'How many new jobs created’ should be new KPI for local governments: VCCI leader

With a shift in thinking about the role of the private sector, local governments may soon prioritize creation of new jobs and businesses over traditional growth metrics, according to Dau Anh Tuan, deputy secretary-general of the Vietnam Chamber of Commerce and Industry (VCCI).

Speaking at the “Legal flow 2024-2025 & recommendations for businesses” workshop in Ho Chi Minh City on Thursday, Tuan emphasized the importance of the private sector and the transformative potential of two recent Politburo resolutions: Resolution 66 on innovation in lawmaking and enforcement to meet the requirements of national development in the new era and the newly-issued Resolution 68 on private economy development.

He shared three stories that underscore the turning point in how private enterprises can shape socio-economic development.

In the first story, the Party chief of a mountainous district told him that the local government used to struggle with poverty alleviation - subsidizing cattle and providing funds annually without lasting results. But once the district attracted a medicinal herb company to cultivate local plants, the dynamics changed.

Residents began protecting the forest, not because they were told to, but because it became economically valuable. The local government no longer had to provide subsidies; the business created jobs and preserved the environment.

In the second story, Tuan recounted a 2013 visit to California, where he met with the state’s Deputy Attorney General. As usual, he asked about growth rates and economic transformation. Her response surprised him: “We only care about two things - how many new jobs are created and the unemployment rate.”

The third story came from a personal account by Vietnam’s Party General Secretary To Lam. During a visit to the northern province of Bac Kan, local officials highlighted the region’s economic struggles and lack of businesses. The Party chief asked a simple question: How much money do local people have in their bank accounts? The answer revealed that residents had significant savings. His conclusion: The issue isn’t a lack of resources, but a lack of business engagement. The key is creating an environment where people feel empowered and motivated to invest and start businesses.

According to Tuan, Party chief To Lam's remarks - along with Resolution 68’s target of having 2 million operating businesses by 2030, or 20 businesses per 1,000 people - signal a critical shift in economic thinking.

"Ultimately, business is what contributes to the economy, creates income, and generates employment,” said Tuan.

He also highlighted that the role of business extends beyond economic value. Referencing the earlier forest story, he noted that businesses not only boost GDP, tax revenue, and exports but also help address social and environmental challenges such as forest conservation and social security.

“This is why government bodies are increasingly focused on attracting businesses. Without businesses, there are no jobs. Without businesses, unemployment can't be reduced. It's the same for provincial and city governments,” Tuan stressed.

“When I talk to leaders in the Mekong Delta, I often mention the net migration rate - how many people are leaving to find work elsewhere, like in Binh Duong province. In the near future, local success may be measured not by growth rates, but by how many new businesses are formed and how many jobs are created,” he added.