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Local business confidence grows

Update: January, 11/2014 - 09:28

This year holds promise for Vietnamese enterprises, says Vu Tien Loc, president of the Viet Nam Chamber of Commerce and Industry in an interview with Nguoi Lao Dong (The Labourer) newspaper.

How do you assess the country's economic situation in 2013 and the government's major policies that impacted Vietnamese enterprises the most?

I should say 2013 left an impressive footprint on the national economic growth, thanks to the government's policy of restructuring the national economy, including State-owned enterprises (SOEs).

In late 2013, to accelerate the restructuring of SOEs, Prime Minister Nguyen Tan Dung signed Decree 204/ND-CP that asked all joint stock companies whose ownership representatives are from the ministry, sector or local governments to return the profits earned from government shares in 2013-14 to the State budget.

The PM also ordered SOEs to withdraw from their non-core investments.

Another measure that left a strong impact on the business community was Viet Nam's active negotiation in international trade agreements, including the Trans Pacific Partnership Agreement (TPP).

These measures indicate the government's resolve to integrate with and follow the rules of the global arena, particularly TPP.

In your opinion, what are the expectations of the business community in 2014?

This year will be a difficult year for Vietnamese enterprises. Last year, more than 10,000 enterprises resumed their operations after closing down temporarily.

However, the number of enterprises which declared bankruptcy continues to increase. About 60 per cent of the enterprises could not pay corporate income tax.

The benefit rate and tax contribution to the State budget were not as high as expected. All these speak of the comparatively low advantages of our enterprises in the international integration environment.

However, studies by Vietnamese and foreign organisations have made a positive observation that Vietnamese enterprises have confidence in the long term and mid-term development of the national economy.

Among 500 leading enterprises, 60 per cent reported that their business in 2013 was better than in the previous year and 80 per cent said they would expand their production in 2014.

Meanwhile, foreign investment in 2013 totalled US$21 billion. This indicates that foreign investors have confidence in Viet Nam's economic development, particularly because it is set to become a TPP member.

Do you think Vietnamese enterprises will make the best use of these opportunities to make progress in 2014?

In 2013, about 80,000 new enterprises were established. This shows the strong development of Vietnamese enterprises. The aggregated strength of the old veterans as well as of the newcomers will make the enterprises stronger and they will be able to overcome difficulties and challenges in the context of the global economic downturn.

During the process of international integration, Vietnamese enterprises will have the opportunity to follow the rules of the game the world over. They can follow the mergers and acquisitions (M&A) trend in order to work with foreign investors.

Through such activities, our enterprises will be able to cut short the time needed to achieve a global quality standard for their business.

I am confident that when Viet Nam becomes a TPP member, the comparative advantages between the members will no more be a barrier for Viet Nam.

For example, Japan is currently focusing more on agricultural development. When the protection barrier is lowered, Viet Nam may become an investment destination for Japan. — VNS


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