Closure, cash shortage drag businesses down: survey

Sixteen percent are still operating, while 15 percent have officially shut down, according to the online survey conducted last month in collaboration with Private Sector Development Committee (Committee IV).

Most of the 21,517 companies polled are small and micro businesses.

The majority of suspended businesses are located in Ho Chi Minh City, Binh Duong and Dong Nai, the three biggest Covid-19 hotspots in the country.

Nearly half of companies polled said they don’t know how long the suspension would last. This in turn affects their ability to make plans for recruiting people and buying materials.

The sectors of fishery, services and agriculture had the highest shutdown ratio, followed by industry and construction.

Companies reported disruptions in the domestic supply chain is the main reason for the temporary closure. Social distancing orders have blocked the transport of goods considered non-essential.

Although the government has allowed the transport of all legal goods, there are still inconsistencies in implementation between localities, business owners reported.

Four out of ten companies that have temporarily closed have enough cash to last another month at most, the survey found.

Fifty-two percent of them have cut staff to reduce costs.

Companies that are operating have tried to cut down costs, get loans from banks and from other organizations or individuals to survive the pandemic.

Committee IV said whether these businesses will survive or not would be decided this month.

The majority of respondents, 62 percent, want to receive loans with incentive interest rates of 1-3 percent a year to pay salaries.

Other petitions include a break in corporate income tax and discounts in utilities and fuel.

Most companies also want the government to let workers who have received two vaccine doses to return to work.

Vietnam has recorded nearly 551,000 Covid-19 cases since the end of April.

Government officials recently stressed the lockdown strategy cannot last forever and that people should prepare to live with the disease.