VietNamNet Bridge - Although the private sector is an important driving force for the country’s development, private businesses still have to travel a thorny path to expand and develop.

Mr Vo Tri Thanh

Vo Tri Thanh, an economist, said at a recent conference on private sector development that there are still too many obstacles encircling private businesses. 

He mentioned property rights. “Property rights are greater than ownership. In the broadest sense of the word in Vietnamese, it relates to many problems, including assets associated to land, competition, and approach to resources and business environment,” Thanh said.

Vietnam has large corporations, but most of them are in the real estate sector. The country needs more large corporations in manufacturing and processing industries in the 4.0 industrial revolution era.

CIEM’s (Central Institute of Economic Management) deputy head Phan Duc Hieu also mentioned property rights. “If businesses don’t feel safe about property rights, they will not want to do business,” he said.

Regarding obstacles against private businesses, Hieu said there are five problems:  high costs and time to follow the laws, legal risks, and security in doing business.

Hieu said businesses cannot anticipate administrative procedures, and therefore,  may lose business opportunities.

For example, a company wants to import vaccines to sell in the domestic market when epidemics break out. It predicts that it will take three days to follow procedures and get a customs clearance. However, it has to spend seven days to get imports cleared. As a result, the company cannot launch vaccines on the market as scheduled.

“The safety in doing business, in people’s thoughts, means the non-criminalization of economic relations. Meanwhile, we rarely mention property rights,” Hieu said.

The security of Vietnam's property rights is poor, especially intellectual property rights. A report said Vietnam ranks 88th among 128 countries in this term. 

The fourth problem, according to Hieu, is competition. And the fifth lies in governance.

“The resolutions released by the government just focus on reducing the time to follow procedures and easing business cost, but they have not mentioned other issues,” Hieu commented.

Thanh also said that the government has settled one problem – removing barriers to pave the way for businesses to join the market. 

The expert, who has completed in-depth studies on the private sector, commented that Vietnam has many big enterprises in terms of revenue and number of workers, such as Vinamilk, FPT and Vietjet, but still doesn’t have powerful conglomerates.

‘Powerful conglomerates’, as defined by Thanh, are enterprises which have global brands, creative technologies and can control distribution networks.

Pham Chi Lan, also a renowned economist, commented that Vietnam has large corporations, but most of them are in the real estate sector. The country needs more large corporations in manufacturing and processing industries in the 4.0 industrial revolution era.

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