Solutions to prevent supply chain disruption

There is a need to urgently develop plans on Covid-19 epidemic prevent and control in industrial parks to prevent disruption to the supply chain and production, and prevent the negative impacts on the economy. In case of necessity, it is necessary to report to the National Assembly to supplement resources to speed up the purchase of COVID-19 vaccines. These are considered solutions to realise the "dual goals" in the last months of the year.

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Faced with the unprecedented impact of the fourth wave of COVID-19, industrial production in May and the first five months of 2021 as a whole still maintained a positive growth rate. As for the two provinces with epidemics in their industrial parks, Bac Giang and Bac Ninh, the index of industrial production (IIP) has slowed down, but overall, year-on-year growth is still poised at a double-digit rate.

Positive industrial production

According to Minister of Planning and Investment Nguyen Chi Dung, the macroeconomic situation in the first five months of the year continued to remain stable, with the average consumer price index (CPI) increasing by 1.29% over the same period, the lowest increase since 2016. Positive balances in finance, currency, and credit have been basically secured.

The industrial growth rate is encouraging. The IIP in May was estimated to have increased 1.6% as compared to the previous month and 11.6% over the same period last year.

The number of labourers working in industrial enterprises as of May 1 also increased slightly compared to the previous month and the same period last year, especially in the foreign-invested enterprises sector. Total import and export turnover in the first five months of year still increased, reaching more than US$262 billion, up 33.5% over the same period last year.

An issue of public concern today is how the fourth wave of COVID-19 is affecting some localities which are key provinces in industrial and export development such as Bac Giang and Bac Ninh.

According to the Bac Giang provincial Statistics Department, the spread of the Covid-19 epidemic in the community and industrial zones in the province has slowed down industrial production in this locality. Specifically, in May, the IIP of Bac Giang decreased by 40.9% compared to April and by 33.3% over the same period last year. The main reason is that some large enterprises, such as Hosiden, Newwing, ST tech, Shin young and Luxshare had to stop production. Industries such as feed manufacturing, the beverage industry, the garment industry, and paper production have fallen sharply. In Bac Giang at the end of May, four industrial parks, with 375 enterprises and more than 163,000 workers, had to be closed.

However, a number of manufacturing sectors operating outside the industrial zones, such as the leather industry and its related products; metal production; the pharmaceutical industry, pharmaceutical chemical and medicinal herbs industry, all still maintained normal operations and achieved production increases.

In general, from the beginning of the year until now, Bac Giang’s IIP has still grown by 19.1%. Of which, the processing and manufacturing industry has still played a dominant role and continues to grow at a double-digit rate.

Meanwhile, Bac Ninh's IIP decreased slightly by 2.2% in May compared to April but increased at a very high rate (31.7%) over the same period last year. In the first five months of the year, the province's IIP increased by 14% , compared with a decline in the same period two years ago.

The strict control and zoning of Covid-19 epidemic outbreak areas, especially in industrial zones, has been an important factor contributing to the above results, including implementing anti-epidemic prevention and control and production maintenance at Samsung Complex.

According to the Bac Ninh provincial Statistics Department, the province's IIP in the first five months of the year still grew by 14%. Investment activities continued to be active with 14 new foreign investment projects in May, with a total registered capital of US$61 million . In particular, disbursement of public investment capital in the province decreased deeply in May and decreased by 5.7% over the first five months of year, as compared with last year.

Plans for epidemic prevention and control in industrial zones

Currently, Ho Chi Minh City has had to implement social distancing, the Ministry of Planning and Investment (MPI) said that this fact may affect the growth and overall budget revenue of the whole country because Ho Chi Minh City is the largest economic centre. The realization of the “dual goals” of both combating the COVID-19 pandemic and promoting socio-economic development is a very difficult task, especially as recent forecasts show that the fourth COVID-19 outbreak will continue.

For the key tasks in June and the last six months of the year, the MPI has requested the Ministry of Health (MoH) coordinate with localities to urgently develop plans for the prevention and control of the Covid-19 epidemic in industrial parks to prevent supply chain and production disruption, and negative impacts on the economy. It is necessary to expand the scope, priority and subjects to be vaccinated, particularly in affected areas and areas at risk of further outbreaks.

The Ministry of Finance should focus on allocating resources, thoroughly savings on recurrent expenditure to speed up the purchase of COVID-19 vaccines. In a case of necessity, it is necessary to report to the National Assembly for the supplementary resources needed to implement the task.

At the same time, it is necessary to urgently issue regulations on the organisation, operation, management and use of the Vietnam COVID-19 vaccine fund to mobilise resources from society.

Facing the situation of the Covid-19 epidemic entering and spreading in industrial parks, the MPI will coordinate with the MoH and localities to study and assess the impact of the epidemic on industrial parks, and propose solutions to maintain production and business activities for enterprises.

According to the head of the Prime Minister's economic advisory group Nguyen Duc Kien, from April 2021, the Government has issued policies to support businesses and people affected by the Covid-19 epidemic with both short-term and long-term perspectives, helping businesses build their recovery and production plans for when the fourth wave of the pandemic passes.

These include solutions regarding tax and fee policies; interest rates and promoting public investment. As for the social security policy, the Ministry of Labour, Invalids and Social Affairs is completing a plan to submit to the Government. In particular, policies will be designed to be more accessible, especially in terms of clarifying the conditions and support levels for businesses, workers and people in isolated areas as compared to other areas.