VN needs more private firms

Update: February, 16/2016 - 10:30

Chairman of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc talked to Tuoi Tre (Youth) about encouraging businesses to get started as the country faces higher competition from free trade pacts.

To prepare for integra-tion with the world's biggest economies like the US, EU, Canada and Japan, what should Viet Nam do to compete?

I think it is necessary to promote a national programme of developing enterprises with the goal of one million businesses operating efficiently by 2020 and in the future, the country would have five million enterprises.

Viet Nam has signed TPP so it is facing not only opportunities but also big challenges. There will be no barrier between the Vietnamese market and ASEAN economies as well as big markets such as EU, Canada and Japan. Therefore, the way to prosperity and wealth must be built by well-educated entrepreneurs. Enterprises should not be only a household or small scale. The business must be done professionally and creatively so that they will be able to compete with competitors.

In developed countries, there is one enterprise for every 15 to 20 people. But in Viet Nam, the ratio is 1/ 200. More than 70 per cent of the labour force lives in rural areas and 45 per cent of labour force works in the agricultural sector with low productivity. One of our disadvantaged areas when TPP takes effect is agriculture, but that is the strength of our counterparts. Tens of million workers in the sector might be unemployed when it is restructured. Meanwhile, the State-owned sector would be narrowed and unable to employ more workers. Therefore, a part of the labour force should be moved to the private enterprise sector.

How can we ensure that these newly-established businesses don't die young?

It is difficult to let enterprises grow up by their own creativity and competence without a fairer and more transparent competitive environment. Those who have good ideas and do business properly must get richer. If only some State-owned enterprises have privileges to access land, capital and funds, efforts to set up new businesses will be ruined. Creativity, research and investment in science and technology must be encouraged.

Regulations must be issued in a way that helps promote entrepreneurship and remove barriers.

Specifically, what regulations should be issued?

A law to support small-scale and medium enterprises must be promulgated. Poor performing State-owned enterprises should not be allowed to continue operation. Discrimination in favour of State-owned enterprises must be eliminated.

Japan and South Korea have been attaching much importance to private enterprises for a long time, which has helped make these countries wealthier over the last 25 years. However, we should not only study the good cases. It is time for us to practice what we learn from them. — VNS