Illustrative photo (Photo: VNA) Hanoi (VNA) – The Government’s Resolution issued on March 31 on implementing a Party’s Resolution on the promotion of the private economic sector set a target of having about 1.5 million enterprises by 2025 and, according to experts, this requires breakthroughs in policies.
Vietnam used to set a target to have 1 millionenterprises by 2020, but it failed due to various reasons, especially the impacts of the COVID-19 pandemic in the past few years.
Adverse impacts, international conflicts, shrinking commodity consumption markets, and supply chain disruptions have prevented theestablishment of new businesses. As a result, many businesses have gone bankrupt andhad to withdraw from the market.
According to the Ministry of Planning andInvestment, to have 1 million businesses operating in 2020, the growth rate ofthe number of enterprises must have topped 17% per year in the previous period,while the actual rate was just over 10%.
Deputy Minister of Planning and Investment Tran DuyDong said that policies to support enterprises, particularly small- andmedium-sized enterprises (SMEs) have yielded encouraging results over the recent year. Theaverage growth rate of enterprises in the 2016-2019 period is 14.4%, anincrease of about 80% compared to that during the 2011-2015 period. Privateenterprises currently make up about 46% of the Gross Domestic Product (GDP).
However, there is still a gap between policies andrealities. The quality of reform and the effectiveness of the Government’ssupport for businesses are still limited. Out of the about 865,000 operatingenterprises, 98% are private SMEs. Particularly, in the first quarter of 2023,the whole country had 57,000 new enterprises and returned to operation, down5.4% over the same period in 2022. But more than 60,000 enterprises withdrewfrom the market, an increase of 17.4% compared to the same period in 2022.
A worker operates the household appliance production line at Son Ha Household Appliances Factory in Phung Industrial Cluster, Hanoi's Dan Phuong district.(Photo: hanoimoi.com.vn)
For the new target of 1.5 million enterprises by2025, according to experts, the Government must support not only theestablishment of new enterprises but also the operation of the existing ones toavoid the case that the number of withdrawals is higher than that of the new.
Economic expert Nguyen Dinh Cung said that from thenational level to localities, each must set specific goals with an identifiednumber of enterprises to be established yearly and measures to realise thegoals.
Economist Vu Dinh Anh said that to have 1.5 millionenterprises by 2025, it is necessary to focus on encouraging individualbusiness households to turn into enterprises.
It is also necessary to develop enterprises in thefields of the digital economy and green economy which Vietnam is prioritising.
According to the Ministry of Planning andInvestment, Vietnam will keep promoting reform in state management of privateenterprises. The government and management agencies also persist in sixgroups of solutions to promote business development, including post-pandemicsupport to businesses and developing big enterprises which take a leading role inindustries. Vietnam also promotesresearch and innovation in enterprises, develops high-quality human resources, strengthens business linkages, and improves the efficiency and effectiveness ofmanagement for business development./.
