Arousing the internal strength of the private economic sector.

The private sector has been playing an important role in the Vietnamese economy, contributing about 40% of GDP and more than 30% of total state budget revenue (according to 2023 data). However, the majority of private enterprises are still small and medium-sized enterprises, facing many barriers in expanding their scale and improving their international competitiveness. In particular, Vietnam still lacks leading enterprises with great influence in the region and globally.

At a working session with the Central Policy and Strategy Committee on March 7, General Secretary To Lam emphasized the importance of changing mindsets, eliminating prejudices about the private economy, and improving the business environment to promote sustainable development of this sector. The General Secretary affirmed that the private economy is the key for Vietnam to achieve sustainable economic growth and improve its position in the international arena.

According to the General Secretary, the private economy can be a strategic weapon to help Vietnam improve its national position. If well promoted, the private economy will create major breakthroughs, opening up enormous development potential for the country.

This is the desire of society, helping to liberate resources and create a strong resonance effect. The private economy is sensitive, flexible and has the ability to stimulate internal strength, create a chain reaction, and form a vibrant economic ecosystem.

According to Professor Vu Minh Khuong, lecturer at the Lee Kuan Yew School of Public Policy, National University of Singapore, the private economy in particular and economic sectors in general are facing many difficulties due to institutional limitations. Many current regulations seem to allow (private enterprises) to exist but do not create conditions for development, making it difficult for the economy to make a breakthrough.

International experience shows that to develop the private economic sector, it is necessary to focus on a number of key points. Vietnam needs to have a long-term strategic vision from now until 2030 - 2045, to create conditions for the private economy to develop sustainably. Currently, management is mainly focused on controlling compliance with regulations, while many of these regulations do not really create momentum for future growth.

“Vietnam is currently leaning towards growth rather than evolution. Evolution is the factor that helps change the economic structure, grasp technology and innovate. Meanwhile, growth is just doubling and tripling within the old model, not creating a qualitative breakthrough” – Professor – Dr. Vu Minh Khuong emphasized.

Associate Professor, Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute (Photo: NLD Newspaper)

Discussing this issue, Associate Professor Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, emphasized that the current context of the private enterprise sector is undergoing strong changes, different from the past when enterprises did not dare to speak out strongly. As the General Secretary affirmed, the private enterprise sector is the most important driving force for economic development. This has created a new shift, breaking prejudices, dogmas and taboos in the view of the private economy.

When Vietnam introduced the private economy into the multi-sector economy (in 1986), the economy revived. However, it is only now that the role of the private economy is truly recognized as the most important driving force. This event has special significance, being an important fulcrum, creating confidence in the sustainable development of the economy.

Statistics show how much the private enterprise sector contributes to GDP, how many jobs it creates, how much it contributes to the budget, etc., clearly demonstrating the role of the private economy. However, in a developed economy, the private economy - especially domestic private enterprises - must contribute 60%, 70%, or even 80% to GDP. In fact, in recent times, the Vietnamese private enterprise sector has been at a disadvantage compared to foreign direct investment (FDI) enterprises. The private enterprise sector is still small, weak, and facing many difficulties; the number of enterprises withdrawing from the market is greater than the number of enterprises entering the market. Meanwhile, this sector should play a fundamental role in the economy.

“Therefore, to promote the private economy, the pioneering business community – those who are concerned with the development of the country – need to have more opinions to contribute to the resolution on developing national enterprises. It is time for the private business sector to create pressure to change policies, not just stop at "asking - giving". Creating pressure is necessary to promote policy changes, thereby creating development momentum for the private economy in the current context" - Associate Professor - Dr. Tran Dinh Thien emphasized.

Dr. Nguyen Duc Viet, public policy expert

Particularly for Ho Chi Minh City, to promote the strong development of the private economy, it is necessary to specify some important contents that have been emphasized by General Secretary To Lam. It is necessary to clearly identify the current situation of the private economic sector, including both the formal and informal sectors. Currently, there are about 5 million business households operating in the informal sector, but they are not strictly managed.

Statistics and specific assessment of the production and business capacity of this sector are necessary conditions to accurately determine the level of contribution to GDP and the state budget. Formalizing the activities of the informal economic sector will be an important step for Ho Chi Minh City in expanding and improving the efficiency of the private economy.