Despite difficulties and challenges lying ahead, Vietnam will be able to control inflation below the target set by the National Assembly this year, according to experts.

PhD. Nguyen Duc Do, deputy director of the Institute of Economics and Finance (Academy of Finance), says inflationary pressure is not expected to be high in 2024 because major world powers, especially the United States and China, are set to grow slowly.

Amid the slowing world economic growth forecast, Vietnamese exports in 2024 will probably grow moderately. Furthermore, the industry - construction sector and the entire economy in general will also be impacted and have low growth this year as the real estate market is anticipated to remain in the doldrums.

If GDP growth hovers around 6% in 2024 as planned, or the 4.64% recorded in the 2020 - 2024 period on average, the economy will still not operate within its capacity. This can be seen as a factor in curbing inflation, with the average inflation for the whole year forecast to be around 3% - 3.5%, which is lower than the 4% - 4.5% target set by the National Assembly, analyses PhD. Do.

Given the current and future context, the inflationary pressure will not be high, and more importantly, anti-inflation policies introduced by the State Bank of Vietnam have so far proved to be effective over the past 10 years, adds the expert.

However, to keep inflation in check for 2024, economic experts suggest that the Government, ministries, sectors, and localities all closely monitor the health of the world economy, especially in relation to major economic powers, in order to take appropriate response measures. Priority should therefore be given to ensuring the market law of supply and demand to stabilise domestic prices.

According to PhD. Vu Dinh Anh, a leading economic expert, Vietnam managed to keep the average consumer price index (CPI) at 3.25% by the end of 2023. If fuel and food were excluded in the commodity basket for inflation calculation, core inflation or basic inflation would still be above 4%.

The country should duly keep a close watch on monetary inflation factors in the year ahead, particularly those caused by public investment disbursement and credit increases, warns the economist.

Danang ready to take off in 2024

After Prime Minister Pham Minh Chinh approved the planning for the rest of this decade and with a vision to 2050, the central city of Danang is converging many factors to create rapid development momentum.

Danang has proactively sought new motivation for development. In particular, the semiconductor and AI industrial ecosystem is one of the breakthroughs that the city aims to innovate its growth model. Therefore, in recent times, many shuttle activities have been carried out by Danang to prepare infrastructure, human resources, and invite investment in this field.

At the end of 2023, Danang High-Tech Park and Foxlink International Investment of Taiwan invested in the Foxlink Danang electronics factory project. The project will cost up to $135 million, operating in high-tech electronic equipment manufacturing.

Also within the framework of a business trip to the United States in November, leaders of Danang held meetings and working sessions with companies and corporations in semiconductor chips such as Qorvo, Marvell, Nvidia, and Intel.

According to statistics, Danang has about 250 businesses operating in manufacturing, processing, and assembling electronic components with over 10,000 employees. Currently, companies operating in integrated circuit design such as Synopsys, Uniquify, and Savarti are also present in the city.

Regarding ICT infrastructure, Danang currently has one high-tech park, six industrial and export processing parks, and three IT and software parks in operation.

The city has invested in the construction of Software Park 2, which is currently completing legal procedures to put into operation. It is also continuing to expand Danang Centralised IT Park’s phase 2, attracting investment in Hoa Xuan Creative Space, and supporting construction of Viettel’s high-tech building and Danang Bay IT Park. That infrastructure is guaranteed to be ready for corporations and electronic, microchip, and semiconductor businesses.

Truong Gia Binh, chairman of the Board of Directors of FPT Group, shared that he sees a bright future for Danang, with Vietnam gradually becoming a destination for the semiconductor industry.

“Danang has many advantages. It has the highest ratio of universities per population in the country, and students account for 10 per cent of the population. Many major IT and semiconductor companies in the world are already in Danang,” Binh said.

In addition to the semiconductor industry, Danang is also aiming to become a regional financial centre. Detailed drawings of the financial centre have been completed. This year, a strategic investor will be selected to develop the centre, which will include financial centre zoning planning and other detailed plans. A mechanism will also be established to create the Vietnam International Financial Centre Development Council.

Towards 2030, a focus will be laid on completing the infrastructure of Danang’s international financial centre, including hard infrastructure such as offices, complexes, and soft infrastructure such as financials and IT.

Danang is deemed to have many advantages to form an international financial centre, with its geographical location and connectivity, and strong conditions in terms of urban infrastructure, living environment quality, and basic development needs. In addition, Danang is oriented to become a national innovation centre, with the foundation and infrastructure advantages to form a fintech centre.

There is a 6.17 hectares of available land planned for the establishment of the financial centre complex, with robust connectivity and infrastructure conditions.

The planning for Danang this decade and with a vision to 2050 has oriented and created new development dynamics. It will turn Danang into a large urban area, high-tech industrial centre, and IT centre; an international financial centre on a regional scale; and a liveable coastal city at the Asian level. Danang is therefore facing a great opportunity to assert itself in the international competition.

The completion of the plans is an essential premise for the development of Danang because it will create a legal basis, orient key areas, and serve as a driving force for the next phase of growth.

Strategic investors and large domestic and international corporations are therefore also more comfortable pouring investment capital into the city. At the ceremony to announce Danang’s planning, the city approved seven projects. This included six projects with domestic investment capital and one foreign-led project, with total capital at nearly $400 million.

Le Trung Chinh, Chairman of Danang People’s Committee said, “The planning for this decade and with a vision to 2050 is an extremely important legal basis, creating a solid corridor for sustainable development of the city in the new period; is the foundation to continue exploiting and promoting local potentials and strengths.”

The results of socioeconomic development in 2023 once again reflect Danang’s efforts to overcome difficulties. It maintained regional GDP growth in 2023 by 2.58 per cent, and the scale of its economy is estimated to be around $5.65 billion, an increase of $422 million compared to 2022.

Danang has completed and been approved by the government’s city planning for the 2021-2030 period, with a vision to 2050. At the same time, 9/9 urban subdivision planning projects and 4/10 functional construction subdivision planning projects have been all but completed.

Ninh Thuan inspired to form effective agriculture

As Vietnam is stepping up efforts to cope with climate change, investment into adaptation activities will produce positive impacts in the short and long term.

On the last days of 2023, Hung Ky, chairman of Tuan Tu General Service Cooperative of Ninh Phuoc district in the south-central province of Ninh Thuan, expressed his delight at his newly built house, with a car and pickup truck in the garage.

The 54-year-old owns 21,000 square metres of land, part of which is for the house and the rest for planting asparagus and raising cows.

“Our life has remarkably changed,” Ky said. “Previously, our family members used to be hired farmers with a meagre income. We decided to shift to cultivating crops such as peanuts and carrots, but the soil was not good, making it hard for us to do this business, meaning we faced massive difficulties.”

A new door was opened to Ky in 2009 when the family started to grow asparagus, but at that time they suffered from water shortages.

“When the weather was fine, we could have sufficient water for the crop, but during the drought period, we struggled. It was not until 2017 that the locals here were provided with a large water tank by the Asian Development Bank (ADB), with water pumped from the nearby Tuan Tu dam. Since then, the life of residents here has changed,” Ky explained.

Nao Van Xay, another local in the commune, also talked about the water tank. “It has become a lifebuoy for all poor households and for the arid land area here. Over 10 years ago, this area was a miniature desert for the Cham ethnic minority. However, you can see the land covered with green asparagus thanks to the ADB’s project helping water flow,” Xay said.

Difficulties in agricultural production facing local inhabitants were gradually removed by Ninh Thuan People’s Committee that invested in constructing a network of irrigation works, including reservoirs, pumping stations, and canals.

However, the province partook in a governmental project on rural development in the central region (Phase 2 with additional loans) aimed at rural infrastructure development and implementation of projects for climate change response.

For this project, Ninh Thuan constructed water-saving irrigation works to produce safe vegetables under an added value chain from production to consumption. The works include upgrading the Tuan Tu dam as well as building a canal, two pumping stations, 15 tanks, a pipe system, and a system of electricity grid and power stations.

Inspired by these effective projects, Ninh Thuan continued to cooperate with the ADB to implement a project on improving water efficiency for drought-affected provinces.

The goal is to turn the arid land areas of Phuoc Nhon, Thanh Son, Nhon Hai, and Thanh Hai in the Tan My irrigation system into a high-quality agricultural production area, with a modern system originally designed for rice cultivation.

At the same time, the project aims to ensure water supply for 2,800ha of land and solve water scarcity due, while supporting farmers to switch to growing high-value crops with higher income.

In addition, the project also supports water supply and demand monitoring, as well as making drought plans and emergency plans in order to control severe droughts.

The project is divided into four construction packages, with a land area of nearly 69ha, and is being implemented from 2018 to 2026. The deployment is ensured by the Management Unit of Agricultural and Rural Development Works.

Dang Kim Cuong, director of Ninh Thuan Department of Agriculture and Rural Development, said that since 2019, the ADB has financed a pumping station to bring water from the Tuan Tu dam to the arid land area of Tuan Tu. Next, the province obtained preferential loans from the ADB to invest in five irrigation infrastructure projects with a total capital of $57 million.

“Before investing in the irrigation system, many areas of Ninh Thuan had unused water, while many places were quite dry, and hit by droughts. Now the situation has changed, with water distributed evenly according to farmers’ crops.” Cuong said.

“Farming on arid land like a desert is very difficult. Costs are high, so we have to save every drop of water. Now every family applies modern watering systems. Each area of 1,000sq.m only needs 7-9cu.m of water a day. This is very different from the previous method of overflow irrigation, which would consume more than 30cu.m of water a day.”

While quickly arranging and tying each bunch of asparagus, Chau Thi Tram of the Cham ethnic minority in An Hai commune said that in one night, the plant grew 3cm and by 8am, the harvesting of the asparagus was completed.

On average, each area of 1,000sq.m of asparagus yields 5-7kg a day, which are sold at a market price of about $2.10 per kg. The highest productivity is seen in the third year, reaching 20kg per 1,000sq.m a day. Every year, the locals can earn an average of $16,900-21,000 per 1,000sq.m a year, which is three to four times higher than other crops in the same area.

After three months of harvesting, the plant rests for a month and then continues to be harvested for a life cycle of about nine years.

“Nowadays, almost every house in the Tuan Tu village grows asparagus, so it is very difficult to hire local workers. During the peak time, some even earned over $4.000 a month, but now it’s about $2,500. About 30 per cent of the villagers now have their own cars,” Tram said.

Along with houses growing asparagus, the Tuan Tu General Service Cooperative led by Hong Ky was established in 2016, with 13 members to share experiences and support farmers in agricultural production.

In the first year, the cooperative both purchased products from members and cooperated with a number of local businesses to sell green asparagus, with a stable price throughout the year of $2.10 per kg.

To date, the number of the cooperative’s members has increased to 84, and the area planted with asparagus has risen to more than 53ha.

After the asparagus purchase is completed at 9am, Tram and her relatives often have breakfast together. They look back to the past when the area was full of sand, which got into the house and was difficult to remove. However, the houses have now been built closer together, and where there is empty land, asparagus is planted, so sand no longer covers the area.

“In the past, when asparagus was not grown, the price of 1,000sq.m of land was $1,700, but now it has soared by 10 times, while there is no more land to buy or sell,” Tram added.

Vietnam’s consumer gold demand down in 2023

Vietnam saw a slight drop in consumer gold demand, down 6 per cent on-year, from 59.1 tonnes in 2022 to 55.5 tonnes in 2023, according to the World Gold Council’s Gold Demand Trends report.

It said that gold bars and coins saw a modest on-year decline in 2023, settling at 40 tonnes, reflecting a marginal decrease of 2 per cent. Notably, investment in Vietnam gained traction in the fourth quarter, spurred by a price correction.

However, Vietnam experienced a substantial downturn in jewellery demand, declining by 16 per cent to 15 tons. This decline was marked by four consecutive quarterly on-year decreases, attributed to slowing economic growth and relatively high inflation in the region.

Shaokai Fan, head of Asia-Pacific (ex-China) and Global head of Central Banks at the World Gold Council said, "In the fourth quarter, Vietnam experienced an investment surge propelled by a price correction. However, increased demand and limited gold investment options led to a substantial premium on official SJC tael bars, reaching approximately $600-700 per ounce. The steady decline in the value of the local currency throughout 2023 further fuelled demand, especially amid a fragile economic environment."

The World Gold Council’s Gold Demand Trends report reveals that annual gold demand (excluding OTC) fell to 4,448 tonnes in 2023, down just 5 per cent from a notably strong 2022. When factoring in demand from the OTC markets and other sources, total demand climbed to a new annual record of 4,899 tonnes. Investment from this more opaque source of demand supported 2023’s highest annual average gold price on record.

The central bank's buying streak continued on from 2022 at a blistering rate. Demand reached 1,037 tonnes last year, making it the second-highest on record, down 45 tonnes on the previous year.

Turning to bar and coin investment, global demand was subdued and down 3 per cent as strength in some markets worked to offset weakness elsewhere.

In other ASEAN markets, including Vietnam, Malaysia, Indonesia, and Singapore, bar and coin demand experienced a decline of 2 per cent, 4 per cent, 5 per cent, and 8 per cent respectively, on-year.

European demand continued to plummet, down 59 per cent on-year. This decline was offset by a strong post-pandemic recovery in China, where annual retail investment demand was up 28 per cent to 280 tonnes; combined with notable increases in India to 185 tonnes, Turkey 160 tonnes, and the US 113 tonnes.

The global jewellery market turned out to be remarkably resilient amidst record-high prices, as demand inched up by 3 tonnes on-year. China played an important role, recording a 17 per cent increase in demand for gold, as it recovered from COVID-19 lockdowns, offsetting a 9 per cent decrease in India.

Mine production was relatively flat in 2023, up 1 per cent. Recycling increased by 9 per cent, which was lower than expected given the high gold price, and drove total supply up 3 per cent.

According to Louise Street, senior markets analyst at the World Gold Council, unwavering demand from central banks has been supportive of gold demand again this year and helped offset weakness in other areas of the market, keeping 2023 demand well above the ten-year moving average.

“In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand, and in 2024 we expect this to have a pronounced impact on the market. Ongoing conflicts, trade tensions and over 60 elections taking place around the world, are likely to encourage investors to turn to gold for its proven track-record as a safe haven asset," Street said. “We know that central banks often cite gold’s performance in times of crisis as a reason to buy, which suggests demand from this sector will stay high this year and may help to offset a slowdown in consumer demand due to elevated gold prices and slowing economic growth.”

Work begins on Metro Line 2 in HCMC

The Management Authority for Urban Railways (MAUR) has started work on Metro Line No. 2, which will connect Ben Thanh Market in District 1 and Tham Luong Depot in District 12.

The project requires nearly VND47.9 trillion, which will be sourced from the Asia Development Bank (ADB), Germany’s KfW Development Bank, European Investment Bank (EIB), and Vietnam.

The 11-kilometer urban rail line will consist of one elevated and nine underground stations, and pass through districts 1, 3, 10, 12, Tan Binh, and Tan Phu.

The project needs a total of 251,136 square meters of land. Compensation and support for resettlement will exceed VND3.75 trillion. Over 86% of cleared land has been handed over to the project.

It was originally scheduled for completion in 2026, but land clearance delays have led to the completion date being pushed back to 2030.

Vietnam likely to extend visa waiver to more countries

Vietnam is weighing extending a unilateral visa waiver to more countries, especially those having upgraded ties with the nation.

Prime Minister Pham Minh Chinh has issued a directive ordering ministries to prepare plans for coping with ongoing challenges at home and abroad following the Lunar New Year holiday.

The directive asks the Ministry of Public Security to look into the possibility of offering visa exemptions to citizens of more countries based on the current circumstances and bilateral relationships.

The Ministry of Foreign Affairs is tasked with reviewing the unilateral visa exemption policy for citizens of 13 countries which has been in force over the past few years, and working with the Ministry of Public Security to make a new list of countries eligible for a unilateral visa waiver.

Last year, Vietnam’s tourism sector performed better than expected. International visitor arrivals reached 12.6 million, nearly 3.4 times higher than in 2022, while the full-year target was eight million.

This year, the tourism industry aims for around 18 million international visitors and 110 million domestic tourists, with total revenue of VND840 trillion.

Private sector shows interest in HCMC-Tay Ninh road expansion

Several investors have expressed keen interest in a project of expanding National Highway 22, which connects HCMC and Tay Ninh Province.

Among the interested parties are a conglomerate comprising three construction companies— Vietnam Construction 168, Dac Dao Construction JVC, and Dong Thuan Ha Co. Ltd; Trung Nam Corporation, and Construction Investment Corporation 194.

The HCMC Department of Transport has disclosed that the selection process for the project’s contractor is set to commence in the third quarter of the upcoming year through a bidding invitation.

The expansion project, covering a 9.1-kilometer road section from An Duong intersection to Beltway No. 3, requires an investment of VND7,173 billion. This is one of the five build-operate-transfer (BOT) projects benefiting from special mechanisms under the National Assembly’s Resolution 98.

National Highway 22 is a crucial link between HCMC, Moc Bai International Border Gate, and Cambodia. However, frequent traffic congestion has plagued the route in recent years due to its narrow design and the substantial volume of vehicles traversing it.

Vietnam earmarks US$27 billion for public investment in 2024, mainly infrastructure

Prime Minister Pham Minh Chinh, speaking at a meeting on infrastructure projects of national importance today, February 16, said that the Government has set aside around VND657 trillion (nearly US$27 billion) for public investment this year, with more than two-thirds of the amount going to infrastructure projects.

He called for ministries and agencies to accelerate the construction of key infrastructure projects nationwide this year.

Disbursement of public investment in infrastructure projects will not only help reduce logistics costs and lower input expenses but also enhance the competitiveness of local businesses, he said, adding it would contribute to developing industries, services and urban areas.

The disbursement target is at least 95%.

He expressed concern that a couple of projects are falling behind schedule due to time-consuming procedures and site clearance, and poor coordination among relevant parties.

Solutions are needed to expedite construction work while ensuring quality and addressing bottlenecks in official development assistance (ODA) loan disbursement and the use of sea sand for infrastructure development projects, he said.

Currently, there are 34 major infrastructure projects and 86 components under construction in 46 cities and provinces nationwide, including five railway projects, two airports, and multiple expressways and beltways in HCMC and Hanoi.

Thousands of job vacancies available in Binh Duong post Tet

Following the Tet holiday, businesses in Binh Duong Province have great demand for hiring, with around 60,000 jobs available across various sectors, according to the Binh Duong Department of Labor, Invalids, and Social Affairs.

Compared to the previous year, employment in the province has shown greater stability as businesses have resumed hiring after the Lunar New Year holiday. The manufacturing and processing industry, including food and beverage, textile and garment, and electronic industrial equipment, shows the highest demand, with 48,500 job openings.

Other processing industries are expected to hire around 6,000 workers, while the transportation and warehousing sectors aim to hire 300. The lodging and catering services sector plans to employ 1,000.

At the beginning of the year, Binh Duong’s Department of Labor, Invalids, and Social Affairs normally organizes online and offline job bazaars to facilitate and enhance the matching of demand and supply in the labor market. Authorities are also gathering information on job seekers in the province to build a database aimed at improving connectivity with employers.

HAGL to issue 130 million shares via private placement
 
Hoang Anh Gia Lai Joint Stock Company (HAGL), whose HAG shares are traded on the Hochiminh Stock Exchange, has got approval from the State Securities Commission of Vietnam to issue 130 million shares via private placement.
The firm’s shares will be offered at VND10,000 each.

Of those, 50 million shares will be purchased by LPBank Securities, while another 52 million shares will be bought by Thaigroup. The remaining 28 million shares will be acquired by Le Minh Tam, LPBank Securities’ chairman, as an individual investor.

Hoang Anh Gia Lai JSC is expected to mobilize VND1.3 trillion from these transactions to repay debt and inject capital into its subsidiaries.

Regarding its business performance in the fourth quarter of 2023, the company made nearly VND1.9 trillion in revenue, up by 15.8% year-on-year, and around VND1.1 trillion in after-tax profit, skyrocketing by 376.8% over the same period last year.

PM calls for action on gold market management

Prime Minister Pham Minh Chinh has directed the State Bank of Vietnam (SBV) to review Decree 24 on gold trading and propose solutions for market management in the first quarter of this year.

Decree 24/2014 was introduced to combat the “goldization” of the economy, with SJC recognized as the national gold bar brand. “Goldization” refers to the tendency of individuals to hoard and make transactions in gold rather than using the national currency, driven by concerns over currency depreciation. This term was first referred to in a Government decree issued in 2012, which sought to address and mitigate this behavior.

On February 15, PM Chinh issued Directive 06 emphasizing the need to address gold market volatility, which is attributed to the SBV’s policy of not importing gold for production, resulting in gold being in short supply and domestic gold prices being higher than global levels.

To bridge the gap between domestic and global gold prices, which reached up to VND20 million per tael (a tael equals to 1.2 troy ounces) by the end of 2023, the central bank and relevant agencies have taken measures for intervention. These include increasing SJC gold supply so that the price would not lead to exchange rate fluctuations and inflationary pressure.

In addition to addressing challenges in the gold market, the directive calls for ensuring credit growth by 15% in 2024 to meet the economy’s capital demand. The SBV is tasked with simplifying procedures, facilitating capital access for businesses, and lowering loan interest rates to discourage informal lending and loan sharking.

Given forecasts of global and domestic economic difficulties, the Government has urged ministries and localities to reform administrative procedures and alleviate business challenges. Local governments are instructed to expedite land clearance for infrastructure projects like the Quang Trach-Pho Noi 500kV power line segment, ensuring completion and handover to investors in the first quarter.

PM Chinh has directed the Ministry of Planning and Investment (MPI) to monitor and expedite public investment capital disbursement in 2024, with reports on fund allocation extensions due before June 30.

The Ministry of Finance is tasked with stringent management of revenue sources and cost savings, and strengthening collaboration with the SBV and the MPI on measures to upgrade the stock market from frontier to emerging status, with a report due to the PM before June 30.

The Ministry of Industry and Trade is tasked with monitoring international freight transportation, proposing solutions to reduce shipping costs, prevent export disruptions, and ensure adequate supply of petroleum products to maintain market stability.

Thinking Big: Vietnamese enterprises aim high to secure success

There is a lack of initiative on the part of Vietnamese companies to seize opportunities, improve their awareness and capabilities, and expand their vision for greater achievements.

 In 2023, many local insiders witnessed VinFast's efforts in its global projection when it became the first Vietnamese automaker to be listed on the Nasdaq stock exchange.

This is a significant milestone and an iconic symbol of Vietnamese companies venturing into the international market. However, VinFast is not the first Vietnamese company to go global. There have been hundreds of Vietnamese companies that have made outbound investments and achieved great success.

Viettel Global reported that in 2023, the company continued to reaffirm its position as Vietnam's leading outbound investor. Its cash flow from the third quarter of 2023 reached VND2.86 trillion (US$117.4 million), accumulating nearly VND5 trillion (US$205 million) in the first nine months of the year.

In early December 2023, FPT also announced that it had reached the milestone of earning US$1 billion from the overseas market.

In addition to Viettel and FPT, there are many other companies such as Vinamilk, TH Group, Hoang Anh Gia Lai, and Vietnam Rubber Group (VRG) that have invested overseas and achieved favorable business results.

In addition to outbound investors, there are thousands of Vietnamese companies that export goods and trade abroad, contributing significantly to the country's revenue and expanding the outreach of Vietnamese products and brands to markets around the world.

Figures from the General Statistics Office showed that in the first nine months of 2023, Vietnamese investors poured $244.8 million into 84 newly licensed investment projects abroad. Vietnam's total overseas investment (including new and adjusted capital) reached US$416.8 million.

In terms of foreign trade, in the first ten months of 2023, the country's total import-export turnover of goods reached $557.95 billion, with an estimated record trade surplus of $24.61 billion. These figures indicate that Vietnamese enterprises are stronger exporters than overseas investors. Net income from overseas investment remains modest.

But these statistics also paint a different picture. Vietnamese enterprises are no longer novices in foreign markets, as there are positive precedents.

Today, Vietnamese enterprises are faced with significant opportunities. As of October 2023, Vietnam has signed and negotiated 17 free trade agreements. Among them, 10 agreements are currently in force and being diligently implemented, three agreements have been signed or negotiations completed but are not yet operational, and four agreements are currently under negotiation.

At present, Vietnam has diplomatic relations with 192 countries and economic relations with more than 221 foreign markets. The country is also a member of various international organizations and forums. These macro-level opportunities ensure a legal framework and fair treatment for Vietnamese enterprises and their products to enter the international market.

In 2023, Vietnam  welcomed many foreign leaders, such as US President Joe Biden and Chinese President Xi Jinping, who came to Vietnam accompanied by hundreds of large enterprises with ambitious investment and business plans. Following these visits, economic activities are expected to flourish and provide numerous opportunities for Vietnamese businesses.

In addition, tensions between some major economies have led to the relocation of investment capital and factories to Vietnam as a new destination, resulting in the establishment of thousands of supporting manufacturing companies and other business opportunities.

The current situation and opportunities indicate that Vietnamese enterprises face the convergence of favorable conditions to rise and become an effective actor in the international economy. Their international integration is not only about revenue and profit, but also about reaffirming the courage, strength, resilience, and aspirations of the Vietnamese people. Their greatest challenge is the task of self-improvement.

Currently, over 97% of Vietnamese businesses are small and medium-sized enterprises (SMEs), with weak financial resources, vulnerable to market fluctuations, and low competitiveness compared to international peers.

However, the biggest shortcoming of most SMEs is their lack of awareness and proactivity. Some companies still operate with short-term thinking, engage in opportunistic practices, and fail to plan strategically for the long term, resulting in a lack of consistent investment in both human and financial resources. These companies also often have little initiative to seize opportunities, improve their awareness and capabilities, and expand their vision for greater achievement.

There is underinvestment in building corporate culture and complying with laws and regulations. A business mindset based on relationships, rather than one based on principles and well-thought-out plans, is still a deep-seated problem. This is the root cause of hesitation and uncertainty in business operations over time.

There are also external factors that make it challenging for Vietnamese businesses to grow, such as the immaturity of market economy factors, including a lack of transparency and effectiveness in policies and laws, as well as widespread administrative intervention in market activities.

Negative attitudes and behaviors on the part of a small segment of regulators make entrepreneurs reluctant to make long-term, systematic investments. These negative factors also turn into negative forces within companies through chain effects and linkages.

In addition, Vietnamese businesses face many disadvantages compared to those in other countries, such as high cost of capital, difficult borrowing conditions, and short loan maturities, which create difficulties in financial and business planning.

From an objective point of view, as Vietnam's economy has changed and flourished over the years, historical and inherent shortcomings and difficulties are being addressed and resolved rapidly over time.

The government, ministries and sectors have been aware of these problems and have made continuous efforts to assist the business community in overcoming the challenges.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes