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According to the report "Economic impact of the agri-food industry in Southeast Asia" commissioned by Food Industry Asia (FIA) Oxford Economics, Vietnam ranks 2nd out of 10 regional countries in terms of economic recovery expectations. in the agri-food industry, with a score of 6.6 out of 10, just behind Singapore.
This is partly thanks to Vietnam having stopped the spread of Covid-19 relatively early and minimized the economic damage. The agri-food industry remains resilient during the pandemic, posting 4% growth in 2020, equivalent to an increased contribution of $3.7 billion to national GDP.
However, according to the report, similar to other countries in the region, Vietnam's agri-food industry has had long-term challenges over the past decade. It is the process of rapid urbanization and migration that reduces agricultural labor. With that, as incomes increase and population grows, consumers are demanding more and better quality food.
And with the arrival of the pandemic, the industry must invest more in technology to increase efficiency, flexibility and safety for the environment and the food value chain. This will require "smarter practices, including mechanization, financial support, skills development, as well as sound macroeconomic policy".
James Lambert, Asia Economic Advisor at Oxford Economics, said that in order for Vietnam to continue to be one of the world's fastest-growing economies, it is important for policymakers to create favorable conditions. most favorable for the strong development of agri-food industry. To do so, fiscal policies must be carefully planned, designed and communicated.
Mr. Lambert also noted that a fiscal policy adjustment including an increase in sales tax could reduce the needs and welfare of households as food and non-alcoholic beverages currently account for more than a third. expenditures of these subjects.
The report recommends that, in order to successfully formulate fiscal policies that do not constrain the agri-food sector's recovery, the government needs to meet three conditions: behavioral orientation; Prioritize standard regulations over taxes and engage in ongoing dialogue with the industry.
According to Ms. Mary Tarnowka, Managing Director of AmCham Vietnam, the agri-food industry has shown good resilience to the pandemic. However, the spread of Covid-19, supply and demand and fiscal risks could disrupt growth. "It is necessary to continue to diversify the agri-food sector by building capacity to create higher added value in agro-technology, manufacturing and services," she recommended.
Before the pandemic, Vietnam's agri-food industry made great contributions to the economy. The results from the report show that the industry contributed $86.4 billion to GDP in 2019, providing 27.5 million jobs, accounting for half of the workforce. In addition, the agri-food industry also contributes a total of 13.2 billion USD to Vietnam's tax income.
FIA was established in July 2010 by a group of leading food and beverage companies in Singapore. The organization brings together the food industry's senior business leaders to champion initiatives that promote sustainable growth and support regional policies that deliver harmonized outcomes.
Source by: VNExpress
