Vietnam’s private sector has become a critical driver of the economy, yet its growth remains constrained by structural challenges.

To unleash its full potential, policymakers must shift from passive policy implementation to a more dynamic and results-driven approach.

The Central Steering Committee needs to incorporate real economic data and business realities into decision-making, ensuring that General Secretary To Lam’s directives lead to tangible improvements for private enterprises.

The non-state economic sector, which largely consists of private businesses, currently contributes approximately half of Vietnam’s GDP.

It accounts for 56% of total social investment, 28-30% of total export value, and provides more than 82% of employment nationwide.

Despite these impressive contributions, the majority of private enterprises remain small, with low efficiency and limited competitiveness compared to foreign-invested firms.

Vietnam has produced a few large corporations such as Vingroup, Sungroup, Thaco, and Hoa Phat, but these remain exceptions. The country still lacks multinational enterprises with regional influence and core technological capabilities.

Many Vietnamese businesses struggle to expand due to difficulties in securing land, mobilizing capital, and adopting advanced technologies. At key moments of potential growth, they find themselves unable to access the necessary resources to scale up.

At the same time, many entrepreneurs choose to remain small to avoid regulatory scrutiny. Informal business practices, such as operating unregistered household enterprises or keeping multiple sets of accounting records, remain widespread. This preference for informality reflects a reluctance to embrace transparency, particularly in financial reporting.

As a result, businesses that do not fully integrate into the formal economy find it harder to grow sustainably and compete on a larger scale.

A legal and institutional framework that encourages businesses to operate transparently is essential. Instead of imposing punitive regulations, the government should focus on simplifying business laws and ensuring that compliance is both practical and beneficial. Institutional support should be available to help businesses transition from informal to formal operations. Clear and consistent economic policies must be in place to protect businesses that choose to operate legally and transparently.

Since 2021, Vietnam’s General Statistics Office (GSO) has stopped publishing separate data on household businesses and private enterprises.

Unofficial estimates suggest that registered businesses contribute 28% of GDP, while non-agricultural household businesses account for 12%, and agricultural households contribute another 10%.

To craft effective policies, the GSO must resume publishing transparent, detailed data on private sector contributions. A clear definition of the private sector is necessary to measure its economic impact and develop targeted strategies.

For years, the implementation of economic policies has been largely passive and bureaucratic. The standard approach involves issuing a resolution, conducting formal study sessions, assigning action plans to government agencies, monitoring implementation through the Central Economic Committee, and periodically reporting progress to the Politburo and Secretariat.

However, many action plans merely restate the resolutions without adapting them to real-world conditions. For example, Resolution No. 10 in 2017 aimed to develop the private sector, but the subsequent government action plans, Resolution 98 and Resolution 45, resulted in excessive paperwork with little practical impact.

Few businesses are aware of these resolutions, and no government agency is held accountable for meeting specific economic targets.

The goal of having 1.5 million active businesses by 2025 remains unmet, with fewer than 1 million currently in operation.

The lack of a designated authority responsible for this objective means there is no mechanism to track progress, enforce accountability, or ensure that targets are achieved.

To ensure that the upcoming resolution on private sector development is effectively implemented, Vietnam must adopt a more proactive strategy. A national Steering Committee led by the General Secretary should oversee execution, with the Central Policy Strategy Committee tracking real-world implementation.

A dedicated task force should be responsible for assessing the impact of policies, identifying challenges, and proposing necessary adjustments. Direct engagement between the government and business community should be prioritized, allowing policymakers to receive real-time feedback and refine strategies accordingly.

A dedicated policy team consisting of experienced officials and independent economic experts should continuously evaluate the effectiveness of government policies. Transparent, independent assessments should be reported directly to the General Secretary to ensure accountability.

By embedding real economic data and business realities into decision-making, the government can create policies that truly drive private sector growth.

Vietnam needs a fundamental shift in its approach to policy execution. Rather than treating resolutions as static documents, the government must ensure they remain active and responsive to the evolving needs of the private sector. Economic policies should not exist in isolation but should be continuously reviewed and adapted to real business conditions.

The success of Vietnam’s private sector will depend on a policy framework that is not only well-designed but also effectively implemented, creating an environment where businesses can grow, innovate, and compete on a global scale.

Tu Giang & Lan Anh