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“Unlocking Capital: The Government’s Pivotal Role in Enhancing Business Accessibility and Reducing Interest Rates.”

31 October, 2024

National Assembly Deputy Tran Thi Hien (Hanoi delegation)

On October 27, the National Assembly discussed the socio-economic situation and the state budget. National Assembly Deputy Tran Thi Hien (Hanoi) shared that, in the context of the post-COVID-19 pandemic era, the economy has faced numerous challenges, including the impact of the pandemic, slow global economic recovery, and the effects on Vietnam’s major markets. In addition, natural disasters and climate change have become more severe and intense.

However, with the efforts, determination, and leadership of the Party, the Government’s management, the companionship of the National Assembly, and especially in the third quarter of 2024, we have achieved optimistic results.

According to the National Assembly Deputy, the focus on growth and its promotion in 2024 is a prudent approach. Fourteen out of fifteen targets have been met or exceeded, including a remarkable improvement in import and export activities. The challenging target of labor productivity in recent years has also been achieved, which is commendable. The Government’s report, the Verification Report of the Economic Committee, and the opinions of the Council for Ethnic Minorities and other committees of the National Assembly have provided specific evaluations of these achievements.

However, from a business perspective, Deputy Hien suggested that the Government should pay more attention to the business sector. Surveys and assessments conducted by the General Statistics Office indicate that between 10% and 50% of businesses believe that 15 factors have impacted their operations in the past.

The most prominent challenges include low market demand, high competitiveness of domestic goods, bad debts in construction, rising prices of raw materials for production, financial difficulties, and high-interest rates.

“Based on my practical experience in business, I believe these assessments are objective and reflect the reality,” said Deputy Hien.

In previous sessions, the Deputy had spoken about the difficulties in accessing capital. While there have been improvements, this area still requires continued attention, especially regarding interest rates. Deputy Hien suggested that the current interest rates are still high and requested that the Government and the State Bank soon study and adjust the interest rates downward to support businesses. This would also contribute to promoting credit growth, which stood at only 9% in the first nine months, far from the target of 14-15%.

Moreover, while the number of businesses has consistently increased over the years, from over 654,000 in 2017 to over 921,000 in 2023, and is expected to continue growing in 2024, achieving the goal of developing 1.5 million businesses by 2025, as stated in Resolution No. 58/NQ-CP dated April 21, 2023, might be challenging.

Additionally, the scale of our businesses is relatively small, with over 90% being small, very small, and medium-sized enterprises. Statistical data also show that the majority of loss-making businesses fall within this category.

Furthermore, we should also pay attention to the quality of businesses, not just their quantity. The proportion of profitable businesses is not high; for example, in 2022, less than 45% of the total of over 735,000 operating businesses made a profit, while 46.9% suffered losses, and only 8.5% broke even.

In the first nine months of 2024, more than 86,000 businesses temporarily ceased operations. “These are issues that require the Government’s attention, focusing on improving quality rather than just increasing the number of businesses,” said Ms. Hien.

Van Duan – Minh Chien