Private sector could do better if policies were improved

12:25 | 03/03/2019 Economy- Society

(VEN) - While Vietnamese policy has strongly promoted the private sector in recent years as a driving force of the country’s economy, its performance has not fulfilled expectations due to policy and business environment flaws.

private sector could do better if policies were improved

The private economic sector now accounts for the largest share of Vietnam's economic structure, representing 83.6 percent of the total labor force and making a 37.99-percent contribution to the country’s gross domestic product (GDP), compared to a 28.63-percent contribution by the state economic sector. In 2018, 131,275 private enterprises were established.

Although it is growing rapidly, the private sector has not become the important driving force for the economy as was envisioned because its participation in global value chains remains poor. Only some 21 percent of small and medium-sized enterprises in the country have joined global value chains, much lower than the 46-percent rate in other ASEAN (Association of Southeast Asian Nations) countries.

In 2019, the government will further promote implementation of its Resolution 98/NQ-CP to improve the business environment and support the development of private enterprises. According to the Ministry of Planning and Investment, apart from improving the investment environment and cutting business conditions, the government needs policies specifically designed for large enterprises, enabling them to approach science, technology, credit and land so they can make bigger contributions to the economy and encourage other businesses to develop.

Economists say the state needs to create ecosystems, support scientific and technological research and development, and at the same time create a policy framework and assist private enterprises to mobilize resources for large projects.

Under the plan, in the first quarter of 2019, the Central Economic Commission will submit to the Politburo a plan to develop Vietnam's economy on a fast and sustainable basis, an important part of which is to develop the private economic sector.

The Head of the Central Economic Commission Nguyen Van Binh told the press that the private sector has become more powerful since Resolution 10-NQ/TW on private economic sector development was implemented in 2017. The Vietnamese private economic sector has an unprecedented “golden opportunity” to make a breakthrough, he added.

Binh said overall policy for the private sector must be improved further in order to promote the participation and development of this sector in the economy in accordance with Resolution 10-NQ/TW. This sector, with its dynamism and flexibility, will become a main driver for increasing labor productivity and the competitiveness of the economy, Binh said.

The private economic sector contributes increasingly to production and business development, economic growth,

state budget revenues, employment and improved standard of living.

Duy Minh