To develop a fair market economy, Viet Nam needs to treat its SMEs better, Nguyen Duc Thanh, director of Viet Nam Centre for Economic and Policy Research, tells Thoi bao Kinh doanh (Business Times).
What are the comparative advantages that Viet Nam enjoys on its path towards deeper integration into the world economy?
Viet Nam enjoys many advantages in its association with ASEAN and countries in Northeast Asia, including China, Japan, and South Korea.
At present, we are in the process of negotiations with the Trans-Pacific Partnership Agreement.
As a late comer in the game, we have to follow the rules of the game.
However, we should choose the best way possible to be a part of the game. This is very important.
For example, the automobile or motorbike industries have strong roots in Thailand and Malaysia. Hence, it is not easy for us to compete with them.
In business, sustainability is a very important factor; thus, it is not easy for the investors to move their factories from one country to another. So, it is important to understand what the investors require from us. For example, Samsung company from South Korea recently decided to build a chain of factories in Viet Nam with the hope of establishing a production centre and developing technology. This is a very right decision taken by Samsung.
Viet Nam is basically an agriculture-based economy. But we have to analyse which market will suit us, and also being successful in this venture is essential as we have many competitors, in particular Thailand.
In addition, our other competitive advantages are our traditional crafts, including ceramics, which are much sought after in the world market. A case in point is the high-quality ceramics produced by the Minh Long company.
What are the roles of our small and medium enterprises in this game?
One of the advantages of small- and medium-sized enterprises (SMEs) is that they provide employment to many people, which is a major factor contributing to the stability of our economic growth. The government has adopted many preferential policies to promote production, but the support mainly goes to State-owned enterprises. In my opinion, the government, however, should focus on more support to the SMEs.
In addition, the business environment needs to be improved to help reduce production cost and other expenses for the enterprises. This is a very important factor for the SMEs to exist and have a sustainable development.
Deeper international integration can only be successful when we have established a strong foundation in our country and are in good harmony with other countries. To achieve this goal, it is imperative for Viet Nam to follow the market economy. In other words, the government needs to have policies to protect the enterprises, particularly the private enterprises, and to focus on SMEs.
Lessons learned from international integration have shown us that our economic restructuring should enable the development of private sector, as the private sector is a cornerstone and a driving engine for a full and comprehensive market economy to develop. The development of the market economy will certainly help in development of our economy.
So, in your opinion, how should we formulate our economic development policy?
As we all know, international integration requires the freedom of choosing industries or production to develop. This is entirely in line with the market economy. But what is more important is that the government must create a sound business environment with low cost and no corruption as well as a fair play between different economic entities.
Last but not least, it is important to create a stabilised macroeconomic environment with moderate inflation rate, a balance in budget and trade as well as good policy on the exchange rates. — VNS