Private Sector-Driving Force for Economic Development

To reaffirm the commitment of the Government of Vietnam as well as appreciate the role of domestic and foreign enterprises in the development of the country, Minister Vinh stated that the government has made drastic, positive changes. It is applied in practice with the goal that in 2015 Vietnam will be in the group of 4 ASEAN countries having the best investment environment, instead of the previous target 6 ASEAN countries. Specifically, the time for paying tax actually decreases, from 800 hours to 300 hours this year and to 175 hours next year. It is not only discussed on paper.

 

Minister Vinh said in 2015 Vietnam's economy is faced with not only opportunities but also many difficulties and challenges. The advantage is that the government has succeeded in curbing inflation, stabilising the macro economy in recent years, helping Vietnam regain solid growth. The inflation consistently kept below 3 percent proves the stability of the monetary policy of the Government. The low CPI increase shows that the economy is still growing, a clear expression of recovery. In 2014, GDP growth rate was 5.98 percent, this is the first year Vietnam exceeded the plan in 3 years. In 2015, GDP growth rate in the 1^st quarter was 6.03 percent, the highest compared to the same period last year. The GDP forecast from 6.2-6.3 percent will be possible. The investment environment is being put on reform with the executive oversight of the legal system. Particularly, as the lead agency, the Ministry of Planning and Investment in collaboration with the World Bank finds solutions to reform which contains many innovative ideas expressed in the Vietnam 2035 report and other research projects. The "transfusion" of the economy is expected in the equitisation of state-owned enterprises, creating favourable condition for the private sector.

 

Recognising the challenges, Minister Vinh said that, in recent years the economy of Vietnam has a stable growth rate, but the quality is still poor. Obstacle is the low labour productivity compared to other countries in the region. The application of science and technology is very slow and backward. This leads to the overall weak competitiveness. In particular, in the context of 2015, Vietnam will participate in a series of free trade agreements, as well as participate in the ASEAN Economic Community, opportunities and challenges are huge, requiring Vietnamese businesses to learn thoroughly as well as prepare for the integration process to avoid being defeated at home by foreign firms with high productivity, advanced technology.

 

While concurring with the opinion of Minister Vinh, many businesses expressed their candid views on the economy of Vietnam. Accordingly, the majority of foreign investors said that the number one hindrance to their work in Vietnam now is corruption. Accordingly, the contents of the transaction or sale must enclose percent of "commission" especially in state owned enterprises. On the other hand, foreign investors are hopeful about the change and new flow of air into Vietnam's economy such as the introduction of the Enterprise Law, amended Investment Law, and the Procurement Law. All rely on a transparent investment environment with high performance.

 

Representing the business sector in the country, Ms Thai Huong, CEO of North Asia Bank confided that they have confidence in the leaders as they recognized the role of the business team in peacetime. Revolution also requires the involvement of a very important subject which is the policy – the involvement of the state. Through policies, the government can attract businesses and entrepreneurs. To listen to business is the most practical action by the state. The biggest wish of business is transparent environment and clear mechanisms.

 

Going into practice, representatives of Kinder World Group share that they recognized the administrative reform including the reduction of investment licensing time from 45 to 15 days. However, in practice, the Government of Vietnam should also recognize that there are circumstances where it takes three years for a number of enterprises to get one project licensed.

 

Recorded and shared dedication to the contribution of enterprises in Vietnam, Minister Vinh said that the task of improving the investment environment is a vital element of Vietnam's economy. Accordingly, all sectors such as state-owned enterprises, foreign enterprises, and especially the private sector, are the foundation and driving force for economic development during this time.