Hanoi (VNA) – The Government Office, the Ministry of Planning andInvestment and the US Agency for International Development (USAID) launched theUSAID Linkages for Small and Medium Enterprises (LinkSME) in Hanoi on September24.

Under the 22.1-million USD project, which will be carried out during September2018-September 2023, the three parties will work together to enhance supply andlinkage capability of SMEs, and improve the capabilities of business organisationsin Vietnam in supporting SMEs’ development.

Strengthening business linkages between SMEs and leading firms is expected to advancethe Indo-Pacific vision of improved economic competitiveness, and supportUSAID’s objective of expanding inclusive, market-driven, and private sector-ledgrowth in Vietnam.

According to Minister and Chairman of the Government Office Mai Tien Dung,LinkSME will contribute to making systematic changes in the businessenvironment through promoting institutional reform, streamlining regulationsand administrative procedures, reducing compliance cost to better SMEs’competitiveness.

“The project plays an important role in the country’s sustainable development,and ability to escape middle-income trap in the coming decades”, Dungunderlined.

Minister of Planning and Investment Nguyen Chi Dung said thanks to theGovernment’s strong reform, local firms have made substantial progress in thepast two decades. Currently, Vietnam has 730,000 operating enterprises, 97percent of which are SMEs.

SMEs have contributed greatly to the nation’s economic growth and sustainabledevelopment by creating jobs and improving living quality of workers, hestressed, adding they are an important link of the value chain to bettercompetitive edge for Vietnamese exports.

However, the firms are lacking in capital to renew technologies and expandproduction scale, while their management capacity remain poor and supply chainlinkages among the SMEs are still limited, he pointed out.

Therefore, LinkSME is hoped to support the Vietnamese Government to addresschallenges for the SMEs, promote their linkage ability and encourage them toreach out to the global market, he added.

Sharing the same viewpoint with Minister Dung, US Ambassador DanielJ.Kritenbrink said SMEs play an important role in the Vietnamese economy asthey contribute 45 percent of the nation’s GDP.

As their operation has been hampered by shortage of linkages to the globalvalue chain, LinkSME is expected to help the SME community run their businesseffectively, contribute more to the national economic growth, and promotecompetitive capacity, he added.

Since 2018, the Government has carried out comprehensive measures to simplify 3,451out of 6,191 administrative procedures. Meanwhile, 6,776 out of 9,926 productlines subject to specialised inspections have been cut, and 30 related administrativeprocedures have been simplified, helping save over 18 million man day a year,equivalent to over 6.3 trillion VND (271.7 million USD) a year./.