Helping Enterprises Get through Hardships

According to the latest statistics, only 471,000 out of total 675,000 enterprises established are operational. A great number of enterprises are operating at a loss. In 2012, 51,000 enterprises were established but as many as 40,000 businesses went to the wall. It meant that the number of bankruptcy filings nearly equalled new establishment filings. According to a Vietnamese business survey performed by the Vietnam Chamber of Commerce and Industry (VCCI), operating indicators tend to worsen, especially profit margin, total revenue and inventory.

 

On the macroeconomic level, exports expanded 16.6 per cent, imports rose 6.8 per cent, and trade deficit was about US$1 billion, equal to 0.9 per cent of export turnover. Budgetary revenue completed 67.3 per cent of estimations and budgetary expenditure reached 71.2 per cent of estimations. Total social capital development investment was estimated at 29.5 per cent of GDP in 2012 (compared with 34.6 per cent in 2011). Manufacturing production index rose 5.3 per cent. Agriculture, forestry and fisheries sectors were predicted to grow at 3.9 per cent. Service sector reported higher growth than the country’s GDP growth. Total retail and service sales were forecast to advance 18 per cent. Tourism revenues increased over 15 per cent while international tourist arrivals to Vietnam rose over 8 per cent. The number of passengers transported climbed 13 per cent. Postal and telecommunications sector continued to thrive. GDP growth slowed to 5.2 per cent, lower than the initial target but the growth rate was higher quarter by quarter.

 

While the economy, enterprises and the society are fraught with difficulties, VCCI has advocated specific actions to support businesses to get through the tough time.

VCCI Vice President Hoang Van Dung said, in 2012 VCCI studied and sent opinions to many draft laws like Price Law, amended Personal Income Tax Law, Circular on Corporate Income Tax, amended Decree No. 39/2009/ND-CP, Decree on Non-cash Payment, Decree on E-customs, Circular on Standards of Valuating Intangible Assets, Contractor Tax Policy, etc.

 

VCCI organised 423 conferences and seminars to seek opinions and comments for important policies and laws like Land Law, Labour Law, Vocational Training Law, Employment Law, and Corporate Income Tax Law. More than 70,000 enterprises attended these meetings, representing an increase of 10 per cent from 2011. And, VCCI completed the 4th policy recommendations of the Vietnamese business community to Trans-Pacific Partnership negotiation - Employment and dispute settlement chapter. It also built action plans for itself and business associations to deploy the Prime Minister’s Decision 06/2012/QD-TTg effective from March 15, 2012. This document formalises a mandatory consultation mechanism between the Government’s negotiator delegation with the business community on international trade negotiations and the central role of VCCI in this process.

 

As regards administrative reform, VCCI collaborated with the Ministry of Finance to organise two dialogue conferences on tax and customs policies in 2012 in Hanoi and Ho Chi Minh City with the participation of 1,100 enterprises.

 

According to a report by VCCI, in 2012, VCCI also arranged about 1,400 training courses for 70,000 enterprises. Apart from basic business knowledge and skill training programmes, VCCI also paid great attention to high-level corporate governance courses for business leaders in recent years. With respect to support for small and medium enterprises (SMEs), VCCI built and the Government approved the "Supporting SMEs to develop sector linkages in agricultural and countryside value chains” project - a part of SME Development Plan 2011-2015. It also actively collaborated with international organisations such as ILO, UNIDO and GIZ to seek fund sources and technical support for business development.

 

Besides, VCCI welcomed 240 foreign delegations accompanied by more than 14,000 businesses which came to Vietnam to survey market and seek business and investment opportunities. 11 delegations followed heads of state. VCCI also organised 110 business delegations joined by 6,000 Vietnamese enterprises to participate in international conferences, market surveys, trade fairs and exhibitions in foreign countries, including three large delegations accompanying the State President and high-ranking officials. VCCI organised 500 workshops, conferences, seminars and business matching meetings for 40,000 Vietnamese and foreign companies.

 

Dung said, in 2012 Vietnam Business Forums with key markets such as Vietnam - Africa Business Forum, Vietnam - China Business Forum, Vietnam- EU Business Forum, Vietnam - Japan Business Forum, Vietnam - United States Business Forum, Vietnam - Russia Business Council, Vietnam - Saudi Arabia Business Council, Vietnam - South Africa Business Council, APEC Business Advisory Council (ABAC), ASEAN Business Advisory Council (ASEAN BAC) operated effectively. Forum agendas focused on bilateral cooperation and business matching. These forums enabled businesses to communicate and contact foreign business communities.

However, he said VCCI did not have major programmes and projects of the national scale to support businesses to develop their resources, restructure and integrate into international economies in the past year.

 

Dung said most forecasts predicted a worse year for the world economy in 2013 in comparison with 2012. Recovery prospects of growth centres (US, EU, Japan and China) are very low. In previous years, Vietnam’s fundamental economic indicators (growth, inflation, currency value, debt, etc.) are worse than many other economies. This possibility may be seen in 2013, even at a worse level.

 

Therefore, in 2013, top-priority goals are to restore macroeconomic stability, control inflation, restore growth, and strengthen business and market confidence. According to economic experts, Vietnam necessarily regards economic restructuring as a vital task to change its growth model. To enable the restructuring process, Vietnam must stabilise the economy to restore market confidence and social confidence. These are two most important tasks and objectives. Thus, growth is not a priority and Vietnam must be consistent with this stance. Restructuring solutions must be considered backbone solutions to growth stability and restoration, monetary policies are support solutions, which focus on fiscal policy and SOE reform.

 

Faced with that prospect, VCCI will focus on advising on business policies and environment in support of restoring macroeconomic stability, sustainable growth, trouble-shooting policies and programmes for businesses in 2013. It will support businesses to overcome hardships by renovation and restructuring, seek markets and partners for domestic enterprises, and expand multilateral cooperation relations. Besides, it will continue strengthening, renewing and enhancing operational capacity of VCCI in a more professional manner.