Reviving the economy and developing supply chains

Preview of Vietnam Business Forum 2022 “Restoring the Economy and Developing the Supply Chain in the New Normal”

By Thanh Huyen DoDeputy director, business intelligenceDezan Shira & Associates Ho Chi Minh City Office

On February 21, a high-level session of Vietnam Business Forum 2022 was held on the theme of Restoring the economy and developing the supply chain in the new normal. This was an event organized by the Ministry of Planning and Investment (MPI) in collaboration with the World Bank and the International financial organization (IFC).

The session was organized to discuss Vietnam’s economic issues, including improving business conditions, the role and responsibility in developing sustainable supply chains, and identifying local and foreign companies in supply chains. .

Vietnamese Business Forum (VBF) has been a channel for continuous policy dialogue between the Vietnamese government and the business community towards a favorable business environment since 1997. The forum usually features a specific theme that is in line with the government’s work program during the year.

Vietnamese Prime Minister Pham Minh Chinh attended the event along with heads of ministries, branches, representatives of diplomatic missions, embassies, as well as domestic and foreign business associations.

In addition to updating the status of issues raised at the previous forum and offering recommendations in future policymaking, this is an opportunity for business and government to better understand the opportunities and challenges. faced by the business community in Vietnam.

Positive results in 2021

At the forum, business associations from the US, EU, Japan and South Korea appreciated the efforts and positive results of the Vietnamese economy in 2021.

According to Vietnam Chamber of Commerce and Industry (VCCI), the government had timely and effective management guidelines to eliminate difficulties in the business community. In particular, the government has successfully implemented the vaccination diplomacy strategy with rapid vaccination coverage, making Vietnam one of the highest vaccination rates in the world.

As of February 28, 78.6% of the population had been double-vaccinated, while 40% had received boosters.

As a result, in 2021, GDP growth was 2.58%, while total import and export turnover reached a record high of $668.5 billion. Moreover, the credit market and exchange rates remained stable.

Representing the European Chamber of Commerce in Vietnam (EuroCham), Alain Cany warmly applauded the first anniversary of the implementation of the EU-Vietnam Free Trade Agreement (EVFTA). The year 2021 saw a 14.8% increase in trade between the EU and Vietnam, reaching around $63.6 billion. With the easing of restrictions and the reopening of countries, Vietnam has the opportunity to attract a new wave of FDI from European investors looking for a thriving, safe and competitive investment destination.

the American Chamber of Commerce in Vietnam (AmCham) also confirmed their optimism about the prospects for reopening, recovery and rebound of the Vietnamese economy. With over 650 company representatives and 2,500 individual company representatives across Vietnam, US companies represent billions of dollars in foreign investment, tens of thousands of direct employees, hundreds of thousands of indirect employees and a significant share of Vietnam’s exports and tax revenue.

Measures for a sustainable economic recovery

During the high-level session, representatives of business organizations and associations discussed numerous proposals to revive the economy against the negative impacts of the pandemic that will accelerate the country’s economic recovery and develop supply chains. sustainable in the new normal.

VCCI presented 10 recommendations, including facilitating access to information on policies and regulations to support businesses, effectively helping businesses access financial sources, and simplifying immigration and travel procedures for workers and experts. , and speed up computer application in administrative procedures, among others.

EuroCham recommended strengthening cooperation between competent authorities in Europe and Vietnam to remove existing trade bottlenecks and barriers, and at the same time create a favorable environment for the exchange of services and goods between the contracting parties. .

AmCham suggested reforms to unleash the full potential of the digital economy, accelerate e-government for efficient and effective services to residents, shift to a cleaner energy future, invest in infrastructure to drive sustainable growth , developing a globally competitive workforce and reforming capital markets to stimulate investment.

Prime Minister Chinh confirmed the government’s support for all economic sectors, encouraging private and foreign investment, investment in high technology, support industries, smart agriculture, environmental protection, renewable energy , infrastructure construction and social security service projects.

The Prime Minister also asked relevant ministries and departments to consider and incorporate the delegates’ reasonable proposals and recommendations into their programs and action plans when implementing Resolution No. 11 on the development agenda. and socio-economic recovery and Resolution No. 43 of the National Assembly. on fiscal and monetary policies to support the program.

Key questions by the World Bank

Representing the world Bank (WB) in Vietnam, Carolyn Turk, the country director, expects the growth rates of the sector in industrialized countries to slow down, for a year or two. Interest rates are expected to rise and inflation could be a feature of many economies, which will provide a difficult global backdrop for Vietnam to plan for further recovery.

Climate change is an important issue for Vietnam; it is estimated that more than 3% of GDP is lost due to severe weather events. It further predicts that by 2050, this could amount to as much as 15 or 20 percent of GDP that Vietnam will spend on climate change-related disasters.

Turk stressed that the World Bank is working with the Vietnamese government to ensure that the kind of adaptation measures needed are put in place to help Vietnam maximize its resilience.