Upgrading Vietnam in Global Supply Chains, Seizing Opportunities to Become “Dragon” and “Tiger”

2:06:20 PM | 13/5/2020

At the meeting between the Prime Minister and businesses, VCCI President Vu Tien Loc delivered a speech on the Government's efforts to support businesses in the past time and on the resilience of businesses. He also proposed initiatives for Vietnam to become a “dragon” and a “tiger”. Vietnam Business Forum would like to introduce this speech.

The Vietnam Chamber of Commerce and Industry (VCCI) reported over 150 specific initiatives and recommendations of the business community to the Government and the Prime Minister. Here are some general issues.

First of all, I would like to express my sincerest thanks to the Prime Minister for a very difficult decision he made more than three weeks ago: Basically lifting quarantine measures and reopening the domestic market. With this decision, businesses and the economy are changing very quickly and positively.

VCCI conducted a business survey in late April and early May, finding that up to 55% of respondents will maintain their current production scale in the third quarter, 22% planned to expand operations, and only 21% will narrow their scale or suspend operations. This is encouraging and much better than that in the survey VCCI announced a month ago.

Once again, Vietnamese businesses have shown their vitality, elasticity and resilience in tough conditions and in time of crisis.

More respectably, many businesses are striving to take good care of their employees and keep their jobs although they have no profit, even suffering losses, and seeing sales drop. This is showing that the social responsibility of enterprises and entrepreneurs - job generators in the economy - who dare to trade off their personal peace of mind to enrich the country and take care of people's livelihoods.

I propose that the Party and the State praise and reward enterprises and entrepreneurs who have bravely and steadfastly overcome the epidemic.

The business landscape has become better although there are a lot of tough difficulties ahead. Timely support measures from the Government are extremely important. The business community highly appreciates the Government for the fiscal and credit packages, with unprecedented scale, and in a tight budget context, to support business. This illustrates the Government’s spirit of sharing and siding with the business. What the business community wants is: The Government and the National Assembly consider reducing and exempting more taxes and fees, extending repayment deadline for loans/debts, and loosening credit growth caps.

But most importantly, enterprises proposed that relevant agencies and organizations promote the quick, effective, transparent and impartial implementation of support packages launched. A stitch in time saves nine. Many companies will survive if we act one day faster and many will die if we act more slowly. Late support won’t work.

As for more radical and longer-term solutions in the coming time, the Prime Minister said “We can turn challenges into opportunity” and Party General Secretary and President Nguyen Phu Trong emphasized “We fight the epidemic together but the biggest task is to develop business” and “Our country has never had the opportunity, capability, position and prestige as nowadays." The Provincial Competitiveness Index (PCI), recently released by VCCI, also highlights the highest satisfaction of the business community with all levels of the Party and authorities in the past 15 years. In the country, public and business confidence is rising. In the world, the largest wave of global supply chains in human history, since World War II, is targeting Vietnam as a safe destination. Vietnam is once again facing the opportunity to become a “dragon” or a “tiger”.

To take this opportunity, accelerating institutional reform is the most important foundation. The National Assembly and the Government have decided on the goal of bringing Vietnam into the Top 3 or Top 4 ASEAN of competitiveness and business environment. We kindly request the Government to consistently implement this goal and consider it a measure of political achievements of agency leaders at all levels, across all sectors and in all localities.

We hail the Government for setting up a legal review task force to work out plans, to be submitted to the National Assembly and the Government, to eliminate overlaps and irrationalities and ensure transparency and consistency in the current legal system, especially investment and construction laws, to create favorable conditions for rapid launch of business and infrastructure development projects.

When I asked many well-respected entrepreneurs, even in the most difficult times of the pandemic, what they needed. Their frank and heartfelt response was: We do not ask for money but for mechanisms as we know the government is in difficulty.

Simply speaking, the transparency and simplicity of administrative procedures to minimize the time and costs to this effect is the ultimate sustainable solution for businesses. We know that more than US$30 billion for public infrastructure investment projects has already included in the plans of central and local agencies. If procedures are eased and the money is quickly disbursed this year, we can create an important push for the economy. Promoting institutional roles and mobilizing enough resources in this way, there is no reason that we cannot achieve GDP growth of over 5% this year as determined by the Prime Minister. We support the Government for this.

We are also happy to know that the Politburo is preparing to issue regulations on protection of officials who dare think and dare act for the common good. We do hope that the Party will soon issue this policy to give an “iron armor” to secure officials and Party members, especially brave, courageous, committed, innovative, creative leaders who act for the cause of the Party and of the nation.

In order to actively receive new FDI inflows, I suggest the Government assign ministries and sectors to work with VCCI, localities and the business community to soon deploy a national strategic investment promotion campaign to contact the headquarters of global supply chains, actively facilitate and attract appropriate, higher value-added production and business stages into Vietnam rather than passively wait for them to come in.

In order to enhance the competitiveness and capacity of Vietnamese enterprises, especially SMEs, seeking to become potential partners of transnational corporations, I propose developing and implementing a supporting industrial development strategy and a national program for higher corporate governance of the business community, helping businesses to invest in improving human resource quality, helping them fulfil digitalization and internationalization requirements and adopt sustainable, innovative and responsible business models. The enabling government and the creative and socially responsible business community will be the two wings for Vietnam's economy to fly high. VCCI is ready to stand by ministries, trade associations and organizations to develop and implement this important program.

For the time being, the biggest difficulty for Vietnamese enterprises is still the consumer market. I suggest launching programs to encourage Vietnamese people to use Vietnamese goods to further support Vietnamese enterprises.

Today, the Government is meeting with the business community to formally open the front to revive the economy. I propose setting up a steering committee and a task force on this front which will be presided over by the Prime Minister. The business community and I propose establishing steering committees to be chaired by the chairpersons of the People's Committees to extend the helpful arm to assist enterprises to successfully restart and recover the economy.

Source: Vietnam Business Forum