Helping Vietnam Businesses Through A Difficult Time

Many businesses have asked the Government to help them with economic stimulus packages similar to the one it offered three years ago.

Over the past ten months, more than 41,000 businesses were dissolved or had to suspend production and by the end of September inventories remained high, accounting for 50 percent of total production volume in some industries like cement, steel and plastics.

Nguyen Minh Quang, General Director of the Hanoi Infrastructure Investment and Development Company, says many businesses are finding it hard to realize their feasible projects for lack of capital coupled with slow progress in site clearance. Those operating in Hanoi are confronted with bad debts and high inventory levels in the face of low purchasing power, he adds.

Others are waiting for the Government to adopt incentive policies, extend tax payment deadlines, reduce tariffs, and increase bank liquidity.

The Chairman of the Vietnam Small-and-Medium-Sized Enterprises Association (VINASME), Cao Si Kiem, says it is essential to identify the obstacles to national economic development and map out appropriate measures to facilitate business operations.

He proposes drastic measures to settle bad debts, reduce inventories and develop long-term plans in minute detail.

Phung Quoc Hien, Chairman of the National Assembly Finance and Budget Committee, says "we need to have a more optimistic attitude towards the national economy so that we can get out of the woods step by step".

To deal with bad debts, he says it is necessary to increase the purchasing power through sales and marketing campaigns. In addition, banks should offer local businesses preferential loans.

The Government has identified nine groups of solutions to stabilize the macroeconomy, control inflation and remove obstacles to business operations. Accordingly, businesses, primarily agricultural producers and exporters, will enjoy low-interest loans as funds will be set up to help them through a difficult time.

In order to reduce public spending and improve the investment climate, the Government is urging ministries, agencies and local administrations to support cash-strapped businesses, especially those involved in the real estate sector.

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