Socialist Republic of Vietnam

HA NOI (December 6) — The Vietnamese Government is working harder to further liberalise its economy to overcome problems private businesses have faced in getting their operations off the ground, a private business meeting was told on Thursday in Ha Noi.

Policy makers at the meeting pledged to work towards speedier reforms for a more competitive, broader-based private sector to cater to local and export markets.

The domestic private sector had the chance to interact with the country’s top policy makers as part of the first domestic business meeting, which brought together nearly 200 small and medium-sized enterprises from Ha Noi and the northern provinces of Viet Nam.

The meeting, organised by the Central Institute for Economic Management (CIEM) and the United Nations Development Programme (UNDP), highlighted some of the opportunities and constraints for development of the local private sector, and its role in powering future growth and development in Viet Nam.

The meeting focused on the implementation of a Communist Party of Viet Nam resolution which identifies private sector development as an important component of Viet Nam’s economy.

According to the deputy head of the Party’s Commission on Economic Affairs, Nguyen Van Dang, the Party’s resolution was designed to abolish discrimination between different economic sectors. "The resolution highlighted the need to ensure equality between economic sectors in terms of opportunities and choices for development," Dang said.

UNDP resident representative, Jordan Ryan, noted the critical role of the private sector in creating jobs and tax revenue, as well as raising living standards.

"Viet Nam will meet many of its social and economic challenges in the coming decade if it can further tap the talent and drive of domestic private entrepreneurs. It is critical that this expansion happen in the most equitable way possible, so as not to exacerbate income and human development gaps in the country," Ryan said.

Most of the attending entrepreneurs said they welcomed the Party’s resolution and the Enterprise Law which came into effect in 2000.

However, many voiced concerns on the practical implementation of these policies and the negative perceptions of private businesses among some public servants.

Others pointed to the constrained regulatory environment, lack of sound implementation of policies at the local level and limited access to capital, land and business information.

"The implementation of the Party’s resolution at local level is still too general, and so it does not really support private businesses," general director of Hai Phong Textile and Garment Company, Hoang Van Khanh, said.

"Many public servants are still keeping their distance from private entrepreneurs." According to the deputy minister of Planning and Investment, Lai Quang Thuc, listening to the business community’s demands and aspirations is now part and parcel of a policy maker’s job.

"The active participation of entrepreneurs in this dialogue is essential to further improving the legal and institutional environment for domestic business development," Thuc said.

The domestic private sector has boomed since the enactment of the Enterprise Law in early 2000, with the creation of 53,000 businesses worth US$5.3 million.

In 2001, the sector represented some 25 per cent of the total investment in Viet Nam, compared with 20 per cent from the foreign sector.

According to CIEM president, Dinh Van An, two domestic business meetings in the central and southern provinces have been scheduled for next year. An said a mechanism will be formed to ensure inter-agency follow-up on the issues discussed at each of the events so the entrepreneurs’ feedback is translated into practical actions needed for quicker, balanced private sector development in Viet Nam. — VNS