Tra Vinh SME Project- Platform for Socio-economic Growth

11:18:23 PM | 7/5/2015

Recently, Tra Vinh province held a ceremony to launch the Small and Medium Enterprises (SMEs) Development Project in Tra Vinh period 2014-2020. In the context of Tra Vinh SMEs facing many difficulties and challenges (access to markets, land and finance; limited business development services; infrastructure not in sync and difficult transportation), the implementation of the SME project becomes more meaningful. It is expected to have a significant contribution to socio-economic growth and local stability. To learn more about this project, Vietnam Business Forum interviewed Mr Nguyen Thanh Tam, Vice Chairman of Tra Vinh People’s Committee. Truong Minh reports
Could you briefly introduce the SME project?
The SME project is funded by the Ministry of Foreign Affairs, Trade and Development of Canada for six years, from 2014 to 2020 in 20 communes of 8 districts in the province. The total funding of the project is CAD 12.1 million, in which the Ministry of Foreign Affairs, Trade and Development of Canada grants 11 million CAD, corresponding provincial budget is CAD 1.1 million. The project consists of 3 components: SME development; building infrastructure to support SME development; and raising capacity for governance of Tra Vinh to support SME development.
The objective of the project aims to promote growth and improve the competitiveness of SMEs, creating favourable investment environment for SMEs to contribute more to economic development, improving national competitiveness and international integration. The beneficiaries of the project are about 200 businesses and communities in 20 communes who will be granted enhanced access to small infrastructure scale to support the development of SMEs. It also creates jobs for 4,000 employees.
In your opinion, what are the opportunities and challenges for Tra Vinh SMEs in this project?
The completion and use of the national projects (Co Chien Bridge; Dinh An EEZ Generator Unit 1 and large tonnage vessel route in Hau River) will definitely help Tra Vinh become a hot destination for investors; while trade between provinces in the area will be more favourable. In this context, I think Tra Vinh province's SMEs will have more opportunities than challenges. Better transport reduces the time and cost of transportation, thereby helping SMEs with access to raw materials from outside with better quality and lower costs; and find appropriate markets with greater purchasing power outside the province. In addition, investment to the province will create more jobs, incomes of workers will increase so the purchasing power of the provinces will be higher. Thus, the SME manufacturing service will serve the market.
On the other hand, Tra Vinh is one of 3 provinces with the smallest population and the lowest income per capita in the Mekong Delta, so the purchasing power is low. Therefore, products from outside the province can hardly compete with products of SMEs within the province. Similarly, it is expected that the number of investment projects from outside for local consumption are small; investment projects in the province mainly cater markets outside the province and exports to take advantage of attractive incentives of provinces and abundant cheap labour. So the challenge for SMEs in the province in the early years when the national projects putting in operation will not be too harsh, synonymous with the province's SMEs have more opportunities than challenges. The SME project is expected to more fully analyse the economic situation of the province, the state of SMEs in the province and the potential trades to help increase the competitiveness of SMEs in the province.
Among 3 components of the project, which component is your favourite?
Tra Vinh SME project was designed with three complemented components and they are all important components. But I fully agree with component 3 "Raising Tra Vinh’s state management capacity to support SME development" because I see the profound impact as well as long-term benefits of this component in the development of SMEs in Tra Vinh. Through research and repeated exposure to businesses in the public-private dialogue, I find that most businesses, whether large or small, to survive in the marketplace always find a way to adapt the best in the existing conditions. Aside from the challenges from competition in manufacturing and doing business, the majority of enterprises, especially SMEs are impeded by public services used daily. The difficulties and obstacles are both sides: the enterprise due to not fully grasping all policies and procedures of the public sector can not create advantages for their business; the state agencies due to the lack of synchronization, overlapping and weak capacity in enforcement discourage many investors and businesses.
Businesses, especially SMEs will not be able to develop their capabilities and take advantage of favourable conditions of the improved infrastructure if they are still "tied" by inefficient public services. Therefore, improving the efficiency of public administration capacity of Tra Vinh in a systematic way will help create a favourable business environment for enterprises, increasing the efficiency of public investment, saving resources and make public sector services more "friendly" and effective at solving problems of enterprises. The result is that investment from people inside and outside the province will increase, and drive sustainable economic growth.
So what is your personal concern when performing the SME project?
Like other localities implementing foreign funded projects across the country, we are concerned about how to maintain, institutionalize and widely apply the practices and initiatives of the project after the project ends. To do this, we have been trying to mount the operation of the Project to the activities of agencies and government departments from the beginning, regarding aid as additional resources to implement the daily work of government and state agencies in the province.
Besides, we will improve understanding of business development, the operation of the business and private sector for government officials at the agencies responsible for supporting the development of enterprises, so that their thinking and attitudes are more business oriented, to better serve the sector. It is also one of the major challenges of the project. However, with the strong commitment of the government and people of Tra Vinh, I'm still very optimistic about the prospects of the projects.
Representing the leaders of Tra Vinh, what message do you want to send to the SME project sponsors as well as SMEs benefiting from the project?
Tra Vinh always has determination and tradition of successful implementation of foreign funded projects and this SME project is no exception. Especially after many times implementing successfully foreign projects in general, particularly from the Canadian government – a traditional development partner of Tra Vinh – the government and People besides the determination, also have experience to implement development projects in many different fields. So I confidently assert with project sponsors for SME Tra Vinh that we can complete this project. We will mount the activities of project activities under the duty of the state agencies in the province; and effectively use both aid and budget to achieve the development goals of the project and of the province.
Particularly for SMEs benefiting from the project, on behalf of the agencies implementing the project, I call for the active participation of SMEs in the activities of the project. In this way the operation of the project truly brings practical benefits for SMEs in the province.
The province is striving to fill all the remaining investment gaps in Long Duc IZ; launching Co Chien IZ; launching one of the functional areas in Dinh An EZ and start up the wind power project; of which capital from reception on the IZ and EZ estimated 50-100 million.
It’s believed that these efforts, together with the upcoming completion and coming into operation of projects like Duyen Hai power centre, Tra Vinh Canal and Co Chien Bridge, will contribute greatly to the promotion of infrastructure investment in IZs and EZs in Tra Vinh province, as well as helping to create special value and unlock local economic potential and advantages for industrialization and modernization.
Minh Kiet