Delete the old mindsets to avoid a "distorted" market

How do you evaluate the current business environment?

In fact, Vietnam is still striving to be recognized as a market economy. With over 30 years of construction, the market mechanism in our country has "the clothes of a growing child". Over time, some of them are replaced, for example, issuing legal systems on anti-dumping, anti-subsidy, amending the tax law, customs, one-stop mechanism... However, overall, we have achieved a lot of progress, raising the ranking of the business environment compared to many countries in the region and the world. But compared to the ASEAN+6 countries, China and India, we are not as expected, even weaker than Laos and Cambodia.

To resolve this situation, in recent years, the Government continuously issued documents, resolutions to change the business environment and support businesses in their development. Obviously, political will and general awareness have changed significantly, but not radically yet; many localities and agencies have clearly not changed, and deployed tasks unevenly. Therefore, enterprises have not reached the true, equal competitive environment.

So what are the reasons that prevent businesses from a true competitive market, sir?

The first is institution. When the starting point of people and enterprises is the "subsidy" mentality of depending on the state, because in the past the state managed many issues, this mental attitude is not positive or active for changing and enhancing the competitive environment. In addition, state agencies have too many staff, leading to bulky apparatus with many levels. This causes many cases to be directed from the central to higher levels, but is not done at the subordinate level, which is poor coordination. Moreover, the state agencies have so many departments that businesses do not know who to meet, who to submit to..., which takes time and costs for businesses. The second is the cumbersome system of legal documents in our country. According to statistics, by 2017, Vietnam had 1,000 legal documents. This number makes it difficult for skilled people to fully grasp.

On the business side, the weakness of businesses is loss of confidence in the business environment and lack of capacity. There are 20% of businesses that do not want to bring business disputes to court for fear of interconnection from the inside, arranging the results beforehand, doubting the objectivity of the settlement agencies. This is very normal operation overseas, because the court arbitration system judges fast and properly. Therefore, there are two types of enterprise existing in our country: First, the large enterprises that know how to create competitiveness and good performance by themselves; Second, small and medium enterprises, micro-enterprises that are mostly "crippled" in terms of expertise, lack knowledge about trademarks, legislation, transportation... leading to a "crowd" business culture with no research, so information is picked up unsystematically. This leads to the situation “Good harvest, devaluation – Good trading, crop failure”, the enterprises cannot save themselves in the market economy sense.

In addition, an ominous problem in the competitive environment of enterprises is the status of work settlement based on "group interests". Accordingly, the information is not disclosed clearly, but provided separately by the group, because it is very important to get information from the state to decide on many business activities; therefore, when only a few enterprises have private relationships based on this operational information they can conduct profiteering. Many cadres have poor capacity, low treatment mechanism and are interested in their own benefit by finding ways to harass or "do business" with enterprises. This has "distorted", manipulated the market economy, but is still quite popular in the Vietnam business environment nowadays.

In your opinion, how has the issue affected the operation and the fair competition between foreign and domestic enterprises?

First of all, it must be said that in overseas markets, unfair competition, competition through private relationships persists, but to a very small extent. Because about 95-99% of people's income is through banks; trading activities and asset management are through national and even country-by-country data systems. Therefore, people have to explain the origin of their assets, money... so it will be more transparent, avoiding ask-give activities, bribery... So, when coming to do business in Vietnam, because of the poor management, deliberate suggestions from individuals, and even regulators, have led businesses to act on unfair competition, corruption, and transfer pricing. Moreover, our country does not have the mechanism, the inspection apparatus that operates regularly and effectively, so these enterprises continue to implement as usual.

Please tell us, what solutions the management agencies and businesses need to do to improve the inadequacies to have a fair competitive environment for businesses as well as the economy?

The government is adopting a number of measures to improve the business environment, competitiveness and promise to achieve positive results. First of all, the application of digital technology in public administration to limit the direct contact between people, enterprises and officials; This helps to standardize the sequence of relationships. In addition, the Government is also actively promoting the one-stop mechanism, which will reduce costs and time for businesses, avoiding the negative ask-give activities leading to unfair competition.

Moreover, the drastic action to reduce the business conditions of ministries is commendable. However, these are short-term and medium-term solutions, in a way that reduces what the state allows businesses to do; there is a need for serious research on institutions to find out what the state governs, what the market is self-regulating, and what is socialized. It is necessary to study clearly in these fields, and then narrow the management scope of the state, after that enterprises and people will take responsibilities by themselves gradually. The most important thing is that localities and ministries must have awareness of "thinking for enterprises, acting for enterprises" to reduce the state apparatus, reduce the projects provided by the ask-give mechanism, and resolve the problems of people and businesses...

For enterprises, the solution is not only to raise their awareness to operate in a professional way, but also to take more initiative to protect their legal rights. Enterprises should use professional services such as logistics, legal consultancy, technology... to save time, get convenience and improve their competitiveness. In addition, businesses should actively participate in monitoring; raise their voices so the state agencies can listen to them then make positive changes to facilitate the business environment properly, equally under the market mechanism.

Thank you Sir!