Laying the foundation for fast and sustainable growth

The COVID-19 "variable" has caused the beginning of the five-year socio-economic development plan for the 2021-2025 period to face difficulties and economic growth in the transitional year of 2021 is unlikely to meet the set targets. This is a big challenge for Vietnam in order for the nation to reposition its role in the new world order.

Enterprises the focus of policy

Permanent Member of the National Assembly Economic Committee Phan Duc Hieu, who contributed ideas to the 2021 socio-economic development report to the National Assembly, emphasised the motto of "saving enterprises like sick patients". Hieu noted it is crucial to ensure the smooth circulation of goods and production materials, while preventing the prolonged congestion of goods during social distancing according to Government Directive 16.

In the immediate future, there must be mutual use between localities of the negative test result strategy for truck drivers towards forming a transparent information channel about anti-epidemic requirements from central to local level so that people and businesses can actively implement it.

Hieu added that it is important to stop the promulgation of regulations that increase costs for enterprises.

Notably, the fourth outbreak of the COVID-19 pandemic has greatly increased the operating costs of enterprises, thus the Government needs to consider tax exemptions and reductions instead of tax extensions and rescheduling.

The Vietnam Chamber of Commerce and Industry (VCCI) proposed the National Assembly build and issue a master resolution on policies in support of businesses and people facing difficulties due to the COVID-19 pandemic in the 2021 – 2025 period and organise several monitoring programmes to evaluate and improve the effectiveness of such support packages.

The VCCI also suggests the Government develop policy packages to support enterprises to recover and expand business and investment for the new period. Accordingly, it is necessary to provide support to the right subjects with separate support policies for businesses directly affected by the pandemic such as those in tourism, transportation, textiles, footwear, education and training and small and micro enterprises.

Amid the difficulties facing enterprises, Finance Minister Ho Duc Phoc said that the ministry is building a new support package on taxes and fees for enterprises to a scale of about VND24 trillion (US$1 billion) and will soon submit these to the Government and the National Assembly Standing Committee.

Average GDP in 5 years about 6.5% to 7%

In formulating the socio-economic development plan for the 2021 - 2025 period, the Government sets the general goal of ensuring fast and sustainable economic growth on the basis of enhancing macroeconomic stability, promoting science, technology and innovation, and bringing into full play the country's potential and advantages.

The Government also strives to achieve an average economic growth rate of 6.5% to 7% in the next five years, higher than the five-year average in the 2016 – 2020 period.

Minister of Planning and Investment Nguyen Chi Dung emphasised that the Government is determined to achieve the set targets at the highest level while actively preparing plans to promptly adapt to the fluctuations of the actual situation.

Twelve groups of specific tasks and solutions have been set out in order to realise these goals including the implementation of the “dual goals” of both preventing the pandemic and promoting socio-economic development and the urgent implementation of the vaccination strategy to achieve herd immunity by the end of 2021 or the beginning of 2022.

The solutions also include the building of a synchronous and complete institution, including the socialist-oriented market economy and the promotion of economic restructuring in association with renovating the growth model, improving productivity, and competitiveness.

Building an independent and self-reliant economy with high adaptability and resilience is also one of the most important tasks set out by the Government.

However, economic experts say that short-term operating solutions must be prioritised amid the unpredictable COVID-19 pandemic and the Delta variant.

Dr. Nguyen Minh Cuong, chief economist at the Asian Development Bank in Vietnam, noted that the results of pandemic control, including the speed of the vaccination strategy and vaccine production will decide the recovery and development of Vietnam's economy in 2021 as well as in the following years.

Therefore, spending on healthcare is a top priority at this time in order to improve the capacity to prevent and control the pandemic. It is also necessary to have a plan to spend investment capital on anti-pandemic activities for the whole 5-year period while increasing spending on the purchase and production of vaccines.

The view is also shared by Phan Duc Hieu, in terms of discussing socio-economic development in the coming period. He said that the current situation is very different and Vietnam may not reach 100% of the target assigned by the National Assembly in 2021, but that it can still create room and motivation for fast and sustainable growth for the next few years. And that is the solid foundation for the country's development in the new period.