Vietnamese enterprises need assistance to survive: economist

Vietnamese businesses are facing unprecedented difficulties, and many are being forced to tighten spending to survive. The government needs to reduce costs for businesses such as waiving and reducing interest rates, fees, and taxes to help them stay afloat, said Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM).

The private sector has contributed greatly to Vietnam's socio-economic development, but many experts say it has been unable to utilize its internal resources efficiently. What is your point of view?

The private sector is important to socio-economic development and employs the majority of workers in the country. It contributes nearly 50% of national GDP. There are two types of enterprises in this sector: those operating under the Enterprise Law and those operating in the form of production and business households. In my opinion, the private economy is currently facing a number of external and internal difficulties.

External difficulties come from the sector’s limited integration level and capacity. Its outbound investment is still low. Most processing and manufacturing industries are controlled by foreign enterprises because domestic enterprises with weak capacity are unable to join global supply chains.

In terms of policy, despite many reforms, private enterprises are facing obstacles in accessing resources and mobilizing capital, so it is difficult for them to join global production and value chains. In addition, many private businesses are worried about their production and business, or they are afraid of making mistakes when provisions in laws, resolutions, and circulars overlap and lack consistency.

How can we tap the capacity of the private sector?

It is no coincidence that the recent 2023 Vietnam Socio-Economic Forum took the theme of "Reinforcing internal capacity, generating drivers for growth and sustainable development". I think economic development must rely on the internal strength of private enterprises and the people of each country.

The private sector is an indispensable part of socio-economic development. If the sector is not sustained, it will be difficult to promote economic development. In my view, Vietnamese businesses are facing their most difficult period ever. Many of them have been forced to tighten spending in order to survive.

While some businesses have exited the market, others have been acquired or merged. How to deal with them is a matter of concern. We need to reduce costs for businesses such as waiving and reducing interest rates, fees, and taxes.

In this context, we need to create favorable conditions and reduce barriers for businesses so that they can overcome difficulties to recover and access new opportunities for development. We should also create a solid, clear, transparent institution that can predict opportunities and challenges to enable businesses to plan ahead.

To promote resources and intelligence for production and business as well as economic development, what should state agencies do?

Resources that are not invested in production and business are "dead" resources. Talent and intelligence that are not used in production and business are also "dead" resources. To efficiently utilize resources and intelligence in production and business as well as economic development, state agencies, ministries and sectors need to review institutions and policies to make appropriate additions and changes.