Prime Minister's economic advisory group proposes second economic relief package

Therefore, the situation in the last 6 months of the year is forecast to be very challenging, the pressure to control inflation is very high, the output market for production and business, especially the processing, manufacturing, textile, footwear, etc. industries, is facing many difficulties. To stimulate growth, recover quickly and promote economic development, the Government believes that faster and stronger actions are needed.

In this context, many economic experts believe that the Government should have additional economic stimulus packages to support businesses, avoid economic collapse, and cause social unrest.

Increase dosage in 2nd pack

National Assembly Delegate Tran Hoang Ngan, member of the Prime Minister’s Economic Advisory Group, commented that the Covid-19 pandemic situation in the world is still not under control, while domestic enterprises are facing many difficulties and unemployment is increasing. Therefore, he proposed the need for a further economic support package.

Mr. Ngan said that the second support package will follow the first package that the Government has implemented, aiming to overcome the shortcomings that the previous package has not yet completed, and may also increase the dosage.

Typically, with fiscal policy, it is possible to extend the time for tax debt payment, land rent, etc. With monetary policy, it is possible to continue to extend the time for debt payment, lower interest rates. With the credit package for businesses to borrow to pay workers' salaries from the Social Policy Bank, it is possible to adjust the conditions for implementation.

The National Assembly delegate also said that it is necessary to increase the amount of support for workers and businesses that will face difficulties in the coming period, especially businesses with national brands, businesses that have met the standards to export goods to the US, Europe... but are unable to export at this time. Support at this time will help preserve and protect national brands.

The second support package also needs to take into account credit guarantee funds. Mr. Ngan said that there needs to be a source of money to transfer to the funds, to increase guarantees for businesses, and to access bank capital. At the same time, with monetary policy, it is necessary to continue to adjust in the direction of reducing interest rates.

National Assembly Delegate Tran Hoang Ngan, member of the Prime Minister's Economic Advisory Group. Photo:Yellow River.

Public investment disbursement was also an issue that Delegate Tran Hoang Ngan mentioned. He appreciated the Government's drastic actions on this issue, but recommended finding the causes of delays to overcome them, creating momentum for better disbursement in the following stages.

Mr. Ngan also hopes that unfinished projects will be completed quickly to avoid prolongation and waste. Sharing the same view, Mr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), mentioned the two words “clear” and “necessary” to talk about the second economic support package.

He said that on the one hand, the Government needs to implement the first support package well, on the other hand, it needs to expand the scope of subjects, support core areas and key enterprises in the second support package. "Promoting public investment is also a very good trigger point. The Prime Minister and the Government have paid great attention and determination to this," said Mr. Loc.

“You can't go into the operating room and then ask if you have health insurance.”

Pointing out the bottleneck of the first support package was the procedures, Mr. Tran Hoang Ngan said that this needs to be resolved soon in the second support package. He said that some government agencies have seen the problem and can adjust policies and guidelines accordingly. However, the adjustment must be quick, flexible, and meet the wishes of businesses.

He noted that if the economy collapses, many businesses will go bankrupt, which will cause huge social security consequences. “In emergency cases, we have to accept the procedures later, but post-check. We cannot go into the operating room and ask if we have health insurance. If we follow the procedure then the patient will die. We have to be flexible and then do post-check,” he shared.

Delegate Tran Hoang Ngan also proposed that the National Assembly should consider a law to respond to emergency situations, similar to the “wartime law”. When there is an emergency situation, typically the Covid-19 pandemic, what flexibility is needed to help quickly resolve many issues, what is the policy framework, and what is the authority?

According to him, this law is also the legal basis for taking quick and decisive actions, avoiding fear of making mistakes in procedures.

Mr. Ngan cited the example of the runway renovation at Noi Bai and Tan Son Nhat airports, which is facing many shortcomings. During the time the country is fighting the pandemic, if the runways are repaired, it will be both quick and effective. However, at that time, procedures will be involved and it cannot be implemented immediately.

Currently, the repair work is being carried out, but the frequency of flights has increased, causing pressure on the airports, making people very afraid to travel. He emphasized that this is a loss of opportunity, causing a lot of waste for society.

"Laws are needed to respond to emergency situations to avoid losing opportunities," delegate Tran Hoang Ngan emphasized.

Must take into account the absorption issue very carefully.

Talk toPV, a leader of the Ministry of Planning and Investment (MPI) said that if there is a second economic relief package, the absorption issue must be carefully considered. He cited the example of the first support package having a very large credit package, but the economy still had difficulty absorbing it.

Accordingly, the credit growth rate in the first 6 months of the year was about 2.7%, while in the same period of previous years it was about 6-7%. Thus, the disbursement of money is very low in the context of the Covid-19 epidemic causing many difficulties.

Meanwhile, with the 62,000 billion VND social security package, there is a loan for businesses to pay workers' salaries, but not much has been disbursed. "The absorption issue is very important so it must be calculated very carefully," he shared.

National Assembly delegates said it is necessary to support key industries and key enterprises. Photo:Quynh Danh

In a meeting with the Ministry of Finance, Prime Minister Nguyen Xuan Phuc said many countries have loosened fiscal policy to a very large extent, up to11,000 billion USD, and the number shows no signs of stopping. Many countries are buying up debt to prevent defaults.

He said the financial sector needs to continue to propose specific fiscal stimulus packages, solutions including continuing to postpone, reduce, and exempt taxes and mobilizing more resources for development investment to stimulate aggregate demand and promote growth.

The head of the Government believes that it is possible to increase the deficit and public debt to 3-4% of GDP without affecting the national financial deficit in the short and long term. In addition, countries have recently offered economic support of about 10% of GDP. If Vietnam does so, there will be about30 billion USDeconomic support, while so far only support15,000 billion VND.