Econ
Creating motivation for the development of private sector
Expectation for private sector being the driving force for the economy is the right sentiment in the context of Vietnam’s deep integration to world economy.
On September 30, the Prime Minister Nguyen Xuan Phuc chaired the conference with private sectors themed “The Government accompanies with private sectors for economic development”.
In previous conferences, the Government often met with state owned enterprises, but this year, it was the private sector chosen in this conference. According to the Prime Minister, out of the 496,000 operating enterprises, private enterprises have contributed to 96.7% of the total number, Foreign direct investment (FDI) enterprises are 2.6%, and the remaining is state owned enterprises. But in private enterprises, large enterprises are less than 10,000, while the remaining is small and micro enterprises. The Prime Minister said, the role of leaders are important for the development. Private enterprises despite owning small percentage of assets, have contributed to 43% of GDP. “What is the bottleneck? What should government do for private enterprises to develop, and for this specific period, what should the government and private enterprises focus on?” – The Prime Minister questioned.
Private corporations taking part in the conference have preliminary success and contributed to the development of Vietnam such as Hoang Anh Gia Lai, BRG, Geleximco, TH, VietJet. The Prime Minister said, from this event, the government will form policies and orientation for appropriate framework and business environment for enterprises going in the right direction; which focuses on having more and more strong small and medium enterprises.
Chief of the Prime Minister’s Economic Advisory Group Vu Viet Ngoai said, in 2017, the economy has had positive results, but there remains works to be done to achieve the target growth and the next development phase of the country.
According to the statistics of the General Statistics Office of Vietnam, in the first 9 months, Vietnam has 93,967 newly established enterprises and 21,200 enterprises back to operation. The number of enterprises stopped operation in the first 9 months is 49,345 enterprises, up 9.4% compared to the same period of last year. Difficulties are coming mainly from the low demand of the market, limited financial capabilities, low competitiveness of domestic products. “In the context of global economic integration, Vietnam has to firmly go on the way of self changing, with an aim for survival at least” – the head of Vietnam Economy Institute Assoc. Dr. Tran Dinh Thien said, Vietnam is lacking leading enterprises, which create a linkage and foundation to unite small enterprises into collective force.
Meanwhile, advantages over policies, accessing to land plots, and capital of some corporations are obvious, but the influence and capabilities to lead other enterprises are not clear. “The problem is that big enterprises are not motivated to keep the leading role for other small enterprises. From their perspective, they can take advantage over policy’s loophole and projects for short term profits, while not focus on long term and sustainable projects” – Thien said.
On the other hand, banking expert, Dr. Nguyen Tri Hieu said, in addition to the role of government being supportive to private sector, the objective of private sector to be the driving force for the economy will be feasible with the presences of big private enterprises in fields of IT, manufacturing, industry, instead of supporting for FDI enterprises through extracting natural resources or producing products with low added value.
According to the Director of Central Institute for Economic Management Nguyen Dinh Cung, in addition to the internal efforts from enterprises, administrative agencies must have supporting policies and preferential treatments for fields such as agriculture, processing industry, IT. However, this must be advantages stemming from the overall policies modification, with an aim to ensure fairness to all enterprises.
The Prime Minister Nguyen Xuan Phuc talked with representatives at the conference.
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Private corporations taking part in the conference have preliminary success and contributed to the development of Vietnam such as Hoang Anh Gia Lai, BRG, Geleximco, TH, VietJet. The Prime Minister said, from this event, the government will form policies and orientation for appropriate framework and business environment for enterprises going in the right direction; which focuses on having more and more strong small and medium enterprises.
Chief of the Prime Minister’s Economic Advisory Group Vu Viet Ngoai said, in 2017, the economy has had positive results, but there remains works to be done to achieve the target growth and the next development phase of the country.
According to the statistics of the General Statistics Office of Vietnam, in the first 9 months, Vietnam has 93,967 newly established enterprises and 21,200 enterprises back to operation. The number of enterprises stopped operation in the first 9 months is 49,345 enterprises, up 9.4% compared to the same period of last year. Difficulties are coming mainly from the low demand of the market, limited financial capabilities, low competitiveness of domestic products. “In the context of global economic integration, Vietnam has to firmly go on the way of self changing, with an aim for survival at least” – the head of Vietnam Economy Institute Assoc. Dr. Tran Dinh Thien said, Vietnam is lacking leading enterprises, which create a linkage and foundation to unite small enterprises into collective force.
Meanwhile, advantages over policies, accessing to land plots, and capital of some corporations are obvious, but the influence and capabilities to lead other enterprises are not clear. “The problem is that big enterprises are not motivated to keep the leading role for other small enterprises. From their perspective, they can take advantage over policy’s loophole and projects for short term profits, while not focus on long term and sustainable projects” – Thien said.
On the other hand, banking expert, Dr. Nguyen Tri Hieu said, in addition to the role of government being supportive to private sector, the objective of private sector to be the driving force for the economy will be feasible with the presences of big private enterprises in fields of IT, manufacturing, industry, instead of supporting for FDI enterprises through extracting natural resources or producing products with low added value.
According to the Director of Central Institute for Economic Management Nguyen Dinh Cung, in addition to the internal efforts from enterprises, administrative agencies must have supporting policies and preferential treatments for fields such as agriculture, processing industry, IT. However, this must be advantages stemming from the overall policies modification, with an aim to ensure fairness to all enterprises.
