Director of HIDS suggests spending up to VND40 trillion to support businesses

SGGP
Vietnam has suffered huge economic losses in the past two years. In 2020, economic growth was expected to be 6.8 percent, but it was only 2.9 percent for the whole year. In 2021, the economic growth target is 6 percent, but the actual achievement will possibly be not higher than 3 percent. It means that within two years, the country has lost about 7 percent of its GDP (GDP is currently about US$343 billion), equivalent to a loss of nearly $24 billion. Mr. Tran Hoang Ngan, Director of the HCMC Institute for Development Studies (HIDS) stated.
Director of HIDS suggests spending up to VND40 trillion to support businesses ảnh 1 Mr. Tran Hoang Ngan, Director of the HCMC Institute for Development Studies. (Photo: SGGP)
The budget revenue of Vietnam has decreased by about VND150 trillion in the past two years. In Ho Chi Minh City alone, the two-year loss accounts for about 50 percent of the whole country, or about $12 billion, and budget revenue drops by about VND70 trillion. Therefore, in the coming time, the Central Government, provinces, and cities need to join hands soon to resume disruption caused by the crisis because they increase costs and commodity prices and do not ensure the labor supply.

Regarding public investment, the country has disbursed more than 47 percent, or VND216.5 trillion this year. It is expected that by the end of January 31, 2022, the remaining 53 percent cannot be disbursed completely. Public investment is a driving force for motivation, a prime foundation to attract social investment in infrastructure, especially health infrastructure, that is "craving" for projects.

In HCMC alone, one Vietnamese dong of public investment capital attracts ten Vietnamese dongs of social investment capital. Therefore, it is necessary to solve the problem of public investment to attract social investment capital. Mr. Tran Hoang Ngan, Director of the HCMC Institute for Development Studies (HIDS), proposed that the National Assembly extend the disbursement of public investment capital of 2021 to the end of 2022, instead of January 31, 2022.

Businesses have been facing many difficulties, with loan interest rates at 6-8 percent, even 9 percent. With such an interest rate level, it is difficult for them to recover. Mr. Ngan suggested that the Government spare large enough resources of about VND20 trillion-VND40 trillion to help businesses. With this amount of money, it is possible to support an outstanding balance of about VND1 quadrillion, accounting for 10 percent of the total outstanding balance of VND10 quadrillion, focusing on sectors that suffer the most, such as tourism and aviation, and supporting the development of the digital economy and digital transformation.

By Manh Hoa – Translated by Gia Bao

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