"Revolution" needed for private economy to break through

Dr. Nguyen Dinh Cung expects there will be a "revolution" of streamlining regulations to create momentum for the private economic sector to develop dramatically.

On the sidelines of the workshop “Bank capital contributes to promoting the private economy” held on the morning of March 21 in Hanoi, Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM) - shared with reporters of the Industry and Trade Newspaper about the story of creating motivation for the private economy to break through, creating a breakthrough in the era of national development.

The role of large economic groups in the private enterprise sector

Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM) shared with reporters of the Industry and Trade Newspaper about the driving forces for private economic enterprises to make a breakthrough. Photo: Hoang Giang

- It is known that the Politburo will soon issue a Resolution on private economic development, in which it encourages, supports and orients the development of the private economy, creating a breakthrough driving force, opening up an era of growth for Vietnamese private enterprises. So, in your opinion, what will be the leading role of key economic groups in this Resolution?

Dr. Nguyen Dinh Cung: In an economy, the business community has many layers. First is the start-up layer, then small businesses, medium-sized businesses, and then they gradually grow larger. Businesses develop naturally. The foundation of large businesses and key economic groups also comes from the growth of start-ups, small and medium-sized businesses.

We cannot build and form large economic groups without building a foundation from small and medium enterprises. This development process has quantity before quality. A large number of enterprises then develop into large economic groups.

To promote the growth of enterprises, different mechanisms, policies, support, encouragement and mobilization are needed for each class of enterprises. Because each class of enterprises will have different roles and support needs.

For example, small, medium and micro enterprises are a large part, accounting for the vast majority of the total number of Vietnamese enterprises, but they have the biggest role and responsibility in the economy in creating jobs and solving livelihoods for the majority of people. Therefore, the stability and resilience of the economy depends mainly on this class of enterprises.

However, in the development process, this class of small, medium and micro enterprises cannot lack the leading and guiding role of economic groups. These are the "leading cranes" leading and guiding the development of the business community.

The role of large economic groups in the economy is to develop the country's strategic, pillar industries. But to develop, we must grasp science and technology, develop science and technology, and master core technology.

The role of large economic groups in the economy is to develop the country's strategic, pillar industries. Photo: Thien Minh

General Secretary To Lam emphasized that this is a new era in which private economic enterprises play a pioneering and leading role in the process of industrialization and modernization of the country; contributing to the country's deeper and more effective integration, thereby enhancing the position and competitiveness of the country. This is the mission of the private sector enterprises. To do this, the role of large economic groups is indispensable.

In the new context, we cannot rely on foreign enterprises to carry out the industrialization and modernization of the country, but must rely on ourselves, pull the private economic sector, and take it as the main driver. The policy of promoting the private economy is considered a turning point, opening up great development opportunities for the private economy in general and large economic groups in particular.

Two pillars need reform for the private economy to thrive

Sir , recently, General Secretary To Lam pointed out that there needs to be a clear strategy to develop the private economic sector. How do you evaluate the strategy to develop this sector in the coming time and what needs to be reformed to truly create a strong driving force for the economy?

Dr. Nguyen Dinh Cung : The role of private enterprises is very important, not only through numbers. Private enterprises are present in all economic regions, from urban to rural, from plains to mountains, from favorable economic regions to difficult economic regions and appear in especially difficult economic regions.

Private enterprises are present in all industries. In industries that we used to say only state-owned enterprises could do, private enterprises can now do it, and do it better.

However, up to now, private enterprises have still developed passively and faced many barriers, the biggest of which is institutional. Private enterprises have not been systematically encouraged and supported to fully exploit their potential.

In the new context, the era of national development, as General Secretary To Lam said, a clear strategy for developing the private economy is inevitable. This strategy must determine the mission of the private economy as not only the most important driving force of economic growth, but also the pioneering and main force in implementing the country's industrialization and modernization, in implementing important national projects to enhance the position, competitiveness and resilience of the economy.

Currently, we are emphasizing that private enterprises are the most important driving force of economic growth, and need the highest growth. If this sector does not achieve growth of about 10%, the economy will certainly not achieve its set target. To do this, I emphasize two pillars.

The first is institutional reform. Removing the “bottleneck of the bottleneck”, creating “breakthrough of the breakthrough”. The focus of this pillar must be transformation and removal. In particular, removing and transforming the legal system that is overlapping, duplicate, unclear, ineffective, non-specific, non-transparent...

Our current legal system is management-oriented. Therefore, it needs to be transformed into a more open legal system, creating a truly free business environment, free creativity, fair business with low compliance costs, and no legal risks in business activities.

If we move to a more open legal system, businesses can demonstrate their full potential to contribute and enrich themselves and the country. The result of this pillar is to build a more open business environment. There, people are free to do business in all industries that are not prohibited by law, and are free to be creative; in which, property rights and assets are firmly protected and treated fairly. If disputes arise, they are handled fairly, effectively and quickly.

Second, regarding the capital of enterprises. That is, it is necessary to create an environment and a policy system to support and encourage the development of private enterprises.

Create conditions for private enterprises to access capital, land, science - technology, data... in a timely manner, large enough in scale and synchronously so that they can break through to a new level, from super small to small, from small to medium, from medium to large - a very difficult threshold for enterprises.

I emphasize that the framework for private enterprises to develop is not only credit capital, but also long-term investment capital. Thus, the State needs to open up a more diverse investment capital market, reducing the burden on banks. We must develop a capital market with various types of funds, which we currently lack a lot. Because of the lack, many enterprises have not been able to develop...

I hope that the upcoming strategy of the Politburo will mobilize all resources of the private economy, and the creativity and dynamism of this sector. Thereby, it will help to take full advantage of the development opportunities of the private economic sector in general and the whole economy.

There will be a regulatory revolution.

- In fact, we already have a number of large economic groups that can be considered “leading cranes” leading growth. In your opinion, what do we need to do to have more “leading cranes” enterprises?

Dr. Nguyen Dinh Cung: First of all, I reiterate the above point of view, we must develop more the foundation of large economic groups, that is, we must develop small and medium enterprises.

We have 1 million enterprises, but only about 20 large private economic groups. So, if we want to have 50, 60, 70 economic groups, we need 1.5-2-3 million enterprises. We cannot build an economic group without the foundation of small enterprises.

Second , large economic groups develop like that, but if they are not linked to key national projects and works; if they are not linked to strategic construction industries, the pillars of the economy will also lose direction. Therefore, the State needs to use private economic groups, promote their initiatives, implement key national projects, both taking advantage of domestic resources and encouraging private groups.

Regarding the connection between enterprises in the private economic sector, I think that enterprises are linked together for benefits, but let enterprises be free to innovate, free to do business, remove unnecessary barriers; regulate the market through market mechanisms. The State stands behind to support enterprises.

In short, the strongest push for the private enterprise sector to grow is to remove the bottlenecks of bottlenecks; remove the mechanisms and policies that create barriers for businesses.

Thank you!

Dr. Nguyen Dinh Cung hopes that after streamlining and rearranging the operating apparatus, or together with streamlining and rearranging the apparatus, there will also be a revolution in streamlining legal regulations to create a breakthrough momentum, opening up an era of growth for Vietnamese private enterprises.

Source: https://congthuong.vn/ts-nguyen-dinh-cung-can-cuoc-cach-mang-de-kinh-te-tu-nhan-but-pha-379386.html