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Extend stimulus and foster full revival, businesses urge
The government should persist with and widen stimulus measures to make a complete recovery from the global economic crisis possible, business representatives said last week.
Closing the stimulus package now could “shock” firms and make their recovery more difficult they told Thanh Nien Daily in separate interviews.
“If possible, the state should extend the stimulus package to benefit more firms,” said General Secretary of the Vietnam Rubber Association, Tran Thi Thuy Hoa.
Now that the rubber sector has good prospects with both production and demand increasing, businesses will need capital to develop rubber supplies, she said.
“It would be good for enterprises if they have their outstanding debts frozen and they are allowed to access new soft loans,” she said without specifying any time period for the move.
Chairman of the Vietnam Association of the Small- and Medium-Sized Enterprises, Cao Sy Kiem, said the stimulus package should not be stopped, but monitored and managed more strictly to help firms develop in a stable manner.
“Stimulus measures should be gradually adjusted after their effectiveness is brought into full play, the economy shows signs of positive changes, firms gain recovery, more laborers have jobs, and the stock and property markets become more dynamic,” he said.
“The government should narrow the stimulus package to enterprises which have already gained recovery, and keep suitable assistance policies in place for those facing difficulties. Without the state’s support, it will be hard for many firms to recover,” he added.
Kiem suggested that the state, in the coming time, should intensify monitoring all credit sources, accelerate labor-intensive projects, implement social welfare programs and strengthen the domestic market.
Economist Bui Kien Thanh said implementation of the stimulus package is about to be completed, but it would be no use for it to be stopped now.
If the stimulus package was closed suddenly without substitute measures, many firms will suffer shock, and the economy will face serious harm, he warned.
However, Thanh also noted that inflation may rear its head again if the state does not phase out, in a careful manner, the policy of offering firms a 4-percent interest rate subsidy on their loans. If an inflation hike happens, the situation will become more complicated, he warned.
According to the State Bank of Vietnam (SBV), lending under the government loan subsidy program totaled VND389.1 trillion (US$21.85 billion) as of July 30, up 0.91 percent from a week earlier and around 318 percent from February when the package began implementation.
Inflation rose 9.25 percent year-on-year in the first 7 months of 2009, according to the General Statistics Office.
Thanh said: “What is important is the economy’s real recovery. If firms overcome certain difficulties, and earn profits again, the elimination of the government’s interest rate subsidy will not greatly affect businesses’ activities, but will help accelerate their restructuring process.”
SBV governor Nguyen Van Giau had told reporters on July 24 that: “SBV has submitted to the government plans to deal with stimulus measures, and support enterprises in the post-stimulus period.”
The central bank will not suddenly stop the whole stimulus package, but stop it phase by phase to prevent firms from experiencing shocks, he said.
Stimulus spending that the Vietnamese government values at more than $8 billion has been very effective, helping firms overcome the most difficult stage, he noted.
The International Monetary Fund, which had urged member nations to adopt stimulus measures to fight the severe economic downturn, has called on them in recent months to formulate exit strategies once recovery takes hold, AFP reported.
Ngan Anh
thanhnien
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