We would like to introduce the article 'Private Sector Development – The Driving Force of a Prosperous Vietnam' by General Secretary To Lam.

Nearly 40 years of economic reform have marked Vietnam’s resilience, breakthroughs, and relentless pursuit of progress. From a centrally planned economy with inefficiencies and a per capita income of just $96 in 1989, Vietnam has rapidly ascended, projected to reach the upper-middle-income threshold by 2025 with an annual per capita income exceeding $5,000.

This transformation is not only the result of bold, strategic reforms led by the Party but also a testament to the hard work, ingenuity, and unwavering determination of the Vietnamese people.

Even amidst global economic fluctuations, Vietnam’s growth rate has consistently doubled that of developing nations, elevating the country to the 24th largest economy in the world by purchasing power parity (PPP).

These achievements extend beyond economic figures, reflecting significant social advancements that have enhanced the quality of life for millions of Vietnamese citizens.

Private sector development: a strategic and long-term national policy

This success would not have been possible without the substantial contributions of the private sector. In the early years of reform, private enterprises played a secondary role, with economic growth primarily driven by state-owned enterprises (SOEs) and foreign direct investment (FDI).

However, over the past two decades - particularly following the adoption of Resolution 09 (2011) and Resolution 10 (2017) on private sector development - Vietnam’s private sector has emerged as a key pillar of the economy, increasingly proving to be the most critical driver of national growth.

With nearly one million businesses and over five million household enterprises, the private sector currently contributes 51% of GDP, over 30% of state budget revenues, and employs more than 40 million people - accounting for 82% of the national workforce.

It has played a crucial role in expanding production, trade, and services, enhancing productivity, driving innovation, and improving Vietnam’s global competitiveness.

Many Vietnamese companies have established strong domestic market positions and are making strides internationally. This demonstrates that, given the right environment, Vietnamese enterprises can compete effectively on the global stage.

However, despite its growing contributions, the private sector continues to face structural challenges that hinder its ability to scale up and enhance competitiveness. Many household enterprises continue to operate under traditional business models, lacking incentives to formalize and expand.

The majority of Vietnamese private enterprises are small and micro-sized, with limited financial capacity, weak corporate governance, and inadequate technological adoption.

Many have yet to embrace digital transformation, invest in research and development (R&D), or adopt innovative business models, making it difficult for them to increase value-added production, enhance competitiveness, and achieve global recognition.

Beyond internal limitations, private enterprises also struggle with restricted access to capital, land, and skilled labor, particularly in high-tech, engineering, and financial sectors.

Meanwhile, some state-owned enterprises continue to control large portions of national resources, including land, capital, and high-caliber talent, yet fail to utilize them efficiently.

Moreover, regulatory inconsistencies, bureaucratic inefficiencies, and complex administrative procedures create obstacles for private businesses. The legal framework remains fragmented, and while SOEs and foreign firms benefit from certain advantages, private enterprises often encounter higher operational costs, excessive compliance requirements, and institutional biases. Corruption and informal costs further erode business confidence and hinder long-term growth.

A new chapter for Vietnam’s private sector

To achieve Vietnam’s goal of becoming a high-income nation by 2045, the private sector must be at the forefront of industrialization, modernization, and global integration. This requires:

Comprehensive institutional reforms and market liberalization to ensure a level playing field, regulatory transparency, and a pro-business environment.

Robust protection of property rights, investment security, and contractual enforcement to enhance investor confidence and attract capital inflows.

Fostering globally competitive private enterprises by supporting high-potential firms to scale up, enter high-tech industries, and engage in strategic national projects such as high-speed rail, renewable energy, and digital infrastructure.

Promoting innovation and digital transformation through R&D incentives, venture capital funding, and a thriving startup ecosystem.

Enhancing private sector access to capital and resources, including land reforms, transparent financial mechanisms, and fairer market access.

Administrative streamlining to create a business-friendly government that minimizes red tape and maximizes efficiency.

Ensuring sustainable and responsible private sector development, with a focus on corporate social responsibility, green technologies, and ethical business practices.

A vision for Vietnam’s economic future

The private sector is the backbone of Vietnam’s economic growth. By removing institutional barriers, strengthening governance, and fostering entrepreneurship, the country can unlock its full economic potential.

Vietnamese businesses must aspire to global competitiveness, drive technological advancements, and contribute to national prosperity.

As Vietnam enters a new phase of industrialization and modernization, collaborative efforts between the government, private sector, and international partners will be instrumental in shaping a dynamic, resilient, and inclusive economy. The path to becoming a high-income nation is within reach, with a strong, competitive private sector leading the way.

Vietnam stands at a historic crossroads, witnessing unprecedented advancements in science, technology, and global economic shifts. Despite challenges, the nation’s entrepreneurial spirit, determination, and ambition will propel Vietnam towards a new era of economic excellence.

A strong, visionary private sector will not only drive economic growth but will also ensure Vietnam’s rightful place among the world’s most prosperous nations. The time to act is now - to build a thriving, innovative, and globally integrated private sector that secures Vietnam’s future prosperity.

General Secretary To Lam