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Law necessary to improve function of business groups

Update: April, 25/2013 - 10:10
HCM City has around 70 industry associations, including 30 for foreign businesses.—Illustrative image/Photo huba.org.vn

HCM CITY (VNS)— Legislation is necessary to streamline the functioning of business groups and ensure they offer their members better support, a workshop heard in HCM City.

Speaking at the event held by the HCM City Union of Business Associations (HUBA) on Monday to improve the functioning of business groups, a delegate said there are no laws regulating industry associations, only a decree on their organisation and operation.

Because of this and a lack of mechanisms, most industry associations can only make recommendations and cannot make any decisions, he said.

Also due to the lack of mechanisms, member companies cannot establish close co-operation with each other, especially for export-related activities, which affects their business.

Delegates said HCM City has around 70 industry associations, including 30 for foreign businesses.

A survey by the HCM City Institute of Development Studies (HIDS) found that the business groups are good at providing information to their industry, making policy-related proposals, and organising seminars and fairs. But they do not offer specific and effective support to members, it found.

Prof Vo Thanh Thu of the HCM City Economics University said the number of business groups has increased rapidly and they have attracted many members.

Some of them help member companies improve their competitiveness and find export outlets, he said.

Some major associations have become a bridge linking members and authorities, enabling the two to understand and support, thus boosting development of the local economy, he said.

Many have actively provided information to members, promoted them at home and abroad, and protected their interests through international lawsuits, he said.

Thu also pointed out some of the shortcomings of the system.

The number of firms belonging to business groups remains very modest at just 35,000 out of a total of 150,000, he said.

While most industries involved in exports have associations, they have not been very effective and rely on Government support, he added.

Vu Kim Hanh, director of the Business Studies and Association Centre, said industry associations should operate with support from their members, not taxpayers' money.

After the country's accession to the World Trade Organisation, the associations' role of supporting member companies has become more important, she said.

The associations should act as a forum where companies can work with each other to outline plans to develop the industry and cope with challenges thrown up by international integration, she said. They should also be responsible for conveying businesses' inputs to authorities to help the process of policy making, she added.

Nguyen Bang Tam, chairman of the Binh Thanh District Enterprises Association, said the Government should allow associations to participate in enterprise support programmes and projects run by the Government. — VNS




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