Business environment is the "lifeline" for all enterprises

Mr. Pham Tan Cong, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI)

How do you evaluate the efforts of the business community to overcome recent difficulties and challenges?

"The year 2023 was fraught with challenges. What we once perceived as a 'seismic earthquake' from Covid-19 was overshadowed by even more daunting 'tsunamis' that followed. The unpredictable geopolitical shifts and high inflation rates led to a dire situation for many businesses, resulting in a lack of orders, halted operations, and even bankruptcy. Despite a trade surplus, the negative growth in merchandise trade turnover in 2023 reflected a decline in production, business demand, and weakened consumption, forcing businesses to cut back on importing raw materials and goods.

Despite these hardships, the Vietnamese business community demonstrated remarkable resilience, patience, and endurance. The sheer determination of Vietnamese entrepreneurs to overcome these adversities and their readiness to share the country's burdens highlights a significant spirit of perseverance. Their efforts have contributed to maintaining the stability of our country's overall macroeconomy, ensuring social security targets, and securing incomes for workers."

In light of the government's support, especially fiscal policies, how have these impacted the economy and businesses?

"The government has shown commendable attentiveness to the voices of entrepreneurs and businesses, responding with timely policy interventions. Efforts to untangle institutional bottlenecks and enhance the business environment have alleviated many challenges faced by businesses. These actions have not only opened new developmental avenues for enterprises but have also facilitated the exploration of new market territories. The Prime Minister's numerous international visits and engagements with major economic groups in 2023 have been pivotal in attracting business opportunities, especially in high-tech and semiconductor industries.

Fiscal policies have played a significant role in the economic recovery and bolstering the business community. Resolution 41-NQ/TW by the Politburo, aimed at fostering the role of Vietnamese entrepreneurs in the new era, underscores the necessity of allocating resources for business development. The collaboration between the Ministry of Finance, VCCI, and the business community in policy formulation and addressing enterprise challenges has been instrumental. Initiatives by the General Department of Customs and the General Department of Taxation, in partnership with VCCI, to clarify tax and customs policies through dialogues, have significantly mitigated business hurdles. The proactive stance of the Ministry of Finance in supporting tax reduction, tax relief, and fee support proposals from VCCI has been noteworthy. In times of need, even minor support from state resources can have a substantial impact on businesses."

What changes have been observed in the business environment, and how is it being improved?

"VCCI has consistently strived to ameliorate the business environment, recognizing its critical importance for all types of enterprises. Drawing an analogy, I often liken the business environment to water and businesses to fish; only in clean water can fish thrive. If the water is contaminated, the fish either perish or struggle to grow, prompting them to seek better habitats elsewhere.

Hence, nurturing and enhancing the business environment is a crucial task for the government, ministries, and departments, aligning with the spirit of Resolution 41. This resolution has broadened the scope of a 'favorable' business environment to include 'safety and equity,' emphasizing the need for macroeconomic safety, security, and fair treatment among businesses, irrespective of their origin, size, or location.

VCCI's commitment to publishing the Provincial Competitiveness Index (PCI) reflects our dedication to highlighting inequalities and obstacles faced by businesses. Addressing disparities, such as the prolonged procedural durations for domestic businesses compared to foreign entities, is imperative. We are also focusing on adapting policies to accommodate changes, such as those affecting renewable energy investments, to ensure they are conducive to business growth.

A significant advancement in Resolution 41 is the formal stance against criminalizing economic activities, promoting a safe business environment and addressing economic violations with appropriate economic sanctions. This approach resonates well with both domestic and international entrepreneurs and investors, fostering confidence in Vietnam's business landscape.

Improving the business environment and institutional reform is a gradual process. However, recognizing the issues and committing to action is the first step towards significant progress. Immediate measures, such as administrative reform and digitization of procedures, can enhance transparency and efficiency, although it's crucial to ensure these digital transitions are comprehensive to avoid half-measures that could inadvertently complicate processes."

Looking forward, what initiatives are needed to support sustainable business development amidst global integration trends?

"Despite existing challenges, the current scenario presents unprecedented opportunities for seizing historical milestones. Continuing to refine the business environment and institutional reforms is imperative. Simultaneously, the business community must enrich their knowledge and leverage support from regulatory bodies to cultivate an international integration mindset and understand global business cultures.

Building a reputable and recognizable brand for Vietnamese enterprises and entrepreneurs through the development of a business culture is equally important. VCCI has introduced six ethical rules for entrepreneurs to help define and promote the Vietnamese business culture, aiming to integrate common values in the global arena.

Additionally, businesses urgently need support in finding partners and accessing new markets to expand their production and business horizons. There is a pressing need for businesses to reduce their reliance on imported raw materials, enhance the value of export products, and elevate their status in the supply chain. Shifting towards greener and cleaner production methods to meet international standards and elevating their position in the value chain, especially in higher-value production sectors, are essential steps for businesses aiming for sustainable development in the global market."

Thank you, sir!