MOIT VIETNAM | Supporting small and medium enterprises to overcome the Covid-19: a big gap from policy to reality

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Supporting small and medium enterprises to overcome the Covid-19: a big gap from policy to reality

8th December 2020 post by MOIT Vietnam

The Covid-19 pandemic had a strong impact on enterprises (DN), especially small and medium enterprises. The Government's policy response is quite reasonable, policy policy is correct but policy design is problematic, policy implementation is not really smooth. Needs to narrow the gap from policy to practice in supporting small and medium enterprises to overcome a pandemic is a problem posed by experts.

On the morning of December 8, the Vietnam Chamber of Commerce and Industry (VCCI) and the United Nations 

Development Program held a policy forum with the theme: “Supporting small and medium-sized enterprises affected by the Covid-19 epidemic: Narrow the gap from policy to enforcement ”.

There are about 5,000 enterprises / month had to leave the market

Mr. Vu Tien Loc - Chairman of VCCI - said that the negative impact of Covid-19 epidemic caused the business community to suffer heavily, and business activities stagnated. According to data, by November 2020, there were about 15,000 enterprises completing dissolution procedures, only up 3.1% over the same period in 2019, but the number of enterprises had to stop operating and leave the market up to 44 thousand enterprises, an increase of 60% over the same period in 2019. Thus, on average, over 5,000 enterprises in Vietnam have to leave the market each month. This is a record high ever and entails a lot of consequences, affecting the jobs and income of tens of millions of people.


In the difficult context, the government urgently issued many policies to support enterprises and focused on small and medium enterprises. In which there are some basic packages such as: 250,000 billion VND support package on credit support; 62,000 billion VND on social security; 16,000 billion VND to support businesses to pay salaries to their employees… Some of the policies have had a good effect, but also the policy department is not designed to really follow the reality of life. 

However, the policy implementation still has many concerns. “The Government's policy response is quite reasonable, policy policy is correct but policy design is problematic, policy implementation is not really smooth. Our policies have to be implemented in a state of war or new normal, not the normal state of yesterday but in reality the administrative procedures are still troublesome. ”, Mr. Vu Tien Loc spoke.
The implementation results of the policy are quite slow, until October 2020, no enterprise can borrow money from the 16 trillion dong support package, up to November 27, there are 75 enterprises borrowed from this support package, this result noteworthy but only put into practice after the Prime Minister promptly issued Decision 32/2020 / QD-TTg dated October 19, 2020 amending Decision 15/2020 / QD-TTg dated April 24, 2020 of the Prime Minister on the implementation of policies to support people facing difficulties caused by the Covid-19 pandemic.

There is a need to close the gap between policy and enforcement

Reality shows that the enterprises that are most severely affected by the Covid-19 epidemic in Vietnam are small and micro enterprises, enterprises operating in agricultural fields and in difficult areas. This is a group of weak businesses that are disadvantaged. Due to the difficulty of resources, this group of businesses often encounter difficulties, especially in timely grasping support policies from state agencies, in order to take advantage of opportunities to maintain production and business activities. 


Knowing about policies to support from the state, however, according to Mr. Le Viet Cuong - Director of Vuon Art Cooperative (Hanoi), up to now, businesses have not been able to access capital and support packages. Legal procedures are a huge barrier for micro-businesses like Bon Art to access. The certification by the local government authority where the business is located is also a barrier.
According to survey data from the National Economics University and VCCI, 78% of surveyed enterprises have not received support from the Government, and a relatively high proportion of enterprises do not know these policy packages. Thus, the policy is great, but the policy design has not really reflected the life breath and the policy implementation is not smooth with some solutions that the Government has issued.


Appreciate that the Government has issued Resolution No. 154 / QD-TTg to amend and supplement Resolution 42 / QD-CP and Decision 15/2020 QD-TTg on implementing policies to support people, businesses meet Difficult to translate Covid-19, Mr. Dau Anh Tuan - Head of Legal Department (VCCI) said that it is necessary to promptly grasp the shortcomings and problems in the implementation of the recent support packages to make adjustments fit. In addition, it is necessary to design the forms of support that should be suitable for businesses in each industry, field and stage. Special priority is given to small and medium enterprises because of the poor resilience of this type of enterprise. It is necessary to extend the time of support packages so that enterprises have enough time to complete the deferred and extended amounts in the past time to restore production and business. The supporting policies should be clear and transparent. At the same time, it is necessary to relax a number of conditions to expand beneficiaries and minimize the procedures and processes to access support packages, especially financial proof.

Mr. Vu Tien Loc recommends that it is necessary to independently review and reassess the implementation effectiveness of the supporting policies as well as consult with the affected objects to ensure the feasibility of promulgated policies. There is a need to strengthen collaborative efforts between government agencies and the business community in both shaping policies and the organization of policy implementation.