Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), has sent a written document to leaders of business associations and enterprises to respond to cost reduction orientation as stated in the Government’s Resolution No. 01/NQ- CP dated January 3, 2012 on major solutions to realise socioeconomic development and budgetary estimations for 2012.
According to this document, in 2011, despite numerous challenges, Vietnam’s economy expanded 5.89 percent thanks to flexible and timely administration, the support, sharing of the entire society, including business community and entrepreneurs. This growth rate was quite high and reasonable given existing difficulties and efforts to ease inflation and stabilise macro economy. In 2012, global economies are likely adverse and unpredictable. Domestically, macroeconomic instability and high inflation have been curbed but still stayed at high levels. Hence, it is quite clear that 2012 is a tough year for the economy and the business community. It requires endeavours of entrepreneurs to stabilise production and business operations and ensure employment and living conditions for workers.
To bring targeted GDP growth to 6 - 6.5 percent and keep inflation at a single-digit rate, the Government, on January 3, 2012, issued the Resolution No. 01/NQ-CP on primary solutions for guiding, administering and implementing socioeconomic development plan and budgetary plans in 2012, which also includes corporate restructuring, particularly State-owned enterprises. The Resolution No. 01/NQ-CP requires “tightly controlling and strengthening the economisation of production costs, reducing administrative costs by 5-10 percent, lowering selling prices, and enhancing productivity of State-owned enterprises.”
Under the guidance of the Government, the Ministry of Finance issued the Document No. 807/BTC-TCDN dated January 17, 2012 and the Document No. 1944/BTC-TCNH to request all State-owned enterprises and banks to cut down administrative costs by 5-10 percent as required by the Government. Many leading State-owned economic groups have registered to join the campaign, including the Electricity of Vietnam Group (EVN), the Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin), the Vietnam National Textile and Garment Group (Vinatex), the Bao Viet Holdings (BVH), the Vietnam National Shipping Lines (Vinalines) and the Vietnam National Petroleum Corporation (Petrolimex).
Mr Loc said that although the Government mentions administrative cost reduction in State-owned enterprises, this move is helpful for enterprises in the currently difficult situation. Reducing costs and lowering product prices are an effective measure for enterprises to withstand the present tough time. This is important to all enterprises regardless of types, sizes or economic sectors. By assessing corporate governance, minimising expenses for meetings, celebrations, administrative spending and indirect expenses and applying drastic solutions and measures to renovate business administration to enhance labour productivity and cut input costs of products and services, enterprises will achieve both goals: reducing costs and completing corporate governance. Then, they will have more effective business management model, products will have more reasonable prices, and the competitiveness of enterprises, products and services is boosted up.
As a national representative for the business community, business associations, employers and entrepreneurs, the Vietnam Chamber of Commerce and Industry (VCCI) appealed business associations, enterprises and entrepreneurs nationwide to positively respond cost reduction policies, cut down administrative costs by 5-10 percent, lower product prices and enhance business efficiency. It regards these measures as the key to maintain and develop enterprises in this difficult period. VCCI recommends business associations work closely with VCCI to introduce new policies of the Government to all businesses and entrepreneurs.
Mr Vu Tien Loc confirmed that Vietnamese entrepreneurs - vanguard soldiers on economic front - are determined to join forces with the Party and the State to successfully implement socioeconomic development tasks in 2012 and subsequent years.
Quynh Chi
Vietnamese
