For a Powerful Vietnam

It’s necessary to fire at sluggishness with a gun

Chair of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc believes that attaching importance to developing the private economic sector is the way to make the country prosperous.

Loc points out that whenever the private sector becomes ‘untied’, the national economy flourishes.

There are countless references to prove this viewpoint. Analyzing Vietnam’s economic growth in the last 30 years since doi moi (renovation), Loc found that in 2012-2014, economic growth slowed down with growth rates below 6 percent per annum, a record low which was just a little higher than that in the global economic crisis period.

It’s necessary to fire at sluggishness with a gun

Whenever the private economic sector is untied, the national economy will flourish

The high economic growth rates of over 6 percent have returned since 2015, which Loc attributes to the great efforts to reshuffle the economy. Vietnam has changed its development model, shifting from reliance on public investment, state-owned enterprises and credit growth, to the view that the private sector is an important driving force of the national economy.

He said: “To develop the economic sector, the state’s role in the economy has turned from boat rowing to boat directing. In other words, the state, instead of regulating enterprises with orders, now regulates them with laws and measures to support them. ”

The two most important economic functions of development are creating a market-economy institution and supporting business development. These require significant and tireless efforts of many people in the fight against conservative views held by their comrades in the state apparatus.

The working session of the Minister, Chair of the Government Office, and head of the PM’s Working Group at the Ministry of Health (MOH) on September 20, 2017 was one of these efforts.

He criticized MOH, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade for the required business conditions which enterprises have to spend 28,793,000 days out of total 30 million days, and VND12.208 trillion out of total 14.3 trillion, to satisfy.

“Sometimes ministries create bindings and sub-licenses, not envisioning how many obstacles they raise for development,” he said.

The working session ended up with the Minister of Health’s commitment to amend Decree 38, a legal document drafted by the ministry which had upset the business community for a long time.

 

The requirements in the decree cost enterprises a lot ofmoney to observe. It takes enterprises four months and VND10 million on average to satisfy the requirements set on normal food and VND30 million on functional food. About 35,000-45,000 cases have to follow procedures to obtain the certificate on conformity, as estimated by the Central Institute of Economic Management (CIEM).

On February 2, 2018, Decree 15/2018 was promulgated to replace Decree 38. Under the new regulation, instead of having to obtain certificates from state management agencies, the institutions and individuals making and trading food can make declarations themselves about the quality of food.

The change has helped cut up to 90 percent of costs on administrative procedures, and save 10 million working days and VND3.7 trillion a year, according to EuroCham.

Decree 15/2018 can be seen as a ‘revolution’, the canons fired at sluggishness and conservatism, bringing big benefits to businesses and thier activities.

According to VCCI, 15 decrees on cutting business conditions had been promulgated as of October 2018.

Pham Chi Lan, a respected economist, commented: “The decree 15 alone can help enterprises save VND3.7 trillion. Imagine how high the figure would be if 15 decrees are amended!”

“Businesses need to spend their time to compete with rivals in the market rather than follow many administrative procedures,” she commented.

VCCI has reported that 58 percent of enterprises complain they still have to ask for licenses for conditional businesses and 42 percent of them said they face difficulties when seeking the licenses.

Five years have elapsed since the day the Resolution 19 was released, and two years since Resolution 35. The business environment has improved significantly. However, the efforts are modest in the context of global competition. 

Tu Giang

 
 
 
 
 
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