Institutional renovation to enhance private economic sector

(VOVworld) – Vietnam has about 500,000 private businesses, providing 1.2 million jobs, 51% of the total labor force. The Vietnamese government considers the private economic sector an important driver of the national economy and institutional reform. Vietnam has created conducive conditions and an open mechanism to encourage private sector’s growth as Vietnam integrates more fully into the global economy.  

Institutional renovation to enhance private economic sector  - ảnh 1

PM Nguyen Xuan Phuc at a meeting with the business community in Ho Chi Minh City
on April 29, 2016. (Photo: vnexpress.net)

Private companies contribute more than 40% of the national GDP and drive national economic growth. But they face difficulties in securing loans, land, and new technology and expanding their markets.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, urged the government to issue a resolution on a national action plan to develop enterprises and revise ways of thinking at all levels.

Deputy Prime Minister Vuong Dinh Hue underscored the importance of adopting policies that help startups and other domestic enterprises to grow sustainably.

According to Hue, “the government will do its best to improve the investment and trade environment, increase the competitiveness of Vietnamese businesses, and make it easier for all economic sectors and types of businesses to compete fairly under to the market rules. The government is drafting a law that will extend support to Vietnamese small and medium-sized enterprises to ensure a level playing field for all businesses in line with international commitments.”

At a recent meeting with the business community in HCMC, ministries and agencies promised to resolve some of the current difficulties.  The Ministry of Planning and Investment pledged more favorable conditions for businesses. The Finance Ministry will continue improving administrative procedures, tax payment and customs clearance efficiency. The Ministry of Industry and Trade said it will step up administrative reforms and ensure freedom in doing legal business for everyone. The State Bank of Vietnam promised to stabilize the exchange rate and the foreign currency market, resolve bad debt, and minimize risks and costs for enterprises.

Institutional renovation to enhance private economic sector  - ảnh 2
Agricultural products are processed at Nam Huy Dong Thap Company in Dong Thap Province. (Photo: Vu Sinh)

Commercial banks will apply the maximum reduction in cost management, making it easier to reduce interest rates and help enterprises attract capital.
Prime Minister Nguyen Xuan Phuc said at the meeting: "Private enterprises play an important role in creating jobs, incomes, and inspiring innovation and initiatives in commerce. We need more special policies to boost growth and integration. Only 1.8% are medium-sized enterprises, 2% are large scale, and 96% are small businesses. At this meeting, I want to reiterate the Party and government’s recognition of the private sector a key driver of national economic growth. We will work to prevent the criminalization of economic relations to build the trust of the business community.”

Mr. Phuc asked ministries and sectors to promptly address issues relating to administrative reform. He added: “We need create a favorable investment climate for investors and enterprises. A top priority should be to fix inconsistencies in the Investment Law, the Enterprise Law, and related laws. We should focus on creating a law that supports SMEs and solve problems related to investment procedures, business registration, and foreign investors. The state and the provinces should promote a startup spirit in various forms and encourage foreign enterprises to invest in start-up companies.”

The 12th Party National Congress acknowledged the importance of the private economic sector to the national economy and said Vietnam will create conditions conducive to boost the sector growth to improve national competitiveness.

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