Friday, 23 Aug 2019

Private sector makes up 40% of Hanoi’s economy

Updated at Saturday, 04 May 2019, 11:06
The Hanoitimes - Hanoi has a total of 256,000 enterprises, of which the private sector accounts for 97.2%, indicating a significant role of the private economy for the city’s socio-economic development.
The private sector currently makes up over 40% of Hanoi’s gross regional domestic product (GRDP) and creates jobs for over 50% of the labor force, Hanoi’s portal reported. 
Illustrative photo.
Illustrative photo.
As of present, Hanoi has a total of 256,000 enterprises, of which the private sector accounts for 97.2%, , indicating a significant role of the sector for the city’s socio-economic development process. 

Tran Thi Thu Hang, CEO of Vietnam Agriculture and Foods Import Export Company, said Hanoi’s business environment has greatly improved over the past few years, particularly the local authority is supportive in addressing concerns of the business community. 

Nevertheless, Hang expected more support from government agencies in removing bottlenecks and restrictions for further development of the private sector. 

For the first time since the launch of the provincial competitiveness (PCI) index report in 2005, Hanoi has been named among the top 10 of the ranking nationwide, claiming the ninth position out of 63 provinces and cities with a score of 65.40 out of 100, up four places compared to last year's report. 

Hanoi’s ranking has been consistently going up in six consecutive years, up 41 places from 51st in 2012 to ninth in 2018,” said Nguyen Doan Toan, vice chairman of the Hanoi People’s Committee, at the 2018 PCI report launching ceremony on March 28. 

The result has exceeded the initial target of being included in the top 10 PCI index ranking by 2020 set by the municipal People Council, stated Toan, attributing the success to the fact that Hanoi has always been the pioneer in activities meant to build a government of service which supports businesses in every step. 

Toan referred to previous remark of Chairman of the Hanoi People’s Committee Nguyen Duc Chung that the satisfaction of enterprises and citizens has been identified as the gauge in the operation of Hanoi’s governance.

Vice Chairman of the Hanoi Association of Small and Medium-sized Enterprises (Hanoisme) Mac Quoc Anh said SMEs in general have limited financial capabilities, human resources and corporate governance, leading to inefficient operation and lack of competitiveness. 

As the country is pushing for deeper integration in the global economy through a number of free trade agreements, shortcomings of local SMEs would be exposed unless these issues are properly addressed, Anh added. 

Releasing potential of private sector

For the private sector to realize its role as one of the driving force of the economy, the Hanoi People’s Committee suggested three major plans.

Firstly, the city would focus on creating a favorable business environment to support the development of the private sector, encouraging innovation and modernization for greater productivity. 

Part of the effort is to narrow the gaps of technologies, qualifications of human resources and enterprises’ competitiveness between Vietnam and the leading ASEAN – 4 countries that are Indonesia, Malaysia, the Philippines and Thailand. 

Secondly, Hanoi continues to perfect the legal framework and policies, which is part of the government’s plan to realize the socialist-oriented market economy mechanism by 2030. 

Thirdly, Hanoi would push forward with the restructuring of state-owned enterprises for greater efficiency. Most SOEs in Hanoi are expected to be privatized by 2030 and able to compete with their peers in the region. 

Nguyen Manh Quyen, director of the municipal Department of Planning and Investment, said Hanoi would continue to simplify administrative procedures in a bid to improve the business environment and enhance the city’s competitiveness in this second quarter. 

In the time ahead, Hanoi is expected to hold a conference on improving business environment and its provincial competitiveness index (PCI) in 2019 and subsequent years, Quyen added. 

Additionally, the city gives priority to startups and supporting the development of the private sector, he continued. 

Hanoi targets GRDP growth rate of 7.5% in 2019 and 2020, leading to an expansion of 7.33% - 7.41% in the 2016 – 2020 period, which is in line with the city’s five-year socio-economic development plan. 
Ngoc Mai
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