Solutions to enhance the operational efficienty of vietnamese enterprises after global financial crisis,

-i- STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING BANKING ACADEMY Faculty of Foreign Language - - GRADUATION THESIS SOLUTIONS TO ENHANCE THE OPERATIONAL EFFICIENCY OF VIETNAMESE ENTERPRISES AFTER GLOBAL FINANCIAL CRISIS Lecturer Student Class : NGUYEN PHUONG LAN (MA) : NGUYEN VAN ANH : ATCC – K14 Hanoi May 20, 2015 -i- DECLARATION I declare that this thesis is the product of my own work and has not been previously submitted for my degree or examination in any other university All the sources I have used have been indicated and acknowledged by means of complete references Signature: Date: -ii- ACKNOWLEDGEMENT This graduation thesis would not have been possible without the guidance and the inspiration of several individuals who in one or another way contributed and extended their valuable assistance in the preparation and completion of this study First of all, I would like to convey my deepest gratitude to my beloved supervisor, Ms Nguyen Phuong Lan (M.A), for her great inspiration and constant guidance She encouraged me to set the target of writing thesis for graduation when I was a second-year student of her English for Banking and Finance IV class Then, in spite of her busy schedules, she always found the time to guide me through this thesis Next, I would like to express my sincere thanks to all the teachers in Banking Academy of Vietnam, especially those of the Faculty of Foreign Language who have provided me with a huge source of knowledge during my four years at university Last but not least, I also owe my heartfelt gratitude to my family and my friends, who have been a constant source of love, concern, support and strength, greatly assisting me in completing my work Because of time constraints and limited capacity of the writer, this thesis will certainly not be free from defect Therefore, it is my hope that lecturers and readers of the thesis will sympathize and offer further contribution to it -iii- ABSTRACT The joining of Vietnam into the World Trade Organization (WTO) has brought the economy a lot of growth potential as well as opportunities By taking part in global economic integration, Vietnamese economy in general and Vietnamese enterprises in particular might not only raise the position in global economic market but also be easily affected by the downsides of economy in the world which include the global financial crisis in 2008 This paper studies the impacts of the global financial crisis on Vietnamese enterprises It goes ahead to understand theoretical underpinnings relating to financial crisis in general before critically analyzing the influence of the global downturn on Vietnamese enterprises The theory mentions three fundamental aspects of financial crises, including definition, classifications, and their consequences on economy Particularly, the global financial crisis in 2008 was proved to be a typical fiscal turmoil possessing all specific features of a financial crisis A study of its development, causes, and effects was conducted with an emphasis on the situation of enterprises in Vietnam Finally, in an attempt to make Vietnamese enterprises operate more effectively after being impacted by the crisis, some recommendations are proposed to the government and enterprises -iv- LIST OF ABBREVIATIONS Abbreviation Original ASEAN Association of Southeast Asian Nations CDOs Collateralized debt obligations EU European Union EUR Euro FDI Foreign Direct Investment FDIC Federal Deposit Insurance Corporation FED Federal Reserve FII Foreign Indirect Investment FTA Free Trade Agreement IMF International Monetary Fund GDP Gross Domestic Product GBP Great Britain Pounds JPY Japanese Yen LIBOR London Interbank Offer Rate M&A Merger and acquisition MBS Mortgage-backed securities SBV State Bank of Vietnam SMEs Small and Medium Enterprises UK United Kingdom US United States USA United States of America USD United States Dollars VAT Value Added Tax VND Vietnamese Dong WTO World Trade Organization -v- LIST OF TABLES AND FIGURES Figure 3.1 House prices during the housing market bubble in the US (Source: Wikipedia) 14 Figure 3.2 The movement of some indexes on stock market in 2008 (Source: Wikipedia) 16 Figure 3.3 Sales Prices of New Houses Sold in the United States 2002 – 2010 16 Figure 3.4 Prices of some exported commodities (Source: Thomson Rueters) 17 Figure 3.5 Overnight LIBOR based on USD (Source: Sober Look) 18 Figure 3.6 Treasury and Mortgage-Backed Securities Held (Source: Sober Look) 20 Figure 3.7 FDI into Vietnam (Source: GSO) 24 Figure 3.8 The number of unemployed people in Jan 2009 (Source: GSO) 28 Figure 3.9 Situation of SMEs in Vietnam in 2008 30 -vi- TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENT ii ABSTRACT iii LIST OF ABBREVIATIONS iv LIST OF TABLES AND FIGURES v TABLE OF CONTENTS vi CHAPTER 1: INTRODUCTION 1.1 Rationale of the study .1 1.2 Aims of the study 1.3 Research questions 1.4 Research methodology 1.5 Research scope 1.6 Thesis organization CHAPTER 2: LITERATURE REVIEW 2.1 Definition 2.2 Types of financial crisis 2.2.1 Banking crisis .4 2.2.2 Currency crisis 2.2.3 Speculative bubbles and crashes 2.2.4 International financial crises 2.2.5 Wider economic crisis -vii- 2.3 Causes and consequences of financial crisis 2.3.1 Strategic complementarities in financial markets 2.3.2 Leverage .7 2.3.3 Asset-liability mismatch .8 2.3.4 Uncertainty and herd behavior 2.3.5 Regulatory failures .9 2.3.6 Contagion 11 2.3.7 Recessionary effects 11 SUMMARY OF CHAPTER .11 CHAPTER 3: RESEARCH METHODOLOGY & DATA ANALYSIS 12 3.1 Global financial crisis in 2008 12 3.1.1 Development of the crisis 12 3.1.2 Causes of the crisis 13 3.1.3 Effects on the global economy 15 3.1.3 Policy responses .19 3.2 Impacts of global financial crisis on Vietnamese enterprises 23 3.2.1 Enterprises lacking production capital .23 3.2.2 High price of input factors 25 3.2.3 Reduction of output markets 26 3.2.4 Unemployment 28 3.2.5 Reduction in profit 29 3.2.6 Bankruptcy .29 3.3 Current economic conditions of Vietnam encouraging enterprises 30 3.3.1 Positive signals for recovery by 2014 30 -viii- 3.3.2 Prospects for 2015 32 SUMMARY OF CHAPTER .33 CHAPTER 4: RECOMMENDATIONS AND CONCLUSION 34 4.1 Recommendations for the government .34 4.1.1 Continuing to implement production capital support policy 34 4.1.2 Promoting investment along with solving employment problems 35 4.1.3 Continuing to implement business tax support policy .36 4.2 Recommendations for Vietnamese enterprises 37 4.2.1 Changing business strategies 37 4.2.2 Focusing on domestic market 38 4.2.3 Controlling finance effectively .39 SUMMARY OF CHAPTER .40 CONCLUSION 41 REFERENCES 42 -1- GRADUATION THESIS BANKING ACADEMY CHAPTER 1: INTRODUCTION 1.1 Rationale of the study The financial crisis is a phenomenon that its influence is far-reaching for the economy not only just in a single country but also in the whole region It causes the fall in growth rate and investment, leading high inflation, rising unemployment, and so on The global financial crisis in 2008 had a huge impact on the economy in the countries, especially developed countries such as Russia, Japan, Germany, and the EU This does not mean that developing countries are not affected The crisis had a huge influence on enterprises, corporations In reality, many businesses that had survived more than a hundred years with full of experience, position and brand had to declare bankruptcy Therefore, we can imagine that businesses in developing countries including Vietnam would also face difficulties Accordingly, I choose the topic “Solutions to enhance the operational efficiency of Vietnamese enterprises after global financial crisis” as my graduation thesis’s title in the hope of illustrating the real situations during crisis period and making some recommendations to enhance the effectiveness of Vietnamese enterprises 1.2 Aims of the study The thesis aims at analyzing the impacts of the global economic crisis on Vietnamese enterprises in terms of capital, labor, business markets, and so on Firstly, the thesis shows research about basic theoretical contents about financial crisis Together with that, it also aims at finding out government measures to support enterprises overcome the hard time Furthermore, I would like to provide information indicating that businesses themselves have been made effort to develop after the global financial crisis -29- GRADUATION THESIS BANKING ACADEMY 3.2.5 Reduction in profit Due to the global financial crisis, price of input materials rose dramatically as being mentioned above Besides, enterprises was not able to sell products because there was no export market, leading to difficulty in earning profit from production costs At the bottom of the crisis, several manufacturing enterprises quickly focused on purchasing materials for storing at very low prices, or some property companies benefited from the rise of market, which made an outstanding profit in the second quarter of 2009 However, when sources of low-cost materials was exhausted, the enterprises had to buy materials at new floor prices, causing decreases in profits earned from the third quarter or even great losses At the end of 2009, according to the report of Tuong An Company (TAC), its revenue was VND686 billion and profit was VND20 billion in quarter II However, quarter III saw a fall in revenue of VND629 billion and a surprising loss of VND68 billion The reason of this loss might be the decrease in sales and the increase in financial cost About Vietnam Land Investment Company (VNI), its profit in the quarter II was VND6 billion and a loss was VND63 million, but the figures for the quarter III were VND35 million and VND695 million Moreover, many other enterprises such as BaSa Company (BAS) and Sai Gon Tribeco Beverage Joint Stock Company (TRI) continuously suffered from heavy losses In addition, the consequences of the crisis had caused the number of tourist arrivals decrease significantly According to released report of the Vietnam Airlines, profit before tax in 2008 was only USD14 million, down from USD23 million in the previous year The profit went down although the revenue of the corporation was USD1.56 billion, compared to USD1.27 billion in 2007 3.2.6 Bankruptcy In 2008, according to Vietnam Chamber of Commerce and Industry, Vietnam had around 350,000 small and medium private enterprises (SMEs) containing -30- GRADUATION THESIS BANKING ACADEMY VND10 billion capital and less than 3000 employees Of these, there were about 70,000 enterprises going bankrupt, 200,000 enterprises in difficult situations, and just about 70,000 enterprises working effectively By the first quarter of 2009, of 20% of SMEs standing on the verge of bankruptcy, 7,000 businesses declared dissolved and 3,000 enterprises had to stop producing In terms of block of SMEs, the reduction rate reached 30-50% compared to the previous figure Therefore, there was 10% of enterprises being affected by the inflation and might be improved with proper policies 21% 22% Going bankrupt Getting difficulties 57% Working effectively Figure 3.9 Situation of SMEs in Vietnam in 2008 Another highlight point is that industrial output of both domestic private and foreign private (foreign investment sector) accounted for 75% of total production Since then, economic experts said the private sector would collapse leading to a series of economic disaster It not only caused decrease in the growth rate and unemployment but also affected social security 3.3 Current economic conditions of Vietnam encouraging enterprises 3.3.1 Positive signals for recovery by 2014 GDP increased by 5.98% in 2014, the highest level since 2011 until now The figures for agriculture, forestry and fisheries increased by 3.49%, 2.64% higher than the level of 2013 The industry and construction sector have been improved significantly and achieved a breakthrough of 7.14%, the highest level in the last years However, the service sector increased by only 5.96%, which was 6.56% lower -31- GRADUATION THESIS BANKING ACADEMY than the previous year’s figure These figures show that Vietnam's GDP growth was gradually escaping the bottom The positive point worth to be noted is that exports and imports in 2014 continued to increase Specifically, export turnover reached USD150 billion, a rise of 13.6% Particularly, FDI sector excluding crude oil rose by 16.67%, higher than the domestic sector (10.4%) Meanwhile imports reached USD148 billion, up 12.1% over the previous year Thus, Vietnam 2014 trade surplus was up to $ billion This is the highest trade surplus ever Some other positive signs for the economy as inflation in 2014 was almost completely controlled CPI rose by only 1.84%, the lowest level since 2002 In the commodity group, except for education which increased by 8.24%, most other commodity groups increased quite low The currency of Vietnam in 2014 was relatively stable Currency exchange rates versus the US dollar had some small but negligible volatile session and within the limits of the commitment of the State Bank of Vietnam (SBV), while most of the world currencies have depreciated quite sharply against the dollar However, that the currency depreciated less than other currencies reduced the competitiveness of goods produced domestically The total social investment in 2014 was up by 11.5% over the previous year and by 31% of GDP Notably, non-state sector experienced the largest increase of 13.6%, FDI increased by 10.5% and the public sector grew by about 10% The investment in the private sector increased significantly showing that the confidence of the people backed In addition, the capital increased partly due to the fall of market interest rates Interest rate was considered as one of the bright spots of the economy Currently, interest rates and loans was almost the lowest ever That interest rate was cut and the bank expanded the budget contributes to cost reduction and corporate finance businesses were revived when accessing funds Along with lower interest -32- GRADUATION THESIS BANKING ACADEMY rates, another positive point is that the financial banking system was quite stable over the past year VAMC became active in the acquisition of the bad debt of the banks A bright spot cannot help mentioning that is policy The law as the Housing Law, the Law on Real Estate Business, Enterprise Law or the Investment Law was passed in Parliament These laws are more progressive than before Housing Law adds one thing that the business object, foreign individuals can purchase and own houses in Vietnam The administrative reform spirit of lawmakers through the simplification of procedures; transparency documents necessary papers; shortening and specify the time limit for handling dossiers is also expressed quite clearly in the legislation These are important changes to help create the legal framework for business can work better 3.3.2 Prospects for 2015 At the last meeting of 2014, Congress passed the target GDP growth of about 6.2%; social investment rate of about 30-32%, consumer price index rose by 5%; exports increased by 10%; the trade deficit compared with exports of about 5% This is the basic economic indicators and generally quite close to the level achieved by 2014 With economic recovery now, these economic statistics may not be difficult to achieve Some other economic trends in 2015 includes that IPO wave of the stateowned enterprises sector (SOEs) will be more exciting According to the Ministry of Finance, in 2014, there were 115 SOEs equalization, so under the 2015 target there are also 317 enterprises to implement privatization This goal cannot be achieved but certainly the equalization will continue strongly Another trend should be mentioned is that the M&A activity in 2015 will be exciting Statistically, M&A activities in Vietnam in 2014 worth more than USD2.5 billion, up by 15% compared to 2013 On the real estate market, M&A activity is strong with a series of projects to transfer -33- GRADUATION THESIS BANKING ACADEMY In 2014, registered FDI capital decreased compared with 2013, but disbursements continued to rise This shows that Vietnam has attracted a great attention of foreign investors This positive trend is expected to continue in 2015 In early 2015, the SBV actively increased the interbank exchange rate by 1% Even after this adjustment, the exchange rate on the market fluctuated sharply However, only a few days later, the exchange rate stabilized By 2014, most currencies depreciated sharply against the dollar, but the currency adjusted only slightly by Vietnam remained a surplus balance of payments By 2015, it is likely that fluctuation in exchange rates is only the extent of the central bank target In the second half of 2014, the real estate market became active Numerous projects in the various and different segments were rushing to complete and open a successful sale Confidence in the market was significantly improved and the reserved cash flow entered the real estate market was strong Many predicted that this trend was more active in 2015 due to macroeconomic stability, low interest rates and banks are willing to expand the chances for real estate SUMMARY OF CHAPTER Chapter has given the details about the global financial crisis in 2008 and its impacts on Vietnamese enterprises as well as the current conditions of economy in Vietnam The crisis started from the USA and then spread to all over the world, which resulted in collapse of many large financial institutions The year 2008 saw great efforts of many countries and regions to get rid of the crisis As a developing country in process of global economic integration, Vietnam was also affected by the consequences of the crisis However, basing on the achievements after six years of struggling with difficulties, Vietnamese enterprises are expected to enhance their operational efficiency in 2015 Several recommendations for both the government and enterprises in Vietnam will be given in chapter -34- GRADUATION THESIS BANKING ACADEMY CHAPTER 4: RECOMMENDATIONS AND CONCLUSION 4.1 Recommendations for the government 4.1.1 Continuing to implement production capital support policy In 2009, the government of Vietnam implemented stimulus policy through interest rate support of 4%, tax exemption, tax reduction, and loan guarantees to businesses According to this policy, package of 4%-interest subsidy belonged to spending stimulus towards business investment There were three types of interest subsidy: short-term loans, medium & long-term loans, and loans for agriculture and residential housing On 12/05/2009, the Ministry of Planning and Investment had officially announced on stimulus package of the government worth VND143,000 billion (equivalent to USD8 billion); the figure then increased to VND160 trillion (approximately USD9 billion) Accordingly, the demand stimulus package was divided into sections with different values which supported credit loan interest rate of about VND17,000 trillion This first stimulus package had a positive psychological effect by instantaneously increasing the trust of businesses, banks and investors in the responsibility of the government for supporting enterprises, as well as in the market outlook in Vietnam The stimulus package directly supported businesses to have access to bank funds with lower cost, thereby reduced business costs, and increased competition and goods consumption on the market Many companies which were received timely support from the stimulus package had opportunities to maintain and expand production, contributing to unemployment pressure reduction and ensuring social stability In addition, program “Bank - Enterprise Connection” was one of the innovative solutions being deployed by banking system, helping businesses rapidly gain access to loans with preferential interest rates to continue develop production and business After years of implementation, the program appealed over 4,500 clients to borrow the total amount of VND67,500 billion with preferential interest rates Also, 10,590 enterprises taking part in the program were advised about debt restructuring with the total debt structured at VND218,000 billion By 2015, the -35- GRADUATION THESIS BANKING ACADEMY program will support enterprises with a limit of VND60.000 billion and many other preferential policies The SBV will not only focus on lending enterprises in manufacturing sector and five groups of priority areas, but also support enterprises in high technology and supporting industry sectors as well as extend long-term loans to improve technology in expansion of production However, to ensure that the solutions will work, the government needs to closely monitor the allocation of demand stimulus package resources, and avoid creating unfair competition between the parties in the economy, especially businesses Next, the government should create favorable mechanisms for investment environment by implementing proper macroeconomic policies or improving the infrastructure On the other hand, only local areas which have feasible human resources and financial plans before they call for support of investment funds can be approved the loans In fact, through foreign investment environments, Vietnamese enterprises can acquire knowledge and take opportunities to review their products on the domestic market Finally, the stimulus package is only a temporary solution in the period of economic crisis As the economy overcomes the difficult period, government should implement a flexible monetary policy, and restructure the economy following a sustainable development in order to avoid the outbreak of the crisis remnants 4.1.2 Promoting investment along with solving employment problems Creating jobs for 1.6 million people in 2015, including 1.51 million local employees, and 90,000 exporting employees, is one of the important goals set by the government on January 22 To reach this goal, there should be several solutions First, government should continue to provide new policies to stimulate investment, improve infrastructure in rural areas, and invest in production operations and service areas This might increase incomes, create jobs and contribute to the industrialization and modernization of agriculture and rural areas Also, enterprises -36- GRADUATION THESIS BANKING ACADEMY investing in agriculture and rural areas should be given a number of incentives and additional support of land, labor training, market development, consulting services, technology application, and transport charges Second, the state should supervise the activities of employment services Activities of job centers should focus on counseling, and giving labor market information It is necessary to strengthen the coordination between job centers, enterprises, and the employees Next, the government should promulgate new employment policies, which particularly focus on developing high-qualified human resources in important sectors such as agricultural economy using high-tech, marine economy, and information technology industry These policies also should encourage the employees working overseas to back to the country after the end of labor contracts or of training periods Finally, the state must ensure that the implementation of vocational training and apprentices have real economic effectiveness and avoid wasting funds for these process 4.1.3 Continuing to implement business tax support policy At the end of 2014, the tax solutions to remove difficulties and obstacles and to promote the development of enterprises set out in the Government's Resolution No.63/2014/NQ-CP dated 25/08/2014 has been basically completed By 2015, the government will continue to enact the amended and supplemented laws to support businesses more on tax issues Accordingly, the government will extend not subject to VAT, facilitating agriculture In 2015, as stipulated in Article of Law No.71/2014/QH13 (amended and supplemented law of the law on taxes), many items related to agricultural production which has been under the tariff of 5% VAT will be switched to not subject to tax like: Fertilizers; machinery and equipment used in agricultural production; offshore fishing boats and so on Therefore, enterprises which produce and supply these items will have the opportunity to lower prices and expand the markets -37- GRADUATION THESIS BANKING ACADEMY In addition, the government should adopt measures to effectively implement Agreement on avoidance of double taxation which Vietnam has signed with other countries For businesses operating in the country have not signed this agreement with Vietnam, the businesses have to pay the difference only in the case that the income tax rate at that country is lower than the rate in Vietnam In terms of international trading, apart from joining the Agreement of the World Trade Organization (WTO), Vietnam has signed other agreements about the free trade area The Ministry of Finance in collaboration with other related ministries should strictly follow commitments on tariffs in the free trade agreements (FTA) of Vietnam in the period of 2015-2018 Therefore, Vietnamese enterprises can take advantages of these agreement and develop their business 4.2 Recommendations for Vietnamese enterprises 4.2.1 Changing business strategies The crisis is a good opportunity for business restructuring Some strategies such as M&A, split or transformation may be the effective ways to overcome the difficulties Enterprises should consider the crisis as an opportunity to enhance their value and competitiveness in the market When being restructured, the organizational structure of the enterprise should be compatible not only with the characteristics of each job and each sector, but also with international standards in order to avoid unnecessary risks when Vietnam is further integrating to international economy In addition, enterprises need to change business strategy to take advantage of the crisis such as centralization to overcome the crisis Vietnam businesses, especially small and private businesses, should learn from the major corporations in the world that has centralized their brands During the crisis, the brand extension often must be carefully studied and put in a long-term strategy Some typical cases in the world such as Intel which does not give up its key industry of chip manufacturing after many years, or Toyota having always tried to take the leading position in the world in car production industry, and Apple not only taking advantage of creativity to expand its -38- GRADUATION THESIS BANKING ACADEMY brands like iPod, iPhone, Macbook, but also still sticking to its traditional industry In Vietnam, Vinamilk is a company pursuing the centralized brand strategy and has achieved success in implementing this strategy Vinamilk has focused on building a mega brand on many products and created the marketing campaign so that Vinamilk could regain market share from Dutch Lady and elevate the brand image among consumers Instead of using profit to invest in real estate or finance sectors, Vinamilk continues to invest in the system of milk production plants and in healthy beverage industry which company also has advantages in distribution and marketing Most enterprises are currently operating in a very scattered way and mainly developing the business in width Therefore, enterprises need to evaluate the current customer groups to focus on marketing on potential customers with high demand and purchasing power Furthermore, enterprises should actively participate in industry associations or business organizations to share information, to link businesses and to coordinate in the market Enterprises can also actively adjust marketing activities to suit changes in the macroeconomic policy of the government In doing so, enterprises must closely monitor the changes of the government and in anticipation of the opportunities offered by the macroeconomic policies created 4.2.2 Focusing on domestic market During the global financial crisis, rising costs and unstable incomes caused consumers more cautious in their purchasing This is a problem in all countries affected by the global financial crisis Businesses stuck in the situation in which they could not sell their goods and revolve the production Since then, the difficulties in the production of enterprises were formed In addition, the products of Vietnam exported to foreign markets that are not sold would generate a lot of costs Therefore, enterprises should focus on the domestic market of both the inputs and outputs So far, countries often exploited domestic market; however, due to chasing export earnings during the integration, enterprises have not yet paid proper attention to the potential domestic market with more than 86 million people By focusing on -39- GRADUATION THESIS BANKING ACADEMY developing the domestic market, enterprises can reduce the level of dependence on the foreign market of fuels and other materials Furthermore, along with the supported policy package by the State, businesses need to strengthen the domestic market, directing the stimulated package to the right domestic products rather than imported goods, especially the businesses in the textile, footwear, handicrafts, processed agricultural and fishery which often put priority on export markets Enterprises should focus on strong penetration into rural areas, a potential market not being exploited yet To be able to penetrate the domestic market, enterprises should take several actions Firstly, they should carry out the market research to catch the market demand about design, quality, price, and product line structure Secondly, they should pay more attention to the development of products for the domestic market Although businesses might have high export turnover, mainly products are made following the orders of overseas customers, especially textile, leather and footwear industries If companies want to produce goods for sale in the domestic market, they need to develop products that suit the needs of domestic customers Next, the distribution channel is an equally important condition Enterprises can link to others having pretty strong distribution channels in order to support in consumption of goods 4.2.3 Controlling finance effectively Once understanding the impacts, enterprises should plan to navigate businesses escape the crisis in the best possible situation This should start from protecting financial foundation of the business by ensuring a positive cash flow, being able to have access to capital, ensuring liquidity, and managing cash strictly Besides, enterprises should consider reasonable borrowing rates and increase operational efficiency In particular, enterprises should strictly control finance to prevent embezzlement and the types of financial fraud in the company Enterprises should not assign a single employee to control a financial transaction from beginning to end or should impose quotas of the transaction value for the employees Enterprises can use a third party to conduct audits at least once a year In terms of business, due to -40- GRADUATION THESIS BANKING ACADEMY the increase in product prices, while the income of the people is limited, reduced purchasing power caused many difficulties to enterprises in consuming the products Therefore, businesses need to balance between price and quality of the goods in order to stimulate consumption SUMMARY OF CHAPTER Chapter has given several recommendations for both the government and enterprises in Vietnam in 2015 Only when these solution are synchronously performed with the combination of the parties, the production and business activities of enterprises in Vietnam can be efficiently improved, and the available resources are properly exploited -41- GRADUATION THESIS BANKING ACADEMY CONCLUSION The global financial crisis in 2008 caused the worst results since World War II, leading to bankruptcies of many businesses and large corporations all over the world The root reason is that the control of business operations for the derivative products on the US financial market was not tight To deal with this terrible situation, governments had taken measures fiscal policy and monetary policy The consequences of the global financial crisis in 2008 have shown the importance of healthy and stable macroeconomic policies Economic growth is a necessary condition but need to tie up with macroeconomic stability Focusing on achieving growth at any costs may leave the risks of loss of macroeconomic stability and socioeconomic development in the long-term Financial crisis and economic recession are challenges but also opportunities for Vietnamese enterprises to enhance the competitiveness and flexibility Many issues of business management, risk management, restructuring, production enhancement, as well as investments in technology, labor productivity and skills training for workers should be taken seriously As a developing country actively involving in the process of international economic integration, Vietnam should take initiative in selecting solutions and take advantages of the current conditions to deal with the challenges of the crisis The positive results achieved for the stimulus measures of the government in recent years, especially for stimulating investment and production activities of businesses, as well as ensuring social security and tackling the unemployment issues, has proven that However, the government should continue to monitor these measures so that Vietnamese enterprises can completely get rid of impacts of the global economic crisis -42- GRADUATION THESIS BANKING ACADEMY REFERENCES  Books Nguyen Thi Thu Huong (2009), “Impacts of global economic crisis on Vietnamese economy” Page 17-47 Ho Ba Tinh (2015), “Macroeconomics: The year 2015 will be positive, but it is still unclear in medium and long term” Economic Press Vo Thi Thuy Anh (2010), “Problems of the first demand stimulus package – Lessons on demand stimulus policies for Vietnam” Science and Technology Press of Da Nang University  Legal documents: Law No.71/2014/QH13 (amended and supplemented law of the law on taxes) Resolution No.63/2014/NQ-CP dated August 25th, 2014  Annual report of several Vietnamese enterprises in 2009 (Tuong An Company, Vietnam Land Investment Company, BaSa Company, and Sai Gon Tribeco Beverage Joint Stock Company)  Websites Great Recession (n.d) In Wikipedia, the free encyclopedia Retrieved from http://en.wikipedia.org/wiki/Great_Recession Lessons for Vietnamese enterprises after global financial crisis (2014, Jun 6) In Financial Press Retrieved from http://www.misa.com.vn/tin- tuc/tabid/91/newsid/39500/Bai-hoc-kinh-nghiem-cho-doanh-nghiep-Viet-saukhung-hoang-tai-chinh-toan-cau.aspx Solutions about taxes to support Vietnamese Enterprises in 2015 (2015, Mar 23) In Financial Press Retrieved from http://tapchitaichinh.vn/co-che-chinhsach/binh-luan-chinh-sach/cac-giai-phap-ve-thue-thuc-day-doanh-nghiepphat-trien-nam-2015-59434.html Solutions to support enterprises (2014) In Business Online Platform Retrieved from http://dddn.com.vn/toa-dam/cac-giai-phap-ho-tro-doanh-nghiep-2014- 20140106062726634.htm -43- GRADUATION THESIS BANKING ACADEMY Subsidy of VND6,000 billion for Vietnamese enterprises in 2015 (2015, Jan 27) Retrieved from http://antt.vn/60000-ty-ho-tro-doanh-nghiep-nam-2015016427.html United States housing market correction (n.d) In Wikipedia, the free encyclopedia Retrieved from http://en.wikipedia.org/wiki/United_States_housing_market_correction http://gso.gov.vn http://soberlook.com http://thomsonreuters.com