Crisis impacts on two-thirds of local SMEs

Two-thirds of the small and medium-sized enterprises (SME) in Vietnam were affected by the global financial crisis but most of them said these challenges were temporary.

This is the result of a survey conducted at SMEs in 10 cities and provinces nationwide, which was announced at a seminar held in Hanoi Friday by the Central Institute of Economic Management (CIEM) under the Ministry of Planning and Investment.

Prof. Finn Tarp, coordinator and supervisor of the survey, said the business environment of SMEs in Vietnam seemed to worsen between 2007 and 2009, when SMEs faced more barriers, including the falls in both demands for products and supply of credits.

The rate of SMEs that annually survived the crisis dropped, while a large number of other SMEs were forced to halt operations, said the professor.

However, Tarp said super-small companies suffered fewer impacts from the crisis than bigger enterprises, as the crisis helped improve their business conditions, make competition less tough and push the government to offer them better assistance programmes.

According to the survey, SMEs in Hanoi, Ho Chi Minh city and the central province of Nghe An were hardest hit by the crisis, while those in the provinces of Phu Tho, Khanh Hoa and Lam Dong and Hai Phong city suffered fewer negative influences.

Almost 40 percent of the SMEs facing credit-related difficulties were in rural areas and household businesses in cities.

The survey, the sixth of its kind, was jointly carried out by CIEM, the Institute of Labour Science and Social Affairs under the Ministry of Labour, War Invalids and Social Affairs, and the Faculty of Economics at Copenhagen University.

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Crisis impacts on two-thirds of local SMEs

Two-thirds of the small and medium-sized enterprises (SME) in Vietnam
were affected by the global financial crisis but most of them said
these challenges were temporary.

This is the result
of a survey conducted at SMEs in 10 cities and provinces nationwide,
which was announced at a seminar held in Hanoi on Sept. 17 by the
Central Institute of Economic Management (CIEM) under the Ministry of
Planning and Investment.

Prof. Finn Tarp,
coordinator and supervisor of the survey, said the business environment
of SMEs in Vietnam seemed to worsen between 2007 and 2009, when SMEs
faced more barriers, including the falls in both demands for products
and supply of credits.

The rate of SMEs that
annually survived the crisis dropped, while a large number of other SMEs
were forced to halt operations, said the professor.

However, Tarp said super-small companies suffered fewer impacts from
the crisis than bigger enterprises, as the crisis helped improve their
business conditions, make competition less tough and push the government
to offer them better assistance programmes.

According to the survey, SMEs in Hanoi, Ho Chi Minh city and the central
province of Nghe An were hardest hit by the crisis, while those in the
provinces of Phu Tho, Khanh Hoa and Lam Dong and Hai Phong city suffered
fewer negative influences.

Almost 40 percent of the SMEs facing credit-related difficulties were in rural areas and household businesses in cities.

The survey, the sixth of its kind, was jointly carried out by CIEM,
the Institute of Labour Science and Social Affairs under the
Ministry of Labour, War Invalids and Social Affairs, and the Faculty of
Economics at Copenhagen University./.

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Post-crisis opportunities, challenges highlighted

Photo: AFP

Numerous managers, economists and businesspeople gathered at a seminar in Ho Chi Minh City Thurday to discuss the opportunities and challenges as well as Vietnam’s policies and measures after the economic crisis.

Co-hosted by the Vietnam Investment Review (VIR) and the Association of Foreign-invested Enterprises, the seminar also served as a forum for the delegates to analyse the factors affecting the flow of investment and trade.

VIR’s Editor-in-Chief Nguyen Anh Tuan said that the global financial crisis had many adverse impacts on Vietnam in terms of exports, foreign direct investment (FDI), the stock market, international tourism and other fields.

However, Vietnam has managed to stave off the worst of the economic recession and stabilise its macro-economy thanks to concerted efforts by the government and the business community, he said.

Professor Nguyen Mai noted that FDI is considered the brightest spot in the country’s economic picture over the past two years, but Vietnam needs to improve the quality of this capital source.

While discussing the knock on effects on the stock market, the Vice Chairman of the State Securities Commission Nguyen Doan Hung emphasised the need to stabilise the market before implementing long-term targets, including enhancing the quality of auditing, information and corporate administration, tightening the supervision and protection of investments and dealing properly with securities companies suffering losses.

Dr. Le Xuan Nghia, the Vice Chairman of the National Financial Supervisory Committee, said that Vietnam is likely to face more monetary risks in the medium term, citing its foreign exchange rates.

The slow recovery of the global economy could hamper the flow of capital into Vietnam , worsen the depreciation of the Vietnamese dong and weaken the country’s international balance of payments, said Nghia.

 

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Post-crisis opportunities, challenges highlighted

Numerous managers, economists and businesspeople gathered at a seminar
in Ho Chi Minh City on September 9 to discuss the opportunities and
challenges as well as Vietnam ’s policies and measures after the
economic crisis.

Co-hosted by the Vietnam
Investment Review (VIR) and the Association of Foreign-invested
Enterprises, the seminar also served as a forum for the delegates to
analyse the factors affecting the flow of investment and trade.

VIR’s Editor-in-Chief Nguyen Anh Tuan said that the global financial
crisis had many adverse impacts on Vietnam in terms of exports,
foreign direct investment (FDI), the stock market, international tourism
and other fields.

However, Vietnam has managed
to stave off the worst of the economic recession and stabilise its
macro-economy thanks to concerted efforts by the government and the
business community, he said.

Professor Nguyen Mai
noted that FDI is considered the brightest spot in the country’s
economic picture over the past two years, but Vietnam needs to
improve the quality of this capital source.

While
discussing the knock on effects on the stock market, the Vice Chairman
of the State Securities Commission Nguyen Doan Hung emphasised the need
to stabilise the market before implementing long-term targets, including
enhancing the quality of auditing, information and corporate
administration, tightening the supervision and protection of investments
and dealing properly with securities companies suffering losses.

Dr. Le Xuan Nghia, the Vice Chairman of the National Financial
Supervisory Committee, said that Vietnam is likely to face more
monetary risks in the medium term, citing its foreign exchange rates.

The slow recovery of the global economy could hamper
the flow of capital into Vietnam , worsen the depreciation of the
Vietnamese dong and weaken the country’s international balance of
payments, said Nghia./.

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