Economist Đinh Thế Hiển
Economist Đinh Thế Hiển talks to Kinh tế&Đô thị (Economic and Urban Affairs) newspaper about why the Government should create a fair legal corridor for both the private and public sectors
Do you have any comments on the development of the Vietnamese private economic sector?
The Vietnamese private economic sector has played an important role in the national renewal process.
In 1992 when Việt Nam started its renewal process, most young Vietnamese people preferred to work for State-owned companies rather than private firms.
However, 20 years have gone by and this thinking has become outdated. Everyone has acknowledged the considerable contributions made by the private sector to the national economy, particularly in the terms of high-quality products and the employment sector. Nowadays, many private enterprises/companies have become essential stakeholders in key areas that used to be controlled by State corporations, like the electricity and transport sectors. In other words, the private sector has become part and parcel of the national economy. However, most Vietnamese private companies have focused on only providing services to the domestic market, including the real estate market, transport and hydropower.
Việt Nam is a strong country thanks to its agricultural products, but most private companies have yet to venture into the field of processing to increase their added value. We have quite a few tech companies, but none of them have thought of applying hi-tech to increase the value of agricultural products.
How do you respond to claims that say Việt Nam will only become a rich country when the private sector develops?
Not only in Việt Nam, in most developed countries the private sector contributes more than 85 per cent to their GDP. The private sector is the main pillar ensuring the country develops strongly and sustainably. No country could develop without contributions from the private sector. In other words, people will become rich and the country will become strong when the private economy is developed strongly and healthily.
The Vietnamese private sector has developed rather quickly and become an essential driver for national economic development.
Vietnam now has more than 750,000 Vietnamese private companies that provide jobs to some 12 million people. They contribute up to 43 per cent of the country’s GDP. In the service sector, the private sector accounts for up to 85 per cent of GDP.
What key factors will help the private sector develop on a par with the State sector?
A level playing field is the only way to help the private sector develop on a par with the State sector.
To achieve this goal, there should be clear guidelines and policies for the public sector that say: let them do it! The Government should not interfere too much in their affairs.
Some people think it will be difficult to create a level playing field, but in reality it is not so. If the private sector can do the job, the State should stand back.
The other point I want to mention is that the Government should speed up the equalisation of State companies. If this process is completed there will be no differentiation between State companies and private companies. Việt Nam will then only have joint-stock companies, listed firms and small- and medium-sized enterprises.
Last but not least, the Government should create a level playing field for both the State economy and the private economy, and for Vietnamese enterprises and foreign firms. — VNS