By the end of 2005, HCMC has some 86,000 enterprises operating under Enterprise Law, 200,000 households engaging in trade and 30,000 households in production. The private sector has exceeded FDI sector and attained the highest growth rate, especially in industry and become the main driving force of the economic growth in 2001-2005.
In 2004, while the State-owned sector attained a growth rate of 8.8 per cent, FDI sector of 12 per cent, the private sector posted 14.1 per cent contributing to the economic growth of the city by 5.5 per cent ( 3.8 per cent by State-owned sector and 2.3 per cent by FDI sector). 41 per cent of the investment was by the private sector and 22 per cent by FDI. It shows that while the State investment decreased, the city has successfully mobilised investment from the private sector.
More important still, the private sector has improved in quality: fraudulent and fake companies decreased, bona-fide and efficient businesses increased attaining strong foothold at home and abroad. For instances, Kinh Do company established in 1993 has become a strong group with five member companies operating nation-wide, accounting for 35.8 per cent of confectionery market share in Vietnam, and Kinh Do cookies and cracker among the main products of the city. Tien Dat Electronics makes up 30 per cent of the market share and among the Top Five of Vietnamese electronic industry. Others are SAPUWA, Thai Tuan Textile, Truong Thanh wooden furniture and hundreds of thriving trademarks.
Another success is the development of joint stock companies. Many of them have engaged in the development of infrastructure such as Tan Binh Construction Company building Phu My bridge, Phu Duc water supply station, etc.
Trade and service have become ebullient with the participation of the private sector, making the market more diversified and plentiful, meeting the demand of the production and domestic consumption. In particular, with the policy of socialisation of education and public health, the private sector has played a bigger role developing the existing resources and contributing to the prosperity of the city. The city has some 11,000 private medical establishments, local and foreign, reducing the burden of the big hospitals. Likewise, private schools with various training programmes and levels have met the demand of the people and production.
The private sector has also generated more employment for the people at a rate of 215,000 jobs a year, exceeding the plan by 190,000 jobs, and reducing the unemployment rate from 6.8 per cent in 2001 to 6.1 per cent in 2004.
The successful development of the private sector is due to the new Enterprise Law and more importantly, the support of the city such as the establishment of Credit Fund for Small and Medium Enterprises, assistance in information and investment promotion. The city has also organised meetings with the businesses to remove their constraints. “The city considers that the private sector will play an important role in the economic integration and extends full support for its development into economic groups with strong competitiveness”, said Mr Nguyen Huu Tin, Vice-Chairman of HCMC People’s Committee.
Thuy Tien
Vietnamese
