The domestic private sector in Vietnam is still relatively underdeveloped and faces major challenges said speakers from the Ministry of Planning and Investment at a recent economic forum in Hanoi
In a keynote address, Minister Bui Quang Vinh told the audience that since Doi Moi reforms began in the 1980s and governmental leaders opened the country to international trade and investment, the country has experienced marked economic growth.
But it has largely been the strong response from foreign multinationals that has transformed the economy into a dynamic market-oriented one without a corresponding answer from the domestic private sector.
Though this economic growth has contributed to lifting tens of millions out of poverty, this prosperity has not been broadly shared among the population and just as many citizens have received little to no benefit at all.
The country now finds itself at a crossroads, said Minister Vinh, with economic growth slowing down compared to that of the past decade to well below 7%— and lower than what is needed to transition the country as a whole to middle income status.
Vietnam now must turn to entrepreneurship and the domestic private sector to shoulder more of the load to continue down the path to improved prosperity and a higher standard of living for all its citizens.
Simply stated, entrepreneurship is about innovation and managing a business venture in a competitive global marketplace that is constantly evolving with the overarching objective of benefiting the entire Vietnamese society.
Entrepreneurs are a special brand of people who buck tradition, innovate, invent and actively lead and build small companies and then turn them into larger ones and eventually into multinationals.
They are, said Mr Vinh, in essence the engine for the growth of the Vietnam economy of tomorrow.
To support entrepreneurship the government is rolling out new draft laws in support of small-and medium-sized businesses with the goal of promoting some one million start-ups.
The objective is to create a level playing field for state-owned and domestic private sector businesses giving the latter better access to debt and equity capital so they can retool and become more competitive with their foreign peers.
This should allow entrepreneurs to position themselves to take better advantage of opportunities presented by free trade agreements for expanded trade in overseas markets, which in turn will create higher paying jobs for Vietnamese workers.
The new laws will also speed up the resolution of bad debts in the banking segment, which in and of itself will provide more long-term capital for small businesses. In addition, it will help develop the bond, securities, pensions and insurance markets, which are additional sources financing.
Vietnam has a bright future, said Mr Vinh, if it can find the financial resources and unleash its entrepreneurs and fully capitalize upon the innovativeness and creativity of the domestic private sector.
With entrepreneurs as the pillar, the economic success of the country will grow and tens of millions more Vietnamese citizens will have a better chance of finding good paying jobs and sharing in the country’s growing prosperity.