Vietnam pushes private sector development to boost growth

Vietnam is planning on generating half of its economic output from the private sector in the next two years, Prime Minister Nguyen Xuan Phuc has said.

Speaking before a regional summit, the PM said that bolstered by new trade agreements and improved business conditions, the country is set to surpass its GDP growth rate of nearly 7 percent last year, and maintain this momentum for “many years to come”, the Financial Times reported. “The private sector is an important impetus for the economy of Vietnam.”

We will try to put in place the most favorable policies and create the most favorable environment so that by 2020, we will have in operation over one million businesses, accounting for 50 percent of Vietnam’s GDP, he said, up from 43 percent at present.

The prime minister added: “We will try to maintain favorable conditions for businesses, healthy environment for businesses and further international integration, especially support for private sector and nurture innovation so that we can enhance GDP growth for many years to come.”

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said the private sector has also been receiving more attention from the government than ever before, but it is still not enough. Nearly 60 percent of private enterprises are unable to make a profit.

Administrative procedures are a big obstacle.

The Vietnam Provincial Competitiveness Index pointed out that in 2017, 30 percent of surveyed companies spent at least 10 percent of their time on administrative procedures.

“Private enterprises still need more support from the government to help them cash in on opportunities during the country’s international integration process,” he said.

Vietnam’s export-driven economy grew 6.8 per cent last year, one of the strongest showings in Southeast Asia.