Driving a sustainable private sector
Driving a sustainable private sector
Although the local private sector has enjoyed phenomenal growth in the past years, reaching its abundant potential still proves a challenging task. Nguyen Trong Dieu, chairman of the Vietnam Private Entrepreneurs’ Association and former Deputy Minister of Home Affairs, looked at Vietnam’s current business climate and made suggestions to develop the private sector to full strength.
What do you perceive about Vietnam’s current business climate?
With swift and positive improvements, the current business climate here is becoming increasingly attractive to businesses and investors. We recognise that the Vietnamese Party and government have always paid due attention to improving the local business environment, which is a central piece in the country’s economic development and GDP growth goals, as well as laying down the groundwork for investment and business development.
Demographically, Vietnam is in the stage of having a golden population pattern as young people in the working age accounts for a large proportion in the population structure. This creates an abundant and youthful workforce which is an essential factor behind any investment and business decisions of businesses and investors. As a developing nation with a fast-growing GDP that often exceeds 6.5 per cent per year, Vietnam still provides an ample space for investment and development. Its juvenile and dynamic population, and an open and friendly culture that can easily absorb new things is providing a lucrative market not only to foreign investors, major domestic entrepreneurs and businesses, but also to up-and-coming business startup community.
The Vietnamese government has also recently made constant efforts to revising and improving the criteria related to the business environment, such as amending policies and mechanisms, focussing on pushing up administrative reforms, and posting initial results with e-government and paperless administration drive through the launching of the national database axis, as well as the radical application of IT progress into state management activities in order to facilitate production and business activities. In addition, creating a business venture or startup has now grown into a justification for living and a growing social trend. More and more people in society now look at decent entrepreneurs as the mirrors to follow, leaving ripple effects and inspiring more people to engage in business startups, investment and business expansion, and providing a catalyst to push up their development and improve the local business environment.
The policies promoting private sector development and international economic integration play a vital role in this field, don’t they?
Yes. The Party and the government have paid due heed and taken drastic actions to accelerate Vietnam’s integration into the global community and posted very encouraging achievements. Our country has finalised negotiations and signed a slew of free trade agreements (FTAs) with the international community. Several other important FTAs are in the pipeline. The government has put a focus on promoting the significance of the FTAs to the business community, as well as supporting them to become better prepared to avail of the benefits from the FTAs, from there helping to improve the local business climate.
With these underpinning advantages, we expect the local business environment to further improve, especially regarding administrative procedure reforms. It is important to shortly put online and establish a seamless system to ensure smooth control of administrative procedures that relate to people and businesses.
Importantly, more active and practical support from authorised management agencies is required to help businesses in international integration, consultancy, international market survey, trade promotion, and business development in foreign markets. This will enable the country to sharpen competitiveness and stay steadfast in highly competitive foreign markets.
Albeit being recognised as a dynamic economic sector with significant contributions to the national development, there are arguments that the private sector is still facing unfair treatment. What do you think about this?
Biased treatment does exist towards private sector development, in my opinion. The Party and the government give high regard to the private sector, taking them as a motivating force to drive the national development. This was set in Resolution No.10-NQ/TW enacted in June 2017 by the fifth plenary of the 12th Party Central Committee, and Resolution No.98-NQ-CP of the government on enacting an action plan to implement Resolution 10 dated October 2017.
Accordingly, in the macro-policy facet, the private sector and other sectors of the economy are equally treated, and even the private sector is regarded as an important constituent and a major impulse to propel Vietnam’s economic growth in the upcoming period.
In the process of shifting the Vietnamese economy from subsidy and central planning to a market-based mechanism under a socialist orientation, the prejudice against the private sector does still exist and cannot be removed overnight.
From a subjective view, as Vietnamese businesses and entrepreneurs are juvenile, their ultimate goal is often striving to optimise profits. Several of them might be trying to optimise profits by all possible means, including illegal ones, while neglecting other values such as business ethics or community support.
Vietnamese businesses and entrepreneurs, therefore, need to make changes and strive to constantly improve their image to become increasingly recognised by people and society.
What policy and mechanism proposals do you suggest in your role, to accelerate private sector development?
First, it is important to quickly build up and perfect a transparent, clear, and impartial legal system on doing business, and apply a simple and comfortable system to handle administrative procedures. The advantages of Industry 4.0 need to be applied in all management activities, while inappropriate business conditions must be removed to support development. More efforts must be exerted on creating a favourable investment and business climate to cultivate private sector development. Second, the state needs to apply impartial policies towards all sorts of businesses doing business in Vietnam’s territories, avoiding the discrimination in treatment between foreign and domestic ones. Drastic measures must be taken in the fight against corruption, those causing harassment to businesses, simplifying and putting online administrative procedure settlements, and building an honest and dedicated management apparatus to support businesses.
I also suggest supporting private businesses to get access to diverse resources such as land, finance, labour, and science and technology for business development.
It is also necessary to present policies and mechanisms on building and developing the database about businesses operating in similar areas, about capital market, labour market, and science-technology market among others. Of equal importance is the need to review, update, and improve the standard set on high quality human resources training with professional expertise, communicative and teamwork skills, and work ethics.
It is also a must to present policies and mechanisms on vocational education that matches integration requirements, enhance the network of vocational training systems, and improve the quality of vocational training to come on par with regional and international standards. Next, it is important to work out concrete strategies to support major private groups on their journeys to the global market and build up brands of international significance.
These concrete action plans must also be in place to support business startups, lifting private sector development to a new high in both quality and quantity. Lastly, we must raise awareness of businesses and entrepreneurs in the implementation of Resolution 10 on private sector development.
Other activities of no less importance are regularly updating on the private sector’s achievements, raising the sense for corporate social responsibility and business ethics in the business community.
