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Businesses applaud interest rate subsidy, but still feel uneasy
Enterprises said that they still have a lot of things to worry about, even though they can enjoy a 4% interest rate subsidy.
Nguyen Chien Thang, Chairman of the HCM City Fine Arts and Woodwork Processing Association, said that even the low interest rates still cannot help domestic businesses develop as the market for products has been narrowed.
Thang pointed out that the current difficulties prove to be the consequences of the high interest rate policies in 2008, which then pushed production costs up and sent customers away.
He went on to say that the most important thing enterprises need to do now is to persuade customers to come back. Nowadays, woodwork producers have opportunities to reduce the production cost as 80% of domestic companies import materials, while the prices are now at low levels.
Currently, enterprises dare not borrow loans with an interest rate prop-up for eight months to stock up wood materials, as they have to sign contracts for the whole year.
Thang said that the demand stimulus measures are applied for eight months only, while the global difficulties are expected to last for the whole year of 2009. In 2010, when the national economy becomes more stable, the competition among businesses, domestic and foreign, will be fiercer, therefore, businesses will need more support.
Truong Dinh Hoe, Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that the interest rate subsidy will help enterprises reduce production costs. He said that a lot of fish ponds have been left idle as farmers do not have capital, which has resulted in the material price increases.
Pham Trung Cang, Deputy Chairman of the Vietnam Plastics Association, Chairman of the Credit Council of Asia Commercial Bank, suggested that enterprises that need loans to upgrade or renovate machines and equipment should be added to the list of subjects for the interest rate subsidy program. Cang said that the investment in equipment will help force the production cost and sale prices down. When the national economy recovers, the enterprises that received preferential loans will be able to become competitive in export.
According to the Ministry of Industry and Trade, the world’s market keeps declining, especially Vietnam’s key export markets like the US, EU and Japan, which will have further negative impacts on Vietnam’s production and export. The ministry said that the world’s commodity prices are staying at low levels, and they are not likely to increase in 2009.
Vietnam strives to obtain the export growth rate of 13% in 2009 and export turnover of $70.85 billion, which is considered a difficult task.
VietNamNet, DTCK
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