Prime Minister Nguyen Xuan Phuc urged private enterprises yesterday to expand their global reach, pledging to create favourable conditions for the development of the private sector as a major driver of economic growth.

Phuc was speaking in Ha Noi at the second Viet Nam Private Sector Forum (VPSF), an initiative of the Viet Nam Young Entrepreneurs’ Association (VYEA) and the Mekong Business Initiative (MBI) of the Asia Development Bank (ADB).

“It is vital to remove all the barriers and create conditions to boost the development of the private sector,” Phuc said. “The private sector should be encouraged to do what it does well. This is the right way for Viet Nam to follow in transforming the economic structure and encouraging innovation to exploit its potential.”

Phuc said the private sector should contribute 60 per cent to the country’s gross domestic product (GDP), compard to 40 per cent at present. “As the Government is determined to be a constructive one, private enterprises must also keep innovating to improve their competitiveness and grasp opportunities,” Phuc stressed.

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover,” Phuc said, citing Mark Twain’s famous quote.

Lauched for the first time at this year’s VPSF, the CEO Confidence Index (CEO.CI) pointed to lower- than-expected business results due to complicated administrative procedures, difficulties in accessing land and capital and problems in tax and insurance policies.

With 245 responses, the CEO.CI scored just 58 out of 100. Two components, business environment and business efficiency, scored respectively 46 and 64.

Just 37 per cent of firms anticipated profits, 63 per cent planned business expansions in the next two years while 44 per cent said they missed opportunities due to legal barriers and market limitations, according to the survey.

The disappointing survey findings suggested that greater efforts were needed.

At the forum, PM Phuc called for improved coordination and hastened efforts by the Government, ministries, management agencies, banks and enterprises to create conditions for the private sector, citing the quote: “If you want to go fast, go alone. If you want to go far, go together.”

Management capacity must be enhanced to keep pace with market demand, especially in the 4.0 industrial revolution, Phuc said, adding that policies must also be consistent. Localities should join hands with each others to share opportunities rather than to compete in attracting investment.

Phuc said that a consultative council on administrative reforms would be launched in August and be tasked with connecting businesses, raising proposals and evaluating business environment improvement.

Agriculture, digital economy

Phuc listened to proposals from participants on boosting the digital economy, argiculture and tourism – the three spearhead economic sectors with significant potential for development.

VBSP’s working group on agriculture agreed that it’s urgent for Viet Nam to reorganise agricultural production with market-focused trade policies and high-technology farming.

According to Tran Manh Bao, head of the working group cum chairman of Thaibinh Seed, agricultural production must shift from farming households to firms. Policies limiting land ownership remain a barrier to investments in agriculture, which now involve just 4 per cent of the total number of firms in the country and 3 per cent of investments..

The working group urged the Government to propose to the National Assembly a review of the Law on Land to create favourable conditions for agricultural production. In response, Phuc pledged to propose that the National Assembly consider amending several points in the land law, including land limitations.

According to Nguyen Trung Chinh, head of the VPSF’s working group on digital economy, Viet Nam has significant room to boost the digital economy, given with wide internet coverage, US$900 million revenue from e-commerce in 2016 and 60 million smartphone users.

However, a lack of favourable policies to encourage new business models and digital technology-enabled companies remains a major challenge, Chinh said, adding that the Government should hasten efforts to limit the use of cash, promote e-commerce and e-contracts and create payment infrastructure for electronic transactions, while providing incentives to the software industry and high-tech zones.

Bui Quang Ngoc, deputy chairman of technology for FPT Group, said it was critical to create a fair playing ground for different economic sectors, especially in accessing State-funded IT projects. Special attention must be paid to develop IT human resource which are in short supply, he said.

A small survey carried out at the end of the forum found a majority of participants expected that more than 50 per cent of the proposals and problems raised at the forum would be adopted or resolved by the Government. A majority believed that the Government’s goal of having one million operating firms by 2020 was realistic. — VNS