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Despite the implementation of a number of policies in support of the private sector over the past few years, the private sector remains insignificant.
According to Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research under the Vietnam National University, Hanoi, the private sector's contribution to the national economy has never surpassed 10% of the GDP during the past 10 years, while the rate is at least 80% of the GDP in developed countries.
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Professor Tran Van Tho from Japan's Waseda University said that the private sector shows an inefficient structure, low productivity, a lack of capacity for exports and has yet to connect with the global value chain of multinational corporations.
SOEs hold high positions and are provided with preferential treatment in terms of capital and land while these factors of production are disadvantages to small private enterprises, requiring institutional reform in the factors of production to enhance resource efficiency and productivity.
Although the foreign direct investment (FDI) sector occupies a large proportion of the economy, it creates a negligible impact on economic structure transfer.
In addition, the link between FDI and domestic enterprises remains weak, creating limited influence on technology and knowledge transfers. A strategy for increasing the connectivity between the FDI and domestic sectors would help to improve the productivity of domestic enterprises.
Enterprises operating in Vietnam face prolonged unsolved difficulties, including gaining access to capital and land, high costs, and unfair treatment in attempting to gain access to business opportunities concerning State projects and projects requiring business conditions.
The expert recommended policy adjustments in order to encourage enterprises to take part in industries.
