In that situation, at the working session on private economic development on March 7, General Secretary To Lam directed the Party Central Committee’s Commission for Policies and Strategies to actively coordinate with the Government and relevant agencies to develop a resolution on the private economy to submit to the Politburo for early promulgation.
In particular, it is necessary to change thinking, awareness, “behaviour” and specific actions and policies for this important economic sector. In particular, it is necessary to affirm that the private economy is the most important driving force for growth.
Being cared for and treated more fairly is what private enterprises have been longing for for many years. A resolution with a clear direction, including breakthrough solutions, aiming to remove barriers, creating a more equal playing field between economic sectors, will certainly create great momentum to help the private sector have the opportunity to make a strong breakthrough in the coming time.
Clear strategy, breakthrough solutions
Recognising the limitations and weaknesses of the private economic sector, General Secretary To Lam emphasised that there must be a clear strategy for the development of the private economic sector, suitable to the current development level of the economy, with the new geo-economic and geo-political space of the country, taking into account changes in the world’s geo-economic and geo-political to ensure that the private economy is capable of developing with the ability to adapt, cope and compete highly.
In particular, the key point to create a breakthrough is to remove “institutional” bottlenecks, quickly improve the investment and business environment, remove barriers and obstacles to business development; build a favorable legal environment, an open, transparent, safe, low-cost business environment; have comprehensive and flexible support policies for the private economic sector; at the same time, ensure equality and fairness, allowing private enterprises to access capital and production materials no less than state-owned enterprises and foreign-invested enterprises.
Knowing the above information, Director of Delta International Co., Ltd. Tran Duc Nghia happily shared: General Secretary To Lam has directed to continue institutional reform, improve the business environment, strive to reduce at least 30% of administrative procedure processing time and business costs; eliminate at least 30% of unnecessary business conditions to bring Vietnam’s investment environment into the top 3 of ASEAN within the next two to three years.
The private sector hopes that the General Secretary’s instructions will be implemented resolutely, substantially, and effectively in practice. Only then can the private sector remove bottlenecks and promote investment, production, and business activities of people and businesses.
The current state of Vietnam’s private enterprises, 98% are small and medium-sized enterprises, many of which are micro-sized. Enterprises are divided into two groups: Enterprises that do not want to grow and enterprises that want to grow but cannot grow because of barriers from administrative procedures, business conditions, etc.
The current business environment, although having many reforms, is not favorable for investment and production activities because compliance costs are too high, becoming a burden for enterprises.
Therefore, the new resolution needs to create breakthrough, substantive mechanisms to support the real development of private enterprises, to change this situation. For his part, Chairman of the Board of Directors of T&T Group Do Quang Hien expects the new resolution to have many breakthrough solutions to support small and medium enterprises.
As the leader of one of the country’s largest private enterprises, Hien understands that to go far, for a long time, and develop sustainably, many small enterprises need to be accompanied in the supply chain.
Meanwhile, small and medium enterprises in Vietnam are currently facing great limitations in capital and management capacity, and often have good ideas but cannot make business plans.
Therefore, if there is a mechanism for credit guarantees or allowing a certain level of risk (as long as it is not negative) in lending to small and medium enterprises, banks will certainly be more “enthusiastic” in providing credit and consulting support to small enterprises, helping them have the resources to break through and become large enterprises.
More equitable behaviour
Mac Quoc Anh, Director of the Institute of Economics and Enterprise Development, Vice Chairman and General Secretary of the Hanoi Association of Small and Medium Enterprises, said: The private economic sector has long been affirmed as an important driving force of the Vietnamese economy, accounting for about 42-45% of GDP and creating jobs for more than 85% of the country’s workforce.
However, compared to the other two sectors, state-owned enterprises and foreign-invested enterprises (FDI), the private economy has not received due attention. While state-owned enterprises still receive great protection from the State, FDI enterprises also enjoy many preferential policies, etc., the private sector still faces difficulties in accessing capital, land, tax policies or administrative procedures.
It can be seen that current business support policies mainly focus on state-owned enterprises and FDI enterprises, while the private sector, especially small and medium-sized enterprises, rarely enjoy incentives in finance, credit and support policies.
In particular, the current competitive environment is still unfair when in many important sectors such as infrastructure, energy, logistics, private enterprises still have difficulty participating in large projects due to inadequate access mechanisms.
Therefore, private enterprises, especially small and medium enterprises, are looking forward to the new resolution that will have a more appropriate view, assessment and action on the role and position of the private sector.
Along with that are breakthrough solutions, close to the actual needs of enterprises, implemented fundamentally and effectively to help private enterprises overcome current barriers and develop more strongly in the coming time.
More specifically, according to Quoc Anh, enterprises expect to have breakthrough solutions to help private enterprises borrow capital without having to mortgage large assets, helping them access capital with low interest rates and simpler borrowing conditions.
In addition, the Government should publicise land funds for private enterprises, creating opportunities for fair access to land resources; reduce administrative procedures in granting land use and land lease licenses; in particular, limit land speculation, ensuring reasonable land lease prices for enterprises.
In the context of the 4.0 industrial revolution, private enterprises need support in technological innovation and digital transformation to improve their competitiveness. The new resolution should guide the issuance of preferential tax policies for enterprises investing in technology and innovation; add more solutions to increase support for enterprises in digital transformation; build centers to support enterprises in research and development, helping to connect enterprises with research institutes and universities.
A major challenge for private enterprises today is the lack of high-quality human resources. Therefore, the resolution also needs to discuss the story of building a systematic human resource training strategy associated with the actual needs of enterprises; have policies to support enterprises in training and developing human resources as well as creating conditions and bridges for private enterprises to cooperate with training centres and universities.
The private sector is not only an important part of the economy but also the main driving force for Vietnam to achieve sustainable growth goals. If there is a favorable business environment, substantial support policies and the support of the State, the private sector will certainly be able to make a strong breakthrough in the coming time, contributing more to the development of the country.
