Local big companies should invest into core businesses to improve technology and products and increase the need for infrastructure and capital and generate more jobs instead of risky speculation in land and stocks, state media and economists said.
Core businesses here mean defining key products with comparative advantages Vietnam has to boost its trademarks and overall its economy’s productivity with more jobs generated for local people as it already joined the World Trade Organization, observers said.
Since WTO entry, Vietnam has attracted further investment in electronic components assembly and other areas.
A survey titled “Top 200: Industrial Strategies of Vietnam's Largest Firms” by the UNDP showed that the largest firms in Vietnam, most of them state-owned were found to be “dynamic and ambitious”, but lacking sufficient help from government to gain access to export markets, acquire new technologies and train workers.
Some of them rely heavily on risky speculation in land and equities to make profits when they adapt to global competition, U.N. economist Jonathan Pincus told a new conference.
Jonathan Pincus pointed out once cause for concern is that state-owned enterprises are drawing down most the investment but they are not producing many jobs.
The incentive structure at present encourages firms to invest in assets like land and shares where they can make quick returns, Pincus said, explaining that doesn't mean much to the overall productivity of the Vietnamese economy.
The year-long survey found that many companies were dissatisfied with the education and training of Vietnamese institutions. It also noted that raising productivity and effectiveness of state-owned companies will play a key role in sharpening Vietnam’s economy.
The 200 out of the surveyed 113,000 companies in Vietnam account for 40 per cent of the total assets, more than 25 per cent of the revenues and roughly 45 per cent of tax revenues contributed to State budget, the report said.
Property prices are at record highs and the main Hochiminh Securities Exchange is up 44 per cent this year.
Policies such as land tax, property tax and capital gains tax do not exist in Vietnam as they did in Japan, South Korea and Taiwan when they were at similar stages of development. Big conglomerates helped fuel the growth of those economies.
Vietnam has the young workforce with about half of its 85 million people aged less than 35, which was considered trainable and hard-working by senior management, according to the report.
The research included state-owned, private and joint venture foreign companies and were chosen based on labor, assets, turnover and tax.
Below is a breakdown of top ten big firms:
1) the Bank for Agriculture and Rural Development of Vietnam (Agribank)
2) the Vietnam Post and Telecommunications (VNPT) Group
3) Electricity of Vietnam Group
4) the Bank for Investment and Development of Vietnam (BIDV)
5) Vietsovpetro
6) Vietcombank
7) Pouyen Vietnam Co. Ltd
8) Vietnam Insurance Corporation (Bao Viet)
9) Ho Chi Minh Post Co
10) Military-run telecom firm Viettel
(VnMedia, Thanh Nien Online, New Hanoi)
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