According to a new survey by the Vietnam Chamber of Commerce and Industry (VCCI), 30% of Vietnamese enterprises will survive for three months at maximum, and 50% for six months. The survey also found that through either dissolution or hibernation, 35,000 businesses have withdrawn from the market in the first three months of the year.
"This is a record number. For the first time in decades, the number of businesses leaving the market is greater than the number of new ones," the VCCI report on the survey said.
Of the surveyed enterprises:
• 85% said their markets have narrowed
• 82% expect their revenues
• 60% have problems with a lack of capital and cash flow
• 43% plan to reduce their workforce
Related to staff levels, 75% of the respondents said they would have to downsize their workforce, with 10% of enterprises expecting to cut their workforce by 50% or more. Less than 1% of businesses said they were likely to increase the number of employees.
The report notes that millions of workers are at risk of losing their jobs in the coming months.
Vu Tien Loc, Chairman of the VCCI said that there are some misunderstandings among some local authorities that are negatively affecting businesses. Examples that he cited include localities not allowing the circulation of goods and raw materials, and suspending manufacturing and construction activities.
Vu said that in order to provide relief to enterprises that, "it is necessary to immediately postpone the payment of VAT, corporate income tax, personal income tax, social insurance and trade union fees." He also proposed that the government enacts policies to exempt and reduce payment of taxes, social insurance, fees and other charges.
The VCCI report also notes that the businesses that were surveyed are recommending that there be a lowering interest rates to about 4-5% on VND loans, and 2-3% on USD loans, for enterprises that are affected badly by the Covid-19 crisis.