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Vietnam Today

Private enterprises up against it

Released at: 16:30, 27/04/2017

Private enterprises up against it

Photo: Hai Van

Forum hears that private enterprises still struggle to compete with SOEs despite contributing significantly to Vietnam's economy.

by Van Dao

It is difficult for private enterprises to compete with State-owned enterprises (SOEs), Mr. Truong Dinh Tuyen, former Minister of Trade, said at the first Private Business Forum held in Hanoi on April 26.

Although there is no difference between SOEs and private enterprises under Vietnamese law, private enterprises must cope with a host of difficulties when competing.

He suggested that development strategies promote market share and improve competitive capacity.

He still believes, however, that there are advantages held by private enterprises. The government has acknowledged the important position they play in Vietnam’s economic development and has been improving administrative processes and the business environment. It has also pushed forward with SOE equitization.

In discussing the private sector in Vietnam after 30 years of “doi moi” (renovation), Mr. Tran Dinh Thien, Director of the Vietnam Institute of Economics stated that private business is foundation of economy.

Vietnam’s private sector has proved its position in the economy, especially over the last decade. It contributes about 40 per cent of GDP, about 30 per cent of total industrial output, and about 64 per cent of total goods production.

Mr. Tuyen said that private enterprises should have reasonable strategies for development in new free trade agreements (FTA). They must also reduce their weaknesses and promote their strengths to improve the competitive capacity. The growth strategy is, indeed, competitive improvements.

They should also restructure with reasonable strategies and green growth. Restructuring should be deployed when there are changes in the market. Enterprises should express their responsibility to Vietnamese society.

The Private Business Forum, entitled “The Private Economy in Socio-Economic Development”, was organized by the Vietnam Private Business Association (VPBA).

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