(VOVworld) – With increasing contributions to the GDP in recent years, the private sector is playing a more and more important role in the national economy. Promoting the sector is one of the Vietnamese government’s main tasks in the future to strengthen the economy.

The PM said the two-year (2014-2015) restructuring program for SOEs should be completed on schedule. (Photo: Trong Dat/ VNA)

Last year Vietnam added 74,000 new businesses with total registered capital of 20 billion USD.

Between 2006 and 2010, state-owned enterprises received 45% of the total investment but turned out only 28% of the national GDP. Privately owned businesses received 28% of the total investment but created 46% of the GDP. The private economic sector now contributes more than two thirds of the GDP and three fourths of industrial values.

96% of private firms are small or medium-sized, which means they will find it hard to compete globally. Minister of Planning and Investment Bui Quang Vinh says: “Vietnam lacks an auxiliary industry due to little investment by the small and medium-sized enterprises of the private sector, forcing foreign-invested companies to import input materials for production. Greater development of the private sector and SMEs could generate millions of jobs, create useful products for the local market, and make Vietnam’s economy less dependent. ”

Vietnam has successfully attracted foreign investment and total export turn-over has increased steadily in recent years. But Vietnam’s participation in the global value chain has been minimal. Its main contribution has been supplying labor.

Vietnam’s economy will maintain its upward trend in 2015, say experts.

The Vietnamese government has developed a long-term strategy for the private economic sector and built a system of medium-sized or larger companies that can provide materials for foreign companies and exporters.

Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, highlights the missions the business community should do: “domestic enterprises should create their business strategies in line with the nation’s long-term business strategy and economic reforms. The legal system should protect the interests and profits of companies.”

During its international integration process, Vietnam’s prosperity will depend on promoting its role in the global value chain and maximizing foreign direct investment. Apart from improving the legal system and creating a favorable business environment, Vietnam’s strengthening of the private sector has proven to be the right strategy for increasing its competitiveness and moving toward sustainable growth.