VASEP General Secretary: For the private economy to 'breakthrough', a new '10-contract' is needed

Policy must be " correct " , based on the reality of private enterprises.

At the meeting, Mr. Nguyen Hoai Nam - representative of the Vietnam Association of Seafood Exporters and Producers (VASEP) shared many passionate views and proposed a series of solutions to "untie" the private economic sector to develop to its full potential.

According to Mr. Nam, for this sector to be truly sustainable and play a driving role in the economy, the State not only needs to issue appropriate policies, but also needs to create a fair environment where private enterprises can arouse pioneering spirit, dedication and belief in long-term development.

“It is necessary to clearly distinguish between large enterprises and small and medium enterprises. At the same time, it is also necessary to separate agricultural and aquatic enterprises from other sectors to ensure that support policies are realistic, fair, and that 'emotional nurturing' is recognized and contributed to,” Mr. Nam emphasized.

He also frankly pointed out that many current policies for private enterprises are still very vague and not really fair when compared to state-owned enterprises or foreign-invested enterprises (FDI). The imbalance is clearly shown in investment and construction procedures, in the ability to access land, capital, credit, administrative procedures, as well as a series of other preferential policies.

Notably, according to Mr. Nam, there is not only a distinction between private enterprises and other business sectors, but also a large gap within the private sector. “There is a ‘difference’ between large enterprises and small, micro and household business communities. There is an even more obvious ‘difference’ between enterprises operating in agriculture and aquaculture and other sectors such as industry, real estate, manufacturing, production or services,” he said .

This creates an invisible but persistent barrier, especially for small and micro enterprises in the agriculture and aquaculture sector – which not only play an economic role and are a national brand, but are also closely linked to the livelihood, culture and identity of the Vietnamese people. However, this is the group that is facing the most difficulties and challenges.

In addition, Mr. Nam also believes that when building policies, Vietnam can completely select and refer to good models from developed countries in the region and the world. But more importantly, all solutions need to come from the specific situation of the domestic economy. “Policy must be in the right place, right disease. To ‘treat’ the private economy, we must understand what is happening,” he added .

Untie the "knot", create a new "10-contract" for the private economy

Mr. Nam believes that to create a development turning point like the previous “contract 10” in agriculture, there needs to be truly breakthrough policies. Accordingly, he proposed a series of major solutions, including many specific and highly practical recommendations.

Firstly, there needs to be a mechanism to mobilize large private enterprises to participate in key national projects, including marine infrastructure and marine exploitation cooperation, effectively implementing Resolution 36-NQ/TW of the Politburo on developing Vietnam's marine economy to 2030, with a vision to 2045.

Second, enhance the role and position of business associations. Associations need to become real partners of state agencies, supporting the development of the private sector.

Third, strongly reform administrative procedures, abolish overlapping and unreasonable regulations, create fairness between private and state-owned enterprises, FDI; create a legal corridor for enterprises to operate instead of leaning towards control... "We must shift from control to creating an open and transparent legal corridor. Private enterprises cannot continue to have their enthusiasm 'eroded' by cumbersome, overlapping and inconsistent procedures", he said.

In addition, Mr. Nam also proposed that each province and city should establish a Center that can be called a “Startup Center” or “Center for Innovation and Development” to perform at least three functions: legal support, technology transfer and project appraisal. This will be the place to coordinate, organize and support according to the State’s policies for the private economy and private enterprises in each province.

Mr. Nam also pointed out that, in order for the private economy to truly "keep the fire burning" and develop sustainably, it is necessary to immediately remove 10 major "bottlenecks" that are hindering the dynamism of this sector.

First is investment and construction procedures - an area that Mr. Nam calls one of the most serious "bottlenecks". Currently, to implement a new project or expand production, many businesses have to spend 3 to 5 years, even 10 years to get permission from all levels, from commune, district, department, province to the Central Government. "Investment opportunities pass by, and business enthusiasm is gradually eroded," he said.

Not only does this procedure take time, it also requires businesses to deposit a project guarantee and prove their investment capital by depositing money in a bank or taking out a bank loan before being granted a license. As a result, businesses lose time and increase their investment costs due to interest rates and inflation.

The next issue is land access. Mr. Nam believes that private enterprises, especially agricultural and aquaculture enterprises, need to be given priority in accessing production land funds at reasonable rental prices. In reality, many areas suitable for agricultural production or aquaculture are not prioritized for planning for the private sector, while land rental prices in industrial parks are still high, and preferential policies are still biased towards state-owned enterprises or FDI enterprises.

Regarding land use conversion, Mr. Nam suggested that there should be more flexible policies, especially in agriculture, such as converting from rice fields to shrimp farming, to optimize investment efficiency and suit local farming practices.

Regarding capital, credit and interest rates, he said that current borrowing conditions are narrow, only accepting assets with ownership certificates. He suggested that the State should mobilize existing funds together with the commercial banking system to implement preferential credit policies for small businesses and agricultural enterprises.

Tax policy also needs to change in a more fair and practical direction. Mr. Nam affirmed: “It is impossible to ‘equalize’ corporate income tax between “eagle” enterprises and small enterprises. There must be different levels of incentives appropriate to the scale and field.”

He proposed a strong reform of the VAT refund for private enterprises - which is currently very slow, causing small businesses to run out of capital. In addition, there should be clear regulations on the application of corporate income tax incentives for processed products such as seafood products to avoid a lack of uniformity, causing insecurity for businesses.

Regarding social insurance, he said that Vietnam's social insurance and unemployment insurance contributions are among the highest in the world, applied uniformly to all types of businesses, regardless of size or industry. Policies need to be clearly stratified or zoned, with special incentives for small businesses and agricultural and fishery businesses, so that they are not overloaded with obligations.

In addition to taxes, private enterprises are also burdened with many other mandatory fees and expenses such as union fees (2% of salary fund) or Disaster Prevention Fund (0.02% of asset value, maximum 100 million VND). These are all significant expenses, especially for small and micro enterprises.

Another burden is inspection and examination. Every year, businesses have to receive many delegations from different agencies such as fire prevention, social insurance, environment, food safety, technology, etc. Mr. Nam proposed to rank businesses from A to E to adjust the frequency of inspection: Class A - excellent businesses will only be inspected once every 10 years, while weak businesses will be inspected every six months. Doing so will create more motivation for businesses to improve and develop themselves.

Electricity costs are also a major bottleneck in the operations of manufacturing enterprises. While the general electricity price is not reasonable, the installation of rooftop solar power faces many constraints. He proposed that there should be a clear incentive mechanism, from price incentives to installation support.

Finally, he recommended that key industries should be allowed to establish a “Technology Development Fund”. This fund would be allocated based on a percentage of exports, and would be a resource for technology, support innovation, and connect the investment-market strengths of the industry.

Thanh Ha