01-Sep-2021 Intellasia |
In an interview with Nhan Dan, minister of Industry and Trade Nguyen Hong Dien underlined the need for bold and focused measures in the final months of 2021 in order to curb the pandemic and facilitate enterprises in stabilising their production and business.
Q: How has the COVID-19 pandemic affected business operations in general and industrial production and exports in particular?
A: The current outbreak is the most serious in Vietnam so far, with large case numbers and a wide scope, adversely affecting almost all economic sectors. The pandemic has penetrated deep into industrial parks, first in Bac Ninh Province and Bac Giang Province in the north and then spreading to the south, including HCM City, Binh Duong Province and Dong Nai Province, which are major industrial hubs with significant contributions to Vietnam’s export revenue.
Many enterprises in such localities have a high worker density and most of their employees are migrant workers. With inadequate infrastructure and insufficient financial resources to afford worker sleepovers, many have had to close temporarily.
Enterprises are also facing difficulty in the circulation of input materials and final products due to bureaucracy and inconsistent pandemic prevention rules between localities, while the characteristic of industry is the connection of production by chains irrespective of administrative borders. As such, difficulty in the circulation of goods could result in further disruptions to supply chains.
As in previous years, it is now an important production time to meet the end of the year orders for the US and EU markets, so the fact that the pandemic has yet to be brought under control is a major hurdle to enterprises’ ability to fulfil orders.
Furthermore, enterprises are facing rising input costs due to higher transport and warehouse fees.
Q: What do you think about the chances of realising the targets assigned to the ministry in 2021? Besides the challenges, are there any opportunities for industrial and export growth in the coming months?
A: The index for industrial production in July grew by only 2.2 percent against the same month in 2020, the lowest since the start of the year. Exports also slowed down with a modest rise of 0.8 percent against the month earlier and difficulties are expected to continue in the coming months.
The COVID-19 pandemic is still developing in a complicated and unpredictable manner, causing the prices of some input materials to go up and many enterprises to experience stagnation. Such factors are making it very difficult to realise the industrial growth target of 8-9 percent and the retail and service growth target of 7-8%.
After conducting a thorough review of each sector, we are still able to see some factors that are favourable for production and export growth in the coming months. Specifically, exports in July dropped slightly against June, but the aggregate figure for the first seven months still rose 26.2 percent over the same period last year to reach $186.4 billion.
In the meantime, there is still large room for export growth by utilising free trade agreements. The demand in major economies is recovering, offering an opportunity for Vietnam to bolster the export of consumer goods such as clothes, footwear and electronic devices. There is also an opportunity for the industrial sector to rebound strongly if they are provided with timely government support.
Furthermore, the National Assembly has adopted a resolution on the 2021-2025 public investment plan with a total budget of VND2.87 quadrillion (more than $125 billion), which is expected to give a strong boost to key industries such as steel, mechanics and building materials.
The government is also drafting a resolution on enterprise support and development for the 2021-2025 period as well as some urgent measures to remove difficulties for enterprises amid COVID-19.
Q: What breakthrough measures are the ministry planning to carry out to ensure that the set missions will be fulfilled?
A: Successfully bringing the pandemic under control in key business and manufacturing centres is crucial to macroeconomic stability and economic recovery. Therefore, the measures in the final months of the year must be aggressive and focused.
First of all, it is necessary to ensure the supply of essential goods for the people, especially those in pandemic-hit regions. The prices of essential goods will be watched closely so that prompt measures can be taken.
Secondly, the ministry will concentrate on addressing difficulties to maintain the supply and production chains. It is now extremely important to keep orders and maintain supply chains for manufacturing and trade. Therefore, the ministry will continue taking bold measures to ensure the circulation of goods and labour; instruct local authorities to organise production safely in line with pandemic prevention guidelines; and introduce concrete measures to restart factories that meet safety requirements.
Thirdly, the ministry will continue to monitor the domestic and international markets closely and take prompt actions to address obstacles and boost exports. And finally, the ministry will seek to expand the domestic market, promote e-commerce, and organise trade promotion activities so as to create stable sales channels.
Thank you very much.
Category: Business, Vietnam
Article source: https://www.intellasia.net/bold-measures-needed-to-remove-difficulties-for-enterprises-industry-and-trade-minister-953393