Dr. Vu Dinh Anh: We need to operate the economy safely instead of freezing it.

- The government has issued a credit package of VND285,000 billion and is considering a fiscal package of tax deferral of over VND80,200 billion to reduce short-term financial pressure on businesses. How do you assess the impact of these solutions?

- Fiscal solutions such as tax deferral, deferral, and reduction will help businesses reduce their burden of obligations to the state budget. Currently, that is a reasonable option.

Meanwhile, the VND285 trillion credit package with low interest rates actually does not have much impact on the industries directly affected. Enterprises currently have no need for new loans because production and business have significantly decreased. What they are most concerned about is financial obligations when loans come due, especially bank loans. At this time, they need to extend or postpone financial obligations related to repayment of principal and interest on old debts, not reduce interest rates for new credit contracts.

The solution of lending capital to businesses at 0% interest to pay workers is also unreasonable, because it is not known when the epidemic will end. If businesses cannot recover, workers will no longer have the opportunity to return to work.

Finally, stimulating the economy means relaxing business conditions for people and businesses. But this action contradicts the measures to limit large gatherings and stop business, service, and commercial activities that are being applied by many localities.

-At the regular Government meeting on March 27, the Prime Minister proposed calculating and studying a support package from government bonds to stimulate demand. What do you think about the feasibility of this solution?

- I think it is not appropriate. Issuing bonds is something that is done when the economy is operating normally. After the first 3 months of this year, organizations and financial institutions have fallen into a state of cash flow disruption due to stagnant economic and commercial activities. So who will buy the bonds issued by the Government?

Next, Vietnam's public debt increases every year, the issuance of government bonds will certainly change the public debt/GDP ratio, creating significant pressure on budget revenue and expenditure this year and the following years.

- In the context of limited budget, in your opinion, what priority solutions should the Government have to support businesses?

- In my opinion, the Government needs to have a plan to operate the economy in the context of the epidemic instead of stopping all business activities to fight the epidemic. It is impossible to agree to allow factories and workshops to operate production but stop business activities. So who will the produced goods be sold to? The first thing to do is to develop a plan to operate both production and business while still avoiding infection.

Second, in the early stages of Covid-19, businesses suffered from disruptions in the supply of raw materials for production due to their dependence on the Chinese market. Recently, when the epidemic in China was gradually controlled and supplies could resume, domestic businesses faced the problem of a lack of consumer markets due to the epidemic spreading to many countries, leading to isolation and strict control at customs gates.

Therefore, it is necessary to find alternative sources of supply, reduce dependence on the Chinese market by increasing the localization rate and strengthening supporting industries. If there is a loan support package, it should be reserved for this group. From there, they will have more opportunities to expand production scale, gradually reducing dependence on foreign raw material supply markets.

Third, the Government must pay attention to product consumption output. When the epidemic has spread to many countries, the goal of stimulating exports is extremely difficult, and businesses also have to bear a large cost. Policies at this time need to focus on developing the domestic market. This will help Vietnamese businesses solve the market problem in the short term and create jobs for workers.

Fourth, it is necessary to reduce financial pressure on businesses. When revenue from production and business activities does not arise, businesses' cash flow is difficult, the simplest solution is to reduce their obligations to the state and customers.

These solutions will maintain economic demand while ensuring output for production and business activities.

- For small and medium enterprises, what should be done to ensure that mass bankruptcy does not occur?

- The outstanding feature of this group is its high flexibility and the ability to quickly change its operating methods. I see many educational institutions organizing group study via Skype, Zalo, and livestreaming on fanpages. Many coffee shops and restaurants have marketed and sold products via e-commerce sites, Facebook, and used delivery services. Therefore, the Government and localities need to guide their production and business.

However, the problems facing small and medium-sized enterprises are very diverse. Instead of applying a common policy to hundreds of thousands of enterprises, there should be different policies for each group.

For businesses that need financial resources to maintain operations, banks can support them through low-interest loans. For businesses that have difficulty finding new directions, localities, ministries and sectors can provide advisory information. If businesses continue to have difficulties with their workforce, this market needs to be activated. In cases where businesses cannot operate continuously, conditions should be created for them to stop doing business or dissolve.

I just want to note that we need to do our best to avoid businesses falling into a situation where they cannot pay their debts when the deadline comes and they are forced to go bankrupt. The options of deferring, postponing, and reducing taxes and land rents will help the Government solve this problem.

- In addition to the VND285 trillion credit support package, most of the economic support plans remain on paper due to the complicated legal approval process as prescribed. What do you suggest so that the support policies can be issued soon and become effective?

- The current regulations on the scope, authority and responsibility of each organization are quite complicated but not to the extent that they hinder any decision or proposal. For urgent issues that exceed the authority of the Government, they can still be submitted to the National Assembly Standing Committee for decision, without having to wait for the annual National Assembly session.

In my opinion, the most important thing is to have a project and choose a clear, systematic direction, with specific details to ensure feasibility. We should not let the situation happen where today we think of this, tomorrow we think of something else, all presented to the National Assembly for comments. This way of working shows fragmentation, lack of synchronization, and even the proposals can easily conflict with each other.

- Besides direct financial support, how do you think we should transfer jobs for unemployed workers?

- This should be resolved by the market. The government only needs to direct the resources of the developing economy to where the labor flow will move.

The pandemic is a temporary factor, but we do not know how long it will last. The problem of training, shifting, and job conversion is long-term. Therefore, the state cannot intervene, it must let the market move on its own. When production and business activities move in the direction of maintaining operations while ensuring safety, the labor market will shift on its own.