Đậu Anh Tuấn, deputy secretary-general of the Vietnam Chamber of Commerce and Industry (VCCI) and head of its legal department. Photo baochinhphu.vn

Đậu Anh Tuấn, who is the deputy secretary-general of the Vietnam Chamber of Commerce and Industry (VCCI) and head of its legal department, has been talking to the Government portal about the development of the private economic sector.

Looking back, how do you evaluate the development of the private economic sector in our country?

I think that after nearly 40 years of đổi mới (renewal), the private economic sector has made a breakthrough. We can see a clear difference.

In terms of quantity, in the past, the number of private businesses remained humble, but now we have nearly one million officially operating enterprises and five million business households.

Obviously, looking at the products and services we use every day, the mark of private enterprises is strong. There has been a huge change.

Private enterprises are taking on an important role in the economy. Private enterprises have participated in the construction of important national infrastructure projects, such as highways, international airports and seaports.

Private enterprises have brands that state-owned enterprises (SOEs) have not been able to match yet. It can be seen that the private economic sector has developed vigorously in recent periods.

Vietnamese private enterprises have also relatively multi-dimensional marks.

We have large private enterprises, but most of them still depend on real estate and finance.

Large private enterprises with production capacity, prominent global brands and being able to compete with other countries are rare. We lack a medium-sized private enterprise sector in terms of production and technology that proactively engages in the global production chain.

Regarding the informal economic sector, although the small private economic sector has been large in number, creating jobs and contributing greatly to GDP, they still operate unofficially. These can be called business households and individual businesses.

Currently, we have about five million business households and individual businesses. This force is large but not official, has no motivation to officially operate as an enterprise and does not upgrade its management.

This also limits growth in scale. When an enterprise does not increase in scale, the application of science and technology, the application of management and participation in State support programs remain humble.

Could you share your views on the need for the private economy to be treated equally like other economic sectors?

To develop the private economy, there is still much to do. According to the Party's orientation, we have reached a stage where we need a more systematic strategy to promote private enterprises to affirm their more important role in the economy.

According to many evaluation criteria, such as contribution to GDP, job creation, this is the most important sector in terms of the ratio of formal and informal sectors but the current treatment and support orientation remain vague.

Many people say that private enterprises have some unequal points compared to State-owned enterprises and foreign-invested enterprises. I think this is completely true.

We can see this in terms of access to business resources. For example, State-owned enterprises have advantages in land, even being exempted from land rent or renting land at low prices.

FDI enterprises often have industrial parks where the State has invested in relatively basic infrastructure. They also have a lot of capital to rent land in industrial parks and can be exempted from land rent and extremely large tax exemptions.

Private enterprises have no advantages, no incentives, no support in accessing land, leading to the modest participation of private enterprises in the industrial parks. Small and medium enterprises find their opportunity to access land difficult.

Regarding capital, for State-owned enterprises, the credit level with banks is better, they can access capital more conveniently. FDI enterprises can access many sources of capital, especially low-cost capital.

Meanwhile, most of Vietnamese private enterprises access capital through one channel, which is banks with relatively high interest rates compared to other countries. Therefore, the competition in capital costs of Vietnamese private enterprises compared to enterprises of other countries is difficult.

State-owned enterprises have difficulties in administrative procedures. But their interaction and influence on the government is good, so this is not a major obstacle.

FDI enterprises operate relatively professionally, have good associations and their position and voice are more respected by the Government. Meanwhile, many private enterprises have not received attention or support regarding administrative procedures.

Within the legal framework, we have preferential policies to support major foreign enterprises, but very few for private enterprises.

The Law on Support for Small and Medium Enterprises issued in 2017 includes provisions on tax reduction for small and medium enterprises, a policy that is well evaluated, but after many years, we have not yet implemented this provision.

Currently, these enterprises have not yet enjoyed tax reduction policies because the corporate income tax law has not been amended.

This shows that there are still shortcomings, difficulties and barriers for the operation of private enterprises in Việt Nam.

You mentioned groups in private enterprises. Are there currently clear regulations on classifying groups or statistical criteria in this area?

The important thing that needs to be changed is the system of statistical criteria for private enterprises. The statistical criteria in Việt Nam are currently unclear and not specific enough to assess the level of contribution of private enterprises to GDP.

We can see that the current statistics are mainly from the State and non-State sectors. How do the 940,000 enterprises operating under the law currently contribute to GDP? How much did they grow every year? We do not see that number clearly at the moment.

In the future changes need to be made in terms of the number of newly established enterprises, the time of contribution to GDP, the contribution to import and export, to industry. Those numbers can be divided by region and province so that each locality can know the 'health' and the level of contribution of private enterprises to their economy.

Currently, the statistics on private enterprises, both official and unofficial, are still not user-friendly. In the future, I believe there needs to be a strong change in statistics, numbers, and criteria for the private enterprise sector.

What groups of issues should a more systematic and breakthrough private economic development strategy focus on?

In my opinion, the first step is to mobilise large enterprises to participate in difficult and important tasks in the country.

Private enterprises need to be boldly assigned more responsibilities and participate more in key strategic projects of the country. This will enhance the capacity and affirm the role of this business sector.

The private enterprise sector must be attached to the national brand. Work not only for profit, but also for the country's benefit.

This group of enterprises needs to be mobilised to participate for many important national projects, such as high-speed railways, energy and airports.

Second, the small-scale, small- and medium-sized private enterprises in the middle sector need a strategy to enhance the quality of management, apply technology to operate effectively, and participate more deeply in the global production chain.

The economy is changing and transforming rapidly. Small enterprises have the advantage of a high level of adaptability. Obviously, Vietnamese private enterprises have the advantages of latecomers, such as exposure to new technology.

For the group of micro-enterprises and business households, we need a strategy to promote formalisation of this sector, gradually getting used to the form of governance, transparency and openness to grow. But to formalise, there needs to be economic motivation. Changes in laws, taxes, administrative fees, procedures for this group must be simple and friendly.

I think the Vietnamese private enterprises' strategy includes different groups aimed at different subjects.

How should we create support policies to promote the sustainable development of private enterprises?

I think the policy to support private enterprises in the coming time can be divided into many different groups.

One is the institutional group. We must continue to reform administrative procedures strongly as Party General Secretary Tô Lâm directed, cutting down on business conditions and compliance costs.

Việt Nam must be one of the top three ASEAN countries regarding business environment facilitation. We need to review legal regulations towards creating more favourable conditions for private enterprises.

This group of solutions can focus on creating more favourable conditions for private enterprises in terms of land, capital and finance.

The second group is policies related to empowerment, aimed at large enterprises. We can place orders and assign work to large private enterprises to carry out important projects, encourage private enterprises to participate in more fields.

The third group is support and training. We have support and training programmes, but the way must be different from the present, more market-oriented, instead of the traditional way of organising a recruitment system.

For small and micro enterprises, we can have public lawyers paid by the State, accountants paid by the State. These people can provide services for dozens, hundreds of enterprises and other small businesses.

In some important areas, such as export, the State must launch programmes to support market research, trade promotion and brand building for Vietnamese agricultural products.

It will be extremely challenging if every company does it independently, but I think it will benefit business operations if the State has a programme, professional activities and more resources.

For private enterprises to develop sustainably, we should promote the connection of businesses. The connection of Vietnamese businesses is relatively poor, and there is still unfair competition. We must develop ways to improve business culture and promote the role of business associations.

You usually work with businesses. Could you tell us what private businesses currently expect the most?

Compared to earlier, there have been positive changes in the current mindset towards private activities have changed a lot and are positive. However, there are still doubts in the operating system about the role and capacity of private enterprises.

I feel that there is still a gap in trust in the operation of the Government apparatus. Many leaders and the State apparatus think that private enterprises do short-term business, are unqualified and opportunistic, etc.

This may only be true for a few enterprises, but the common prejudice sometimes makes management solutions follow the direction of 'one person with a stomach ache makes the whole village buy medicine'. Many solutions create huge costs.

When private enterprises lack confidence, they operate in a haphazard manner. There is still a gap in trust between the Government system and private enterprises. This gap must be eliminated.

Next is the gap in thinking. Many state agencies still provide solutions to private enterprises according to what they have, without listening to what businesses need and what solutions are suitable for practice.

It is necessary to have a level of understanding of business and of investors to provide solutions that businesses need most. The Government apparatus must understand businesses better and understand business thinking better.

The third is the gap in speed. Currently, the speed of business is fast, business decisions must be made quickly. Meanwhile, administrative decisions and processes take a long time.

We will see a gap between administrative decisions and business decisions. In the context of technology, business decisions are fast because the market changes quickly. If administrative decisions cannot be kept up, business activities will be held back.

I think it is necessary to shorten the gap in mindset, trust and speed between the State and private sectors. This is also an important solution to create a favourable business environment going forward. VNS