In recent talks with VietNamNet, Dr. Nguyen Duc Kien – Head of Economic Advisory Group to the Prime Minister – said the pandemic battle and mass media communications have to be adjusted to support economic development.
What is your view about our economic situation under the impact of policies to fight pandemic?
In the first two months of this year, our production has been doing well, trade surplus remains stable from FDI enterprises. Domestic enterprises still suffer a deficit. Currently, the FDI enterprises account for more than 76% of national export. It has helped to stabilize production but also reflected the slowness and weakness of domestic enterprises in the global value chain.
Stock investors have earned high profits since the last months of 2020.
In 2020, the financial sector has done well in spite of the pandemic. So have labor intensive industries such as textile, Samsung, etc. But employees of small and micro businesses and of family business have been affected due to the lack of social security policies.
Drastic changes are needed.
Dr. Nguyen Duc Kien: the world has set up the business of vaccines. If we don’t change, it’ll be difficult for us.
What do you think about the economic stimulus package under consideration?
Statistically, by May 2020, about 32 million employees were affected. The government could not support them for the whole pandemic time. They have had to spend their savings. Many of them ran out of savings. Right where I live, there are about 200 people who lost their jobs due to restaurant closures. But they still stay in Hanoi to look for different jobs.
It is necessary for social security policies to consider the benefits of workers in 5 million family businesses and 8 million farm households. We haven’t admitted the reality of business bankruptcy so the workers haven’t been able to receive social security benefits when there is a bankruptcy. The government should bear the responsibility due to its unsuccessful management.
Even though approved in April 2020, Resolution 42 for supporting businesses and workers started to be realized in June and has been amended a couple times since. In short, we have to push up everything we planned. We are not short of solutions but our policy realization has failed.
What do you think about the coming time when we have to develop the economy as well as fight against the pandemic?
The government tasks in the first six months are to focus more on support measures for business than on public investment as in 2020. Reduced interest rates in March have shown the participation of banks in the process.
One the other hand, the world demand has risen. The “vaccine” economy has shaped. Vietnam will be in difficulty if unchanged. In the first two months, tourism reduced by 99% compared with the same period of 2020.
Without a drastic change, we will lose another season starting in May. Tourism and supporting industries account for 10-15% of GDP. It would take ages for the economy to recover if we lose another 15%.
COVID-19 vaccinations in Ho Chi Minh City on March 8. (Photo: Thanh Tung)
There is a huge impact of pandemic measures on local business and people as seen in Hai Duong. What do you think about it?
Recent Covid-19 outbreak in Hai Duong has shown a huge economic loss. The pandemic continues to negatively affect farmers and low-income workers. For the past year, we have seen but not yet fully understood the tragedy caused by the pandemic until the recent agricultural loss in Hai Duong. The government has to find a support solution within its tight budget and weak management system. However, we have an absolutist thinking style. We have not yet admitted our mistakes. The people in charge of providing financial support have to check over and over and ask permission from their higher managers to avoid their own responsibilities when something goes wrong and discovered by the media. This way of working has slowed down the financial support distribution to beneficiaries.
Stay alert and keep calm
How do we balance the pandemic fight and economic development?
As I stressed earlier, we have an all-or-nothing thought. Let’s look at the difference in the pandemic treatment of Vietnam and other countries.
In European countries and America, anyone positive with Covid-19 is first self-isolated at home and follows doctors’ instructions. In Vietnam, he or she has to go to hospital.
We are too scared of Covid-19. We should stay alert and keep calm to create a new normal. We should change from what we learnt in the past year. We should fully understand the spread and infection rate of the virus to adopt a proper treatment.
In Europe and countries with more advanced healthcare systems, it is considered an epidemic and a highly contagious flu. If we look at it that way, we could find a solution to combine socioeconomic benefits with pandemic fight.
The past year strategy needs to be adjusted. The outbreak in January 2021 caused loss for business and people. It will take longer for economic recovery. The state budget will be tighter.
Whenever there is a positive case, local authorities apply a lockdown on that district or even the whole province, causing an unpredictable situation for people. Do you think this should be adjusted?
Covid-19 solutions should be different from mass media communication. It is necessary to carry out more effective solutions apart from quarantine. Though it is right for travelers from abroad to be quarantined in government managed isolation, self-isolation at home should be applied for community cases. The media should encourage people to understand and cooperate with the government.
At the same time, we should have a new look at the vaccine economy. Vaccine now plays an economic and political role. Currently, our economic, political and diplomatic capacity is not strong enough to help us to participate in the global vaccine chain. We should produce the vaccines on our own and apply solutions as other countries do in emergencies (America applied war-time rules for vaccine production).
More importantly, the government should purchase domestic vaccines at two-thirds of the price of international vaccines to encourage domestic manufacturers and scientists.
There is also a constraint in our PCR testing capacity. In the recent outbreaks in Da Nang and Hai Duong, other localities joined in to accelerate testing. The large-scale testing cost is huge, which is unable to be covered by the state budget. In the coming time, the production and utilization of quick test kits should be privately funded. The testing capacity should be extended too.
VN-Index drops with trade value surges
Vietnam’s benchmark VN-Index fell 0.7 percent to 1,241.81 points Friday with trading value hitting a 10-session high.
The index stayed in the red throughout the day, dipping to around 1,231 points in the early afternoon before climbing and ending with a near 9-point fall. This is its biggest plunge in the last seven sessions.
Trading value on the Ho Chi Minh Stock Exchange (HoSE), on which the index is based, rose 10 percent to VND22.4 trillion ($975 million), the highest of the past 10 sessions.
The VN30 basket, comprising the largest 30 capped stocks, saw 22 tickers in the red, with VCB of state-owned lender Vietcombank and VNM of dairy giant Vinamilk the biggest contributors to the drop of VN-Index.
VCB fell 2.3 percent. The ticker has been going sideways around the VND100,000 level since February after climbing to a new historic peak of VND107,000 in early January.
VNM dropped 2.9 percent to a nine-month low. The ticker continued its downward trend that began in January, having lost 25 percent in four months.
VHM of real estate giant Vinhomes fell 1.6 percent to its lowest level since March 30.
BID of state-owned lender BIDV lost 1.5 percent, having fallen nearly 17 percent since its mid-January peak.
On the winning side, HPG of steelmaker Hoa Phat Group rose 2.4 percent, and CTG of state-owned lender VietinBank gained, 2.1 percent. They were the top tickers pushing up the VN-Index this session.
Foreign investors were net sellers for the fifth session in a row to the tune of VND330 billion, with the strongest pressure on VPB of private lender VPBank and HPG.
The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, fell 0.44 percent while the UPCoM-Index for the Unlisted Public Companies Market dropped 0.41 percent.
Inflation fears begin as economy recovers
HCM CITY — The cost of raw materials used in many industries have risen sharply in the last few months, putting pressure on the prices of many essential goods.
Instant noodles, seasoning, cooking oil, and others have seen prices increase by 7 -10 per cent since the end of 2020.
The price of meat and poultry has increased by 10 -15 per cent.
Nguyễn Thị Trâm, a pig farmer in Đồng Nai Province’s Thống Nhất District, said the price of a 25kg bag of bran has increased from VNĐ245,000 in October last year to VNĐ295,000 now.
Prices of raw materials used to make feed, such as corn, rice bran and fish flour, are also rising.
But farmers cannot hike poultry price since they have to compete with cheap imported products.
Globally, the prices of raw materials and fuels are expected to rise again as COVID is gradually controlled, vaccination is done on a large scale and production and trade recover.
Dr Nguyễn Ngọc Tuyến of the Academy of Finance predicted the consumer price index (CPI) to rise more than last year but remain below 4 per cent for the year, the target set by the National Assembly.
Nguyễn Anh Tuấn, director of the Ministry of Finance’s price management department, warned there would be pressure on prices this year because of the rise in fuel prices.
But a spokesperson for a large supermarket chain in HCM City said the price of each item would be carefully considered before any increase is made, and essential goods are not expected to be affected much in general. —
FTA providing impetus for Việt Nam – Chile trade
HÀ NỘI — Despite there being no commitments on services and investment in the Việt Nam – Chile Free Trade Agreement (FTA), the pact has boosted trade and economic ties between the two countries.
The view was shared at the fourth meeting of the Việt Nam – Chile free trade council, which was held online and chaired by Deputy Minister of Industry and Trade (MoIT) Đỗ Thắng Hải and Vice Minister of Trade at Chile’s Ministry of Foreign Affairs, Rodrigo Yanez on Thursday.
According to the Ministry of Industry and Trade’s European – American Market Department, the two countries have enjoyed robust relations over the years.
Despite the difficulties posed by the COVID-19 pandemic, two-way trade in 2020 topped US$1.28 billion, up 4.43 per cent year-on-year and 2.5-fold higher than the figure recorded in 2013, prior to the FTA coming into effect.
Chile is one of Việt Nam’s four largest trade partners in Latin America, while Việt Nam is the largest trade partner of Chile in ASEAN.
Goods trade in the first four months of this year rose 15.3 per cent year-on-year to $401.1 million, with Việt Nam’s exports standing at $321.3 million, up 11.8 per cent.
Both sides recognised the efforts made to implement the FTA.
The subcommittee for trade in goods discussed matters regarding tariffs and origin of goods and considered the application of electronic certificates of origin to simplify procedures for exporters in both countries.
Meanwhile, the subcommittee for hygiene and phytosanitation worked on import procedures for several agricultural products.
Việt Nam has begun risk analysis on Chilean kiwi fruit while the South American country said it will begin analyses of Vietnamese rambutan in July.
Both agreed to step up measures to help Vietnamese and Chilean businesses capitalise on the Việt Nam – Chile FTA as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after it is ratified by Chile. —
VN-Index drops with trade value surges
Popular train routes suspended amid fresh Covid-19 outbreak
Things to consider when choosing an international school
Veteran V. League coach passes away
Lockdown at Hanoi cancer hospital catches patients off guard
Quảng Nam Province praised for improved breastfeeding statistics
Conditions in place for offshore development
Citigroup to exit consumer banking in Vietnam
Singaporean investor to operate large ecotourism project in Vietnam
VIETNAM BUSINESS NEWS APRIL 20
Da Nang museums attracting domestic visitors with free entry policy
Nom, nom, Việt Nam – Episode 76: Fried cheese sticks
In Sa Pa, ethnic children forced to peddle on streets in bitterly cold night
Nom, nom, Việt Nam – Episode 74: Huế beef noodle soup
New pedestrian mall to become new hotspot in HCM City
Business1 day ago
BIM Land raises US$200 million via debut issuance of Singapore-listed bonds
Entertainment-Sports6 days ago
“Photo Hanoi ‘21” cultural events bring a month of photography to the capital
Life5 days ago
A cake hawker from belarus
Business2 weeks ago
Companies complain about new academic requirements for foreign execs
Society2 weeks ago
VIETNAM NEWS HEADLINES APRIL 23
Business2 weeks ago
VIETNAM BUSINESS NEWS APRIL 22
Entertainment-Sports6 days ago
Vietnamese gamers among high esports earners
Business4 days ago
VN businesses pour money into advertising on social networks