"The Government will do its best to create favourable conditions for the business community, as the main productive force of the economy, to develop and enhance productivity, quality, efficiency and competitiveness. This enables businesses to reap success on the one hand and contribute to the country’s socioeconomic growth and development on the other. I do hope that the business community will make an effort to promote accomplished achievements and to overcome difficulties and challenges to be successful,” said Prime Minister Nguyen Tan Dung at a recent meeting with businesses in Hanoi.
The meeting was also attended by three deputy prime ministers, nine ministers and businesspeople representatives of more than 400,000 private enterprises in Vietnam. This was really a meaningful meeting for the business community and showed special care of the Prime Minister, who wanted to listen to difficulties in production and business activities to have appropriate troubleshooting measures.
According to the overview report on business situations and socioeconomic development tasks in 2014-2015 released at the meeting, Vietnam had 224,2000 start-up businesses in the 2011-2013 period, equal to nearly 41 percent of enterprises established in 20 years (1991-2010). In 2013, the economy showed signs of recovery and macro difficulties eased, helping increase new business start-ups (10 percent higher than in 2012). In the first quarter of 2014, the country had over 18,000 new business start-ups with a combined registered capital of VND98 trillion (US$4.6 billion), up 17 percent in business establishments and 23 percent in investment value over the same period in 2013.
However, in the first three months of 2014, nearly 17,000 businesses ended or suspended operations because of difficulties, representing an on-year increase of 9.6 percent). Economic slowdown in recent years was also a reason for a declining value of start-up capital. In 2011, a new company registered to invest VND6.63 billion on average but the value slid to VND5.13 billion in 2013.
The private sector accounted for 96 percent of total enterprises in operation in the 2010-2012 period. This sector contributed 48 - 49 percent to GDP in the 2009-2012 period, ranking first among all economic sectors.
The State-run business sector was the second biggest contributor to the nation’s GDP but the contributed proportion tended to decrease as a result of government-backed privatisation. This sector’s contribution to GDP fell from 37.72 percent in 2009 to 32.57 percent in 2012. Meanwhile, the foreign direct investment (FDI) sector was the smallest contributor, accounting for 17-18 percent in 2009-2012.
Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam has not yet generated a generation of industrialists whose names, reputations and careers are attached to the formation and development of major brands and national industrial clusters which successfully reach out the world. Not only lacking leading businesses, Vietnam also does not have enough medium-sized enterprises to acquire new know-how, become partners of transnational corporations, and take part in global value chains. For the time being, only 2 percent of more than 500,000 businesses in operation are large-scaled. Medium-sized enterprises also account for a similar percentage. And, up to 94-96 percent are micro and small enterprises. Particularly, micro companies (employing less than 10 workers, according to Vietnam criteria) make up for 66-67 percent. If individual businesses and households are taken into account, micro businesses may account for over 99.9 percent.
“Figuratively speaking, according to economists, the ‘coracle fleet’ of the Vietnamese business community is facing the open vast sea when the country integrates more deeply into the world, with the formation of ASEAN Economic Community in 2015, the signing of Vietnam - EU Free Trade Agreement in late 2014, and the near-complete Trans-Pacific Partnership Agreement (TPP),” Dr Loc said.
He said during the meeting with the Prime Minister, VCCI collected and submitted a report with more than 300 recommendations of the business community to the Prime Minister. Most enterprises recommended improving business legal system, property ownership, business freedom and competitive equality; preventing the issuance of bylaws in any form; easing credit access for businesses; advocating lending policies based on production and supply chains; developing credit guarantee forms; and introducing support and incentive policies (relating to tax, credit, science and technology, labour, etc.).
Prime Minister Nguyen Tan Dung said the Government will analyse all the proposals put forward at the meeting and send them to relevant ministries and agencies to seek solutions. Appropriate and lawful ones will be accepted.
Tackling all difficulties for enterprises in one or two days is impossible. But, the most important thing in the Prime Minister’s meeting with businesses is to create the confidence and motivation for enterprises, especially private enterprises, to overcome difficulties and have plans for future development. This also helps the institutional reforms that Vietnam is pursuing.
Anh Mai
Vietnamese
