Representatives of major business associations put forward solutions aimed at removing difficulties and increasing exports at a conference held on April 25 in Ho Chi Minh City, Cong Thuong (commerce) newspaper reported.

Tran Nhu Tung, vice president of the Vietnam Textile and Apparel Association (VITAS), pointed out that the garment industry, one of the major hard currency earners of the national economy, is currently facing difficulties due to a steep fall in export orders globally, especially to major markets such as the European Union and the United States.

Over the short term, it is imperative to strengthen trade promotion between Vietnam and other countries to expand export markets through the network of Vietnamese Commercial Counselors abroad, with a particular focus on countries in the EU and the Comprehensive and Progressive Agreement for Trans-Pacific partnership (CPTPP) where Vietnam has signed bilateral trade agreements, he said.

He suggested that the Government move to introduce a preferential loan package with an interest rate of 0%, similar to the loan package that the social policy bank had offered during the COVID-19 period, in order to help businesses partly reduce financial pressure and pay wages for employees and retain employees.

In the medium and long terms, Tung stressed the need to have financial assistance for green and digital transformation projects in the garment industry to help it engage more deeply in the global supply chain whilst also creating conditions for businesses to develop and produce raw materials.

Other solutions, according to the executive, are to build and promote the brand name of Vietnamese textile and garment industry, co-operate with foreign partners in training human resources, particularly reduce the corporate income tax by 2% for businesses that meet green standards, and support interest rates for green transformation projects.

Taking the floor, Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), shared difficulties faced by the seafood processing industry, saying that seafood exports nosedived by 27.5% in the first quarter of the year, equivalent to the industry’s decrease during the height of the COVID-19 pandemic. It is forecast that seafood exports will continue to face more difficulties this year, especially amid its main export markets such as the US, Europe, and Japan all shrinking.

Explaining the situation, Nam said that due to economic difficulties many importers have asked for delays in executing signed contracts, thereby resulting in a large amount of inventory. Without money flowing in, businesses are unable to purchase raw materials for production and processing, whilst at the same time they have to pay bank loans in US$ with an interest rate of more than 4%, as opposed to the rates of between 2.1% to 2.3% as was previously the case.

He suggested that the interest rate for bank loans in US$ should be reduced to remove capital bottlenecks, making it easier for businesses to purchase raw materials. In addition, he said the Government should introduce a credit package worth VND10 trillion with low interest rates as a way of assisting with the purchase of raw materials and helping farmers and fishermen maintain production.

This is just a workaround solution, but it is necessary in the current period, he stressed.

For the rice industry, Nguyen Ngoc Nam, president of the Vietnam Food Association (VFA), said that despite rice exports increasing thanks to rising global demand coupled with high export prices, the results have yet to live up to business expectations. He pointed to the fact that most rice businesses are small and medium sized, meaning their financial resources are limited. He therefore suggested that the State Bank implement a credit policy mechanism for the rice industry.

Echoing Nam’s view, Nguyen Dinh Tung, vice president of the Vietnam Fruit and Vegetable Association, proposed that the State Bank consider products grown on land such as durians and longans as assets which can be mortgaged in order to help businesses access bank loans.

Every year, farmers have to invest roughly VND50 million in a hectare of land under durian cultivation, but the fruit is not considered as collateral, noted Tung.

Source: VOV