Become a leading pillar of the economy
Along with the general development of economic types, our country's private economic sector has been constantly developing and making great contributions to the country's socio-economic development. The private economy is considered the driving force of economic growth with a total of about 900,000 operating private enterprises, including many large corporations such as Vingroup, Vinamilk, Massan, Sun Group, Vietjet, Thaco... with revenues of tens of thousands of billions of VND and contributing a lot to society. Many key industries such as steel production, automobiles, high technology... are witnessing the strong rise of the private enterprise sector.
In the article: “Private economic development - Leverage for a prosperous Vietnam”, General Secretary To Lam recently affirmed the role and contribution of the private economy in the economy. “From an inefficient, centrally planned economy, with an average income per capita of only 96 USD in 1989, Vietnam has risen strongly, and is expected to enter the group of upper middle-income countries by the end of 2025, equivalent to over 5,000 USD/person/year”.
From a poor economy dependent on international aid, Vietnam has continuously made strong breakthroughs to become the 24th largest economy in the world in terms of scale calculated by purchasing power parity (PPP).
This success has a very important contribution from the private economic sector. 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 direct investment (FDI), then in the past two decades, this economic 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. With nearly one million enterprises, about 5 million individual business households, the private economic sector currently contributes about 51% of GDP, more than 30% of the state budget, creates more than 40 million jobs, accounts for more than 82% of the total labor force in the economy, and contributes nearly 60% of total social investment capital.
“The private economy not only helps expand production, trade and services but also makes an important contribution to improving labor productivity, promoting innovation and increasing national competitiveness. The strong rise of many Vietnamese private enterprises not only dominates the domestic market but also affirms their brands in the international market. This proves that if there is a favorable development environment, Vietnamese enterprises can absolutely go far and compete fairly with the world,” General Secretary To Lam emphasized.
Need for breakthroughs in institutions, policies and business environment
Pointing out the bottlenecks that prevent the private economy from promoting its strengths, General Secretary To Lam said that despite its increasingly large contributions, the private economy is still facing many barriers that hinder its development, and cannot break through in terms of scale and competitiveness. Many individual economic households still follow old business practices, lack the motivation to develop into enterprises, and even “do not want to grow”.
“Most Vietnamese private enterprises are small and micro enterprises, with limited financial potential and management skills, lacking connections with each other as well as with the foreign direct investment sector; have not yet taken full advantage of the opportunities brought by the 4.0 industrial revolution, are still slow in digital transformation, very few enterprises invest in research and development (R&D), pay little attention to business model innovation, technological innovation or new product creation. Therefore, it is very difficult to increase added value, promote competitiveness, enhance enterprise value and reach international standards,” said General Secretary To Lam.
In addition to internal limitations, private enterprises also face many barriers in accessing resources, especially credit capital, land, resources and high-quality human resources, especially in the technology, engineering and finance sectors. Meanwhile, some state-owned enterprises hold many resources, land, capital and high-quality human resources but have not exploited them effectively, even letting them go to waste.
“The private economy must be the pioneering force in the new era, successfully implementing the cause of industrialization and modernization of the economy, enhancing national competitiveness, being socially responsible, contributing to improving people's lives, participating in building a civilized and modern society and contributing to building a dynamic and internationally integrated Vietnam. The private economy needs to strive to become the main force, taking the lead in applying technology and innovation, to achieve the goal of contributing about 70% of GDP by 2030; together with the whole country, building a dynamic, independent, self-reliant, self-reliant and prosperous Vietnam.” - General Secretary To Lam.
In addition, the legal system still has many shortcomings and overlaps, the business environment has many obstacles, administrative procedures are complicated, time-consuming, costly and potentially risky. In many cases, the right to freedom of business and property rights are still violated by the weakness or abuse of power of some civil servants in the performance of their duties.
According to National Assembly delegate Ly Tiet Hanh - Binh Dinh, in order for the private economy to develop, it is necessary to focus on removing bottlenecks in administrative procedures so that the economy can quickly absorb capital in the first 6 months of the year, in which it is necessary to pay attention to investment projects of the private sector. To do this, it is necessary to more closely assess the current difficulties of the domestic private sector, especially small and medium enterprises in the export sector, helping them proactively take measures to cope with fluctuations in the world market and at the same time have effective solutions to support domestic enterprises, creating favorable conditions for enterprises to access capital to invest in developing production, business, and exporting goods in the first months of 2025.
Sharing this view, experts said that in order for the private economic sector to develop strongly, it is necessary to continue to have breakthrough reforms in institutions, policies and the business environment to maximize its potential, becoming the driving force leading the economy to reach out to the international market. A prosperous economy cannot rely solely on the state sector or foreign investment, but must rely on its internal strength, which is a strong private sector, playing a pioneering role in innovation and development of the country.
“To reach 8% and aim for double digits, businesses must be strong and large. Strong businesses need capital to stimulate demand to develop production and business to achieve large revenue to pay the state budget. Currently, many small, medium and micro enterprises are facing many difficulties in accessing bank capital because interest rates are still high, so production and business are not effective, while many banks earn billions of USD in annual profits. Therefore, the desire of people and businesses is for banks to share part of their profits by reducing interest rates so that people and businesses can feel secure in production and business, to increase revenue and pay the state budget” - National Assembly Delegate Nguyen Duy Thanh - Ca Mau expressed his opinion.
“In order for the private economic sector to develop, credit must be at a reasonable interest rate and combined with the required reserve policy as well as the open market so that credit growth in 2025 can reach 17-18%, which will contribute greatly to economic growth of over 8%. In particular, fiscal policy must continue to reduce taxes, especially from now until the end of the year on VAT and for priority investment and development areas in digital transformation, AI, circuits, chips, semiconductors...” - National Assembly Delegate Tran Anh Tuan - Ho Chi Minh City.
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