Seafood processed by workers at the privately owned Hong Ngoc Seafood Company at Phu Yen province’s Hoa Hiep Industrial Park. (Photo: VNA) HCM City (VNS/VNA) - Vietnam needs to develop a strategy topromote the development of the private sector over the next decade to maintaingrowth, speakers said at a conference on socio-economic development from 2021to 2030 recently held in HCM City.
Dr Vu Thanh Tu Anh, dean of the Fulbright University Vietnam’s Fulbright Schoolof Public Policy and Management, said with the current global uncertainty, itwould be difficult to achieve the target of average GDP growth of 7 percentover the next decade unless the country focuses on the development of theprivate sector.
Anh is also a member of the Prime Minister’s Economic Advisory Group.
“Private firms, mostly small- and medium-sized enterprises, are considered thespearhead of the economy, but their contributions remain modest due to a lackof supportive policies,” he said. “It’s important to offer them fairness inaccessing economic resources.”
Dr. Tran Du Lich, a member of the Prime Minister’s Economic Advisory Group,said the country would not be able to achieve the target unless it mobilisesall resources for economic development over the next decade as the populationis getting older.
“The proportion of the working age population has begun to decline and thistrend will continue in the next decade. There is no country with an agingpopulation that can grow rapidly. I am concerned we will be old before we canget rich.”
Dr. Nguyen Ba An, a member of the Editorial Group of the 13th National Congressof the Communist Party, said it was important to continue to reformadministrative procedures to help remove barriers for private enterprises.
Dr Vu Tuan Anh, lecturer at the National Economics University, noted thatprivate enterprises’ contribution to GDP remains modest at less than 10 percent.In comparison, the FDI sector contributes about 20 percent to GDP.
This is a problematic economic structure, making it difficult for private firmsto develop.
Experts recommended that, for a normal economy, the contribution of the privatesector to GDP should be around 60-70 percent.
Anh, the dean at Fulbright University, said more than 96 percent of privatefirms are micro and small size, so their resilience to external shocks remainsweak, making it difficult to connect to the global value chain.
Statistics from the Ministry of Planning and Investment last year showed only15 percent of private enterprises are suppliers to FDI enterprises in thecountry. More than 8 percent are likely to export directly, and 7.4 percent canexport indirectly through a third country.
He said the Government should reform the governance system of State-ownedenterprises, and stop providing bailouts or financial support to anyState-owned business or project that encounters prolonged heavy losses.
“For attraction of FDI, priority should be given to domestic privateenterprises to connect to supply networks of leading multinational corporationsin the country. The domestic private sector should play a major role in theeconomy,” he said.
The private sector altogether contributes around 40 percent to the country’sGDP, of which some 32 percent is from household-based businesses and only eightpercent from private firms. State-owned enterprises contribute around 28 percent,according to statistics from the Ministry of Planning and Investment.
State-owned enterprises and business households are the two major contributorsto GDP, but they both have problems in capacity. Household-based businesses areof small scale, while State-owned enterprises lack efficiency in operation, theministry said.
Vietnam’s private sector has more than 700,000 firms and 5.2 million businesshouseholds.
The meeting was organised by the Institute of Development Strategy under theMinistry of Planning and Investment in coordination with the United NationsDevelopment Programme (UNDP) in Vietnam./.
VNA
