Businesses need to be proactive when the economy in 2023 is still "turbulent"

Economic Forum 2023: Together with businesses "surpassing the waves".

The business sector is still seriously hurt

Sharing at Economic Forum 2023: Together with businesses "surpassing the waves" organized by Business Forum Magazine on the afternoon of November 17, Mr Hoang Quang Phong, Vice Chairman of the Vietnam Confederation of Trade and Industry (VCCI) ) said that Vietnam's impressive recovery after the Covid-19 pandemic was recognized by international organizations and foreign media.

However, according to Mr Hoang Quang Phong, although the business sector is large, the scale and potential are not robust, but the resilience and competitiveness are still limited. Statistics show that 18.1 thousand newly established enterprises return to operation per month, and 12.5 thousand enterprises withdraw from the market.

"In the economy, 7 out of 10 new and returning businesses are temporarily or permanently withdrawn from the market. This reflects that the business sector is still seriously vulnerable to the difficulties of the global and domestic economy," the VCCI leader said.

Mr. Hoang Quang Phong also stated that VCCI's goal is that a private enterprise officially registered under the Enterprise Law will contribute 15% of GDP by 2025 and 20% by 2030. Currently, the new contribution figure is about 9% of GDP. Therefore, VCCI recommends that businesses strive for self-reliance and improve private enterprises' connectivity in the production chain.

Assessing the economy in 2023, Mr Nguyen Hong Long, Deputy Head of the Steering Committee for Innovation and Enterprise Development, acknowledged that in the fourth quarter of 2022 and into 2023, Vietnam's economy would have significant impacts influenced by other countries in the world. In particular, when the conflict between Russia and Ukraine occurred, it significantly impacted the economy.

Therefore, according to Mr Long, the Government has had many meetings to develop countermeasures for the economy's future at the end of 2022 and 2023, focusing on two essential monetary and fiscal policies.

Need to be self-reliant and proactive in the face of "storms"

Talking at the forum, Dr Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research, said that reform measures are necessary when some difficulties and uncertainties need to be faced. However, according to Mr Viet, reforms should not have a sudden intervention, especially interventions of non-market nature. Therefore, there is nothing but to rely on international practices, trade agreements and investment agreements signed by Vietnam.

Along with that, with risks related to costs, Mr Viet pointed out that besides the need to prepare management mechanisms and methods to reduce costs, businesses also need to coordinate with ministries, sectors, local authorities and central agencies to study mechanisms to reduce informal costs.

"Enterprises themselves also need to maintain the spirit of starting a business, promoting the spirit of autonomy and self-reliance alongside the support of the State to preserve the initiative in the face of "turbulence." At the same time, the Policy-making and management agencies also need to behave according to the market, based on the market mechanism, to be able to better support businesses," said Dr Nguyen Quoc Viet emphasized.

Also on this issue, Mr Nguyen Trong Duong, Deputy Director of the Department of Enterprise Management, Ministry of Information and Communications, said, according to experience, businesses that apply digital technology and digital transformation when facing a crisis also weakened but were able to recover more quickly. After the crisis, they regained growth with a higher profit-to-total sales ratio.

According to Mr Duong, businesses need digital transformation to recover and develop, in which technology is not essential but must solve the right problem, then technology will solve the problem.

Proposing solutions to support businesses to access credit, Mr Nguyen Quoc Hung, General Secretary of the Vietnam Bankers Association, said that the Government should continue to drastically direct the increase in the disbursement of public investment, as well as implementing expansionary fiscal policy, reducing pressure on currency and credit from the banking system; simultaneously, strengthen trade promotion, boost exports, enhance investment attraction, to help improve the supply and demand of foreign currencies as well as reduce pressure on the exchange rate.