Incentives are not enough, practical policies are needed to promote development...

The private business sector is undergoing strong changes and is truly recognized as an important driving force for the sustainable development of the economy. Experts and businesses believe that if the private economy plays a leading role, then encouragement alone is not enough. It is necessary to have practical policies, reduce cost burdens and create a favorable environment for business development...

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.

In that context, 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.

At the seminar with the theme "Solutions to promote private economic development" on the morning of March 20 organized by Nguoi Lao Dong Newspaper, experts and businesses focused on discussing many issues such as: the development situation of the private economy in Vietnam; assessment of current policies and limitations in developing this sector; points that need to be reformed in the current legal system and administrative procedures; Do tax, credit and financial incentives policies really effectively support private enterprises?

Finding solutions to promote strong and sustainable private economic development

Consider the private economy as the "most important driving force" in economic growth

Speaking at the seminar, Prof. Dr. Vu Minh Khuong from the National University of Singapore highly appreciated General Secretary To Lam's views on the private economy and said that the private economy could 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.

Professor and Doctor Vu Minh Khuong emphasized that the private economy is sensitive, flexible and has the ability to stimulate internal strength, creating a chain reaction, "investment begets investment, opportunity begets opportunity", forming a vibrant economic ecosystem.

Sharing international experience, Professor Vu Minh Khuong said that to develop the private economic sector, it is necessary to focus on a number of key points. That is, it is necessary to have a long-term strategic vision from now until 2030 - 2045, in order to create conditions for the private economy to develop sustainably. Currently, management mainly focuses on controlling compliance with regulations, while many of these regulations do not really create momentum for future growth.

To effectively implement this strategy, there needs to be a systematic plan, clearly identifying key areas and projects that need priority investment, with the participation of both the public and private sectors.

Dr. Nguyen Quoc Viet emphasized that the focus of the private economic development policy is that the State needs to select priority areas and projects for development in each phase, in accordance with the ability to mobilize and allocate resources. Placing orders for enterprises to implement key projects must be done on the basis of clear, public selection criteria and with specific scope limits.

Selected enterprises must be those that have or have the potential to implement key projects and fields, have the ability to lead development trends and create positive spillover effects to other industries and enterprises. This spillover will promote entrepreneurial spirit in the private sector, arousing sustainable development momentum for the entire economy.

Dr. Nguyen Quoc Viet emphasized that the focus of the private economic development policy is that the State needs to select priority areas and projects for development in each stage, in accordance with the ability to mobilize and allocate resources.

To realize these goals, the State needs to review, adjust and synchronize relevant laws, especially the Law on Public Investment, the Law on Public-Private Partnership and the Law on Bidding, to create a clear and consistent legal corridor for private enterprises to develop.

In addition, it is necessary to issue specific incentive policies for enterprises receiving orders, such as incentives on access to resources, including capital, land, and labor; tax incentives; and at the same time, simplify administrative procedures to create favorable conditions for enterprises in the process of implementing projects.

"The political determination of senior leaders is very clear. However, to put these policies into practice, there needs to be innovative models of a breakthrough nature from the local level, even ready to 'break the rules' within the legal framework to build pilot mechanisms for private enterprises," emphasized Dr. Nguyen Quoc Viet.

Building a favorable business environment for private enterprises to develop

Associate Professor, Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, commented that the current context of the private enterprise sector is undergoing strong changes, different from before. In 1986, when Vietnam introduced the private economy into the multi-sector economy, 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, is an important fulcrum, creating confidence in the sustainable development of the economy.

In fact, in recent times, the Vietnamese private enterprise sector has remained small, weak, and faced many difficulties, while this sector should have played a fundamental role in the economy. According to Associate Professor, Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, in a developed economy, the private economy, specifically domestic private enterprises, should have contributed 60%, 70%, or even 80% to GDP. However, in reality, the Vietnamese private enterprise sector is still inferior to foreign-invested enterprises (FDI). While this sector should have played a fundamental role in the economy.

Associate Professor, Dr. Tran Dinh Thien believes that now is the decisive time, creating a breakthrough development for the private economy.

Associate Professor, Dr. Tran Dinh Thien said that now is the decisive moment. For the market economy to develop, the private economic force must become the foundation. The role of the state needs to be to pave the way, lead and most importantly, build a favorable business environment for private enterprises to develop.

The spirit of innovation must be radical change, not just stopping at improving the old. It is necessary to open up a new perspective, create a new system of Vietnamese enterprises, so that private enterprises can participate in the global supply chain, promote the spirit of entrepreneurship and innovation. The important issue is to build a new institutional system. Laws such as the Law on Science and Technology, the Law on Intellectual Property, etc. also need to be amended to create a more favorable legal corridor for private enterprises to develop, so that private enterprises can participate in the global supply chain, promote the spirit of entrepreneurship and innovation.

Sharing the same view, Dr. Nguyen Quoc Viet, a public policy expert, said that promoting private economic development is an important strategy to enhance the competitiveness of the economy through industrial policies and infrastructure investment, combined with strengthening the capacity of the domestic economic sector, especially domestic private enterprises. To effectively implement this strategy, there needs to be a systematic plan, clearly identifying key areas and projects that need priority investment, with the participation of both the public and private sectors.

Private enterprises need to develop both breadth and depth.

Dr. Can Van Luc, chief economist of BIDV Bank, said that China has 55 million businesses, while Vietnam is only striving to reach 1 million this year. The number of Chinese businesses is 55 times that of Vietnam, while their population is only 15 times that.

Therefore, Vietnam should aim to have 4 million enterprises, instead of 1.5-2 million by 2030. According to Mr. Luc, one of the potential sources is to encourage business households to convert into enterprises, by exempting income tax for the first 3-5 years for this sector, to nurture revenue sources and simplify establishment and accounting procedures.

Along with that, in order for the private economy to develop its internal strength, increase competitiveness and participate more deeply in the global value chain, experts say it is necessary to perfect institutions and improve the investment environment towards fairness and reduce begging and giving.

Dr. Can Van Luc expressed his opinion at the seminar.

According to BIDV's chief economist, the Law on Support for Small and Medium Enterprises should be amended to reduce taxes for small and micro enterprises to 15-17% instead of the current 20%. At the same time, administrative procedures, business costs and time to handle administrative work should be cut by 30%.

At the same time, authorities need to classify businesses to have appropriate management and support policies according to their scale and nature of operations. Associate Professor Dr. Tran Hoang Ngan said that support policies must take into account the contributions of businesses in many aspects, from the budget, exports to employment.

According to Mr. Luc, the private sector also needs an equal competitive environment, ensuring full implementation of property rights and freedom of business in industries not prohibited by law.

So that the private sector can really participate in large projects

From a business perspective, Mr. Phan Dinh Tue, Vice President of the Ho Chi Minh City Business Association (HUBA), Chairman of the Board of Directors of Bamboo Airways, said that the relationship between the state and private enterprises should be viewed as the relationship between enterprises and customers. Enterprises that want to sell products must think in the direction of what customers need, what they like and must find ways to meet those needs. On the part of state management agencies, there should be appropriate mechanisms, policies, and support interest rates...

Mr. Phan Dinh Tue, Vice President of Ho Chi Minh City Business Association (HUBA), Chairman of the Board of Directors of Bamboo Airways, expressed his opinion at the discussion. Photo: NLĐ

On the other hand, Mr. Le Tri Thong, Chairman of the Ho Chi Minh City Young Entrepreneurs Association and General Director of Phu Nhuan Jewelry Company (PNJ), said that Vietnam can build joint investment funds between the public and private sectors.

“Public-private implementation should be carried out according to market mechanisms, with investment decisions based on market factors. In the era of development, connectivity in the operating system is very important to connect businesses and policies, and businesses with businesses,” said Mr. Thong.

At the same time, it is necessary to create mechanisms for these businesses to share and cooperate to form a sustainable private business ecosystem.

Meanwhile, Ms. Ly Kim Chi, Chairwoman of the Ho Chi Minh City Food and Foodstuff Association, said that for the policy to be truly effective, businesses need to clearly feel the practical support from authorities at all levels, not just stop at paper.

The policy needs to be implemented in practice, requiring knowledgeable staff and a positive attitude. Ms. Ly Kim Chi said the business community is more confident when the State has a policy to develop the private economy. "But our mentality is mixed between expectation and concern," she said.

Ms. Chi gave an example of the Prime Minister's directive to cut 30% of administrative procedures, but in reality, the drafts of some ministries and branches still contain regulations that increase costs and procedures. Last week, 6 industry associations representing tens of thousands of businesses continued to petition the Prime Minister to remove difficulties.

Source: https://baodaknong.vn/khuyen-khich-la-chua-du-can-chinh-sach-thuc-te-de-thuc-day-phat-tien-kinh-te-tu-nhan-246614.html