return icon Vietnamnet.vn

Private conglomerates must be pillar of economy: economist

It is necessary to create a market where privately run conglomerates will play the pivotal role. This must be associated with a system of policies which encourage the development of the private economic sector. 
VietNamNet Bridge - “It is necessary to create a market where privately run conglomerates will play the pivotal role. This must be associated with a system of policies which encourage the development of the private economic sector,” Tran Dinh Thien, head of the Vietnam Economics Institute, has said. 


{keywords}




Vietnam’s private businesses remain weak and they still cannot act as an important driving force of the national economy as expected.

Thien believes the government should create favorable conditions for large private economic groups to develop, which will bring about the development of other private companies. 

As of December 31, 2016, Vietnam had 477,808 businesses, which is not a small number compared with the population and the current development level. However, two problems have been found.

As of December 31, 2016, Vietnam had 477,808 businesses, which is not a small number compared with the population and the current development level.

First, 97 percent of Vietnam’s businesses are small and medium sized, 60 percent of which are very small and use outdated technology. 

Second, with weak capability, plus lack of cooperation, Vietnamese businesses cannot join forces to create a big power. Vietnam lacks leading enterprises that could play a motive force and connect small enterprises to create influence. 

Analysts have recognized the great efforts by management agencies to increase the number of businesses. However, while many new businesses have been set up, the number of dying businesses is also high. 

According to GSO, in the first quarter of 2017, Vietnam had 26,478 newly set up businesses, and 23,904 businesses were dissolved. 

The number of closed businesses was ‘abnormally high’. An analyst commented that if businesses continue to open and close, the economy would lack ‘adult’ businesses.

According to the Central Economic Committee, the GDP growth rate of the private sector has slowed down in recent years from 11.93 percent in 2003-2010 to 7.54 percent in 2011-2015.

Though the government has many policies to encourage the entrepreneurial spirit, the tendency of businesses leaving the market is still growing. At least 31,000 businesses withdrew from the market in the first four months, while the figure was 60,000 last year.

Private conglomerates must be the pillars

“It is necessary to discuss large private conglomerates because they serve as a motive for business development,” Thien said.

Of 500 Vietnam’s largest businesses, the number of real conglomerates is modest and they operate in only some business fields. 

This is not because they don’t have potential. The analyst said there is no incentive for them to act as leaders of small businesses. To some extent, they try to exploit the loopholes of policies to do business, but they don’t choose long-term and sustainable investments.


RELATED NEWS

Vietnam puts higher expectation on private economic sector

Policies give preferences to FIEs, neglect domestic enterprises


Kim Chi

MORE NEWS

FDI hoped to help realty market develop sustainably in long term

Vietnam’s real estate sector last year attracted an additional 1.85 billion USD in foreign direct investment (FDI), retaining its second place among industries drawing FDI with combined investment of 4.45 billion USD.

Party chief’s book on fight against corruption and negative phenomena released

A ceremony was held in Hanoi on February 2 to release the book by General Secretary of the Communist Party of Vietnam (CPV) Nguyen Phu Trong.

Make in Vietnam drives ICT firms into international markets

Global expansion has become a trend in domestic ICT enterprises in recent years.

Schools launch digital-related majors to meet students’ needs

In 2023, many universities have launched new subjects associated with the digital era to meet students’ needs.

Southeast region prepares for new FDI wave

The southeast region is preparing conditions in infrastructure, administrative procedures and human resources to welcome a new wave of foreign direct investment (FDI), as investors have flocked to the region from the beginning of this year.

VIETNAM NEWS HEADLINES FEBRUARY 2/2023

PM chairs monthly teleconference with localities

Experts call for stricter penalties as drink driving soars over Tet

The maximum punishment for car drivers with alcohol concentration levels exceeding 0.4mg per litre of breath, or 80mg in 100 ml of blood, is a fine of VND40 million (US$1,693) and a two-year suspension of their driving licences.

Over 32% of apparel firms remain closed in Hanoi

Nearly a third of textile and garment firms have yet to reopen in Hanoi although the Lunar New Year holiday has ended.

Domestic tourism hits five-year high

Domestic tourism numbers hit 13 million in January, the highest in the last five years, according to the Vietnam National Administration of Tourism.

VIETNAM BUSINESS NEWS FEBRUARY 2/2023

Businesses exporting medicinal herbs to China required to register

Cashless payments on the rise: convenience and security for expats in Vietnam

As digital payment methods surge in popularity, expats in Vietnam are not alone in embracing the change to cashless transactions.

My Dinh Stadium needs money for more upgrading

Having been upgraded with a package worth VND408 billion, My Dinh Stadium is still in poor condition.

Vietnam needs more submarine cables to ensure internet services

Vietnam will need at least two or three more submarine cables to ensure proper internet services for the country's development in the next five years, according to Vu The Binh, Secretary-General of the Vietnam Internet Association.

Government convenes January meeting

The Government convened its first regular monthly meeting for 2023 in Ha Noi on Thursday under the chair of Prime Minister Pham Minh Chinh.

Scammers steal information, money on first days of Year of the Cat

The first days of the New Year are the time for scammers to increase their activities. The most common tricks are stealing information and money from victims’ accounts.
back_to_top