On the afternoon of March 7, 2025, General Secretary To Lam worked with the Central Policy and Strategy Committee on a number of strategic solutions to create a breakthrough in private economic development in Vietnam in the coming time. Photo: Phuong Hoa/VNA
PRIVATE ECONOMIC DEVELOPMENT - LEVERAGE FOR A PROSPEROUS VIETNAM
To Lam
General Secretary of the Central Committee of the Party
The journey of nearly 40 years of renovation has marked a resilient, breakthrough and development-hungry Vietnam. From an inefficient, centrally planned economy with an average income per capita of only 96 USD in 1989, Vietnam has risen strongly, expected to enter the group of upper-middle-income countries by the end of 2025, equivalent to over 5,000 USD/person/year. This miracle is not only the result of the correct development path under the leadership of the Party with bold and decisive reforms in institutions, policies and integration, but also the result of the spirit of hard work, creativity, determination and tireless efforts of our entire nation.
What is even more proud is that Vietnam's economic growth rate is always twice as high as the average of developing countries, despite global economic fluctuations. From a poor economy dependent on international aid, Vietnam has continuously made strong breakthroughs to become the 24th largest economy in the world in terms of purchasing power parity (PPP). The achievements are not only in the economic field but also include great social progress, contributing to bringing an increasingly prosperous and happy life to the people.
This success has a very important contribution from the private economic sector. If in the early stages of innovation, the private economy only played a secondary role, the economy mainly relied on the state sector and foreign direct investment (FDI), then in the past two decades, especially when the Politburo issued Resolution 09 in 2011 and the Central Committee issued Resolution 10 in 2017 on private economic development, this economic sector has risen strongly, becoming one of the leading important pillars of the economy and increasingly showing itself to be the most important driving force to promote national economic growth. With nearly one million enterprises, about 5 million individual business households, the private economic sector currently contributes about 51% of GDP, more than 30% of the state budget, creates more than 40 million jobs, accounts for more than 82% of the total labor force in the economy, and contributes nearly 60% of total social investment capital.
The private economy not only helps expand production, trade and services but also makes an important contribution to improving labor productivity, promoting innovation and increasing national competitiveness. The strong rise of many Vietnamese private enterprises not only dominates the domestic market but also affirms their brands in the international market. This proves that if there is a favorable development environment, Vietnamese enterprises can completely reach far and compete fairly with the world.
However, despite its increasing contributions, the private economy still faces many barriers that hinder its development, and it cannot break through in terms of scale and competitiveness. Many individual economic households still follow the old business practices, lack the motivation to develop into enterprises, and even "do not want to grow". The majority of Vietnamese private enterprises are small and micro enterprises, with limited financial potential and management skills, lacking connections with each other as well as with the foreign direct investment sector; have not yet taken full advantage of the opportunities brought by the 4.0 industrial revolution, are still slow in digital transformation, very few enterprises invest in research and development (R&D), pay little attention to business model innovation, technological innovation or new product creation. Therefore, it is very difficult to increase added value, promote competitiveness, enhance corporate value and reach international standards.
In addition to inherent limitations, private enterprises also face many barriers in accessing resources, especially credit capital, land, resources and high-quality human resources, especially in the fields of technology, engineering and finance. Meanwhile, some state-owned enterprises hold many resources, land, capital and high-quality human resources but have not exploited them effectively, or even wasted them. In addition, the legal system still has many shortcomings and overlaps, the business environment has many obstacles, administrative procedures are complicated, time-consuming, costly and potentially risky. In many cases, the right to freedom of business and property rights are still violated by the weakness or abuse of power of some civil servants in performing their duties.
On the other hand, the Government's preferential and support policies are not really effective and fair among economic sectors and are not easily accessible to the private economy. In many cases, state-owned enterprises and foreign enterprises still receive more incentives than the private sector. State-owned enterprises often have more favorable access to land, capital, and credit; while foreign enterprises often receive better support in terms of taxes, customs procedures, and access to land. In addition, corruption and informal costs still exist, creating an invisible burden for private enterprises, reducing production and business efficiency and causing hesitation when expanding investment.
Obviously, the limitations on the development of private enterprises stem partly from the shortcomings of the institutional system and economic policies and the business environment. These bottlenecks not only restrain the growth rate of the private economic sector, causing its contribution to GDP to remain almost unchanged for more than a decade, but also prevent the economy from increasing added value, escaping the middle-income trap, and slowing down the process of turning Vietnam into a high-income developed country by 2045 according to the Party Resolution's goals and the people's expectations.
Towards the common vision of the country, the private economy also needs to define more clearly its mission and vision. The private economy must be a pioneering force in the new era, successfully implementing the cause of industrialization and modernization of the economy, enhancing national competitiveness, having social responsibility, contributing to improving people's lives, participating in building a civilized and modern society and contributing to building a dynamic and internationally integrated Vietnam. The private economy needs to strive to become the main force, leading in the application of technology and innovation, to achieve the goal of contributing about 70% of GDP by 2030; more and more private enterprises have the capacity to compete globally, master technology and deeply integrate into international value chains and supply chains; together with the whole country to build a dynamic, independent, self-reliant, self-reliant and prosperous Vietnam.
In order for the private economic sector to fulfill its mission and realize that aspirational vision, the most important factor is to continue to have breakthrough reforms in institutions, policies and the business environment so that the private economy can maximize its potential and become the driving force leading the economy to reach the international market. A prosperous economy cannot rely solely on the state sector or foreign investment, but must rely on the internal strength of a strong private sector, playing a pioneering role in innovation and national development. The national economy is only truly prosperous when all people participate in labor to create material wealth, a society where everyone, every household, and every person is enthusiastic about working.
Faced with that requirement, we need to thoroughly re-orient the viewpoints and perceptions throughout the political system on the role of the private economy as the country's leading growth engine. This requires a fundamental change in policy making, overcoming limitations and promoting the superiority of the market mechanism to support the private economic sector in improving labor productivity and innovation. The State must have a management method suitable to the market mechanism, ensuring the right to freedom of business, property ownership and the right to fair competition of the private economy; removing all barriers, making policies transparent, eliminating group interests in policy making and resource allocation, and not discriminating between the private economic sector and state-owned enterprises and foreign-invested enterprises in all policies. At the same time, consistent with the viewpoint that "everyone has the right to freely do business in industries that are not prohibited by law", building policies to reassure investors, businesses and entrepreneurs, it is necessary to create stronger trust between the State and the private economic sector, thereby encouraging businesses to boldly invest, innovate and participate in strategic economic sectors.
On the morning of February 10, 2025, in Hanoi, Prime Minister Pham Minh Chinh chaired a meeting of the Government Standing Committee with businesses to discuss tasks and solutions for private enterprises to accelerate and make breakthroughs, contributing to the country's rapid and sustainable development in the new era. Photo: Duong Giang/VNA
The upcoming Resolution of the Politburo on the private economy needs to encourage, support and orient the development of the private economy, creating a breakthrough driving force, opening up an era of growth for Vietnamese private enterprises. It is necessary to identify the development of the private economy as a long-term strategy and policy of the country. The private economy, together with the state economy and the collective economy, is the core group to build an autonomous, self-reliant and self-reliant economy. In which, focus on implementing the following key solutions:
The first is to continue to accelerate the completion of a complete, socialist-oriented, modern, dynamic and integrated market economy institution. This is a prerequisite for the private economic sector to develop rapidly and sustainably. To achieve this, the State needs to focus on stabilizing the macro economy, perfecting institutions, ensuring that the economy operates according to market principles, minimizing intervention and eliminating administrative barriers, the request-grant mechanism, truly managing the economy according to market principles and using market tools to regulate the economy. In particular, it is necessary to strictly control the situation of monopoly enterprises and policy manipulation, protect fair competition, and ensure that private enterprises have equal opportunities to develop. The core point of perfecting the market economic institution is to clearly define the role of the State in the economy, whereby the State focuses on macro-regulation, creating a favorable business environment, ensuring the effective operation of the market mechanism, and ensuring social justice. We must consider the task of promoting the development of the private economy as our central task at present.
The second is to effectively protect property rights, ownership rights, freedom of business rights and ensure contract enforcement of private enterprises. One of the functions of the State in a modern market economy is to protect the property rights of investors. Therefore, the State needs to build and enforce a strict legal mechanism to protect property rights, including intellectual property rights and intangible assets; minimize legal risks, and limit sudden policy changes that cause losses to businesses. Create a mechanism to support and protect private investors, especially start-ups and innovative businesses, to help them feel secure and develop smoothly. In addition, a modern socialist-oriented market economy requires a transparent, effective and efficient contract enforcement system, helping businesses feel secure in trade and investment transactions. To do this, the State needs to reform the commercial justice system, shorten the time to resolve contract disputes, minimize costs and risks for businesses, reduce the situation of contract violations without effective sanctions; increase the transparency and effectiveness of economic courts and commercial arbitration, ensure fair and objective decisions, and help businesses protect their legitimate rights. Strengthen supervision of law enforcement, overcome the inconsistency between the central and local levels; strictly handle acts of abusing inspections to cause disturbances and difficulties for businesses, increase investment, and support the development of the private economy. At the same time, resolutely handle acts of law violations by businesses; require businesses to raise their awareness of law compliance, build values, and business ethics to promote the healthy development of the private economy.
Third , in addition to the need to strongly consolidate the state-owned enterprise sector, especially state-owned economic groups; it is necessary to prioritize the building of regional and global private economic groups, actively support small and medium-sized enterprises, and at the same time support the household economy and cooperative economy; encourage private enterprises to participate in the country's strategic sectors: practice the view that the private economy plays an important role in the socialist-oriented market economic structure, eliminate the ideology of "Public over private" and the "monopoly" of state-owned enterprises in a number of sectors. Form and develop large, strong private economic groups with international competitiveness, with the mission of leading and supporting other domestic enterprises to participate deeply in the global value chain. At the same time, there must be separate policies to support the development of small and medium-sized enterprises, as well as the household economic sector and the cooperative economy, encouraging household businesses to transform into enterprises and develop new and effective cooperative models. In order for the private economy to not only develop in scale but also contribute positively to the long-term development of the country, it is necessary to encourage private enterprises to participate in strategic areas, develop important infrastructure, high technology, spearhead industries and energy security. Expand opportunities for private enterprises in important national projects, join the State in a number of strategic industries and some special fields, improve research capacity and technological innovation. The State has a policy mechanism to order the private economic sector to participate in a number of key, important national projects, urgent tasks such as building high-speed railways, metro railways, energy infrastructure, digital infrastructure, defense industry, security, etc.
Fourth , promote the wave of startups, innovation, digital transformation and application of new technologies. This is a key factor to help the private economy break through and reach international standards. There needs to be strong and effective support policies to promote private enterprises to apply technology, innovate products and increase added value. The State needs to create a legal sandbox for new technology fields, encourage private enterprises to invest in pioneering fields such as artificial intelligence, blockchain, big data, e-commerce, financial technology (fintech) and smart healthcare... Implement financial support policies and tax incentives for enterprises investing in research and development (R&D). Form a strong startup ecosystem, creating conditions for startups and "technology unicorns" named Vietnam to reach international standards.
Fifth is institutional reform, creating an administrative system "serving businesses - serving the country": It is necessary to drastically reform institutions on the basis of innovative thinking in strongly reforming the administrative system towards serving people and businesses; be decisive in cutting administrative procedures, business conditions, accelerating the digitalization process and applying technology in state management to reduce time, compliance costs, and unofficial costs; establish an effective policy dialogue and criticism mechanism, create conditions for the private business community to participate in giving opinions on the economic policy-making process, ensuring high practicality and feasibility. Strive for Vietnam's business environment to be in the Top 3 ASEAN within the next 3 years.
Sixth , it is necessary to maximize development resources for the private economy, creating opportunities for the private economy to effectively access important resources such as capital, land, human resources, and technology. Promote the private economy to integrate more deeply into the global economy, enhance Vietnam's economic position in the international arena, and protect businesses from economic risks. There needs to be more effective support policies so that the private economy can access resources in a convenient, fair, equitable, transparent, and effective manner, and can exploit and optimally use these resources. Develop capital mobilization channels for private enterprises, including the stock market, corporate bonds, venture capital funds, credit guarantee funds, and modern financial forms such as fintech and crowdfunding; develop stable and transparent land policies, creating conditions for private enterprises to access land funds conveniently and at reasonable prices.
The State needs to effectively orient and support Vietnamese private enterprises to participate in the global supply chain, strongly attract investment capital and advanced technology, and form a team of entrepreneurs with a global mindset. In particular, there needs to be policies to encourage and orient private enterprises to invest in processing and manufacturing industries, supporting industries, agricultural industrialization, and high technology, instead of focusing too much on real estate and short-term speculative sectors. Develop mechanisms and policies to protect private enterprises from economic shocks, especially in the context of global instability, economic recession, and market fluctuations.
Seventh is to develop the private economy on a sustainable basis, with business ethics and social responsibility: The State promotes the development of the private economy on the basis of macroeconomic stability, closely linked to the green development strategy, circular economy, resource saving, emission reduction and environmental protection. Private enterprises need to proactively carry out social responsibility, not only stopping at financial contributions or charity, but also demonstrating through responsible business policies, caring for the lives of workers, supporting community development; and practicing transparent and effective governance, building a business culture based on ethics, fighting fraud, ensuring fairness with customers, partners and workers. In addition, private enterprises need to proactively participate in social security programs with the State, contributing to improving social welfare, reducing the gap between rich and poor, contributing to building a civilized, humane, and prosperous society, where business interests are closely linked to the common prosperity of the country.
The private economy plays a very important role in shaping the future of the Vietnamese economy. We all believe that if the State has appropriate institutions, correct policies and a favorable business environment, the private economy will be nurtured to grow healthily and make strong breakthroughs, not only helping the economy achieve high growth rates but also soon turning our country into a high-income economy in the next two decades. This is the time to act, to create a prosperous, dynamic Vietnam that is increasingly reaching out to the international arena.
We are living in a historic moment, witnessing the unprecedented development of science and technology and a volatile international environment, both cooperation and struggle, where opportunities and challenges always go hand in hand. But with a resilient spirit, with determination and burning desire, Vietnam can completely create a new miracle in socio-economic development! A strong economy is taking shape, a generation of Vietnamese entrepreneurs with courage and innovation, creativity, full of business enthusiasm and patriotism, is continuing to write the story of success, and a bright future, a socialist Vietnam standing shoulder to shoulder with the world powers as President Ho Chi Minh wished, is gradually becoming a reality in the near future.
News Newspaper/Vietnam News Agency
Source: https://baotintuc.vn/thoi-su/bai-viet-cua-tong-bi-thu-to-lam-phat-trien-kinh-te-tu-nhan-don-bay-cho-mot-viet-nam-thinh-vuong-20250317165039044.htm
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