HCMC strives for economic recovery

There are just more than two months left until the end of 2020 – the year with too many fluctuations due to the Covid-19 pandemic. With much effort, Ho Chi Minh City still managed to maintain the growth rate in the first nine months of the year, with six out of nine service industries posting good growths, which is a foundation for economic recovery and growth in the last months of the year.
After the first social distancing from April 1 to 15, which helped to successfully prevent the spread of the Covid-19 pandemic, on May 5, the People's Committee of HCMC immediately held an online seminar on "Restoring and developing the economy of HCMC in 2020”, under the chairmanship of the leaders of the city, representatives of departments, research institutes, economic experts, associations, and key enterprises, to discuss and propose solutions to both maintain the results of the prevention of Covid-19 and focus on economic development.

Having determined enterprises as the core and the motivation for economic development, the city has carried out several programs to support and create conditions for enterprises to promote production and business activities. Accordingly, it held many meetings and worked directly with most associations and enterprises in many fields to listen, summarize, and report to the Prime Minister on policies to continue supporting enterprises, workers, markets, and credit. Of these, the important issue is not only to provide more credit for active enterprises but also to charge off debts for enterprises directly affected by the pandemic. On the other hand, the city has continued to join hands with enterprises to stabilize markets, access new markets, better exploit the domestic market, organize to connect supply and demand, connect production with consumption channels in the city, and at the same time strongly deploy public investment projects, supporting the real estate market to develop healthily.

In June and July alone, HCMC had held many trade promotion activities and trade fairs to stimulate domestic consumption. For instance, the program "60 days of golden promotion" with the participation of many enterprises offered discounts and gifts to attract customers. As a result, 1,242 enterprises registered 1,745 promotional programs with a total value of more than VND146 billion. In July, the municipal People's Committee kicked off the program on "Stimulating consumer demand in 2020" in the form of a trade fair connecting with manufacturing and distribution enterprises. The conference with a scale of 650 booths participated by 486 enterprises from 29 provinces and cities nationwide displayed and introduced thousands of specialties and key products of many regions. Besides selling products, enterprises successfully connected, with 172 memorandums of understanding and principal contracts signed between suppliers and buyers.

From September 24 to 27, the city’s Department of Industry and Trade continued to hold a conference to connect the supply and demand of goods in 2020 with the participation of more than 1,000 enterprises from 43 provinces and cities. Here, enterprises from HCMC and other cities and provinces signed 595 supply and consumption contracts.

Currently, many activities to support enterprises of the city have been carrying out online. Typically, the Center for Trade Promotion and Investment of Ho Chi Minh City (ITPC) connects online many programs with different topics, creating more playgrounds for enterprises through groups on Viber and its website. This approach also urges the digital transformation of enterprises in approaching the global market, accelerating the world to be flat faster in the process of economic integration.

With such effort, although the economy of the city has not regained its high growth momentum and the gross regional domestic product only increased by 0.77 percent in the first nine months of the year, there were some bright spots. Of which, export turnover rose by 4.9 percent over the same period. Total retail sales of goods and service revenue showed signs of rapid recovery as the second quarter saw a decrease of 11.5 percent, while it was just 0.1 percent in the third quarter. The types of online businesses, e-commerce, and non-cash payments have strongly developed, creating a solid foundation to promote the development of the digital economy and digital transformation of the city.

Mr. Tran Tri Dung, Head of the Department of Trade Administration of the city’s Department of Industry and Trade, said that from now to the end of the year, the department would promote the connection between banks and enterprises, helping enterprises to have the chance to borrow capital with low-interest rates to invest in the production of essential goods. Besides, to motivate commodity rotation, clear inventory, and recover capital for reproduction, the department would organize consumption promotion fairs, promotions, and exhibitions of supporting industry products, and conferences and seminars to answer questions about newly-signed free trade agreements, thereby helping enterprises to make good use of opportunities and increase exports of goods.

To maintain purchasing power amid the current difficult situation, modern distribution networks in the city have launched several promotions, at the same time, stimulated the demand for goods through channels, such as telephones, websites, and apps, and support the delivery of goods. The timely change in sales methods has contributed to helping enterprises to improve revenue and draw consumers back.

At the dialogue on “Recovering and developing the economy of Ho Chi Minh City in the context of complicated developments of the Covid-19 pandemic” held on October 3, Chairman Nguyen Thanh Phong of the municipal People’s Committee said that HCMC has returned to the new normal pace of life. This is a huge achievement and the effort of both the political system and citizens. However, the downside of the prevention of the Covid-19 pandemic has heavily affected all aspects of the city's socio-economic status. Of which, the second wave of Covid-19 sent the city’s economy back into difficulties when it had just begun to recover. Amid that context, there were still more than 6,000 enterprises resuming operations and more than 30,000 newly-established enterprises with registered capital of VND696 trillion. Of these, 579 enterprises have registered capital of over VND100 billion each.

According to Mr. Phong, the city’s leaders will soon organize working sessions with each industry association to listen to their opinions and promptly remove difficulties for enterprises. Contrariwise, enterprises need to actively make suggestions to the city and the Government in the promulgation of policies to promote economic development, as well as support enterprises better in the new normal condition.

Dr. Tran Du Lich, a member of the Prime Minister’s Economic Advisory Group, also said that the economy is facing many difficulties, but there are still opportunistic factors of the post-Covid-19 period. What the country has done to fight against the pandemic and protect the lives of people will contribute to making Vietnam more attractive in the fields of investment and tourism in the eyes of foreign investors. For domestic enterprises, they must restructure both input and output markets to avoid risks and participate in the value chains to survive and develop.

By Thuy Hai – Translated by Gia Bao

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