Motivate businesses to grow quickly
Banks actively improved administrative procedures for businesses | |
New tax law makes it easier to manage online businesses | |
Attracting businesses with useful solutions |
Could you please tell us about the operation of enterprises at present?
VCCI's survey on business performance in 2018 showed that the rate of optimistic enterprises was high. Many foreign trade departments also assessed that domestic and foreign enterprises were quite optimistic about business prospects in the future. This was thanks to objective factors, for example, Vietnam has integrated more deeply, creating business opportunities and attracting more foreign investment. However, the important factor contributing to the growth process was the solution group on administrative procedure reform and business environment. This has been done very persistently and strongly for the past two years. Especially, in 2019, it was shown quite clearly when the reduction of business conditions, administrative procedure reforms and specialized inspections were promoted. Although the implementation process has not yet been consistent and strong as expected, it also has a certain impact on the development of enterprises.
In the remaining months of 2019, business-related activities also have many remarkable points. The general context is more unstable due to negative impacts from some trade relations and the US-China trade war. Meanwhile, Vietnam is now an open economy, so international tensions also affect Vietnam's business. In particular, there are still many important factors in the country to curb the development of enterprises, such as high costs, which makes it more difficult for businesses to compete. Although administrative procedures have seen big changes, there is still a significant gap in comparison with other countries. There are many obstacles from infrastructure, bottlenecks in connecting sea ports and overloaded roads, especially in big cities.
Therefore, Vietnamese enterprises can receive two-way trends from very strong fluctuations. Vietnam may be the most mentioned name, as a country, that benefits in tense trade relations. The US president said that manufacturers could import Vietnamese goods. This is the message that Vietnam can exploit skillfully. Moreover, Vietnam's foreign investment is promising. But it is necessary to pay attention to the risks when investment from China into Vietnam increases rapidly, if Vietnam is not well prepared, it will continue to create great pressure on infrastructure and high quality human resources.
In fact, there is a situation that enterprises are “afraid of growing", what is the cause?
The survey of VCCI in the past year found that a number of small businesses still faced difficulties – the rate of enterprises reducing business scale, leaving the market was still high, accounting for 8% of the total number of enterprises surveyed. It is noteworthy that the majority of Vietnamese enterprises are small and medium so most of them are not really strong. Therefore, this is a big problem in Vietnam's business development. Enterprises will be more motivated when having advantages in scale, because if they achieve certain scale, they will apply technology easier, and get better business efficiency. In Vietnam, however, growing is associated with risks and costs: more expenses for implementing administrative procedures, welcome more inspection teams, and face more regulatory changes. These are factors that make Vietnam enterprises afraid of growing.
In addition, internal factors such as qualifications and management ability of enterprises are also challenges. Thus, very few Vietnamese enterprises reach medium and large scale. Many economists said that Vietnam had a lot of small and large enterprises but lack of medium-sized and efficient enterprises, especially medium-sized enterprises in the manufacturing industry. Therefore, reforms are needed to pave the way for businesses to grow. Most notably, the Directive 20 of the Prime Minister in 2017 on the rectification of inspection work has been effective, the VCCI survey showed that the rate of inspection and overlapping inspections had been greatly reduced. But many enterprises still said that they had to welcome dozens of inspection teams every year. Therefore, VCCI recommends that localities, departments and agencies have to coordinate and supervise publicly. Typically, the Ministry of Finance has good experience in coordinating and tightening inspection work of the tax sector.
With the above difficulties, which issues do businesses and authorities need to pay attention to in the future, sir?
It is important for businesses, especially Vietnamese private enterprises, to fully exploit trade opportunities, benefits from the market and integration activities. Vietnam has many new generation trade agreements such as the CPTPP. This agreement has been over 6 months, so it is necessary to re-evaluate whether private enterprises can exploit them all, if they cannot exploit them well, what is the reason? Because of capacity, internal factors or poor competitiveness?
2019 is a relatively important year for the domestic macro economy. Vietnam mentioned a lot about changing strategies in attracting and selecting FDI, so there should be a big solution this year. 2019 is also the year to evaluate the effectiveness of ambitious Government reform programs in the past year. Did the reforms of business conditions and administrative procedures reach their targets? The Government was very fierce, but were the ministries and departments in line with the Government? Did it bring positive results or not? In the first 5 months of the year, there were very few initiatives of ministries and agencies, which showed a continuous lack of reform. It means that reform was largely under the pressure of the Government. Therefore, the challenge of the Government is how to maintain the momentum of reform for the system of ministries, branches and localities in order that reform is the whole process, not a batch.
2019 is also an important year to realize the goal of 1 million businesses operating under the Resolutions of the Party Central Committee and the Government. This is a very ambitious, aggressive goal, even many pessimists think it is difficult to achieve. In my opinion, theoretically, this goal can be achieved, but more breakthrough efforts are needed. In addition, 2019 is also the year when Vietnam drafted and proposed big laws that have an impact on the business environment, so great changes and big breakthroughs from these laws are expected. This year is also the year the Government talked a lot about e-government, information technology application. The Ministry of Finance, in which the General Department of Customs has been in charge of the National Single Window, we should have strong steps in the operation of this Portal for the rest of 2019.
Thus, the business-related activities in 2019 are "huge", according to you, does this make the ministries and agencies overloaded?
In fact, being overloaded or not lies in the determination of tasks of ministries and sectors. Therefore, the orientation of the ministries and sectors in the future is only to develop policies, laws and institutions. Any tasks, such as trade promotion, training, licensing, certification that can be transferred to external units should be done. Thus, it is necessary to reform the apparatus, focus on core issues, as many times the Prime Minister has stressed the institution, so creating a good institution is essential.
Thank you, sir!
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