At a recent seminar on Vietnam-France trade and investment promotion held by the Ministry of Industry and Trade (MoIT), Alain Chevalier praised the fine adjustment made by the Vietnamese government in the scale of state-owned enterprises (SoEs).
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Further assistance to SMEs and a reduction in the number and scale of SoEs have demonstrated Vietnam’s sound policies, he added.
Alain noted that Vietnamese people are very intelligent and creative, with many initiatives for developing the household economy. If they receive the right support, they can develop SMEs effectively, he noted.
SMEs put at a disadvantage
With enormous potential for developing service and manufacturing sectors, SMEs can team up with large groups to engage in the support industry. They are also enjoying favourable conditions to penetrate fields such as information technology, tourism and finance, Alain said.
However, he pointed out some hurdles facing SMEs, including limited access to financial sources thus putting them in a difficult position to pay taxes, apply advanced technology and sharpen competitive edge.
Alain’s view was shared by Hoang Gia Media Group General Director Hoang Hai Au, who said local businesses, especially SMEs, are suffering numerous challenges due to weak liquidity, low purchasing power and large inventories.
It’s difficult for Vietnamese businesses to compete against foreign rivals and stand firm on home turf as they have to pay high interest rates of bank loans. In addition, local firms are struggling to protect their trademarks in the face of invasion by foreign companies, Au elaborated.
He said that in many countries, including the US, SMEs are considered a great source for job generation and GDP contribution, while giant groups create reputation and represent a country on the global market.
Vietnam’s Enterprise Law (revised) is expected to help SMEs iron out teething problems and operate more efficiently, he added.
Providing energy for SMEs
Alain suggested Vietnam learn experience from developed countries in assisting SMEs in their fledgling period. The government should assist SMEs who are in need of technical assistance, zoning plans and development strategy.
In Switzerland, SMEs are regarded as the backbone of economic growth, and the government is willing to help them with investment capital and technology, he said, citing Nestle as an example.
As an one-member firm previously, Nestle was then expanded, and soon became a globally renowned brand name. Thanks to its flexibility, creativeness and self-recovery ability, Nestle has generated huge job opportunities and overcome difficulties and challenges caused by the world’s economic downturn, Alain noted.
He hailed SMEs’ crucial role in boosting Vietnam’s economic growth, apart from valuable inflow of foreign direct investment (FDI).
Regarding business consultation, Hoang Hai Au emphasised the need to provide stronger support for SME and introduced a programme called CEO SME 2014 that aims to help local businesses improve management and administration capacity.
