Green Alliance Company creates products with unique values.

The private economic sector, focusing on SMEs, makes important contributions to socio-economic life and is identified as central to the national economic development strategy.

Promote many areas of development

In fact, the private economic sector has made great contributions to the country's development. That was also affirmed by Prime Minister Pham Minh Chinh in a related directive: “The private economic sector, focusing on SMEs, accounts for about 98% of the total number of enterprises operating in the economy. The private economic sector contributes more than 50% of GDP, 30% of total state budget revenue, creates more than 40 million jobs, accounting for more than 82% of the total number of workers in the economy. SMEs are the main force exploiting niche markets, mobilizing maximum resources from the people to serve socio-economic development. SMEs are present in most industries, production and business fields. With their small and medium scale, SMEs always demonstrate flexibility, dynamism, innovation, and successfully start new and creative business models. Even in difficult times, SMEs still strive to maintain production and business activities, demonstrating social responsibility to the community and the country”.

Green Alliance Company supports the community to develop and protect medicinal herbs under the forest canopy.

In the new era, the role and position of the private economy are increasingly affirmed not only at the national level but also at the local level, with attention and mechanisms and policies to prioritize development.

There are currently more than 7,600 enterprises in Hue city, of which more than 6,200 are operating, with 97% being SMEs. These enterprises contribute significantly to the state budget through taxes and other revenues. In 2024 alone, the budget revenue from SMEs will be more than VND 9,000 billion, accounting for 70% of the total local budget revenue. From this revenue, the locality will have more resources to invest in infrastructure development and ensure social security.

In addition, the private economy plays a very important role in promoting the development of many service and production sectors. At the same time, through the formation of value chain linkages, SMEs have created a mutually developing ecosystem.

A typical example is the ecosystem of Green Alliance Company (in Phu Xuan District) - a company specializing in the production of essential oil products and products from natural herbs. The production and business activities of this company not only create jobs for a staff of 9 workers, but during the development process, the company has linked up with the local community, contributing to solving employment and creating a stable source of income for local people in the direction of "symbiosis".

Businesses proactively approach partners

Mr. Pham Nguyen Thanh, Director of Lien Minh Xanh Company, said that the company does not advocate developing raw material areas but encourages the community to participate in developing raw material areas. Through cooperation with people in 4 forest protection community groups in Sao La Nature Reserve and 2 forest protection community groups in A Roang commune (A Luoi) and Thuong Long commune (Phu Loc) in developing raw material areas, the company contributes to solving employment and increasing income for local people. At the same time, through this association, it also helps the community to be more responsible in exploiting and protecting natural medicinal resources. The company also supports improving the management, operation and business capacity of cooperatives and cooperative groups participating in the association so that the units participating in the production chain are not only partners in supplying raw materials and manufacturing products, but also develop strongly with the enterprise.

According to Dr. Nguyen Thanh Tung, Director of the KMI Knowledge Management Institute: "A developing enterprise not only brings benefits to itself, but also pulls many other units to develop together."

Disproportionate scale and quantity

It can be said that SMEs are making great contributions to the city's economy and society, but it must be admitted that in general relation to the whole country and localities in the region, the number of enterprises currently operating in Hue City is still quite modest in terms of scale, industry, field...

Data from the Department of Finance shows that by the end of 2024, the number of enterprises operating in Hue City was only 6,105, an increase of 2,084 enterprises compared to 2020. Comparing the number of enterprises operating in 2024 in neighboring localities, Hue is in the group with the lowest number of enterprises operating, only higher than Quang Tri, Quang Binh and equal to 20% of the number of enterprises in Da Nang City, equal to 39% of Nghe An and 64% of Quang Nam. This shows that Hue's economy is still not really vibrant and has not attracted many enterprises to invest.

Mr. Phan Quoc Son, Deputy Director of the Department of Finance, informed that the business development situation in Hue City is slower than that of other provinces and cities in the region. In the period from 2021 to 2024, there were 2,910 newly registered enterprises with a total registered capital of VND 24,014 billion, only 20% compared to Da Nang City in terms of quantity and 32% in terms of capital; 63% compared to Quang Nam Province in terms of quantity and 74% in terms of capital.

In addition, the number of newly established enterprises in recent years is not much. In 2021, the number of newly established enterprises decreased due to the impact of COVID-19, only 623 newly established enterprises (down 9.7% compared to the same period), by 2022 with the expectation of recovering after COVID-19, the number of newly registered enterprises, although there was a change, was only 821 enterprises. However, this rate is also the highest ever, at 32%.

With the complicated and unpredictable developments of the world situation and the current difficulties in the domestic situation, the number of newly registered enterprises is expected to continue to decrease. In fact, in 2024, the number of newly established enterprises will be only 788. That leads to the average growth rate of enterprises in the period 2020-2024 reaching only 5.2%/year, lower than the general level of the whole country and many provinces and cities in the region.

Along with that, the number of dissolved and suspended enterprises in the area is quite large. At times, the number of enterprises withdrawing from the market is higher than the number of newly established enterprises, creating great pressure in solving the problem of enterprise development in 2025 and the following years.

According to data recently released by the City Statistics Office, in the past 3 months, Hue City had 176 newly established enterprises, while 28 dissolved enterprises and 456 enterprises registered to temporarily suspend operations. In the short term, it can be seen that the number of enterprises in the area is likely to shrink in both scale and capital. This raises many issues in the internal development of each enterprise and policies for the private economy, with the core being SMEs, to promote its position as "the country's leading important growth engine" as affirmed by General Secretary To Lam in the article: "Private economic development - Leverage for a prosperous Vietnam", especially when Hue has many potentials and strengths to develop both in scale and number of SMEs.

(To be continued)

Article and photos: Hoang Loan

Source: https://huengaynay.vn/kinh-te/kinh-te-tu-nhan-vuot-rao-de-vuon-ra-bien-lon-bai-1-khang-dinh-vi-the-cua-khu-vuc-kinh-te-tu-nhan-152838.html