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Vietnam's Small Businesses Face Mass Closures as Covid-19 Outbreak Worsens

As the Covid-19 outbreak worsens overseas and more new cases are detected in Vietnam, many businesses face the threat of shutting down.

VnExpress reports that the Private Economic Development Board (IV Board) surveyed over 1,200 companies in Vietnam from March 2 to 3 and found that roughly 30% of these businesses had lost up to 50% of their revenue since the outbreak began. A further 60% had seen their revenue fall by over 50%.

Three-quarters of the surveyed companies have under 100 employees, and a majority said they will go bankrupt if the outbreak lasts for over six months.

The IV Board also found that companies working in tourism, education, textiles and wood production have been the hardest-hit thus far. Tourism has been decimated by the outbreak, with revenue falling by US$7 billion in the first two months of the year and more pain expected as restrictions on European visitors come into effect.

Meanwhile, the Saigon Times adds that over 28,300 businesses stopped operating in January and February, in part due to the Covid-19 pandemic. This figure topped the number of new business registrations by over 11,000.

Pham Chi Lan, an economist, told the news outlet that many small businesses, particularly in the F&B sector, were already struggling due to the zero-tolerance drunk driving laws which went into effect on January 1, and recent outbreak developments have only exacerbated the problem.

These companies often have minimal financial reserves, so in the event of a crisis they have very little cushion to fall back on.

Schools are struggling too, with the Times reporting that 150 private schools petitioned the government for support last week, with 90% of this group saying they would go out of business in another six months without financial assistance.

Prime Minister Nguyen Xuan Phuc has asked tax officials to reschedule tax payments for businesses in heavily-impacted sectors, while up to US$10.8 billion in loans has been offered.

[Photo via Flickr user ILO Asia-Pacific]

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