Industry Update/National Response
- Vietnam has approved the reopening of sub-border gates and border crossings in Lang Son and Quang Ninh provinces connecting with China to ease trade between the two countries.
- The Deputy Minister of Health stated that Vietnam has conducted 275,000 COVID-19 tests as of May 12 or 2,000 daily tests.
- As of May 11, the government has eased its social distancing campaign and allowed a series of non-essential businesses and services to resume operations, excluding karaoke parlors and discos. All students are back in school.
- The International Monetary Fund has stated that Vietnam’s economic growth may slow down to 2.7 percent this year due to the pandemic, but may pick up to 7 percent in 2021.
- Vietnam donated medical supplies worth US$240,000 to eight countries including Australia, Brunei, India, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The US will give Vietnam an aid package worth US$9.5 million to combat the COVID-19 pandemic.
- The Prime Minister issued Directive No. 19 on measures to cope with COVID-19 on 25 April. The measures give directives on handwashing wearing face masks, while banning religious gatherings, festivals, and sporting events. In addition, bars, pubs, beauty salons, and karaoke bars will continue to remain closed until further notice.
- The Ministry of Finance recently composed two key draft decrees to be tabled to the Prime Minister for consideration, including a draft decree to increase the cap of deductible interest expenses under Clause 3 Article 8 of Decree 20/2017/ND-CP and a draft decree on invoicing.
- Authorities are considering a wide range of COVID-19 support measures, including reductions of customs duty and customs audits, but such measures are not officially announced.
- Textiles businesses, including several with no prior experience, have begun producing antibacterial masks after authorities announced a daily need of 10 million.
- According to a Vietnam Chamber of Commerce and Industry Survey, nearly 35,000 companies and small businesses have stopped operations during Quarter 1 and more than 75% of companies will need to reduce their workforce (10% of them by 50%). Over 1,500 companies were dissolved in Ho Chi Minh City in the first quarter of the year as per the municipal government figures. Vietnam could miss its target of having one million businesses this year, due to the pandemic causing many to shut down.
- The government has suspended until 20 June the payment of social insurance premiums into the retirement and survivorship fund, without late payment interest charges, for businesses that have at least 50% of their labour force temporarily on leave as a result of the pandemic. Affected businesses are also exempt from contributions to the Labour Union fund.
- On 25 March the Ministry of Labor, War Invalids and Social Affairs issued an official letter to enterprises to guide wages payments to those laid off due to COVID-19.
- Authorities have approved a plan to delay the collection of US$7.6 billion worth of taxes and land rent to help industries affected by COVID-19.
- The government has passed a US$2.6 billion financial support package including a monthly allowance for between US$21.5-US$77 for up to three months for six categories of individuals and businesses affected by COVID-19.
- As of 20 May, the Ministry of Health confirmed cases of COVID-19 have remained at 324 total. 264 of the affected patients have recovered and been discharged from hospitals.
Factory Service Update
- Better Work is gradually resuming on-site service in the upcoming weeks, including advisory and assessment service, following the government’s social isolation restriction easing.
- Advisory services are being delivered both virtually and on-site with a focus on prevention and mitigation of COVID-19.
- Online training courses are being piloted, and these courses will be implemented until the end of May 2020.
- Better Work has developed and shared guidelines for factories on response to COVID-19.
- Better Work organized eight online industry seminars for factories from 10-30th April to introduce stimulus package proposals of the government to counter the economic fallout of the COVID-19 pandemic. Approximately 230 enterprises participated.
Additional Better Work Activities
- Better Work is liaising with all stakeholders to limit the impact on workers and business and identify a collective approach to support the industry.
- Better Work organized a buyer webinar on 3 April, as well as a buyer legal forum with attendance by representatives of Ministry of Labour, Invalids and Social Affairs on 23 April.
- Better Work will organize a webinar to share updates with brands on 12 May.