(VOVworld) – The private economy plays an important role in Vietnam’s economy. As the sector for the most part consists of household traders and small and micro businesses, it needs specific policies for development.

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The private economic sector in Vietnam employs about 85% of the labor force and contributes 40% of the GDP. 97% of private businesses are small or micro scale with poor competitiveness and limited technological, managerial, and financial capability.

Associate Professor Doctor Nguyen Van Thao, Vice Chairman of the Party Central Committee’s Theoretical Council, said: “The law and policies on the private economy are not compatible and administrative procedures are cumbersome. Law enforcement sometimes makes it difficult for businesses to access resources. The businesses themselves are struggling with internal problems such as the lack of a long-term business strategy.”

Economists say policies are needed to increase the number of small and medium-sized enterprises, support their development, resolve their problems, and achieve breakthroughs in competitiveness.

Doctor Nguyen Hong Son, Director of the Hanoi Social-Economic Research Institute, suggests: “The state agencies should be mediators connecting private businesses. Policies should be revised toward administrative reform, transparency, less preferential treatment for state enterprises, and direct assistance for spearhead sectors. Local authorities should hold dialogues with businesses to resolve their problems.”