Affirming the position and role of the private economy in the new era
- In the article “Private economic development - a lever for a prosperous Vietnam”, General Secretary To Lam emphasized that the private economy must be the pioneering force in the new era. What do you think about this viewpoint?
- The General Secretary's article shows a very strong change in the Party's viewpoint on private economic development. Going back in history, around the early 1980s, when we carried out the "reform of private capitalist industry and commerce", the private economy was the object to be eliminated and not accepted.
By 1986, we had renewed our economic thinking, from a centrally planned economy to a market economy, and then we recognized the existence of a multi-sector economy, including the private economy.
That means the private economy has gone from not being allowed to exist to being allowed to exist. However, at that time, the collective economy, the state economy, and other economic sectors were valued higher, the private economy was only a sector that was allowed to exist but had no status.
About ten years later, we raised the status of the private economy one step further, that is, considering all economic components to exist equally.
If in the early stages of innovation, the private economy only played a secondary role, the economy mainly relied on the state sector and foreign investment capital, then in the past two decades, especially when the Politburo issued Resolution 09 in 2011 and the Central Committee issued Resolution 10 in 2017 on private economic development, this sector has risen strongly, becoming one of the leading important pillars of the economy and increasingly showing itself to be the most important driving force to promote national economic growth.
Looking back at that process, we can clearly see the shift in the Party's ideology, viewpoints, and perceptions of the role of the private economy. The General Secretary's article on the private economy more clearly and correctly defines the position of the private economy in our country's economy as "one of the most important pillars of the economy" and "increasingly showing itself to be the most important driving force" to promote national economic growth.
- Although the private economy in our country contributes more and more, this sector still faces many barriers and cannot break through. In your opinion, what is the biggest barrier?
- In terms of institutions and laws, we have recognized that all economic sectors are equal and without discrimination. However, in reality, the private economic sector still faces major barriers and is hindering its development. Currently, the biggest obstacle that hinders the private economy from promoting its role and capacity is that the resources of the private economy are still very weak. 95% of the total number of enterprises in our country are small and medium-sized enterprises, therefore, the resources of the private economy are already small and scattered among many different subjects and are not linked together to create strength.
Our country's private economy also does not have a strategic orientation for long-term development, does not have a vision for the future, partly because the capacity of the private economy is still limited, partly because the private sector does not have a playground . For example, in which field or industry, the state has oriented the state enterprise in the direction of development, reserved the market, reserved the playground for that enterprise; but in the private economy, you are forced to move on your own, explore, manage, and if there is competition, you will immediately lose the market. Therefore, if there is a market, a playground, a long-term strategic orientation for development, the private economy can confidently focus on investing resources for development, truly promoting its role as a driving force, a lever for a breakthrough in growth in the coming time.
Policy consistency is required so that the private economy can truly feel secure in investing and developing.
- In recent years, our Party and State have shown great determination and taken drastic actions to remove institutional bottlenecks and improve the investment and business environment to create more favorable conditions for economic sectors, including the private sector, to develop. How do you evaluate the progress we have made in this area?
- It is true that in recent times, there have been many changes to perfect the institution and create development, including creating an environment for the private economy to develop. For example, we have changed from the viewpoint of not allowing the private economy to exist to allowing it to exist, then to equality with other economic sectors and to having a position, role and importance in the national economy. Now, our viewpoint is that the private economy plays the most important role. That is a huge change in viewpoint and awareness. Even state-owned enterprises say that they dream of being like the private sector because private enterprises are allowed to do everything that is not prohibited by law, while state-owned enterprises are only allowed to do things that the state allows for investment and business.
Our investment and business environment has improved a lot compared to before and has attracted foreign investment very well, creating a good competitive environment. There are also many strong private corporations in the country, some of which create products that can replace and compete very well with foreign products. Many areas of our country have developed thanks to domestic private corporations, creating potential and even many private corporations reaching out to the world to invest and compete internationally. That proves that the State has removed obstacles and promoted the development of the private economy.
Besides those positive results, we also see that we still need the State's direction, the State's hand , and the State's support so that the private economy can truly play its role and truly become a lever for the country's growth breakthrough.
- Specifically, what support does the private economy need from the State, in your opinion?
- As I said above, the private economy needs to be given a market to develop. The products that domestic enterprises in general, including state-owned enterprises and private enterprises, have created and produced, we must have a market for those products to be consumed. Enterprises with a committed market to consume their products can then feel secure in investing in production and have the ability to compete. Therefore, it is necessary to have a protection policy for domestic enterprises in general for products and goods produced to be consumed domestically and not to be competed by imported products.
Even in the field of public procurement, priority must be given to domestically produced goods, materials and means. The State must take the lead in this and must create a framework to encourage domestic people and domestic enterprises to prioritize purchasing and consuming domestically produced products and goods. Along with that, it is necessary to create more opportunities for private enterprises to participate more in the Government's public investment programs.
The State also needs to have policies to encourage private enterprises in the start-up and innovation movement because this is the new driving force to create a breakthrough in growth.
Startups and innovation are associated with high risk factors, so state investment in risky areas is still very limited because the use of state budget for investment requires strict management, but the private sector is very willing. The private sector is willing to accept "5 wins, 5 losses", even the higher the risk in the field, the greater the profit, so the private sector is willing to accept the risk. Therefore, there is a lot of room for the private economy to participate and the State needs to promote and encourage the private economy to invest in new and risky fields.
Compared to before, now we have "opened up" many fields for the private economy to participate in, we have abandoned the idea of "if you can't manage it, then ban it" and allowed the private economy to freely invest and do business in many new fields that have never existed before such as digital currency, virtual currency, digital technology, digital finance...
- The business community is very excited and has high expectations for the new Resolution of the Politburo on private economic development. What do you personally expect from this Resolution?
- What we hope for in the coming time are strong changes not only in thinking and awareness but also in action towards the private economy. The General Secretary's article on the private economy has shown new thinking, promoting the position and role of the private economy in the national economy and providing policy directions to support the development of the private economy. The article mentions the need for specific policies to support, encourage and facilitate the development of private enterprises, including reforming administrative procedures and reducing business barriers.
I hope that the upcoming resolution issued by the Politburo on the private economy will help create a real shift from determination to action. The State must take action to guide, guide and support the development of the private economy. There needs to be guidance from the State on which sectors the private economy invests in, which groups of enterprises it invests in, and it may even be necessary to issue administrative orders to specific enterprises to avoid the situation where the private economy competes with each other.
There must be policies to help create large private enterprises, build large pillars in the private economic sector and other things will revolve around those pillars, instead of letting the market be divided into five or seven parts. Therefore, it is necessary to have the State's hand in supporting the development of the private economy, there must be market commitments and also consistent policies so that the private economy can truly feel secure, confident and invest in development.
Thank you!
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