Private enterprise development: motivating, creating, sustainable

Private sector development encourages sustainability. Source: Internet

Confidence is strengthened

Looking back on the development of the past few years, many private companies are exhilarated because their business is easier to breathe; policies are more open to accessing credit, land and markets; inspection activities, the state of harassing enterprises has reduced. Particularly, with the Government's policy, the confidence of the private sector is increasing; the number of newly established enterprises is increasing to reach the number of 1 million enterprises in 2020. Not only that, the way the social recognition of the business class has changed so that they are respected and have a voice in society. As a result, the private sector has made the dynamic development of the economy, contributing significantly to the creation of jobs, raising the incomes of people, making breakthroughs and leading in many new production and business fields.

According to the survey conducted by VCCI and the United States Agency for International Development (USAID), the PCI of the Provincial Competitiveness Index (PCI) in 2017 shows that confidence of enterprises is on the rise since 2013. Most businesses said they would expand their business in the next two years, reaching the highest level since 2011. Caused by the strong reform efforts of the past time, the administrative procedures have improved, and the costs have not been reduced. Especially, what is most appreciated by businesses is the government's cooperation in solving difficulties and obstacles of enterprises through dialogue and contact with local enterprises.

Talking about this issue, Mr. Vu Huy Dong, Chairman of the Board, General Director of Damsan JSC said, in the past 5 years, the business environment has really improved. In Thai Binh, the province and departments have come to solve difficult business, 30% reduction time, paper records reduced 15%. However, there are still many bottlenecks that need to be taken up by functional agencies to improve and support business development.

Motivation for "motivation"

Sharing the difficulties of private enterprises, Mr. Vu Tien Loc, Chairman of the Chamber of Commerce and Industry of Vietnam (VCCI) said that Vietnam's business investment environment, despite many improvements, still remains with many points that are not satisfactory. First is the transparency and legal institutions to address the problems of enterprises are slowly changing. Enterprises still face difficulties with the informal costs and quality of public services of government agencies. In addition, one of Vietnam's development challenges in the coming time is to improve the competitiveness of the private sector so that it can successfully compete in the integration process. Since the private sector has experienced tremendous growth in quantity over the past few years, but the scale of both capital and labor is dwindling, we are in shortage of businesses in the economy.

Recognizing the remaining difficulties of enterprises as above, in order to create more motivation for the development of enterprises, the Government has issued many directives and documents to direct the ministries and sectors to support businesses. It can be said, from the time of Resolution 35/NQ-CP on support and development of enterprises by 2020 issued by the Government, the business environment "picture" and supporting policies of enterprises have become increasingly clear. Recently, the Prime Minister said that 2018 will continue to be the year of strong implementation of the policy of "reducing costs for businesses" by many solutions, requiring ministries to cut 50% of business conditions. 50% of the list of goods subject to specialized inspection and remove logistic bottlenecks...

Particularly, from 2017 to early 2018, the business community, especially small and medium enterprises, was very excited when the Small and Medium Enterprise Promotion Law was passed and came into force. Despite the lag of more than 3 months, the Government promulgated decrees guiding the implementation of the law, but enterprises are evaluating this as a big step in supporting enterprises.

According to Mr. Ha Quyet Thang, Director of Kim Long Production and Trading Service Co., Ltd (specializing in manufacturing and manufacturing mechanical parts and molds), the regulations and policies are very specific, help businesses have more motivation and confidence to expand investment and business development. But Mr. Thang also worries that these regulations must be put into practice, because at present, the accesses to support policies from the State of enterprises are difficult. Enterprises still have to "self-reliance" on many issues, especially on capital sources; meanwhile, small and medium-sized enterprises are being supported not only by capital but also by information, trade promotion and market.

In addition, Mr. Bui Van Quan, Chairman of the Board of Directors of Anh Quan Strong Group, Chairman of Vietnam Young Entrepreneurs Association, said that despite many innovations, there are still many rigid procedures that have not really started because of business activities. This can be evidenced by the access to credit of enterprises, the smaller the credit access, the more difficult, even "impossible". Many businesses have reflected, the banks only accept either reputable companies with firm profiles, or who have fixed asset as security and do not accept unsecured credit. Therefore, the enterprises, most of which are start-up businesses, newly established enterprises when the capital need is still difficult to rely on, the banks have to resort to external borrowing resources, even from "black credit" with high interest rates.

Thus, it can be seen that the motivation for business development in Vietnam still has many "leftovers" for ministries and branches to continue implementing to achieve the best effect. The government and the authorities have identified and issued many solutions, but still seems to be "struggling" in the implementation. Mr. Mac Quoc Anh, Vice Chairman and General Secretary of the Association of small and medium enterprises in Hanoi, said the ministries should focus on the problem of solving the avoidance of overlapping, because it benefits the ministries to set out regulations not enterprises. In addition, the policies must be implemented in a uniform manner, avoiding "hot, cold" situation to remove the "knots" that have existed a long time. But it is important that the experts agree that there must be an integration of all sides, forming the "motive force" outside and self-motivation, the new business can promote all strengths, creating a sustainable growth with great achievements and positive results to contribute to the country's economic growth.