HCMC possibly to see a V-shaped recovery

Because the Covid-19 epidemic is under control, Ho Chi Minh City will recover and develop very quickly or a V-shaped recovery, an economy that has suffered a sharp economic decline experiences a fast and strong rebound, according to Associate Professor Tran Hoang Ngan, Head of the HCMC Institute for Development Studies.


HCMC possibly to see a V-shaped recovery ảnh 1 Associate Professor Tran Hoang Ngan, Head of the HCMC Institute for Development Studies
The Associate Professor said that the southern metropolis can see a possible growth rate of 6 percent-6.5 percent. However, to achieve that, Ho Chi Minh City must first avoid being hit by the Covid-19 pandemic while making good use of its potential strength and transforming potential bottlenecks into an impetus for the city’s development, Mr. Ngan said.
In 2022, Ho Chi Minh City sets a growth goal of 6 percent-6.5 percent, returning to the same growth momentum as before the Covid-19 epidemic. Before that, Ho Chi Minh City often kept its growth momentum 1.1-1.5 times the national average.
However, Ho Chi Minh City has begun to encounter many bottlenecks and challenges in development. When the Covid-19 epidemic hit the city, those challenges became more obvious, and the economy suffered a serious decline. In 2020, the city only grew by 1.36 percent while the country grew by 2.91 percent. This is the first time that the growth rate of Ho Chi Minh City is lower than the country. Then in 2021, Ho Chi Minh City fell into a recession, falling very deeply, negative 6.78 percent.
Even in the midst of the pandemic, the southern largest city still retains many bright spots. The city has seen an increase in exports, foreign direct investment, and total budget revenue over the same period. In total, the city’s inner strength is still preserved, the infrastructure, production, and business foundations are still intact.
In January 2022, the city has seen nearly 3,200 newly established enterprises, an increase of nearly 25 percent compared to the same period last year. Moreover, 4,850 enterprises in the city have resumed their operation in January, up 36 percent over the same period last year.
Accordingly, Ho Chi Minh City is highly likely to achieve a growth rate of 6 percent -6.5 percent, even over 6.5 percent. The total value of the city’s gross regional domestic product can reach over VND 1.4 million billion, even VND14,000 billion higher than in 2019, the time before the impact of the Covid-19 epidemic.
The city’s internal weakness is that the infrastructure system has not met the requirements of high-level development. The city faces many difficulties such as traffic jams, flooding, overloaded hospitals, and schools.
HCMC possibly to see a V-shaped recovery ảnh 2 HCMC authorities should take heed of worker dormitory construction 
In addition to the above bottlenecks, Ho Chi Minh City also faces deep institutional bottlenecks as well as a lack of decentralization and authorization mechanisms to promptly solve arising problems and promote the strengths of the city. The city will continue to streamline administrative procedures with an aim to improve the business climate
Mr. Ngan supposed that HCMC needs to focus on three tasks from now to the end of 2022. Firstly, the city needs to proactively propose specific mechanisms and policies for HCMC for extension of two- year implementation of the National Assembly’s Resolution 54 with a more open and stronger mechanism to compensate for the time affected by the epidemic or propose a special Urban Law for Ho Chi Minh City, helping the city to make a breakthrough. Secondly, the city should propose specific mechanisms and policies for Thu Duc City - the city in the first centrally-run city in the country- to the Central Government so that the East High Interactive Urban Area of Ho Chi Minh City develops more.
Last but not least, the city should solve suspension projects for years which has hindered the city’s growth.
Many in those industries are small businesses, and their recovery may take even longer, if at all; therefore, businesses need to be supported in terms of capital, investment procedures, connection, and expansion of the market. Responsible departments and agencies in Ho Chi Minh City should provide specific instructions and help businesses access policies of exemption, reduction, and extension of taxes and fees that the Government has just issued. What’s more, related agencies should help businesses connect with banks so that businesses can access preferential capital with low-interest rates from the Bank for Social Policies...
Social security for laborers is also the city’s matter. The Covid-19 epidemic has exposed the city’s weakness which is a shortage of worker dormitories. It’s time the city must tackle the problem to attract employees.
Currently, a lot of migrant workers have to live in very narrow rented rooms that provide living space of only two to three square meters per person in the city. City administration needs to take heed of lending policies to help landlords upgrade their accommodation. Ho Chi Minh City should have mechanisms and policies to support interest rates and procedures so that businesses can build accommodation for workers.

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