Vietnam Business Development Forum focuses on private sector growth

09:40 | 23/06/2017 Society

The Ministry of Planning and Investment (MPI) held the 2017 Vietnam Business Development Forum, in Hanoi on June 22, to discuss how to develop a robust private sector.

Speaking at the event, Director of the MPI’s Business Development Department, Ho Sy Hung, said the private sector currently contributes 43.22% of GDP, accounts for 39% of the total social investment and generates 11.9% of all jobs.

Meanwhile, the State sector contributes only 28.69% of GDP.

In terms of capital size, 94.8% of firms nationwide are small or medium-sized, with fixed assets averaging VND7-8 billion (US$304,000 – 347,000) each, which isn’t higher than during 2011-2015, making it hard for them to join the domestic value chain, according to the department.

In 2016, the number of newly-established enterprises nationwide hit a new record, with more than 110,000, up 16% annually. In the first five months of 2017, an additional 50,534 firms were established which contributed around VND1.2 quadrillion to the economy.

In terms of staff size, up to 97.7% of firms are small and medium-sized enterprises.

Dau Anh Tuan, head of the Vietnam Chamber of Commerce and Industry’s Department of Legal Affairs, said major obstacles to businesses include consumer base, market, capital, labour, administrative procedures, land, unofficial fees and a risky legal environment.

Economist Vu Dinh Anh underscored the importance of creating a fair business environment by not discriminating between the private sector and foreign-invested firms.

Participants looked into ways of improving Vietnam’s stature on the back of research, innovation and the development of high-quality products.