The Prime Minister met with private enterprises and wanted them to develop into the most important pillars of the economy so that the country can accelerate double-digit growth. Vietnam Weekly continued to talk with Mr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management.
What should be done in the immediate future to activate and restore the confidence of the private business sector, sir?
Mr. Nguyen Dinh Cung : The Government has 6 teams to resolve problems and promote public investment disbursement. I think that, from that experience, the Government should establish a steering committee to implement Resolution 02 of the Government as it did before to reform and improve the business environment for resource mobilization and economic growth.
In the immediate future, this Committee will focus on directing and creating pressure for ministries, branches and localities to fully and consistently implement Resolution 02. The Committee is headed by the Deputy Prime Minister, with a working group of officials from the Government Office, experts, representatives of business associations, etc. to identify obstacles, difficulties and barriers for businesses (within the scope of the resolution) that need to be removed each month and each quarter; assign tasks and request each Minister and Provincial Chairman to resolve the identified obstacles, difficulties and barriers.
The Government should organize meetings with representatives of the private business community nationwide, listen to and receive realistic, multi-dimensional feedback on their thoughts, difficulties and problems, and on the attitudes and working methods of civil servants at all levels in handling administrative procedures related to business investment. The business community will have many strategies for reforming the business environment and many solutions to help achieve the target of double-digit growth.
Mr. Nguyen Dinh Cung: Researching, developing, approaching and mastering appropriate technology for businesses creates breakthroughs in the development process. Photo: VietNamNet
I believe that the Government will commit to implementing drastic and consistent reforms in the spirit of removing "bottlenecks of bottlenecks" and creating "breakthroughs of breakthroughs" by issuing resolutions or directives of the Prime Minister to immediately overcome and remove bottlenecks and legal barriers according to the list collected and selected above.
In the long term, I think it is necessary to define the core content of institutional reform as reform of the legal system. Therefore, it is necessary to reform the legal system in a substantial and thorough manner in accordance with the Party's policy of "institutional reform is a strategic breakthrough", and the direction of General Secretary To Lam that "institutions are the bottleneck of bottlenecks" and to make strategic breakthroughs "breakthroughs of breakthroughs".
Sir, what should be done to deal with the situation of tens of thousands of business conditions embedded in many legal documents?
Mr. Nguyen Dinh Cung: The 2013 Constitution stipulates: “Human rights and civil rights can only be restricted according to the provisions of law in necessary cases for reasons of national defense, national security, social order and safety, social morality, and public health”. In addition, General Secretary To Lam has very close instructions and reforms on institutional reform.
From there, I think it is necessary to soon research, abolish, and amend the law on conditional business and convert the management method to "post-audit" according to the level of risk and standards, especially common standards according to international practice.
Review and abolish about 2/3-3/4 of the conditional business lines in Appendix IV of the Investment Law and related specialized laws. Abolish all conditions for business lines.
In addition, it is necessary to redefine the number of conditional business lines and occupations to ensure clear management objectives, and to remove all unclear and non-specific business conditions that are not understood and complied with in a uniform manner.
The most important thing is to move to "post-audit" for conditional business lines according to industry standards prescribed with common international practices.
Developing science, technology, and digital transformation is one of the “breakthroughs of breakthroughs” in institutional development. What policy suggestions do you have for businesses in this field?
Mr. Nguyen Dinh Cung : Researching, developing, approaching and mastering appropriate technology for new businesses creates breakthroughs in the development process.
However, the Vietnamese business environment does not encourage, but rather limits and stifles innovation and creativity. Therefore, the demand of businesses for research, development and innovation is very low.
They are very short of resources for research, development and innovation. Enterprises are only allowed to allocate no more than 10% of pre-tax profits to establish a science and technology fund, but are not allowed to use it autonomously in accordance with research and development; and if it is not fully used within the fiscal year, it must be transferred to the state fund; that is, it must transfer (without compensation) a part of its assets to the state. With the above management method, enterprises that do not establish a fund are more profitable than enterprises that establish a science and technology research fund.
I think it is necessary to amend and supplement the laws on science and technology , intellectual property and technology transfer laws, corporate income tax and personal income tax laws, and other relevant laws to create a legal framework for the operation and development of the science and technology market, increasing the demand and capacity for research and development of enterprises and the team of national research and development organizations.
That legal framework must aim to encourage and promote innovative businesses, create investment opportunities and expand development space. From there, increase the demand for research and development of businesses.
Each enterprise has the right to establish a Research and Development Fund; the enterprise has the right to annually allocate 5-10% of pre-tax profit to the fund; there is no limit to the size of the fund. The enterprise has the right to autonomously use the Fund to invest in research and development according to the product contract mechanism; abolish the fixed-rate spending mechanism; accept risky investments without the desired results.
Enterprises attend the Government Standing Committee meeting with enterprises on tasks and solutions for private enterprises to accelerate and make breakthroughs on February 10. Photo: VGP
The Law on Science and Technology is being amended and needs to have additional regulations on the establishment and operation of private scientific and technological research institutes and organizations. These organizations have the rights, obligations and operate like enterprises; and enjoy preferential treatment such as 0% VAT, exemption from corporate income tax, personal income tax, foreigners can be Institute Directors, etc.
Land has become extremely expensive for Vietnamese businesses. What do you think is the solution?
Mr. Nguyen Dinh Cung : Access to land for business investment is always a huge barrier for Vietnamese private enterprises, especially small and medium enterprises.
According to the current Land Law, the State mainly allocates and leases land through auction or bidding mechanisms to select investors, except for some important national projects.
Such a mechanism has excluded most small and medium enterprises from auctions. In addition, the land price assigned or leased is determined according to the speculative market price, which is higher than the payment level of the investment project, making the investment cost too high; related investment projects are difficult to be financially feasible; and dampening the spirit and business investment of enterprises.
Industrial parks have long been built mainly to serve foreign investment rather than domestic enterprises. Without access to land, enterprises certainly cannot invest and develop, especially in manufacturing, logistics and large-scale wholesale and retail industries.
Faced with that reality, I think it is necessary to review, amend and supplement the Land Law in the direction of: (1) flexibly applying land use planning and plans in accordance with the specific development process in each sector, locality and country and (2) building a legal framework for the construction and operation of the land use rights market, especially agricultural land use rights.
It is necessary to allocate land without collecting land rent to experienced and reputable industrial park developers to build industrial parks reserved for domestic investors only. This solution helps domestic investors and enterprises access industrial production space at acceptable costs; in this way, it helps build and develop Vietnam's supporting industry.
In short, I think that although there have been many reforms and improvements over the past decades, the Vietnamese business environment still has many major shortcomings. First of all, the legal system has become a bottleneck that prevents and limits business freedom, eliminates innovation, is very difficult to comply with, and especially creates legal risks, including criminalization risks... which stunt and reduce business confidence; making the majority of investors and businesses not want to grow. Others want to grow, but at turning points in development, they cannot mobilize resources such as capital, technology... to take advantage of opportunities and make breakthroughs in development.
This is a huge opportunity to change that reality.
Vietnamnet.vn
Source: https://vietnamnet.vn/lam-gi-de-thoi-bung-nang-luc-noi-sinh-cua-viet-nam-2372292.html
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