The government should prioritize participation of the domestic private sector in modernizing the country’s railway industry, National Assembly member Hoang Van Cuong said Thursday.
Cuong, vice president of National Economics University Hanoi, was speaking at the ongoing parliamentary session discussing social-economic development issues for 2023.
The associate professor said that it was not advisable for Vietnam to keep hiring foreign investors to build separate railway lines that will not be able to connect with each other, and to have the routes rely on their maintenance services.
“Instead, domestic investors should be encouraged to cooperate with foreign companies in building new railway lines, or in buying their technologies,” he said.
“Not just in railroad, a similar approach should be considered by the government for other sectors and industries like shipping, logistics, digital infrastructure and so on.”
The delegate representing Hanoi said he wanted the government to support the establishment of corporations with strong competence in railway, marine shipping, logistics, and information technology that are also dedicated to digital transformation.
In powerful countries, major corporations serve as key economic drivers and this is a good lesson for Vietnam to learn, Cuong added.
Other NA members mentioned difficulties faced by the domestic business community despite the country’s strong post-pandemic economic recovery.
To Ai Vang, who represents the southern province of Soc Trang, said Vietnamese enterprises were facing the problem of limited capital.
In general, they rely on loans, which make up to 70-80% of their working capital, but they are finding it difficult to get loans from banks these days because of credit caps set by the State Bank. High capital costs were a hindrance for local enterprises, she said.
Meanwhile, Cuong noted that the government’s financial incentives for businesses would come to an end next year, and they must face doubled pressure - debt liabilities in the pandemic period and post-pandemic stage.
“The government needs to work out plans to support businesses to deal with the worst scenario when an economic downturn occurs,” he said.