Economic restructuring: Need "new space" for private enterprises

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Forum "Economic restructuring in the 2021-2025 period: issued raised for businesses". Photo: H.Dieu

On December 14, in Hanoi, under the direction of the Vietnam Chamber of Commerce and Industry (VCCI), Business Forum Magazine organized a forum titled Economic Restructuring in the 2021-2025 period: issues raised for businesses.

Need the active role of businesses

Speaking at the Forum, Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM), said the economic restructuring plan in the 2021-2025 period is expanding the economic restructuring plan in the 2016-2020 period, which achieved many results, created many changes in the growth model, improved productivity, and the competitiveness of the economy as well as created a premise for sustainable development.

However, according to Ms. Minh, the 2021-2025 plan must inherit and develop the results and achievements in the previous period; especially prioritizing the development of a number of key industries and fields to create breakthroughs and spread to other fields.

Notably, the Covid-19 pandemic has shown inadequacies and difficulties in the absence of institutions for motivating regional and industry linkages. Therefore, regional and industry linkages for regional economic development and creating a push for urban economic regions has also been set out in this restructuring plan.

VCCI’s Vice Chairman Hoang Quang Phong also said the development of the private sector has not been commensurate with the size and openness of the economy; the dependence on the foreign economic sector has not decreased.

"The restructuring of the economy also needs to be a concern for businesses. They need put themselves in an active role. Because the business environment still has unstable factors, especially the instability brought by the global pandemic. Therefore, businesses need to adapt and make appropriate adjustments," Mr. Phong said

At the same time, the VCCI’s Vice President said that businesses must consider restructuring themselves because it is related to the core issues of businesses such as goals, vision and strategic orientation, business philosophy, core values ​​and corporate culture.

Also talking about this issue, economist Le Duy Binh, director of Economica Vietnam, said businesses have made a great contribution to the restructuring process of Vietnam's economy. Therefore, the restructuring of Vietnam's economy is not only reflected in GDP but also in the difference in added value of different economic sectors.

Need comprehensive solutions

According to experts, the State needs to create a "new space" for the private sector in restructuring Vietnam’s economy.

Binh said the issue posed to businesses today is that Vietnam's labor productivity is underestimated in Southeast Asia, and the business structure lacks medium-sized enterprises, it is mostly small and micro small businesses. While medium-sized businesses have a lot of potential to become large enterprises and have the ability to invest in research and development and to raise their scale.

“We need to rethink how to form a medium-sized enterprise. In about 10 years, the picture of Vietnamese enterprises will change," said Mr. Le Duy Binh.

In addition, he noted the ability to generate sustainable profits when more than 50% of Vietnamese enterprises are operating at a loss or breaking even. Along with that, it is necessary to continue reforming the state-owned enterprise sector, taking advantage of free trade agreements (FTAs) to contribute to expand Vietnam's import and export turnover.

On behalf of the business community, Mr. Nguyen Quang Huan, Vice Chairman of the Vietnam Private Entrepreneurs Association, suggested that in the structure of public investment, the state's capital would only be the decoy to call for investment from the private sector, this is a space for private businesses to participate in green development, in which, in the field of environmental treatment, there are many opportunities for private businesses to work together with the State.

Regarding labor issues, Dr. Truong Anh Dung, Director of the General Department of Vocational Education and Training, Ministry of Labour, Invalids and Social Affairs, said the demand for skilled workers will increase. The job market will be divided into two groups: low-skilled and high-skilled. Therefore, the domestic labor market will need comprehensive solutions from all stakeholders to improve the quality of recruitment and training of human resources through developing skills and improving knowledge for employees in the new situation.

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In addition, experts at the forum also made recommendations and wished for effective solutions to remove "knots" for businesses in terms of capital, technology, etc. To catch up with the process of restructuring the economy, businesses need to focus on adaptability and resilience; restructuring enterprises by industry, by competitive area; and cooperation and welcoming domestic and international trends, industry trends and value chains, technology trends, capital and labor shifting trends.