A breakthrough mechanism is needed to promote private economic development
According to Dr. Can Van Luc - an economic expert, member of the National Financial - Monetary Policy Advisory Council - the private sector currently contributes to 85% of total employment, including about 9.1 million workers working in private enterprises and a similar figure in the business household sector. However, the contribution to GDP of this region has been stuck at about 50% for many years, without many breakthroughs.
Mr. Luc pointed out many bottlenecks that hinder the private sector such as: Difficulty in accessing land, capital, and technology; lack of mechanisms to participate in national programs; lack of expertise in governance; slow digital and green transformation; low budget contributions from business households.
He analyzed 3 objective reasons affecting the private sector including: fluctuating global economy, competition from multinational corporations and strict requirements on environment and traceability. 7 notable subjective reasons include: Slow management thinking and innovation, unequal business environment, complicated procedures for converting business households, along with limitations in governance, finance, technology and loose linkages between large and small enterprises.
To unblock these bottlenecks, Dr. Can Van Luc proposed 8 key groups of solutions, including changing development thinking, considering the private economic sector as the most important driving force in growth, perfecting institutions, creating a transparent, healthy and equal investment - business environment among economic sectors while building a standard data system to serve operations and policy making...
Promoting leading enterprises and modern models
Sharing the same view, Dr. Dinh The Hien said that for the private sector to develop sustainably, it is necessary to form value chains with the leadership of leading enterprises.
Developing a leading private enterprise is not simply about creating a few big players, but is the foundation for a strong business ecosystem capable of resonating and leading. When large enterprises are strong enough and capable of reaching international markets, they will become the locomotive to attract small enterprises to develop together, creating a sustainable domestic value chain" - Mr. Hien said.
According to Dr. Dinh The Hien, these enterprises do not necessarily have to be super large or embrace huge projects, but the important thing is to have a good organizational model to gather and connect small enterprises in the chain.
With the group of private enterprises expected to take on a larger role, especially in key projects transferred by the State, Dr. Hien emphasized: It is necessary to develop the model of public joint stock companies. This is a modern, transparent model, with the participation of many individual investors and professional financial institutions.
Mr. Hien commented: "If there are more large-scale public companies, well-run such as in developed countries, the private sector will be able to undertake large contracts, build an export value chain and compete fairly with FDI enterprises".
However, to do that, it is necessary to have a transparent stock market, where businesses are clearly listed and governed according to international standards.
Dr. Hien believes that if a system of public joint stock companies is developed in accordance with standards and transparency, Vietnam will create a truly leading private enterprise force. At that time, the domestic capital market will be healthier, attracting cash flow from domestic and foreign investors, instead of being too dependent on bank credit.
