(VOVworld) – The private sector, one of three components of Vietnam’s economy, includes 95% all operating enterprises. If the private sector is not developed properly, Vietnam’s economy cannot generate the momentum for sustainable development increase its self-direction. Promoting the private sector was the main topic at the Vietnam Development Partnership Forum (VDPF 2014) in Hanoi on Friday.
The 2013 Vietnamese Constitution specified the role of the private sector for the first time. The National Assembly has 36 part-time deputies who are businesspeople. Since Vietnam began its renewal process and in the current economic reform period, the role of the private sector in the national economy has been acknowledged and promoted. In 2000 the Enterprise Law legalized the performance of the private sector.
The private sector in Vietnam’s economy
The private sector has an increasing importance in the national economy. Before 1986 Vietnam had about 15,000 private enterprises and 10,000 state-owned enterprises. Now, the number of private enterprises has increased to 600,000, while the number of state-owned enterprises has fallen to approximately 1,000. Under its equitization plan until 2015 Vietnam will continue to reduce the number of state-owned enterprises to be consistent with the ASEAN community forming in 2015, certain WTO commitments, and other trade agreements currently being negotiated including the Trans-Pacific Partnership.
The private sector has been a major force in the economy, contributing greatly to job generation, the budget collection, and economic growth. Prime Minister Nguyen Tan Dung said at the 2014 Vietnam Business Forum that the government will continue to offer the most favorable conditions for developing the private sector and considers it the locomotive of Vietnam’s economic development. He repeated these policies at the just-concluded year-end Business Forum. “The government will focus on implementing breakthroughs in economic restructuring and growth model adjustment to obtain better results than in 2014. The government is mobilizing all resources, including the private sector and overseas resources to invest in the infrastructure. The Vietnamese government concentrates on boosting the private sector, particularly small and medium-sized enterprises, and attracting foreign investment.”
Placing high expectations on the private sector
Vietnamese and foreign experts said the private sector makes practical and effective contributions to Vietnam’s economy, including a positive economic index, job generation, and poverty reduction nationwide. Wendy Werner, the World Bank Group’s Trade and Competitiveness Manager in East Asia and the Pacific, said: “Some years ago, Vietnamese businesses experienced a hard time but many have still developed. Private enterprises have a strong business determination which should be assisted by better policies and loans to develop in a market-oriented economy”.
The private sector has a prominent voice in Vietnam’s legislative process. The National Assembly and the government collect the opinions of private enterprises before approving legal documents. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, said: “We need a master plan to boost the private sector and give it equal status with state-owned enterprises and foreign-invested enterprises.”
Antony Nezic, President of the Canadian Chamber of Commerce in Vietnam, said: “The Vietnamese people are very entrepreneurial. The country is very entrepreneurial. So what I’d like to see is unleashing of that genuine domestic feeling of Vietnamese to be entrepreneurial and allow them to set up private business work to operate and compete effectively not just in Vietnam but in the region and internationally.”
WB Group President Jim Yong Kim said during a recent visit to Vietnam that Vietnam has a bright future. If it now unleashes the full power and creativity of the private sector, millions of people will have a better chance of getting good jobs and sharing in the national prosperity. The Government’s policies and assistance have shown Vietnam’s determination to promote the private sector while developing a sustainable and self-directed economy.