises in a simple and convenient way. Moreover, the rapid implementation of policies and programs in the 2% interest rate support package with a scale of VND40,000 billion from the bank can pour more capital into recovery. Especially, credit loans for export, agriculture and rural areas, innovation, supporting industries, processing and manufacturing, linkage chains should be a priority.

On the other hand, in my opinion, the management agency should quickly issue a policy to support online purchases and sales specifically for small and medium enterprises. This is to adapt to the drastic and rapid changes of customers and partners from buying and selling goods directly to online in order to help them survive and develop.

Management agencies can also provide support in the form of public procurement for construction bidding packages under VND5 billion and procurement of goods and services under VND3 billion using the budget required for contractors of micro and small businesses.

For bidding packages that require too high scientific and technological capacity or the package price for construction is over VND5 billion and the procurement of goods and services is over VND3 billion, priority will be given to contractors employing subcontractors of micro and small businesses.

Finally, I hope that the authorities create a favorable mechanism (especially the ground and procedures for project approval) to encourage domestic investors and private investors to boldly invest in key projects such as setting up small and micro-enterprise incubation zones and clusters.

These projects have "paved the way” and should be encouraged to be implemented in many policies of the Party and State and most recently the Law on Supporting Small and Medium Enterprises, but so far they have not been implemented.

Thank you very much!