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Vietnam Today

Private sector the economic driver

Released at: 11:14, 05/10/2015

Private sector the economic driver

Workshop hears views on the importance of the private sector to Vietnam's development.

by Quynh Nguyen - Le Huong

After a period of ups and downs, private enterprises have gradually asserted their position in Vietnam’s economy due to growth in scale and production capacity. This was a commonly held sentiment at the “Motivation for Private Economic Development” workshop held on October 3 by the Vietnam Young Entrepreneurs Association in association with Vietnam Economic Times.

Private enterprise motivation

Addressing the workshop, Mr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said the private sector is the driver of the economy so it is important to provide it with the right motivation.

If you were to take Vietnam’s economy as a high-speed train, he explained, the railway line is the market economy and the locomotive is the private sector.

“Around the world we can see a contrasting economic picture, with some countries attaching great importance to the private sector and others to the State economy,” he said. “The role of the State is very important, but the driver of economic development is the private sector.”

Deputy Minister of Planning and Investment Nguyen Van Trung said the private sector now has over 500,000 enterprises, which confirms its role and position in the economy.

Institutional improvements

Deputy Minister Trung also said that Vietnam has made progress in its legal framework for the operation of the private sector. The Law on Enterprises in 1999, which took effect in 2000, is considered revolutionary for enterprises and a major turning point for the economy. “Vietnam has breakthrough institutions and infrastructure, and recognizing the private sector is a key factor creating breakthroughs,” Mr. Trung said.

For his part, Mr. Nguyen Dinh Cung, Head of the Central Institute for Economic Management (CIEM), said an economy cannot grow if the private sector is not leading the way. “Institutional improvements are created by the State and the enterprise community uses these institutions,” Mr. Cung said. “Therefore, enterprises have a responsibility to promote institutional improvements, or in other words they must take the initiative to make changes.”

Mr. Cung stressed that: “The business community needs to unite for the development and growth of the private sector in the country, became it is the driving force of economic growth and national prosperity.”

In speaking about the legal framework and institutions, Deputy Chairman of the National Assembly’s Economic Committee Nguyen Van Phuc said the Committee in particular and legislature in general has worked towards issuing the necessary documents. More than 40 delegates in the legislature are entrepreneurs but it still often delays issuing guidelines. The government has adopted a specific direction to address the situation.

Create products of value

Mr. Tran Ba Duong, Chairman of the Board at the Thaco Group

The number of new private enterprises increased when the Law on Enterprises came into effect and the private sector has been passionate and aggressive in recording success. Enterprises not only make money but also contribute to society and the country. They must therefore create value, which is indispensable for integration. For successful integration businesses must step up production technology investments, including technology management and the implementation of good services and high value products.

Breakthroughs from agriculture

Mr. Dang Kim Son, former Director of the Institute of Policy and Strategy for Agriculture and Rural Development

The agricultural sector is one of Vietnam’s major advantages. With the TPP approaching, a number of entrepreneurs from Japan came to Vietnam to discuss investments in agriculture. They clearly see investments in agriculture as being very important, creating jobs in the high employment sector. Although the TPP is approaching the private economy in the agricultural sector has not fully developed. In this context, I believe that investing in agriculture is both an opportunity and a challenge.

Young entrepreneurs need good business plans

Mr. Phuong Huu Viet, Chairman of Viet A Bank

The Party and State have adopted many policies to support enterprises, in particular to give priority to small and medium-sized enterprises. But the State must also have policies to support business startups. For young entrepreneurs, it is important to identify their areas and lines of business and they must have a good business plan.

Don’t lose Vietnamese brands

Ms. Nguyen Thi Thanh Huyen, General Director of May 10

If Vietnamese enterprises cannot dominate the market, Vietnam will eventually lose its brands. The Ministry of Industry and Trade must encourage Vietnamese people to not only buy Vietnamese products but also buy products from the supply chains and services of Vietnam. Products from Vietnam will then reach domestic consumers.

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