Support policies needed for businesses to recover after the super typhoon No. 3

In an interview with a CustomsNews reporter, Tran Thi Thanh, manager of Thanh Tan Feather Co., Ltd. (Thuong Tin, Hanoi), reported that the company suffered damage to six machines, each worth VND500 million, not to mention the collapse of the roof and walls.

Costs for recovery and concerns over supply chain disruptions

Preliminary statistics from the government as of September 17, 2024, estimate total property damage from the typhoon No. 3 at over VND50 trillion, which could reduce GDP growth by about 0.15% compared to the projected growth rate of 6.8-7%. Many businesses are striving to both recover from the typhoon's aftermath and meet their partners' production orders.

According to the Hai Phong economic zone management board, 100% of enterprises in the economic zones and industrial parks in the city have resumed operations to avoid disruptions in the supply chain. Many businesses in the VSIP and Nam Cau Kien industrial zones were severely impacted, with roofs blown off, water flooding into warehouses and production areas, and damage to gates, fences, signs, cameras, and other equipment. This situation entails significant costs for businesses to recover from the typhoon’s effects.

Not only Hai Phong and Quang Ninh but numerous businesses in northern provinces, from Hanoi and Hai Duong to Thai Nguyen, Lao Cai, and Yen Bai, have been affected to varying degrees. Some businesses and household enterprises have lost everything after the storm.

From a sector perspective, experts indicate that businesses exporting agricultural and seafood products are more impacted by rain, storms, and floods, leading to supply shortages, delivery delays, and increased production costs. A recent market strategy report from An Binh Securities (ABS) noted that companies would require significant time and resources to restore normal operations.

Moreover, according to Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research (VEPR), the last months of the year are peak periods for production and exports. However, transportation may be hindered by flooding, and authorities will need to inspect bridges for safety, which could disrupt the supply chain for businesses in northern regions. The typhoon has also affected Thailand, Laos, and several provinces in China, leading to raw material shortages and increased production costs for enterprises.

The importance of support policies

According to economic expert Dr. Vo Tri Thanh, Director of the Institute for Brand and Competitive Strategy Research, two crucial policies that could be implemented to support business recovery—similar to those during the COVID-19 pandemic—are monetary and fiscal policies. The first involves debt restructuring, loan support, and interest rate reductions. The second pertains to tax exemptions, reductions, and deferrals. He emphasized that support policies must be designed for faster and more effective implementation.

Fortunately, recognizing the circumstances faced by businesses, the government has swiftly issued six key solutions to urgently address the aftermath of the typhoon No. 3, enhance business recovery, and actively promote economic growth as outlined in Resolution No. 143/NQ-CP.

Previously, various authorities, including Customs and Tax agencies, issued multiple policies and directives to support businesses post-storm. Customs departments in Hai Phong, Quang Ninh, Hanoi, and Lao Cai, as well as customs offices in Yen Bai, Phu Tho, and Thai Binh provinces, have been prepared to ensure the smooth clearance of goods. These units have actively engaged with businesses, visiting their production facilities to understand their specific difficulties. Customs officials have provided timely and convenient support for procedures and assessments of damage to materials, supplies, finished products, machinery, and equipment. The General Department of Taxation has instructed tax offices to guide businesses and taxpayers affected by losses in implementing support policies for tax exemptions, reductions, and extensions.

In the insurance sector, companies are also actively assessing damages to expedite claims and payments. Nguyen Viet Hoang, Deputy General Director in charge of production at Tinh Loi Co., Ltd. (Hai Duong), noted that just a week ago, the entire facility and stock were damaged, with total losses exceeding US$1 million. Without coordination with the insurance provider, the company would have had to bear all the losses, making it difficult to find resources for recovery and resuming production.

In the banking sector, many commercial banks have announced reductions in lending rates by 0.5% to 2% for clients affected by the typhoon No. 3. During recent meetings with banks, Deputy Governor of the State Bank of Vietnam Dao Minh Tu urged banks to continue supporting customers not just financially, but also through consultation and encouragement, stating, “do not turn your back on customers during these challenging times.”

However, many voices have raised concerns that small and medium-sized enterprises find it difficult to access capital from banks due to a lack of collateral, especially after suffering losses from the typhoon. Thus, regulatory agencies need to establish a credit guarantee fund to encourage banks to streamline loan procedures and be more willing to provide new loans to affected businesses.

Moreover, businesses have requested that procedures for accessing support policies be simplified to expedite their implementation in line with the specific needs of enterprises. Furthermore, the processes for obtaining permits for rebuilding facilities, importing, and purchasing equipment should also be streamlined to facilitate quick resumption of production.

Finally, policies should consider the particularities and levels of damage in each sector. For instance, businesses in aquaculture in Hai Phong and Quang Ninh, which have suffered severe losses, require more robust solutions and long-term mechanisms to support their recovery.