The proposal has been sent to the Ministry of Planning and Investment. The beneficiaries are small and medium enterprises, cooperatives, business households in which small and micro enterprises (under ten employees) are given priority, and workers in rural areas. Production and business units can borrow up to VND2 billion, while employees are entitled to VND100 million.

The interest rate support period is 12 months, applied from September 1, 2020 to September 1, 2021. The loan interest rate is 3.96 per cent per year (equal to 50 per cent of the interest rate for the near poor). Estimated cost is about VND15 trillion.

The ministry also recommended a policy supporting unemployed workers living in difficult circumstances. Beneficiaries of this policy are workers who are renting houses or raising children under six years old. They lost jobs or have had labour contracts suspended.

The three-month support amount is VND1 million per person (household) per month and VND1 million for those raising children under six. This will be applied from September 2020 to December 2020. Estimated cost is about VND3.6 trillion.

If it is approved by the Government, it will be the second social security support package to those affected after the country’s economy was hit by the coronavirus outbreak early this year. The first package worth VND62 trillion, launched in April, is being disbursed with zero-interest loans.

Difficult disbursement

Insiders said that it is necessary to loosen conditions to raise the number of beneficiaries. With the current VND62 trillion support package, the disbursement is difficult for beneficiary groups to access.

Vo Tri Thanh, a senior economist at the Central Institute for Economic Management (CIEM) and a member of the National Financial and Monetary Policy Advisory Council, told local media that more than VND17 trillion of the VND62 trillion package disbursed was a low figure.

“I think there is a situation of passing the buck and being afraid of responsibility, delaying the disbursement,” Thanh said.

General Director of G7 Taxi Management Joint Stock Company Nguyen Anh Quan said his company has more than 1,000 drivers who have completed procedures for financial support in accordance with the Prime Minister’s Decision No 15 on supporting those affected by the COVID-19 pandemic, however no cases have been resolved yet.

Quan said the difficulty is that the support policies are dedicated to employees whose working contracts have been postponed, in which employees have taken time off for more than a month from April 1, 2020 to June 30, 2020. However, G7 drivers only took 22 consecutive days off, then went back to work on alternate days.

“The company’s production and business efficiency have been severely affected, reducing drivers’ income. However, the number of days off is not enough for a consecutive month, so these workers are not eligible for support,” Quan said, “As for the second support package, I don't expect much.”

Economist Le Dang Doanh said the second social security support package needs to have a broader coverage, comprehensively covering all groups of affected people because the pandemic has negatively impacted almost all industries and fields. Meanwhile, it is necessary to loosen conditions for beneficiaries.

“As many businesses have not been able to access the first support package, ministries and agencies need to reconsider the reason; whether the policy is really effective or not; if it need to be adjusted and supplemented. The most important thing is that the new policies must be more open, practical and meaningful,” Doanh told nguoiduatin.vn.

Nguyen Khac Quoc Bao, Head of the Finance Faculty under the University of Economics Ho Chi Minh City said that most of the packages issued were ineffective or very unclear. 

Bao said businesses can be divided into two types – one is State-owned economic groups and the other is the private sector. In which, State-owned groups have strong financial potential in multiple fields, so they are strong enough to cope with the pandemic.

The most worrying is small and medium enterprises. Most of them do not have financial resources, so they are vulnerable when consumption and the economy’s demand decreases. Therefore, they need to be given priority support and protection. “Besides the support from the State, they must also try themselves.”

“Vietnam’s post-pandemic policy will be very different from other countries because we had spent a large amount of money compared to the size of the budget and the economy to control and stamp out the pandemic. Successful control over the pandemic will create favourable conditions to restore and reactivate the economy,” Bao said.

“But on the contrary, it also puts enormous pressure on balancing budgets and securing other fiscal spending tasks. This is the reason why it is necessary to classify the beneficiary groups, in which identifying who is prioritised, which economic sectors and which enterprises need support first,” he added.

According to report by the Ministry of Planning and Investment, the COVID-19 pandemic has negatively impacted the economy, seriously affecting almost all sectors and socio-economic fields. About 17.6 million people have had their income reduced, leading to difficulties in stimulating domestic consumption.

In the first seven months of this year, the unemployment rate increased at the highest rate in the past 10 years, of which unemployment in the working group aged 15-54 accounted for 30.7 per cent of the total.  VNS

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