Restoring the Economy and Developing the Supply Chain in the New Normal

8:38:02 AM | 2/24/2022

This is the theme of the Vietnam Business Forum (VBF) 2022 that recently took place in Hanoi. The event was jointly organized by the VBF Alliance Board of Directors, the Ministry of Planning and Investment, the World Bank (WB) and the International Finance Corporation (IFC).

Three strategic breakthrough stages

At the forum, Prime Minister Pham Minh Chinh said that Vietnam will continue to perform tasks in the context of the "new normalcy" in 2022. The country launched the socioeconomic recovery and development program along with a master program on epidemic prevention and control built on accumulated experience consisting of three pillars of quarantine, testing, treatment, 5K+vaccine+drugs+technology+public awareness formula and other measures to strengthen healthcare capacity.

The socioeconomic recovery and development program of VND350 trillion (about over 4% of the GDP) will be directed for major solutions such as economic reopening, healthcare capacity building, disease prevention and control; for social security and employment; business recovery support; important infrastructure development investment; institutional reform, administrative reform and business investment environment improvement, he said.

Defining that internal resources (people, natural resources and historical and cultural traditions) are basic, strategic, long-term, decisive; and external resources (institutional support, finance, technology, governance and human resource qualifications) are important and innovative, Vietnam is focusing on three strategic breakthrough stages: Institutions, infrastructure and human resources.

Regarding institutions, according to the Prime Minister, Vietnam will focus on amending and supplementing the legal system, especially new practical issues that need to be adjusted to remove obstacles in mechanisms and policies. Regarding infrastructure, the country will concentrate on strategic infrastructure, especially transport infrastructure, digital infrastructure and climate response infrastructure. With respect to human resource training, Vietnam has changed strongly from mainly equipping knowledge to comprehensively developing learners' capacity and qualities. In addition, the country will continue to build and develop an advanced culture imbued with national identity; accelerate anticorruption, get rid of badly conducted public employees, and reduce troubles for people and businesses.

In addition, the country will continue to build and develop an advanced culture imbued with national identity; accelerate anticorruption, get rid of badly conducted public employees, and reduce troubles for people and businesses.

According to the Prime Minister, Vietnam is speeding up digital transformation and fostering green transformation while not sacrificing the environment, progress and social justice to pursue only economic growth.

He hoped that businesses and industry associations will continue to accompany, support and assist Vietnam in the course of rapid recovery and sustainable development in the spirit of shared successes, shared hardships, share interests and shared risks.

As representative of the Vietnamese business community, VCCI President Pham Tan Cong proposes solutions to help restore the economy

Mr. Pham Tan Cong, President of the Vietnam Chamber of Commerce and Industry (VCCI), Co-Chair of VBF Alliance, said, international and domestic supply chains are exposed to disruption risks caused by the Covid-19 epidemic and unpredictable fluctuations of trade conflicts and natural disasters. Supply chain recovery is fundamental for business recovery, thus determining the success of Vietnam's economic recovery program. From another perspective, this is also a rare opportunity for businesses in Vietnam to improve their position and role in domestic and international supply chains.

Many recommendations for economic recovery

Mr. Nitin Kapoor, representative of the British Chamber of Commerce Vietnam (BritCham), said, the Vietnam - UK Free Trade Agreement (UKVFTA) brought trade growth to more than 16% last year even when the world suffered from pandemic impacts. In particular, with right monetary policies and support from the Government, companies and the broader economy are able to quickly return to pre-pandemic growth and development.

He added, to rapidly recover the economy in the new normalcy, border reopening along with a set of national entry rules and regulations for the safe return of businesspeople and tourists is one of the important factors. Accordingly, the elimination of restrictions and of quarantine requirements and the resumption of pre-pandemic entry conditions will support not only international entrepreneurs but also local entrepreneurs in the tourism and business sectors. On the other hand, as the global economy recovers, inflation will be an important matter that needs to be addressed. Attention should be paid to this aspect of national economic policy to ensure that Vietnam avoids a recurrence of the inflation-boosting asset bubble that occurred from 2010 to 2012 and help stabilize the macro-economy and facilitate sustainable growth.

Mr. Alain Cany, President of the European Chamber of Commerce (EuroCham), said, boosted by the Vietnam - EU Free Trade Agreement (EVFTA), Vietnam - EU bilateral trade expanded 14.8% to US$63.6 billion in 2021. With the EVFTA already in effect and the Vietnam - EU Investment Protection Agreement to take effect soon, Vietnam has the opportunity to attract a new wave of FDI flows from European investors seeking a potential, safe and competitive investment environment.

“We, therefore, welcome the Vietnamese Government's efforts in promulgating, amending and simplifying regulations to match the EVFTA," he said. At the same time, Vietnam is recommended to promote efficient digital processes for the international exchange of goods and services. To this end, Vietnam needs to facilitate the growth of global and European digital businesses and their integration with Vietnam's digital economy.

According to a representative of the American Chamber of Commerce (AmCham), Vietnam has staged strong growth of e-commerce, fintech, educational technology, creative economy and behavioral changes as the pandemic has fueled the growth of digital transformation. However, also according to AmCham, the country needs to ensure a favorable and compatible regulatory environment that allows fair, reciprocal access to information, data privacy, intellectual property protection, cybersecurity, and digital trade in services consistent with global standards.

After listening to recommendations from domestic and international representatives, Prime Minister Pham Minh Chinh assigned relevant agencies to study, receive, respond to and handle appropriate ideas and recommendations at the forum to remove institutional and legal barriers, better support the business community and international organizations, and foster production chain development and recovery.

By Anh Mai, Vietnam Business Forum