A worker inspects an electronic circuit board in Bắc Giang Province.— VNA/VNS Photo

On March 15, the Government's Steering Committee for Private Sector Plan Development held its first meeting to discuss a plan to boost the growth of Việt Nam's private economy.

Deputy Prime Minister Nguyễn Chí Dũng, Deputy Head of the Steering Committee, chaired the meeting which gathered leaders of various ministries, central agencies and localities.

The plan aims to position the private economy as the 'most important driver' of the national economy, striving to reach two million private businesses by 2030. This effort aligns with Việt Nam’s broader goal of becoming a high-income, developed nation by 2045.

A transformational shift

Before 1986, Việt Nam’s economy was centrally planned and dominated by state-controlled industries. That changed with the Communist Party’s 6th National Congress held in December 1986, which officially recognised the private economy.

Today the private economy covers private enterprises, limited liability companies, joint-stock firms and millions of small household businesses.

After nearly four decades of growth, it now contributes more than 50 per cent of Việt Nam’s GDP and is considered as the most important engine of the country's economic growth.

Why does it matter?

The numbers tell a compelling story. Việt Nam’s private economic sector currently includes around 940,000 active enterprises and over 5.2 million household businesses, employing 82 per cent of the workforce.

It accounts for 56 per cent of total social investment, approximately 30 per cent of state budget revenue and over 30 per cent of total import-export earnings.

Beyond the statistics, the private sector is a hotbed of innovation and technology adoption, significantly helping Vietnamese brands gain global recognition.

Unlike state-owned enterprises, private firms are more agile and efficient, delivering 30-50 per cent higher returns on investment.

Productivity growth in the private sector has achieved about 7 per cent annually, driving competition, lowering prices, and improving quality for consumers.

Private entrepreneurs have kept growing strongly with a desire of becoming rich legitimately, improving their business capacity and corporate governance. Their social responsibility as well as business ethics and culture have been fostered.

What’s holding it back?

Despite its impressive contributions, the private economic sector has yet to reach its full potential due to several barriers.

Businesses face administrative hurdles, informal fees and 'under-the-table' costs, and limited access to land and capital. Over 50 per cent of private firms complain of frequent inspections that waste time and money, while 60 per cent struggle to secure financing.

Land reclamation processes remain slow and cumbersome, and vague and inconsistent business regulations leave companies scrambling to stay compliant.

These obstacles hinder growth in a sector that could otherwise be a dominant factor in Việt Nam’s economic future.

What’s the plan to fix it?

At the meeting, all participants agreed that the plan on private economic development must clear bottlenecks, remove institutional barriers; create a favourable, safe, and transparent environment to mobilise maximum resources from the people, exploit potential, intelligence, and entrepreneurial spirit. Particularly, it must encourage innovation and enhance competitiveness in the new era.

The plan must propose breakthrough and substantial tasks, solutions, mechanisms, and policies to drive the strong and sustainable development of the private economic sector, which serves as the core force in the process of national industrialisation and modernization.

Once finalised, the draft plan will be submitted to the Communist Party of Vietnam's Politburo for issuance of a resolution for implementation. — VNS