In June last year, Ngo Dinh Vuong halted the operation of his garment factory in Quang Minh Industrial Park in Hanoi’s Dong Anh District due to the health crisis. The factory was opened in late 2018 and is the third to have been opened by Vuong in the northern region of the country since 2016.
Then in July, the second factory, based in Hung Yen Province, faced the same plight, leaving the first factory operating moderately also in Hung Yen. The three factories are managed by Hoang Yen Garment and Trading JSC, established in 2016, where Vuong is the director.
However, in early January, the two factories with halted operations began resuming operations as some big contracts have been landed with local and foreign experts. This would allow 800 workers to have incomes.
“We are happy that all of our three factories are in full operations now,” Vuong told Nhan dan Online.
Hoang Yen Company’s case is among more than 11,000 enterprises resuming operation in the first two months of this year nationwide.
According to the General Statistics Office (GSO), also in the first two months of 2021, the economy saw 18,100 newly-established enterprises with total registered capital of VND334.8 trillion (US$14.55 billion), employing 172,800 new labourers – up 4% in the number of enterprises, 52.2% in capital, and 9.7% in the number of labourers as compared to those in the same period of last year.
In particular, the average registered capital of each newly-established business in the two months of the year is VND18.5 billion (US$804,347), up 46.4% year-on-year. If an additional VND385.6 trillion (US$16.76 billion) registered by 6,500 operational enterprises is included, the total registered capital inserted into the economy in the first two months is VND720.4 trillion ($31.32 billion).
In February, despite the Lunar New Year, the number of newly-established firms hit more than 8,000 registered at VND179.7 trillion (US$7.81 billion), down 20.3% in the number of enterprises but up 15.9% month-on-month and 85.6% year-on-year in capital. The average registered capital of each business in the month reached VND22.4 billion (nearly US$974,000), up 45.5% month-on-month and 111.6% year-on-year.
Also, in February, the number of businesses with halted operations reduced 80.1 month-on-month and 21.3% year-on-year. Furthermore, the number of those with halted operations and waiting for dissolution decreased 53.5% month-on-month and 32.2% year-on-year.
“These are extremely positive signals for the economy in the context that the COVID-19 pandemic remains very complicated, badly affecting the business and production activities of businesses,” said a GSO report on the economy’s two-month economy.
A leader from the Ministry of Planning and Investment stated, “Despite the health crisis, domestic production and business have been gradually recovering. However, Though the economy is still facing massive difficulties, it is expected to bounce back strongly in this year.”
Optimistic expectations
According to global data analyst and provider FocusEconomics, after economic growth gained further momentum in the fourth quarter of last year, whose growth hit 2.91% in 2020, signs for the first quarter of 2021 are generally positive.
“Economic growth is projected to rocket this year amid strengthening domestic and foreign demand, with Vietnam set to continue outperforming its regional neighbours. The recent spike in COVID-19 cases and associated implementation of restrictions are a cause for concern, however, while a possible prolonged downturn in the tourism sector remains a key downside risk,” FocusEconomics told Nhan dan Online in a statement. “Our panellists expect GDP to expand by 7.4% in 2021, which is unchanged from last month’s forecast, and by 6.9% in 2022.”
A few weeks ago, Standard Chartered released its fresh forecast for Vietnam’s 2021 GDP growth.
“Standard Chartered expects Vietnam’s GDP growth to rebound to 7.8 per cent in 2021, from 2.91 per cent in 2020, with manufacturing likely continuing to drive the economy and helping Vietnam outperform the rest of Asia,” said the bank on a statement.
“The economy emerged from the worst of the COVID-19 downturn in the third quarter of 2020, and we think the recovery remains intact. Vietnam has been one of the best-performing economies globally for the past decade, and we expect this to continue,” said Tim Leelahaphan, Standard Chartered economist for Thailand and Vietnam.
Standard Chartered’s economists anticipated that improving public investment and services growth should support the economy in the coming years. Effective COVID-19 containment measures have further enhanced Vietnam’s appeal to overseas investors, making it an attractive destination globally for foreign direct investment.
Spurring confidence
With a view to fuelling the economy and support enterprises and investors, on January 1, 2021, Prime Minister Nguyen Xuan Phuc signed and enacted Resolution No.01/NQ-CP on key tasks for implementation of the socioeconomic development plan and state budget estimates for 2021, as well as Resolution No.02/ND-CP on continuing implementation of measures to improve the domestic business climate and enhance national competitiveness in 2021.
According to Resolution 01, in order to realise the socioeconomic development plan for 2021-2025, the government has identified “solidarity, discipline, innovation, and aspiration for development” as guidelines for action this year.
The government defined 11 key missions and measures, including effective implementation of tasks to serve the organisation of the Party Congress, election of deputies to the National Assembly and all-level people’s councils, and preparation, issuance, and implementation of action programmes to carry out the resolutions.
The government will also continue implementation of tasks in a flexible and effective manner to simultaneously fight the pandemic and boost economic growth; while completing institutions for the socialist-oriented market economy, thus facilitating economic recovery and development based on stabilising the macro-economy and curbing inflation rate, as well as improving the economy’s resilience.
Meanwhile, according to Resolution 02, the government requested ministries, municipal and provincial people’s committees, and other governmental agencies to comprehensively and effectively enforce main tasks and solutions to enhance Vietnam’s business environment and national competitiveness in 2021.
The government ordered priority to be given to improving several indexes and indicators regarding construction permit issuance, asset registration, settlement of contract disputes, bankruptcy of enterprises, land administrative management quality, application of information technology, quality of vocational training, students’ skills, patent granting, fighting against corruption, online transactions, job opportunities in knowledge-intensive sectors, and a sustainable ecosystem.
Notably, Resolution 02 underlined the mission for the national digital transformation programme by 2025 with a vision towards 2030 approved under Decision No.749/QD-TTg last June, which must align with public administrative reforms.
The resolution emphasises solutions to improve the country’s preparedness for new production in the era of the Fourth Industrial Revolution.
Both resolutions 01 and 02 aim to reach the ultimate goal of securing an economic growth rate of at least 6.5% for 2021, with improvements in national economic competitiveness and in the local investment and business climate in favour of investors and enterprises.
The resolutions demonstrate the government’s unceasing efforts to drive the economy forward, though last November the NA seemed to take great caution when it set the economic growth target at about 6% only.
Each percentage of growth can create 300,000 direct jobs and many other hundreds of thousands of indirect jobs, according to experts.
Ngo Dinh Vuong of Hoang Yen Garment and Trading JSC said that he expected the resolutions will be materialised via specific solutions and programmes by ministries, agencies, and localities.
“The economy is bouncing back, and we hope the solutions will continue helping enterprises like us to not only stay afloat but also to weather all difficulties now and ahead. This will help the economy ensure the government desired economic growth,” Vuong told Nhan dan Online.
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Source: Resolution No.1/NQ-CP dated January 1, 2021, on key tasks for implementation of the socioeconomic development plan and state budget estimates for 2021
