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Accompanying with enterprises: not just a slogan

After more than one month the policy to support enterprises was deployed through such measures as tax exemption, tax cut or tax payment extension, and interest rate-subsidized loans, the enterprises have partly kept their “balance” in this period of recessionary economic conditions. However, what have been done is not sufficient enough when the unemployment rate in Dong Nai province is increasing, and the enterprises have not overcome their obstacles due to the lack of capital and the fact that domestic consumption market has become weak.

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       Enterprises still are in great trouble

   
 

    Workers in industrial zones is facing the unemployment

          By end-December 2008, in order to deploy the policy to support enterprises, Dong Nai Management Board of Industrial Zones had conducted a survey on the impact of financial crisis and economic recession on the production and business activities of over 500 enterprises in the province. The results revealed that the business activities of 180/260 enterprises have been considered to be affected continuously by the end-2009. According to the statistics made by Dong Nai Management Board of Industrial Zones, more and more enterprises in industrial zones are likely to reduce their production. In the fourth quarter of 2008 and the first two months of 2009, the number of labor force reduced to 8,460 people/64 enterprises, especially in enterprises manufacturing spare parts of electronics, motorbikes and wooden products. Many enterprises just have their orders until March, thus 10,000 labors are forecasted to be unemployed in the upcoming time. This is because the enterprises have failed to sign new contracts. In 2009, the business plans of most enterprises will be to maintain their current production conditions. Additionally, some enterprises will allow workers to stop their work with 70% of the salary they are receiving from 2-3 days/week, and will reduce the working time to one shift from 2-3 shifts. But in some cases, workers will be allowed to be off work from 3 months and above.

          Not only enterprises in industrial zones have to cut labor forces, but also traditional trade village is facing difficult situations. Lacking capital and orders has led to the unemployment situation. Director of Tinh Hoa Viet Co., Ltd. Nguyen Tan Tu said “In the past time, the traditional trade village has received orders for goods and distributed them to small establishments in order to maintain jobs for workers in localities. But now the orders for goods are reducing, thus enterprises are in bigger trouble.

   
 

Traditional trade village meets difficulty without orders for goods

          Director of Dong Nai Department of Plan and Investment Bo Ngoc Thu stated that the interest rate subsidized loans will help enterprises overcome their obstacles, but just enterprises being strong enough. Difficulty-hit enterprises did not get loans from banks. Enterprises did not earn more profits, so the tax reduction policy was not effective. The demand stimulus package is also not adequate enough in the province. Therefore, functional agencies need to solve these problems as soon as possible so that the number of bankrupt enterprises will not increase sharply.

Boosting the policy to support enterprises in difficulty

          Supporting enterprises with various measures is considered as an important duty to help enterprises stand firm on their feet and go through the recession storm. Of which, the priority is given to the subsidy loan provision and employment settlement. Banks in the province has so far provided loans for 3,994 customers with a total capital of VND2,892 billion, mainly through commercial banks of Vietcombank, ABbank, and Techcombank, etc. Thanks to the abundance of mobilized capital, banks have positively conducted disbursement process. “With the implementation of interest rate support policy, enterprises will have opportunity to reduce production costs, promote their competitive capacity, and enhance their productivity, but still see the dramatic decline in the export market. The most important thing is that the manufacturing market and consumption market have to go along with each other”, Director of the State Bank of Vietnam – Dong Nai Branch Tran Quoc Tuan said.

   

Providing subsidized loan

  

          In order to conduct the tax cut and tax payment extension, Dong Nai Department of Finance and Dong Nai Department of Taxation in the past time had checked the State’s budget estimates, and well deployed the policies to support enterprises in cut and tax payment extension. The province’s State budget revenue was about VND16,000 billion in the first two months, increasing to about VND350 billion.

          Custom Department of Dong Nai province also deployed the Government’s demand stimulus solutions by not collecting export tax on woods (a tax rate of 10%), abrogating tax rate for such goods as fertilizer, rice, and crude copper ore; reducing 50% value added tax to some groups of goods, etc. The value added tax in the first two months of 2009 reached VND357 billion, accounting for 59% over the same period last year. The functional agencies in the province also play an important role in supporting enterprises. Particularly, the Department of Labor, War Invalids and Social Affairs, provincial Labor Union and Dong Nai Management Board of Industrial Zones have created favorable conditions for enterprises to rearrange labor force, stabilize production, and help laborers find new jobs. The Management Board of Industrial Zones has also required enterprises to inform workers about labor cut, and to fully protect the legislative rights of workers.

          Moreover, the Dong Nai-based Vietnam Development Bank is deploying loan guarantee for enterprises having effective investment projects with a maximum guarantee fee of 0.5% per annum on total guaranteed amount. It is considered as an entrance for enterprises that are not able to get access to the State’s interest rate support policy.

          The provincial People’s Committee together with functional agencies had a discussion to find out new measures to support enterprises in difficulty.

          Reported by H.L, Translated by Minh Minh

 

Author: phongvien

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