2015 is coming with a lot of controversies as well as hopes - the hopes for economic revival and revitalised entrepreneurship to prop up growth. The private sector is expected to bring new sources of vitality to the Vietnam’s economy.
According to Dr Nguyen Duc Kien, Vice Chairman of the Economic Committee of the National Assembly, to have a GDP growth of 6.2 percent in 2015, Vietnam necessarily keeps inflation growth at 5 percent, credit growth at 14-16 percent and total social investment at 30-32 percent.
With a natural population growth of 1.5 - 1.6 million, for every 1 percent of GDP added, it will generate 250,000-300,000 jobs. At the very least, to ensure stable social security, we must have a GDP growth of over 5 percent. This is the most important root to ensure macroeconomic stability and social security. 2014 is the second year Vietnam has a positive real growth of the economy.
Arousing the power of the people
Inflation was curbed at a low rate and economy had signs of recovery in 2014. At the Vietnam Business Forum and the Vietnam Development Partnership Forum 2014, many analysts highlighted the considerable contribution of the private sector to economic recovery.
The business community continues to place high expectations on investment and business opportunities after the bilateral and multilateral trade agreements are signed and the ASEAN Economic Community is formed in 2015. Businesses want Vietnam to create new appeal and competitiveness when tariffs in the region are removed. Tax and customs reform must be spread to other sectors to create powerful shift in State management. The reform of administrative procedures must also ensure harmony with the area.
After experiencing a long economic slowdown and suffering from pressures of international developments, it is important for Vietnam to carry out regulatory reform to inspire the power of the people and promote the private sector to generate huge resources for the society. To achieve this target, we must increase private businesses and make them stronger. The private sector must have direct dialogues with authorities to propose inclusive and feasible policies. This sector must have easier access to capital, resources, science, technology and information to do better business, thus helping Vietnamese economy to develop healthily and sustainably.
Developing the private sector rather than rely on other economies
At the Vietnam Development Partnership Forum in early December 2014, Planning and Investment Minister Bui Quang Vinh emphasised that it is better to develop the private sector rather than be dependent on other economies.
Development partners and donors expect Vietnam to continue to build more complete elements of a modern market economy to boost transparency and publicity. Transparency and accountability of policies is one of major concerns of donors.
In 2014, Vietnam built many important laws to suit international practices like the amended Law on Public Procurement, the amended Law on Investment, the amended Law on Enterprises towards the easing of the private sector. However, after many years, the private sector of Vietnam is still very small and pale to State enterprises. Minister Bui Quang Vinh said that the only by power up the private sector in both quantity and quality, we can create millions of new jobs for the people. Private enterprises must develop everywhere and make more products for the society, thus enabling us to rely less on other economies.
Some reports and statistics show the increasing role of the private sector in Vietnam’s economic development. SMEs account for about 97 percent of total companies in Vietnam. They are very dynamic and effective. Many countries, especially members to APEC and ASEAN, consider SMEs a driving force for economic development. SMEs are typically weak in capital, brand, technology, partnership, market, information, human resources and others.
Dr Ho Sy Hung, Director of Business Development Department under the Ministry of Planning and Investment, said their private sector development policy is being carried out. He added that the Government defines that the private sector will play a decisive role in economic development when Vietnam shifts to market economy regime. Therefore, supporting and facilitating private sector development is an inevitable orientation in the coming time.
Even countries with a strong SME sector like Japan and South Korea still have support policies for SMEs. Compared with other countries in the regime, Vietnam’s support for the private sector is quite low.
Mr Hung said to develop the private sector, the Government must create favourable conditions for this sector to make investment and do business. It also needs specific actions to power up SMEs as well as boost up the operating efficiency of State enterprises.
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