More cash support could boost economic recovery: Experts
During a meeting with the Chairman of the National Assembly, Vuong Dinh Hue, the Vietnamese UNDP representative Terrence Jones emphasized the importance of cash support for the weak.
Vietnam has issued two aid packages to residents suffering from Covid, VND 62 trillion ($ 2.72 billion) in April last year and VND 26 trillion in July this year.
However, Jones said these packages are not enough to protect people who have lost income due to social distancing.
More cash support would therefore help boost economic growth, he said, adding that a 5 percent GDP support package, or VND 77 trillion, should be paid out in the final quarter of this year.
Following him, Jacques Morisset, chief economist at the World Bank and program director for Vietnam, said social support programs would help ease the burden on the economy and help the weak get into financial hardship.
To lead the country to a “new normal,” Vietnam needs to push vaccinations and testing to control the pandemic and limit economic damage, he said.
He also suggested smarter solutions to simplify procedures in managing mobility.
To stabilize the macroeconomy, Morisset suggested that the government focus more on fiscal and less on monetary policy, as the latter could increase financial risks due to rising bad debts and a lack of transparency in support packages.
The chief economist of state lender BIDV Can Van Luc said Vietnam paid out about 2 percent of its GDP last year and less than 1 percent this year for tax and monetary aid to businesses and citizens, according to data from his research group.
The corresponding figure is 16 percent of GDP in developed countries and 7.7 percent in emerging economies, he said.
This means that more support packages are needed as many informal workers have not benefited from the existing ones, he added.
Other experts suggest that the government set up a macroeconomic development program.
From now until the end of the first quarter of next year, Vietnam should prioritize controlling the pandemic and enacting macro policies, including encouraging disbursement of public investment, to help businesses weather this difficult period, said Nguyen Thi Hong Minh , Head of the Central Institute for Economic Management (CIEM).
From then until the end of 2023, the government can relax economic policies and stimulate growth.
Luc said the redevelopment plan should be imposed nationwide rather than letting each place decide its own strategy, which would make the plan ineffective.
Vietnam has registered over 752,000 Covid-19 cases since the end of April, 10,000 of which were added on Sunday.
Hanoi relaxed its social distancing rules last week, while Ho Chi Minh City will do so from October 1st.