Hà Tây Chemical Weave Company Limited in Hà Nội's Đan Phượng District specialises  in producing footwear products. Vietnamese firms are urged to enhance competitiveness. — VNA/VNS Photo Trần Việt

HÀ NỘI — It is critical to improve the resilience of the Vietnamese economy to withstand and recover from external shocks, experts told a conference in Hà Nội on Wednesday.

Senior economist from the Bank for Investment and Development of Việt Nam Cấn Văn Lực spoke at the conference about economic stability and business competitiveness held by the Institute for Brand and Competitiveness Strategy. Lực said that due to its small scale but high level of openness, the Vietnamese economy was more vulnerable than most to external shocks.

From the end of 2018 to date, major risks to the growth momentum of the global economy and Việt Nam included trade tensions between the US and China, the slowdown of the global economy, geopolitical risk and diseases and climate change, he said.

The operation efficiency of firms was low with the return on asset ratio (ROA) averaging only 2.7 per cent, Lực said, adding that the highest ROA was still demonstrated by foreign direct investment (FDI) companies (6.9 per cent), followed by State-owned enterprises (SOEs) (2.6 per cent). The lowest ROA was among non-State firms (1.4 per cent).

The development of new firms has also slowed since mid-2018, Lực said.

He said the privatisation process for SOEs was stagnant while the restructuring of credit institutions remained a challenge, posing a threat to economic growth.

To increase the resilience of Vietnamese firms, Lực urged firms to be proactive in enhancing competitiveness by improving corporate governance capacity and product quality, developing their business strategy and building their brands and a skilled workforce.

Focus should also be placed on improving the capacity for integration so that firms would be able to take advantage of free trade agreements.

Việt Nam also needed to promptly issue national strategies for Industry 4.0 and the digital economy, Lực said.

According to Trần Đình Thiên, former director of the Việt Nam Institute for Economics, Việt Nam did not have many firms which could compete globally. Thiên said 65 per cent of firms are still categorised as micro.

“Why do micro-sized firms account for such a large proportion? We need to figure out the causes and solutions to boost their development,” Thiên said.

In the disruptive era of Industry 4.0, many Vietnamese firms struggle to find a coherent plan of action, Thiên said.

“If Việt Nam wants to innovate and avoid being left behind, it is necessary to develop an appropriate legal framework and take risks,” said Thiên.

At the conference, Deputy Chairman of the National Financial Supervisory Committee Hà Huy Tuấn stressed the importance of economic stability in the context of global uncertainty and the rapid development of the digital economy.

“Việt Nam needs to give priority to economic stability, especially financial stability,” Tuấn said, adding that the digital economy was developing rapidly but carried a number of risks. — VNS