SME reforms vital to progress

Tuesday, Sep 08, 2015 10:04

A worker load bricks at Thanh Phuc Mechanical and Building Material Company in Hai Phong City. Domestic small-and medium-sized enterprises need support from the Government to develop during the country's global integration. — VNA/VNS Photo Vu Sinh
HA NOI  (Biz Hub) — Local small- and medium-sized enterprises (SMEs) need to reform themselves and also need support from the State to survive and develop as further economic integration takes place once Viet Nam signs free trade deals with partners, experts said.

Now, the SMEs account for 96 per cent of the total number of enterprises in Viet Nam whose operations and finance are on a small scale and which have low competitive ability, according to the General Statistics Office.

Meanwhile, economic experts said most of the SMEs did not have much knowledge about global economic integration and do not know how and what to do as the economy integrates further with the global structure, the Tin tuc (News) newspaper reported.

The SMEs also do not know the demand of the world market, neither do they know the world quality standards and commercial rules, the experts said.

A representative of the HCM City Food Association said 80 per cent of the members at the association are SMEs who did not have access to information about international economic integration.

Cao Sy Kiem, chairman of the Viet Nam Association of Small and Medium Enterprises, said key issues for the SME as well as local enterprises in general include the need to improve their competitive ability by diversifying products and ensuring reasonable selling price.

To achieve the targets, he proposed that interest rates for medium- and long-term loans should be at 7 per cent per annum against 9 per cent to help enterprises have attractive sale price.

Kiem said the state should come up with ways to enhance the number of skilled workers in enterprises and use of modern production technology to improve competitiveness of the enterprises. This was necessary because Viet Nam lacks good managers and policy makers as well as skilled workers.

CEO Dang Duc Thanh, head of the Viet Nam Economist Club, said Viet Nam has in the past improved its business environment to integrate into the global economy but the nation does not have many strong enterprises that are highly competitive and efficient.

To reach the targets, the State Bank should adjust credit structures to focus credit on production, business, rural area, exports, supporting industry and SMEs, Thanh said.

The state should build and develop a system of economic policies to support the SMEs in production and business and credit guarantee funds for SMEs, said Thanh, adding that the state should also reform administrative procedures and complete the legal system to protect the SMEs as well as local enterprises in general.

Dau Anh Tuan, head of the Legal Department under the Viet Nam Chamber of Commerce and Industry, said information, support and consulting for enterprises as they integrate into the world economy are very important. Therefore, the state should provide information about what free trade agreements will involve. That would help local enterprises to take appropriate steps in the areas of production and business to integrate better with global system. — VNS

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