New role and position of private economy

A batch of VinFast electric cars exported to Indonesia at Mipec port, Hai Phong city. (Photo: TAM VO)

The potential and dynamism of Vietnamese private enterprises are growing. If we know how to exploit and create favorable business environment conditions, promptly remove obstacles, private enterprises will grow very quickly and become the leading important pillar of the economy.

Contributes about 51% of GDP

In the article “Private economic development - a lever for a prosperous Vietnam”, General Secretary To Lam stated: If in the early stages of renovation, 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 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.

From a poor and backward economy, with an average income per capita of only 96 USD/person in 1989, Vietnam has now risen to be among the top 40 economies in the world. By the end of 2024, the average income per capita had increased to nearly 4,700 USD/year, and the gross domestic product (GDP) reached 476.3 billion USD. In the country's overall achievements, there is a very important contribution from the private economic sector.

Statistics show that as of December 31, 2024, the private economic sector had more than 940 thousand enterprises, about 5.2 million individual business households, contributing about 51% of GDP, more than 30% of the state budget, creating more than 40 million jobs (accounting for more than 82% of the total number of workers in the economy). Despite facing many difficulties, the private economy has continuously maintained a good growth rate, continuing to be the core force in creating material wealth, making an important contribution to economic growth, creating jobs for workers, and contributing to social stability.

However, in addition to the achievements, the private economic sector is still showing limitations and shortcomings. Most of Vietnam's private enterprises are small and micro-sized, with poor management skills, and weak competitiveness and operational efficiency. Some enterprises have appeared on the list of global billion-dollar enterprises, but the number is still small and has not become a driving force for small and medium-sized enterprises. Meanwhile, the individual household business sector is large in number but fragmented, operating mainly in the fields of trade, services and retail.

The reason why the Vietnamese private economic sector has not yet fully exploited its potential and strength is because the legal system, mechanisms and policies to encourage private economic development are still inadequate, lacking in synchronization and implementation has many limitations. In addition, administrative procedures are still cumbersome and complicated, creating bottlenecks that hinder the development of the private economy. According to economic experts, basically, up to now, there has not been a proper development strategy for the private economic sector to position and serve as a basis for designing appropriate policies for each group of enterprises and groups of individual business households according to scale or by production and business sector.

The "three-legged stool" strategy

Also in the article “Private economic development - a lever for a prosperous Vietnam”, General Secretary To Lam affirmed that a prosperous economy cannot rely solely on the state sector or foreign investment, but must rely on internal strength, which is a strong private sector, playing a pioneering role in innovation and development of the country. In that spirit, General Secretary To Lam directed that it is necessary to thoroughly re-orient the viewpoints and perceptions throughout the political system on the role of the private economy as the country's leading important growth driver. This requires a fundamental change in policy making, overcoming limitations and promoting the superiority of the market mechanism to support the private economic sector to improve labor productivity and innovation...

To awaken and promote the potential and strength of the private economic sector in the new era, it is expected that in the near future, the Politburo will issue a resolution to encourage, support and orient the development of the private economy with breakthrough reforms in institutions, policies and the business environment so that the private economy becomes the leading important growth engine of the country. This is information that the private business community is eagerly awaiting.

Mr. Nguyen Quoc Ky, Chairman of the Board of Directors of Vietravel Tourism-Aviation Group, said that this is a time of turning point changes in the thinking and awareness of the Party and State about the position and role of the private economy. Enterprises hope that this spirit will be transformed into the content of the new resolution of the Politburo and implemented in a practical and effective manner in real life, overcoming the bottlenecks that are hindering the development of the private economic sector.

“Enterprises are the internal force and strength of the economy. Only when domestic enterprises are strong can the economy be strong. Policy thinking needs to be approached from the perspective of fairness between state-owned enterprises, private enterprises, and family businesses. All three types of businesses have the same position and role, together creating a solid three-legged tripod of the economy for sustainable development,” Mr. Nguyen Quoc Ky emphasized.

Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), said that in order to promote institutional reform and unlock resources in the private sector, it is necessary to focus on three core issues: Improving the legal environment with solutions to simplify investment licensing, business registration and tax procedures. In addition, reducing barriers to capital access for businesses through increasing transparency in credit approval, continuing to improve the credit guarantee fund to actually support small and medium enterprises. At the same time, there must be a mechanism to protect business interests, specifically improving the effectiveness of the legal system to protect intellectual property rights, combat commercial fraud, ensure fair competition, etc.

The Chairman of HUBA hopes that, with the General Secretary's decisive reform, strong leadership and vision, the new resolution on private economic development will have a clear strategic orientation, a breakthrough in the role of the private economy in the socialist-oriented market economy, removing institutional bottlenecks that are hindering business development.

As planned, today, March 21, in Ho Chi Minh City, Nhan Dan Newspaper in collaboration with Vietnam Television (VTV), Ho Chi Minh City Business Association (HUBA) organized the Workshop "Removing policy shortcomings to promote the role of the private economy in the Vietnamese economy". The workshop aims to provide an overview of the role, potential and challenges of the private economy, and at the same time clarify the policy shortcomings that are hindering the development of this important economic sector. From there, propose solutions to remove them so that the private economy can truly become the leading important growth driver of the country, as well as contribute opinions to the upcoming draft resolution of the Politburo on the private economy.

Nhandan.vn

Source: https://nhandan.vn/vai-tro-vi-the-moi-cua-kinh-te-tu-nhan-post866548.html