HCMC seeking new impetus for economic growth

The fourth outbreak of the Covid-19 epidemic has left serious consequences for Ho Chi Minh City’s economy. However, this is only a temporary setback to create momentum for development in the coming years if Ho Chi Minh City can find a new impetus and change its way of doing things in the context of the ongoing Covid-19 epidemic.

HCMC seeking new impetus for economic growth ảnh 1

Policy and environmental conditions affect economic growth both in the long run and in the short run. In 2021, Ho Chi Minh City has many growth opportunities because the world economy is on a good recovery, so export orders of enterprises increase.

At the same time, the trade conflicts of some big countries such as the US with China and the political crisis in Myanmar have pushed orders to shift to Vietnam quite a bit. Foreign investors also choose Ho Chi Minh City as an attractive destination to pour money into an investment. However, businesses could not produce, capital flow did not come as expected because of the impact of the prolonged epidemic.

Therefore, the city authorities’ policies have switched from fighting the coronavirus pandemic to safe adaptation to the epidemic removing barriers for facilitation of the resource flow, then Ho Chi Minh City's economy will gradually recover quickly.

For the economy to develop, state management must not obstruct the circulation of resources and maintain orderly operations of the markets. At the same time, actively correct market defects created by free actors pursuing legitimate interests.

Currently, the outbreaks of Omicron variant of the SARS-CoV-2 virus in several countries around the world is expected to quickly spread to many countries and the epidemic situation becomes more complicated. No matter what, it is necessary to be consistent with the principle of "adapting safely to the epidemic", minimizing the obstruction to the circulation of resources.

Accordingly, the southern largest city is focusing on strengthening the third dose of vaccines as well as controlling the source of infection. HCMC will empower people and businesses to proactively control the epidemic, establishing mobile treatment support forces, enhancing public health knowledge, using effective use of digital technology for epidemic control.

The fact that the city administration declares a long-term stable epidemic control policy is very important in creating new impetus for economic and social development because based on the policy, people and businesses can develop their operation plan and business plans for the future with an appropriate approach. When the epidemic control policy is stable, people and businesses can easily create new ways of doing things that are suitable to the context of the ongoing epidemic - a new impulse for development.

Hence, the government needs to create stability in policies so that people and businesspersons can put their trust in the government. Moreover, stability will help residents and businesses to reduce risks.

To achieve the goal, two forces including the push and the pull for the business are needed. During the past epidemic, many large enterprises experienced losses, bad debts, and large fixed costs.

Therefore, it is necessary to implement measures to help businesses overcome difficulties especially measures to extend debt and freeze debts which help to give businesses a chance of recovery; at the same time, minimizing fixed costs related to taxes, fixed fees will also contribute to business recovery.

Implementation of solutions following these policies issued by the Government should be done as quickly as possible helping businesses to get early access. Helping businesses overcome difficulties is a way to help push businesses. The city needs to apply measures to stimulate demand quickly and early.

First of all, speed up public investment to create conditions for enterprises of different industries to participate. Simultaneously, measures to stimulate personal consumption should be adopted through reducing value-added tax and normalizing shopping activities in the direction of safety.

Ho Chi Minh City enterprises make products for export which requires a lot of attention to pull businesses to develop. Measures to facilitate the circulation of export goods are the top priority at present. The city needs to accelerate the reform of export procedures towards digitization. For example, training businesses on electronic C/O procedures to international markets EU, UK, RCEP and worldwide application payment guarantee procedures.

Foreign direct investment (FDI) enterprises play a very important role in the economic development of Ho Chi Minh City in recent years and in the coming time. To attract FDI, HCMC needs to prepare a land fund and infrastructure for manufacturing enterprises. Currently, the city plans to convert empty land into industrial zones or clusters of industry parks; yet, the implementation progress is still very slow, causing a loss of opportunities to attract FDI. The city has been actively accelerating industrial infrastructure projects not only creates growth potential for the future but also creates demand for business development in the present.

Besides measures to stimulate demand to pull businesses to develop, it is necessary to implement promotion measures. First of all, it is necessary to focus on measures to minimize production and transaction costs for businesses by carrying out digitalization in administrative procedures related to the activities of people and businesses synchronously in all departments and agencies.

Businesses operating in the context of the ongoing epidemic will incur additional costs related to epidemic control. Government must take heed of the market providing equipment, medicine and medical services to prevent speculation.

Many businesses voiced their concern about providing accommodation for workers. Although the Government has many policies to support the development of housing for workers, this is a long-term program. Administrations in each residential area must check all rental houses in the area, encouraging or supporting landlords to renovate houses for the safety of the tenants. When employees feel safe and relaxed, they will contribute more to business development.