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Private investment is an important growth driver contributing to economic recovery after the Covid-19 pandemic. Photo: H. Anh

Important growth drivers

Despite the great impact of the pandemic, the Government still aims at economic growth this year of about 4.5% and strives to achieve a higher increase at5.4%. In order to achieve this goal, one of the five key targets is particularly emphasized by the Prime Minister to create favorable conditions to attract private investment, thereby promoting economic growth.

Assessing the role of the frontier to attract private investment in post-Covid-19 economic development, Dr. Le DuyBinh, Director of Economica Vietnam, said that private investment plays an important role for economic growth.

“According to calculations of some research units, if private investment increases by 1%, Vietnam's GDP in 2020 will increase by more than 0.15 percentage points, so it can be seen that this is a dynamic and important growth force, contributing to economic recovery after the Covid-19 pandemic,”said Dr. Le DuyBinh.

The importance of attracting private investment has been affirmed by the Government in Resolution No. 84 on the tasks and solutions to continue removing difficulties for production and business, promoting disbursement of public investment and ensuring social order and safety in the context of the Covid-19 pandemic.

Accordingly, the Government assigned ministries, central agencies and localities to accelerate the consideration and settlement of investment procedures for projects proposed by enterprises, not to delay and create backlogs. Unresolved dossiers, proactively report to competent authorities for consideration and settlement of issues beyond their authority, and at the same time create favorable conditions for enterprises to conduct production and business activities safely and prepare necessary conditions to attract new investment resources such as planning work; infrastructure; human resource training; guarantee of energy; and administrative reform.

Previously, in March 2020, the Prime Minister also established the Prime Minister's Working Group on reviewing legal documents with the aim of reviewing laws and developing plans to submit to the National Assembly and the Government to eliminate overlaps, irrationalities, ensure transparency and consistency in the current legal system, especially the provisions of law on investment and construction to create favorable conditions for rapid deployment of production, business and infrastructure development projects.

1,001 ways to attract private investment

Obviously attracting private investment is important, but one more important thing is that after the pandemic, businesses and people face difficulties, many businesses halt operations. So, what should be done to promote businesses to continue investing, especially, what to be able to mobilize the huge accumulated capital?

According to Mr. Mac Quoc Anh, Vice Chairman of Hanoi SME Association, after the pandemic of private enterprises in Vietnam, most of SMEs wobbled. Therefore, there is a need for support from the Government on connecting supply - demand of the market, promoting trade activities, seeking new export markets, thereby stimulating the private sector to strengthen investment and boost production and business activities to overcome difficulties to continue investing in production and business.

Mr. Mac Quoc Anh said that besides reforming administrative procedures in a transparent and thorough manner, supporting and creating favorable access to capital and land for all businesses, the Government should have strong support for large private enterprises and corporations. These businesses will then play the role of leading other small businesses, forming new ecosystems and value chains along with thousands of Vietnamese businesses, creating jobs for workers as well as output for businesses, which contributes to stimulating private investment.

“It is necessary to have large enterprises leading for other private enterprises to participate in the new value chain. For these enterprises, there should be tax, credit, land incentives for them to do well in their leading role, thereby promoting private investment from businesses in the ecosystem," Mr. Mac Quoc Anh said.

In addition to promoting private investment, it is private enterprises, according to experts' estimation; the population reserve is estimated at US$ 60 billion, if it is revived, this source of capital will be the first resource of major investment for the economy.

Affirming that mobilizing capital in the population will be many times larger than raising money from banks and budgets, Mr. Nguyen Van Than, Chairman of Vietnam Association of SMEs, proposed the Government to propose effective solutions to collect money, attracting short-term and long-term idle resources among people and businesses.

First of all, the Government should approve the form of issuing more bonds related to public investment projects to mobilize foreign currencies and assets such as gold, silver and gems. In addition, it is necessary to promulgate a supervised pilot mechanism for fintech activities, including peer-to-peer lending, and this will mobilize a large amount of long-term and short-term resources in the country.

Many people said that promoting private investment means having solutions to remove procedures for many projects today, especially in the field of real estate, attracting investment capital and the backbone of the economy. In fact, many real estate businesses are facing a lot of difficulties when many real estate projects get stuck in investment procedures.

Recently, speaking at a seminar on the ups and downs of the real estate market, Mr. Dang Hong Anh, Chairman of the Vietnam Young Entrepreneurs Association, Vice Chairman of TCC Group, said that the Government had a solution to stimulate public investment, it is necessary to enable private investment. Mr. Dang Hong Anh said that many projects are currently congested and have unfinished implementation, if removed, the capital flow into the economy will reach hundreds of thousands of VND. Accordingly, the representative of the Vietnam Young Entrepreneurs Association proposed to set up special working groups to resolve, remove, first a few projects, to gradually circulate resources in the market.

Proposing solutions to attract private investment, Dr. Le DuyBinh said that, in the context of most businesses facing difficulties after Covid-19, barriers to the business environment need to be further removed. Notably, Dr. Le DuyBinh said that it is necessary to create opportunities for private enterprises to increase investment in many different sectors of the economy. “The average size of an FDI project in the first months of the year is just over US$ 2 million/project, of the more than 700,000 Vietnamese enterprises operating, there are several tens of thousands of businesses capable of investing in projects under this scale. Therefore, local governments need to have orientations and policies to create favorable conditions for domestic enterprises to be able to carry out such projects to participate, instead of resorting to attracting investment capital from FDI enterprises,” said Dr. Le Duy Binh.