“Giving wings” to private enterprises

	Striving for the contribution of private sector in GDP to 50% by 2020
	Growth in the Vietnam private sector slows in 2017
	Sustainability forum highlights fundamental role of private sector

After confirming the name, the private sector has operated strongly

Looking back on the history of the Party Congress, in 1991, the Resolution of the VII National Party Congress determined the State the foundation of the national economy was a collective one. Then in 2017, the Party Central Committee's Resolution No 5 defined the State economy, collective economy and private economy as the core to develop an independent, autonomous economy. As a result, the resolution has significantly changed in thinking and policies, identified the right position and raised the rank of the private sector. As economist Dr. Vo Tri Thanh said, the private sector started from the time when it was unnamed, then named, and to the time when it confirms its name”.

Obviously, this is an achievement worth to be proud of and should be promoted when the whole country strives on the way of development in a socialist-oriented market economy. Moreover, this result has been recognized by many countries and international organizations, created motivation and trust for Vietnam to become an ideal destination for foreign investors. In particular, in 2017, the private sector received more and more attention from the Government and management levels from central level to local level.

In mid-2016, the private sector gained more confidence and motivation from the Government's Resolution 35 / NQ-CP on enterprise support and development by 2020 with specific targets to each ministry, sector and locality to support enterprise development with the intention of bringing the goal of 1 million private enterprises operating by 2020 into reality. In 2017, this Resolution really took affect, the policies were put into reality and brought practical results to the development of enterprises. Accordingly, ministries and sectors have joined to reduce administrative procedures, to cut down business conditions with specific targets and measures; and developed many programs to connect enterprises with the government such as with the entrepreneurs coffee and business dialogue. Thus, the difficulties and proposals of the business community have been listened to, received and removed, creating an open and convenient business environment for enterprises.

Efforts from two sides

The reality showed that the private sector in Vietnam had a lot of potential for development, but the development was not strong because there were many obstacles. At many seminars and conferences, representatives of many enterprises dared to mention about objective and subjective difficulties that they encountered. Most of the enterprises pointed out the barriers on legal burdens, compliance costs; intellectual property; poor competition policy and weak management.

Motivation for the private sector for "taking off" is not only the wings but also the smooth movement of the body.Photo: Huong Dịu

Perhaps because of the barriers and burdens mentioned above, experts have said that Vietnam has many "big" enterprises, but does not have “really big" enterprises, and only has a few growing enterprises. The development of private enterprises means that there must be many types of enterprises, micro enterprises, small and medium enterprises, but also there must be global branded enterprises, leading value chains and distribution chains. Therefore, looking at the "map" of the business community in Vietnam, the private sector in the country is still completely behind the foreign invested enterprise sector (FDI) and state enterprise sector.

The situation raises the question of how the private sector - the "key" to economic growth – can have a solid motivation for taking off. This is a constant concern for the management agencies. According to Director of the Business Development Institute Dr. Le Xuan Nghia, the financial potential of the private sector was very weak, capital is low, so few enterprises have sufficient costs for research and development, or investment in manufacturing technology and management technology. In addition, due to weak financial background, the supporting activities for production and business such as product design, advertisement, communications, advertisement and exhibition are very limited. Furthermore, the Vietnamese private sector is losing out on barriers to trade, business and investment. Vietnamese enterprises are also affected by trade frauds, fake goods, and smuggling.

Together with the above reasons, Vice Chairman and General Secretary of Hanoi Small and Medium Enterprises Association Mr. Mac Quoc Anh said that over the past year, policies for private sector have been very convenient, sufficient and specific, but how to implement and how to effectively implement is still a question. According to Mr. Mac Quoc Anh, the support to the community of private enterprises is still "hot at the upper level and cold at the lower level” and lacks the consistency among ministries, agencies and officers, causing difficulties for enterprises. Therefore, to improve the support for private enterprises, the most important thing to do is to improve human resources.

However, the effort of one side is not enough. This requires the effort from enterprises. It means that the State changes its thinking and innovation strategy, enterprises must also comply with the laws, business rules, transparency and modernization of their activities towards professionalism and international standards.

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It can be seen that the motivation for "taking off" is not only the wings but also the smooth movement of the body, while understanding the flight method and way ahead. To do so, the Vietnamese economic “boat” with the contribution of private sector will have enough confidence to launch to sea.