Golden time for private economic sector to break through

Workshop "Removing policy shortcomings to promote the role of the private economy in the Vietnamese economy" - Photo: VGP/LA

On the afternoon of March 21, in Ho Chi Minh City, the Ho Chi Minh City Business Association (HUBA) in collaboration with Nhan Dan Newspaper and Vietnam Television (VTV) organized a workshop on "Removing policy shortcomings to promote the role of the private economy in the Vietnamese economy".

Comrade Thai Thanh Quy, Deputy Head of the Central Policy and Strategy Committee, stated that after nearly 40 years of implementing the renovation process, the private economic sector has grown strongly in quantity and quality, increasingly affirming its role and making important contributions to the economy.

The private economic sector accounts for about 98% of the total number of enterprises, contributes 30% of the budget revenue, about 50% of GDP, over 56% of total investment capital and creates jobs for 85% of the workforce.

However, despite its increasing contributions, the private economy still faces many barriers that hinder its development and cannot make a breakthrough in terms of scale and competitiveness.

Expectations that the new Resolution on the private economy will remove bottlenecks

Representing the business community of Ho Chi Minh City, Mr. Nguyen Ngoc Hoa, Chairman of HUBA, said that in the context of the 4.0 industrial revolution, investment in research and development (R&D) is a vital factor for businesses to improve their competitiveness. Many member businesses of HUBA have proactively invested heavily in technology, automation and digitalization of production and business processes. Some businesses in the technology and manufacturing sectors have spent 3-5% of their revenue on R&D, applying AI, Big Data, and IoT to improve products and services.

However, currently, the business structure of Vietnam and the City (with nearly 1 million businesses, about 5 million individual business households) has only 2% large enterprises, 10-15% medium enterprises, the rest are small and micro enterprises, so the budget for R&D is limited, this rate is still low compared to developed countries. Therefore, HUBA recommends that there should be stronger support from the State in the coming time to encourage businesses to promote R&D activities, especially Resolution 57 of the Politburo that has just been issued will be the premise to bring Vietnamese businesses into a new era.

In particular, HUBA expects that with the decisive reform, strong direction and vision of General Secretary To Lam, the new Resolution on private economic development will create a more open mechanism, removing the main bottlenecks that private economic sector enterprises are facing such as: Equality in access to capital, land, technology, and markets; reducing administrative procedures, creating a transparent and favorable business environment; long-term support policies to help private enterprises develop sustainably; having a clear strategic orientation on the role of the private economy in the socialist-oriented market economy, ensuring that private enterprises not only develop in quantity but also improve quality and position in the global value chain.

"If the above bottlenecks are removed, I believe this will be a golden time for the private economic sector to make a breakthrough," HUBA Chairman Nguyen Ngoc Hoa emphasized.

Dr. Can Van Luc, economic expert, member of the National Financial and Monetary Policy Advisory Council, pointed out the main reality of the private economic sector today, which is that the scale of private enterprises is still small, competitiveness, quality of human resources, technological level, and participation in the global value chain are still limited. In addition, private enterprises face difficulties in accessing land, capital, technological innovation, programs, and key national projects, etc.

Dr. Can Van Luc recommends the need to improve the equal business environment for private enterprises - Photo: VGP/LA

Perfecting an equal business environment for private enterprises

According to Dr. Can Van Luc, to create momentum for the development of the private economic sector, there needs to be breakthrough solutions in the coming time.

First, it is necessary to unify and be consistent in the "breakthrough" mindset; change the perspective and awareness of the role and position of the private economic sector; consider this sector as the most important driving force in economic growth, the core force in the socialist-oriented market economy.

In addition, it is necessary to urgently improve the business environment such as amending the Law on Small and Medium Enterprises; building a legal framework for new business environments such as green economy, digital economy as well as having a controlled testing mechanism (Sandbox) for the financial sector...

"At the same time, classify enterprises for management and support, not leveling. Support ethnic enterprises to grow and reach new heights, but support needs to be based on the level of contribution of enterprises to the economy, not support based on scale," Dr. Luc emphasized.

The State needs to accelerate institutional improvement, create a favorable, healthy, and equal investment and business environment among economic sectors; pay close attention to implementation. Shift from public administration to service.

Along with that, there needs to be a solution to upgrade business households to micro enterprises: Tax exemption for the first 3 years of operation; support for administration, books and accounting (technology companies can create support software); simplify administrative procedures so that they can upgrade conveniently.

Dr. Can Van Luc also proposed solutions to increase accessibility: Land, finance and technological innovation for private sector enterprises. In particular, developing finance and a more balanced capital market, early establishment of a fund to support digital transformation and green transformation for enterprises, especially small enterprises because they do not have enough resources to do this; early establishment of a venture capital fund and a credit guarantee fund for small and medium enterprises.

Le Anh