Businesses want demand stimulus package extended

Though having had good business results in the first six months of the year, most businesses still want the Government to extend the demand stimulus packages until mid 2010 instead of December 31, 2009.

Most businessmen attending the meeting between the Hanoi Industry and Trade Department and businesses in Hanoi late last week reported satisfactory business results for the first half of 2009.

Thong Nhat Bicycle, May 19 Textile, Xuan Kien Automobile and Hanoi Rubber reported the increase of 20-30 percent in profit in the first six months of 2009.

The businesses said this was partially due to the Government’s demand stimulus package (interest rate subsidisation programme, tax reduction programme).

However, they added that the growth rate obtained in the months is not stable. They think that it is necessary to extend the demand stimulus package, with the focus on supporting some key industries and providing longer-term capital.

Bui Ngoc Huyen, General Director of the automobile manufacturer Vinaxuki, said that in its programme to increase the locally-made content ratio, Vinaxuki plans to launch four types of cars and 20 types of trucks onto the market and obtain the turnover of 5,000 billion dong. Vinaxuki is currently building four factories and needs to import several million dollars worth of hi-tech equipment and machines.

“The automobile industry needs huge capital sums, long-term capital, while they can borrow money from banks for five months at the longest. If they borrow under the interest rate subsidisation programme, they will get capital for two years. As such, if businesses cannot get support from the State, businesses will have to give up their plans,” Huyen said.

Pham Hong Viet, Director of Hanoi Rubber Company, added that though there have been signs of economic improvement and businesses have passed their biggest difficulties, the State still needs to consider continuing to support some key industries which create many jobs and extend the interest rate subsidisation programme until June 30, 2010.

The report by the Hanoi Industry and Trade Department showed that in the first seven months of the year, the industrial production value of businesses in the city reached 43,864 billion dong, an increase of 5.1 percent over the same period of last year. Of this amount, the foreign-invested sector saw the lowest growth rate of 2.3 percent; the state-owned economic sector grew by 5.4 percent and non-state sector 8.4 percent.

As such, the industrial production value of Hanoi businesses only saw moderate growth compared to the growth rates obtained by other provinces, like Binh Duong, Quang Ninh and Dong Nai, which saw 8-10 percent growth rates.

Nguyen Nga

vietnamnet

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