Vietnamese businesses are resilient, "long-lived" but "slow to grow"

On the morning of September 19, the discussion session of Topic 1 with the theme "Strengthening internal strength, unleashing resources, supporting businesses to overcome difficulties" took place within the framework of the Vietnam Socio-Economic Forum 2023.

Delegates participated in a roundtable discussion at the Thematic Workshop 1 with the theme "Strengthening internal strength, unleashing resources, supporting businesses to overcome difficulties". (Source: National Assembly)

At the discussion session, Associate Professor, Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, said that in the same general development context, Vietnam is in a development situation with many different, even unusual features.

Associate Professor, Dr. Tran Dinh Thien emphasized: "After 3 years of experiencing the Covid-19 pandemic and overcoming difficulties, the economy is still standing firm, creating momentum and positive growth and development. The figures reflecting growth achievements, macroeconomic stability, and attracting foreign investment are good evidence for this assessment.

These achievements all demonstrate the economy's impressive 'ability to stay in the rankings' and 'ability to face headwinds'. Vietnam truly deserves the praise of being a 'bright star' in the gloomy world economic sky of 2020."

However, looking throughout the practical process, this expert realized that there are still major problems.

First of all, there is the continuous and prolonged decline in the growth momentum of the economy. In addition, Vietnam's economic development process often contains paradoxes: Vietnamese enterprises are good at resilience, "long-lived" but "slow to grow", difficult to mature; the economy is "thirsty for capital" but has difficulty absorbing capital; GDP growth is high but inflation is low; inflation is low but interest rates are high.

Associate Professor, Dr. Tran Dinh Thien emphasized that the congestion of resource circulation is the root cause of "immobilization" of resources, making them unable to transform into "development motivation", leading to the economic body being weakened, damaged and unstable.

To ensure the circulation of resources in the market economy, Associate Professor Dr. Tran Dinh Thien said that it is necessary to limit the allocation of resources according to the request-grant mechanism; prioritize the promotion of market development, especially input markets, creating a basis for the distribution of resources to take place in accordance with market principles. At the same time, it is necessary to ensure smooth infrastructure, open mechanisms, and smart operations.

Associate Professor, Dr. Tran Dinh Thien speaks at the Seminar 1. (Photo: Gia Thanh)

Forecasting Vietnam's economy in the long term, Mr. Jochen Schmittmann, Resident Representative of the International Monetary Fund (IMF) in Vietnam, said that Gross Domestic Product (GDP) growth will decrease to 3.7% in the first months of 2023, but in the future, the economy can recover, especially exports and positive signals from the real estate market.

However, Mr. Jochen Schmittmann noted that Vietnam will continue to be affected by the disruption of the global supply chain, the decrease in demand for goods affecting the market, including the labor market. Therefore, appropriate response solutions are needed, including tighter monetary policies in the coming time.

Commenting on the difficulties of enterprises, according to Mr. Dau Anh Tuan, Deputy Secretary General, Head of Legal Department, Vietnam Federation of Commerce and Industry (VCCI), Vietnamese enterprises are facing enormous challenges.

In the first 8 months of 2023, the total number of newly registered and re-entered enterprises still decreased slightly by about 0.03% compared to the same period in 2022. Notably, the number of enterprises leaving or temporarily leaving the market increased by 15.6% compared to the first 8 months of 2022, reaching 124.7 thousand enterprises. This is an important indicator showing that the "health" of the business sector is alarming.

Not only that, for the first time in many years, Vietnam's export growth decreased compared to the same period last year. This decline is clearly shown in Vietnam's key export products from electronics, garments, wooden furniture to seafood...

The decline in international demand quickly affected Vietnamese manufacturing enterprises. Industrial production value in the first 8 months of the year decreased by 0.4% compared to the same period in 2022.

Mr. Dau Anh Tuan said that there are 6 typical barriers and difficulties of Vietnamese enterprises. These are: The quality of infrastructure is improving but still cannot keep up with the needs of economic development; access to basic production and business resources (capital, human resources, land) is not really favorable; high production and business costs reduce the competitiveness of Vietnamese enterprises; the quality of legal regulations and law enforcement needs to continue to be improved; domestic manufacturing enterprises have not developed strongly and lack effective support mechanisms and domestic private enterprises are still at a disadvantage compared to cross-border enterprises.

Faced with the above difficulties, CEO of the Imex Pan Pacific Group Le Hong Thuy Tien proposed breakthrough solutions, mechanisms and policies to help businesses overcome difficulties. Specifically:

Regarding financial tax policies and loan interest support, there should be specific solutions for each group of businesses, and an independent agency should evaluate support for businesses to adjust support more effectively. It is necessary to remove barriers for businesses, review unrealistic regulations, and not set regulations that are higher than the region or the world or higher than necessary to avoid wasting business resources.

Regarding the mechanism and policy for tourism development , the Government needs to consider issuing special policies to stimulate tourism demand such as trade policies in duty-free zones, building and establishing discount sales centers in duty-free zones and duty-free shops on the streets...

Regarding the policy for financial centers, if a financial center is established, Vietnam will reap many benefits such as attracting capital and promoting the development of related industries. Therefore, Ms. Le Hong Thuy Tien proposed that the authorities soon issue policies for Ho Chi Minh City to develop a financial center.

This year's Vietnam Socio-Economic Forum 2023 is held with the theme "Enhancing endogenous capacity, creating momentum for growth and sustainable development".

The forum includes 2 thematic sessions and 1 plenary session. Specifically:

Topic 1: Strengthening internal strength, unlocking resources, supporting businesses to overcome difficulties

Topic 2: Improving labor productivity and ensuring social security in the new context.

Plenary session with the theme: Strengthening endogenous capacity, creating momentum for growth and sustainable development.

Source: https://baoquocte.vn/pgsts-tran-dinh-thien-doanh-nghie-p-vie-t-nam-gio-i-cho-ng-chi-u-so-ng-dai-nhung-cha-m-lo-n-242694.html