HA NOI — Business that took advantage of market opportunities, such as consolidation and merger and acquisitions, and overcame challenges, such as tight funding or liquidity, would succeed this year, a forum in Ha Noi heard yesterday.
Head of Global Markets, HSBC Bank Viet Nam Ltd Pham Hong Hai told the business forum that nobody knew how the market would turn out this year.
"What we are certain of is that 2012 will be a year of uncertainty," Hai said.
"With the ongoing euro crisis and debt ceiling issue in the US, slowing growth in emerging markets and restructuring in Viet Nam, managers will need to be very cautious in growing their businesses.
"With a big population and rising household incomes, the consumer goods and service markets will provide enormous opportunities for businesses."
However, businesses would face difficulties in accessing loans, as the State Bank of Viet Nam would continue to impose a credit growth cap of 15-17 per cent to control inflation. Funding and liquidity would remain tight while funding from European banks could be affected due to the eurozone crisis.
Businesses would need to be prudent in growing their business, choosing the right banking partner and staying alert to changes in regulations, Hai said.
The forum, entitled "Opportunities and Challenges for 2012", was aimed at enabling organisations to maintain a sustainable competitive advantage this year.
Le Thi Hong Len, head of the Association of Chartered Certified Accountants which organised the event, said the past year had highlighted how interconnected economies around the world had become and how problems thousands of miles away had implications for Vietnamese business.
Len said such forums would look at strategies to meet challenges and make the best of opportunities.
Le Dang Doanh, senior economist and former director of the Central Institute of Economic Management, said Viet Nam had to deal with high inflation, exorbitantly high interest rates for credit in Vietnamese dong, a low securities market and declining real estate market.
"The Vietnamese Government has implemented measures to control inflation and stabilise the macroeconomic situation but more effort must be made," Doanh said.
"Changing the growth model and restructuring the economy is on the agenda for this year."
He said the world economy would fall into a new crisis centred around the European public debt.
"This year, we will continue the results of last year with less investment but higher growth. The private sector has declined and should be strengthened."
He forecast that Viet Nam would continue to reduce tariffs, open markets for industrial products and services and welcome a new investment wave from Japan.
Doanh emphasised the need to change investment, tax and credit policies to redirect businesses to invest in science and technology and manufacturing rather than resource extraction.
Doan Hong Quang, senior economist with the World Bank, said 25 years ago Viet Nam turned a crisis into an opportunity.
"It started with a consensus but it took few years to translate the vision into a detailed action plan. Viet Nam enters 2012 with mounting challenges but with structural weaknesses remaining," Quang said.
He said a consensus on restructuring the economy had been reached but the formulation of a feasible action plan might need time to accommodate different interests and ensure broad support.
Viet Nam could use the power of the market and the facilitating role of the State to chart a new course to create a more efficient economy and a more productive society.
"Such a path will require embracing the market principles more firmly than it has done so far, involving institutions, incentives and information," he said. — VNS