12:29 | 11/06/2017 Economy
(VEN) - There are more than 26,000 privately-owned businesses totaling over VND190 trillion (US$9 billion) in capital in Binh Duong Province. Although its investment capital is only equal to 30 percent of the foreign direct investment (FDI) in the small southern province, the private sector has contributed 30-35 percent to its gross domestic product (GDP). Private businesses in the province are providing jobs for tens of thousands of people and contributing significantly to the state budget.
|The private sector plays an important role in socioeconomic development
in Binh Duong Province
Impetus for growth
Since it was created in 1997, Binh Duong has acknowledged the private sector’s important role in the province’s industrialization, modernization and socioeconomic development.
In the first five months of 2017, the province attracted an additional VND16.62 trillion of domestic investment through 1,986 newly registered projects and 368 projects with increased capital.
Binh Duong has been trying its best to facilitate business development though favorable land and production promotion policies for investors. The province has handed down land to investors while building industrial zones to attract domestic and foreign investment, contributing to the economic restructuring in the region.
Binh Duong considers industrial development crucial for economic growth breakthroughs. The number of province-based industrial zones has increased from six (totaling 800 hectares in area) in 1997 to 28 with total area of more than 10,000ha.
Private sector development
However, the private sector in Vietnam in general and Binh Duong in particular is still facing many difficulties related to policies and business environment. While private businesses in general rely on capital from the banks, the lending interest rate in Vietnam is 1-1.5 times higher than in other countries in the region. This makes it difficult for businesses to create competitive products and services.
At its fifth session, the 12th-term Central Communist Party Committee issued a resolution on turning the private sector into an important engine of the socialist-oriented market economy, developing the sector on a fast, sustainable basis and increasing its contribution to the country’s GDP. Economists have assessed the resolution is a new step forward that creates a driving force for the development of the private sector and the economy as a whole.