Additional relief packages required to restore economy

Saturday, 2020-09-19 17:33:55
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The Government have implemented many policies to ease difficulties for business activities and support economic recovery. (Illustrative image)
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NDO – As usual, the end of the third quarter is the time when the Ministry of Planning and Investment (MPI) releases the basic figures needed to evaluate the implementation of the socio-economic development plan of a specific year, including 12 basic targets.

According to estimates of the MPI, Vietnam has fulfilled five targets set for 2020, including: the average consumer price index growth rate, capital investment as a percentage of GDP, the poverty reduction rate according to a multi-dimensional approach, industrial parks and processing zones with concentrated wastewater treatment systems meeting environmental standards, and the rate of forest coverage.

In addition, Vietnam is estimated to have exceeded two targets including: the rate of trade deficit compared to total export turnover and the number of hospital beds per 10 thousand people.

Amid the many difficulties due to the impact of the COVID-19 pandemic, Vietnam's economy has not fallen into recession but has managed to maintain positive growth which is an encouraging result.

In addition, Vietnam is ranked 12 out of 66 emerging economies with strong finance, and continues to be assessed by many international organisations as having grown by 2% - 3% in 2020.

However, the above optimistic signals are not strong enough to be the dominant colour of the socio-economic picture of a turbulent year due to the devastation caused by the COVID-19 pandemic.

If we do not continue to drastically implement and build strong, new solutions for the remaining months of the year, it will be difficult to maintain a positive growth rate.

A number of eight-month socio-economic indicators were still low, recovery signals are still not clear and growth drivers remain weak while some social problems are increasing such as unemployment, income reduction and social disorder, among others.

Notably, the impact of the second outbreak of the coronavirus pandemic has exceeded the stamina of many industries and businesses.

Government policies in response to the pandemic to ensure social security, ease difficulties for business activities and support economic recovery have been relatively comprehensive. However, such policies have not been brought fully into play due to delays in institutionalisation and implementation in addition to many complicated conditions and procedures.

The four relief packages including fiscal, monetary - credit, social security and other support packages launched by the Government from the beginning of the year are estimated to have cost VND181.4 trillion (US$7.8 million), equivalent to about 3% of GDP in 2019.

But so far, only the monetary - credit package and the reduction in electricity bills have achieved good results, the rest of the packages have been implemented very slowly.

The COVID-19 pandemic makes the forecast of economic growth extremely difficult as just over three months remain until the end of 2020. It has not been easy to achieve the socio-economic development targets and plans set for 2020.

To gain the highest possible economic growth in 2020, the Government should continue to focus on solving problems, speed up progress and effectively implement current support packages.

At the same time, a number of policies should be formulated to launch additional support packages, helping restore the economy and create growth momentum for 2021.

This relief package needs to be designed on a large enough scale to cover the most vulnerable and hardest hit. In particular, special attention should be paid to ensuring social welfare for the informal labour force.

The disbursement of support packages must be conducted through many channels to help this humanitarian policy to soon come to life and ensure no one is left behind.