Enhancing Competitiveness for Businesses

 

The workshop was part of the ‘Restructuring for a more competitive Vietnam (RCV)’ Project funded by the Government of Australia which belongs to the Prime Minister-approved overall economic restructuring project associated with the change in economic growth pattern towards the enhancement of quality, efficiency and competitiveness in the 2013-2020 period.

 

Mr Dang Huy Dong, Deputy Minister of Planning and Investment said that Vietnam’s efforts in economic reform and integration for the past 30 years have gained great successes in various aspects. The structure of economy has been shifted towards a more positive and modern one. The macro economy remains stable with the assurance of macroeconomic balances. However, Vietnam’s economy has exposed a lot of inherent weaknesses. GDP growth rate is slowing down. The structure of economy, investment and labour remain inefficient; investment efficiency and labour productivity are low; the efficiency gap between Vietnam and other regional countries has not been filled. Therefore, the deployment of the RCV Project promises to bring practical results for Vietnam and also results of the comprehensive cooperation between Vietnamese and Australian governments.

 

Australian Ambassador to Vietnam, Mr Hugh Borrownam said that Vietnam is currently engaged in many very complex regional and international economic agreements, requiring it to accelerate reforms. Australia stands ready to support Vietnam in this important reform process. Besides, he added that if reforms are made, Vietnam will continue to grow in both position and force. Obviously, this is a good outcome for Vietnam and for Australia and the region as well.

 

Mr Mike Woods said that the opening of trade in goods and services will lead to reform waves when the capital, financial and labour markets are opened, thus revealing previously ineffective fields that need to be reformed, like obstacles and expenses bound to domestic regulations that weaken competitiveness and performance of enterprises, increase burdens on ineffective, cost-consuming State-owned enterprises, and pressurise micro reform. He added that most policy successes of Australia are based on ideas and evidences as well as the development of strong, well-resourced and independent institutions responsible for recommending reforms and supervising reform progress. Major changes of those economic policies have helped the Government bring long-term benefits for Australians.

 

Dr Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM) and Project Manager, said, improving the transparency and enhancing the competitiveness of enterprises are the first two priorities of the project. By drafting and enforcing the Law on Enterprises and the Law on Investment, the business environment in Vietnam will be significantly improved. Besides, one of important activities of the project is to collect, review and identify the list of prohibited business sectors. The list should be clear, transparent. He added that CIEM will study and propose the establishment of specialised agencies in charge of exercising ownership rights and improving the effectiveness of corporate governance for State-owned enterprises (SOEs).

 

Dr Cung noted that the project plan will be implemented in three components, coordinated by CIEM. The first component aims to enhance business transparency and competitiveness, led and coordinated CIEM. This component will result in more business-friendly Law on Enterprises and Law on Investment, with key enforcement-guiding regulations; diagnostic report on impediments to private sector development and to implementation of international economic commitments submitted to the Government; quarterly and annual reports on progress and issues with the Government’s Master Plan on Economic Restructuring; and at least two high-quality analytical reports on priority macroeconomic and broader economic development issues. The second component aims to complete competition policies and trade remedies, led by the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade. The intended outputs of the component are enhanced evidence base, information and skill to enforce competition policies; enhanced policies, systems and support to mitigate negative impacts of anti-dumping actions and other trade remedies; and expanded early warning systems on potential trade defence cases. The third component aims to restructure the rural economy to increase value added, led by the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD) under the Ministry of Agriculture and Rural Development. This component will result in the following outputs: Reports on modelling of impacts of paddy rice conversion and entries to free trade agreements on food security, agriculture, rice production and people’s incomes; proposed reforms to value chain restructuring to improve competitiveness and sustainable development; contributions to the Agricultural and Rural Development Strategy in the 2016 - 2020 period on the basis of paddy land restructuring and rice development.

 

Mr Trinh Anh Tuan, VCA’s Deputy Director, said the issue of new policies must ensure the principle of fair competition. It is necessary to build a strong competition authority. This will partially help improve transparency in investment attraction, optimise the use of resources and stimulate economic growth.

 

According to representatives from the Vietnam Chamber of Commerce and Industry (VCCI) and the Vietnam Business Association, the project should consult the business community and professionals to seek good evidences for State agencies in the course of building, drafting and promulgating laws and policies as well as help businesses to raise awareness in implementing laws and policies to generate a fair competitive environment and practical benefits for enterprises and Vietnamese people as well.