More favorable conditions needed for private-sector development: PM
More favorable conditions needed for private-sector development: PM
Although private enterprises have increasingly asserted their vital role in the local economy, they still face multiple obstacles in doing business. Therefore, it is necessary to create more favorable conditions for them to become a major driving force for the country’s economic growth, said Prime Minister Nguyen Xuan Phuc.
Addressing the plenary session of the Vietnam Private Sector Economic Forum 2019, opened in Hanoi today, May 2, PM Phuc hailed the private sector’s contributions to the country’s socioeconomic growth.
The sector has accounted for more than 42% of the country’s gross domestic product, contributed one-third of the State budget revenue and created jobs for 83.3% of local laborers, or 45.2 million people.
The sector’s investment grew 17.1% in 2017 and 18.5% in 2018. The proportion of private investment out of the total investment has exceeded 40%.
However, private enterprises’ development remains modest compared with their potential. In addition, the local business environment is not healthy enough as administrative procedures are still overlapping and complicated.
The country edged down one spot to 69th place among 190 economies in terms of the business environment index this year. The country ranked fifth in the ASEAN region, after Singapore, Malaysia, Thailand and Brunei.
Therefore, the Government leader urged the State management agencies to seek ways to further promote the private sector’s role in the economic development process.
He also called for private enterprises to seek new markets, build their brands and promote innovation in introducing Vietnamese products to the world.
The Government will facilitate the operation of these firms, the prime minister added, confirming that private firms can fairly compete with other sectors and access resources.
Further, their assets, freedom to do business and other rights and interests will be protected in line with the Vietnamese Constitution and law, said the leader.
PM Phuc also urged the equitization and reduction of monopolies, opening up more opportunities for private firms.
Clapping with both hands
Addressing the event, Nguyen Van Binh, head of the Party Central Committee's Economic Commission, stated that private economic development is an indispensable requirement in the process of building a sustainable market economy.
In addition, it is necessary to determine and highlight the roles of the State and the market. State agencies play a role in adjustment, while the market is in charge of optimizing social resources, Binh said.
The National Assembly (NA) and the Government have enhanced their focus on institutionalizing economic policies related to the private sector over the last few years, NA Vice Chairman Phung Quoc Hien said, adding that due to the policy, the private sector saw plenty of positive growth.
In 2018, Vietnam was home to 715,000 private firms, which significantly contributed to the country’s economic development.
Hien, however, noted that multiple problems related to laws and the business environment had remained unaddressed, adding that compliance with regulations was still limited, preventing private enterprises from gaining further ground.
The country aims to see one million private firms in operation by 2020, Hien stated, meaning a big gap to be bridged given the number of only 715,000 firms operational to date. Fulfilling the target will be a major challenge, he said.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), pointed out that the local textile and garment sector had posted over US$36 billion in export revenue in 2018 and seeks to raise the figure to US$40 billion this year. Free trade agreements signed between Vietnam and other countries and organizations are considered the backbone of the sector and will pave the way for realizing this year’s target export revenue, Giang said.
As for obstacles faced by the sector, Giang explained that Vietnam has to import a large volume of textile and garment materials, making it difficult to meet requirements on product origins when the country joins free trade deals, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Accordingly, Vietnam should build more industrial parks to attract investment in textile-dyeing sectors and concurrently address the serious shortage of skilled textile-dyeing technicians, the VITAS chairman suggested.
The two-day forum, jointly held by the Government and the Party Central Committee's Economic Commission, has gathered some 2,500 representatives of private enterprises.
The event features six seminars focusing on tourism, agriculture, the digital economy and the mobilization of capital for economic growth.
