Development of private business: It takes a lot of strong “medicine”

What do you think about the development of private enterprises in particular as well as the private sector in general?

In Vietnam, the private sector is growing faster than other economic sectors in the economy. Therefore, over the past years, the Government has paid attention and issued many policies and guidelines to build a legal framework to create more favorable and equal conditions for the private enterprises to develop.

However, most of the private enterprises are small and micro scale (more than 90% of the capital below VND 1 billion), low technology level and slow innovation, financial capacity, labor productivity Business results are still low; the management level and linkage are weak; the ability of participants in the chain of the domestic and international value chain is low.

With the above situation, he said what are the solutions to promote private enterprises to develop?

In order to help the private sector grow, I think it takes a lot of “medicines”. Firstly, in terms of the policy framework, 98% of the small enterprises which are small in the capital should be the need of a policy support and lengthiness for development. In fact, the policy has been in place, the general policy framework is available, but the specific policy to each sector is now necessary because each sector has different requirements. In addition, the policy must ensure equality between enterprises, especially in accessing economic opportunities so that the enterprises can be approached in a transparent and easy way.

For the approach of capital, in particular, the medium and long-term capital, the private enterprises still face difficulties due to their limited scale and the limitation of assets. This is the persistent difficulty for the private enterprises to develop, so it is necessary to have policies so as to access bank credit smoothly. We have a way out of the loans of credit and the legal framework, but the banks are so prudent that the private companies are difficult to access while the private enterprises, especially the small and medium enterprises have the lowest rates of bad debt.

In the term of the administrative procedures, the private enterprises are operating in many fields, there are 243 categories of the administrative procedures with over 5,000 business conditions, and this is a great barrier for them to develop. Over the past few years, the Government has drastically reformed administrative procedures to reduce official and informal costs for businesses. These two costs are proportional to one another. While the official cost decreases, the unofficial costs decrease more. So it needs to reform administrative procedures more strongly, but the easiest part is newly done and the hardest part is the coordination between ministries and branches to jointly shorten the business. This issue must be removed immediately, the post-check should be the post-inspection, it had better not focus on pre-check, removing the unnecessary sub-license.

On the other hand, we need to make favorable for the private sector to be linked together in the chain. The current context, if the enterprises are on a small scale, they will not have enough ability of competition. This will also help businesses appreciate the cooperation and more cohesive. The rate of enterprises say “not” with the "hidden costs" will increase and the healthy competition will really become the main driving force among enterprises. Moreover, the state must have policies to train, improve professional skills and improve the management ability for the private sector.

With many solutions as he said, should there be separate policies for the private enterprises to develop, sir?

In my opinion, there should be no separate policy because the private sector, as well as small and medium enterprises, make up 98%, we have the Support Law for the small and medium Enterprises, currently the Ministry of Planning and Investment is developing the decree of the specific guidance, so it is likely to base on these legal documents to develop the private business.

But if there is a separate policy, it should be the policy to limit the privileges and privileges of state-owned enterprises to ensure an equal business environment. In particular, the policies should focus on respecting the right to business and the property rights of private enterprises, it means that the management agencies, as well as economic organizations, must really attach importance to the private enterprises, not scorning them any size, the policy must be directed to the private enterprises in the spirit of reforming Procedures, saving time, money, not causing difficulties for them, creating the most favorable conditions to help businesses have faith and creating the motivation for development.

Thank you, Sir!