“Overview of the business performances of Vietnamese enterprises in the first 6 months of 2013 was evaluated to be worse than that of the last 6 months of 2012. However, the firms feel that some business indicators of the last 6 months of 2013 will be better. These comments come from the VCCI’s quick survey on Vietnamese businesses nationwide in the first 6 months of 2013.
A pile of difficulties
According to the Ministry of Planning and Investment of Vietnam, the business activities in the first 6 months of 2013 remains tough but exposing first positive changes. Total businesses suspended in the first half have been 26,324.
VCCI’s survey conducted in late May and early June of 2013 showed that the significant positive changes include accessibility to market information, better technology, favourable facilities and infrastructure (water and electricity), better sewage treatment, better transportation infrastructure (roads, airports), higher responsibility and capacity of public officials during the implementation of legislation, higher quality of legal frameworks, policies and administrative procedures, etc. However, the most concern is that the return on investment per unit has been declined and the average price also fells sharply.
Regarding inventory, 69.2 percent of enterprises surveyed responded that inventory is indeed a big business concern during this period, which is lower than 73 percent of total number of enterprises surveyed in the last months of 2012. Even so, it shows that this improvement is not significant and the output is still an unsolved problem facing the businesses now. The efforts of businesses to find solutions to overcome this problem simply focus on seeking new export markets that 49.9 percent of businesses are applying, and reducing the selling prices and promoting other promotion activities that 28.7 percent of businesses are applying, and selling their products at rural areas that only 8.9 percent of businesses are applying.
According to a survey conducted in December 2012, 74.9 percent of businesses made banking loans at the interest rates of above 12 percent while this number is only 48.5 percent at the first 6 months of 2013. The results show that the reduction of interest rates has created good conditions for businesses to access to capital through at the interest rate lower than 12 percent. There are 73.4 percent of businesses having banking loans at the interest rates of 10 percent, which is accepted by 23.4 percent of businesses and afforded by 69.9 percent of businesses to run their businesses in long periods. However, this indicates that there exist 30.1 percent of businesses withstanding this interest rate in long term.
Besides the difficulties of interest rates and other borrowing conditions to meet the long-term demands for businesses loans are still ongoing. The over-reliance on real estate as main collateral is main challenge to the banks to settle bad debts. This also makes the borrowing conditions at the banks become increasingly difficult. The current loans are used as collaterals for other loans began popular; however, the use of other forms, such as overdrafts and credit guarantee fund, is still very limited.
According to the businesses’ evaluation, the solutions of the Resolution 01 and 02/NQ-CP to help businesses overcome difficulties in production, support for market and settle bad debts have not got the rid of the businesses’ concerns about the inventory. It cannot deny that the positive effects of the policy measures through tax (exemption, reduction and extension of tax collection); however, these measures are not enough to help the businesses to revive after a lot of difficulties.
The survey also reflects that the business community is particularly concerned about the lack of plans to enact policies relating to increased gas prices and increased minimum wage in the current difficult conditions. The administrative procedures and mini licenses for business activities appear more and more, especially in areas such as transportation and stamping on building materials.
Needing specific policy
According to VCCI, to support the business community to overcome difficulties, the solutions of Resolution 01 and Resolution 02 of the Government should be implemented extensively and intensively. VCCI also proposed that there should be a comprehensive coordination in implementing policies and the policies must be specific to the business in accessing market and clearing inventory.
In addition, it is necessary to create favourable conditions for enterprises to develop their businesses to meet the loan-making requirements and promote restructuring of the state-owned enterprises to improve the performance of this sector. In particular, the enhanced performance of state-owned enterprises will have a significant impact on addressing inventory and bad debt of the economy so the government may sell shares in some state-owned enterprises that the government does not need take dominance over; the government also invest in a number of sectors (i.e. health and education) in the form of public-private partnership; besides, it is necessary to strengthen trade promotion activities by providing information and supporting businesses to seek for potential markets. Other measures should focus on protecting the development of domestic markets from smuggling, counterfeit goods, poor quality goods and building technical barriers.
For enterprises, VCCI recommended that, businesses need to focus on improving and expanding market access to the new and potential markets and building an effective distribution channel. In addition, businesses should continue to promote the corporate restructuring, which focuses more on improving the quality of human resources, scientific and technological applications in business to improve labour productivity and quality and reduce production costs, etc.
For banks, it is necessary to accelerate the restructuring of debt, bad debts, focus on credit interest for the Small and Medium Enterprise sector and the formation of new products and supporting services to match with the characteristics of the SMEs and continue to reduce the interest base to stimulate demand for loans.
Anh Mai
Đăng ký: VietNam News
