Is the potential of Vietnamese private enterprises strong enough to reach out to the region?

Small scale, support policies are not strong enough

In recent years, the private economic sector in Vietnam has made significant progress, becoming an important driving force for economic growth.

Vietnam has had USD billionaires on the list of the richest people on the planet, some even in the top 500. This is evidence of the development of leading private enterprises.

According to the latest update from Forbes, Vietnam has 5 USD billionaires as of March 29.

Chairman of Vingroup (VIC) and CEO of VinFast (VFS) Pham Nhat Vuong recorded his assets skyrocketing to the highest level in the past two years, reaching 7.5 billion USD as of March 29.

With this level, Mr. Vuong ranked 414th in the world, a sharp increase compared to his assets of 6.7 billion USD and position 502 on March 10 and position 839 recorded near the end of January.

Thus, compared to the end of January, billionaire Pham Nhat Vuong has increased 425 places.

With his current fortune, billionaire Pham Nhat Vuong is much richer than US President Donald Trump. Mr. Trump has a fortune of 4.8 billion USD, ranked 722nd in the world as of March 29, according to Forbes.

Besides Mr. Pham Nhat Vuong, Vietnam also has other USD billionaires. As of March 29, Vietjet Chairman Nguyen Thi Phuong Thao has 2.7 billion USD. Hoa Phat Chairman Tran Dinh Long has assets of 2.3 billion USD. Techcombank Chairman Ho Hung Anh has 1.9 billion USD. Masan Chairman Nguyen Dang Quang has assets of 1 billion USD.

Statistics show that Vietnam currently has more than 940,000 private enterprises operating, employing the majority, about more than 80% of the total workforce nationwide.

Some large private corporations have made a strong impression in the domestic market and expanded abroad, such as Masan's consumer products, Vingroup's VinFast electric cars, Ms. Phuong Thao's VietJet, Mr. Tran Dinh Long's steel... but the number is still small.

Although the number of private enterprises is large, the proportion of enterprises with scale and sufficient competitiveness in the region and internationally is still limited. Most Vietnamese enterprises are small and medium-sized, with weak financial, technological and management capacity and operate mainly in the domestic market.

Compared to Thailand, Singapore and Malaysia, Vietnam's private economy is still quite modest, both in scale and influence. The private economic sector in Vietnam accounts for about 45-50% of GDP, while in Thailand it is more than 57%, and in Malaysia it is about 60%.

Vietnam still lacks corporations capable of reaching out to the region. Photo: Hoang Ha

Thailand has several larger private conglomerates, such as the Charoen Pokphand Group (CP Group), which operates in agriculture, food, and retail globally. Its owner, Dhanin Chearavanont, and his family are worth an estimated $37 billion, with Dhanin Chearavanont alone worth $15 billion as of March 26.

Thai Beverage (ThaiBev) has a market capitalization of nearly 13 billion USD. Owner Charoen Sirivadhanabhakdi's assets as of March 26 were 11.4 billion USD...

In Singapore , DBS Holdings is considered a private conglomerate, although its largest shareholder, 29%, is Singapore state investment company Temasek Holdings. DBS Holdings had a market capitalization of $99 billion as of March 26. Wilmar International Group has a capitalization of about $16 billion. Mr. Kuok Khoon Hong had assets of $3.4 billion as of March 26. The Kuok family (including relatives in Malaysia) owns much larger assets.

Malaysia has Petronas or Genting Group...

Need to break through to reach the region

Although they are an important driving force for economic growth, except for the big names mentioned above, most Vietnamese private enterprises are small and medium-sized, with many limitations in technology, management... compared to some countries in the region.

This difference comes from many reasons.

First of all, Vietnamese private enterprises are still too dependent on the domestic market of 100 million people. Even in the case of Masan Group, although it has become an empire in the retail and domestic consumer goods sector, with brands such as Omachi, Chin-su, or WinMart, the speed of expansion to the region and internationally is not really fast.

Second, limitations in capital, technology and management are barriers. Although billionaire Pham Nhat Vuong’s Vingroup has made a splash with its VinFast car brand and its ambition to export to the US and Europe, it still needs a lot of time to compete with giants like Tesla or Toyota, at least in terms of technology.

Techcombank of Chairman Ho Hung Anh, although one of the leading private banks, also faces fierce competition from foreign banks with extensive experience and superior technology. Thaco Group of Mr. Tran Ba ​​Duong, although exporting cars to some countries in the region, is still small in scale.

Meanwhile, the policy to support private enterprises is not really strong and consistent enough. Although the State has many incentive programs, corporations such as FPT Group or Sovico Group still have to be proactive in seeking opportunities abroad.

According to Dr. Nguyen Dinh Cung - former Director of the Central Institute for Economic Management (CIEM) - private enterprises are still developing passively and facing many barriers, the biggest of which is institutional.

According to Mr. Cung, in the new context, the era of national development, a clear strategy for developing the private economy is inevitable. This strategy must define the mission of the private economy as the pioneering and main force in implementing the country's industrialization and modernization, in implementing important national projects to enhance the position, competitiveness and resilience of the economy.

In Thailand, Singapore and Malaysia, where governments have long-term strategies to support private corporations to expand globally, Vietnam still lacks breakthrough mechanisms to create momentum for businesses.

To activate the great potential of the private economic sector, Mr. Le Duy Binh, Director of Economica Vietnam, proposed that there should be policies to nurture the entrepreneurial spirit, so that the freedom of business can be further strengthened and businesses are truly allowed to freely do things that are not prohibited by law.

These policies will create a foundation for the continued affirmation of property rights and freedom of business of the people and enterprises. The management method of the management agency is based more on market principles and tools than on administrative decisions.

Policies for the private economic sector need to provide guidance so that the legal system can be built in a way that not only serves the management goals of state agencies, but also plays a creative role in unlocking resources, building a favorable, safe, low-cost business environment that approaches international standards.

The legal system will encourage businesses to promote research and development (R&D), invest in science and technology, and apply innovation. This means it is necessary to establish legal mechanisms to support activities with high risks but bring breakthrough benefits in productivity and technology.

In addition, encouraging public-private partnerships (PPP) in large projects, such as transport infrastructure or renewable energy, will help corporations such as Sovico Group or Vingroup have more resources to expand their sphere of influence. A good ecosystem not only helps businesses grow domestically but also provides a launching pad for them to expand regionally.

Vietnamnet.vn

Source: https://vietnamnet.vn/tiem-luc-doanh-nghiep-tu-nhan-viet-nam-da-du-suc-vuon-ra-khu-vuc-2385345.html