Firms avoid business associations

Saturday, Mar 21, 2015 13:00

Craftsmen of the Ha Noi-based Trung Viet Co produce baskets. Many enterprises need support from associations to protect their rights and interests, but are yet to repose confidence in such organisations. — VNA/VNS Photo Thanh Ha

HA NOI  (Biz Hub) — Associations for enterprises should be improved further in terms of quality of management and activities, experts said.

Viet Nam has 400 associations for enterprises. About 96 per cent of the firms are local enterprises that are small in size, and these associations could play an important role during the economic integration process of such small firms, a recent survey conducted by the Viet Nam Chamber of Commerce and Industry (VCCI), has suggested.

However, 70 per cent of them are not interested in joining such associations, according to the survey.

Tran Huu Huynh, VCCI deputy general secretary, told online Cong an nhan dan (People's Public Security) newspaper that the number of newly-established associations had risen sharply nationwide at the national, provincial and municipal levels over past few years.

Many enterprises need support from such associations and have seen these associations playing a role in protecting the rights and interests of enterprises, according to Huynh.

The associations also partially act as a representative of enterprises during the implementation of trade promotion activities, connect partners and provide information and sales training for enterprises.

However, 70 per cent of enterprises not being a part of any association was indicative of something important, Huynh said. Firstly, these enterprises did not really feel the need for connecting with associations. That also meant that the associations had not played their role of helping these enterprises well.

The enterprises were also unaware that the associations need to be used as a tool for protecting the rights and interests of enterprises, he said.

VCCI's Huynh said the small firms were only aware of the short term role played by these associations of introducing them to prospective business partners and hadn't seen them protecting the business environment, businesses' rights and competitiveness, as well as acting as a platform for tapping trading opportunities.

In other countries, the establishment of an association was considered the right of enterprises and associations usually competed amongst themselves to attract more members, he said.

Meanwhile, in Viet Nam, such associations lacked competitiveness and had limited operations.

Nguyen Dinh Cung, the head of the Central Institute of Economic Research and Management, said many state offices had assumed the role that should have been played by the associations instead.

Therefore, ministries and sectors should separate the formulation of policies from the implementation of the policies and market regulation. That would create conditions for the associations to perform their role in a constructive manner.

The associations also needed to manage trade promotion activities and funds, such as funds of investment and industrial development, he said.

During the current economic integration process, the associations should specify their roles as a protector of members' rights and interests, an organisation for trade promotion and development of core products and supporting products, Cung said. — VNS

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