Hanoi (VNA) - Vietnam needs a number of large and medium-size firms in orderto mentor and push forward small businesses, which are the backbone of ahealthy economy, according to General Secretary of the Vietnam Chamber ofCommerce and Industry Pham Thi Thu Hang.

“There will be leading enterprises standing on the top of the pyramid to directother enterprises to push up the economy,” Hang said at a workshop ondeveloping private economy in Hanoi on April 13.

She said State-owned enterprise encroachment on private business operationsmust be minimised, and policies must be formulated to drive up the privatesector and develop its competitive capacity.

Theseminar, jointly held by the Central Theoretical Council, Vietnam Associationof Consumer Goods Development and Hanoi Business Association, was aimed atevaluating the situation of private economic development, breaking downbarriers and creating conditions for the private economic sector to boostsustainable operation.

Deputy Chairman of the Central Theoretical Council Nguyen Van Thao said Partyand State policies and mechanisms had created the legal basis and favourablesocio-economic environment for developing the private sector. In the past twoyears, the startup movement had been accelerated. More than 110,000 businesseswere established in 2016 – the highest figure in recent years.

Employing85 percent of the workforce, the private sector grew at an average rate of 10.2percent per year in the 2003-15 period, contributing about 39-40 percent of thecountry’s GDP.

Thaosaid the private sector had initially formed a number of large-scale privateeconomic groups, but it had not yet become a key driving force for the economybecause most business models were intended to turn individual households intoenterprises.

“Amajority of private businesses are operating on a small scale, with low andout-of-date technologies and slow renovation. Their financial capacity, labourproductivity, business efficiency, product quality and competitiveness are weak,”said Thao.

Apresentation at the seminar reported that there are more than 80 percent ofprivate businesses operating in trade and services, over 10 percent in industryand only 1 percent in agriculture.

Agreeingto the measures needed to develop the private economy, the rector of VietnamNational University’s School of Economics and Business, Nguyen Hong Son,emphasised the importance of building and implementing national industrypolicies, which would focus on developing the private economy, encouraging theappliance of modern technologies and renovation and creativeness.

According to Director of the Central Institutefor Economic Management Nguyen Dinh Cung, the Government has adopted policieson the development of the private businesses. These include encouraginginvestment in areas subject to sustainable development; acceleratingdivestment, restructuring, equitisation of State-owned enterprises; building alevel playing field for various types of businesses in the Vietnamese market;fostering investment in advanced technologies; renovating and raising thequality of vocational training; and supporting large private businesses toexpand to overseas market.-VNA