Business Associations: Still failing to Bridge Enterprises and Authorities

Business Associations: Still failing to Bridge Enterprises and Authorities

Over the past years, along with the establishment of about 300 business associations, the concept of 'business associations' has become more familiar to the business community and these associations are considered indispensable companions and interest representatives for enterprises. This widespread development of business associations initially produced good results.

However, activities of these associations are fragmented and ineffective, and the associations have yet to prove their role as representatives of enterprises as well as a link between enterprises and authorities, which is a necessary requirement of a modern market economy. 

Most business associations, which have operated effectively, are those with many member enterprises with great economic potential or associations of ministries, such as the Vietnam Footwear Association and the Vietnam Association of Seafood Producers and Exporters. Other associations face many difficulties in finance and legal fields. As a result, it is difficult for these associations to help their member enterprises seek partners, expand markets, especially foreign ones, or protect the interests of enterprises.

Therefore, many enterprises have expressed their disappointment after joining business associations, as they do not receive any corresponding support while membership fees of these associations are quite high. These associations have yet to develop their role of linking enterprises and the government. As a result, many enterprises failed to have a representative to submit their proposals on policies and approaches to authorities as they expected when they joined business associations.

The results of a recent conducted survey show that 32 per cent of enterprises said they were not satisfied with the role of representatives of their business associations while 52 per cent said that support in market analysis had yet to meet their requirements. Of this figure, 68 per cent of surveyed enterprises said they were not satisfied with training activities and 72 per cent were unhappy technology access support.
Clearly, the development of the role and power of business associations is an urgent issue for the business community and a key focus of the Government for economic development.

Experience of some developed countries shows that business associations acting as a nursery for enterprises are an objective requirement of the economy. Via business associations, the government can understand developments of the economy thus facilitating the choice and effectiveness of macro policies suitable with each cycle. Furthermore, with a large scale of operation, associations can gather member enterprises to help each other in production and business activities for mutual development, as output of some enterprises may be an input of other enterprises. This can be seen clearly in the Japanese and Chinese business communities. Japanese and Chinese enterprises use services and products of enterprises within an association with the same quality and prices.

Therefore, relations among enterprises, associations and the Government need to be close to create a healthy business environment, creating a motivation for enterprises to develop and integrate into the world economy.

• Hai Yen