Vietnamese firms need to prepare for hidden risks
Vietnamese enterprises have
done well to improve productivity and sales in the face of several
challenges last year, but they need to temper optimism for 2014 with
awareness of risks that lie ahead, a new report says.
The Viet
Nam Chamber of Commerce and Industry (VCCI)'s Report on Corporate
Finance Competence says local firms need to prepare well for coping with
hidden risks associated with the expected economic revival even as they
look to take advantage of new investment and trade opportunities.
The
report noted that despite several positive achievements, Vietnamese
enterprises reduced their staff numbers as well as bank loans despite
lower borrowing costs.
In an online discussion of the report on
January 7, VCCI Secretary-General Pham Thi Thu Hang said that an upward
tick in the Corporate Sentiment Index showed enterprises were looking
forward to brighter economic prospects this year.
Their optimism
was based on positive results from enterprise reform that have "sorted
out good resources for development," including a rise in orders and
infrastructural improvements, she said.
However, Nguyen Truong
Son, vice chairman of the Vietnam Young Entrepreneurs' Association,
predicted that difficulties would dominate commerce this year.
His
view was echoed by Vo Tri Thanh, Deputy Director of the Central
Institute for Economic Management (CIEM), who warned that the slow
recovery of the global economy and the moves of emerging economies like
India and Malaysia represented a high degree of risk for Vietnamese
firms.
Vietnamese enterprises should take into account the
impacts of speculation as they built strategies for short-term
development, Thanh said.
He said local entrepreneurs should learn to adapt to global trends and apply them well in the local context.
Meanwhile,
Hang highlighted the need for long-term development strategies if local
firms are to benefit fully from the Government's policies.
Nguyen
Trong Hieu, deputy head of Enterprises Development Department under the
Ministry of Planning and Investment, proposed five measures to improve
the environment for domestic enterprises in 2014.
These included
the completion of a comprehensive legal framework that supports
development of Small and Medium Enterprises (SMEs), including pricing
and advertising regulations; the establishment of an SME Development
Fund and credit guarantee mechanism to facilitate the sector's access to
badly needed capital; and the promotion of a transparent information
system to connect enterprises, facilitating the exchange of products and
services.-VNA