General Secretary To Lam has just written an article "Private economic development - Leverage for a prosperous Vietnam" . Sharing with Dan Tri reporters , economic experts commented that with these orientations, the private economy has the opportunity to develop strongly if barriers are removed.
Institutional and policy breakthrough reforms are prerequisites.
Economist Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM), affirmed that the private sector is playing an increasingly important role in the Vietnamese economy. "Vietnam has seen the emergence of large-scale private enterprises capable of reaching out to regional and global markets," he said.
Many key industries such as steel production, automobiles, high technology, etc. are witnessing the strong rise of the private enterprise sector.
However, the team of entrepreneurs and businesses still has many limitations. Most businesses are small and medium-sized, have low competitiveness, and limited operational efficiency. Many entrepreneurs do not have high management skills, and their business thinking still lacks long-term strategic vision.
In addition, institutions and laws remain the "bottleneck of bottlenecks", becoming a major barrier to business development. If not resolved soon, these obstacles could hinder the progress of the private economic sector - one of the important driving forces of the Vietnamese economy in the coming period.
In his article, General Secretary To Lam also emphasized that in order for the private economic sector to fulfill its mission and realize its 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 out to the international market.
General Secretary To Lam (Photo: Pham Thang).
This requires a fundamental change in policy making, overcoming limitations and promoting the superiority of market mechanisms to support the private economic sector to improve labor productivity and innovation.
The first key solution mentioned in General Secretary To Lam's article is to continue accelerating the completion of a full market economic institution, in the direction of socialism, modernity, dynamism and integration.
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 mechanism of asking and giving, truly managing the economy according to market principles and using market tools to regulate the economy.
Dr. Mac Quoc Anh - Vice President and General Secretary of the Hanoi Association of Small and Medium Enterprises - said that in recent times, Vietnam has made significant progress in perfecting the legal framework, reforming administrative procedures, as well as creating favorable conditions for the private sector to participate in the economy.
First, the business environment has been continuously improved. According to the World Bank report, Vietnam's Ease of Doing Business index had been continuously improved before the Covid-19 pandemic, from 82/190 economies in 2016 to 70/190 in 2020.
The Government has also made efforts to reduce business conditions. Since 2016, the Government has reduced or simplified nearly 50% of business conditions and more than 60% of specialized inspection procedures.
The Enterprise Law 2020 and Investment Law 2020 have helped to make the investment environment transparent, reduce administrative barriers, and enhance business freedom for private enterprises.
Dr. Le Dang Doanh and Dr. Mac Quoc Anh (Photo: IT).
However, Mr. Quoc Anh assessed that besides positive reforms, there are still some barriers that prevent the private economic sector from developing as strongly as expected. Currently, although there have been many reform efforts, there are still overlapping laws and regulations, causing difficulties for private enterprises.
Besides, we are lacking policies to support small and medium enterprises. According to VCCI report, more than 90% of Vietnamese enterprises are small and medium enterprises but financial and credit support policies are still not really effective.
Another limitation is the lack of transparency in accessing resources. Private enterprises still face difficulties in accessing land and credit due to complicated procedures and administrative barriers.
Mr. Quoc Anh recommended that the Government continue to reform institutions in a synchronous, transparent and simplified manner in investment and business processes. In particular, it is necessary to build a mechanism to encourage private enterprises to participate in strategic sectors such as energy, high technology, and supporting industrial production. He also proposed creating a financial and credit support mechanism specifically for small and medium-sized enterprises, ensuring that they can access capital at preferential interest rates.
Maximize development resources for the private economy
Maximizing development resources for the private economy is also an important solution mentioned by General Secretary To Lam in the article.
Accordingly, we need 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 forms of finance such as fintech, crowdfunding; build stable and transparent land policies, creating conditions for private enterprises to access land funds conveniently, at reasonable prices.
General Secretary and President To Lam met with a delegation of outstanding businessmen from the Vietnam Federation of Commerce and Industry (VCCI) and the Vietnam Private Entrepreneurs Association on the occasion of the 20th anniversary of Vietnamese Entrepreneurs Day in November 2024 (Photo: Nhan Dan).
The State needs to orient and effectively 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 should 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.
According to Mr. Mac Quoc Anh, private enterprises are facing many resource limitations such as limited access to capital. For example, lending interest rates are still high at 8-10%, many small enterprises are not eligible for loans.
The second is land restrictions when land allocation procedures for private enterprises still have many shortcomings. The third is the shortage of high-quality human resources. Private enterprises have difficulty recruiting personnel with technological skills.
Representatives of the Hanoi Association of Small and Medium Enterprises proposed to strongly reform the capital market, expand capital mobilization channels from corporate bonds and investment funds. Make land allocation procedures transparent, create mechanisms for private enterprises to access land more easily. Promote high-tech human resource training, and link between enterprises and universities to meet human resource needs.
He also recommended amending the Land Law to make it easier for private enterprises to access land. The State should establish a Private Enterprise Support Fund to provide long-term finance.
Sharing the same view with Mr. Mac Quoc Anh, Dr. Dinh The Hien - an economic expert - said that businesses are thirsty for capital but have not found the right approach. Low-interest bank loans are not as good as capital to sell goods.
According to him, the relationship between banks and businesses should also be fair because this is a symbiotic relationship. Therefore, experts expect the State to have policies to support businesses through tax policies, open consumption, and open regional economies. So that businesses can gradually shift capital flows from production and business, not depending on bank capital sources.
In addition, Mr. Hien proposed a mechanism to prioritize public joint stock companies, listed companies and transparent information in expanding opportunities to participate in important national projects, participating with the State in a number of strategic industries and some special fields, improving research capacity and technological innovation; participating in key projects such as construction of high-speed railways, urban railways, energy infrastructure, digital infrastructure, defense industry, security...
Innovation and digital transformation are the driving forces for development
General Secretary To Lam emphasized promoting 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 should be strong and effective support policies to promote private enterprises to apply technology, innovate products and increase added value.
According to the Global Innovation Index (GII) 2023, Vietnam ranked 46th out of 132 countries. However, Dr. Mac Quoc Anh commented that the rate of enterprises actually applying high technology is still low. The digital transformation process is taking place strongly, but mainly in large enterprises, while small enterprises still face many difficulties.
In the current context, he said that private enterprises need to take advantage of policies supporting innovation, especially funds supporting research and development; invest in digital transformation, apply AI, big data to improve efficiency. Enterprises need to strengthen cooperation with technology corporations to access knowledge and resources.
Dr. Dinh The Hien proposed that it is necessary to create conditions for international investment funds to invest in Vietnam, because they have the best ability to evaluate the development capacity of startups in every country. If development is based on will, it can lead to a situation of losing money and suffering.
Dr. Dinh The Hien and Associate Professor, Dr. Nguyen Huu Huan (Photo: IT).
Regarding the issue of innovation, Associate Professor Dr. Nguyen Huu Huan, lecturer at Ho Chi Minh City University of Economics (UEH), said that Vietnam needs to have policies to promote attracting domestic investors, especially in the automobile, semiconductor, and artificial intelligence industries. Technology enterprises are being treated like normal enterprises, and there are no special mechanisms such as capital support or building a surrounding ecosystem.
According to him, to develop the private economy, regulations are also needed for foreign enterprises to transfer technology to Vietnam, especially FDI enterprises such as China and South Korea.
Accordingly, Prime Minister Pham Minh Chinh recently also proposed that corporations transfer technology by investing in R&D centers, creating conditions for Vietnamese people to participate in management, and Vietnamese enterprises to participate in the supply chain.
Great opportunities from policy
The private economy currently contributes nearly 45% of the country's GDP, more than 40% of the total investment capital of the whole society, creates jobs for 85% of the country's labor force; accounts for 35% of total import turnover and 25% of total export turnover.
Deputy Prime Minister Nguyen Chi Dung, Deputy Head of the Steering Committee for the Development of the Private Economic Sector Project, said that up to now, Vietnamese enterprises have grown strongly in both quantity and quality. Some enterprises have developed to regional and world levels, proactively participating and affirming their position and role in global supply chains, contributing to enhancing Vietnam's position and prestige in the international arena.
Associate Professor, Dr. Nguyen Huu Huan commented that the correct and timely direction of General Secretary To Lam will promote and develop the private economy in the coming period.
The role of the private economy is undeniable. In the world, there is no powerful country without a developed private economy. For example, when talking about Korea, there are Samsung, LG, CJ, Japan has Honda, Toyota, Sony… Each country has large private economic groups to create a powerful country.
Therefore, the key task of developing the private economy is completely correct so that Vietnam can create strong economic groups, playing the role of locomotives leading the economic development, alongside the State economy.
To promote the development of the private economic sector, Mr. Huan said that Vietnam needs to increase the localization rate in Vietnam's exports. Exports are currently the main spearhead of Vietnam's economy, but it can be seen that 72% of Vietnam's export turnover belongs to the FDI sector, so it will depend heavily on foreign investors, while domestic investors only account for about 28%.
Dr. Dinh The Hien expressed his excitement and trust in General Secretary To Lam's message on developing the private economy, considering the private economy as a lever for a prosperous Vietnam. According to Mr. Hien, many Vietnamese private enterprises have grown strongly in recent times, dominating the domestic market and affirming their brands in the international market.
General Secretary To Lam's timely attention, direction and orientation to the private economy is the foundation for this sector to develop more strongly, contributing to building a dynamic and internationally integrated Vietnam.
Dr. Mac Quoc Anh assessed that private enterprises will have great opportunities to develop from strong policy changes. The first is the policy to promote public investment. The government plans to invest about VND700,000 billion in public investment in the 2021-2025 period, including many large infrastructure projects such as Long Thanh airport and the North-South expressway.
The equitization of state-owned enterprises helps create opportunities for private enterprises to participate in fields previously dominated by state-owned enterprises.
In addition, prioritizing the development of large-scale private economic groups, creating conditions for enterprises such as VinFast, Vingroup, FPT, Masan... to reach regional level is a clear proof.
Source: https://dantri.com.vn/kinh-doanh/doanh-nghiep-tu-nhan-dung-truoc-nguong-cua-lon-de-giup-viet-nam-thinh-vuong-20250318111307418.htm
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