Vietnamese firms have come through the global economic crisis well and can achieve more with support from the government, economist Pham Chi Lan said.
Lan, a former member of the Prime Minister’s Research Commission, told Tuoi Tre that though the number of businesses in the country rose 12.5 times from 40,000 to 500,000 between 1990 and 1999, the change in political and social perception about their roles only started five years ago, five years after the Enterprise Law too effect.
What is the contribution of Vietnamese entrepreneurs?
Since October 13 has been chosen as the national day for them and not for business in general, it is clear that Vietnam has started to recognize their contributions. The number of businesses, at around six per 1,000 population, is still small compared to other countries where the average rate is 19 per 1,000 people in low-income nations and 29 per 1,000 in middle-income countries.
The fact that more than 1 million jobs have been created, mainly in the private sector, is enough to show the undeniable contributions of Vietnamese entrepreneurs. During the crisis, the number of enterprises going bankrupt and the percentage of workers laid off were very small, making Vietnam one of a handful of countries enjoying positive growth rate during the period.
What kept our businesses afloat during the economic downturn?
It was the national campaign to promote the consumption of domestically-made goods.
But the main problem is that in the campaign policymakers just paid attention to the tip of the iceberg by calling for consumer patriotism and developing the distribution system.
The more important part, support for businesses to adopt global technological and management advances to cut costs and improve quality and packaging, has yet to receive attention.
What are main shortcomings of Vietnamese businesses and entrepreneurs?
Though many Vietnamese entrepreneurs are competent at doing business, they are desperately short of capital.
Since Vietnam does not have enough resources for all, it is allocating most of the resources to state conglomerates. So Vietnam should consider this more carefully so that capital will be redirected to those who operate the most efficiently.
Another problem is that a large part of our resources is channeled into the real-estate and stock markets and not manufacturing due to our administrative system, legal framework, and policy making. So our policymakers are still playing catch-up with the market and not moving ahead of it.
Are the existing incentives enough to promote Vietnamese goods at home?
There are a lot of incentives but they have little effect.
For example, the 15 measures the government announced to support development of small and medium-sized enterprises in 2006-2010 … A survey by the Central Institute for Economic Management found that only 12 of them have been implemented.
[However] even the measures have had little effect since there are only nine municipal credit guarantee funds for small and medium-sized enterprises in the country’s 63 provinces and cities, with just three actually operational.
There are too many policies that require a large number of guiding documents. So the most practical solution is to focus on the implementation and effectiveness of each policy.
To back Vietnamese businesses, what areas should policies focus on?
Dominating the domestic market and then expanding to the global market needs outstanding quality at reasonable prices. So the application of technological advances is the key.
Though we claim that research and development is a priority, the Ministry of Science and Technology returns hundreds of billions of dong [meant for research] to the budget every year since. The research projects receiving ministry funding are also impractical.
So the system should be changed and funding should go directly to businesses who want to take drastic action for their survival.
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